Jose M. Lopez and Blanca Alvarez, Individually and as Next Friends of Vianca Lopez and Kassandra Lopez, Minors, and Eva Alvarez v. Juan Pablo Sandoval ( 2006 )

                                    NUMBER 13-03-322-CV

                                 COURT OF APPEALS

                     THIRTEENTH DISTRICT OF TEXAS

                         CORPUS CHRISTI B EDINBURG

JOSE M. LOPEZ AND BLANCA ALVAREZ,

INDIVIDUALLY AND AS NEXT FRIENDS

OF VIANCA LOPEZ AND KASSANDRA LOPEZ,

MINORS, AND EVA ALVAREZ,                                                     Appellants,

                                                             v.

JUAN PABLO SANDOVAL,                                                              Appellee.

                    On appeal from the 103rd District Court

                                       of Cameron County, Texas.

                          DISSENTING MEMORANDUM O P I N I O N

Before Chief Justice Valdez and Justices Yañez and Castillo

Dissenting Opinion by Chief Justice Valdez  

I respectfully dissent.  I would hold that the trial court erred in denying appellants= motion to disqualify the law firm representing appellee and therefore would reverse and remand for a new trial based on that issue. 

I.  RELEVANT FACTS REGARDING DISQUALIFICATION

On March 22, 1998, appellants and appellee were involved in a car accident.  Appellants sued appellee for personal injuries allegedly caused by the accident.  Appellee was represented in the trial court by an attorney (Athe Attorney@).  In appellee=s answer, he alleged the affirmative defense of pre-existing condition against all appellants, including Lopez.

At trial, during Lopez=s direct examination, he stated he only remembered being involved in one previous car accident in 1991.  During cross-examination, the Attorney attempted to impeach Lopez with a police report indicating Lopez had previously been injured in a 1996 car accident and was taken away from the scene of that accident in an ambulance.  Appellants objected to this impeachment on the basis that the report was not provided during discovery.  The court sustained the objection on the report but allowed the Attorney to continue questioning Lopez regarding the 1996 accident and his injuries resulting from that accident.  In her subsequent questioning about the 1996 accident, the Attorney asked Lopez whether he complained of injuries at the scene, left the scene in an ambulance, was taken to the hospital, and injured his neck in that accident.

After Lopez=s cross-examination, appellants= counsel learned that the Attorney=s firm (the Law Firm@) had represented Lopez in a lawsuit filed against him arising from the 1996 accident.  Appellants moved to disqualify the Law Firm and moved for a mistrial based on the Law Firm=s prior representation of Lopez.  The trial court held a hearing on the motion during the trial.  In the hearing, Lopez testified that the Law Firm previously represented him in a suit filed against him arising from the 1996 accident and that the suit was settled shortly after it was filed.  Lopez said he did not sign a waiver or consent to the Law Firm=s representation of appellee in the present case.  The trial court took the matter under advisement.

At the conclusion of the evidence, the trial court directed a verdict on liability in favor of appellants, leaving the issue of damages to the jury.  While the jury deliberated, the trial court held a second hearing on the disqualification issue.  Lopez testified again.  When asked whether he spoke to the attorneys at the Law Firm about any injuries he sustained in the 1996 accident, Lopez testified, AI can=t honestly remember what all went on, I know I just went in there to talk to them, and yes, they might have.  I just don=t remember exactly one way or the other.@  Lopez did recall meeting with the attorneys from the Law Firm several times and explaining to them what happened in the accident. 

The Attorney=s legal assistant (the Assistant) also testified during the second hearing.  She explained that, on the Thursday before trial was scheduled to begin, she received a call from State Farm informing her that it had information regarding a 1996 accident involving Lopez.^[1]  The Attorney asked the Assistant to follow up on the call.  The following day, the Assistant sent someone to the Mission Police Department to pick up a copy of a police report on the accident.  At around 5:00 p.m., the name of the other driver involved in the 1996 accident rang a bell with the Assistant.  After investigating, she learned the Law Firm had a closed file in storage on a lawsuit arising from the 1996 accident and that the Law Firm had represented Lopez in that case.  When she told the Attorney about the file, the Attorney responded that she had not reviewed the file and did not know it existed.  The Attorney did not ask the Assistant to follow up on the matter.  The file was found on Monday, the day the trial started.

Although the Attorney did not testify at the hearing, she stated to the court that she did obtain the settlement agreement and the motion to dismiss with prejudice in the 1996 case.  She also stated she did not take any action after she learned about the prior representation because she did not believe a conflict existed.  The court again took the matter under advisement. 

The jury returned a verdict of zero damages.  On January 17, 2003, before entering judgment on the verdict, the trial court issued a letter opinion denying the motion for disqualification.  In the opinion, the trial court said the Law Firm previously represented Lopez in purely a defensive capacity and no evidence of cross-claims was submitted.  The court assumed that the attorneys inquired into matters relevant only to the defense and that such matters would not include information pertaining to any injuries Lopez sustained in the 1996 accident.  The court concluded no substantial relationship existed between the 1996 and 1998 accidents and denied appellants= motions.  The trial court later entered judgment on the jury=s verdict.  Appellants again raised the disqualification issue in a written motion to disqualify and in a motion for a new trial.  The trial court also denied these motions.

II.  ANALYSIS

In appellants= first issue, they contend the trial court abused its discretion in denying the motion to disqualify the Law Firm.  The appellate court reviews a trial court=s ruling on a motion to disqualify for abuse of discretion.  Metro. Life Ins. Co. v. Syntek Fin. Corp., 881 S.W.2d 319, 321 (Tex. 1994) (per curiam); see Howard v. Tex. Dep=t of Hum. Servs., 791 S.W.2d 313, 315-16 (Tex. App.BCorpus Christi 1990, no writ).  Under this standard, this Court will consider whether the trial court acted without reference to any guiding rules or principles or acted in an arbitrary or unreasonable manner.  Metro. Life Ins. Co., 881 S.W.2d at 321.

In reviewing a ruling on a motion to disqualify, we turn to the Texas Disciplinary Rules of Professional Conduct for guidance.  In re Nitla S.A. de C.V., 92 S.W.3d 419, 422 (Tex. 2002) (orig. proceeding). Rule 1.09 of the disciplinary rules of professional conduct states, in pertinent part:

(a) 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:

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(3) if it is the same or a substantially related matter.

Tex. Disciplinary R. Prof=l Conduct 1.09(a), reprinted in Tex. Gov=t Code Ann., tit. 2, subtit. G app. A (Vernon 1998). If one member of the firm would be disqualified under this rule, other members in the disqualified attorney=s firm are similarly disqualified.  Tex. Disciplinary R. Prof=l Conduct 1.09(b); In re Mitcham, 133 S.W.3d 274, 276 (Tex. 2004) (orig. proceeding).

In NCNB Texas National Bank v. Coker, the supreme court stated that, in order to show a substantial relationship between the matters, the movant must prove Athe existence of a prior attorney-client relationship in which the factual matters involved were so related to the facts in the pending litigation that it creates a genuine threat that confidences revealed to his former counsel will be divulged to his present adversary.@  NCNB Tex. Nat=l Bank v. Coker, 765 S.W.2d 398, 400 (Tex. 1989) (orig. proceeding); see In re Epic Holdings, Inc., 985 S.W.2d 41, 51 (Tex. 1998) (orig. proceeding) (matters are substantially related where Agenuine threat exists that a lawyer may divulge in one matter confidential information obtained in the other because the facts and issues involved in both are so similar@).  If the movant meets this burden, he is entitled to a conclusive presumption that confidences and secrets were imparted to the former attorney.  Coker, 765 S.W.2d at 400.  The supreme court added:

In this manner, the movant is not forced to reveal the very confidences he wishes to protect.  By proving the substantial relationship between the two representations, the moving party establishes as a matter of law that an appearance of impropriety exists.  Although the former attorney will not be presumed to have revealed the confidences to his present client, the trial court should perform its role in the internal regulation of the legal profession and disqualify counsel from further representation in the pending litigation. 

Id.

The parties do not dispute that the Law Firm represented Lopez in the lawsuit against him arising from the 1996 car accident.  Nor do the parties dispute that the Law Firm did not obtain Lopez=s consent to represent Sandoval in the underlying suit.  The parties, however, do not agree on whether the lawsuit arising from the 1996 car accident is Asubstantially related@ to the underlying suit.  The majority opinion concludes that there is no substantial relation between the suits; I disagree and would find such a relationship to exist.

In the underlying case, appellee pleaded the affirmative defense of pre-existing condition.  This defense placed at issue, at a minimum, any previous injuries Lopez may have sustained that affected his neck and surrounding areas, which he testified were injured as a result of the 1998 accident.  Thus, any other accidents in which Lopez was involved and may have been injured were relevant to this defense.  The subject of the suit giving rise to the prior representation was the 1996 accident in which Lopez was involved.

The trial court assumed that the Law Firm confined its investigation of the 1996 accident to facts relevant to defending Lopez and surmised these facts would not include any information pertaining to Lopez=s injuries. On the contrary, Lopez testified he recalled speaking with the attorneys for the Law Firm several times to explain what happened in the accident.  Lopez also said he struck his head during that accident.  Lopez also indicated that he may have mentioned his injuries to the attorneys:  AMaybe I did, I don=t know.@  The trial court=s assumptions that, despite this ambiguous testimony from Lopez, he did not provide any information pertaining to any injuries were not founded in the evidence presented at the hearing or on any presumptions established by the law.

The Attorney=s cross-examination of Lopez further emphasizes the relationship between the facts involved in the two matters.  The Attorney=s questioning went beyond merely impeaching Lopez on his answer regarding prior car accidents in which he was involved. The Attorney questioned Lopez about injuries he sustained and what happened immediately after the accident.

Appellee contends no conflict existed for a number of reasons: (1) the Law Firm=s representation of Lopez concluded long before the Law Firm represented appellee; (2) the Attorney did not obtain any information about Lopez=s previous action by virtue of the Law Firm=s prior representation of Lopez; and (3) the information the Attorney did obtain about the 1996 accident was not confidential.  I would disagree.

The movant does not need to prove that the attorney-client relationship is ongoing or overlapped with the representation of a party in a matter adverse to the movant.  See Tex. Disciplinary R. Prof=l Conduct 1.09(a).  Moreover,  actual disclosure of confidences need not be proven.  In re Epic Holdings, Inc., 985 S.W.2d at 51.  Rather, the key question in determining whether the matters are substantially related is whether a genuine threat of disclosure exists based on the similarity of the matters.  Id.  The movant need not prove he relayed relevant confidences to counsel.  Nor is the movant barred from relief merely because the relevant information has been publicly disclosed.  See Centerline Indus., Inc. v. Knize, 894 S.W.2d 874, 876 (Tex. App.BWaco 1995, orig. proceeding) (A[I]t should make no difference whether the lawyer gained no confidences or whether all the confidences gained have been publicly disclosed.@).  Instead, he need only satisfy the test set out in Coker to be entitled to the conclusive presumption that confidences and secrets were imparted to the former attorney.  Coker, 765 S.W.2d at 400.

Essential to appellee=s defense of pre-existing condition against Lopez was information about prior accidents Lopez was involved in and injuries he may have sustained in those accidents, including any injuries arising from the 1996 car accident.  The facts of the matters are so related that a genuine threat existed that confidences Lopez revealed to the Law Firm would be divulged to appellee. Having shown that the matters are substantially related, appellants were entitled to the conclusive presumption that Lopez imparted confidences and secrets to Law Firm.  Appellants established an appearance of impropriety as a matter of law.  The trial court abused its discretion in denying the motion to disqualify the Law Firm.              

III.  CONCLUSION

Because I would conclude that the trial court erred in ruling against appellants= motion to disqualify, I would reverse and remand the cause to the trial court.  See Howard, 791 S.W.2d at 315-16 (proper remedy for abuse of discretion in denying motion to disqualify is reversal of judgment and remand of case for new trial).   Accordingly, I dissent from the outcome reached by the majority opinion.           

Rogelio Valdez,

Chief Justice

Dissenting Memorandum Opinion delivered and filed

this 23rd day of February, 2006.

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^[1]Lopez testified State Farm was his insurer in 1996 when he was involved in the accident.  State Farm was appellee=s insurer in 1998, when the accident in the underlying case took place.