in Re Rescue Concepts, Inc.
556 S.W.3d 331
| Tex. App. | 2017Background
- Rescue Concepts retained attorney Jacqueline Lucci Smith by engagement letter to provide legal representation "related to the negotiation and sale" of a 300‑acre property and agreed to pay a 3% contingency fee; letter referenced legal fees, ABA/Texas Rules, and described the engagement as legal representation.
- Smith, a licensed attorney (not a licensed broker), negotiated and drafted contract provisions, advised Rescue Concepts on legal matters (re‑platting, pipeline/right‑of‑way, liens, 1031 exchange), and communicated with the buyer’s broker, James Peacock of JLL. Peacock introduced Smith as Rescue Concepts’ attorney in at least one email.
- The sale contract listed Smith’s firm as the Seller’s “Principal Broker” for fee purposes; the sale later failed and HouReal sued Rescue Concepts. Rescue Concepts counterclaimed for fraud and breach; JLL (the buyer’s broker) sought communications between Rescue Concepts and Smith in discovery.
- Rescue Concepts asserted attorney‑client and work‑product protection, produced a privilege log and affidavits from Smith and Rescue Concepts’ VP. JLL moved to compel, arguing Smith acted as a broker (hybrid role) and privilege did not apply; the trial court reviewed emails in camera and ordered production, finding no privilege.
- Rescue Concepts sought mandamus. The court of appeals conducted its own in camera review and concluded (as a matter of law) an attorney‑client relationship existed and the communications were confidential and made to facilitate legal services; it conditionally granted mandamus and directed the trial court to vacate its order compelling production of the in‑camera documents.
Issues
| Issue | Rescue Concepts' Argument | JLL's Argument | Held |
|---|---|---|---|
| Whether an attorney‑client relationship existed between Smith and Rescue Concepts | Engagement letter, affidavits, conduct show parties formed attorney‑client relationship for sale negotiations and related legal matters | Listing Smith as "broker" in the sale contract and engagement language about "agent" shows she acted as broker, not as attorney | Court held, as a matter of law, an attorney‑client relationship existed (engagement letter, conduct, and services performed established it) |
| Whether disputed emails were privileged (confidential communications for legal services) | Emails were confidential and made to facilitate Smith’s rendition of legal services (contract drafting/advice, re‑platting, liens, litigation prep) | Many emails were transactional/negotiation or forwarded third‑party messages; where Smith acted in a hybrid role, privilege should not attach | Court held the emails were confidential attorney‑client communications made to facilitate legal services and are protected; trial court erred in ordering production |
| Whether trial court properly performed in camera review and applied privilege law | In camera review is proper but trial court misapplied law by treating "hybrid" role as negating privilege when communications showed legal advice | Trial court’s factual finding that Smith wore "more than one hat" justified deference and production | Court exercised de novo review of privilege law and found trial court misapplied the law; privilege applies despite dual‑role activities |
| Whether mandamus relief was appropriate | Disclosure of privileged communications is not remediable on appeal; mandamus is proper to prevent loss of privilege | Trial court’s factual findings are entitled to deference and mandamus is inappropriate | Court granted mandamus because trial court clearly abused discretion by ordering production of privileged documents and there was no adequate appellate remedy |
Key Cases Cited
- In re Baytown Nissan, 451 S.W.3d 140 (Tex. App.—Houston [1st Dist.] 2014) (orig. proceeding) (privilege prima facie showing and use of affidavits/privilege log)
- In re ExxonMobil Corp., 97 S.W.3d 353 (Tex. App.—Houston [14th Dist.] 2003) (orig. proceeding) (requirements to assert privilege and documents as evidence)
- In re Fairway Methanol LLC, 515 S.W.3d 480 (Tex. App.—Houston [14th Dist.] 2017) (orig. proceeding) (court may conduct its own in camera review to evaluate privilege)
- Huie v. DeShazo, 922 S.W.2d 920 (Tex. 1996) (privilege extends to entire document if confidential communication exists)
- LeBlanc v. Lange, 365 S.W.3d 70 (Tex. App.—Houston [1st Dist.] 2011) (attorney‑client relationship is contractual and determined by objective manifestations)
- Tanox, Inc. v. Akin, Gump, 105 S.W.3d 244 (Tex. App.—Houston [14th Dist.] 2003) (use of objective standards to determine formation of attorney‑client relationship)
- Walker v. Packer, 827 S.W.2d 833 (Tex. 1992) (mandamus is appropriate where trial court erroneously orders disclosure of privileged material)
- Plains Exploration & Production Co. v. Torch Energy Advisors Inc., 473 S.W.3d 296 (Tex. 2015) (contract construction principles; ascertain intent from whole writing)