William G. WASSERMAN, Relator, v. Hon. H.D. BLACK, Jr., Judge, 77th District Court, Limestone County, Texas, Respondent.
No. 10-95-208-CV.
Court of Appeals of Texas, Waco.
Sept. 20, 1995.
J. Val Fulcher, Teague, & Joe Cannon, Cannon & Simmons, Groesbeck, for Defendants/City of Teague, Wayne Shinn, Jerrell Sartor, James Herrington, and Melvin Wylie, Real Parties in Interest.
Kenneth Stein, Dallas, for City of Teague and Jerrell Sartor, Cross-Defendants, Real Parties in Interest.
Rozanne Moore McKinney, McKinney & McKinney, Fairfield, and K. Scott Brazil, Houston, for Stanley Smith, Fred McKinley and Monette Brooke, Ind. Executrix of the Estate of William Brooke, Deceased, Real Parties in Interest.
Before THOMAS, C.J., and CUMMINGS and VANCE, JJ.
OPINION
CUMMINGS, Justice.
Relator William G. Wasserman seeks a writ of mandamus from this court directing the Honorable H.D. Black, Jr., to vacate his order of May 5, 1995, that denied his motion to disqualify J. Val Fulcher from representing any of the parties to the cause of action docketed under 94-257-A in the 77th District Court of Limestone County, and directing Judge Black to grant said motion. We conclude that Wasserman is entitled to the relief sought and conditionally grant the writ.
PROCEDURAL AND FACTUAL BACKGROUND
The City of Teague is a Class A municipality under the Texas Local Government Code. See
Upon considering the circumstances of their dismissals, Smith, McKinley, and Brooke (hereafter plaintiffs) concluded that the members of the council and Wasserman had conducted a “smear campaign” against them and had violated certain provisions of the Texas Open Meetings Act to foment their
When it received notice of the principal suit, the council decided to hire attorney J. Val Fulcher to represent each of the defendants named in the suit. Furthermore, according to Wasserman, the council agreed to indemnify Wasserman and any of the individual councilmen should they incur any personal financial liability from the lawsuit. Fulcher, agreeing to represent the parties but apparently aware that his representation of multiple parties might result in a conflict of interest, on August 24 sent a letter to the council and to Wasserman warning them of this possibility. He advised each of them that they might want to retain their own independent counsel and that, should they choose to proceed with him as their attorney, they should inform him immediately when and if a conflict of interest should arise. Notwithstanding the warning, each of the defendants permitted Fulcher to represent him in the principal suit.
Fulcher wasted no time in actively representing his clients. On October 25 he filed on the behalf of the defendants an answer to the plaintiffs’ petition and two counterclaims. In the same pleading, Fulcher also filed a third counterclaim solely on the behalf of Shinn, alleging $50,000 in actual damages and requesting $50,000 in punitive damages for the unlawful interference with his other employment at the United States Postal Service.
On November 15 an employee of the city not a party to this lawsuit gave a sworn statement to Police Chief Roger Brooke that on the previous day Wasserman asked him to notarize a document containing accusations of illegal activity against Mayor (formerly Councilman) Sartor and deliver the document to a councilman also not a party to this lawsuit. The employee performed his duties as instructed by Wasserman.
On November 16 Wasserman‘s deposition was taken by the plaintiffs’ attorney with Fulcher present. The deposition apparently proceeded without incident until, in response to a question from the plaintiffs’ attorney, Wasserman testified that he, as a professional auditor, did not believe the City of Teague should pay for Fulcher to represent Shinn in his counterclaim against the plaintiffs. The next day Fulcher sent a letter to the council, Mayor Sartor, and Wasserman, informing them of a possible conflict of interest between Wasserman and some or all of the remaining defendants. He asked the council to discuss the issue at its next meeting and asked Wasserman to respond in writing to his concerns.
In a letter dated December 2, 1994, Wasserman wrote to Fulcher explaining that, at the deposition, he was merely offering his opinion as an auditor that he did not believe the city should fund Shinn‘s counterclaim against the plaintiffs. Wasserman also indicated in the letter, however, that he understood the city had the authority to pay the attorney‘s fees for each of the defendants involved in the case and that, as a result, he was not opposed to the city‘s decision to pay the attorney‘s fees related to Shinn‘s counterclaim.
On December 5 the council voted to discharge Wasserman as City Secretary effective immediately; the council also decided to no longer provide Wasserman with legal representation in the principal suit.2
On December 16 Fulcher filed answers to interrogatories and responses to requests for admissions on the behalf of Wasserman in the principal suit. Also on December 16, Fulcher filed his motion to withdraw as counsel for Wasserman in the principal suit. Wasserman, who had since retained W.R.
Also on January 23, Malone, alleging that the council had rescinded its agreement to indemnify Wasserman for any financial liability he might incur in the principal suit, filed a cross-claim in the principal suit against the City of Teague and Sartor (hereafter cross-defendants) for a declaration of his rights to indemnification (hereafter Wasserman‘s cross-claim). In addition, Malone filed a second cross-claim against Sartor and the City of Teague alleging, among other things, wrongful discharge, intentional infliction of emotional distress, and defamation (hereafter the second suit).3
On February 2 Fulcher filed a general denial on the behalf of the cross-defendants to both Wasserman‘s cross-claim and the second suit. At about this time, Fulcher, the council, and Sartor decided that too many potential conflicts of interest would exist if Fulcher attempted to represent Sartor and the city in either the second suit or Wasserman‘s cross-claim, so the determination was made to retain Kenneth R. Stein, alone, to defend these claims. Nevertheless, Fulcher remained the attorney for the defendants other than Wasserman in the principal suit.
On February 13 Stein filed a general denial on the behalf of cross-defendants to both Wasserman‘s cross-claim and the second suit.
On February 7 Malone filed Wasserman‘s motion to disqualify Fulcher from representing any of the litigants in any of the proceedings, and when it was denied he brought this mandamus petition.
DISQUALIFICATION
Rule 1.09(a) of the Texas Disciplinary Rules of Professional Conduct provides:
Without prior consent, a lawyer who personally has formerly represented a client in a matter shall not thereafter represent another person in a matter adverse to the former client:
(1) in which such other person questions the validity of the lawyer‘s services or work product for the former client;
(2) if the representation in reasonable probability will involve a violation of Rule 1.05; 4 or
(3) if it is the same or a substantially related matter.
Although the wording of Rule 1.09(a)(2) indicates that it was designed primarily to address situations where an attorney seeks to represent a wholly new client in litigation against a former client, we believe the rule also applies under these facts where an attorney represents multiple parties and a conflict arises among them. The concern addressed by Rule 1.09(a)(2) under the former situation is also present in the latter: an attorney, who having represented a client, might use confidential information gained during that representation to the former client‘s detriment. See Tex.Comm. on Professional Ethics, Op. 482, 57 TEX.B.J. 200 (1994). Rule 1.09(a)(2) applies here.
Prior to Fulcher‘s withdrawal from his representation of Wasserman, he was actively engaged in the representation of Wasserman and his interests. Not only did he file an answer and two counterclaims on the behalf of Wasserman and the other defendants named in the plaintiffs’ petition in the principal suit, but he also assisted Wasserman in answering his discovery and appeared as his legal representative when his deposition was taken on November 16, 1994. Such representation of a client necessarily involves the discussion of many factual details pertinent to the case, and Wasserman, in a sworn affidavit, asserted that many of these details were related to Fulcher in confidence.
WAIVER
A party who fails to seek disqualification timely waives the complaint. Grant v. Thirteenth Court of Appeals, 888 S.W.2d 466, 468 (Tex.1994) (orig. proceeding) (per curiam) (on rehearing). The court will consider the length of time between the moment the conflict became apparent to the aggrieved party to the time the motion for disqualification is filed in determining whether the complaint was waived. See Vaughan v. Walther, 875 S.W.2d 690, 690-91 (Tex.1994) (orig. proceeding) (per curiam). The court should also consider any other evidence which indicates the motion is being filed not due to a concern that confidences related in an attorney-client relationship may be divulged but as a dilatory trial tactic. See Spears v. Fourth Court of Appeals, 797 S.W.2d 654, 656 (Tex.1990) (orig. proceeding).
Here, there is evidence that at least as early as November 15, 1994, Wasserman suspected Sartor had committed illegal acts. Whether the alleged acts were performed in his position as a city official is not indicated in the record. Also not indicated in the record is whether these alleged acts were somehow related to the plaintiffs’ complaints in the principal suit. Without any evidence to link these allegations to the plaintiffs’ complaint in the principal suit, we cannot consider Wasserman‘s actions to have provided him with the basis of knowledge for concluding that he might have a conflict of interest with Sartor in the case.
What is clear from the record is that on November 16, 1994, Wasserman made a statement during his deposition that he did not believe the city should pay for the attorney‘s fees in Shinn‘s counterclaim against the plaintiffs in the principal suit. On November
Considering that Wasserman‘s complaints in the second suit and his cross-claim in the principal suit appear to be derived from the termination of his employment and the city‘s decision to no longer provide him indemnity in the principal suit, the date upon which Wasserman first became aware of the conflict was December 5, the day he was fired. Certainly as early as November 16, the day of his deposition, Wasserman possessed information that a real conflict may have been arising between him and the city; nevertheless, his letter to Fulcher dated December 2 indicates that he did not believe there was any true conflict. A reasonable person under these facts would not have concluded at that time that such a conflict had arisen between Wasserman and his codefendants to such a point that he needed to seek the disqualification of Fulcher from representing the codefendants in the litigation before the trial court. Having identified December 5 as the date the conflict became apparent to Wasserman, we note that approximately two months passed from this date until the date he filed his motion to disqualify.
With regard to any other evidence of a possible improper use of the motion to disqualify, nothing in the record indicates that it was filed on the eve of any final hearing or trial date. See Vaughan, 875 S.W.2d at 691.6 The facts fail to indicate either the use of his motion to disqualify as a dilatory tactic by Wasserman or any negligence by him in bringing the motion promptly. See Spears, 797 S.W.2d at 656. Therefore, we conclude that Wasserman‘s complaint against Fulcher‘s representation of the defendants in the principal suit was not waived. See Syntek Finance Corp. v. Metropolitan Life Ins. Co., 880 S.W.2d 26, 34 (Tex.App.—Dallas), rev‘d on other grounds, 881 S.W.2d 319 (Tex.1994) (six weeks between time conflict became apparent and time motion to disqualify was filed did not waive complaint).
WHETHER MANDAMUS WILL LIE
A writ of mandamus may be issued to correct a “clear abuse of discretion.” Walker v. Packer, 827 S.W.2d 833, 839-40 (Tex.1992) (orig. proceeding). Issuance of a writ of mandamus is limited to those instances in which no adequate remedy by appeal exists. Id. at 840; Jampole v. Touchy, 673 S.W.2d 569, 572-73 (Tex.1984) (orig. proceeding). Disqualification of counsel is a proper subject of a mandamus proceeding. Coker, 765 S.W.2d at 400; Centerline Indus. Inc. v. Knize, 894 S.W.2d 874, 875 (Tex.App.—Waco 1995, n.w.h.). We conclude the trial court‘s failure to grant Wasserman‘s motion to disqualify was a clear abuse of discretion for which he was left with no adequate remedy by appeal. We will conditionally grant the requested writ of mandamus; it will issue only upon the trial court‘s failure to comply with this opinion and order.
THOMAS, Chief Justice, dissenting.
I must respectfully dissent to the granting of Wasserman‘s petition for a writ of mandamus.
Wasserman labors under a “heavy burden” in attacking Judge Black‘s ruling denying the motion to disqualify Fulcher from representing any of his clients in the original suit filed by Smith, McKinley, and Brooke. See Johnson v. Fourth Court of Appeals, 700 S.W.2d 916, 917 (Tex.1985). He must show that the
Because what record we do have before us conclusively shows, as of the time of the hearing on the motion to disqualify, that Fulcher was not then representing any clients in an action against Wasserman, I would hold that the trial court did not clearly abuse its discretion when it concluded that Fulcher was not disqualified by Rule 1.09.
RULE 1.09
At the heart of the controversy is the correct interpretation of Rule 1.09.
SUIT BY SMITH, MCKINLEY, AND BROOKE
When the court heard and denied Wasserman‘s motion to disqualify, Fulcher was then representing the City of Teague, Sartor, Shinn, Herrington, and Wylie, as defendants and counter-plaintiffs, in the original suit filed by Smith, McKinley, and Brooke. The court had previously granted Fulcher‘s unopposed motion to withdraw as Wasserman‘s attorney, and thus Fulcher was no longer representing him as a defendant or counter-plaintiff in the original suit. W.R. Malone was apparently representing Wasserman in his capacity as a defendant and counter-plaintiff in the original suit. Therefore, at the time of the hearing, all of Fulcher‘s clients (City, Sartor, Shinn, Herrington, and Wylie) were in an adverse position to Smith, McKinley, and Brooke. Wasserman was also in an adverse position to Smith, McKinley, and Brooke, but he was being represented by Malone.
WASSERMAN‘S SUIT AGAINST CITY AND SARTOR
Two of Fulcher‘s clients (City and Sartor) were in an adverse position to Wasserman at the time of the hearing on the motion to disqualify because they are cross-defendants in Wasserman‘s cross-claim based on wrongful termination and a claim for indemnity. But, at the time of the hearing, Kenneth R. Stein was representing the City and Sartor in their capacities as cross-defendants on Wasserman‘s cross-claim. Thus, Stein—not Fulcher—was then representing the City and Sartor in a matter adverse to Wasserman.
SEPARATE TRIALS
Moreover, prior to the hearing on the motion to disqualify, the trial court ordered that the suit by Smith, McKinley, and Brooke against the City, Sartor, Shinn, Herrington, Wylie, and Wasserman be tried separately from Wasserman‘s cross-claim against the City and Sartor. Accordingly, when the trial occurs on the original suit, the City, Sartor, Shinn, Herrington, and Wylie will be repre-
RELIEF SOUGHT BY WASSERMAN
Wasserman seeks a writ of mandamus directing Judge Black to withdraw his order denying the motion to disqualify and directing him to enter an order disqualifying Fulcher from representing any litigant. He is thus seeking to have Fulcher disqualified from representing the City, Sartor, Shinn, Herrington, and Wylie in their capacities as defendants and counter-plaintiffs in the original suit brought by Smith, McKinley, and Brooke. Wasserman asserts by affidavit that he never consented to Fulcher‘s continued representation of any defendants in the original suit. He contends that the trial court should have disqualified Fulcher under Rule 1.09 because “it is to be expected that Mr. Fulcher will attempt to place all blame for any damages suffered by [Smith, McKinley, and Brooke] upon [Wasserman] rather than his remaining clients, and to aid Mr. Stein, now apparently lead counsel for the City and Sartor[,] in similar efforts in the separate trial of [Wasserman‘s] cross-action.” He further argues that to permit Fulcher‘s continued participation in the case will “bring further obloquy upon the legal profession by the actuality, and certainly the appearance, of impropriety.”
Rule 1.09 is the only ground asserted by Wasserman in his motion to disqualify Fulcher. He cannot show from the record that, at the time of the hearing on the motion, Fulcher was representing another person in any matter adverse to him (Wasserman), which is a threshold requirement for the rule‘s application. See
Wasserman‘s problem is that he is seeking to have Fulcher disqualified under Rule 1.09 even though he is not representing the City, Sartor, Shinn, Herrington or Wylie in any matter adverse to him (Wasserman). The City and Sartor are involved in the litigation in two separate legal capacities: they are defendants and counter-plaintiffs in the suit by Smith, McKinley, and Brooke, and they are cross-defendants in Wasserman‘s cross-claim. The City and Sartor are clearly entitled to be represented by different counsel in each capacity.
This is not say, however, that Fulcher does not owe Wasserman any continuing duties under the disciplinary rules. In fact, Fulcher is somewhat hemmed in by having represented Wasserman. First, he cannot knowingly use or divulge any confidential information obtained from Wasserman to Wasserman‘s disadvantage. See
Moreover, during the trial of the suit by Smith, McKinley, and Brooke, Fulcher cannot take any action on behalf of his clients that would be in any way adverse to Wasserman. See
Thus, Fulcher can only represent his clients in the original suit in a way that accommodates his continuing duty to Wasserman under the disciplinary rules. A potential possible conflict between the representation of his clients in the original suit and his continuing duty to Wasserman does not preclude Fulcher from continuing to represent his clients in a matter that is not directly adverse to Wasserman. See
Wasserman contends, in effect, that the limitations Fulcher has with respect to his clients disqualifies him from representing them in the trial of a matter that is no way adverse to him (Wasserman). As already noted, however, that decision lies with Fulcher‘s clients, not with Wasserman. More than Wasserman‘s interests are implicated by the intricate facts. Any attempt to disqualify Fulcher is of substantial importance to his clients, and their interests must be considered as well. See
Accordingly, I would deny the petition for a writ of mandamus. Wasserman has not demonstrated from the record that Judge Black could have reached only one decision under the law and facts and that the decision he reached is so arbitrary and unreasonable as to constitute a clear and prejudicial error of law. See Johnson, 700 S.W.2d at 917.