Opinion issued June 5, 2003
In The
Court of Appeals
For The
First District of Texas
NO. 01-02-00786-CV
IN RE ROSSIE L. ALLEN, JR. AND OLLIE FAYE HAGIN, Relators
Original Proceeding on Petition for Writ of Mandamus
MEMORANDUM OPINION
Relators, Rossie L. Allen, Jr. and Ollie Faye Hagin, filed a petition for writ of mandamus, asking this Court to direct the trial court to vacate its order of May 10, 2002 granting the motion of Sherie Allen Ford, the real party in interest, to disqualify relators’ counsel. We conditionally grant the petition.
BACKGROUND
Rossie L. Allen, Sr. died intestate in 1985. He was survived by his wife, Lillie B. Allen, two children, Rossie L. Allen, Jr. and Sherie Allen Ford, and a step-daughter, Ollie Faye Hagin. In 1990, Lillie Allen, Allen, Jr., and Ford agreed to form the Lillie B. Allen Family Trust to hold the property in Allen, Sr.’s estate. Lillie Allen, Allen, Jr., and Ford were the trustors, Lillie Allen was named as trustee, and Allen, Jr., Ford, and Hagin were the beneficiaries. The trust property consisted primarily of real estate that had been purchased by Lillie Allen and Allen, Sr. during their marriage. Family members lived on some of the property, and the rest of the property produced rental income.
In 1999, Ford filed an application to compel an accounting by the trustee, to remove the trustee, and to revoke the family trust. In June 2001, Ford filed an amended application in which she also sought damages for breach of fiduciary duty and named Allen, Jr. and Hagin as parties to be joined in the suit. Ford served Allen, Jr. and Hagin with citation, and Allen, Jr. and Hagin retained U. Lawrence Boze’, the trustee’s attorney, who answered for each of them on July 24, 2001 with a general denial and the assertion of various affirmative defenses.
On March 28, 2002, Ford filed a motion for disqualification of counsel in which she contended that the interest of the trustee and that of Allen, Jr. and Hagin, as beneficiaries, were opposed and that, under rule 1.06(a) of the Texas Disciplinary Rules of Professional Conduct, Boze’ could not represent the opposing parties.
Boze’ filed a verified response stating that he had disclosed to Allen, Jr. and Hagin the potential for conflict and that they had consented to his representation because they, like the trustee, disagreed with the contentions of the plaintiff in the amended application. Attached to this response were affidavits of Allen, Jr. and Hagin, asserting that they each supported their mother’s management of the trust, wanted the trust to continue, and were opposed to the position taken by Ford. Copies of documents relating to the trust were also attached to the affidavits. The trial court conducted a hearing on the motion to disqualify and, on May 10, 2002, signed an order granting the motion.
DISCUSSION
In their second issue, relators contend that the trial court failed to adhere to the standard required when considering a motion to disqualify counsel in that the trial court did not require Ford to establish a violation of a disciplinary rule.
Disqualification of a party’s counsel is a severe remedy, and courts must discourage use of the motion as a dilatory tactic by adhering to an exacting standard when considering motions to disqualify. Spears v. Fourth Court of Appeals, 797 S.W.2d 654, 656 (Tex. 1990). The burden is on the movant to establish with specificity the violation of one or more of the disciplinary rules. Id. We review a trial court’s ruling on a motion to disqualify counsel for abuse of discretion. See In re Meador, 968 S.W.2d 346, 350 (Tex. 1998). A trial court abuses its discretion when it acts without any reference to guiding rules or principles. Id. at 353.
The Texas Supreme Court has repeatedly stated that the disciplinary rules of professional conduct, although not necessarily controlling, are guidelines to be considered in deciding disqualification issues. See, e.g., In re Epic Holdings, Inc., 985 S.W.2d 41, 48 (Tex. 1998); Meador, 968 S.W.2d at 350 (and cases cited therein). A court has the power to disqualify an attorney, even though the attorney has not violated a specific disciplinary rule, under appropriate circumstances, such as when the attorney violates some duty to a client or former client. See Nat’l Med. Enters., Inc. v. Godbey, 924 S.W.2d 123, 129 (Tex. 1996) (compelling disqualification for violation of duty to protect co-defendant’s confidences under joint defense agreement).
In her motion for disqualification, Ford asserted “that the interest of Lillie B. Allen and that of both Rossie Allen, Jr., and Ollie Faye Hagan [sic] are diametrically opposes [sic] inasmuch as Lillie B. Allen is the Trustee from which Movant herein has sought an accounting and both Rossie Allen, Jr. and Ollie Faye Hagan are beneficiaries of such Trust.” Ford then cited rule 1.06(a) of the Texas Disciplinary Rules of Professional Conduct, which provides, “A lawyer shall not represent opposing parties to the same litigation.” Ford did not include in her motion any facts to support her contention that the interests of Allen, Jr. and Hagin were in opposition to the interests of Lillie Allen, nor did Ford present any supporting facts or evidence at the hearing on the motion. Therefore, the only support for the trial court’s order disqualifying Boze’ was the mere allegation of opposing interests. Such an allegation is not a sufficient basis for disqualification. See Spears, 797 S.W.2d at 656.
Relators, on the other hand, contend that subsections (b) and (c) of rule 1.06 apply to this case. We agree. Subsection (b) provides that a lawyer shall not represent a client whose interests are or may become materially and directly adverse to the interests of another client or the interests of the lawyer or the lawyer’s firm. Tex. Disciplinary R. Prof’l Conduct 1.06(b), reprinted in Tex. Gov’t Code Ann. tit. 2, subtit. G app. A, art. 10, § 9 (Vernon 1998) (Tex. State Bar R. art. X, § 9). Subsection (c) provides,
A lawyer may represent a client in the circumstances described in (b) if:
(1) the lawyer reasonably believes the representation of each client will not be materially affected; and
(2) each affected or potentially affected client consents to such representation after full disclosure of the existence, nature, implications, and possible adverse consequences of the common representation and the advantages involved, if any.
Id. 1.06(c).
In his verified response to the motion to disqualify, Boze’ stated that, before he began to represent Allen, Jr. and Hagin, he “disclosed to each of them the potential for any alleged conflict between them and Lillie Allen.” He further stated that, after this disclosure, Allen, Jr. and Hagin each agreed to be represented by him. Boze’ attached the affidavits of Allen, Jr., Hagin, and Lillie Allen to this response. Allen, Jr. and Hagin each averred that (1) they disagreed with Ford’s allegations against Lillie Allen and considered them to be unreasonable and outrageous, (2) they did not consider their position to be diametrically opposed to the position of Lillie Allen, and (3) Boze’ had explained that there could be a potential conflict in his representation of them and Lillie Allen in their respective positions as beneficiaries and trustee of the trust. Allen, Jr. and Hagin each stated that they understood the disclosure, but told Boze’ that they wanted him to represent them because they strongly disagreed with Ford’s allegations. Lillie Allen’s affidavit made a similar statement regarding the disclosures made to her by Boze’ and stated that she had informed Boze’ that she had no problem with his representing Allen, Jr. and Hagin while he also represented her.
The comments to rule 1.06 state, “The term ‘opposing parties’ as used in this Rule contemplates a situation where a judgment favorable to one of the parties will directly impact unfavorably upon the other party.” Tex. Disciplinary R. Prof’l Conduct rule 1.06, cmt. 2. Under this definition, Allen, Jr. and Hagin are not necessarily parties opposed to Lillie Allen because a judgment favorable to Lillie Allen will not necessarily be unfavorable to Allen, Jr. and Hagin. Although Ford’s amended application does not assert any claims against Allen, Jr. and Hagin, it was, nevertheless, Ford who brought them into the litigation and required them to file answers. Those answers show that Allen, Jr. and Hagin are adverse to Ford and aligned with Lillie Allen. A judgment in favor of Ford would remove Lillie Allen as trustee and terminate the trust—results that, according to their affidavits, would be unfavorable to Allen, Jr. and Hagin. In addition, such a judgment could result in a money judgment against Lillie Allen and in favor of Ford, thus shifting a portion of Lillie Allen’s assets to Ford rather than retaining them in the trust to be divided among the three beneficiaries. On the other hand, a judgment favoring Lillie Allen would continue the trust, and there would be no money judgment against Lillie Allen—a result sought by Allen, Jr. and Hagin.
Comment 17 to rule 1.06 provides that questions of conflict of interest are primarily the responsibility of the lawyer, but may be raised by the court if it appears that the lawyer has neglected that responsibility. The comment also provides,
Where the conflict is such as clearly to call in question the fair or efficient administration of justice, opposing counsel may properly raise the question. Such an objection should be viewed with great caution, however, for it can be misused as a technique of harassment.
Tex. Disciplinary R. Prof’l Conduct 1.06, cmt. 17 (emphasis added).
Ford brought her motion under subsection (a) of rule 1.06. She was not complaining about a conflict between herself and opposing counsel. She was complaining about a potential conflict in opposing counsel’s representation of multiple parties. In this case, there were no exceptional circumstances that would cause the case to be governed by subsection (a).
Under rule 1.06(b) and (c), Boze’ may represent the trustee and the relators as long as Boze’ has fully disclosed to them the potential for a conflict and they have consented to the representation. Boze’s verified response to the motion to disqualify and the attachments to the response are evidence of the clients’ consent after Boze’s disclosure. We hold that, under these circumstances, Ford did not carry her burden of showing that Boze’s representation of the trustee and two of the beneficiaries was not a violation of rule 1.06. Accordingly, the trial court acted without any reference to guiding rules and abused its discretion in granting the motion to disqualify Boze’.
We sustain relators’ second issue and, therefore, need not reach their first issue.
We conditionally grant the petition for writ of mandamus against the trial court. The writ will issue only if the trial court does not vacate its order granting the motion to disqualify Boze’ from representing Allen, Jr. and Hagin.
Sam Nuchia
Justice
Panel consists of Justices Hedges, Nuchia, and Keyes.