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NUMBER 13-05-223-CV
COURT OF APPEALS
THIRTEENTH DISTRICT OF TEXAS
CORPUS CHRISTI - EDINBURG
IN RE: JENNIFER HILLIARD
On Petition for Writ of Mandamus
MEMORANDUM OPINION
Before Justices Hinojosa, Yañez, and Garza
Memorandum Opinion by Justice Yañez
Relator, Jennifer Hilliard, has filed a petition for writ of mandamus challenging an order disqualifying her attorney, James Harris. We conclude that the respondent, the Honorable Jose Longoria of the 214th District Court of Nueces County, Texas, abused his discretion in disqualifying relator=s counsel. Accordingly, we conditionally grant the writ.
Mandamus
To be entitled to mandamus relief, relator must show that the trial court committed a clear abuse of discretion and that she has no adequate remedy by appeal. In re Ford Motor Co., 165 S.W.3d 315, 317 (Tex. 2005) (orig. proceeding); In re Nitla S.A. de C.V., 92 S.W.3d 419, 422 (Tex. 2002) (orig. proceeding) (per curiam). A trial court abuses its discretion if it reaches a decision so arbitrary and unreasonable as to amount to a clear and prejudicial error of law, or if it clearly fails to correctly analyze or apply the law. Walker v. Packer, 827 S.W.2d 833, 839-40 (Tex. 1992).
Mandamus is appropriate to correct an erroneous order disqualifying counsel because there is no adequate remedy by appeal. In re Sanders, 153 S.W.3d 54, 56 (Tex. 2004) (per curiam); see Nitla, 92 S.W.3d at 422.
Background
This original proceeding arises from a suit brought by Jennifer Hilliard to enforce the payment of spousal maintenance by her former husband, Robert C. Hilliard. When the Hilliards divorced, they entered into an Agreement Incident to Divorce (AAgreement@), signed January 14, 1999, which awarded Jennifer approximately three million dollars in spousal alimony. This Agreement was incorporated in and made a part of the final divorce decree on January 18, 1999. Robert stopped making alimony payments after paying Jennifer approximately two million dollars.
In 2003, Jennifer, represented by attorney Ronald A. Simank, brought suit to enforce the Agreement. In 2004, Jennifer retained attorney James R. Harris as additional counsel and as an expert witness. Robert moved to disqualify Harris from representing Jennifer based on Harris=s prior representation of Robert in a grievance proceeding initiated by the Texas Supreme Court. See Merrell Dow Pharms., Inc. v. Havner, 953 S.W.2d 706 (Tex. 1997) (op. on reh=g).
With regard to Harris=s representation of Robert, the record shows that, from May 1998 to October 1998, Harris represented Robert in a grievance proceeding arising from Robert=s motion for rehearing in Havner. Robert=s strident motion for rehearing essentially accused the Texas Supreme Court of failing to follow established precedent and suggested that the Texas Supreme Court was engaging in judicial tort reform in favor of certain special interests. Finding the tenor of Robert=s motion for rehearing objectionable, the Texas Supreme Court referred Robert to the Texas State Bar Grievance Committee for professional misconduct. In the grievance proceeding, Robert contended that the allegedly objectionable statements in his motion for rehearing were true, or were based on his good faith belief or opinion. Robert further contended that his statements were matters of opinion which were protected as free speech under the first amendment and the Texas Constitution. The grievance against Robert was ultimately dismissed.
In the motion to disqualify, Robert argues that the Havner grievance proceeding and the spousal maintenance suit are substantially related insofar as the Havner grievance arose from his belief that the Texas Supreme Court was engaging in judicial tort reform and, in the spousal maintenance suit, Robert contends his inability to continue to pay spousal maintenance is the result of the impact of tort reform on his law practice. According to Robert, the amount of spousal maintenance due to Jennifer under the Agreement was calculated based on Robert=s estimated income based on his law practice, and tort reform reduced Robert=s estimated income.
The Honorable Jose Longoria disqualified Harris. According to the order of disqualification:
. . . Harris was paid over $50,000.00 in legal fees from Hilliard for previously representing him in 1998 in a matter involving a grievance arising from a decision by the Texas Supreme Court on a tort claim brought by Kelly Havner against Merrell Dowell [sic] Pharmaceutical in which Robert C. Hilliard argued that the results of the opinion were motivated by judicial tort reform and not the merits of the case or law; and as a result Harris has previously represented Robert Hilliard in a >substantially related= matter involving the same or similar issue of law, liability, defenses and affirmative claims, and strategies regarding tort reform and Robert Hilliard=s response to tort reform in 1997 and 1998, at or about, and during the time of the divorce proceeding at issue in this case . . . and the issue of tort reform and Robert C. Hilliard=s understanding, familiarity, opinions, and strategies was a significant issue in the prior representation by Harris, and is a significant issue in this case now pending before this Court, and a significant defense of Robert C. Hilliard to the claims of Jennifer HIlliard in this case now pending before this Court; and it appearing from the testimony and record in this case that James R. Harris represented Jennifer Hilliard in the planning of her case, and in her trial strategies to a significant extent well before August, 2004 and well after formally appearing in this case and after the written objection immediately made by Robert C. Hilliard upon such formal notice . . . .
Disqualification
We review a trial court's ruling on a motion to disqualify under an abuse of discretion standard. Henderson v. Floyd, 891 S.W.2d 252, 254 (Tex. 1995) (per curiam). Disqualification is a severe remedy. In re Cerberus Capital Mgmt., L.P., 164 S.W.3d 379, 382 (Tex. 2005); Sanders, 153 S.W.3d at 57; Nitla, 92 S.W.3d at 422. Disqualification can result in immediate and palpable harm, disrupt trial court proceedings, and deprive a party of the right to have counsel of choice. Nitla, 92 S.W.3d at 422. Therefore, in considering and deciding a motion to disqualify counsel, the trial court must Astrictly adhere to an exacting standard to discourage a party from using the motion as a dilatory trial tactic.@ Id. The party seeking disqualification bears the burden of establishing conduct that violates the disciplinary rules or otherwise warrants disqualification Id. The disciplinary rules provide guidelines for deciding disqualification issues; however, they are not controlling standards, and in "appropriate circumstances" a lawyer may be disqualified even if he or she has not violated a specific disciplinary rule. Id.; In re Bivins, 162 S.W.3d 415, 417‑18 (Tex. App.BWaco 2005, orig. proceeding).
Even if a lawyer violates a disciplinary rule, the party requesting disqualification must demonstrate that the opposing lawyer's conduct caused actual prejudice that requires disqualification. Nitla, 92 S.W.3d at 422; In re Users Sys. Servs., Inc., 22 S.W.3d 331, 336 (Tex. 1999); In re Meador, 968 S.W.2d 346, 350 (Tex. 1998); In re Southwestern Bell Yellow Pages, Inc., 141 S.W.3d 229, 232 (Tex. App.BSan Antonio 2004, orig. proceeding). The mere allegation of potential prejudice is insufficient to warrant the extreme remedy of disqualification. Southwestern Bell Yellow Pages, Inc., 141 S.W.3d at 232; Ghidoni v. Stone Oak, Inc., 966 S.W.2d 573, 579 (Tex. App.BSan Antonio 1998, pet. denied).
The disciplinary rule at issue in the instant case is Texas Rule of Disciplinary Conduct 1.09. See Tex. Disciplinary R. Prof'L. Conduct 1.09, reprinted in Tex. Gov't Code Ann., tit. 2, subtit. G app. A (1998) (Tex. State Bar R. art. X, ' 9). This rule provides that, without prior consent, a lawyer who has formerly represented a client in a matter shall not thereafter represent another person in a matter adverse to the former client if, inter alia, the representation will, in reasonable probability, involve a violation of rule 1.05, prohibiting the disclosure of confidential information, or Aif it is the same or a substantially related matter.@ See id. Rule 1.05(b)(3) prohibits an attorney from using the confidential information of a former client, unless the former client consents to use of the confidential information, or the confidential information has become generally known. See id.
To determine whether a lawyer should be disqualified for having represented the adverse party in an earlier suit, the court must decide if the two suits are Asubstantially related.@ Metro. Life Ins. Co. v. Syntek Fin. Corp., 881 S.W.2d 319, 320 (Tex. 1994). The "substantial relationship" test as applied by the courts in similar cases does not originate in the disciplinary rules, but in the common law. In re Cap Rock Elec. Coop., 35 S.W.3d 222, 230 (Tex. App.BTexarkana 2000, orig. proceeding) (citing In re Am. Airlines, Inc., 972 F.2d 605, 617 (5th Cir. 1992)).
To show that a substantial relationship requiring disqualification exists, the party seeking disqualification must prove that the facts and issues involved in both the former and present litigation are so similar that there is a genuine threat that confidences revealed to the party's former counsel will be divulged to his present adversary. In re Epic Holdings, Inc., 985 S.W.2d 41, 51 (Tex. 1998) (orig. proceeding); NCNB Tex. Nat'l Bank v. Coker, 765 S.W.2d 398, 399‑400 (Tex. 1989) (orig. proceeding); In re Bell Helicopter Textron, Inc., 87 S.W.3d 139, 146 (Tex. App.BFort Worth 2002, orig. proceeding); see also Texaco, Inc. v. Garcia, 891 S.W.2d 255, 257 (Tex. 1995) (orig. proceeding) (holding that substantial relationship existed where cases involve similar liability issues, scientific issues, defenses, and strategies).
The movant for disqualification is required to establish a substantial relationship by a preponderance of the facts. Cap Rock Elec. Coop., 35 S.W.3d at 230. The movant has the burden of producing evidence of such specific similarities capable of being recited in the disqualification order. Coker, 765 S.W.2d at 400; Relators Bell Helicopter Textron, Inc., 87 S.W.3d at 146; Cap Rock Elec. Coop., 35 S.W.3d at 230; see also Troutman v. Ramsay, 960 S.W.2d 176, 178 (Tex. App.BAustin 1997, orig. proceeding).
Analysis
Having reviewed the pleadings and evidence, we conclude that the trial court abused its discretion in finding that the grievance proceeding and the spousal maintenance suit are substantially related. The grievance proceeding involved the interaction between the right to freedom of speech and the professional requirements imposed upon attorneys by the Texas Disciplinary Rules of Professional Conduct. In contrast, the spousal maintenance suit involves Robert=s ability, or lack thereof, to pay alimony as stated in the Agreement.
Robert contends that in the grievance proceeding he shared his opinions about judicial tort reform with Harris and that judicial tort reform is the reason that he cannot pay spousal alimony in the instant suit. However, this allegation simply does not establish a substantial relationship between the two proceedings. The two matters do not involve similar facts, liability issues, scientific issues, defenses, or strategies. While tort reform may well have impacted Robert financially, an issue we do not address herein, his opinions about tort reform during the Havner proceeding, or at the present time, can hardly be said to affect Robert=s ability to comply with the Agreement. We conclude that the matters are not substantially related. And further, we would note that Robert=s attitudes and opinions regarding tort reform cannot be said to constitute Aconfidences.@ His feelings are clearly and abundantly detailed in the Havner motion for rehearing and the affidavit that he provided to the grievance committee, both of which are a part of the record herein. Finally, the record before us is devoid of any evidence that Harris=s representation of Jennifer has caused Robert actual prejudice or harm. See Nitla, 92 S.W.3d at 422.
Conclusion
We do not lightly grant the writ of mandamus in this matter. The ethical implications and pragmatic considerations that arise when a lawyer represents one client, and subsequently represents an opposing party against that same client, are multitudinous and difficult. The problems involved are often insurmountable. Fundamentally, we believe that such representations are generally avoided by most practitioners out of an abundance of caution. However, we must balance the problems and difficulties arising from such a sequential representation against a party=s right to be represented by counsel of her choice. Accordingly, Texas courts have derived the substantial relationship test to ascertain whether counsel should be disqualified.
Applying the substantial relationship test, we conclude that Robert failed to meet his burden to prove that the facts and issues involved in the grievance proceeding and the alimony litigation are substantially related. Further, Robert failed to establish actual prejudice. Accordingly, the trial court abused its discretion by granting the motion to disqualify. Jennifer has no adequate remedy at law. Therefore, we conditionally grant the requested writ of mandamus. The writ will issue only if the trial court fails to advise this Court in writing within fourteen days after the date of this opinion that it has vacated the order granting the motion to disqualify.
_______________________
LINDA REYNA YAÑEZ,
Justice
Memorandum opinion delivered and filed
this the 27th day of April, 2006.