in Re the Williard Law Firm, L.P. ( 2013 )

Opinion issued September 5, 2013
In The
Court of Appeals
For The
First District of Texas
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NO. 01-13-00358-CV
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IN RE THE WILLIARD LAW FIRM, L.P., Relator
Original Proceeding on Petition for Writ of Mandamus
MEMORANDUM OPINION1
In this mandamus proceeding stemming from a legal malpractice case,
relator, The Williard Law Firm, L.P., petitions for relief from the trial court’s order
disqualifying attorney Steve Williard from representing it in the underlying
dispute. John Sewell, the respondent, alleges that The Williard Law Firm breached
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The underlying case is Sewell v. The Willard Law Firm, L.P., No. 1012376 in County
Civil Court at Law No. 1 of Harris County, Texas, the Honorable Debra Ibarra Mayfield
presiding.
its fiduciary duties and a fee agreement while representing Sewell in a separate
dispute. We conditionally grant relief.
Background
Steve Williard and The Williard Law Firm represented John Sewell in a
dispute that resulted in a settlement. Pursuant to the settlement agreement, Sewell
obtained title to real property, forgiveness of indebtedness, and $19,500. Sewell
executed a promissory note, secured by the real property obtained in the
settlement, in payment for legal services that Williard provided pursuant to their
fee agreement. Williard obtained a lien against the property, and, claiming that
Sewell had defaulted on the note, Williard foreclosed. After the foreclosure, Sewell
sued The Williard Law Firm in this suit, alleging that Williard’s actions with
regard to the promissory note and the foreclosure breached the parties’ contingency
fee agreement and Williard’s fiduciary duties to Sewell. Sewell then sought to
disqualify Williard from representing The Williard Law Firm as counsel, arguing
that Williard is an essential witness. The trial court disqualified Williard.
Discussion
Standard of Review
“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).
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Attorney Disqualification
When a lawyer is or may be a witness necessary to establish an essential
fact, Texas Disciplinary Rule of Professional Conduct 3.08 prohibits the lawyer
from acting as both an advocate and a witness in an adjudicatory proceeding. See
TEX. DISCIPLINARY R. PROF’L CONDUCT 3.08(a). Rule 3.08 was “promulgated as a
disciplinary standard rather than one of procedural disqualification, but [Texas
courts] have recognized that the rule provides guidelines relevant to a
disqualification determination.” See Sanders, 153 S.W.3d at 56 (citing Anderson
Prod’g Inc. v. Koch Oil Co., 929 S.W.2d 416, 421 (Tex. 1996)).
“Disqualification is a severe remedy.” Spears v. Fourth Court of Appeals,
797 S.W.2d 654, 656 (Tex. 1990). It can result in immediate and palpable harm,
disrupt trial court proceedings, and deprive a party of the right to have counsel of
choice. In re Nitla S.A. de C.V., 92 S.W.3d 419, 422 (Tex. 2002). Consequently, in
considering a motion to disqualify, a trial court must adhere to an exacting
standard to discourage parties from using disqualification motions as dilatory
tactics. Spears, 797 S.W.2d at 656.
The fact that an attorney serves, or may serve, as both an advocate and a
witness does not in itself compel disqualification. See Ayres v. Canales, 790
S.W.2d 554, 557−58 (Tex. 1990); In re Chu, 134 S.W.3d 459, 464 (Tex. App.—
Waco 2004, orig. proceeding); May v. Crofts, 868 S.W.2d 397, 399 (Tex. App.—
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Texarkana 1993, orig. proceeding). Rather, the party requesting disqualification
must demonstrate that the opposing attorney’s dual roles as attorney and witness
will cause the party actual prejudice. Ayres, 790 S.W.2d at 558. Absent such a
showing, the rule could be improperly employed “as a tactical weapon to deprive
the opposing party of the right to be represented by the lawyer of his or her
choice.” TEX. DISCIPLINARY R. PROF’L CONDUCT 3.08 cmt. 10; see Ayres, 790
S.W.2d at 557.
In Ayres, the trial court disqualified R. Jack Ayres, Jr. from representing his
law firm, R. Jack Ayres, Jr. P.C., in a dispute in which the opposing party alleged
that Ayres had entered into an oral contract on behalf of his firm. Ayres, 790
S.W.2d at 555. The trial court had found that Ayres, as a party to the oral contract,
was an essential witness, and it thus disqualified him from representing the firm.
Id. at 556. The Texas Supreme Court acknowledged that an attorney acting as both
advocate and witness had the potential to confuse the jury and prejudice the
opposing party. Id. at 557 n.7. Given that the lawyer individually sought to
represent his personal corporation, however, the Supreme Court concluded that
allowing the representation did not prejudice the opposing party so as to require
disqualification without a showing of actual prejudice. Id. 558. The Texas Supreme
Court granted mandamus relief. Id.
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A similar situation exists with respect to Williard and his firm. Steve
Williard seeks to represent his law firm, The Williard Law Firm, in a dispute about
a contingency fee agreement that Williard had entered into on behalf of his firm.
See id. at 556. Though Williard may be a witness, like in Ayres, this relationship
alone is insufficient to show actual prejudice to Sewell. See id. at 558. Sewell
reiterates that the dual role could potentially confuse the jury. See id. This potential
for confusion, alone, was essentially the case in Ayres, and, without more, does not
compel disqualification. See id.; In re Sanders, 153 S.W.3d at 57. When a former
client sues an attorney for damages arising from the attorney’s representation, the
attorney-witness rule does not bar the attorney from representing himself and his
firm in connection with the dispute, absent a showing of actual prejudice. See
Ayres, 790 S.W.2d at 558.
Following Ayres, we hold that the trial court erred in granting the motion to
disqualify Williard; we therefore grant mandamus relief. See id.; In re Sanders,
153 S.W.3d at 56.
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Conclusion
We direct the trial court to vacate its order disqualifying Steve Williard from
representing The Williard Law Firm in the underlying proceedings. Our writ of
mandamus will issue only if the trial court does not comply.
Jane Bland
Justice
Panel consists of Justices Keyes, Higley, and Bland.
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