Daves v. Commission For Lawyer Discipline

• Decision Date: 14 August 1997
• Docket Number: No. 07-96-0093-CV,07-96-0093-CV
• Citation: 952 S.W.2d 573
• Parties: Russell DAVES, Appellant, v. COMMISSION for LAWYER DISCIPLINE, Appellee.
• Court: Texas Court of Appeals

Page 573

952 S.W.2d 573

Russell DAVES, Appellant, v. COMMISSION for LAWYER DISCIPLINE, Appellee.

No. 07-96-0093-CV.

Court of Appeals of Texas,

Amarillo.

Aug. 14, 1997.

Rehearing Overruled Sept. 15, 1997.

Carr, Fouts, Hunt & Wolfe, L.L.P. (Donald M. Hunt and Gary M. Bellair) Lubbock, for appellant.

State Bar Of Texas (Linda A. Acevedo) Austin, McClesky, Harringe, Brazil & Grat (Jim Hund, Special Assistant Disciplinary Counsel) Lubbock, for appellee.

Before BOYD, C.J., and DODSON and QUINN, JJ.

DODSON, Justice.

The Commission for Lawyer Discipline (the Commission) brought disciplinary proceedings against Russell Daves (Daves), alleging that his conduct in representing K.D. and B.D. (the Parents) and their minor child (the Child), violated the Texas Disciplinary Rules of Professional Conduct. The Parents and the Child had conflicting claims to a settlement arising out of injuries suffered by the Child while at a psychiatric hospital (the Hospital). After the presentation of evidence, a jury found that Daves was guilty of violating Disciplinary Rules 1.06(b)(1), 1.06(b)(2), 1.07, and 3.02. ¹ Based upon these findings, the trial court rendered judgment against Daves, suspended him from the practice of law for nine months, and assessed attorneys' fees against him. By sixteen points of error, Daves appeals the trial court's judgment and imposition of sanctions. We affirm.

The Child was being treated in the Hospital in late 1990 for behavioral problems. In early February, 1991, the Parents learned that the Child had been sodomized by a Hospital employee. Soon thereafter, the Parents learned that the person who had sodomized the Child was infected with the AIDS virus. Faced with the prospect of spiraling medical bills, the Parents hired attorney Jay Harvey (Harvey) to represent them against the Hospital and its employee. In July, 1992, the Parents reached a tentative settlement of $1.5 million with the Hospital.

The Parents then learned that the settlement was limited to compensation for the Child, and they became concerned for the recovery on their own claims. After experiencing difficulty with Harvey and becoming disgruntled with his services, the Parents sent a letter to him requesting the termination of his services. Meanwhile, Harvey filed a friendly suit in the 237th District Court of Lubbock County, Texas, seeking court approval of the settlement, and requested that attorney Bruce Magness serve as guardian ad litem for the Child.

The Parents hired Daves to have themselves appointed as the Child's co-guardians. Daves filed an application to appoint the Parents as co-guardians of the Child, which was granted by the County Court of Lubbock County, Texas (hereinafter referred to as the "guardianship case"). An attorney ad litem was appointed by the court for the Child. Soon thereafter, the Parents applied to the court for and received permission to institute an action on behalf of the Child for the injuries sustained by him while at the Hospital. The Parents also received permission from the Court to hire Daves as attorney to pursue the claims of the Child.

Daves then filed an application in the guardianship case requesting permission for the Parents, as co-guardians, to settle "any and all claims of [the Child]" against the Hospital and its employee. Specifically, they requested authority to settle the Child's claim for $1 million, $500,000 less than the original $1.5 million settlement negotiated by Harvey. Further, the Parents made an offer to the Hospital to settle their claims for $500,000. No settlement was reached.

Daves additionally filed a petition in the 166th District Court of Bexar County, Texas, on behalf of "[the Parents], Individually and as Co-Guardians of the Person and Estate of [the Child], a minor, Plaintiffs," naming the Hospital's employee as the defendant (hereafter referred to as the "Bexar County case"). An attorney ad litem was appointed for the Child. After the unsuccessful negotiations with the Hospital, Daves amended the petition in the Bexar County case to include the Hospital as a defendant.

In November of 1992, a grievance complaint was filed against Daves by Harvey and Magness with the State Bar of Texas. Various interventions, claims, and counterclaims were filed by the parties in the grievance proceedings. By January, 1993, the parties executed a memorandum of agreement which proposed settlement of all pending matters for $1.5 million, division of which was to be agreed upon by the parties with the approval of the court. Further, the parties conceded that if they were unable to reach an agreement regarding the division of the $1.5 million, they would submit the division to the Honorable William Shaver, District Court Judge of Lubbock County, Texas. As part of the agreement, Daves agreed not to seek attorney's fees from the $1.5 million. The parties were not able to reach an agreement as to the division of the monies, and Judge Shaver eventually divided the funds equally between the Child, the Parents, and Harvey's law firm.

In September 1993, the Commission filed a disciplinary petition against Daves, alleging his conflict of interest in the representation of the Parents and the Child. By the court's charge, the jury was asked whether Daves had committed acts which were violative of Rules 1.06 and 1.07 (conflict of interest provisions) and Rule 3.02 (minimizing the burdens and delays of litigation provision) of the Texas Disciplinary Rules of Professional Conduct. The jury affirmatively answered all of these questions. The trial court rendered judgment on the jury's findings, and imposed a sanction on Daves which included a nine month suspension from the practice of law and payment of attorneys' fees for the Commission.

Daves asserts sixteen points of error on appeal. In the interest of clarity, we will group and discuss these points according to subject matter. By points of error one, five, and nine, Daves contends that the trial court erred in rendering judgment on the jury's verdict because he could not have violated Texas Disciplinary Rules of Professional Conduct 1.06(b)(1), 1.06(b)(2), and 1.07 as a matter of law. We disagree.

Daves first asserts that, as a matter of law, he did not violate the Disciplinary Rules proscribing representation of clients with conflicting interests because under comment 12 to Rule 1.02 he could have no attorney-client relationship with the Child because he was not court-appointed. Comment 12 to Rule 1.02 states that, "Unless a lawyer is legally authorized to act for a person under a disability, an attorney-client relationship does not exist for the purpose of this rule." (emphasis added). Accordingly, only for the purposes of an alleged violation of Rule 1.02 must a lawyer be court-appointed to represent a person under a disability. Daves was not alleged to have violated Rule 1.02, and therefore comment 12 does not apply in this case.

Notwithstanding Rule 1.02, then, the actions of Daves and the Parents clearly shows that Daves was acting as counsel for the Child. The attorney-client relationship may be implied if the parties by their conduct manifest an intent to create such a relationship. Perez v. Kirk & Carrigan, 822 S.W.2d 261, 265 (Tex.App.--Corpus Christi 1991, writ denied); Parker v. Carnahan, 772 S.W.2d 151, 156 (Tex.App.--Texarkana 1989, writ denied); Duval County Ranch Co. v. Alamo Lumber Co., 663 S.W.2d 627, 633 (Tex.App.--Amarillo 1983, writ ref'd n.r.e.). In this connection, the record reveals that: Daves took action to assert the claims of the Child in the Bexar County lawsuit, and also negotiated the settlement of the Child's claims with the Hospital; the Parents entered into a legal services agreement on behalf of the Child for Daves to represent the Child; and, Daves and the Parents represented to the County Court of Lubbock County in their "Application to Settle the Claims of [the Child]" that Daves was the "court approved attorney for the person and estate of [the Child] " (emphasis added). It is evident that the Parents and Daves intended by their actions that Daves represent the Child. Accordingly, we conclude that the attorney-client relationship was established between Daves and the Child.

Assuming, arguendo, that Rule 1.02 does apply in this case, we nonetheless conclude that the attorney-client relationship was established between Daves and the Child. As stated above, the Parents became the court-appointed co-guardians of the person and estate of the Child. See, Tex. Prob.Code Ann. §§ 601(10), 676, 690, 693 (Vernon Supp.1997). As co-guardians of the Child, they had the duty to bring suits on behalf of and defend suits brought against the Child. Tex. Prob.Code Ann. §§ 769, 768 (Vernon Supp.1997). In order to bring a suit on behalf of the Child, it was necessary to employ an attorney to assert the claims of the Child. The Parents, as co-guardians, employed Daves for precisely this purpose, entering into a "Legal Services Agreement" for Daves to represent "the estate of [the Child]." The Court approved this employment of Daves. Daves was therefore authorized by the court to act on behalf of the Child. Accordingly, Daves had a duty not only to the Parents as co-guardians, but also to the Child whose claims he was asserting, and the attorney-client relationship was established between the Child and Daves under comment 12 to Rule 1.02.

Daves also asserts in connection with these points of error that the appointment of the attorneys ad litem in the guardianship case and the Bexar County case properly protected the Child's interests, and therefore eliminated as a matter of law any conflict of interest. When a parent or guardian appointed to bring suit on behalf of a minor has an interest which is potentially adverse to the interests of the minor, the court must appoint an ad litem to protect the interests of the child. Tex.R. Civ. P. 173. Once that ad litem is appointed, he or she replaces the parent or...