in Re CMH Homes, Inc. and Vanderbilt Mortgage and Finance, Inc. ( 2013 )

Fourth Court of Appeals
San Antonio, Texas
DISSENTING OPINION
No. 04-13-00050-CV
IN RE CMH HOMES, INC. and Vanderbilt Mortgage and Finance, Inc.
Original Mandamus Proceeding 1
Opinion by: Karen Angelini, Justice
Dissenting Opinion by: Rebeca C. Martinez, Justice
Sitting: Karen Angelini, Justice
Rebeca C. Martinez, Justice
Luz Elena D. Chapa, Justice
Delivered and Filed: June 5, 2013
The majority decides that based on an irrebuttable presumption of shared confidences,
Carrillo’s representation of Duval County in its suit against CMH Homes requires that Rumley
and Gutierrez (the “Firms”) also be disqualified. The majority opinion relies on two premises:
that Carrillo’s name appearing on a pleading and/or motion constitutes evidence of
representation adverse to his former client, and that an irrebuttable presumption applies to
disqualify any firm appearing as co-counsel of record along with a disqualified attorney.
Because I believe that the majority fails to properly analyze the law governing disqualification, I
respectfully dissent.
1
This proceeding arises out of Cause No. DC-12-09, styled Duval County, Texas v. Vanderbilt Mortgage and
Finance, Inc., CMH Homes, Inc., Bruce Robin Moore, Jr., and Benjamin Joseph Frazier, pending in the 229th
Judicial District Court, Duval County, Texas, the Honorable Ana Lisa Garza presiding.
Dissenting Opinion 04-13-00050-CV
Mandamus Standard of Review
As a preliminary matter, I note we are required to afford the trial court deference when
fact determinations are made below, as they were in this case. In reviewing the trial court’s
resolution of factual issues or matters committed to its discretion, we may not substitute our
judgment for that of the trial court. Walker v. Packer, 827 S.W.2d 833, 839 (Tex. 1992) (orig.
proceeding). Thus, we cannot set aside the trial court’s finding unless it is clear from the record
that the trial court could have reached only one decision. In re Nitla S.A. de C.V., 92 S.W.3d
419, 422 (Tex. 2002) (orig. proceeding) (per curiam). Even if we would have decided the issue
differently, we cannot disturb the trial court’s decision unless it is shown to be arbitrary and
unreasonable. Walker, 827 S.W.2d at 840.
“Representation”
Initially, I disagree with the majority’s conclusion that Carrillo represented Duval County
in a matter adverse to CMH. Rule 1.09(a) provides that it is improper for a lawyer who formerly
represented a client in a matter from later representing another person in a matter adverse to the
former client if there is a reasonable probability that confidential information will be revealed or
if it is the same or a substantially related matter. See TEX. DISCIPLINARY R. PROF’L CONDUCT
1.09(a). The record before us contains no evidence of a contract between Carrillo and Duval
County creating an attorney-client relationship mutually intended to pursue the client’s claims
against CMH. See Vinson & Elkins v. Moran, 946 S.W.2d 381, 405 (Tex. App.—Houston [14th
Dist.] 1997, writ dism’d by agr.) (attorney-client relationship is contractual). Nor is there any
evidence in the record of a “mutual meeting of the minds” between Carrillo and Duval County
implying an attorney-client relationship with respect to the CMH litigation. See Tanox, Inc. v.
Akin, Gump, Strauss, Hauer & Feld, LLP, 105 S.W.3d 244, 254 (Tex. App.—Houston [14th
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Dissenting Opinion 04-13-00050-CV
Dist.] 2003, pet. denied) (attorney-client relationship may be implied where there is a meeting of
the minds to form such a relationship). Instead, the majority heavily relies on the fact that
Carrillo, in his role as the elected County Attorney, 2 negotiated on behalf of Duval County a
contract retaining the Firms to pursue Duval County’s claims against CMH. 3 In disregard of the
trial court’s findings, the majority emphasizes this negotiation alone as evidence that Carrillo
was “representing [Duval County] in a matter adverse to [CMH].” It further states that Carrillo
failed to show he did not know his name was included as attorney of record on the Original
Petition filed by the Firms.
While hesitant to adopt Relators’ proposition urged at oral argument that the listing of
Carrillo’s name on the original petition and his motion to withdraw constitute a “judicial
admission” of representation, the majority opinion explicitly concludes that Carrillo’s name
appearing as attorney of record and signature on his motion constitute significant evidence from
which the trial court could only find he represented the County. I disagree that Carrillo’s
appearance on the Original Petition or signature on the motion to withdraw is conclusive
evidence of representation. First, pleadings are not evidence, even when verified. See Laidlaw
Waste Sys. (Dallas), Inc. v. City of Wilmer, 904 S.W.2d 656, 660 (Tex. 1995). Second, there is
no authority for the proposition that a signature on a motion constitutes a judicial admission. To
2
The majority fails to recognize the distinction between government lawyer and private lawyer and the troubling
impact its holding will effectively have on governmental employees, such as county attorneys and prosecutors, who
are statutorily allowed to practice law while performing a role in government. See generally Scott A. Durfee,
Guessing Game: Government Lawyers and Their Relationship to the Disciplinary Rules, 55 THE ADVOCATE 41
(2011); see also TEX. DISCIPLINARY R. PROF’L CONDUCT preamble ¶ 13 (emphasis added) (“The responsibilities of
government lawyers, under various legal provisions, including constitutional, statutory and common law, may
include authority concerning legal matters that ordinarily reposes in the client in private client-lawyer
relationships.”).
3
The majority concludes that in the act of embarking on negotiations with the Firms, Carrillo acted adverse to his
former client CMH, “and the presumption attached.” This is confusing, since a presumption of shared confidences
“arises” from the attorney-client relationship between the client (the County) and its attorney (Carrillo), and does not
“attach” to create an attorney-client relationship between the County and Carrillo from Carrillo’s acts [negotiating]
with a third party (the Firms).
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Dissenting Opinion 04-13-00050-CV
the contrary, the signature of an attorney is not the equivalent of a verification. See In re
Valliance Bank, No. 02-12-00255-CV, 2012 WL 5512455, at *3 (Tex. App.—Fort Worth Nov.
15, 2012, orig. proceeding) (noting that attorney’s signature on motion merely certifies that he
has read the document and that to the best of his knowledge, information, and belief the
instrument is not groundless and not brought in bad faith or for the purpose of harassment;
signature does not represent the facts to be true and based upon personal knowledge); Luxenberg
v. Marshall, 835 S.W.2d 136, 140 & n.3 (Tex. App.—Dallas 1992, orig. proceeding); see also
TEX. R. CIV. P. 13. The motion to withdraw 4 was not an admission that Carrillo represented
Duval County in this matter, but a mere formality required of Carrillo upon discovering that his
name was listed on the pleadings unbeknownst to him. See Carpet Services, Inc. v. George A.
Fuller Co. of Tex., Inc., 802 S.W.2d 343, 344-45 (Tex. App.—Dallas 1990), aff’d, 823 S.W.2d
603 (Tex. 1992) (pleading is addressed to the court and party should be free to address court
“without being held in terrorem”). The leap taken to reach the conclusion of “representation” is
no less long than the leap taken to determine that Carrillo was “associated with” the Firms.
Association
Having “presumed” that Carrillo represented the County in its suit against CMH, the
majority next relies solely on a definition from Webster’s Dictionary to hold that Carrillo was
“associated” with the Firms. See TEX. DISCIPLINARY R. PROF’L CONDUCT 1.09(b) (“[W]hen
lawyers are or have become members of or associated with a firm, none of them shall knowingly
represent a client if any one of them practicing alone would be prohibited from doing so by
4
Although Carrillo’s name is listed on the Original Petition, CMH did not file its motion to disqualify until after
Carrillo filed his motion to withdraw. CMH then argued to the trial court that since Rule 13 mandates “substantive
consultations” between co-counsel prior to filing suit, “surely” Carrillo shared confidential information with the
Firms and that Carrillo “agreed to work in concert with” the Firms. Presumably, the majority recognizes that Rule
13 is inapposite since Carrillo’s name and signature (as Duval County Attorney) appear only on his motion to
withdraw.
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Dissenting Opinion 04-13-00050-CV
paragraph (a)).” The majority conclusively holds that “any lawyer with which Carrillo is
associated” is disqualified, extending to those “closely connected (as in function or officer) with
another.” This would necessarily include the Firms, the majority reasons, since presumably they
are individuals “working together on a case or issue regardless of their actual status as a member
of the firm, of-counsel or co-counsel” and, to hold otherwise would conflict with “the plain and
common meaning of ‘associate with.’” By the majority’s own reasoning, it would logically
follow that “association” would be determined by whether Carrillo and the Firms “worked
together on a case or issue,” regardless of whether they were listed as “co-counsel.” Again,
failing to defer to the trial court’s findings, the majority applies an irrebuttable presumption
where none is recognized.
An irrebuttable presumption is recognized to address a client’s possible concerns that its
lawyer may share its confidences with another which cannot be readily proven. See In re EPIC
Holdings, Inc., 985 S.W.2d 41, 49 (Tex. 1998) (orig. proceeding). Here, no argument is made,
nor does the majority address, the need to protect a reasonable concern by a party seeking
disqualification that it would be unable to prove whether confidences were disclosed. The Texas
Supreme Court has not recognized an irrebuttable presumption of client confidences between co-
counsel. In In re American Home Products, the Court applied a rebuttable presumption, placing
the burden on the “party seeking disqualification [to] first demonstrate that there were
‘substantive’ conversations between disqualified counsel and co-counsel, joint preparation for
trial by those counsel, or the apparent receipt by co-counsel of confidential information.” In re
American Home Products Corp., 985 S.W.2d 68, 81 (Tex. 1998) (orig. proceeding). Relying on
In re American, CMH sought to discover whether Carrillo and the Firms jointly prepared for trial
or had “substantive” discussions regarding the case, but failed to present the trial court with more
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than speculation. 5 Id. (discovery available “without inquiring into the substance of the work that
has been done or of discussions between co-counsel”).
In conclusion, the issue of whether Carrillo represented the County is a question of fact. I
believe the majority substitutes its findings for that of the trial court. We must give deference to
the trial court’s explicit findings of fact on the issues of representation and disclosure. More
importantly, mandamus is not appropriate where the trial court did not clearly abuse its
discretion or commit clear and prejudicial error in law. See Walker, 827 S.W.2d at 839. The
record does not reflect that Carrillo represented the County in its suit against CMH or that
Carrillo shared confidential information with the Firms. Even assuming the trial court erred in
finding to the contrary, there is no precedent recognizing an irrebuttable presumption of shared
confidences between co-counsel. Therefore, I cannot agree that the trial court abused its
discretion in denying the motion to disqualify Rumley and Gutierrez. Accordingly, I would deny
the petition for writ of mandamus.
Rebeca C. Martinez, Justice
5
Relators fail to present any evidence to substantiate their assertions that Carrillo “surely had substantive
consultations with them prior to withdrawing;” that Carrillo “agreed to work in concert with” the Firms; that Carrillo
“join(ed) his prior counsel to sue his former client;” and that Carrillo and the Firms “in all likelihood” entered into a
contingency contract. CMH posited that a contingency contract was negotiated, but offered no discoverable
evidence of a written agreement signed by the County authorizing joint representation between Carrillo and the
Firms. See TEX. DISCIPLINARY R. PROF’L CONDUCT 1.04(d), 1.04(f)(1)-(2) (client must consent in writing to the
terms of an arrangement for the division of a fee between lawyers who are not in the same firm).
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