in Re Synergy Natural Resources, LLC, Trailers for Less, Gary M. Riebschlager, 04-17-00601-CV

Background

Circle Bar A, Inc. (CBA) sued Synergy Natural Resources, L.L.C. (Synergy) for unpaid fees relating to two chassis trailers; default judgment and attorney’s fees were entered against Synergy on May 4, 2017.
A writ of execution issued and the Bexar County Sheriff seized the trailers in July 2017; Trailers for Less (TFL) claims to be the owner and sought to intervene to recover the trailers.
Attorney Gary M. Riebschlager filed a motion to dissolve the writ on behalf of intervenor/owner Trailers for Less and later filed a motion for new trial on behalf of Synergy; an associate from his firm filed additional pleadings for TFL.
CBA moved to disqualify Riebschlager (invoking Rule 1.06), alleging he represented adverse clients (Synergy and TFL); the trial court granted disqualification at a hearing based on email evidence and signed an order dated August 11, 2017.
After disqualification the trial court also granted sanctions against Riebschlager ($2,500) and struck Synergy’s motion for new trial; relators sought mandamus relief asserting the trial court abused its discretion.

Issues

Issue	Plaintiff's Argument	Defendant's Argument	Held
Whether trial court properly disqualified Riegsbchlager under Rule 1.06	CBA: Riebschlager represented opposing/adverse clients (Synergy and TFL); conflict requires disqualification	Relators: No showing of actual prejudice to CBA; representation did not create a material adverse effect and no specific rule violation proven	Court: Disqualification was an abuse of discretion because CBA failed to show actual prejudice; order must be withdrawn
Whether trial court’s sanctions and striking of new-trial motion should stand given disqualification	CBA: sanctions and striking were justified after discovery of the conflict and conduct	Relators: Sanctions and strike were predicated on erroneous disqualification and thus must be withdrawn	Court: Because sanctions/striking were based on disqualification, those orders must be withdrawn as well
Whether mandamus is appropriate to correct disqualification order	CBA: (implicit) relief by appeal sufficient or disqualification proper so mandamus unnecessary	Relators: Mandamus warranted because disqualification causes immediate, irreparable harm and appellate remedy is inadequate	Court: Mandamus appropriate; disqualification orders corrected by writ conditionally granted
Burden to show conflict/prejudice	CBA: Alleged that TFL’s ownership gives it a direct cause of action against Synergy, creating conflict	Relators: Allegation is speculative and conclusory; CBA failed to demonstrate specific harm	Court: Movant must show specific, actual prejudice; CBA’s vague theory insufficient

Key Cases Cited

In re Sw. Bell Tel. Co., L.P., 235 S.W.3d 619 (Tex. 2007) (mandamus is extraordinary relief)
In re Prudential Ins. Co. of Am., 148 S.W.3d 124 (Tex. 2004) (mandamus only to correct clear abuse of discretion)
Walker v. Packer, 827 S.W.2d 833 (Tex. 1992) (standards for mandamus review)
Johnson v. Fourth Court of Appeals, 700 S.W.2d 916 (Tex. 1985) (mandamus prerequisites)
In re Cerberus Capital Mgmt., L.P., 164 S.W.3d 379 (Tex. 2005) (abuse of discretion defined)
Liberty Nat’l First Ins. Co. v. Akin, 927 S.W.2d 627 (Tex. 1996) (clear abuse requires single reasonable decision)
In re Sanders, 153 S.W.3d 54 (Tex. 2004) (disqualification is severe; movant must show prejudice)
In re Sandoval, 308 S.W.3d 31 (Tex. App.—San Antonio 2009) (mandamus available for disqualification orders)
Spears v. Fourth Court of Appeals, 797 S.W.2d 654 (Tex. 1990) (exacting standard for disqualification motions)
In re Drake, 195 S.W.3d 232 (Tex. App.—San Antonio 2006) (disciplinary rules guide but do not control disqualification)
In re Nitla S.A. de C.V., 92 S.W.3d 419 (Tex. 2002) (disqualification possible absent specific rule violation in appropriate circumstances)
In re Garza, 373 S.W.3d 115 (Tex. App.—San Antonio 2012) (mere remote possibility of conflict insufficient)
In re Tips, 341 S.W.3d 30 (Tex. App.—San Antonio 2010) (movant bears burden to show prejudice)