The remedy of fee forfeiture against lawyer fiduciaries has been marginalized. Following Burrow v. Arce, Texas trial courts have frequently applied a no-fracturing rule that effectively bars a claim for breach of fiduciary duty against an attorney. Although the court in Burrow held actual damages were not a prerequisite for fee forfeiture, many Texas trial courts have not followed that precedent. Most Texas trial courts require the plaintiff to prove actual damages to survive a summary judgment motion. Others have openly asserted that not all legitimate claims for breach of fiduciary duty should be allowed as an alternative claim to legal malpractice. As a result, a schism in the substantive law applied to claims between non-lawyer and lawyer fiduciaries has emerged. A review of 741 appellate opinions over the last twenty-five years suggests that the schism has been growing over the last ten years. Furthermore, in the last five years, summary judgment was granted in 62% of cases against lawyer fiduciaries, compared to only 32% against non-lawyer fiduciaries. The no-fracturing rule is a misapplication of current Texas law. The rule incorrectly assumes that fee forfeiture and actual damages are mutually exclusive. Therefore, granting a defendant summary judgement for lack of actual damages beyond legal fees directly contradicts Burrow and must be reversed if fee forfeiture is to retain any effect. The Texas Supreme Court and the appellate courts, however, have made little effort to reconcile the schism on fee forfeiture between non-lawyer and lawyer fiduciaries. Due to Texas trial courts’ bias in favor of granting summary judgement, a plaintiff seeking a claim against a former attorney for a breach of fiduciary duty is advised to seek a remedy in equity.
St. Mary's University School of Law
George P. Roach,
Texas Remedies in Equity for Breach of Fiduciary Duty: Disgorgement, Forfeiture, and Fracturing.,
St. Mary's L.J.
Available at: https://commons.stmarytx.edu/thestmaryslawjournal/vol45/iss3/2
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