Reversed and Remanded and Opinion filed October 31, 2013.




                                     In The

                    Fourteenth Court of Appeals

                              NO. 14-12-00494-CV

 MARK A. D’ANDREA, M.D., GULF COAST CANCER & DIAGNOSTIC
     CENTER OF SOUTHEAST, INC., GULF COAST ONCOLOGY
 ASSOCIATES, P.A., UNIVERSITY CENTER HUNTSVILLE-BRENHAM,
INC. AND SOUTHEAST GULF COAST BUSINESS DEVELOPMENT, L.P.,
                           Appellants

                                        V.

    EPSTEIN, BECKER, GREEN, WICKLIFF & HALL, P.C., EPSTEIN
    BECKER & GREEN, P.C., AND STEPHEN R. COCHELL, Appellees

                    On Appeal from the 80th District Court
                            Harris County, Texas
                      Trial Court Cause No. 2010-41660

                                OPINION


      In this attorney malpractice case, the plaintiffs are an individual, Mark A.
D‘Andrea, M.D., and various business entities of which D‘Andrea is the self-
described ―de facto owner.‖ We refer to the business entities collectively as ―Gulf
Coast.‖ The defendants, attorney Stephen R. Cochell and the law firm of Epstein,
Becker, Green, Wickliff & Hall, P.C. (collectively, ―the firm‖) represented Gulf
Coast and D‘Andrea in various matters. The plaintiffs assert claims against the
firm for negligence, breach of fiduciary duty, an unspecified intentional tort, and
common-law fraud.

      The representation at issue began when the firm prepared a ―memo‖ at the
request of Gulf Coast general counsel Kirk Kennedy that contained serious
allegations against D‘Andrea. The firm prepared the memo knowing Kennedy
would soon be fired as general counsel, and it provided Kennedy with a copy of
the memo after he had been fired. Kennedy‘s possession of the memo ultimately
caused D‘Andrea and Gulf Coast considerable expense and frustration. This case
began when both D‘Andrea and Gulf Coast sued the firm for negligence and other
claims.

      The trial court granted the firm‘s motion for final summary judgment based
on specific grounds.      The trial court granted summary judgment against
D‘Andrea‘s claims on the following grounds: (1) D‘Andrea was not a client of the
firm as to the memo and lacked standing to assert the rights of Gulf Coast, so the
firm owed him no duty, and all of his claims failed as a matter of law; and (2)
though there was an attorney-client relationship between the firm and D‘Andrea
regarding the bankruptcy proceeding, there is no evidence that this proceeding was
in any way related to the memo. We conclude that the trial court erred in granting
summary judgment on these grounds.

      The trial court also granted summary judgment against Gulf Coast‘s claims
because it concluded that even if the firm‘s preparation of the memo was negligent,
Kennedy‘s unforeseeable use of the memo broke the chain of proximate causation
between this negligence and the harm to Gulf Coast. We disagree because there

                                        2
are fact questions regarding the foreseeability of harm to Gulf Coast. Accordingly,
we reverse and remand.

                                       BACKGROUND

       There has been considerable litigation about the memo. The trial court
ordered the document sealed, and specific discussion of its contents is unnecessary
to write a ―cogent, meaningful opinion,‖ see R.V.K. v. L.L.K., 103 S.W.3d 612, 614
(Tex. App.—San Antonio 2003, no pet.), so there will be no such discussion here.
For our purposes, it suffices to say that much ink has been spilled and much money
spent to keep the memo‘s contents secret. We also note that D‘Andrea describes
the memo as ―a big lie.‖

       The firm prepared the memo in 2009 at the request of Kennedy, Gulf
Coast‘s general counsel and corporate secretary at the time. A month before
commissioning the memo, plaintiffs allege that Kennedy ―secretly deposited‖
$412,000 belonging to Gulf Coast into an account under his sole control. He
allegedly used $35,000 of the secreted funds to pay the firm‘s retainer for
preparing the memo.

       Although Kennedy requested the memo, there is no contention that the firm
prepared it for Kennedy personally. Indeed, when Gulf Coast later sought an
injunction requiring Kennedy to turn over all copies of the memo, our sister court
upheld a finding that Kennedy was not the firm‘s client for purposes of the memo.
See Kennedy v. Gulf Coast Cancer & Diagnostic Ctr. at Se., Inc., 326 S.W.3d 352,
358 (Tex. App.—Houston [1st Dist.] 2010, no pet.).

       The memo‘s stated purpose was ―to apprise the . . . President and
Board . . . as   to   Gulf   Coast‘s    potential . . . exposure . . . arising   from   Dr.
D‘Andrea‘s alleged misconduct.‖           Thus, Gulf Coast was the firm‘s client.


                                            3
Although the Gulf Coast entities had their own business structures and officers,
D‘Andrea testified that he was the ―de facto owner‖ who ―made the decisions‖ and
―produced all [the] revenue‖ for all of the Gulf Coast entities. Attorney Stephen R.
Cochell spearheaded the memo‘s preparation for the firm while personally
representing D‘Andrea in unrelated litigation.1 Until its work was complete, the
firm contacted no officers or directors of its client Gulf Coast other than Kennedy.

       Kennedy‘s largely unsubstantiated allegations against D‘Andrea provided
the factual basis for the opinions in the memo; the firm performed no independent
investigation. As work on the memo progressed, the firm received indications that
Gulf Coast would soon fire Kennedy or may have fired him already. The firm also
received indications that Kennedy would use the memo in litigation against Gulf
Coast. For example, Kennedy specifically asked that the firm‘s memo inform Gulf
Coast‘s president about a statute making it illegal to fire whistleblowers.

       Notwithstanding the indications that Kennedy was adverse to its actual
client, Gulf Coast, the firm emailed the memo to Kennedy. It also sent a copy to
the president of Gulf Coast. Kennedy received the memo the day after Gulf Coast
fired him for theft. Plaintiffs allege that once Kennedy got the memo, he ―refused
to return his copy . . . and began showing it to lawyers and talking about the
‗[firm‘s] investigation‘ that purportedly found ‗wrongdoing.‘‖ Kennedy allegedly
―claim[ed] that he was fired because he obtained an outside opinion of
wrongdoing.‖      Plaintiffs also allege that Kennedy ―tried to use the memo to
blackmail Gulf Coast into paying money that was not owed.‖ Plaintiffs assert that
the memo ―all but destroyed‖ D‘Andrea‘s practice.



       1
         The nature of the unrelated litigation is not relevant to our analysis. It involved an
appeal that was decided in In re ProEducation International, Inc., 587 F.3d 296 (5th Cir. 2009).

                                               4
      Gulf Coast and D‘Andrea sued the firm, alleging negligence, breach of
fiduciary duty, an unspecified intentional tort, and common-law fraud. The firm
filed a traditional and no-evidence motion for summary judgment, contending that
the plaintiffs should take nothing on their claims. The trial court granted the
motion and signed an order specifying the reasons for its ruling, as discussed
above. Gulf Coast and D‘Andrea then filed this appeal.

                                        ANALYSIS

I.    Standard of review

      We review a trial court‘s order granting summary judgment de novo.
Merriman v. XTO Energy, Inc., 407 S.W.3d 244, 248 (Tex. 2013). To be entitled
to a traditional summary judgment, the movant must demonstrate that no genuine
issues of material fact exist and that it is entitled to judgment as a matter of law.
Tex. R. Civ. P. 166a(c). If the movant does so, the burden shifts to the nonmovant
to produce evidence sufficient to raise a fact issue. Walker v. Harris, 924 S.W.2d
375, 377 (Tex. 1996). When reviewing a summary judgment, we take as true all
evidence favorable to the nonmovant, and we indulge every reasonable inference
and resolve any doubts in the nonmovant‘s favor. Valence Operating Co. v.
Dorsett, 164 S.W.3d 656, 661 (Tex. 2005).

      When, as here, the trial court expressly bases its summary judgment only
upon certain grounds, we must consider all of the grounds upon which the trial
court rules if they are preserved for our review and necessary to dispose of the
case. Cincinnati Life Ins. Co. v. Cates, 927 S.W.2d 623, 624 (Tex. 1996). We
may review additional summary judgment grounds, but we need not and do not do
so here.2 Id.


      2
          For example, the firm argues it is also entitled to summary judgment based on an
                                             5
II.    The trial court erred in granting a take-nothing summary judgment.
       The trial court granted summary judgment against D‘Andrea‘s claims on the
following grounds: (1) D‘Andrea was not a client of the firm as to the memo and
lacked standing to assert the rights of Gulf Coast, so the firm owed him no duty,
and all of his claims failed as a matter of law; and (2) though there was an
attorney-client relationship between the firm and D‘Andrea regarding the
bankruptcy proceeding, there is no evidence that this proceeding was in any way
related to the memo. As discussed below, these grounds do not provide a basis for
affirming the trial court‘s summary judgment against D‘Andrea‘s claims.

       Second, the trial court granted summary judgment against Gulf Coast‘s
claims on the ground that the evidence conclusively established that any breach by
the firm did not proximately cause Gulf Coast‘s damages. Instead, the court
concluded that Kennedy‘s breach of his fiduciary duty to Gulf Coast was a
superseding, intervening cause that cut off the chain of proximate causation. As
we explain below, however, there are fact questions regarding (1) whether the
harm to Gulf Coast was a generally foreseeable result of preparing the memo, and
(2) whether Kennedy‘s breach was foreseeable.

       A.     The grounds stated in the trial court’s order do not support
              summary judgment against D’Andrea’s claims.
       In their first issue, the plaintiffs challenge the trial court‘s grant of summary
judgment against D‘Andrea‘s claims. The trial court‘s summary judgment order
included two paragraphs explaining the basis for its ruling on those claims. In the
first paragraph, the court concluded that ―[t]here is no evidence of an attorney-
client relationship between [the firm] and D‘Andrea in his individual capacity with


element challenged in its motion but not addressed in the judge‘s order—cause in fact. We do
not reach that issue.

                                             6
regard to the memo. Even if D‘Andrea is the primary or sole owner of the Gulf
Coast entities, [the firm] owed him no duty and he lacks standing to recover for
injuries to Gulf Coast.‖

      We interpret this paragraph as granting summary judgment based on
multiple grounds raised in the firm‘s motion.         Those grounds asserted that
D‘Andrea was not a client of the firm as to the memo and lacked standing to assert
the rights of Gulf Coast, so the firm owed him no duty and all of his claims failed
as a matter of law.3

      We hold that the firm is not entitled to summary judgment on those grounds.
It is undisputed that the firm represented D‘Andrea in unrelated bankruptcy
litigation at the time it produced the memo. The firm thus owed D‘Andrea duties
as a current client, including a duty of reasonable prudence and fiduciary duties of
loyalty and good faith. See Cosgrove v. Grimes, 774 S.W.2d 662, 664 (Tex. 1989);
Authorlee v. Tuboscope Vetco Int’l, Inc., 274 S.W.3d 111, 126 (Tex. App.—
Houston [1st Dist.] 2008, pet. denied) (―[A]n attorney owes a duty of loyalty and
good faith to each client . . . .‖). The relevant question is the scope of the firm‘s
duties and whether the firm breached them by preparing the memo or engaging in
other allegedly actionable conduct. Thus, even assuming for the sake of argument
that D‘Andrea was not a client as to the memo, and that D‘Andrea lacks standing
to assert the rights of Gulf Coast, these premises do not establish as a matter of law
that the firm owed D‘Andrea no duty or that all of D‘Andrea‘s claims fail as a
matter of law.

      In its second paragraph addressing D‘Andrea‘s claims, the trial court
concluded that ―while there was an attorney-client relationship between [the firm]
and D‘Andrea with regard to the bankruptcy proceeding, there is no evidence that
      3
          See 2 CR 131, 134–35, 142–44.

                                          7
that proceeding was in any way related to the memo.‖ Standing alone, the lack of
a relationship between the bankruptcy and the memo does not establish as a matter
of law that the firm‘s work on the memo could not breach its duties to D‘Andrea
arising from the bankruptcy representation.        Therefore, this ground does not
support the trial court‘s summary judgment against D‘Andrea‘s claims.

      The trial court‘s second paragraph may have been intended to grant
summary judgment based on the following ground raised in the firm‘s motion: that
as a matter of law there was no conflict of interest prohibiting the firm from
representing D‘Andrea in the bankruptcy litigation while also preparing the memo.
In particular, the firm argued that it did not violate the Disciplinary Rules with
regard to concurrent representation, and thus it could not be held liable for breach
of fiduciary duty. But the firm‘s conclusion does not follow from its premise.
Even if the trial court‘s order were construed as granting partial summary
judgment based on this ground, we conclude the summary judgment evidence does
not prove the firm‘s entitlement to that relief.

      The firm directs us to Rule 1.06 of the Texas Disciplinary Rules of
Professional Conduct, which provides in relevant part:

           (a) A lawyer shall not represent opposing parties to the same
      litigation.
          (b) In other situations and except to the extent permitted by [an
      exception allowing concurrent representation with client consent], a
      lawyer shall not represent a person if the representation of that person:
                    (1) involves a substantially related matter in which that
             person‘s interests are materially and directly adverse to the
             interests of another client of the lawyer or the lawyer‘s firm; or
                   (2) reasonably appears to be or become adversely limited
             by the lawyer‘s or law firm‘s responsibilities to another client
             or to a third person or by the lawyer‘s or law firm‘s own


                                           8
              interests.4

Even if the firm‘s preparation of the memo did not violate this rule (an issue we
discuss further below), we disagree with the firm‘s position that it could not be
held liable for breach of fiduciary duty.

       The flaw in the firm‘s argument is that a violation of the disciplinary rules is
not necessary and may not be sufficient to establish civil liability for attorneys.
Indeed, ―the Texas disciplinary rules . . . do not establish the standard of care or
civil liability for attorneys.‖ Greenberg Traurig of New York, P.C. v. Moody, 161
S.W.3d 56, 96 (Tex. App.—Houston [14th Dist.] 2004, no pet.); see also Tex.
Disciplinary Rules Prof‘l Conduct preamble ¶ 15; cf. Fleming v. Kinney ex rel.
Shelton, 395 S.W.3d 917, 929 (Tex. App.—Houston [14th Dist.] 2013, pet. filed)
(expert‘s testimony ―crossed the border of inadmissibility‖ when she told the jury,
among other things, that violation of certain disciplinary rules necessarily
established breach of fiduciary duty).5

       Here, D‘Andrea introduced expert testimony that ―[p]reparation of the
memo required [the firm] to take positions adverse to Dr. D‘Andrea and as a result
[the firm] breached [its] duty of loyalty.‖ The expert stated that the firm also
―breached [its] duty of loyalty to Dr. D‘Andrea by providing the . . . memo to
Kennedy, a person [the firm] knew to be adverse to Dr. D‘Andrea.‖ The expert
also noted that the investigation brought the firm‘s interests into conflict with
D‘Andrea‘s, so ―[a]t a minimum,‖ the firm should have notified D‘Andrea. This
testimony raises a fact issue regarding whether the firm breached its fiduciary duty


       4
           Tex. Disciplinary Rules Prof‘l Conduct R 1.06, reprinted in Tex. Gov‘t Code Ann., tit.
2, subtit. G app. A (West 2004).
       5
           The firm itself recognized this rule in its summary judgment motion, arguing that
plaintiffs could not maintain a cause of action against it for violating the disciplinary rules.

                                               9
to D‘Andrea, its current client.6

       Moreover, even if we were to conclude that the common-law standard
regarding breach of fiduciary duty resembles Rule 1.06 (an issue we do not
decide), the application of that standard would not be as straightforward as the firm
suggests. The rule‘s comments contemplate that lawyers will sometimes avoid
representations that the rule might otherwise permit. For example, according to
one comment,

       Even when neither paragraph [barring concurrent representation based
       upon a specific conflict] is applicable, a lawyer should realize that a
       business rivalry or personal differences may be so important to one or
       both that one or the other would consider it contrary to its interests to
       have the same lawyer as its rival even in unrelated matters; and in
       those situations a wise lawyer will forego the dual representation.

Tex. Disciplinary Rules Prof‘l Conduct R. 1.06 cmt. 6. Another comment goes
even further, stating that ―[o]rdinarily, it is not advisable for a lawyer to act as an
advocate against a client the lawyer represents in some other matter, even if the
other matter is wholly unrelated and even if [the portion of the rule quoted above
is] not applicable.‖       Id. cmt. 11.       Moreover, ―[t]he propriety of concurrent
representation can depend on the nature of the litigation. For example, a suit
charging fraud entails conflict to a degree not involved in a suit for declaratory
judgment concerning statutory interpretation.‖ Id.

       The firm‘s preparation of the memo falls on the high-conflict part of this
spectrum.     Kennedy requested a memo to document and analyze D‘Andrea‘s
alleged actions—actions that Kennedy believed to be improper and possibly


       6
          The firm argues that to hold it may be professionally liable while complying with the
disciplinary rules requires us to ―assume the role of the legislature.‖ But the Legislature did not
write the disciplinary rules. Moreover, the authorities cited above, among others, establish that
the disciplinary rules do not necessarily set the standard for D‘Andrea‘s common-law claims.

                                                10
illegal. In this way, the memo required the firm to attack directly the integrity of
its current client. According to D‘Andrea‘s expert, such an action is inconsistent
with the duty of loyalty the firm owed to D‘Andrea.

       In sum, although the memo‘s subject matter was not substantially related to
the firm‘s representation of D‘Andrea, preparation of the memo nonetheless
implicated the firm‘s fiduciary duty to D‘Andrea—as D‘Andrea‘s expert and the
comments to Rule 1.06 show. The trial court erred in granting summary judgment
against D‘Andrea‘s claims on the grounds stated in its order. We sustain the
plaintiffs‘ first issue and reverse the summary judgment against D‘Andrea‘s
claims.7

       B.        There are fact questions regarding whether the damage that Gulf
                 Coast suffered from the memo’s production was foreseeable.
       In their second and third issues, the plaintiffs argue that the trial court erred
by granting summary judgment against all of Gulf Coast‘s claims. The trial court
concluded ―there [wa]s no evidence showing that [the firm‘s] alleged malpractice
and breach of fiduciary duty proximately caused [the Gulf Coast entity clients‘]
harm.‖8       Instead, it held that ―the summary judgment evidence conclusively
establishe[d] that [Kennedy‘s use of the memo] was not [a foreseeable result of the
firm‘s alleged negligence].‖ The court held that this absence of foreseeability
entitled the firm to summary judgment. We disagree.

       The trial court relied upon cases in which an intervening crime or tort broke

       7
         The firm cites King Ranch, Inc. v. Chapman, 118 S.W.3d 742, 753 (Tex. 2003), for the
proposition that ―there is no prohibition against representing a new client in a matter that
involves an existing client.‖ What King Ranch held, however, was that ―simultaneous
representation in unrelated matters is not evidence of a fraudulent conspiracy‖ between the
attorney and one of the clients. Id. at 752. It does not follow from King Ranch that an attorney
cannot breach a fiduciary duty by representing directly adverse clients in unrelated matters.
       8
           The plaintiffs have not sought fee forfeiture in this case.

                                                   11
the chain of proximate cause connecting negligence to injury. Dyess v. Harris, 321
S.W.3d 9, 16–17 (Tex. App.—Houston [1st Dist.] 2009, pet. denied) (foster
parents had no duty to prevent one foster child from sexually assaulting others
where sexual assault was not foreseeable); see also Phan Son Van v. Pena, 990
S.W.2d 751, 755 (Tex. 1999) (store that sold alcohol to minors not liable for
minor‘s criminal acts where acts were not foreseeable result of alcohol use);
Barton v. Whataburger, Inc., 276 S.W.3d 456, 463 (Tex. App.—Houston [1st
Dist.] 2008, pet. denied) (restaurant not liable for wrongful death during robbery).
The trial court reasoned, and the firm now argues, that harm to Gulf Coast was
unforeseeable because no one could have known that Kennedy would use the
memo against his client, Gulf Coast. As a result, the trial court concluded that
Kennedy‘s breach, like a criminal act, severed the chain of proximate cause.

      We disagree with this conclusion for two independent reasons. First, there
was evidence that a reasonably prudent attorney would carefully consider not
opining in writing upon allegations like Kennedy‘s because the writing could later
be used against the attorney‘s client. Second, Kennedy‘s own actions raise a fact
issue regarding whether his use of the memo against Gulf Coast was foreseeable.

            1.     Gulf Coast introduced evidence that preparing a written
                   investigation report can breach the standard of care because it
                   is foreseeable the document will become public.
      Foreseeability requires only that the general danger, not the exact sequence
of events that produced the harm, be foreseeable. Walker, 924 S.W.2d at 377.
Thus, Kennedy‘s misuse of the memo need not have been foreseeable if it was
generally foreseeable that the memo was likely to harm Gulf Coast. Id. Because
the plaintiffs introduced evidence of such general foreseeability, the trial court
erred in granting summary judgment.


                                        12
       Specifically, Gulf Coast‘s evidence raises a fact issue regarding whether
preparing a written report, like the one the firm prepared, breaches the standard of
care. For example, according to one source submitted with Gulf Coast‘s summary
judgment evidence, written reports ―typically [have] limited utility and [carry]
great risk.‖ Am. Coll. Trial Lawyers, Recommended Practices for Companies and
Their Counsel in Conducting Internal Investigations 11 (2008). As a result, ―[t]he
goal at the outset of an internal investigation should be frequent updating by oral
reporting,‖ and ―[c]areful consideration should be given to the extent to which
written reports should be rendered, if at all.‖           Id.   Written interim reports,
according to the recommended practices, ―run the risk of creating confusion and
credibility issues, as well as potential unfairness to officers and employees who are
the subjects of the investigations, if facts discovered in the latter part of the
investigation are inconsistent with the preliminary factual determinations or
interim substantive findings.‖ Id. Moreover, ―[t]he [written or oral] form of the
[final] report . . . should be analyzed because of the likelihood that some version of
the report will likely make it into the hands of government authorities or plaintiffs‘
attorneys, resulting in the substantial risk of enhanced civil litigation against the
Company, and the officers and directors.‖ Id. at 21.

       The affidavit of Gulf Coast‘s expert further supports Gulf Coast‘s assertion
that preparing a written report created a foreseeable possibility that the report
would be misused. The expert testified that the firm breached the standard of care
by ―[a]greeing to put the matters at issue in written form at the outset without first
conferring with [Gulf Coast‘s] management and advising them of the risks inherent
in publishing Kennedy‘s allegations and their comments on these allegations.‖9

       9
          The firm contends that the expert‘s report is conclusory and ―mere ipse dixit‖ and
therefore no evidence that a prudent attorney would have foreseen the production of a written
memo being harmful under these circumstances. But Gulf Coast also introduced the
                                             13
       According to this summary judgment evidence, the standard of care requires
lawyers to consider carefully whether to opine in writing during internal
investigations because written opinions have the potential to harm clients. This
standard requires reasonably prudent attorneys to foresee that sensitive written
investigations may fall into the hands of parties adverse to the client and to
consider this possibility before putting those opinions in writing.                      An
understanding that the material foreseeably could come to light is thus required for
a lawyer to conduct such an investigation competently.

       Here, the firm came closest to ―carefully considering‖ the production of a
written report when an associate of the firm wrote in an email that he was not sure
the firm was in a position to respond to all of the allegations and suggested that the
firm conduct a more formal inquiry before assessing exposure and recommending
corrective action. Notwithstanding the associate‘s concerns, the record contains no
indication that the firm ever discussed the report‘s potential for harm with any
official from Gulf Coast.

       In sum, there are fact issues regarding whether a reasonably prudent attorney
would have foreseen that a written memo was likely to harm the client, whether
such a lawyer would have produced the memo, and what steps a reasonably
prudent lawyer would have taken before doing so. Accordingly, the trial court
erred in granting summary judgment against Gulf Coast‘s claims.

              2.     Indications that Kennedy was adverse to Gulf Coast before the
                     firm sent him the memo raise a fact issue regarding whether
                     his use of the memo against Gulf Coast was foreseeable.
       We also disagree with the trial court‘s summary judgment because the firm
received indications that Kennedy was considering litigation against Gulf Coast,
recommended practices discussed above, which explain why such written reports are foreseeably
harmful.

                                             14
raising a fact issue regarding whether Kennedy‘s betrayal of Gulf Coast was
foreseeable.     A defendant who seeks to negate foreseeability on summary
judgment must prove more than that intervening third-party conduct occurred; the
defendant must prove that the conduct was not foreseeable. Phan Son Van, 990
S.W.2d at 754. Thus, in this case, the mere fact that Kennedy, and not the firm,
used the memo against Gulf Coast does not sever as a matter of law the causal
chain between the firm‘s alleged negligence and the harm Gulf Coast suffered.

       Rather, the firm had the burden of establishing that Kennedy‘s use of the
memo against Gulf Coast was unforeseeable as a matter of law. See id. Several
pieces of evidence prevent the firm from making this showing. For example, more
than a year before preparing the memo, Cochell, the firm lawyer who represented
D‘Andrea and Gulf Coast, looked into getting Kennedy a job with the firm. This
fact demonstrates that, at an early stage, Cochell and Kennedy communicated
about Kennedy‘s eventual exit from Gulf Coast.

       These communications continued when, months before requesting the
memo, Cochell referred Kennedy to ―a plaintiff‘s attorney‖ certified in labor and
employment law. Kennedy evidently sought ―advice, support, and guidance‖ from
this attorney regarding a ―contract question‖ related to Kennedy‘s employment
contract with Gulf Coast.10

       It is unclear from the record whether Kennedy communicated his
termination concerns to Cochell at this point.            Nonetheless, the evidence that
Cochell tried to help Kennedy find a new job and referred him to a plaintiff‘s-side

       10
         The record contains a letter from the attorney to Kennedy, reflecting a consultation
between the two. There is also a copy of Kennedy‘s employment contract containing several
margin notes. One note reads ―* Key provision‖ with an arrow pointing to the contract‘s
―Termination‖ section. Another says: ―Issue: If Company Elects to terminate, do I still receive
remaining term of two years, less mitigation?‖

                                              15
employment attorney suggests that Cochell also may have known that Kennedy
would soon be fired.

      In any event, as the memo‘s preparation progressed, Kennedy‘s imminent
departure from Gulf Coast became apparent. Less than a week before delivering
the memo, Cochell solicited advice from other members of the firm, informed
them that ―[t]he GC [(Kennedy)] thinks he is about to be fired tomorrow or in the
next couple days,‖ and described the memo as an ―emergency project,‖ stating that
Kennedy wanted the memo ―as quickly as possible.‖ Two days before the firm
sent Kennedy the memo, Kennedy emailed Cochell, writing ―I DO NOT HAVE
access to Company e-mail any more. Send any e-mails or docs to this [personal]
account for now.‖ When the memo was finished, Cochell attempted to email a
copy of it to Kennedy‘s Gulf Coast account in spite of this warning, but the email
was undeliverable.     Cochell then emailed a copy of the memo to Kennedy‘s
personal account. Cochell also sent a copy to Gulf Coast‘s president.

      Correspondence between Kennedy and Cochell also suggested that Cochell
knew Kennedy was assembling evidence to use against Gulf Coast. Two days
before the memo‘s delivery, Kennedy forwarded Cochell an email from a Gulf
Coast employee, whom D‘Andrea had recently ―let go.‖ In the email, the former
employee offered to ―have any investigator hire [him] as . . . a fully qualified
‗Expert Witness‘ in any full-scale investigation.‖ The employee went on to detail
various allegations against Gulf Coast.

      The next morning, Kennedy sent Cochell section 161.134 of the Health and
Safety Code, which prohibits certain medical facilities from retaliating against
employees who report violations. The section also creates a presumption that a
termination within sixty days of a report is retaliatory. Tex. Health & Saf. Code
Ann. § 161.134 (a), (f) (West 2010). Kennedy wrote that the firm ―[s]hould

                                          16
probably include this [statute] in the memo so that [the president of Gulf Coast] is
on notice.‖

       Summarizing this evidence in the light most favorable to Gulf Coast, when
the firm sent a copy of the memo to Kennedy, it knew that: Kennedy was about to
be fired or perhaps already had been fired; litigation over his firing was possible;
Kennedy had recruited a recently-fired employee to help investigate Gulf Coast;
and Kennedy wanted Gulf Coast on notice that it was a violation of the law to fire
him for reporting the allegations in the memo. These circumstances create a fact
issue regarding whether it was foreseeable that Kennedy would use the memo to
harm Gulf Coast. In particular, Kennedy‘s desire to notify Gulf Coast of the
consequences of firing him creates a fact issue as to whether Kennedy would
foreseeably disclose the memo to avoid being fired or use the memo in suing Gulf
Coast for firing him.

       A reasonable jury could conclude that the firm‘s knowledge of these facts at
the time it sent the memo to Kennedy made it foreseeable that Kennedy would use
the memo against Gulf Coast, the firm‘s client.11 The trial court therefore erred by
holding it was unforeseeable as a matter of law that Kennedy would use the memo
against Gulf Coast.12 Accordingly, we sustain the plaintiffs‘ second and third

       11
            The trial court concluded, and the firm argues, that Kennedy‘s actions were
unforeseeable as a matter of law because ―an attorney should . . . be entitled to rely upon another
attorney‘s fulfillment of his ethical responsibilities to his client.‖ Even if we agree with this
statement as a general matter, here Kennedy‘s actions create a fact issue regarding whether it was
foreseeable that he would breach his duties to Gulf Coast. See Fin. Freedom Senior Funding
Corp. v. Bellettieri, Fonte & Laudonio, P.C., 852 F. Supp. 2d 430, 433, 438 & n.5 (S.D.N.Y.
2012) (where lawyer ―‗ignored warning signs‘‖ of partner‘s check kiting scheme, question of
fact existed regarding whether lawyer committed negligence).
       12
           The trial court also granted summary judgment against the plaintiffs‘ intentional tort
and common-law fraud claims based upon the absence of foreseeability. In their fourth and fifth
issues, the plaintiffs argue that the trial court erred by dismissing these claims because the firm
failed to attack these claims in its summary judgment motion, and because foreseeability is not
an element of common-law fraud. Because we conclude that the trial court erred by holding that
                                                17
issues and reverse the trial court‘s summary judgment against Gulf Coast‘s
claims.13

                                         CONCLUSION

       For these reasons, we reverse the trial court‘s summary judgment and
remand the case for further proceedings consistent with this opinion.




                                             /s/     J. Brett Busby
                                                     Justice


Panel consists of Chief Justice Frost and Justices Jamison and Busby.

Publish — Tex. R. App. P. 47.2(b).




Kennedy‘s acts were unforeseeable as a matter of law, and this was also the trial court‘s basis for
disposing of the intentional tort and common-law fraud claims, we reverse the trial court‘s
summary judgment on the intentional tort and common-law fraud claims as well. We express no
opinion regarding whether foreseeability is an element of the plaintiffs‘ intentional tort or fraud
claims.
       13
          Given our disposition of the other issues, we need not reach the plaintiffs‘ sixth issue,
which complains that the trial court erred by excluding the testimony of one of their expert
witnesses.

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