Beck v. Law Offices of Edwin J. (Ted) Terry, Jr., P.C

In Beck v. Law Offices of Edwin J. (Ted) Terry, Jr., P.C., 284 S.W.3d 416 (Tex. App.--Austin 2009, no pet.), the plaintiff contended that the law firm's failure to disclose the attorney's substance abuse problems breached the attorneys' fiduciary duties and resulted in an improper benefit--the attorney's fees paid by the plaintiff. See Beck, 284 S.W.3d at 431, 433. The court held that the firm's expectation of receiving fees from their continued representation of the plaintiff did not convert what was essentially a professional negligence claim into a claim for breach of fiduciary duty because the plaintiff "did not allege that the firm's failure to disclose the attorney's 'alcohol and substance abuse addictions' had anything to do with the pursuit of attorney's fees or an improper benefit." Id. at 434. In that case, the clients alleged a claim of breach of fiduciary duty based on the attorneys' failure to disclose the alcohol and substance abuse of the lead attorney on the case. 284 S.W.3d at 431. The clients contended that their claim for breach of fiduciary duty was separate from a negligence claim because they would not have initiated or continued the representation if they had known of the condition. Id. at 433. By failing to disclose the condition and continuing the representation, the clients alleged the attorneys were "committing the sort of subordination of their client's interests to their own that distinguishes a breach-of-fiduciary-duty claim." Id. The Austin court disagreed that the mere fact that the attorneys "might have had an expectation of fees from continuing to represent the clients -- a factor present in virtually every attorney-client relationship -- could convert the clients' negligence claim into a breach-of-fiduciary-duty claim." Id. First, the court reasoned that the expectation of fees from continuing the representation, without more, does not support an inference that the attorneys' failure to disclose the condition was motivated by an intent to obtain those fees. Id. The court noted the nondisclosure was equally consistent with a more general aversion to revealing those sorts of discomforting personal facts to others. Id. More importantly, the court noted that whether the attorneys received fees or an improper benefit was not the focus of the clients' complaint regarding the undisclosed abuse. Id. at 433-34. Instead, their claim focused on whether the abuse caused or contributed to the attorneys' failure to exercise a reasonable standard of care when providing legal services. Id. at 434.