In re Barbara Nell Taylor--Appeal from 87th District Court of Freestone County

IN THE

TENTH COURT OF APPEALS

No. 10-02-027-CV

IN RE BARBARA NELL TAYLOR

Original Proceeding

DISSENTING OPINION

There are at least two possible determinations the trial court could have made that would support the decision not to disqualify Terry s chosen attorney. The trial court could have determined that the representation of Barbara in connection with estate planning, including the stockholder agreement, is not substantially related to the divorce. Also, the trial court could have determined that Barbara waived her claim by failing to timely assert it.

It was Barbara s burden to establish the basis of her motion to compel the disqualification of opposing counsel. Spears v. Fourth Court of Appeals, 797 S.W.2d 654, 656 (Tex. 1990); NCNB Texas Nat l Bank v. Coker, 765 S.W.2d 398, 399 (Tex. 1989). We review the trial court s determination for an abuse of discretion. Walker v. Packer, 827 S.W.2d 833, 839-40 (Tex. 1992);R.J. Gallagher Co. v. White, 709 S.W.2d 379, 381 (Tex. App. Houston [14th Dist.] 1986); In re Bahn, 13 S.W.3d 865, 872 (Tex. App. Forth Worth 2000).

To fully understand the trial court s ruling it is important to review some of the events leading up to the motion to disqualify. This litigation commenced with a copy of the petition being sent to Barbara accompanied by a transmittal letter on Naman Howell Smith & Lee letterhead on September 24, 2001. The parties immediately engaged in discovery. A reading of the correspondence in the record would cause the reader to conclude that the relationship between the attorneys quickly became acrimonious. By October 24, 2001, a dispute had arisen between the attorneys regarding a trial setting. Barbara s attorney responded to a letter from Terry s attorney with the following:

I do not adhere to trial by secretary. My secretary does not set my trial docket. My secretary does not make agreements for trial dates; my secretary does not make any agreements for any matter with opposing counsel or his/her staff....Letter writing on this point is ridiculous...The only way I know to handle this sort of conduct with you and your firm is to advise that no agreements in this case, and any other case with your firm, will be made without a Rule 11 agreement. Further, my secretary will answer no questions; she will only take messages.

On the next day, Terry proposed a trial date in February 2002. On the bottom of this October 25, 2001 letter is a note which states: Need to Receive Inventory-may Require Depo & must Resolve Disqualification Issue. The note is initialed by Barbara s attorney but is not dated. The parties continued to engage in discovery over the next month. Then on November 26, 2001, Barbara s counsel writes opposing counsel:

My client came to me this morning with documents prepared by your firm in March, 2000, along with correspondence from your firm dated in April, 2000. She recalled these documents over the weekend and called this to my attention at the earliest appointment this morning . . . The long and short of this is that my client feels uncomfortable with your firm suing her when she was a former client. She has asked that I file a Motion to Disqualify. As a courtesy to you, I have not filed that Motion yet and I ask that you consider this point.

Three days later, Terry s attorney responded to the letter regarding disqualification. The majority has characterized the letter as denying any prior representation of Barbara with respect to the stockholder agreement. The letter denies only that the law firm had represented her in the divorce and states that any work that was done for her was not in any way related to the divorce. The motion was filed the day after this response.

With regard to the argument that Barbara waived her right to require disqualification, I cannot conclude that the trial court abused its discretion by holding that Barbara waived her complaint. From the evidence discussed herein, it appears that Barbara was aware of the issue more than a month before it was raised with opposing counsel during a period of active discovery and trial preparation. Only when pushed for a trial setting was the motion filed. Under the facts and circumstances of this case I cannot hold that the only proper conclusion that the trial court could have reached was that there was no waiver.

With regard to whether the prior representation is substantially related to the issues in the divorce, the majority is dangerously close to a mandamus review of valuation methodology issues. Barbara argues there is no question that the stockholder agreement determines the value of the stock for these divorce proceedings, even though it was drafted as an estate planning tool in contemplation of death. She relies on Finn v. Finn, 658 S.W.2d 735, 741 (Tex. App. Dallas [5th Dist.] 1983, n.r.e.). If she is right, the stockholder agreement establishes the value of the stock to be used in a just and right division of the community estate. If she is wrong, the value of the stock will be determined in the usual manner of testimony by the owner and possibly experts. By her argument in this mandamus proceeding, it appears she has conceded that the valuation process of the stock is an open issue. Thus, the trial court had to decide whether the stockholder agreement, prepared in connection with estate planning, substantially related to the divorce proceeding, and in particular the just and right division of property. If the trial court makes its decision regarding how the stock must be valued in the divorce, and that process does not involve the stockholder agreement, the trial court would be correct in determining the representation in connection with the stockholder agreement was not substantially related to the divorce proceeding. But it is premature for us to inject ourselves into this issue. Barbara did not establish the requisite level of interrelationship between the estate planning and the divorce proceeding in order to establish that the trial court could have only determined that the matters were substantially related. Accordingly, I cannot hold that the trial court abused its discretion, in refusing to find, on the record that is properly before us, that the attorney representing Terry should be disqualified.

For the forgoing reasons, I respectfully dissent.

TOM GRAY

Justice

Dissenting opinion delivered and filed February 27, 2002

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