State Bar of Texas v. Lerner, 01-90-00720-CV

Decision Date01 July 1993
Docket NumberNo. 01-90-00720-CV,01-90-00720-CV
Citation859 S.W.2d 496
PartiesThe STATE BAR OF TEXAS, Appellant, v. Karen A. LERNER, Appellee. (1st Dist.)
CourtTexas Court of Appeals

Linda A. Acevedo, Austin, for appellant.

Karen A. Lerner, Houston, for appellee.



COHEN, Justice.

After a nonjury trial of this disciplinary action against attorney Karen A. Lerner, the judge found she did not violate the State Bar's disciplinary rules and rendered a take-nothing judgment in her favor. We affirm.

In a single point of error, the State Bar asserts the unchallenged findings of fact conclusively show Lerner violated Disciplinary Rules 1-102(A)(4) and 1-102(A)(6). 1

The trial judge made the following findings of fact and conclusions of law:


1. In or around June of 1987 Respondent [Lerner] was the attorney of record for the Plaintiff, Thaddeus E. Cartwright (hereinafter called "Cartwright") and James A. Williams (hereinafter called "Williams") was the attorney of record for Defendants H.W. Kilpatrick III, M.D. (hereinafter called "Kilpatrick"), in a cause numbered 83-386-31, styled Thaddeus E. Cartwright v. H.W. Kilpatrick III, M.D., et al; In the 295th Judicial District Court of Harris County, Texas (hereinafter called "Cartwright lawsuit").

2. On or about June 3, 1987, Williams sent Respondent a letter (hereinafter called "June 3, 1987, letter") offering on behalf of Kilpatrick to settle the Cartwright lawsuit as to Kilpatrick for the payment to Cartwright of One Hundred Thousand and no/100 ($100,000.00) Dollars. Respondent communicated to Williams that the Cartwright lawsuit, as to Kilpatrick, could be settled on the terms outlined in the June 3, 1987, letter.

3. An original and four (4) copies each of a Release and Order of Dismissal were transmitted by Williams to the Respondent by letter dated June 15, 1987. On June 24, 1987, the settlement check was hand delivered to Respondent together with a letter appertaining thereto (hereinafter called "June 24, 1987, letter").

4. On June 25, 1987, Respondent negotiated the settlement check which she knew or should have known was tendered to her as full and complete settlement of the Cartwright lawsuit as to defendant Kilpatrick by depositing same in Respondent's trust account. Respondent had, prior to such negotiation, neither secured Cartwright's execution of the release, nor obtained approval and entry of the judgment, nor forwarded all papers to Williams, thereby failing to comply with the terms of the June 24, 1987, letter.

5. Respondent subsequently decided against settling the Cartwright suit as to defendant Kilpatrick in the fashion previously agreed upon, and, having so decided, failed to return the proceeds of the settlement check to Williams or Kilpatrick.

6. Respondent's failure to either return the proceeds or the executed papers forced Williams to attend additional hearings seeking dismissal or continuance of the Cartwright lawsuit.

7. Respondent actively opposed a motion for continuance sought by Williams after Respondent misled Williams into believing that the Cartwright lawsuit had been settled.

8. After negotiating the settlement check, Respondent failed to inform Williams that she was not settling the Cartwright lawsuit until Williams had inquired on two (2) separate occasions into the whereabouts of the release.

9. Respondent failed to transmit the executed release to Williams until [on] or about September 11, 1987.


1. An escrow agreement was formed by the offer made in the June 3, 1987, letter and the acceptance thereof communicated by Respondent to Williams, the terms of which were set forth in the June 24, 1987, letter.

2. Respondent breached the escrow agreement by negotiating the settlement check without first securing Cartwright's execution of the release, obtaining approval and entry of the judgment and forwarding all papers to Williams.

3. Respondent did not violate Disciplinary Rules 1-102(A)(4), 1-102(A)(6) or 7-101(A)(1).

Findings of fact are like a jury's verdict upon special issues. IFG Leasing Co. v. Ellis, 748 S.W.2d 564, 566 (Tex.App.--Houston [1st Dist.] 1988, no writ). Here, neither party contends the evidence does not support the findings of fact. Therefore, we are bound by the findings of fact. Wade v. Anderson, 602 S.W.2d 347, 349 (Tex.Civ.App.--Beaumont 1980, writ ref'd n.r.e.). We must independently evaluate the legal conclusions drawn from the facts found. Spiller v. Woodard, 809 S.W.2d 624, 627 (Tex.App.--Houston [1st Dist.] 1991, no writ). The State Bar does not contest the judge's conclusion that there was no violation of DR 7-101(A)(1).

Based on the particular facts of this case, we conclude the trial judge was not required to find that Lerner engaged in dishonesty, fraud, deceit, or misrepresentation, or conduct that adversely reflects upon her fitness to practice law. Rather, he could have reasonably concluded that Lerner's conduct was not done with intentional dishonesty in order to defraud or deceive anyone.

Lerner received the check on June 24, 1987 and deposited it the next day into her trust account. Lerner, her secretary, and her client all testified the client signed the release in June 1987, but Lerner does not contest the trial judge's finding that she negotiated the check on June 25, before the client signed the release. She believed then that the case was settled. She deposited the check into her trust account in order to avoid leaving such a valuable negotiable instrument in her office, which had been burglarized a few months before. Lerner testified that she had never before received a settlement document prohibiting her from "negotiating" a check. She incorrectly understood the term "negotiate" to mean distributing the funds to herself or to her client, rather than depositing the check into a trust account. She testified that defendants usually gave her one of two types of instructions regarding settlements, either one that prohibited the disbursement of funds to the plaintiff before the release was signed or one that prohibited depositing the check...

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3 cases
  • Interest of Davis
    • United States
    • Texas Court of Appeals
    • October 12, 2000
    ...784 S.W.2d 585, 587 (Tex. App.-Eastland 1990, writ denied). Findings of fact are equivalent to a jury's verdict. See State Bar of Texas v. Lerner, 859 S.W.2d 496, 498 (Tex. App.-Houston [1st Dist.] 1993, no writ). Thus, the court must make findings on each material issue raised by the plead......
  • Attorney Disciplinary Bd. v. Kress
    • United States
    • Iowa Supreme Court
    • March 14, 2008
    ...mental status of the actor. Iowa Supreme Ct. Att'y Disciplinary Bd. v. Joy, 728 N.W.2d 806, 814-15 (Iowa 2007); State Bar v. Lerner, 859 S.W.2d 496, 499-500 (Tex.Ct.App.1993). With respect to violations of DR 1-102(A)(6), the Board is not required to show intent, but only to show that the o......
  • Montgomery ISD v. Davis
    • United States
    • Texas Court of Appeals
    • July 15, 1999
    ...784 S.W.2d 585, 587 (Tex. App.--Eastland 1990, writ denied). 2 Findings of fact are equivalent to a jury's verdict. See State Bar of Texas v. Lerner, 859 S.W.2d 496, 498 (Tex. App.-- Houston [1st Dist.] 1993, no writ). Accordingly, we hold that finding of fact 17 was not a Conclusion of law......

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