Reported / Citable
Background
Ray Douglas Griffith hired attorney Lindsay Steele to file a Chapter 13 bankruptcy petition in November 2019, primarily to protect his family’s 200-acre ranch in Cisco, Texas from a pending foreclosure by Lone Star Bank. The automatic stay successfully halted the foreclosure the day after filing. However, Steele allegedly failed to file required documents by a December 2, 2019 deadline — and did not seek an extension — causing the bankruptcy court to dismiss the case on December 4, 2019. With the automatic stay lifted, Lone Star proceeded with foreclosure. When Steele moved to reinstate the case, she did not seek expedited reinstatement, and the ranch was sold at a foreclosure sale on January 7, 2020 for $102,000, despite being valued at approximately $510,000 with only about $94,000 owed. The bankruptcy court reinstated the case seven days later.
Griffith retained separate counsel to pursue an adversary proceeding in bankruptcy court against Lone Star for breach of contract and wrongful foreclosure, seeking to undo the sale. The bankruptcy court ruled for Lone Star, and that ruling was affirmed by the Northern District of Texas and then by the Fifth Circuit Court of Appeals on January 30, 2023. Meanwhile, Steele continued to represent Griffith in the main Chapter 13 bankruptcy case through its completion; the bankruptcy court entered a discharge order on December 30, 2024. Griffith filed a legal malpractice and negligence suit against Steele on September 11, 2025.
Steele moved to dismiss under Texas Rule of Civil Procedure 91a, arguing the two-year statute of limitations had expired. The trial court agreed and dismissed Griffith’s claims with prejudice. Griffith appealed, arguing that Steele’s continued representation throughout the bankruptcy case tolled limitations until the December 2024 discharge.
The Court’s Holding
The Second Court of Appeals affirmed, holding that the Hughes tolling doctrine ended when the Fifth Circuit concluded Griffith’s appeals in the adversary proceeding on January 30, 2023 — not when the main Chapter 13 bankruptcy case concluded in December 2024. Under Hughes v. Mahaney & Higgins and its progeny, limitations on a legal malpractice claim are tolled only until “all appeals on the underlying claim are exhausted” or the resulting litigation is otherwise finally concluded. The court held that the adversary proceeding — which Griffith himself initiated specifically to “undo the results of Steele’s negligence” — was a freestanding lawsuit, totally separate from the main bankruptcy case, and constituted the “resulting litigation” for Hughes purposes.
The court rejected Griffith’s argument that the ongoing attorney-client relationship in the main bankruptcy case extended tolling. Because the adversary proceeding was independently appealable and its final judgment precluded relitigation of the ranch foreclosure issues, Griffith was on the clock to sue Steele once the Fifth Circuit issued its January 30, 2023 ruling. With the two-year period expiring no later than January 30, 2025, his September 11, 2025 filing was untimely by more than seven months.
The court also noted an additional wrinkle: Chapter 13 debtors carry an affirmative, ongoing duty to disclose all potential causes of action — including malpractice claims against their own bankruptcy counsel — as property of the bankruptcy estate. The court declined to engage in the policy-based analysis Griffith urged, following the Texas Supreme Court’s instruction in Apex Towing Co. v. Tolin to apply the Hughes rule categorically, without case-by-case examination of its underlying rationale.
Key Takeaways
- Under Texas law, Hughes tolling for legal malpractice runs only through the conclusion of the specific “resulting litigation” — here the adversary proceeding — not through the conclusion of a broader, related proceeding (the main bankruptcy case) in which the same attorney continued to appear.
- Adversary proceedings in bankruptcy are freestanding lawsuits separate from the main bankruptcy case; their final judgments are independently appealable and can trigger the end of Hughes tolling even while the underlying bankruptcy case remains open.
- Chapter 13 debtors must disclose potential legal malpractice claims against their own bankruptcy counsel as estate assets, an obligation that coexists with — and is independent of — the limitations analysis.
- Texas courts apply the Hughes tolling rule categorically; they will not undertake case-specific policy analysis to extend or contract the tolling period based on the practical consequences for a particular client.
Why It Matters
This decision clarifies for Texas practitioners the intersection of legal malpractice limitations and bankruptcy procedure. Clients who suffer harm from their bankruptcy attorney’s conduct and then pursue adversary proceedings to remedy that harm must treat the adversary proceeding as the limitations clock — not the overall bankruptcy case, even if the same attorney continues to represent them in the main case for years afterward. Waiting until the discharge order is entered, as Griffith did, will almost certainly be too late if an adversary proceeding was concluded more than two years earlier.
The case also serves as a reminder that Chapter 13 debtors have affirmative disclosure obligations that extend to malpractice claims against their own counsel, creating a potential conflict that attorneys in this position should recognize and address proactively. Clients and their successor counsel should carefully map the procedural history of any bankruptcy-related litigation — including adversary proceedings — before assuming that limitations are still tolled by an ongoing bankruptcy representation.