Henry Tom Fillion v. The State Bar of Texas--Appeal from 280th District Court of Harris County

IN THE

TENTH COURT OF APPEALS

No. 10-92-170-CV

HENRY TOM FILLION,

Appellant

v.

THE STATE BAR OF TEXAS,

Appellee

From the 280th District Court

Harris County, Texas

Trial Court # 89-31283

O P I N I O N

This appeal arises out of a disciplinary action brought by the State Bar of Texas against Appellant for professional misconduct as defined by Article X, Section 7(1), State Bar Rules, and in violation of DR 5-104(A) of the Texas Code of Professional Responsibility. See State Bar Rules, art. X, 9, DR5-104(A) (Texas Code of Professional Responsibility); 34 Tex. B.J. 758 (1971). The jury found that Appellant, on two occasions, had "entered into a business transaction with his client, Hazel Ann Rich, in which they had differing interests and in which [she] expected [Appellant] to exercise his professional judgment for her protection and as to which she had not consented after full disclosure." See State Bar Rules, art. X, 16(J) (1984) reprinted in Tex. Gov't Code Ann. tit. 2, subtit. G app. (Vernon 1988). In its judgment of February 25, 1992, the court ordered that Appellant be publicly reprimanded according to Article X, Section (35)(B), of the State Bar Rules. See State Bar Rules, art. X, (35)(B) (1984). Because we find that the applicable limitations period precluded any proceeding the State Bar might have brought, we will reverse the judgment and render judgment in favor of Appellant.

Appellant complains in his only point of error that the court erred in signing the judgment that Appellant be publicly reprimanded because the professional misconduct found by the jury occurred more than four years prior to the date on which the allegations were brought to the attention of counsel for the State Bar of Texas. See State Bar Rules art. X 16(J).

The jury found that Appellant entered into two business transactions with Ms. Rich, his client, in which they had differing interests and in which she expected Appellant to exercise his professional judgment for her protection and as to which she had not consented after full disclosure. One instance involved the conveyance of real property in Ector County from Ms. Rich to Appellant in 1976; the other incident pertained to Appellant's execution of an employment contract as her attorney in 1978. He continued to represent Ms. Rich; however, the date their attorney-client relationship was terminated is not known, as became apparent during oral argument. Mrs. Rich is now deceased. During the trial, counsel for both parties stipulated on the record that both transactions, and the misconduct as later found by the jury, occurred prior to November 29, 1981, and that the misconduct was not brought to the attention of counsel for the State Bar until November 29, 1985. Those facts remain uncontested on appeal.

Article X, section 16(J) of the State Bar Rules of Disciplinary Procedure provides:

No member shall be reprimanded, suspended, or disbarred for misconduct occurring more than four (4) years prior to the time such allegation is brought to the attention of counsel except in cases in which disbarment or suspension is compulsory as provided herein. Limitations, however, will not run where fraud or concealment is involved until such misconduct is discovered or should have been discovered by reasonable diligence by counsel.

See id. The statutory reference to "counsel" is to the counsel for the State Bar. Gamez v. State, 765 S.W.2d 827, 833 (Tex. App. San Antonio 1988, writ denied); Wilson v. State, 582 S.W.2d 484, 487 (Tex. App. Beaumont 1978, no writ).

The State Bar contends that its counsel's reliance on the continuing attorney-client relationship between Appellant and Ms. Rich created a disputed fact issue regarding the statute of limitations. Although Appellee acknowledges that the conduct complained of occurred before November 21, 1981, Appellee asserts in its brief that, because the attorney-client relationship continued until September 1985, Appellant's failure to disclose facts material to his representation tolled the running of limitations as long as the attorney-client relationship existed, citing McClung v. Johnson, 620 S.W.2d 644 (Tex.App Dallas, 1981, writ ref'd n.r.e.). The State Bar also argues that Appellant waived his limitations defense by failing to request that a limitations question be submitted to the jury and because he failed to object to the court's charge because it did not contain a question on limitations. See Tex. R. Civ. P. 279.

The State Bar failed to plead either the fraud or the concealment exceptions tolling the running of limitations as specifically provided in Rule 16(J). See Eldridge v. Collard, 834 S.W.2d 87, 90 (Tex. App. Fort Worth 1992, n.w.h.); Powers v. McDaniel, 785 S.W.2d 915, 918 (Tex. App. San Antonio 1990, writ denied). Nor did it request that a question be submitted to the jury on the question of fraud or concealment by Appellant. See Tex. R. Civ. P. 279. Neither was conclusively established as a matter of law. See id. The trial court's judgment made no mention of fraud or concealment. Appellee simply argues in its brief that Appellant's failure to disclose their differing interests amounts to fraudulent concealment under the McClung case.

Appellant pleaded limitations as a bar in his Answer to the First Amended Disciplinary Petition and moved for Judgment NOV on the basis of limitations. Any question submitted to the jury on limitations would have been immaterial; limitations was established as a matter of law. See State Bar Rules, art. X, 16(J).

Appellee's reliance on McClung is misplaced. See McClung, 620 S.W.2d at 645-46. McClung, unlike this disciplinary proceeding brought by the State Bar, involved a legal-malpractice action brought by a former client against the attorney, to which the two-year limitations period for tort actions was applied. In addition, McClung analyzes the time at which a cause of action accrues for breach of a fiduciary relationship. The court in McClung relied upon a case out of the Indiana Supreme Court which indicated that, once a fiduciary relationship (doctor-patient) had ended, limitations would begin to run, regardless of the presence of fraudulent concealment. See McClung, 620 S.W.2d at 647 (citing Guy v. Schuldt, 236 Ind. 101, 138 N.E.2d 895 (1956)). Even if the law as expressed in Guy v. Schuldt applied to this case, the record does not reflect when the attorney-client relationship was terminated, and no question was requested or submitted to the jury. See Tex. R. Civ. P. 279. Moreover, the statute in no way indicates that limitations is tolled until the attorney-client relationship ceases to exist. Finally, the language of section 16(J) of the State Bar Rules, that "[l]imitations, however, will not run where fraud or concealment is involved," cannot support a legal conclusion that either fraud or concealment is presumed from the mere existence of the attorney-client relationship. See McClung, 620 S.W.2d at 648.

For the foregoing reasons, we reverse the judgment and render judgment that the State Bar take nothing.

PER CURIAM

Before Chief Justice Thomas,

Justice Cummings, and

Justice Vance

Reversed and rendered

Opinion delivered and filed October 21, 1992

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