Quintero v. Jim Walter Homes, Inc.

exception requirement. Certainly ings, response, rule in any summary or designed was not to party allow a who judgment proof, employed cannot be to de- pleads neither nor adequate even sets forth feat a movant’s otherwise valid motion for facts support to a cause of action under a summary judgment. In view of the fore- particular theory, to set aside an otherwise going, appellants’ first point of error is summary valid judgment on the basis that overruled. special exception a lodged against was not point error, In their third appel conclusory allegations various in contained complain lants that the trial court erred in pleadings. Crabtree, their As stated in rendering judgment final as to defendant obligated defendant/movant “... is not to Sally Huggins. Huggins par below was a special exceptions file which would suggest ty petitions defendant by ap both filed plaintiff possible causes of action pellants. At the time summary against the defendant.” Ray Crabtree v. judgment hearing, however, she was no Co., Richey & 682 S.W.2d at 728. longer party interest the terms of Furthermore, we are of the opinion that her conveyed Divorce Decree which all of appellants’ contention that appellees had her husband, interest in the property her the burden in their Summary Motion for appellee Huggins, William 0. III. We find Judgment, negate the existence of no error in the trial court’s inclusion of fraud/misrepresentation or mutual mistake Sally Huggins’ judgment. name the final is also without merit. longer “No must a in a proper cause is if it negate movant all possible issues of law conforms the pleadings, appel and as and fact that could raised the non- brought lants suit Sally Huggins, it movant, but were City not.” Houston proper was for the to reflect that v. Clear Creek Basin Authority, appellants nothing against recover her. 678-79 As dis TEX.R.CIV.P. 801. Accordingly, appel above, cussed appellants’ pleadings both point lants’ third of error is overruled. response and their appellees’ motion for summary judgment any failed to raise fact of the trial af- court is issues regard fraud/misrepresenta with firmed. mistake, tion or mutual appellees’ therefore to negate burden such matters

motion Horine, never arose. Walker v. 575 (Tex.App. Corpus— 1985, writ).

Christi Creek,

As stated in Clear the non- . now, movant must in a written or answer QUINTERO Louis P. and Paula response motion, expressly present Quintero, Appellants, to the trial court those issues that would right defeat the summary movant’s to a failing so, may to do HOMES, INC., Appellee. JIM WALTER assign later them appeal.” as error on No. 13-84-452-CV. Creek, supra, Clear at 679. this con-

nection, appellees prove had no burden Texas, Appeals Court of page that a deed was not inserted Corpus Christi. substituted after the deed executed Dec. 1985. appellants’ reason of naked assertion Rehearing Denied March 1986. response page that a and an exhibit clearly prepared have “... been Rehearing April Second Denied typewriter different from pre- that used to pare pages_” the first and third Con- nature,

clusory allegations of this

find support plead- no factual in either the

damage. $78,000 over initially Quinteros. entered favor was later set aside This court replaced by take-nothing judgment. Quinteros appeal the trial court’s deci- to sion set aside the in their to favor and seek have the initial reinstated. Jim Walter Homes contracted to Quintero a for and

build home Louis Paula substantial, “good, and a workmanlike manner.” Dissatisfied with their new home, Quinteros attorney the retained Hec- Gonzalez, tor who a filed lawsuit on their behalf in 1978. he Because had several pending against hundred similar lawsuits Homes, arranged Jim Walter Gonzalez for attorney, another the Honorable Francis case, Gandy, actually Quintero try the Quinteros’ Attorney with the consent. Gandy successfully a recovered ver- Quinteros April dict in favor the on A judgment on the en- verdict was May $78,385.65. for tered Quinteros the also released from their installment note debt to Jim Walter $38,424.40. principal Homes the sum of meantime, attorney In the Gonzalez ne- gotiated aggregate an settlement with Jim Walter Homes on behalf of 349 of his clients for million dollars. This was $1.8 among according be divided clients by attorney formula devised Gonzalez and Jr., Gandy, Christi, Corpus appel- F.I. for legal overseen Jim Walter Homes’ staff. lants. On two weeks after June the Mills, McAllen, Mike appellee. for signed, attorney had been Gonzalez called Quinteros the to his office to discuss set- C.J., NYE, Before and BENAVIDES and tling their ease with Walter Homes. DORSEY, JJ. Quinteros, Gonzalez, Neither the nor nor attorneys the for Jim Walter Homes were OPINION attorney Gandy at time aware NYE, May judgment. Only Chief had the Justice. obtained Gandy, attorney had who taken the time Quintero Louis Appellants and Paula Courthouse, at check the file the knew that Homes, Inc., Quintero sued Jim Walter for finally judg- had the trial court entered Deceptive violations of the Trade Practices He ment. was unaware of and was Act and the Consumer Credit Code. negotiations involved with the settlement Quinteros that, alleged during contractual attorney Walter between Jim Homes and negotiations purchase and construc- Gonzalez. home, tion of a new the salesman for Jim misrepresentations Homes made of a As result conversation quality manager about the home their office Í228 rendered, go have decided to ahead settle could been against

their claim Jim Walter Homes. Court ordered that the dismissal be set They agreed join with all aside remanded the case the trial if and share in the court to determine clients Gonzalez settle- signed plead prove set- ment and release of claims could enforceable against joint motion tlement under release Jim Walter Homes. signed Quinteros. signed to dismiss the suit was by attorney Gonzalez and remand, the trial court concluded that On 11, 1981. Homes’ on June Under enforceable, the release was valid and even agreement, terms this though had revoked $3900.00 were to receive about consent, take-nothing judg- and entered a cash and certain deductions on their note on November payable to Jim Homes. total Walter The 9, Quinteros appeal 1984. The that deci- part their of settlement was value of the and seek reinstatement of the initial sion $13,687.00. May 27, in judgment favor of 22, 1981, Gandy On informed the June error, the points In their last three of Quinteros 27,1981, May judgment of in the Quinteros allege that the trial court’s con Quinteros immediately no- their favor. The They was erroneous. claim that clusion disproved of they tified the trial court no involved in the since one settlement the and release and were revok- judgment’s of exist negotiations knew the ing authority represent them Gonzalez’ ence, of which a “mistake fact” existed any further. Their allows them to annul the release. a attorneys general the Although argument for Jim tracks rule the Walter igno mistake or longer knew the contract made under a Homes dismiss, facts and re- joint rance of material is voidable consented motion See, Enter they equity. e.g., filed the dismissal A.L.G. nonetheless consent lievable (Tex. prises Huffman, v. trial court. Pursuant motion with the 1983), 672 motion, App. Corpus modified, Christi (impliedly) set the trial court - (Tex.1984). 230 S.W.2d first judgment, aside its favorable Quinteros, judgment entered new these last three We overrule 18, 1981, August their suit which dismissed grounds attorney The tried of error. who against Jim Walter Homes. Quinteros, Gandy, Francis the case judgment’s of existence Quinteros appealed knowledge the dismissal of the

The had Quinteros signed Quintero weeks before the their case to this Court v. Jim several (Tex. agreement. Inc., Homes, 648 746 the release and settlement S.W.2d Walter attorney imputed Christi), rev’d, knowledge of an 654 App. Corpus S.W.2d — County Hidalgo, v. (Tex.1983). appeal dealt his client. Fonseca 442 That initial (Tex.Civ.App. Corpus S.W.2d 474 issue of whether 527 solely procedural - n.r.e.); v. ref'd Dixon on a Christi writ of dismissal can be based Co., Guaranty Fidelity & party one has United States joint motion to dismiss where (Tex.Civ.App. 291 joint motion. 293 S.W. repudiated his consent - Texarkana knowledge w.o.j.). This error, writ dism’d Supreme Court held On writ attorney an that which right to revoke his includes party has the that a dil knows, with due any but also which joint motion to dismiss at to a consent Em he could have learned. Texas igence the rendition of time before Association Insurance ployers had erred trial court therefore that the (Tex.1961); Wermske, 90 S.W.2d Quintero 349 v. Jim granting the motion. diligence, Gon at 479. With due Homes, Inc., 444 Fonseca entry easily have could learned joint motion to dis zalez Since Thus, one of the attor judgment. only pleading before the was the miss knew, and the for the neys upon dismissal court quired consent, should known judgment’s have exist- release settle- ence signed at the time the agreement the ment are void and unenforcea- release. As noted in “a we Fonseca at ble. fully party is as concluded the acts of Campbell, In Fleming v. his if acting he were for him- (Tex.Civ.App. [14th Dist.] - Houston self. A Court will not set aside a n.r.e.), writ ref’d the Houston Court ad negligence because or mistakes of enforceability dressed the of a contract attorney.” last three of a Disciplinary formed violation Rule. points are overruled. now, provided then as that a points error, In their first four lawyer another, may not divide his fee with Quinteros allege that the release and settle- lawyer non-affiliated unless the client con they were invalid because sents after full disclosure of the fee divi Disciplinary were made in contravention arrangement. brought by sion a suit Rule 5-106 of the Texas Code Profes- referring alleged enforce Responsibility. sional Supreme Court of fee-splitting agreement, oral de the court Texas, Governing Rules Bar of State clared: XII, (Code Texas art. of Professional § We hold that the referral fee contract Responsibility) DR 5-106 To this by Fleming claimed is as a matter of law agree. we public policy expressed contend that their attor- Disciplinary Rule 2-107 no attor- ney, Disciplinary Hector violated ney’s fees shall be divided unless the Code, Rule 5-106 of the provides: client’s consent is obtained dis- after full (a) lawyer represents who or two more Fleming’s closure. claimed fee referral clients participate shall not make or being public contract violative our of in making an aggregate of settle- policy is void and Lew- unenforceable. ment of the claims of his 468, Davis, is v. 145 Tex. 199 S.W.2d 146 clients, unless each client has con- being sented to the settlement after ours). Fleming (emphasis at 119 advised of the existence and nature Like DR requires 5-106 of all the in the pro- claims involved fully the client be before settlement, posed informed of the total amount consent to an is Al- obtained. settlement, of partic- and of the though the in Fleming decision was also ipation of person each in the settle- supported theory, namely on another lack ment. contract, alleged of consideration for the The finding trial court was correct in reasoning Fleming we find the that Hector Gonzalez violated this rule. court, above, quoted as to be sound. were not informed of the expressed policy clearly in DR 5-106 is nature and settlement amounts of all the people ensure that such as the claims involved in the aggregate settle- give up rights except do not full ment, given showing they nor were a list knowledge of the other in- settlements the names and amounts to be received policy volved. That was violated when settling plaintiffs. the other did not inform of Gonzalez too, noteworthy, It is that the required by the matters DR 5-106. opinion in its Court earlier this case discussing

referred to DR 5-106 when will not enforce contracts Courts Quinte agreement. aggregate settlement made public in contravention of the law or Homes, Inc., ro v. Jim Walter 654 S.W.2d policy Woolsey of this State. See v. Pan 442, n. 1 443 Co., 449, 116 Refining handle 131 Tex. (1938); Harper, Gonza- S.W.2d 675 Dodd v. 670 contend that since 646, (Tex.App. lez violated the Code of Re- S.W.2d Professional 650 [1st — Houston 1983, sponsibility writ); in the he ac- method which no Baron v. Mulli Dist.] cf. 230

nax, Wells, Baab, Inc., statute, Mauzy & specifically must for it or in 623 ask 1981, (Tex.App.—Texarkana aggregate sought. clude it in the amount n.r.e.). v. hold J.M. Hollis Construction Co. Paul Dur writ ref’d We therefore Co., 354, contract (Tex.App.— release and settlement ham 641 S.W.2d cause is void writ). of action Corpus Christi no Neither the so holding, and unenforceable. we are DTPA parties contract nor the between Ap that the Criminal well aware Court of provide for the award nor the Credit Code peals adopted approach has a different Quinteros, prejudgment interest. The Re violations the Code Professional request pleadings, specifically do not sponsibility criminal as the Code relates to they prejudgment interest. awarded State, v. See Henrich matters. 694 S.W.2d relief, However, prayed general they State, Pannell v. (Tex.Crim.App.1985); damages open-ended. their claim for is (Tex.Crim.App.1984) (holding where, here, In such a situation and as Disciplinary of the Code of that the Rules exception, pre special there has been Responsibility “are not laws Professional recoverable. See Lar is judgment interest purposes of the State of Texas” for H H edo Hides Co. v. & Meat Products which excludes the admission of statute Co., (Tex.Civ.App.— 513 S.W.2d law). See evidence obtained in violation n.r.e.). Corpus ref’d Christi writ State, 92 (Tex.App. also Holt next contends that However, 1984, no such pet.). —Austin prejudgment interest award was error where, holding inapplicable to civil eases the con- since was not ascertainable public policy, the ethics of as a matter of parties required but extraneous tract attorneys and their clients must exist proof. Quinte very high plane. We sustain points of error. The initial ros’ first four damages are established “[W]here May should not have there of a time and the amount definite been set aside. determinable, definitely interest is recov right date of a matter of from the erable as case, in Anticipating our decision this Pipe Line injury or loss.” Black Lake the appellee Jim Homes raises cross Walter Co., 538 v. Co. Union Construction judgment in points challenging the initial 80, (Tex.1976). Pursuant S.W.2d 95-96 Quinteros' the favor. Code, the of the Credit Article 5069-8.01 Quinte- The initial awarded the the the twice trial court awarded $28,504.41 Jim Walter Homes’ viola- ros for by time-price charged to them differential Deceptive Act tions of the Trade Practices time-price differ Homes. The & COM. [currently codified at TEX.BUS. $20,626.40. is Since this amount ential was (Vernon ANN. 17.41—17.808 CODE §§ determinable, Quinteros are definitely the $41,252.80 violations of Supp.1986)], for Tom interest. See prejudgment entitled Eight the Chapters Six and of Consumer Alvarado, Chevrolet, v. Benson Inc. Credit Code [TEX.REV.CIV.STAT.ANN. (Tex.App.—San Antonio (Vernon Supp. 1971 and Vernon art. 5069 n.r.e.). writ ref’d fees, $2,500.00 attorney’s and in 1986)], $6,128.44 in interest. Jim prejudgment prejudgment interest The award of challenges the award Walter Homes proper. recovery also the DTPA for the award prejudgment interest and September in of breached The contract was the Credit Code violations. supplied the Homes 1977 when Jim Walter The product. Quinteros with an inferior that Homes contends Jim $9,500.00 repairs in that jury be determined is not recoverable prejudgment interest Quinte- necessary conform the request an would be Quinteros did cause the they had one for which plead home the in its ros’ prejudgment of interest award damages fixed as interest, These were as dam contracted. ings. party who seeks the of breach. Since the moment the not eo nomine via contract or of ages repairs the It of determined cost of neces is unclear which section the Credit sary due to the breach date of the the trial court found to have been Code the breach, interest on the damages those until by Walter Homes since no violated date of is First recoverable. See of law were findings of fact or conclusions Shockley, National Bank v. 663 S.W.2d point the concerning by filed this 685 (Tex.App. Corpus Christi - Appellee a court. therefore raises cross writ); Products, v. Ring Rotello Around possible ground recovery each point for Inc., (Tex.Civ.App 614 S.W.2d 455 . -Hous on which Credit pled the n.r.e.). ton writ ref'd Dist.] [14th part was based. Code Chevrolet, But Tom Benson v. Inc. cf. alleges Appellee’s point first cross Alvarado, (Tex.App. 636 S.W.2d 815 — San Quinte- granting the trial court erred n.r.e.). writ Antonio ref’d penalties judgment for under sections ros’ Supreme recently Court has dis 8.02 It is 8.01 and Credit Code. prejudgment cussed interest in context unnecessary to discuss the merits this personal Qual injury suits Cavnar v. point. In Jim Walter Homes Schuene Inc., ity Parking, Control mann, (Tex.1984), Su (1985). The language, Court’s broad how preme used Court held the contract ever, prejudgment indicates that interest that case violated the proper are plaintiff awards whenever a has harm, liquidated language suffered a The relevant or not. Credit Code. Court held: case, Cavnar quoted by instruments in that time prejudg- opinion, has come revise Court in its is identical to injured ment interest rule par- to make used contract. It equity sym- ties whole and restore inescapably follows that the instruments metry to this area of the law. We there- signed by the the Credit violated that, law, fore hold as a matter of point Code. Jim Walter Homes’ first cross prevailing plaintiff may prejudg- recover overruled. compounded (based daily ment interest 365-day year) on damages that have necessary is not It address accrued judgment. time To points. rest of Jim Walter Homes’ cross the extent that other cases conflict with findings properly Where of fact are not they holding, this are overruled. requested concerning not filed are (emphasis original). Id. at 553-554 appeal, matter raised on prejudgment We hold be affirmed if it can be interest trial court must by trial proper. awarded the court was No any legal theory sup is upheld on that findings of fact or conclusions lawof were W.E.R., ported by the evidence. In re See requested concerning computa- or filed the (Tex.1984). By overruling Therefore, tion of this amount. we will point, cross and Jim Walter Homes’ first legal uphold judgment any theory the on having necessarily judgment held that the W.E.R., supported by re the evidence. In theory, at one supportable is least is There is noth- S.W.2d 716 of necessary address the balance the not to computation ing to indicate the trial court’s They controlling. not points. cross are prejudgment of interest was erroneous. TEX.R.CIV.P. appellee’s cross-point dealing We overrule judgment the of the trial We REVERSE prejudgment with interest. cause with in- court and REMAND the Appellee’s cross-points ten deal so- to reinstate the initial structions ley Quinteros’ the recovery with the under 24,1981, the May including prejudgment of Consumer Credit Code. the DTPA Unlike award, opinion. consistent with this interest claims, the Credit Code claims were tried C.J., NYE, and and BENAVIDES Before the and before the before trial court DORSEY, JJ. jury. ON argues

OPINION MOTION FOR that the Flem REHEARING ing upon case that we relied should be i.e., facts; limited its that only to those NYE, Chief Justice. formed attorneys contracts between cause, opinion in original Our this violate the Code can be void and unenforce ordered the court to set able. Fleming Campbell, See aside post-judgment agree- the settlement (Tex.Civ.App. S.W.2d 118 [14th - Houston parties ment the between and to reinstate n.r.e.). 1976, writ ref’d Dist.] Quinte- its initial in favor of the also contends the misconduct ros. Walter Jim Homes raises twelve Gonzalez) (Hector points rehearing, of error in motion its Quinteros imputed should be in order involving all the same issues in raised its uphold agreement. to the settlement original appellate We brief. believe that only points first two of these deserve disagree both these ar We with of further discussion. guments. designed pro The Code was to attorneys public tect the clients and the

After a and verdict had general wrongdo favor, from the intentional Quinteros been rendered their ings attorneys. and/or mistakes of Gonza joined aggregate agreement settlement comply rule lez failed to between Jim Walter Homes and several allowing designed protect to clients attorney, hundred other clients intelligent, them to make an deci informed Hector Gonzalez. Under terms joint participate sion or not in a aggregate whether to agreement between Quinteros denied settlement. Gonzalez Jim and Walter right. impute To his misconduct gave million dollars to Gonza- $1.8 uphold the settle order lez for him distribute to clients once totally pub express ment would they thwart agreed to settle their claims policy lic of Professional behind the Code money The Jim Walter. amount of Responsibility, protect which is to clients. were receive under the settle- clients, Quinteros, and entitled all are was much less than the vigorous thorough and enforcement for,1 largely called no one knew of because Rules. This is es Disciplinary the Code’s judgment’s and Gon- existence because generally are pecially lawyers true where zalez did not inform the suspicion, under cloud of distrust existence and nature of all the other claims public image has never been lower. person and of participation each public image improve poor settlement, time to joint required by DR-5- long up to the courts overdue. It is Responsi- 106 of the Code Professional step giving take initial notice bility.2 agent Gonzalez’s also told the attorneys not be careless and unethical will Quinteros that they were receive more public’s confidence else, tolerated. money anyone than which was not attorneys regained can trust true. public thoroughly protecting the from opinion This held in a unanimous Court consequences attorneys’ violations that the between the Responsibility. of Professional Code Walter, being and Jim based on a violation “totally Nor Walter Homes the was void and unenforceable. is Jim to be. holding party” purports it assigns to in innocent which Jim Walter error court, findings of fact num- rehearing. its its for motion Texas, $78,385.65, Governing Supreme Rules for 2. Court first which trial; XII, (Code attorney's fees for it also re- of Profes- § included State Bar of Texas art. Quinteros from their installment note leased the Responsibility) sional DR 5-106 the after- debt to Jim Walter Homes. Under settlement, to were re- $13,687.00. ceive provide bers 28 and found existed was to be used to that Jim Walter right payments aggregate reserved under the set- extra to Gonzalez’s clients where tjie agreement attorneys necessary. easily tlement re- That “slush fund” its to would Quinteros’ by view that amount allocated to have covered the amount of the Gonzalez settling plaintiff, rightful at every disapprove judgment, and to least all but any allocated them. forfeited note’s amount. Even if this fund amount to one of Homes, by challenge proved inadequate, Walter does not find- Jim Walter Jim these protect Quinteros by ings. According choosing not to paragraph to 5 of the ensuring in the them a fair amount $1.8 contract between Gonzalez and Jim Walter settlement, re- Homes, million dollar should be right had the Jim Walter Homes quired to seek the difference from Gonza- figure million or to reduce dollar $1.8 bring lez rather than force the contract if 21 more of even cancel or separate lawsuit Gonzalez. We Gonzalez’s clients refused to settle their point overrule Jim Walter’s first of error Thus, claims. both Jim Walter and Gonza- rehearing. strong urge lez had incentives to Gonza- fact, lez’s clients to settle. In Jim Walter’s original opinion Our also holds that the attorneys right exercised their of review judgment properly trial court’s initial making inquiries several into some of $41,252.80 awarded the for Cred- clients, assigned amounts to his Gonzalez Jim Walter Homes. Code violations

which were to be deducted from the $1.8 Homes, relied on Inc. v. We Jim Walter million dollars. Schuenemann, contends in Jim Walter Homes its second Although attorneys Jim Walter’s point is distin- of error that Schuenemann Quinteros’ knew of the favorable ver disagree argu- guishable. We with this near-certainty dict and the it would be tre ment also. statute, they bled under the old DTPA did case, question the much smaller amount as As in the instant three instruments signed comprised full between Gonzalez as They and Jim Walter Homes: a certainly settlement. should have. Schuenemanns contract, note, Thus, building and installment Jim Walter was not an “innocent” Schuenemann, a lien contract. participant in the transaction between Gon at Court held Quinteros. By retaining zalez and the these latter two instruments violated the right by exerting influ review portions of Credit Code. Since the relevant process ence the settlement between at in the the installment note and lien contract clients, torney Gonzalez Jim Walter instant case are identical with those participant became an active in the settle Schuenemann, they obviously also violate process. Since the con the Credit Code. join acquired sent to the settlement was only through a violation of DR 5-107 and argued Homes Schuene- through misrepresentation by Gonzalez’s building contract that a clause mann Walter, agent, Jim like is es- note and lien con- prevented the installment topped enforcing the settlement from being from violative Credit tract Quinteros. agreement against the Homes raises a similar Code. Jim Walter here, involving a different argument Quinteros brought suit in 1978. Al- Although Supreme Court in clause. later, eight years most language in the did discuss Schuenemann up attempt in the has them tied courts contract, rejected Jim building Court Yet, just recovery. deny them their held: argument. The Court Walter Homes’ really attorneys that it Walter’s testified difference, construed Although the terms at the outset we did not make a under settlement, whom, together deter- instruments aggregate all three how, between the agreement were distribut- mine the entire million dollars $1.8 $100,000 for the limited nearly parties, we conclude that ed. A “slush fund” of purpose of determining the terms of ac- delivered December appellee 1985. The celeration parties for which the contract- timely has filed his motion for rehearing, ed, the clear terms of the acceleration asserting reversing that we erred in provisions in the installment note and reinstating court and original lien contract interpreted should be with- judgment against appellee on the basis out reference description thereof opinion set forth in our holding that the contained in the building contract. compromise settlement release was ren- Schuenemann, 668 (empha- S.W.2d at 330 dered void and unenforceable the viola- original). sis in We do not look to the Disciplinary tion of Rule 5-106. Quinteros’ installment contract to save the Texas, Court of Governing Rules The State illegal provisions in the installment note X, (Code Bar of Texas art. of Profes- § and lien contract. “The court cannot de- Responsibility) sional DR 5-106 I part expressed from the terms of the accel- now believe that I was mistaken and would eration clauses contained in the installment find that we erred in reversing the trial note and lien contract to make lawful what court. The violation formed the basis parties have made unlawful.” Id. at 31, 1985, for our opinion December revers- 332. ing the trial court. alleges Homes also finding In that the rule made the settle did plead not a cause of unenforceable, we heavily relied action under Sections 8.01 and 8.02 of the Fleming Campbell, (Tex. Code, Credit granting and that the of relief Civ.App. 1976, writ [14th Dist.] - Houston pleaded or requested improper. n.r.e.), reasoning ref’d and found the “to be Paragraph Quinteros’ V of the “First agree I Fleming sound.” was correct Amended “Chapter Petition” states VIII of decided, ly Fleming but I find is neither the Texas provides Consumer Credit Code controlling nor related to the main issue in penalty for a for violating the Code in an us, appeal following before because the amount of price twice the time differential circumstances in Fleming, existed but not charges default and deferment contract in this case: 47(a) ed for.” provides TEX.R.CIV.P. wrongdoer attorney violating petition must contain “a short statement Responsibility the Code of Professional of the cause of give action sufficient to fair (DR-107) litigant. was the notice of the claim involved....” We hold wrongdoer sought 2. The him- relief for Quinteros’ that the petition adequately ap self. prised Jim Walter Homes of the against Chapter Eight

claims them under wrongdoer (plaintiff 3. The in Flem- of the Credit Code. ing) sought relief for himself from an- (defendant Fleming). Homes’ Rehearing Motion for is overruled. 4. A violation of DR-107 was held to against public policy violate a member of

BENAVIDES, J., dissents. group professionals it was regulate, against intended to and not BENAVIDES, Justice, dissenting. non-attorney litigant. innocent opinion In our delivered December us, original jury appeal before we reversed a trial court appellants verdict in favor of the had been appellee by setting that found favor of received arid entered when the an initial appellants aside for the compromise agreement appellee by entering take-nothing judgment made. The release was executed appellee. in favor of appellants; appellants take-nothing judgment The trial court’s re- appellants; on a check was based settlement and release be- ceived a as trustee parties. part appellants’ payment tween the The facts have been check for bank previously original opinion set out in pursuant our to the release was de-

235 general relating public rules livered; check sent to sets out the settlement was illegal trans- attorney. All of this considerations vis-a-vis appellants by policy appellants by renounced the parties occurred before affected such cases. actions and authority attorney, of their and is reflected opinion, the Court stated In its Findings in the trial court’s of Fact further following: of Law. release cov- and Conclusions [The of a contract two constructions ... When unknown, and ered all matters known or preference given be possible, will are verdict, appellants of the were aware does not result violation that which although directly entry not aware Northern R. Co. v. Delmar law. Great judgment.] 579, Co., 51 S.Ct. 75 L.Ed. 283 U.S. illegal agreement was not The settlement 793, 794, 1349; 251. pp. 12 Sec. Am.Jur. face, and there is no find- or invalid on its Employers’ Ins. Ass’n See also Texas appellee ing or assertion that was aware Tabor, Tex.Com.App., 283 S.W. 779. appel- part on the the DR 5-106 violation performed contract that could have been attorney, I do not believe lants’ Gonzalez. declared legal in a manner will not be public policy considerations should extend performed may have been void because holding the settlement void Corbett, illegal in an manner. Labbe v. appellee under such circum- 808; p. 12 Am.Jur. 69 Tex. 6 S.W. appellee nor his stances. Neither According to the fore- Sec. appellee DR nor violated 5-106. Neither rules, going settled the contract which in, encouraged, or attorney participated his togeth- parties associated themselves wrongdoing knew of violation er, alleged petition, in the must be appellant’s attorney. original decision Our illegal. held valid and not appellee onerous on the be- is even more Lewis, 199 S.W.2d at 149. While Lewis regu- rules formulated to cause the same appeal specifically control be does not attorneys provide attor- late that his own us, interesting to note that fore it is ney communicate the other cannot Act reviewed the Securities Supreme Court (in case) litigant except through this Likewise, purpose analysis. in its and its appellants’ wrongdoing attorney, so that of Professional Re my review of the Code appellee could not have discovered the vio- me to conclude that sponsibility leads lation. regulate the not intended to 5-106 was Davis, In the case of 145 Tex. Lewis v. I attorneys, and do not litigants but the (1947), 199 146 cited Flem- S.W.2d suggests in this case even find its violation quotation in the from ing and contained against a non- policy public consideration original opinion, in our one of the Fleming non-lawyer litigant. wrongdoing, (both sought parties non-lawyers) to avoid assuming might there be some Even pertained to partnership contract as it policy original in our public furtherance of acquired interests neither certain because void, I holding the settlement decision parties registered were or licensed outweigh the that it does not would hold Act at dealers under the Texas Securities of one that the misconduct rule established making agreement. the time of agree- a settlement attorney will not vitiate to have en- parties were not shown litigant is bound ment so that a illegal pur- for an tered into the contract Employers Insurance agreement. Texas There no assertion that pose. Wermske, Tex. Ass’n v. anything illegal, or sought to do parties rule is that general “The sought to sell or become parties is attorney and client relationship of registering un- dealers in securities without rule, the omis- this agency. Under one into the they entered der the law when commissions, sions, as the as well contract, held that the court therefore regarded as the acts are under such of the contract enforcement represents; he client whom poli- against public would not be conditions neglect of the equivalent to the neglect Davis unenforceable. cy or be rendered Wermske, client himself.” attorney 349 S.W.2d at own violated DR 5-106. Consider- public policy require ations of do not that complained the violation that was of herein Trevino, In Martin v. 578 S.W.2d 763 create a remedy to defeat an innocent (Tex.Civ.App. Corpus Christi writ - wrongdoer adversary’s from an wrongdo- n.r.e.), rejected ref 'd our Court a claim from ing attorney. physician against (physician’s defendant patient) and attorney. the defendant’s Estoppel was not before this Court and opinion physician’s thrust of that as to the should not form a basis for the result as against claim attorney pa based on the found majority rehearing. on Not- attorney’s alleged tient’s violation of his withstanding, disagree I appellee was professional responsibility was that the at estopped agree- to enforce the torney party’s is not liable to the adverse ment. The “review condition” in the settle- client, claim for his actions on of his behalf agreement, does not rise to a level and we held that in remedy such case the creates a violation of the DR 5-106 attorney’s profes for the violation of the appellee’s attorney. The review condi- responsibility public, pri sional was not tion respect was not even exercised with Trevino, vate. Martin 578 S.W.2d at appellant’s individual settlement. I 770. While admit that this blanket asser encouraged Settlements should be private tion would not bar all actions impeded, voluntary settlements are against professional respon being favored as in the interest of the law. sibility appellee’s suggested violations as Cook, (Tex.Civ. State v. 407 S.W.2d 876 rehearing, certainly motion for I would n.r.e.). App. writ ref’d - Waco agree non-lawyer litigant that if a cannot' binding settlement offer became when adversary’s attorney sue his for a breach of Lee, accepted. was Fail v. professional responsibility performed in the 1976, writ). (Tex.Civ.App. Worth - Fort (because adversary service of the such rem voluntary The favored status of settle edy public private), would be and not ments, especially with the trend toward here, under the circumstances the non- litigation multi-party growing in an ever wrongdoing litigant should not lose his oth litigious against society, should dictate lawful settlement because of his ad erwise private extension of the law to create a versary’s attorney’s sugges violation. remedy against litigant an innocent in fa majority rehearing tion litigant wrongdo vor of the who hired the seek, appellee might separate in a action attorney. original holding I ing believe our against the difference between public policy would tend thwart the amounts, the settlement and flies voluntary favor of settlements and would holding face of our in Martin. More chilling have a effect on the settlement of over, appreciate why appellee I fail lawsuits. bring the one to suit Gon should be grant rehearing I the motion for would zalez for a violation of DR rather and affirm the decision of trial court. appellant, chose than who Gonzalez duty whose best interest had a Gonzalez

protect.

I do not feel that the violation involved gives appellants’ private

herein rise to relieved from their contract because performed by

violation own

agent. reg- DR 5-106 was not intended to

ulate behavior of an to his adversary private

client’s or to create

right remedy against non-wrongdo-

ing litigant litigant in favor of the whose

Case Details

Case Name: Quintero v. Jim Walter Homes, Inc.

Court Name: Court of Appeals of Texas

Date Published: Dec 31, 1985

Citation: 709 S.W.2d 225

Docket Number: 13-84-452-CV

Court Abbreviation: Tex. App.