author: Justice MORRIS.

text:
    TXU PORTFOLIO MANAGEMENT COMPANY, L.P. n/k/a Luminant Energy Company, L.L.C., Appellant/Cross-Appellee, v. FPL ENERGY, LLC, FPL Energy Pecos Wind I, L.P., FPL Energy Pecos Wind II, L.P., Indian Mesa Wind Farm, L.P., Appellees/Cross-Appellants.
    No. 05-08-01584-CV.
    Court of Appeals of Texas, Dallas.
    July 27, 2010.
    Rehearing Overruled Jan. 14, 2011.

      James W. Walker, Walker Sewell, LLP, Dallas, TX, for Appellant/Cross-Appellee.
    Jeffrey M. Tillotson, Lynn, Tillotson, & Pinker, L.L.P., Dallas, for Appel-lees/Cross-Appellants.
    Before Justices MORRIS, FITZGERALD, and FRANCIS.
   OPINION

Opinion By

Justice MORRIS.

This appeal arises out of a contractual dispute between an electricity wholesaler and three wind-powered electrical generation facilities. TXU Portfolio Management Company, L.P. n/k/a Luminant Energy Company, L.L.C. filed a lawsuit against FPL Energy, LLC, FPL Energy Pecos Wind I, L.P., FPL Energy Pecos Wind II, L.P., and Indian Mesa Wind Farm, L.P. (collectively the Wind Farms). It sought to recover liquidated damages after the Wind Farms failed to deliver the minimum annual quantities of wind-generated electric energy and renewable energy credits due under three purchase and sale agreements. The Wind Farms counterclaimed. They claimed TXUPM materially breached the contracts by failing.to ensure enough transmission capacity to allow them to generate all of the electricity that atmospheric conditions would permit. In addition to damages, the Wind Farms and TXUPM both sought declaratory relief with respect to the others’ obligations under certain contractual provisions.

After several partial summary judgment rulings and a jury trial on the remaining issues, the trial court rendered a final judgment that both TXUPM and the Wind Farms take nothing by their damage claims. The final judgment also included a declaratory judgment in favor of the Wind Farms. On appeal, TXUPM challenges the trial court’s take-nothing judgment on its breach of contract claim, the adverse declaratory judgment rulings, the trial court’s denial of its requested trial amendment, and the admission of certain testimony by an opposing expert witness. The Wind Farms filed a cross-appeal contesting the take-nothing judgment on their breach of contract claim and several of the trial court’s evidentiary rulings. For the reasons that follow, we affirm that part of the trial court’s judgment ordering the Wind Farms to take nothing on their claims for damages. We reverse and render judgment in favor of TXUPM on the construction of section 2.03 of the contracts and the enforceability of the liquidated damage clause. We reverse the remainder of the trial court’s judgment and remand the cause to the trial court for further proceedings.

I.

There are three basic components of the electric industry in Texas: power generation, power transmission, and power distribution. See Pub. Util. Com’n v. City Public Serv. Bd., 53 S.W.3d 310, 312 (Tex.2001). Generally, the transmission of electric energy is accomplished through an interconnected network of transmission systems and infrastructure owned and operated by various transmission service providers. This network forms a single grid managed by the Electric Reliability Council of Texas (ERCOT). Every generating facility enters into an interconnection agreement with the transmission service provider that owns the lines to which the generating facility connects. When electricity is produced by a generating facility, it is transmitted to a point of interconnection with the ERCOT grid. From there, it is distributed along the high voltage transmission lines and lower voltage distribution lines to end users who purchase it from retail electric providers.

FPL Energy Pecos Wind I, FPL Energy Pecos Wind II, and Indian Mesa Wind Farm are wind-powered electrical generation facilities located in the McCamey area of West Texas. Each facility executed a contract agreeing to sell to TXU Electric Company, a retail electric provider, annual minimum quantities of renewable energy credits along with the wind-generated electric energy that produced those credits. At TXU Electric’s option, the term of the contracts could be extended through December 2019. TXUPM is the assignee of TXU Electric’s interest in the three contracts. TXUPM sued the Wind Farms for liquidated damages in the form of deficiency payments under the agreements after the Wind Farms failed to deliver the contractually-required annual minimum quantities of “renewable energy” beginning in 2002. The Wind Farms countered that during the years relevant to this dispute, the McCamey area suffered from chronic transmission congestion because the transmission service providers serving the area failed to timely start and complete needed construction and upgrades of the transmission lines and facilities in and around the McCamey area. This lack of transmission capacity in the McCamey area, in turn, resulted in ERCOT curtailment instructions to the Wind Farms for various periods.

The Wind Farms claimed the curtailment instructions „ prevented them from generating all of the energy that they were capable of producing and resulted in their failure to meet the minimum annual quantities required under the contracts. They further contended that TXUPM was required to ensure adequate transmission capacity as part of its contractual obligation to provide transmission services under section 2.03 of the contracts. The Wind Farms argued TXUPM’s failure to do so was a material breach that not only excused their failure to deliver the annual minimum quantities but also entitled them to damages. TXUPM disputed the Wind Farms’ interpretation of section 2.03, arguing it had no obligation to ensure adequate transmission capacity under the plain language of the contracts.

The parties filed cross-motions for partial summary judgment with respect to the proper construction of section 2.03. The trial court granted the Wind Farms’ motion, declaring section 2.03 unambiguously required TXUPM to provide transmission capacity as part of its obligation to provide all services necessary to transmit energy from the Wind Farms to TXUPM’s customers. Both parties then moved for a partial summary judgment with respect to the liquidated damage provision in the agreements. The Wind Farms argued that the $50 deficiency rate used to calculate the deficiency payments was void as an unenforceable penalty. TXUPM, on the other hand, argued that the deficiency rate was a valid measure of liquidated damages under which it was entitled to $25,948,250 for the Wind Farms’ failure to provide the minimum annual amounts of renewable energy from 2003 through 2005. The trial court ruled the liquidated damage provision in the contracts was an unenforceable penalty and precluded TXUPM from presenting evidence of liquidated damages at trial.

At trial, the Wind Farms did not dispute their failure to provide the minimum annual quantities of renewable energy as alleged by TXUPM. Accordingly, the issues before the jury were limited to: (1) whether TXUPM materially breached section 2.03 of the contracts; (2) which party breached the contracts first; (3) the amount of damages to which each party was entitled, if any; (4) whether TXUPM “covered” for the Wind Farms’ annual deficiencies; and (5) whether TXUPM breached a fiduciary duty to Pecos Wind I and Pecos Wind II. The jury awarded TXUPM $8.9 million in actual damages on its breach of contract claim. The jury found, however, that TXUPM had covered for the Wind Farms’ annual deficiencies. The jury also determined that, although TXUPM had breached its obligations under section 2.03 of the contracts, its breach was not material. Consequently, the jury awarded no damages to the Wind Farms on their breach of contract counterclaim. The jury rejected Pecos Wind I and Pecos Wind IPs breach of fiduciary duty claim against TXUPM, finding that TXUPM was not their agent for the purposes of scheduling electricity from these facilities.

Based on the jury’s finding of cover, the trial court disregarded the jury’s actual damage award to TXUPM and rendered judgment that TXUPM take nothing on its breach of contract claim. The trial court also rendered a take-nothing judgment on the Wind Farms’ breach of contract claim and the breach of fiduciary duty claim in accordance with the jury’s verdict. The final judgment incorporated the trial court’s previous summary judgment rulings declaring (1) section 2.03 of the contracts unambiguously required TXUPM to provide all services necessary to transmit electricity from the Wind Farms to TXUPM’s customers and included the obligation to provide transmission capacity; (2) the contracts’ liquidated damage clause was void under section 2.718(a) of the Texas Business and Commerce Code as an unenforceable penalty;- and (3) TXUPM was obligated to return $3,075 million it received as beneficiary of the Wind Farms’ letters of credit. This appeal and cross-appeal ensued.

II.

In its first issue, TXUPM challenges the trial court’s construction of section 2.03 found in each of the contracts. TXUPM argues that the trial court’s construction requiring it to provide transmission capacity under section 2.03 ignores the plain meaning of the section by adding obligations that are not included in the provision, effectively deleting the defined term “Net Energy” from the contracts, and conflicting with other provisions of the agreements. We agree.

The construction of an unambiguous contract is a question of law that we review de novo. MCI Tel. Corp. v. Tex. Utils. Elec. Co., 995 S.W.2d 647, 650-51 (Tex.1999). When an agreement is unambiguous, we utilize pertinent rules of contract construction, apply the plain meaning of the language used, and enforce the contract as written. See Vincent v. Bank of Am., N.A., 109 S.W.3d 856, 867 (Tex.App.-Dallas 2003, pet. denied). Our primary objective is to determine the true intentions of the parties as expressed in the writing. See Coker v. Coker, 650 S.W.2d 391, 393 (Tex.1983). To determine the parties’ intent, we examine the agreement as a whole, careful to give effect to all provisions so that none are rendered meaningless. Id. We do not consider extraneous evidence of the parties’ intent when construing an unambiguous contract. See Nat’l Union Fire Ins. Co. v. CBI Indus., Inc., 907 S.W.2d 517, 520 (Tex.1995). But evidence of circumstances surrounding the contract’s execution may be considered. See Sun Oil Co. (Delaware) v. Madeley, 626 S.W.2d 726, 731-32 (Tex.1982).

The contracts before us govern the Wind Farms’ production and delivery of “Net Energy,” which is defined as “the amount of electric energy in [megawatt-hours] produced by [the Wind Farms] and delivered to the Connecting Entity ... as metered by the Metering Equipment.” “Connecting Entity” is defined in the contracts as the entity that owns any transmission or distribution system to which the Wind Farms are interconnected. The contracts further provide that the “Delivery Point” is the interconnection between each wind farm and its respective Connecting Entity. Moreover, the contracts place the burden on the Wind Farms, at their own expense, to make all arrangements necessary to interconnect with the Connecting Entity.

Identical language for section 2.03 is set forth in each contract. It provides as follows:

Section 2.03 Transmission

(a) TXU Electric shall provide, by purchasing or arranging for, all services, including without limitation Transmission Services, Ancillary Services, any control area services, line losses except for line losses on Seller’s side of the Delivery Point, and transaction fees, necessary to deliver Net Energy to TXU Electric’s load from the Renewable Resource Facility throughout the Contract Term (“Required Transmission Services”). During the entire Production Term, Seller is responsible for line losses on Seller’s side of Delivery Point.
(b) “Transmission Service” is a service that allows a transmission service customer to use the transmission and distribution facilities of other electric and municipally owned utilities to efficiently and economically utilize generation resources to reliably serve its loads and to deliver energy to another transmission customer.
(c) “Ancillary Service” is a service necessary to support the transmission of energy from resources to loads while maintaining reliable operation of transmission service providers’ transmission systems in accordance with good utility practice.

The Wind Farms contend section 2.03 is a very broad provision that implicitly required TXUPM to ensure that the McCamey area had sufficient transmission capacity to enable them to produce as much electricity as atmospheric conditions would permit and to take whatever steps necessary to prevent area transmission congestion and the resulting ERCOT generation curtailments. The Wind Farms argue that because they cannot transmit energy anywhere, including to the delivery point, unless there is adequate transmission capacity already available to transmit that energy to TXU Electoic’s load, the contracts must necessarily require TXUPM to provide the conditions that allow them to generate energy in the first place by ensuring adequate transmission capacity.

The Wind Farms assert the language requiring that TXUPM provide “all services ... including without limitation Transmission Sendees, ... necessary to deliver Net Energy to TXU Electric’s load from the Renewable Resource Facility” is consistent with their interpretation (italics in the Wind Farms’ appellate brief). They further assert then- construction of the agreement is bolstered by the contracts’ definition of “Transmission Service” in subsection (b) as a service that allows a transmission service customer to deliver energy to another transmission customer. There are several problems with the Wind Farms’ construction.

First, as noted above, ERCOT curtailments address energy generation rather than energy transmission and there is nothing in the parties’ agreements requiring TXUPM to ensure the Wind Farms would be able to generate electricity or that the Wind Farms would be excused from deficiency payments resulting from any ERCOT curtailment orders. Instead, the plain language of section 2.03 clearly limits TXUPM’s transmission service obligations to those necessary to deliver “Net Energy” (energy generated and delivered to the delivery point) to TXUPM’s customers. Although the Wind Farms contend TXUPM’s obligation to provide transmission services begins at the generating facilities and not at the delivery point, this construction is contrary to the plain wording of the contract limiting the transmission services obligation to “Net Energy.” The contracts specifically define “Net Energy” as that amount of electric energy produced and delivered to the Connecting Entity.

The Wind Farms also point out the definition of “Transmission Service,” which uses the term “energy” instead of “Net Energy.” They contend this definition suggests that TXUPM’s transmission obligation extends to more than just the energy transmitted to the delivery point. We are not persuaded. A general definition describing the nature of a transmission service cannot be used to supplant TXUPM’s precise transmission service obligation for “Net Energy.” See Maxus Exploration v. Moran Bros., Inc., 773 S.W.2d 358, 363 (Tex.App.-Dallas 1989), aff'd, 817 S.W.2d 50 (Tex.1991) (specific contract language controls over general terms).

Secondly, there is nothing in the contracts that directly or indirectly includes transmission capacity as a transmission service. Recognizing this important fact, the Wind Farms contend that because the contracts provide no limitation with respect to “all services” in section 2.03(a), it necessarily includes transmission capacity because they cannot transmit energy if there is insufficient transmission capacity. As further support for their construction, the Wind Farms rely on a regulation promulgated by the Public Utility Commission of Texas (PUC) defining “transmission service” to include “construction or enlargement of facilities” and “transmission over distribution facilities.” See 16 Tex. Admin. Code § 25.5(141). This definition, however, is not part of, nor is it referenced in, the contracts before us. Because the contracts specifically define “transmission service,” we will not use a regulatory definition to alter the contracts’ specific definition of “transmission service.”

Additionally, as noted by TXUPM, section 2.02 of the contracts obligates the Wind Farms to interconnect with the ER-COT grid by making all arrangements with the transmission service provider that owns any transmission or distribution system with which the Wind Farms interconnect. As stated in the PUC substantive rules, the interconnection process is not limited to the construction of facilities necessary for a generating facility to connect to the grid but also involves the transmission service provider’s construction of system upgrades necessary to accommodate the energy anticipated to be generated by the new facility. See 16 Tex. Admin. Code § 25.195.

Finally, we find it significant that the one time “transmission capacity” is specifically mentioned in the contracts, it is used as an example in defining an “uncontrollable force.” Under section 6.02, a party is excused from performing its obligations under the agreement due to an uncontrollable force if certain criteria are met. We agree with TXUPM’s position that if it were responsible for ensuring adequate transmission capacity or availability under section 2.0B, then allowing it to avoid any contractual liability on this basis makes no sense.

Having reviewed the agreements as a whole, we conclude there is nothing in the language used that supports the trial court’s construction that within TXUPM’s explicit obligation to provide transmission services for “Net Energy” under section 2.03 was an additional obligation to provide adequate transmission capacity. Such a construction ignores the plain wording of the contracts and cannot be harmonized with other sections of the agreements. As such, the trial court erred in its construction of section 2.03.

III.

It is undisputed that the Wind Farms failed to deliver the contractually-required annual minimum amounts of renewable energy. Because we have rejected the construction of section 2.03 upon which the Wind Farms’ affirmative defense and breach of contract claim was based, the only issue remaining with respect to TXUPM’s breach of contract claim is damages. We therefore begin with the question of the validity of the contracts’ liquidated damage provisions. The Wind Farms specifically raised the affirmative defense of unenforceable penalty. TXUPM asserts the trial court erred in declaring the provision an unenforceable penalty because the Wind Farms did not meet their burden of proof.

A valid liquidated damage provision estimates in advance the just compensation to a party accruing from the failure to perform certain contractual obligations. See Valence Operating Co. v. Dorsett, 164 S.W.3d 656, 664 (Tex.2005); Stewart v. Basey, 150 Tex. 666, 245 S.W.2d 484, 486 (1952). In general, the issue of whether a contractual provision is an enforceable liquidated damage clause or an unenforceable penalty is a question of law for the court. See Phillips v. Phillips, 820 S.W.2d 785, 788 (Tex.1991). In making this determination, we examine whether the harm caused by the prospective breach of the contract is incapable or difficult of estimation and whether the amount of liquidated damages is a reasonable forecast of just compensation. Id.; Baker v. Int’l Record Syndicate, Inc., 812 S.W.2d 53, 55 (Tex.App.-Dallas 1991, no writ). The evidence concerning the difficulty of estimation and the reasonableness of the damages forecast must be viewed as of the time the contract was executed. Baker, 812 S.W.2d at 55. The party asserting that the provision is an unenforceable penalty has the burden of proof. See Fluid Concepts, Inc. v. DA Apartments Ltd., P’ship, 159 S.W.3d 226, 230-31 (Tex.App.Dallas 2005, no pet.). Where, as here, the parties have filed cross-motions for summary judgment, we may reverse and render the judgment that the trial court should -have rendered. See CU Lloyd’s of Tex. v. Feldman, 977 S.W.2d 568, 568 (Tex.1998) (per curiam).

In them motion for summary judgment, the Wind Farms asserted the provision requiring them to pay TXUPM $50 for each renewable energy. credit short of their annual minimum requirement was an unenforceable penalty because (1) TXUPM’s actual damages would be easy to calculate based on publicly available information at the time of any alleged breach, (2) the $50 figure was based on the $50 PUC penalty amount and, therefore, on its face, an unreasonable forecast of actual damages, and (3) the amount of liquidated damages sought by TXUPM is disproportionate to its actual damages.

The contracts provide that in the event of a “Net Deficiency” for a particular year, the Wind Farms were to make “Deficiency Payments” equal to the product of the difference between the “Net Deficiency” and the megawatt-hours of transferred renewable energy credits, times the “Deficiency Rate.” The initial “Deficiency Rate” in the contracts is “$50 per MWh, based upon the $50 per MWh number in PUC Substantive Rule § 25.173.” The contracts also specifically provide deficiency payments are “... intended to be liquidated damages and not a penalty.” Under this provision, TXUPM asserts it is entitled to $29,023,250 in liquidated damages for the Wind Farms’ total net deficiencies of 580,465 megawatt-hours from 2002 through 2005. This figure is obtained by calculating the difference between the minimum annual quantities of renewable energy due for the years in question and the actual amount of renewable energy credits the Wind Farms provided and multiplying that difference by $50.

We first address whether TXUPM’s damages from the Wind Farms’ failure to provide the minimum annual quantities of renewable energy were difficult or incapable of estimation. The Wind Farms assert that TXUPM could readily ascertain its damages from a future breach by simply multiplying the number of megawatt-hours or renewable energy credits they were short by the market price of a credit at the time of the breach. Although it is undisputed that the value of a renewable energy credit was not known at the time of contracting, the Wind Farms argue that the market price would be ascertainable at the time of the breach. But the Wind Farms provided no evidence that, at the time the parties executed the contracts, TXUPM would be able to easily estimate the harm from the Wind Farms’ failure to deliver the annual minimum quantities of renewable energy (which included not only renewable energy credits but also megawatt-hours of wind-powered energy).

In 2000, the year the contracts were executed, the Wind Farms were not yet operational, the production term was not scheduled to begin until over a year later, the annual quantity requirement did not take effect until 2002, the renewable energy credit trading program had not yet been implemented, and there was no existing market for such credits. In fact, it was unclear whether credits would be readily available from other sources in the event of the Wind Farms’ breach to ensure TXUPM had sufficient renewable energy credits to comply with the State’s renewable energy mandate. When viewed from the time of the contracts’ execution, we conclude the harm to TXUPM from the Wind Farms’ failure to meet the minimum annual quantities specified in contracts with a possible term of twenty years would be difficult or incapable of estimation. See Murphy v. Cintas Corp., 923 S.W.2d 663, 666 (Tex.App.-Tyler 1996, writ denied).

We next consider whether the liquidated damages amount is a reasonable forecast of just compensation. The Wind Farms argue that because the contracts simply adopted the PUC $50 penalty rate as the deficiency rate, the liquidated damage clause, on its face, is not a reasonable forecast of TXUPM’s anticipated damages as a matter of law. TXUPM counters that the summary judgment evidence supports its contention that the $50 deficiency rate bore a relationship to the actual damages it might suffer as a result of the breach. It asserts that the Wind Farms’ breach of the annual minimum quantities could potentially expose TXUPM to the PUC penalty. It also contends that the PUC $50 penalty approximated the value of the actual cost of one megawatt-hour of renewable energy. In fact, TXUPM presented summary judgment evidence that the Wind Farms submitted claims to ERCOT for losses incurred by the curtailments valuing one megawatt-hour of renewable energy and a renewable energy credit from $49.31 in January 2003 to $63.07 in May of 2003. Given this evidence, we conclude the Wind Farms failed to establish that the $50 deficiency rate was an unreasonable estimate of TXUPM’s actual damages. In reaching this conclusion, we necessarily reject the Wind Farms’ contention that public comments unrelated to the contracts that TXU Electric made objecting to the PUC penalty rate as too high proves their contention that the $50 deficiency rate set forth in the liquidated damage clause was a penalty.

The Wind Farms also argue the amount of liquidated damages was disproportionate to TXUPM’s actual damages. If the liquidated damages are proven to be disproportionate to the actual damages, the liquidated damages can be declared a penalty and recovery limited to actual damages. See Baker, 812 S.W.2d at 55. As the party asserting this defense, however, the Wind Farms must prove the amount of TXUPM’s actual damages to show the liquidated damages amount was not an approximation of the actual loss. Id. The only summary judgment evidence the Wind Farms offered in this regard was historical credit pricing information from August 22, 2002 through August 18, 2006 indicating the market value of a single renewable energy credit ranged from $4 to $16 during the relevant time period. They presented no evidence about the value of the wind energy that the Wind Farms failed to deliver. TXUPM, on the other hand, presented actual damage models for the Pecos I and Pecos II Wind Farms demonstrating its actual damages ranged from 73 to 79 percent of the aggregate liquidated damages. These models also showed that, for some years, liquidated damages were actually lower than TXUPM’s actual damages.

The Wind Farms also rely on the jury’s award of $8.9 million in actual damages to TXUPM to support them contention that the liquidated damages were disproportionate to TXUPM’s actual damages. Obviously, the jury award was not made at the time of the summary judgment hearing. It appears, moreover, that the jury award was based on testimony from the Wind Farms’ damages expert who indicated that TXUPM damages were $8.9 million. This $8.9 million figure did not include any damages for annual deficiencies caused by ERCOT curtailments. In contrast, the liquidated damages sought by TXUPM, which it presented in the summary judgment evidence, included the entirety of the calculated annual deficiencies, including those allegedly caused by ER-COT curtailments. Because the Wind Farms failed to meet their burden on the affirmative defense of penalty, we conclude the trial court erred in granting the Wind Farms’ summary judgment and declaring the liquidated damage provision unenforceable. Moreover, because the summary judgment evidence before the trial court established that, at the time of the contract’s execution, the harm from a prospective breach was difficult of estimation and the amount of liquidated damages was a reasonable forecast of just compensation, we conclude as a matter of law that the liquidated damage clause was enforceable.

IV.

In its appellate brief, TXUPM requests, among other things, that either we render judgment or remand to the trial court with instructions to render judgment for $36,733,700 in liquidated damages. This amount appears to include liquidated damages for the Wind Farms’ annual deficiencies occurring in 2006. The summary judgment evidence before the trial court, however, did not include any information on the alleged 2006 deficiencies. In fact, at the time of the summary judgment hearing, TXUPM’s live pleading only sought liquidated damages or actual damages for deficiencies occurring in 2003 and 2004. During trial, TXUPM sought leave of court to file a fifth amended petition including liquidated damages, or alternatively actual damages, for annual deficiencies in 2005 and 2006. After a hearing on the motion, the trial court denied the motion as it related to the 2006 annual deficiencies. Counsel for TXUPM then stated he was going to file a new lawsuit that day for the 2006 deficiencies and requested a ruling from the court that TXUPM was “expressly forbidden from seeking this so [the Wind Farms] don’t come up with some other argument that says, well, you had this other lawsuit and you should have brought in all of your claims in that lawsuit. So can we get the declaration that we are not allowed to bring these claims in this lawsuit.” There is no indication that the trial court made such a ruling. Four days after the trial court’s ruling on its motion to amend, however, TXUPM filed a sixth amended petition without objection omitting any reference to the 2006 annual deficiencies contained in its fifth amended petition and sought recovery only for annual deficiencies occurring in 2003 through 2005.

On appeal, TXUPM has challenged the trial court’s ruling denying its trial amendment to the extent it sought recovery for the 2006 annual deficiencies. In light of counsel’s statement immediately following the trial court’s ruling on its trial amendment and TXUPM’s later filing of a sixth amended petition removing any reference to the 2006 deficiencies, we conclude that in this case TXUPM abandoned the claim for 2006 damages. An amended pleading supercedes and supplants all previous pleadings. See Tex.R. Civ. P. 65; Radelow-Gittens Real Prop. Mgmt. v. Pamex Foods, 735 S.W.2d 558, 559 (Tex.App.-Dallas 1987, writ refused, n.r.e.). We have found nothing in the record before us indicating the trial court required TXUPM to file a sixth amended petition omitting the 2006 deficiencies. Because TXUPM abandoned its claim for damages based on the 2006 annual deficiencies after the trial court denied its trial amendment requesting these damages, it cannot now challenge that ruling in this appeal.

TXUPM also challenges that portion of the trial court’s judgment ordering it to return the $3,075,000 received from the Wind Farms’ letters of credit based on their alleged breach of the contract. This ruling was apparently based on the trial court’s determination that TXUPM take nothing on its breach of contract claims against the Wind Farms. Because we have determined that TXUPM is entitled to liquidated damages on its breach of contract claims against the Wind Farms, we will reverse that portion of the trial court’s declaratory judgment as well.

V.

Having concluded the trial court erred with respect to its construction of section 2.03 and its declaration about the enforceability of the liquidated damage provision, we need not address TXUPM’s issues on appeal involving cover and the admissibility of the testimony from the Wind Farms’ curtailment expert. Our resolution of these issues also makes it unnecessary to address the complaints raised in the Wind Farms’ cross-appeal because all of their issues depend on our affirming the trial court’s construction of section 2.03 and its declaration that the liquidated damages provision is an unenforceable penalty.

We affirm that part of the trial court’s judgment ordering the Wind Farms take nothing on their claims for damages. We reverse and render judgment declaring that (1) section 2.03 of the contracts does not require TXUPM to provide transmission capacity as part of its obligation to provide all services necessary to deliver Net Energy to its customers from the Wind Farms and (2) the contracts’ liquidated damage provision is an enforceable liquidated damage clause. We reverse the remainder of the tidal court’s judgment and remand the cause to the trial court for further proceedings.

      . ERCOT serves most of Texas, although there are two other regional power grids that serve parts of the state. See Pub. Util. Com’n, 53 S.W.3d at 312.

      . FPL Energy, LLC constructed Pecos Wind I and Pecos Wind II. It acquired the Indian Mesa Wind Farm in 2002.

      .A renewable energy credit is a tradable instrument representing the generation attributes of one megawatt-hour of electricity from a renewable energy resource, such as a wind-powered generation facility. See 16 Tex Admin Code § 25.5(108).

      . "Renewable energy” is defined in the agreements as the combination of renewable energy credits and the contractually-defined "Net Energy" produced by the wind-powered generation facilities.

      . At times, the total amount of electric energy to be transmitted onto the ERCOT grid from the various generating facilities in a particular area may reach high volumes such that the transmission lines in a particular area cannot accommodate all of the electric energy capable of being generated. In such circumstances, ERCOT instructs certain facilities to limit or curtail their generation of electric energy for periods of time to reduce transmission congestion.

      . Once generated, electric energy cannot be stored and must be immediately transmitted to its destination. FPL Energy Upton Wind I, L.P. v. City of Austin, 240 S.W.3d 456, 458 n. 2 (Tex.App.-Amarillo 2007, no pet.). Thus, ERCOT curtailment instructions effectively limit energy generation rather than energy transmission. Id.

      . Implicit in the Wind Farms’ contention is that, had TXUPM provided adequate transmission capacity in the McCamey area for the energy the Wind Farms were capable of producing, the transmission congestion would not have existed and ERCOT would not have issued curtailment instructions limiting the Wind Farms’ generation of electricity.

      . Although the trial court did not explicitly deny TXUPM’s motion, its denial is implicit in the granting of the Wind Farms’ motion.

      . This amount does not include the deficiencies for 2002 because, before filing its lawsuit, TXUPM had applied funds from the Wind Farms’ contractually required letters of credit to satisfy the deficiency payments for 2002.

      . The trial court rendered an oral ruling on these summary judgment motions on May 24, 2007, during a hearing on pretrial motions.

      . “Cover” is the purchase of goods in substitution of those due from a defaulting seller. See Tex. Bus. & Com.Code Ann. § 2.712 (Vernon 1994).

      . The trial court reasoned that TXUPM’s failure to submit any evidence of its cover damages precluded any recovery in light of the jury's finding.

      . The trial court also denied both parties’ requests for attorney’s fees but awarded costs to the Wind Farms as the prevailing party.

      . The connecting entity is necessarily a transmission service provider because it is defined as an entity that owns a transmission or distribution system.

      . This is where the electricity enters the ER-COT grid.

      . The contracts specifically provide that if the Connecting Entity is TXU Electric, a separate agreement is required to address interconnection issues.

      . In the event of a net deficiency, the contracts permitted the Wind Farms to transfer to TXUPM renewable energy credits not produced by the Wind Farms to partially offset the net deficiency.

      . The contracts further provided that the $50 deficiency rate would be adjusted automatically to reflect any amended rate in section 25.173.

      .After TXUPM applied the letter of credit proceeds to the deficiency payments due, the amount due was reduced to $25,948,250, which we previously recited in part I.

      . The amount requested also does not credit TXUPM with the $3,075,000 it received from the Wind Farms' letters of credit.

      . TXUPM's summary judgment evidence includes a report from TXUPM’s contract manager setting forth the Wind Farms' annual deficiencies for 2002 through 2005 and calculating the resulting liquidated damages due after allowing for application of the proceeds from the Wind Farms’ letters of credit. The only record citation in TXUPM’s appellate brief with respect to the 2006 annual deficiencies is its own sixth amended response to defendant's requests for disclosure that is attached to its motion for trial amendment.

      .TXUPM’s fourth amended petition noted the annua] deficiencies for 2002 had been satisfied by applying the funds it had received from the Wind Farms’ letters of credit.


source: Caselaw Access Project

author: KAREN ANGELINI, Justice.

license: Public Domain

text:
    CMH HOMES, INC.; Vanderbilt Mortgage and Finance Company, Inc.; Bruce Robin Moore, Jr., Appellants, v. Adam PEREZ, Appellee.
    No. 04-10-00259-CV.
    Court of Appeals of Texas, San Antonio.
    July 28, 2010.
    Augustin Rivera Jr., Dunn, Weathered, Coffey, Rivera & Kasperitis, Jorge C. Ran-gel, Attorney at Law, Corpus Christi, TX, Scott A. Brister, Lino Mendiola III, David Whittlesey, Andrews Kurth, LLP, Austin, TX, for Appellant.
    Brendan K. McBride, McBride Law Firm, San Antonio, TX, David L. Rumley, Wigington Rumley, L.L.P., Corpus Christi, TX, for Appellee.
    Sitting: KAREN ANGELINI, Justice, PHYLIS J. SPEEDLIN, Justice, STEVEN C. HILBIG, Justice.
   OPINION

Opinion by:

KAREN ANGELINI, Justice.

CMH Homes, Inc., Vanderbilt Mortgage and Finance, Inc., and Bruce Robin Moore, Jr., (hereinafter “CMH Homes”), appeal from an interlocutory order compelling arbitration and appointing an arbitrator. CMH Homes seeks reversal of the portion of the trial court’s order appointing an arbitrator. In response, the appellee, Adam Perez, argues this court lacks jurisdiction over this appeal. We agree, and therefore, dismiss this appeal for lack of jurisdiction.

BACKGROUND

CMH Homes sold a mobile home to Peréz. The retail installment contract signed by CMH Homes and Perez provides for “arbitration by one arbitrator selected by Seller with Buyer’s Consent.” The arbitration agreement also states it is governed by the Federal Arbitration Act (FAA). Thereafter, Perez filed suit against CMH Homes, alleging violations of the Texas Deceptive Trade Practices Act and fraud. Perez later filed a motion asking the trial court to compel arbitration and appoint an arbitrator. CMH Homes opposed the motion to the extent it sought the appointment of an arbitrator.

The trial court held a hearing on the motion to compel arbitration. At the hearing, CMH Homes argued the appointment of an arbitrator by the trial court would be premature. Nevertheless, the trial court signed an order compelling arbitration and appointing a particular arbitrator. CMH Homes filed this interlocutory appeal pursuant to Section 51.016 of the Texas Civil Practice and Remedies Code. See Tex. Civ. Prac. & Rem.Code Ann. § 51.016 (Vernon 2009).

Discussion

A party may not appeal an interlocutory order unless authorized by statute. Bally Total Fitness Corp. v. Jackson, 53 S.W.3d 352, 355, 359 (Tex.2001). We construe statutes granting interlocutory appeals strictly because they are a narrow exception to the general rule that interlocutory orders are not immediately appeal-able. Tex. A & M Univ. Sys. v. Koseoglu, 233 S.W.3d 835, 841 (Tex.2007).

In 2009, the Texas Civil Practice and Remedies Code was amended to add Section 51.016. Under Section 51.016, in a matter subject to the FAA, a party may appeal from a “judgment or interlocutory order” “under the same circumstances that an appeal from a federal district court’s order or decision would be permitted by” Section 16 of the FAA. Tex. Civ. Prac. & Rem.Code Ann. § 51.016 (Vernon 2009). Section 16 of the FAA, titled, “Appeals,” provides:

(a) An appeal may be taken from—
(1)an order—
(A) refusing a stay of any action under section 3 of this title,
(B) denying a petition under section 4 of this title to order arbitration to proceed,
(C) denying an application under section 206 of this title to compel arbitration,
(D) confirming or denying confirmation of an award or partial award, or
(E) modifying, correcting, or vacating an award;
(2) an interlocutory order granting, continuing, or modifying an injunction against an arbitration that is subject to this title; or
(3) a final decision with respect to an arbitration that is subject to this title.

9 U.S.C. § 16(a).

Here, the parties agree their dispute is subject to arbitration under the FAA. Moreover, CMH Homes acknowledges the interlocutory order appealed from in this case, an order appointing a particular arbitrator, is not one of the orders expressly mentioned in Section 16(a)(1) of the FAA. CMH Homes argues, nevertheless, that this court has jurisdiction over this appeal because “at least four federal circuit courts have entertained interlocutory appeals from such orders.” We disagree. As Perez correctly points out, three of the cases cited by CMH Homes never mention Section 16 of the FAA. See ACEquip. Ltd. v. Am. Eng’g Corp., 315 F.3d 151, 155-57 (2d Cir.2003); Nat’l Am. Ins. Co. v. Transamerica Occidental Life Ins. Co., 328 F.3d 462, 464-66 (8th Cir.2003); ATSA of Calif., Inc. v. Cont’l Ins. Co., 754 F.2d 1394, 1395-96 (9th Cir.1985). And, as Perez further points out, the only case cited by CMH Homes that expressly mentions Section 16 appears to involve a final, rather than interlocutory, order. See Universal Reins. Corp. v. Allstate Ins. Co., 16 F.3d 125, 127 (7th Cir.1994). Having examined the cases cited by CMH Homes, we conclude that none of them demonstrates this court’s jurisdiction under Section 51.016 of the Texas Civil Practice and Remedies Code.

We conclude we have no jurisdiction over this appeal. In addition, we deny CMH Homes’s alternative request to construe its brief in this appeal as a petition for a writ of mandamus. This appeal is dismissed for lack of jurisdiction.


author: KEM THOMPSON FROST, Justice. WILLIAM J. BOYCE, Justice,

text:
    Charles W. BURNETT, Appellant, v. David SHARP, Appellee.
    No. 14-09-00420-CV.
    Court of Appeals of Texas, Houston (14th Dist.).
    Oct. 21, 2010.

      Charles W. Burnett, Rosharon, pro se.
    David Sharp, Angleton, for appellee.
    Panel consists of Justices FROST, BOYCE, and SULLIVAN.
   MAJORITY OPINION

KEM THOMPSON FROST, Justice.

This is an appeal from a case in which a client sued his former lawyer alleging that the lawyer refused to return the unearned part of a fee retainer. The main issue is whether, under a de novo standard of review, the trial court erred in concluding that each of the client’s claims is based on an “indisputably merit less legal theory.” The client’s claims for breach of fiduciary duty, money had and received, and conversion are not based on indisputably merit less legal theories, but the client’s negligence and intentional-misrepresentation claims are based on indisputably merit less legal theories. Accordingly, the trial court’s judgment is affirmed in part and reversed and remanded in part.

1. Factual and ProceduRal Background

Appellant Charles W. Burnett is an inmate housed in the Texas Department of Criminal Justice, Institutional Division. He filed suit in forma pauperis against appellee David Sharp, a Texas lawyer. In his petition, Burnett alleges that Sharp represented him in a criminal case and that he gave Sharp a $3,000 retainer for legal services. Burnett alleges that Sharp refused to return the unearned part of the retainer after Burnett replaced Sharp with another lawyer. Before service of process was accomplished, and without a hearing, the trial court signed an order dismissing Burnett’s case with prejudice on grounds that Burnett “failed to state a cause of action as a matter of law.” Burnett appeals from the trial court’s dismissal order.

II. Analysis

A. Did the trial court dismiss the claims under Chapter 14 of the Texas Civil Practice and Remedies Code?

In its dismissal order the trial court states that Burnett “failed to state a cause of action as a matter of law,” without citing to any case, statute, or other legal authority. As a threshold matter, we consider whether, in dismissing Burnett’s claims, the trial court was acting under Chapter 14 of the Texas Civil Practice and Remedies Code, which governs inmate in forma pauperis lawsuits. See Tex. Civ. Prac. & Rem.Code Ann. §§ 14.001-014 (Vernon 2009). A trial court may dismiss an inmate’s claims under Chapter 14, “either before or after service of process, if the court finds that ... the claim is frivolous or malicious [.] ” Id. § 14.003(a)(2). The court “may” hold a hearing “before or after service of process,” and may do so “on motion of the court, a party, or the clerk of the court.” Id. § 14.003(c). In Minix v. Gonzales, this court determined that an order substantially similar to the one under review constituted an order dismissing the claims as frivolous under sections 14.003(a)(2) and (b)(2) because the claims had “no arguable basis in law.” See Tex. Civ. Prac. & Rem.Code Ann. § 14.003(a), (b); Minix v. Gonzales, 162 S.W.3d 635, 637 (Tex.App.-Houston [14th Dist.] 2005, no pet.). In other opinions this court has followed Minix and has equated a determination that an inmate “failed to state a cause of action as a matter of law” with a determination that an inmate’s claim “has no arguable basis in law” under sections 14.003(a)(2) and (b)(2). See Ramon v. Dow, No. 14-07-01024-CV, 2009 WL 508427, at *1 (Tex.App.-Houston [14th Dist.] Mar. 3, 2009, no pet.) (mem. op.); Gardner v. Tex. Dep’t of Crim. Justice, No. 14-07-00992-CV, 2009 WL 87594, at *1 (Tex.App.-Houston [14th Dist.] Jan. 15, 2009, pet. denied) (mem.op.). But, in two other post -Minix opinions, without citing Minix, this court has concluded that an order dismissing an inmate’s claim because the inmate “failed to state a cause of action as a matter of law” was not a dismissal under Chapter 14. See Anthony v. Owens, No. 14-07-01077-CV, 2009 WL 4250762, at *1 (Tex.App.-Houston [14th Dist.] July 7, 2009, no pet.) (mem.op.); Cooper v. Tex. Dep’t of Crim. Justice, No. 14-07-00741-CV, 2009 WL 1312944, at *1 (Tex.App.-Houston [14th Dist.] May 12, 2009, no pet.) (mem.op.). The Anthony and Cooper courts, after noting that the respective appellants had not challenged the trial court's dismissal without a hearing and for a basis not stated in Chapter 14, addressed the appellants’ complaints premised on a Chapter 14 dismissal and concluded that the complaints would lack merit even if the tidal court had dismissed the claims under Chapter 14. See Anthony, 2009 WL 4250762, at *1-3; Cooper, 2009 WL 1312944, at *1-3.

In part of his appellate brief, Burnett asserts that the trial court erred by dismissing his claims for “failure to state a claim” because this is not a proper basis for dismissal under Chapter 14. Under Minix, the trial court’s dismissal based on a determination that Burnett “failed to state a cause of action as a matter of law” is equivalent to a dismissal based on a determination that Burnett’s claims are frivolous because they have “no arguable basis in law.” Minix, 162 S.W.3d at 637. The panels in Anthony and Cooper did not distinguish or purport to apply Minix. See Anthony, 2009 WL 4250762, at *1; Cooper, 2009 WL 1312944, at *1. Research does not reveal a decision from a higher court or this coui't sitting en banc that is on point and conti*ai-y to this part of Mi-nix, nor is thei'e an intervening and material change in the statutory law. Therefore, we are bound by this pi'ior holding in Minix rather than the decisions in Anthony and Cooper. See Chase Home Fin., L.L.C. v. Cal. W. Reconveyance Corp., 309 S.W.3d 619, 630 (Tex.App.-Houston [14th Dist.] 2010, no pet.) (stating that, absent a decision from a higher court or this court sitting en banc that is on point and contrary to the prior panel holding or an intervening and material change in the statutory law, this court is bound by the prior holding of another panel of this court); see also Lucky-Goldstar, Int’l (America), Inc. v. Phibro Energy Int’l, Ltd,., 958 F.2d 58, 60 (5th Cir.1992) (stating that, if one panel of a court of appeals fails to apply or distinguish a prior panel holding that is on point, a third panel of that court is bound by the holding of the first panel rather than the second panel). Under the Minix holding, we construe the trial court’s determination that Burnett “failed to state a cause of action as a matter of law” to be a determination that Burnett’s claims have “no arguable basis in law” under sections 14.003(a)(2) and (b)(2). See Minix, 162 S.W.3d at 637.

B. What claims did Burnett plead?

In determining the nature of claims in a petition to which the trial court sustained no special exceptions, this court must construe the pleading liberally in the pleader’s favor and construe the petition to include all claims that reasonably may be inferred from the language used in the petition, even if the petition does not state all the elements of the claim in question. See London v. London, 192 S.W.3d 6, 13 (Tex.App.-Houston [14th Dist.] 2005, pet. denied) (concluding that if trial court has not sustained any special exceptions as to a petition, then it should be liberally construed). The author of the concurring and dissenting opinion urges a departure from this rule, arguing that it should not be applied to petitions subject to Chapter 14 that are dismissed before service of process is effected. Carving out such an exception would contravene longstanding policy that courts should read pleadings liberally to reach the merits of the claims asserted rather than passing on the merits at the pleading stage. The application of the liberal-construction-of-pleadings rule is not based on whether a defendant has had an opportunity to assert special exceptions; rather, this rule is based on the general policy of liberally construing a pleading except to the extent that the trial court has ordered the pleader to cure specific defects in the pleading. For this reason, courts construing inmate petitions dismissed before service of process also construe the inmate petitions liberally. See Lagaite v. Boland, 300 S.W.3d 911, 913 (Tex.App.-Amarillo 2009, no pet.) (stating court must liberally construe inmate petition dismissed before service of process); Presiado v. Sheffield, 230 S.W.3d 272, 275 (Tex.App.-Beaumont 2007, no pet.) (construing liberally inmate petition dismissed before service of process based on trial court’s failure to sustain special exceptions); Perales v. Kinney, 891 S.W.2d 731, 732 (Tex.App.-Houston [1st Dist.] 1994, no pet.) (same as Lagaite). There is no legal authority to support a departure from the liberal-construction-of-pleadings rule in this context and no compelling reason to create or apply a different rule.

Under a liberal construction of the petition, Burnett alleges the following:

• In June 2006, Burnett retained Sharp, a lawyer, to represent him in a criminal matter.
• Burnett gave Sharp a $3,000 retainer.
• Sharp had Burnett’s case reset five times but did not provide any other legal services before Burnett replaced Sharp with another lawyer.
• Burnett called Sharp’s office once, and Burnett’s family called Sharp many times on behalf of Burnett, requesting a refund of the unearned portion of the retainer.
• Burnett served Sharp with a written demand for the return of the unearned portion of the retainer. Sharp did not respond to this demand, nor did Sharp return any part of the unearned retainer to Burnett.
• Sharp breached his fiduciary duty to Burnett by refusing to return the unearned part of Burnett’s retainer.
• Sharp committed legal malpractice, negligence, and “deception.”
• Burnett is seeking compensatory damages in the amount of $10,000.

Under a liberal construction of his petition, Burnett has pleaded claims for breach of fiduciary duty, money had and received, conversion, negligence, and intentional misrepresentation. See London, 192 S.W.3d at 13 (holding that pleading was sufficient to assert a claim for money-had and received, under which the only thing that needs to be proved “‘is that defendant holds money which in equity and good conscience belongs to [the plaintiff]’ ”) (quoting Staats v. Miller, 150 Tex. 581, 243 S.W.2d 686, 687 (Tex.1951)); Vickery v. Texas Carpet Co., Inc., 792 S.W.2d 759, 763 (Tex.App.-Houston [14th Dist.] 1990, writ denied) (stating that conversion is the unauthorized exercise of dominion and control over property inconsistent with or to the exclusion of another’s superior rights in that property); Avila v. Havana Painting Co., 761 S.W.2d 398, 399-400 (Tex.App.-Houston [14th Dist.] 1988, writ denied) (holding that lawyer breached his fiduciary duty by refusing to return to former client funds in his possession which the former client was entitled to receive). The next question is whether the trial court erred in concluding that these claims have no arguable basis in law.

C. Do Burnett’s claims have an arguable basis in law?

Whether a claim has an arguable basis in law is a legal question to be reviewed de novo. In re Humphreys, 880 S.W.2d 402, 404 (Tex.1993); Retzlaff v. Tex. Dep’t of Crim. J., 94 S.W.3d 650, 653 (Tex.App.-Houston [14th Dist.] 2002, pet. denied). A claim has no arguable basis in law only if it is based on (1) wholly incredible or irrational factual allegations; or (2) an indisputably merit less legal theory. See Nabelek v. Dist. Attorney of Harris County, 290 S.W.3d 222, 228 (Tex.App.Houston [14th Dist.] 2005, pet. denied). An inmate’s claim may not be dismissed merely because the court considers the allegations “unlikely.” See Nabelek, 290 S.W.3d at 228. If Burnett’s claims have an arguable basis in law, then the trial court erred in dismissing them as frivolous. See Retzlaff, 94 S.W.3d at 654. Burnett’s claims are not based on wholly incredible or irrational factual allegations. Therefore, the main issue on appeal is whether each of Burnett’s claims is based on an indisputably merit less legal theory.

1. Breach-of-Fiduciary-Duty Claim

This court noted in Avila that, under a provision of the former Code, of Professional Responsibility, a lawyer was required to promptly pay or deliver to the client all funds in the possession of the lawyer which the client was entitled to receive. See Avila, 761 S.W.2d at 400. The Avila court concluded that a lawyer’s failure to promptly pay or deliver such funds constitutes a breach of fiduciary duty. See id. In Avila, this court held that a lawyer breached his fiduciary duty by refusing to tender funds recovered for the client in a collection suit until after the client sued the lawyer for return of the funds. See id. at 399^400. By the time the client sued the lawyer, the lawyer’s representation must have been terminated. See Stephenson v. LeBoeuf. See 16 S.W.3d 829, 836 (Tex.App.-Houston [14th Dist.] 2000, pet. denied) (stating that “[fin-deed it cannot be said there was any attorney-client relationship when Stephenson sued LeBoeuf for his unpaid attorney’s fees”). Therefore, the Avila court concluded that the lawyer had a fiduciary duty even after the lawyer’s representation of the client in the collection suit had ended. See Avila, 761 S.W.2d at 399-400. A lawyer who refuses to pay or deliver funds belonging to his former client upon termination of the representation has breached a fiduciary duty owed to the former client. See id.

The word fiduciary “ ‘refers to integrity and fidelity.’” Goffney v. Rabson, 56 S.W.3d 186, 193 (Tex.App.-Houston [14th Dist.] 2001, pet. denied) (quoting Kinzbach Tool Co. v. Corbett-Wallace Corp., 138 Tex. 565, 160 S.W.2d 509, 512 (1942)). A breach of fiduciary duty occurs when a lawyer benefits improperly from his representation of the client by, among other things, a “failure to deliver funds belonging to the client.” Watkins v. Plummer, No. 14-08-01040-CV, 2010 WL 2195459, at *6 (Tex.App.-Houston [14th Dist.] June 3, 2010, no pet. h.); Duerr v. Brown, 262 S.W.3d 63, 70-71 (Tex.App.Houston [14th Dist.] 2008, no pet.); Trousdale v. Henry, 261 S.W.3d 221, 230 (Tex.App.-Houston [14th Dist.] 2008, pet. denied); Goffney, 56 S.W.3d at 193. This court repeatedly has affirmed that a lawyer breaches his fiduciary duty if he refuses to give a client funds belonging to the client, and this court has never stated that this duty ceases if the client discharges the lawyer. See Watkins, 2010 WL 2195459, at *6; Duerr, 262 S.W.3d at 70-71; Trousdale, 261 S.W.3d at 230; Goffney, 56 S.W.3d at 193. Indeed, given that a client may be discharging his lawyer for good cause based on prior breaches by the lawyer of his fiduciary duty to the client, there are compelling reasons why this fiduciary duty should continue until the lawyer returns the client funds in his possession.

The author of the concurring and dissenting opinion concludes that a lawyer has a duty to return a client’s property upon demand during and after the representation but that this duty loses its fiduciary character when the client terminates the representation. In reaching this conclusion, the author relies upon a single case, Stephenson v. LeBoeuf. See 16 S.W.3d 829, 836 (Tex.App.-Houston [14th Dist.] 2000, pet. denied), which, unlike the case under review, did not involve a lawyer’s failure to return the unearned portion of the retainer.

In Stephenson, the lawyer’s representation of the client terminated in 1983. See id. Six years later, in 1989, the lawyer obtained a judgment against the former client for unpaid attorney’s fees. See id. at 834. In 1992, the lawyer was seeking to enforce his judgment lien by pursuing proceeds from the sale of the former client’s real property. See id. The former client asserted that the lawyer owed her a fiduciary duty in 1992 based on the representation that ended in 1983. See id. The former client contended that the lawyer breached this fiduciary duty by asserting a claim against the proceeds from the sale of her real property. See id. This court held that the lawyer owed no fiduciary duty based on the representation that had terminated more than eight years earlier. See id. In Stephenson, there was no unearned part of a retainer, and the former client did not allege that the lawyer failed to return any unearned retainer. See id. at 834-36.

The author of the concurring and dissenting opinion concludes that Sharp’s fiduciary duty and his attorney-client relationship with Burnett ceased when Burnett replaced Sharp with another lawyer, relying upon the Stephenson court’s statement that “[i]n the absence of an agreement to the contrary, an attorney-client relationship generally terminates upon the completion of the purpose of the employment.” Id. at 836. There is no sound reason why refusing to return client funds during the representation should be a breach of fiduciary duty but that refusing to return the same funds after the representation should not be a breach of fiduciary duty. Under Texas Disciplinary Rule of Professional Conduct 1.15(d), entitled “Declining or Terminating Representation,” upon termination of a representation, the attorney shall, to the extent reasonably practical, surrender property that the client is entitled to receive to the client and shall refund any advance payment of attorney’s fees that has not been earned. See Tex. Disciplinary R. Prof’l Conduct 1.15(d), reprinted in Tex. Gov’t Code, tit. 2, subtit. G, app. A (Tex. State Bar R. art. X, § 9). (Vernon 2005). Given that, upon termination of the representation, a lawyer has a duty to return any unearned part of the retainer and any other client property to which the client is entitled, the return of such property to the client would appear to be one of the purposes of the representation and therefore would be part of the attorney-client relationship under the statement in Stephenson. See Stephenson, 16 S.W.3d at 836. But even if the return of unearned retainer did not fall within the scope of the Stephenson court’s statement, the Stephenson court’s statement was not absolute; rather, the court spoke to what was “generally” the case. See id. The Stephenson court did not address whether a lawyer has a fiduciary duty to return to the client any unearned retainer upon termination of the representation. See id. at 834-36.

For the reasons stated above, if, as alleged, Sharp refused to return unearned retainer belonging to Burnett, then Sharp breached his fiduciary duty. Therefore, Burnett’s breach-of-fiduciary duty claim is not based on an indisputably merit less legal theory, and the trial court erred in dismissing this claim as frivolous under section 14.003(a)(2).

2. Claims for Money Had and Received and Conversion

If, as alleged, Sharp refused to return unearned retainer belonging to Burnett, then Sharp holds money which in equity and good conscience belongs to Burnett, and Sharp could be found to have exercised dominion and control over the unearned retainer in an unauthorized manner, inconsistent with or to the exclusion of Burnett’s superior rights in this property. See London, 192 S.W.3d at 13 (holding that under claim for money had and received, the only thing that needs to be proved “ ‘is that defendant holds money which in equity and good conscience belongs to [the plaintiff]’ ”) (quoting Staats, 243 S.W.2d at 687); Vickery, 792 S.W.2d at 763 (stating that conversion is the unauthorized exercise of dominion and control over property inconsistent with or to the exclusion of another’s superior rights in that property). Therefore, Burnett’s claims for money had and received and conversion are not based on indisputably merit less legal theories, and the trial court erred in dismissing these claims as frivolous under section 14.003(a)(2).

3. Negligence Claim

Burnett also alleged in a coneluso-ry manner that Sharp was negligent. But, notably, Burnett has not alleged that Sharp failed to exercise care, skill, or diligence or that Sharp exercised less care, skill, or diligence than would be exercised by lawyers of ordinary skill and knowledge. See Deutsch v. Hoover, Bax & Slovacek, L.L.P., 97 S.W.3d 179, 189 (Tex.App.-Houston [14th Dist.] 2002, no pet.) (stating that “[i]f the gist of a client’s complaint is that the lawyer did not exercise that degree of care, skill, or diligence as lawyers of ordinary skill and knowledge commonly possess, then that complaint should be pursued as a negligence claim”). If, as alleged, Sharp refused to return unearned retainer belonging to Burnett, this conduct would be actionable but it would not constitute professional negligence. See id. Therefore, we conclude that, to the extent Burnett asserted a negligence claim, the trial court did not err in dismissing this claim as frivolous under section 14.003(a)(2).

4. Intentional Misrepresentation Claim

Burnett also alleged in a concluso-ry manner that Sharp engaged in “deception.” Notably, however, Burnett has not alleged that Sharp made any material misrepresentation or that Sharp intended that Burnett act on any such misrepresentation or that Burnett acted in reliance on such a misrepresentation. See Ernst & Young, L.L.P. v. Pacific Mut. Life Ins. Co., 51 S.W.3d 573, 577 (Tex.2001) (stating elements of intentional-misrepresentation claim). If, as alleged, Sharp refused to return unearned retainer belonging to Burnett, this conduct would be actionable but it would not constitute intentional misrepresentation. Therefore, to the extent Burnett asserted an intentional-misrepresentation claim, the trial court did not err in dismissing this claim as frivolous under section 14.003(a)(2).

III. Conclusion

Burnett’s petition, liberally construed, contains claims for breach of fiduciary duty, money had and received, conversion, negligence, and intentional misrepresentation. The first three claims are not based on (1) wholly incredible or irrational factual allegations; or (2) indisputably merit less legal theories. Therefore, the trial court erred in dismissing these three claims as frivolous under section 14.003(a)(2). However, Burnett’s negligence and intentional-misrepresentation claims are based on indisputably merit less legal theories, and the trial court did not err in dismissing these claims as frivolous. Accordingly, to the extent the trial court dismissed with prejudice Burnett’s negligence and intentional-misrepresentation claims, the trial court’s judgment is affirmed. The remainder of the judgment is severed, reversed, and remanded for further proceedings consistent with this opinion,

BOYCE, J., concurring and dissenting.

SULLIVAN, J., concurring without opinion.

WILLIAM J. BOYCE, Justice,

concurring and dissenting.

I agree that the district court’s order operates as a dismissal of inmate Charles W. Burnett’s in forma pauperis action against his former attorney, David Sharp, under Chapter 14 of the Texas Civil Practice and Remedies Code. See Minix v. Gonzales, 162 S.W.3d 635, 637 (Tex.App.Houston [14th Dist.] 2005, no pet.) (citing Tex. Civ. Prac. & Rem.Code Ann. §§ 14.003(a)(2), (b)(2) (Vernon 2009)). I also agree that the trial court properly dismissed Burnett’s “negligence” claim against Sharp because that claim has no arguable basis in law under section 14.003(b)(2).

My disagreements focus on (1) the characterization of Burnett’s remaining claims against Sharp; (2) the explanation for an expansive characterization of Burnett’s remaining claims based upon the absence of special exceptions in a suit that was dismissed before service; and (3) the breach of fiduciary duty analysis.

This court should affirm the trial court’s dismissal of the “legal malpractice” claims Burnett labeled in his original petition as “breach of fiduciary duty,” “deception,” and “negligence.” It should reverse only the trial court’s determination that dismissal is with prejudice, and affirm the trial court’s judgment as modified to specify that dismissal is without prejudice. This court’s disposition is erroneous insofar as it reverses the trial court’s judgment as to breach of fiduciary duty and remands that claim for further consideration, along with claims for conversion and money had and received that Burnett did not assert.

Therefore, I join only sections I., U.A., and II.C.3. of this court’s opinion. I concur in this court’s judgment in part and respectfully dissent in part.

Analysis

We usually apply an abuse of discretion standard to review dismissal of claims brought in forma pauperis by an inmate. Hickman v. Adams, 35 S.W.3d 120, 123 (Tex.App.-Houston [14th Dist.] 2000, no pet.). But when a lawsuit is dismissed without a hearing pursuant to Chapter 14 because it “has no arguable basis in law,” our review is de novo. Minix, 162 S.W.3d at 637; Retzlaff v. Tex. Dep’t of Crim. Justice, 94 S.W.3d 650, 653 (Tex.App.-Houston [14th Dist.] 2002, pet. denied). A claim has no arguable basis in law if it is based on (1) wholly incredible or irrational factual allegations; or (2) an “ ‘indisputably meritless legal theory.’ “ Minix, 162 S.W.3d at 637 (quoting Gill v. Boyd Distrib. Ctr., 64 S.W.3d 601, 603 (Tex.App.-Texarkana 2001, pet. denied)).

In “Plaintiffs Original Petition,” Burnett complained “of and about David Sharp, Defendant, alleging legal malpractice.... ” This pleading included headings entitled “Parties and Service,” “Discovery Control Plan,” “Jury Demand,” “Jurisdiction and Venue,” “Facts,” and “Prayer.” The factual and legal bases for Burnett’s specific causes of action are alleged in numbered paragraphs in the “Facts” section of his pleading:

6. In June of 2006, plaintiff retained defendant to represent plaintiff in a criminal matter. Defendant received $3000.00 from plaintiff for [his] ... services.
7. Defendant made an appearance in court for plaintiffs first court appearance, and reset the cause.
8. Defendant made four additional court appearances for plaintiff, all of which defendant reset for the next month.
9. Defendant was replaced with another attorney. Defendant did not render any more services for the fee paid to defendant.
10. Plaintiff called defendant from the jail facility. Defendant’s secretary accepted one collect call from plaintiff. Afterwards, the secretary did not accept [any more] ... collect calls from plaintiff.
11. Plaintiffs family called defendant on many [occasions] ... to request a refund, minus defendant’s services rendered. Defendant failed to refund any of plaintiffs funds.
12. Plaintiffs family continued to call defendant requesting a refund until plaintiff served defendant a written request for a return of [his] ... funds in September of 2008. Defendant failed to respond nor did defendant refund plaintiffs funds.
13. Defendant has breached [his] ... fiduciary duty owed to plaintiff, by deception and negligence.

In the “Prayer,” Burnett asked that “Defendant be cited to appear and answer ....” He also asked for “compensatory damages in the amount of $10,000.00;” “punitive damages in the amount of $5,000.00;” and “all relief, in law and in equity, to which Plaintiff [may be] ... entitled.”

The factual allegations quoted above are neither irrational nor wholly incredible. Burnett alleges the existence of a dispute with his former attorney arising from Burnett’s post-termination request for a partial refund of the fee he paid to the attorney during the representation, and his attorney’s post-termination failure to do so. Burnett’s factual allegations provide no basis for concluding that his suit is frivolous.

Accordingly, the dispositive issue in this appeal is whether the pleaded legal theories are “ ‘indisputably meritless.’ “ Minix, 162 S.W.3d at 637 (quoting Gill, 64 S.W.3d at 603). Answering this question requires us first to identify Burnett’s pleaded legal theories. To do so, we must construe a pro se appellant’s brief and a pro se petition that was dismissed before service of process was accomplished on the defendant. There is no appellee’s brief and no trial court pleading by the defendant to assist us in identifying the causes of action at issue. Nor are these causes of action identified by name in the dismissal order. The order states that the trial court “reviewed the pleadings in the above referenced cause” and concludes as follows: “It appearing that the Plaintiff has failed to state a cause of action as a matter of law, it is ORDERED that the cause is dismissed with prejudice to the rights of the Plaintiff to refile the same.”

I. Determining Which Legal Theories Burnett Asserted Against Sharp

Identifying the legal theories Burnett pleaded is made more difficult by his appellate briefs nonspecific references to a “legal malpractice claim.” Burnett contends on appeal that he has asserted a non-frivolous claim for “legal malpractice.” He asserts that “[a]ll of the elements for a legal malpractice claim [were] presented in appellant’s petition.” Burnett does not refer in his brief to causes of action for “breach of fiduciary duty,” “deception,” or “negligence,” which are the labels he used in his petition.

This court has identified “a potential nomenclature problem ... caused by the fact that a legal malpractice claim’ might be thought of by some as any claim brought by a client against that client’s attorney.” Deutsch v. Hoover, Bax & Slovacek, L.L.P., 97 S.W.3d 179, 184 n. 1 (Tex.App.-Houston [14th Dist.] 2002, no pet.); see also Beck v. The Law Offices of Edwin J. (Ted) Terry, Jr., P.C., 284 S.W.3d 416, 427 n. 10 (Tex.App.-Austin 2009, no pet.). “[W]hen cases refer to ‘legal malpractice’ or ‘a legal malpractice claim,’ often they are referring to a negligence claim in which the issue is whether the attorney exercised that degree of care, skill, and diligence as attorneys of ordinary skill and knowledge commonly possess and exercise.” Deutsch, 97 S.W.3d at 184 n. 1. (citing Goffney v. Rabson, 56 S.W.3d 186, 190 (Tex.App.-Houston [14th Dist.] 2001, pet. denied)); see also Duerr v. Brown, 262 S.W.3d 63, 69-70 (Tex.App.-Houston [14th Dist.] 2008, no pet.).

Taking this potential nomenclature problem into consideration, the proper approach on appeal is to address the legal viability of Burnett’s “legal malpractice” claim under Chapter 14 by examining it in light of the specific “breach of fiduciary duty,” “deception,” and “negligence” labels he expressly invoked in his petition to describe his causes of action against Sharp.

II. Determining the Disposition of Burnett’s Legal Theories

A. Conversion and Money Had and Received

Burnett sued Sharp for “legal malpractice” based on an allegation that Sharp “has breached [his] ... fiduciary duty owed to plaintiff, by deception and negligence.” This allegation does not assert claims for conversion or money had and received.

Section II.B. of the plurality opinion explains a broad interpretation of Burnett’s allegation on grounds that Sharp did not file special exceptions to the original petition. In so doing, the plurality opinion relies on inapposite case law arising outside the Chapter 14 context. See London v. London, 192 S.W.3d 6, 13 (Tex.App.Houston [14th Dist.] 2005, pet. denied) (citing Boyles v. Kerr, 855 S.W.2d 593, 600-01 (Tex.1993)). This explanation does not withstand scrutiny because Sharp could not be expected to file special exceptions to a petition that was dismissed under Chapter 14 before it was served on him. Moreover, Sharp would not have been required to file special exceptions even if Burnett’s petition had been served on him. The absence of special exceptions has no bearing on whether Burnett asserted legally viable claims under Chapter 14. The erroneous incorporation of special exception standards into the Chapter 14 analysis threatens to sow confusion.

Chapter 14 operates according to its own distinct procedures. “Because a trial court is authorized to dismiss a claim before service of process, i.e., before the defendant has filed an answer, we find the court has continuing authority to dismiss a cause of action even where the defendant files no answer.” McCollum v. Mt. Ararat Baptist Church, Inc., 980 S.W.2d 535, 537 (Tex-App.-Houston [14th Dist.] 1998, no pet.) (original emphasis). “In fact, the applicability of chapter fourteen is not contingent on the defendant’s satisfaction of any procedural rule.” Id. (original emphasis). “This is consistent with the purpose of chapter fourteen which is ‘to control the flood of frivolous lawsuits being filed in the courts of this State by prison inmates, consuming valuable judicial resources with little offsetting benefit .’ “ Id. (quoting Hickson v. Moya, 926 S.W.2d 397, 399 (Tex.App.-Waco 1996, no pet)).

This reasoning has been applied to reject contentions that special exceptions are required before dismissal under Chapter 14. See Hughes v. Massey, 65 S.W.3d 743, 745 (Tex.App.-Beaumont 2001, no pet.) (Special exceptions are not required before dismissal of inmate’s in forma pauperis action under Chapter 14; “the inmate has no right to notice of a motion to dismiss or to an opportunity to amend.”); see also Bonds v. Rodriguez, No. 04-02-00156-CV, 2003 WL 141043, at *3 (Tex.App.-San Antonio Jan. 22, 2003, pet. denied) (mem.op.) (Special exceptions are not required before dismissal under Chapter 14; “[h]ad the Legislature intended to impose such a requirement on defendants in a suit subject to chapter 14, it would have done so. In fact, the Legislature indicated otherwise by permitting the trial court to dismiss a suit as frivolous even before process is served.”); Thomas v. Bush, No. 07-99-0302-CV, 2000 WL 21272, at * 3 (Tex.App.-Amarillo 2000 January 13, 2000, no pet.) (per curiam) (not designated for publication) (“Because a trial court is authorized to dismiss a claim before service of process, i.e., before the defendant has even filed an answer, we find that the court’s authority to dismiss a cause of action does not depend upon a defendant specially excepting to the petition).

Chapter 14 allows dismissal under circumstances in which dismissal would not be permitted in other contexts. Cf. Fort Bend County v. Wilson, 825 S.W.2d 251, 253 (Tex.App.-Houston [14th Dist.] 1992, no writ) (“Although Rule 12(b)(6) of the Federal Rules of Civil Procedure provides for a motion to dismiss for failure to state a claim upon which relief can be granted, the Texas Rules of Civil Procedure do not contain any analogous provision.... Under the Texas Rules of Civil Procedure, a special exception is the appropriate vehicle for urging that the plaintiff has failed to plead a cause of action, and the pleader must be given, as a matter of right, an opportunity to amend the pleading.”) (citing Centennial Ins. v. Commercial Union Ins., 803 S.W.2d 479, 482 (Tex.App.-Houston [14th Dist.] 1991, no writ), and Moseley v. Hernandez, 797 S.W.2d 240, 242 (Tex.App.-Corpus Christi 1990, no writ)). Because a defendant need not be served and need not file special exceptions before dismissal under Chapter 14 is appropriate, the absence of special exceptions cannot properly be relied upon to explain an expansive interpretation of the allegations made in an inmate’s in forma pauperis action. We should not mix apples and oranges.

Burnett did not plead causes of action for conversion or money had and received when he sued Sharp for “legal malpractice” based on an allegation that Sharp “breached [his] ... fiduciary duty owed to plaintiff, by deception and negligence.” The absence of special exceptions does not transform Burnett’s narrow allegation into a claim for conversion or money had and received. Therefore, this court errs when it concludes that the trial court erred under Chapter 14 by dismissing causes of action for conversion and money had and received that Burnett did not plead.

B. Breach of Fiduciary Duty

A legally viable claim for breach of fiduciary duty requires the existence of a fiduciary relationship between Burnett and Sharp. See, e.g., Trousdale v. Henry, 261 S.W.3d 221, 239 (Tex.App.-Houston [14th Dist.] 2008, pet. denied). Such a relationship existed while Sharp represented Burnett. See Duerr, 262 S.W.3d at 69. The attorney-client relationship ended upon Burnett’s termination of Sharp’s representation. See Stephenson v. LeBoeuf 16 S.W.3d 829, 836 (Tex.App.-Houston [14th Dist.] 2000, pet. denied). Under these circumstances, Burnett cannot rely upon a claim for breach of fiduciary duty to address a post-representation dispute with his former attorney that is based wholly on conduct alleged to have occurred after the representation ended.

The circumstances here parallel Stephenson, 16 S.W.3d at 836, in which this court rejected a breach of fiduciary duty claim in connection with a dispute over certain escrowed sums that arose in 1992 between attorney Stephenson and his former client LeBoeuf. “Stephenson argues his representation of LeBoeuf in her divorce could not give rise to a fiduciary duty with respect to the escrow account because that representation terminated upon her divorce in 1983.” Id. “We agree.” Id. “The attorney-client relationship is based [on] a contractual relationship in which the attorney agrees to render professional services for the client.” Id. “In the absence of an agreement to the contrary, an attorney-client relationship generally terminates upon the completion of the purpose of the employment.” Id. This court concluded that the terminated representation provided no basis for a breach of fiduciary duty claim by LeBoeuf predicated entirely on Stephenson’s conduct after the representation had ended. Id.

Just as there was no attorney-client relationship in existence when Stephenson committed the conduct of which LeBoeuf complained, here too there was no attorney-client relationship in existence when Sharp is alleged to have committed the conduct of which Burnett complains. Therefore, Burnett’s allegation does not present a legally viable claim for breach of fiduciary duty. See id.

Section II.C.l. of the plurality opinion relies on Avila v. Havana Painting Co., 761 S.W.2d 398, 399-400 (Tex.App.-Houston [14th Dist.] 1988, writ denied), for the proposition that “[a] lawyer who refuses to pay or deliver funds belonging to his former client upon termination of the representation has breached a fiduciary duty owed to the former client.” See ante, at 8. This reliance on Avila is misplaced.

The client hired attorney Avila to collect past-due accounts and paid him a fee to do so. Avila, 761 S.W.2d at 399. During the representation, Avila collected $8,755 belonging to the client but refused to tender that sum to the client and demanded payment of an additional fee. Id. The client then sued Avila, alleging that he “breached his fiduciary duty to his client, Havana, and ... converted funds which belonged to Havana.” Id. at 399-400. The trial court rendered judgment in the client’s favor following a bench trial, and Avila appealed. Id.

This court affirmed. Id. at 400. “At trial, Havana presented evidence that Avila received funds from Woodland Oaks Apartments which Havana was entitled to receive and that Avila refused to deliver those funds to Havana until Havana sued Avila and requested an injunction to compel Avila to release the funds.” Id. “Havana also presented evidence that it was necessary to hire an attorney to bring suit against Avila to collect the money to which Havana was entitled.” Id. This court held that sufficient evidence established Avila’s breach of his fiduciary duty to the client. Id.

Avila addresses an attorney’s conduct during the representation that breached a fiduciary obligation owed during the representation in connection with a fee dispute that arose during the representation and then continued after the representation ended. Id. Contrary to the plurality opinion’s conclusion, Avila does not establish that a breach of fiduciary duty claim is available to address a post-representation dispute between an attorney and a former client that is based wholly on attorney conduct occurring after the representation has ended. Therefore, Avila does not control the resolution of Burnett’s appeal. Stephenson does.

The plurality opinion cannot bolster its position by asserting that Sharp had a “duty” to refund to Burnett any unearned part of the retainer upon termination of his representation of Burnett. See ante, at 9-10 (citing Tex. Disciplinary R. Profl Conduct 1 .15(d), reprinted in Tex. Gov’tCode Ann., tit. 2, subtit. G, app. A (Vernon 2005) (Tex. State Bar R. art. X, § 9)). No additional clarity is provided by discussion of a free-floating “duty” that exists only in the abstract, untethered to a specific cause of action. In any event, this assertion does not resolve the fiduciary duty question because “[tjhese rules do not undertake to define standards of civil liability of lawyers for professional conduct.” Tex. Disciplinary R. Prof ‘1 Conduct Preamble: Scope ¶ 15, reprinted in Tex. Gov’t.Code Ann., tit. 2, subtit. G, app. A (Tex. State Bar R. art. X, § 9). “Violation of a rule does not give rise to a cause of action nor does it create any presumption that a legal duty to a client has been breached.” Id. “Accordingly, nothing in the rules should be deemed to augment any substantive legal duty of lawyers or the extra-disciplinary consequences of violating such a duty.” Id.

The plurality opinion’s approach would effect a significant change in this court’s ease law. Left unaddressed are the potential consequences of expanding far-reaching fiduciary obligations to encompass disputes between an attorney and a former client that are predicated entirely on attorney conduct occurring after the representation has ended. Because Avila focuses on a different situation, that decision also does not address the existence, duration, scope and consequences of a fiduciary duty that applies to a dispute based wholly on an attorney’s post-representation conduct.

We should follow Stephenson and affirm dismissal of Burnett’s claim for breach of fiduciary duty.

C. Negligence

A “legal malpractice” claim predicated on professional negligence focuses on whether an attorney represented a client with the requisite level of skill. Duerr, 262 S.W.3d at 70. “If the gist of a client’s complaint is that the attorney did not exercise that degree of care, skill, or diligence as attorneys of ordinary skill and knowledge commonly possess, then that complaint should be pursued as a negligence claim, rather than some other claim.” Deutsch, 97 S.W.3d at 189.

Burnett’s allegations do not support a legally viable claim against Sharp predicated on professional negligence. Burnett contends that Sharp failed to respond after Burnett replaced him with another attorney and then requested a partial refund of Sharp’s fee. Burnett does not challenge the quality of Sharp’s professional activity while he represented Burnett, and he does not contend that Sharp failed to exercise the degree of care, skill, or diligence commonly possessed by attorneys of ordinary skill. Therefore, Burnett’s “legal malpractice” claim is based on an indisputably meritless legal theory insofar as he asserts a claim for professional negligence arising from a post-termination dispute over a partial refund of the portion of Sharp’s fee that, according to Burnett, Sharp did not earn before being terminated. Cf. Duerr, 262 S.W.3d at 70 (professional negligence claims were predicated on allegations that attorneys mishandled filing of client’s requests for additional benefits pursuant to class settlement).

D. “Deception”

It is not clear whether Burnett’s pleaded claim for “deception” refers to a statutory claim under the Texas Deceptive Trade Practices Act (“DTPA”) or to common law fraud. Burnett fails to assert a legally viable claim for “deception” under either theory.

Burnett cannot assert a legally viable statutory cause of action for “deception” against Sharp under the circumstances alleged because the DTPA does not apply to “a claim for damages based on the rendering of a professional service, the essence of which is the providing of advice, judgment, opinion, or similar professional skill.” Tex. Bus. & Com.Code Ann. § 17.49(c) (Vernon Supp.2009). Burnett has not identified circumstances that would invoke an exception to this exemption. Cf. Latham v. Castillo, 972 S.W.2d 66, 69 (Tex.1998) (attorney engaged in “unconscionable action” under sections 17.50(a)(3) and 17.45(5) by making affirmative misrepresentation to client that he had filed lawsuit and was actively prosecuting it.).

Similarly, Burnett cannot assert a legally viable common law fraud claim absent circumstances in which Sharp made affirmative misrepresentations or failed to disclose information when there was a duty to disclose it. See, e.g., Johnson v. Brewer & Prichard, P .C., 73 S.W.3d 193, 211 n. 45 (Tex.2002) (fraud based on affirmative misrepresentation); Bradford v. Vento, 48 S.W.3d 749, 755 (Tex.2001) (“As a general rule, a failure to disclose information does not constitute fraud unless there is a duty to disclose the information.”). No such circumstances are described here.

III. Determining Whether Dismissal Should be With Prejudice

Burnett contends that the trial court erred in dismissing his claims “with prejudice.” Dismissal with prejudice constitutes an adjudication on the merits and operates as if the case had been fully tried and decided. Hickman, 35 S.W.3d at 124. Orders dismissing cases with prejudice have full res judicata and collateral estop-pel effect, barring subsequent litigation of the same causes of action or issues between the same parties. Id. Dismissal with prejudice is proper under Chapter 14 when an inmate’s failure to comply with statutory filing requirements cannot be remedied; otherwise, dismissal should be without prejudice. See id,.

Although Burnett’s allegations do not comport with his stated causes of action, I cannot say that Burnett’s failure to comply with Chapter 14’s requirements is beyond remedy given the gist of his factual allegations. Therefore, the proper disposition in this case is dismissal without prejudice. See Hickman, 35 S.W.3d at 124.

Conclusion

The trial court’s April 14, 2009 order dismissing Burnett’s suit with prejudice should be modified to state that Burnett’s suit is dismissed without prejudice. As modified, the April 14, 2009 dismissal order should be affirmed. Therefore, I concur in the court’s judgment in part and dissent in part.

SULLIVAN, J., concurring without opinion.

      . This is a majority opinion as to sections I., II A, and II.C.3. and a plurality as to the remainder.

      . All statutory references in this opinion are to the Texas Civil Practice and Remedies Code, unless otherwise specified.

      . The author of the concurring and dissenting opinion also states that it was not possible for Sharp to file special exceptions because he had not been served. In fact, defendants who have not been served with citation sometimes learn of the suit against them and file answers and special exceptions without ever having been served with process. See Tex.R. Civ. P. 121. In any event, for the reasons noted above, the liberal-construction-of pleadings rule is applied regardless of whether the defendant has been served or has responded to the suit.

      . Though neither the assertion nor sustaining of special exceptions is required before a trial court has the power to dismiss an inmate's claims under Chapter 14, this does not impugn application of the rule that petitions should be liberally construed absent tire sustaining of special exceptions. In a non-Chapter 14 case, defendants are not required to file special exceptions before seeking dismissal of a plaintiff's claims, yet the plaintiffs claims are liberally construed except to the extent that special exceptions have been sustained. See London, 192 S.W.3d at 13.

      .According to the author of the concurring and dissenting opinion, the conclusion that Burnett has pleaded conversion and money had and received is based on one sentence of his petition, which the author finds insufficient to plead these claims. See post at p. 606, 607. This analysis is not based on one sentence of the petition. Instead, the analysis is based on a liberal construction of the entire petition, including the pleaded facts upon which Burnett bases his claims. See Abraham & Co. v. Smith, No. 14-03-00163-CV, 2004 WL 210570, at *2 (Tex.App.-Houston [14th Dist.] Feb. 5, 2004, no pet.) (mem.op.) (liberally construing a petition to include a claim for breach of an orally modified contract based on factual allegations in the petition).

      . The author of the concurring and dissenting opinion asserts that Avila is not on point because Burnett’s breach-of-fiduciary-duty claim is based completely on conduct occurring after the representation ended. Presuming this distinction is valid, Burnett’s claim is based on Sharp's acceptance of the retainer while representing Burnett, and Sharp’s earning some but not all of the retainer during the representation. Therefore, Burnett's claim is not based completely on conduct occurring after the representation ended.

      . Though the author of the concurring and dissenting opinion asserts that this analysis would effect a significant change in the law, in light of this court’s opinions in Avila, Watkins, Duerr, Trousdale, and Goffney, this analysis is instead an application of existing law.

      . The Avila court used a somewhat similar provision under the former Code of Professional Responsibility as a standard for liability. See Avila, 761 S.W.2d at 400. There is no need to adopt Rule 1.15(d) as a standard for civil liability in this case to conclude that Burnett's breach-of-fiduciary duty claim is not based on an indisputably merit less legal theory. Instead, the cases cited in this opinion provide the basis for this conclusion.

      . Though the trial court erred in dismissing these three claims as frivolous under Chapter 14, the extent to which Burnett has evidence to support the allegations in his petition is not an issue before this court.

      . Because the problems with these two claims cannot be remedied, the trial court’s dismissal with prejudice as to these two claims was proper. See Hickman v. Adams, 35 S.W.3d 120, 124 (Tex.App.-Houston [14th Dist.] 2000, no pet).

      . Section 17.49(c)'s exemption does not apply to an express misrepresentation of a material fact that cannot be characterized as advice, judgment, or opinion; a failure to disclose information in violation of section 17.46(b)(24); an unconscionable action or course of action that cannot be characterized as advice, judgment, or opinion; breach of an express wari'anty that cannot be characterized as advice, judgment, or opinion; or a violation of section 17.46(b)(26), which prohibits sales of annuity contracts in cei'tain circumstances. See Tex. Bus. & Com.Code Ann. § 17.49(c)(l)-(5).