Justia Texas Supreme Court Opinion Summaries

Articles Posted in Legal Ethics
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The Supreme Court reversed the judgment of the court of appeals reversing the decision of the district court denying Winstead PC's motion to dismiss USA Lending Group, Inc.'s malpractice claim brought under the Texas Citizens Participation Act in this legal malpractice case, holding that Winstead presented prima facie evidence sufficient to survive a motion to dismiss.USA Lending hired Winstead PC to sue USA Lending's former employee. Later, USA Lending sued Winstead and its attorney seeking more than $1 million in damages, alleging that Winstead's malpractice caused USA Lending to forfeit its claim for monetary damages. Winstead filed a motion to dismiss, arguing that the lawsuit was based on its exercise of the right to petition. The district court denied the motion, but the court of appeals reversed. The Supreme Court reversed, holding that USA Lending adduced prima facie evidence to support its claim for legal malpractice. View "USA Lending Group, Inc. v. Winstead PC" on Justia Law

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The Supreme Court affirmed in part and reversed in part the judgment of the court of appeals affirming the orders that held that a county attorney lacked authority to pursue certain claims on the state's behalf and that sanctioned him personally and individually for pursuing the claims without such authority, holding that the court should have accepted the attorney's appeal from the sanctions order.In affirming the orders at issue, the court of appeals agreed with the lower court that the attorney lacked authority and held that he failed to perfect an appeal on his own behalf. The Supreme Court reversed in part, holding that the court of appeals (1) correctly held that the attorney lacked authority; but (2) should have accepted the attorney's appeal for the order of sanctions or permitted him to amend the notices of appeal. View "State ex rel. Durden v. Shahan" on Justia Law

Posted in: Legal Ethics
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In these consolidated appeals the Supreme Court denied Respondents' request to withdraw the Chief Justice's certification letter and dismiss the underlying petitions as improvidently granted, holding that the Governor's appointment of two substitute justices to participate in the determination of these cases did not violate due process or due course of law protections.After two of the Supreme Court's nine justices voluntarily recused themselves from the case, the Chief Justice requested that the Governor appoint two qualified justices or judges to participate in the Court's determination of these appeals. Respondents objected, arguing that allowing the Governor to appoint justices would create due process and ethical problems where the State was not a party. The Supreme Court denied Respondents' requests to dismiss the petitions as improvidently granted, holding (1) there was no serious risk of actual bias under Caperton v. A.T. Massey Coal Co., 556 U.S. 868 (2009); and (2) the Governor's appointment of the two substitute justices did not taint the commissioned justices with the appearance of partiality or impropriety under the Texas ethical rules. View "State v. Audi Aktiengesellschaft" on Justia Law

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In this products-liability and wrongful-death suit, the Supreme Court vacated the order of the trial court sanctioning an attorney for commissioning a pretrial survey that commenced in the county of suit shortly before trial, holding that the sanctions order, issued under the court's inherent authority, could not stand because evidence of bad faith was lacking.After a hearing, the trial court imposed sanctions against the attorney that commissioned the pretrial survey, ordering the attorney to complete ten hours of legal ethics education and pay the movants $133,415 in attorneys fees and expenses. The court did not find that the attorney violated any disciplinary rules or other applicable authority, instead concluding that the attorney's conduct was intentional, in bad faith, and an abuse of the legal system and the judicial process. The court of appeals affirmed. The Supreme Court reversed, holding (1) the attorney's attitude and intermittent obstinance at the sanctions hearing likely taxed the trial court's patience but did not itself justify the imposition of sanctions; and (2) the attorney's errors in commissioning and executing the survey did not constitute bad faith. View "Brewer v. Lennox Hearth Products, LLC" on Justia Law

Posted in: Legal Ethics
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In this dispute between the Hickman Group and the Murrin Group asserting the right to control the management of Billy Bob's the Supreme Court denied the Murrin Group's petition for writ of mandamus challenging the trial court's denial of its motion to disqualify Kelly Hart & Hallman (KHH) as counsel for Billy Bob's Texas Investments (BBT) and as counsel for the Hickman Group, holding that the Murrin Group did not establish a clear abuse of discretion as to the motion to disqualify.The Murrin Group filed the underlying lawsuit against the Hickman Group asserting claims individually by the members of the Murrin Group and claims asserted derivatively on behalf of BBT. KHH was hired to represent both the Hickman Group and BBT in the litigation. The Murrin Group moved to disqualify KHH as counsel for both BBT and the Hickman Group and filed a Rule 12 motion requiring KHH to show its authority to represent BBT. The trial court denied both motions. The Murrin Group sought mandamus relief. The Supreme Court denied relief, holding (1) the trial court properly denied the motion to disqualify; and (2) the Murrin Group did not establish the lack of an adequate remedy at law as to the Rule 12 motion. View "In re Murrin Brothers 1885, Ltd." on Justia Law

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In this guardianship proceeding, the Supreme Court denied mandamus relief, holding that the trial court did not abuse its discretion by refusing to disqualify counsel for the guardianship applicant due to a purported conflict of interest.Jamie Rogers, represented by Alfred Allen, filed an application for temporary guardianship of Verna Thetford's person and a management trust for her estate. Verna moved to disqualify Allen as Jamie's counsel, asserting that Allen had represented Verna and that she objected to his representation of Jamie in violation of his fiduciary duties to her. The trial court denied the motion to disqualify and appointed Jamie as temporary guardian for Verna. Verna argued before the Supreme Court that the Texas Disciplinary Rules of Professional Conduct required that Allen be disqualified. The Supreme Court held (1) the Rules permit such representation in limited circumstances and that a trial court's decision regarding disqualification, based on a careful, thorough consideration of the evidence, is entitled to great deference by an appellate court; and (2) there was no reason to disturb the trial court's discretion in this case. View "In re Thetford" on Justia Law

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The Vethan Law Firm represents Turner in a suit against Lopez, who is represented by Cweren. Vethan hired Wright as a paralegal to work on Turner’s case. Wright exchanged emails with lawyers, communicated with Turner, reviewed confidential information, drafted an engagement letter, and attended meetings in which Vethan attorneys discussed Turner’s case. Wright’s employment ended weeks later. Cweren hired Wright months later. To screen for potential conflicts, Cweren apparently asked interview questions based on the applicant’s resume. Wright did not disclose her employment at Vethan on her resume nor did she volunteer any information during the interview. Wright worked for Cweren on the Turner matter for several months, largely in a clerical capacity. After Vethan noticed Wright’s initials on Cweren documents, Vethan asserted that Wright’s participation required Cweren to withdraw as Lopez’s counsel. Wright denied that she had worked on the Turner matter while employed by Vethan. Cweren refused to withdraw but instructed Wright not to discuss the case with other employees, barred her from viewing any Turner files, and shifted all responsibility for the case to other paralegals. Vethan unsuccessfully moved to disqualify Cweren. The Supreme Court of Texas reversed. A court must grant a motion to disqualify a firm whose nonlawyer employee previously worked for opposing counsel if the nonlawyer obtained confidential information about the matter while working at the opposing firm and then shared that information with her current firm. Both requirements are met here. View "In re Turner" on Justia Law

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Galveston County Commissioners Court may set a salary range for a county judicial employee while letting Galveston County district judges decide if compensation within that range is reasonable. While the judicial branch may direct the Commissioners Court to set a new range, it cannot dictate a specific salary outside that range.The Supreme Court reversed the court of appeals’ judgment in this long-running dispute over who has the authority to set the compensation of a county judicial employee, holding that, in this case, the trial court lacked the authority to require a county judge to reinstate a county judicial employee at a specific salary, thus encroaching on the county’s legislative branch - the Commissioners Court. View "Honorable Mark Henry v. Honorable Lonnie Cox" on Justia Law

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At issue was whether a newly-elected district court judge or the former judge he or she replaced may file findings of fact following a bench trial over which the former judge presided before his or her term expired. The court of appeals concluded that neither judge could file the findings. The Supreme Court reversed, holding (1) the court of appeals properly found that the new judge could not file the findings because she lacked the authority to file them; but (2) the court of appeal erred by failing to direct the new judge to request that the former judge file the findings because the former judge was the only judge with the power to file findings, even after he left the bench. View "Ad Villarai, LLC v. Pak" on Justia Law

Posted in: Legal Ethics
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In 2004, Linegar, an Australian, formed KeyOvation, which eventually merged with Saflink and became IdentiPHI, in which Linegar was a major stockholder. DLA Piper law firm represented Saflink in the merger. Following the merger, DLA Piper represented IdentiPHI as corporate counsel. During the merger, IdentiPHI needed a short-term loan. Linegar then served as Chairman, Director, and majority shareholder of Zaychan, the corporate trustee of the Linegar Fund, an Australian self-managed retirement trust with Linegar and his ex-wife as the sole beneficiaries. Linegar arranged for the Fund to lend IdentiPHI $1.67million. DLA Piper represented IdentiPHI in the transaction and worked directly with Linegar. IdentiPHI executed a promissory note to Zaychan, which was accepted by Linegar as Chairman and Director, and which granted Zaychan a security interest in IdentiPHI’s assets. The note was payable by June 29, 2008. Timely payment was essential for the Fund's compliance with Australian law. When it became apparent that IdentiPHI was going to default, Linegar took several actions, but ultimately the debt was subject to challenge under 11 U.S.C. 547(b) because the security interest had not been perfected. KeyOvation, the holder of the assigned note, settled its claim for $150,000, which it paid to Linegar. Linegar, Zaychan, and KeyOvation sued DLA Piper for legal malpractice, negligent misrepresentation, breach of fiduciary duty, breach of contract, unjust enrichment, and deceptive trade practices. They claimed that the firm gave assurances that the lien would be perfected. Linegar’s individual claims resulted in an award of $1,293,606. The court of appeals reversed. The Supreme Court of Texas reversed, holding that Linegar, as an individual, had standing. View "Linegar v. DLA Piper LLP" on Justia Law