## Facts

- Carol C. Peeler, a corporate officer involved with government-securities firms, became the target of a federal IRS investigation concerning alleged illegal tax write-offs.
- Peeler retained attorney Darrell C. Jordan of Hughes & Luce, L.L.P. as criminal defense counsel, paying a $250,000 nonrefundable retainer plus hourly fees.
- After a lengthy investigation, a federal grand jury indicted Peeler on twenty-one counts; the same grand jury also indicted her husband and other principals.
- Peeler entered a plea bargain and signed a plea agreement admitting guilt to one count of aiding and assisting the filing of a false tax return under 26 U.S.C. § 7206(2), and she confirmed in court that her plea was voluntary.
- In exchange, the government dropped remaining charges against Peeler, dismissed all charges against her husband, and recommended a relatively short sentence; Peeler received a fine, restitution, and probation.
- Peeler later alleged the prosecutor had offered her absolute transactional immunity before the guilty plea and that Jordan negligently failed to communicate the offer; defendants disputed that any such offer existed.
- Peeler did not obtain reversal or other relief from her conviction before bringing suit.

## Issues

1. Whether a convicted criminal defendant who pleaded guilty may maintain a legal-malpractice action against criminal defense counsel without first obtaining exoneration of the conviction.

## Decision

- The Supreme Court of Texas affirmed summary judgment for Hughes & Luce and Jordan.
- The court held that public policy bars a malpractice recovery for conviction-related damages unless the plaintiff has been exonerated by direct appeal, post-conviction relief, or otherwise.
- Because Peeler remained convicted, her admitted criminal conduct was treated as the sole proximate cause of the indictment, conviction, and resulting injuries, defeating causation as a matter of law.

## Legal Principles

- A convicted criminal defendant generally cannot recover damages in a malpractice action arising from the criminal prosecution unless the defendant first obtains exoneration of the underlying conviction.
- Until a conviction is set aside, the law treats the conviction as valid and attributes the claimed injuries from the prosecution to the defendant’s own criminal conduct rather than counsel’s alleged negligence.
- The exoneration requirement serves public policy by preventing a plaintiff from shifting responsibility for a valid conviction to counsel and by avoiding civil relitigation that would effectively undermine existing criminal judgments.

## Conclusion

Texas law requires exoneration as a prerequisite to malpractice damages arising from criminal representation; absent such relief, the client’s admitted criminal conduct is treated as the legal cause of conviction-related harm, and the malpractice claim is barred.


Peeler v. Hughes & Luce, 909 S.W.2d 494 (Tex. 1995)