Opinion issued April 10, 2008
In The
Court of Appeals
For The
First District of Texas
NO. 01-07-00298-CR
__________
DAMON RICHARD CAPPS, Appellant
V.
THE STATE OF TEXAS, Appellee
On Appeal from the 184th District Court
Harris County, Texas
Trial Court Cause No. 1111629
O P I N I O N
We deny appellant's motion for rehearing. Tex. R. App. P. 49.3. We withdraw our January 17, 2008 opinion, substitute this opinion in its place, and vacate our January 17, 2008 judgment. (1)
Appellant, Damon Richard Capps, challenges the trial court's order denying his application for a writ of habeas corpus. (2) In his sole issue, appellant contends that the State's prosecution of him for misapplication of fiduciary property (3) "following a final judgment of disbarment against [him] for the same conduct, which contained punitive monetary penalties, violates the double jeopardy prohibitions contained in the [Texas] and [United States] Constitutions." (4)
We affirm the order of the trial court.
Factual and Procedural Background
On March 10, 2005, the Commission for Lawyer Discipline (the "Commission"), a committee for the State Bar of Texas, brought a disciplinary action in a civil district court against appellant. (5) In its disciplinary petition, the Commission alleged that the complainant, Kimi Clepper, had retained appellant to bring a lawsuit for the wrongful death of her son and, after the suit was settled for $750,000, appellant failed to provide the complainant with a settlement statement, failed to follow the complainant's directions in the scope of representation, and invested the complainant's funds in property for his own benefit. The Commission further alleged that appellant violated the Texas Disciplinary Rules of Professional Conduct in the following ways:1.02(a)(1) Failing to abide by a client's decisions concerning the objectives and general methods of representation;
1.03(a) Failing to keep a client reasonably informed about the status of a matter and failing to promptly comply with reasonable request for information;
1.03(b) Failing to explain a matter to the extent reasonably necessary to permit the client to make informed decisions regarding the representation;
1.04(d) Entering into a contingent fee agreement prohibited by paragraph (e) or other law, and/or failing to enter into a written contingency fee agreement that states the method by which the fee is to be determined;
1.08(a) Entering into a business transaction with a client;
1.14(a) Failing to hold funds and other property belonging in whole or part to clients or third persons in a lawyer's possession separate from the lawyer's own property;
1.14(b) Upon receiving funds or other property in which a client or third person has an interest, failing to promptly notify the client or third person;
1.14(c) Failing to keep funds or other property in which both the lawyer and another person claim interests separate until there is an accounting and severance of their interests;
3.03(a)(1) Knowingly making a false statement of material fact or law to a tribunal;
8.01(a) Knowingly making a false statement of material fact in connection with a disciplinary matter;
8.04(a)(1) A lawyer shall not violate these rules, knowingly assist or induce another to do so, or do so through the acts of another, whether or not such violation occurred in the course of a client-lawyer relationship;
8.04(a)(2) Committing a serious crime or any other criminal act that reflects adversely on the lawyer's honesty[,] trustworthiness[,] or fitness as a lawyer in other respect;
8.04(a)(3) Engaging in conduct involving dishonesty, fraud, deceit or misrepresentation; and
8.04(a)(8) Failing to timely furnish to a district grievance committee a response or other information as required unless he/she timely asserts a privilege or other legal ground for failure to do so.
See Tex. Disciplinary R. Prof'l Conduct 1.02, 1.03, 1.04, 1.08, 1.14, 3.03, 8.01, and 8.04, reprinted in Tex. Gov't Code Ann., tit. 2, subtit. G app. A (Vernon 2005 & Supp. 2007).
On August 2, 2005, the civil district court granted the Commission's summary judgment motion, ruling that appellant committed professional misconduct by violating disciplinary rules 1.04(d), 1.08(a), 1.14(a), 1.14(b), 1.14(c), and 8.04(a)(8). See id. At a subsequent sanctions hearing on August 22, 2005, the court further found that appellant committed professional misconduct by violating, in addition to the above Texas Disciplinary Rules of Professional Conduct, rules 8.04(a)(2) and 8.04(a)(3). See id. Having found that appellant committed professional misconduct, the court determined that "the proper discipline . . . for each act of professional misconduct" was disbarment. See Tex. R. Disciplinary P. 1.06(V), reprinted in Tex. Gov't Code Ann., tit. 2, subtit. G app. A-1 (Vernon 2005). (6) It ordered that appellant be disbarred and pay the complainant restitution in the amount of $636,000.
A Harris County grand jury subsequently issued a true bill of indictment, accusing appellant of committing the offense of misapplication of fiduciary property. See Tex. Penal Code Ann. § 32.45 (Vernon Supp. 2007). In accord with section 32.45, (7) the indictment reads,
[Capps], . . . while a fiduciary, namely, an attorney, intentionally and knowingly, misappl[ied] property, to wit: money, by dealing with the property contrary to an agreement under which the defendant held the property in a manner that involved a substantial risk of loss to [the complainant], the person for whose benefit the property was held, . . .
Shortly before his trial for this criminal offense, appellant filed an application for writ of habeas corpus, contending that his right against double jeopardy precluded his prosecution. The trial court denied appellant's application. (8)
Double Jeopardy
In his sole issue, appellant contends that the State's prosecution of him for misapplication of fiduciary property, "following a final judgment of disbarment against [him] for the same conduct, which contained punitive monetary penalties, violates the double jeopardy prohibitions contained in the [Texas] and [United States] Constitutions." He asserts that the civil district court's award to the complainant of $636,000 in restitution "was apparently arrived at by taking the net settlement amount of $745,000, and subtracting what the [a]ppellant had already paid to [the complainant]." He further asserts,
It is easy to see that this "restitution" figure goes far beyond what [the complainant] would have been entitled to under any scenario. First, the figures used to determine "restitution" in the disbarment proceedings fail to take into account the contingent fee interest to which [a]ppellant was entitled under his contract with the [complainant], which was a little more than $248,000.00. The [complainant] . . . [was] only entitled to $497,000.00 (2/3 of $745,000.00), less the money that had already been disbursed to them (around $109,000.00). Thus, the [a]ppellant's real indebtedness to the [complainant] at the point the disbarment proceedings concluded was closer to $388,000.00 plus interest, not $636,000.00 plus interest.
Citing Hudson v. United States, appellant argues that because the amount of restitution that he was ordered to pay in the disciplinary proceedings went "far beyond what [the complainant] would have been entitled to under any scenario," the final judgment of disbarment "was so punitive in its effect as to transform the civil remedy of disbarment into a criminal punishment." See 522 U.S. 93, 118 S. Ct. 488 (1997). Thus, appellant complains that he is being subject to "multiple punishments" for the same offense.
The Double Jeopardy Clause of the United States Constitution provides "[n]or
shall any person be subject for the same offense to be twice put in jeopardy of life or
limb." U.S. Const. amend. V, cl. 2. The Double Jeopardy Clause of the Texas
Constitution provides "no person, for the same offense, shall be twice put in jeopardy
of life or liberty, nor shall a person be again put upon trial for the same offense, after
a verdict of not guilty in a court of competent jurisdiction." Tex. Const. art. I, § 14. (9)
"There are three distinct types of double jeopardy claims: (1) a second
prosecution for the same offense after acquittal; (2) a second prosecution for the same
offense after conviction; and (3) multiple punishments for the same offense." Langs
v. State, 183 S.W.3d 680, 685 (Tex. Crim. App. 2006). All three types of double
jeopardy claims arise only when duplicative prosecutions or punishments involve the
same offense. See id.; see also Ex parte Sheridan, 974 S.W.2d 129, 131 (Tex.
App.--San Antonio 1998, pet. ref'd) ("The Double Jeopardy Clause of the United
States Constitution prohibits multiple punishments for the same offense."). Here, as
noted above, appellant complains that he is being subjected to multiple criminal
punishments. In Hudson, the United States Supreme Court explained that "[w]hether a
particular punishment is criminal or civil is, at least initially, a matter of statutory
construction" and that "[a] court must first ask whether the legislature, in establishing
the penalizing mechanism, indicated either expressly or impliedly a preference for
one label or the other." 522 U.S. at 99, 118 S. Ct. at 493 (citations omitted). The
Supreme Court noted, however, that, even in those cases where the legislature has
indicated an intention to establish a civil penalty, a court must inquire further whether
the statutory scheme is so punitive either in purpose or effect as to transform what
was clearly intended as a civil remedy into a criminal penalty. Id. In making this
latter determination, a court should consider (1) whether the sanction involves an
affirmative disability or restraint; (2) whether it has historically been regarded as a
punishment; (3) whether it comes into play only on a finding of scienter; (4) whether
its operation will promote the traditional aims of punishment--retribution and
deterrence; (5) whether the behavior to which it applies is already a crime; (6)
whether an alternative purpose to which it may rationally be connected is assignable
for it; and (7) whether it appears excessive in relation to the alternative purpose
assigned. Id. at 99-100 (citing Kennedy v. Mendoza-Martinez, 372 U.S. 144, 168-69,
83 S. Ct. 554, 567-68 (1963)); see also Ex parte Sheridan, 974 S.W.2d at 132
(applying Hudson factors and finding that cancellation of alcoholic beverage license
by Texas Alcohol and Beverage Commission did not constitute punishment and, thus,
double jeopardy protections did not bar license holder's subsequent prosecution for
his making of false statements on license application). However, "these factors must
be considered in relation to the statute on its face, and only the clearest proof will
suffice to override legislative intent and transform what has been denominated a civil
remedy into a criminal penalty." Hudson, 522 U.S. at 100, 118 S. Ct. at 493
(citations omitted). It is well-settled that attorney disciplinary actions in Texas are "civil in nature."
State Bar of Texas v. Evans, 774 S.W.2d 656, 657 n.1 (Tex. 1989); see also Comm'n
for Lawyer Discipline v. Benton, 980 S.W.2d 425, 454 (Tex. 1998). In fact, the Texas
Rules of Disciplinary Procedure expressly provide that "[d]isciplinary actions are
civil in nature" and that, except as otherwise varied, the Texas Rules of Civil
Procedure apply to disciplinary actions. Tex. R. Disciplinary P. 3.08. The Texas
Rules of Disciplinary Procedure also specifically contemplate that an attorney who
is subject to disciplinary actions under the Texas Disciplinary Rules of Professional
Conduct may also be subjected to criminal prosecution for the same conduct. Tex.
R. Disciplinary P. 3.08(E) ("The parties to a Disciplinary Action may not seek
abatement or delay of trial because of substantial similarity to the material allegations
in any other pending civil or criminal case."). The Texas Government Code provides that attorneys admitted to practice in
Texas are subject to the disciplinary and disability jurisdiction of the supreme court
and the Commission. Tex. Gov't Code Ann. § 81.071 (Vernon 2005); Tex. R.
Disciplinary P. 1.06(C). A disciplinary action is filed neither by the State nor a
private litigant, but rather by the Commission. Acevedo v. Comm'n for Lawyer
Discipline, 131 S.W.3d 99, 104 (Tex. App.--San Antonio 2004, pet. denied). In
filing such actions, the Commission does not seek to redress a private wrong or a
violation of the penal code, but instead seeks to hold a lawyer accountable for his
professional misconduct. Id. In accord with the Texas Rules of Disciplinary
Procedure, the Government Code makes clear that attorneys may be subject to
criminal prosecution and disciplinary action for the same conduct. See Tex. Gov't
Code Ann. § 81.078(c), (d), (f) (Vernon 2005) ("On proof of final conviction of any
felony involving moral turpitude or any misdemeanor involving theft, embezzlement,
or fraudulent misappropriation of money or other property, the district court of the
county of the residence of the convicted attorney shall enter an order disbarring the
attorney"; "In an action to disbar any attorney for acts made the basis of a conviction
for a felony involving moral turpitude or a misdemeanor involving theft,
embezzlement, or fraudulent misappropriation of money or other property, the record
of conviction is conclusive evidence of the guilt of the attorney for the crime of which
he was convicted"; "This chapter does not prevent prosecution of an attorney in a
disciplinary action after conviction for a criminal act based either on the weight of the
conviction or on conduct by the attorney that led to the attorney's conviction."). (10)
Thus, the legislature has expressly labeled disciplinary proceedings as civil.
See Hudson, 522 U.S. at 103, 118 S. Ct. at 495; see also Grotti v. State, 209 S.W.3d
747, 780 (Tex. App.--Fort Worth 2006, pet. granted on other grounds) (noting that
legislature clearly did not intend for disciplinary proceedings initiated against doctor
to bar criminal prosecution). Turning to the Hudson factors, we conclude that "there is little evidence, much
less the clearest proof," that the disciplinary rules appellant was accused and found
guilty of violating and the final judgment of disbarment sanctioning appellant were
so punitive either in purpose or effect as to transform the disciplinary actions and
sanctions into a criminal penalty. See Hudson, 522 U.S. at 104, 118 S. Ct. at 495.
First, the disciplinary action and the sanctions imposed (disbarment and restitution)
did not involve an affirmative disability or restraint. See id. at 104, 188 S. Ct. at
495-96 (noting that monetary penalties and occupational debarment sanction imposed
by administrative agency against bank officers for their misapplication of bank funds
were "certainly nothing approaching the infamous punishment of imprisonment" and,
thus, did not involve affirmative disability or restraint); Ex parte Sheridan, 974
S.W.2d at 133 (stating that "cancellation of a license to engage in a particular
business is not an affirmative disability or restraint"); see also In re Cardwell, 50
P.3d 897, 904 (Colo. 2002) (stating that a "suspension or disbarment from the
practice of law" was not an affirmative disability or restraint). Second, neither monetary restitution nor disbarment has historically been
viewed as "punishment" as it has "long [been] recognized that revocation of a
privilege voluntarily granted . . . is characteristically free of the punitive criminal
element." See Hudson, 522 U.S. at 104, 118 S. Ct. at 495-96; Ex parte Sheridan, 974
S.W.2d at 133; In re Cardwell, 50 P.3d at 904. In regard to appellant's complaint that
the civil district court's award of restitution went "far beyond what [the complainant]
would have been entitled to under any scenario," and "fail[ed] to take into account
[his] contingent fee interest," we note that the Texas Supreme Court has held that in
appropriate circumstances, a client, without proving actual damages, may be able to
obtain forfeiture of all or part of an attorney's fee for the attorney's breach of
fiduciary duty to the client. See Burrow v. Arce, 997 S.W.2d 229, 240 (Tex. 1999).
The primary point is: The remedy of fee forfeiture presupposes that a lawyer's clear and
serious violation of a duty to a client destroys or severely impairs the
client-lawyer relationship and thereby the lawyer's claim to
compensation. Id. (quoting Restatement (Third) of the Law Governing Lawyers § 49
comment b (1996)). Thus, the civil district court could have reasonably concluded
that appellant's breach of his fiduciary duties to his client destroyed the client-attorney relationship and, therefore, appellant was simply not entitled to any fee. (11)
Third, appellant was accused and found guilty of violating numerous
disciplinary rules, some requiring a finding of scienter and some not. See Tex.
Disciplinary R. Prof'l Conduct 1.02, 1.03, 1.04, 1.08, 1.14, 3.03, 8.01, and 8.04;
Tex. R. Disciplinary P. 1.06(V). But there is no general requirement of scienter in
the disciplinary rules. See Hudson, 522 U.S. at 104-05, 118 S. Ct. at 496 (noting that
sanctions imposed against bank officers, including debarment, did not "come into
play 'only' on a finding of scienter"); Ex parte Sheridan, 974 S.W.2d at 133 (noting
that of 32 alternative statutory grounds for cancellation of alcoholic beverage license
under which license was cancelled, only three of those grounds required culpable
mental state, and ground on which actual cancellation was based did not require
finding of culpable mental state); But see In re Cardwell, 50 P.3d at 904 (noting that
"[i]n the absence of a history of disciplinary violations or other very serious
aggravating factors, the sanctions of suspension and disbarment typically require that
the lawyer's state of mind be knowing or intentional"). While it may be true that
appellant's culpable mental state was considered by the court in rendering its final
judgment of disbarment, nothing in the rules provides for disbarment or restitution
for only specific violations that involve an element of scienter. See Tex. R.
Disciplinary P. 3.09-3.12. Fourth, although disciplinary actions and sanctions may offer some amount of
deterrence (12)--a traditional goal of criminal punishment--the mere presence of this
purpose is insufficient to render disciplinary actions and the resulting sanctions
criminal. See Hudson, 522 U.S. at 105, 118 S. Ct. at 496. Fifth, although the conduct for which disciplinary actions are brought and
sanctions are imposed may also be criminal, this fact is insufficient to render the
sanctions "criminally punitive." See id.; see also Ex parte Sheridan, 974 S.W.2d at
134 ("It is well settled that the legislature may impose both a criminal and a civil
sanction in respect to the same act or omission."). Finally, as noted above, disciplinary actions are brought and sanctions are
imposed to "hold a lawyer accountable for his professional misconduct." Acevedo,
131 S.W.3d at 104. Additionally, in assessing an appropriate sanction, a court may
consider a number of factors, including protecting those who seek legal services from
professional misconduct and maintaining respect for the legal profession. See Tex.
R. Disciplinary P. 3.10. Thus, we conclude that the disciplinary actions and
resulting sanctions are not excessive in regard to these alternative purposes. See Ex
parte Sheridan, 974 S.W.2d at 134; In re Cardwell, 50 P.3d at 904. In sum, there is no proof, much less the clearest proof, that the disciplinary
actions and resulting sanctions impose criminal punishment. Accordingly, we hold
that the State's prosecution of appellant for misapplication of fiduciary property does
not violate the double jeopardy prohibitions contained in the United States and Texas
Constitutions. Conclusion
We affirm the order of the trial court. Terry Jennings Justice Panel consists of Justices Nuchia, Jennings, and Keyes. Publish. Tex. R. App. P. 47.2(b).
1. 2. 3. 4. See U.S. Const. amend. V; Tex. Const. art. I, § 14.
5. 6. 7. 8. 9. 10. 11. 12.