In The
Court of Appeals
Ninth District of Texas at Beaumont
________________
NO. 09-24-00452-CV ________________
DAVID EVERTON, AMANDA EVERTON, AND JORGE JACOBO OROZCO SR., Appellants
V.
LYDIA MARICELO TABOADA, AND JOEY “SERGIO” SOTO, AND SOUTHERN MONTGOMERY COUNTY MUNICPAL UTILITY DISTRICT, Appellees ________________________________________________________________________
On Appeal from the 284th District Court Montgomery County, Texas Trial Cause No. 24-10-15753-CV ________________________________________________________________________
MEMORANDUM OPINION
In this interlocutory appeal, David and Amanda Everton (jointly, “the
Evertons” and separately, “Amanda” or “David”) and Jorge Jacobo Orozco Sr.
(collectively, “Appellants”) challenge the trial court’s denial of their application for
temporary injunction. See Tex. Civ. Prac. & Rem. Code Ann. § 51.014(a)(4)
(allowing interlocutory appeal of order granting or refusing temporary injunction).
1 By way of a petition for writ of mandamus, they also challenge the trial court’s denial
of their Motion to Disqualify Defendant Lydia Maricelo Taboada’s counsel, who her
insurer retained to represent her. See In re Basco, 221 S.W.3d 637, 639 (Tex. 2007)
(citation omitted) (“When a trial court improperly denies a motion to disqualify
opposing counsel, there is no adequate relief by appeal.”).
In three issues, Appellants ask whether the trial court: (1) abused its discretion
in refusing to disqualify Mid-Century’s panel counsel when the facts for
adjudication in the liability suit will determine coverage; (2) abused its discretion by
denying disqualification under Rule 106(b) of the Texas Rules of Disciplinary
Conduct because the incongruent interests of panel counsel, the carrier, and the
insureds when the facts for adjudication of liability and coverage overlap preventing
panel counsel from ethical representation of the insured; and (3) abused its discretion
in denying temporary injunctive relief where the Court previously found a probable
right to recovery, the evidence shows communications between Taboada and Mid-
Century threaten to defeat coverage, and loss of coverage would irreparably harm
both insureds and the Evertons’ ability to recover. We hold that: (1) the Appellants
have failed to show the trial court clearly abused its discretion by denying their
Motions to Disqualify Taboada’s carrier-selected counsel, thus they are not entitled
to mandamus relief; and (2) the Appellants have failed to establish the trial court
2 abused its discretion in denying the temporary injunction. We affirm the trial court’s
orders and deny the petition for writ of mandamus for the reasons discussed below.
I. BACKGROUND
Since there has been no reporter’s record filed of any hearing, and the
Evertons’ docketing statement indicates they did not request one, we take our
recitation of the facts from the parties’ pleadings in the clerk’s record.
A. The Evertons’ Petition and First Application for Injunctive Relief
In October 2024, the Evertons filed a Petition and Application for Injunctive
Relief (the Petition). In the Petition, they named Taboada, Orozco and Joey “Sergio”
Soto as defendants. They purchased their home in 2006 and alleged that Taboada
and Orozco (collectively the Taboada Defendants), who were previously married,
began residing in the home next door to the Evertons’ property in July 2019. They
claimed they never had any water come on their property before the Defendants
moved in. They alleged water from the Taboada property inundated the Everton
property.
They alleged that after the Taboada Defendants moved in, the Taboada
Defendants, and their guests or business invitees “have routinely driven over high-
pressure water lines to the right of their driveway.” The Evertons alleged that this
happened repeatedly and outlined various instances when it occurred. The Evertons
asserted that initially when the Taboada Defendants moved in and up until June 1, 3 2024, anytime this happened, the Taboada Defendants either repaired the broken
water lines or reimbursed the Evertons for the repairs. The Evertons also asserted
that after the time period referenced above, the Taboada Defendants refused to repair
leaking high-pressure water lines, which caused water to inundate the Evertons’
property, damaging their home. 10F
The Evertons asserted that in June 2024, the Taboada Defendants “had
multiple breaks in their sprinkler system piping and/or nozzles which the Evertons
reported to Orozco” while he still lived with Taboada. When the Taboada
Defendants failed to repair the high-pressure line breaks, Amanda called Southern
Montgomery County Municipal Utility District (“SMCMUD”), who turned off the
Taboada Defendants’ main water valve. The Evertons claimed that Orozco informed
them as he moved out that Taboada now owned the house, and he told her to repair
the lines, but she did not. The Evertons alleged, “For the next two-weeks,
approximately 67,000 gallons of water, according to SMCMUD, inundated the
Evertons’ yard, penetrating the soil around and under the foundation and into the
Evertons’ house causing an estimated $100,000 in damage to the Evertons’ property.”
They alleged that after they called several times, on July 1, 2024, SMCMUD
shut off Taboada’s water but failed to lock the water meter. The Evertons asserted
1 The Evertons also later sued Southern Montgomery County Municipal Utility District (“SMCMUD”), but they are not parties to this appeal. 4 that after this shutoff, Taboada hired a plumber to repair the breaks, but after July
2024, the leaks continued with broken lines. The Evertons alleged that since July
2024, a cycle developed where lines would break, they would inform Taboada,
Taboada refused to repair them, SMCMUD then would turn off Taboada’s water but
fail to lock her out, so Taboada would “sneak” out and turn the main water valve
back on. Then, the leaks resumed, saturating the Evertons’ yard and penetrating their
foundation.
The Evertons alleged that in late September and early October 2024, a
significant flooding event caused by more ruptured lines on Taboada’s property
happened while they were out of town, which resulted in “extensive flooding” of
their home. In connection with this incident, on October 4, 2024, they had
SMCMUD turn off Taboada’s water, but SMCMUD “would not lock it,” and
Taboada turned it back on. So, on October 6, 2024, they called SMCMUD again;
SMCMUD determined there were now two leaks, “one at the Evertons’ meter
immediately adjacent to the Taboada Property water meter and one at the Taboada
water meter.” According to the Evertons, SMCMUD again turned off the water but
refused to lock it. The Evertons’ hired a plumber to repair the break at their meter,
who informed them that a vehicle had driven over it, and the repairs cost them
$1,379.97. On October 8, 2024, SMCMUD again determined that Taboada’s water
lines near the meter were leaking. 5 The Evertons allege that in October 2024, Amanda, accompanied by
SMCMUD, tried to determine whether Defendants’ water lines were still leaking,
but Soto 2 “emerged from the Taboada house and began verbally assaulting” her “to 1F
intimidate her to stop complaining about the ongoing flooding of her home.”
Amanda claims she then called the police to have them assist as she investigated.
According to the Evertons, SMCMUD repeatedly investigated and
determined Defendants’ high pressure water lines are leaking. The Evertons assert
that “water continues to inundate [the Evertons’] home warranting injunctive relief
and a protective order[.]” The Evertons seek a declaratory judgment and asserted
causes of action for violations of the Texas Water Code, trespass to real property,
negligence, nuisance, assault, intentional infliction of emotional distress, and gross
negligence. In addition to property damage, the Evertons allege they suffered
physical problems from the water intrusion. The Evertons seek damages for: cost of
repair and valuation damages; personal injuries; exemplary damages; and attorney’s
fees. They assert that Taboada, Orozco, and Soto are jointly and severally liable.
The Evertons seek a temporary and permanent injunction under Texas Civil
Practice and Remedies Code section 65.011. They incorporated their pleaded causes
of action, allege they have a probable right to the relief sought, and a probable,
2 It is unclear what relation Soto is to Taboada and Orozco, if any, or whether he also resides in the Taboada home. 6 imminent, and irreparable injury in the interim. They assert that Defendants have a
duty to repair the lines to prevent flooding of the Evertons’ home. They support their
Petition and Application for Injunctive Relief with Amanda’s Affidavit, which
outlined the history of the damaged pipes and Taboada’s and Orozco’s failure to
repair, along with the Evertons’ claimed damages. In her Affidavit, Amanda stated
that the court should “have Mrs. Taboada and Mr. Orozco’s water main turned off
and locked until there is a permanent fix.” On October 9, 2024, the Evertons filed a
Notice of Hearing setting their Application for Temporary Restraining Order for
hearing on October 10, 2024. Another Notice of Hearing the Evertons filed on
October 18, 2024, stated the Temporary Injunction Hearing was set for October 24,
2024.
B. Representation of Orozco
Two days before the scheduled Temporary Injunction Hearing, attorney
Jennifer Reekie filed a Notice of Appearance and Defendant’s Original Answer on
behalf of Orozco. Orozco asserted a general denial.
C. Agreed Temporary Injunction
On October 24, 2024, the parties and the trial court signed an Agreed
Temporary Injunction. The Agreed Temporary Injunction indicates that Taboada
and Soto personally appeared pro se and that Orozco appeared with his attorney. The
Agreed Temporary Injunction states, among other things, 7 The Court finds that [the Evertons] have valid causes of action against [Taboada], that they have a probable right of recovery on their causes of action, and that they face a probable, imminent and irreparable harm in the absence of this Temporary Injunction insofar as it appears that [Taboada] has continuously cause[d] water intrusion onto Plaintiffs’ real property which is destructive in nature.
[. . .]
IT IS ORDERED that [Taboada], her assigns, and all persons or entities acting in concert with or at the direction of [Taboada] shall, within 14 days from the time the MUD moves the water meter on her property, hire a licensed plumber to reconnect the water to the house on her real property and to cap the water sprinklers which are on the side of the driveway adjoining [the Evertons’] real property and shall, until the MUD moves the water meter on her real property turn off sprinkler service for the zone which includes the sprinkler heads which are on the side of the driveway adjoining [the Evertons’] real property so that those sprinklers are not used.
D. Taboada’s Original Answer
Shortly after the trial court signed the Agreed Temporary Injunction, on
November 4, 2024, attorney Sarah Holley Long filed Taboada’s Original Answer
and Jury Demand, which included a general denial.
E. The Evertons’ Amended Petition
On November 15, 2024, the Evertons’ filed an Amended Petition and added
SMCMUD as a defendant. They asserted the same causes of action as in their
Original Petition, including: declaratory relief; violations of the Water Code;
trespass to real property; gross negligence; negligence; nuisance; assault; and
intentional infliction of emotional distress. They also included another claim for 8 injunctive relief again asserting that the Defendants have a duty to repair the lines to
prevent the flooding of the Evertons’ home.
They supported the Amended Petition with Amanda’s Amended Affidavit.
Amanda’s Amended Affidavit again outlined the history of burst pipes, repairs, and
water inundation into the Evertons’ property. Amanda explained that on November
5 and 6, 2024, SMCMUD relocated Taboada’s meter and their water meter. Amanda
also stated that “despite agreeing to move both meters and the underlying water lines,
the SMCMUD only relocated the meters themselves, leaving the high-pressure water
lines in the same hazardous area.” She complained that an SMCMUD employee
“took no action to move the lines away from the edge of the driveway, leaving them
in the same vulnerable location[,]” and “instead of relocating the underlying water
lines, replaced the pipes with newer, more ‘flexible’ piping.” Amanda also averred,
“On November 8, 2024, Mid-Century Insurance Company of Texas issued a
reservation of rights letter.” She stated that the insurer denied coverage for gross
negligence, intentional acts, code violations, assault, nuisance, trespass, and
exemplary damages but did not exclude coverage for negligence.
F. Motions to Disqualify Taboada’s Attorney and Second Application for Injunctive Relief
On November 22, 2024, the Evertons filed their Motion to Disqualify Sarah
Holley Long and Application for Injunctive Relief. The Evertons sought to
9 disqualify opposing counsel, Long and her law firm, under the independent counsel
rule and Rule 1.06(b) of the Texas Rules of Disciplinary Conduct. The Evertons also
sought “to enjoin Taboada and [Orozco] from accepting representation by carrier-
appointed counsel and communicating [to] their insurance carriers or carrier-
appointed counsel any facts related to this litigation.” The Evertons contended that
the facts that will determine coverage under the insurance policies are the same facts
that will determine liability. Thus, they argued that “Mid-Century cannot be
permitted to control Taboada’s defense through appointed counsel while
simultaneously maintaining coverage defenses that create irreconcilable conflicts.”
They further asserted that the conflicts could only be remedied by allowing the
insureds to select independent counsel at the insurer’s expense.
The Evertons argued that Taboada and Orozco had a Farmers insurance
homeowners policy numbered 0767316108 issued to Orozco for a period covering
the dates in question. They also claimed Farmers issued an automobile policy
through Mid-Century Insurance Company of Texas (“Mid-Century”) numbered
0537191161 covering Orozco and Taboada for the relevant period. They asserted
that Orozco and Taboada were divorcing in June 2024, when a leak occurred in early
June 2024. The Evertons claimed that in June 2024, Orozco informed Taboada she
needed to repair the leaks between their driveway and the Evertons’ property, but
neither Taboada nor Orozco did. The Evertons stated that on June 21, 2024, Taboada 10 recorded a deed for the property at issue per the divorce settlement but did nothing
to resolve the water leaks until the first week in July. They contended that additional
breaks occurred between July and September causing more “water inundation” and
damage to the Evertons’ home.
The Evertons explained that Amanda “aided Taboada in making a claim
against her Homeowner’s Policy,” and Farmers assigned a claim number, but denied
the claim on August 21, 2024, under Orozco’s Homeowner’s Policy citing “specific
exclusions.” They also contended that Farmers failed to interview Orozco about the
occurrence. According to the Evertons, Orozco filed a claim under his automobile
policy; Mid-Century assigned a claim number and in July 2024, instructed Orozco
to mitigate his damages. On September 25, 2024, Mid-Century denied the claim
because Orozco drove a vehicle uncovered by his automobile policy.
According to the Evertons, on November 8, 2024, Mid-Century issued the
reservation of rights letter to deny coverage for intentional acts but acknowledging
coverage for negligence. The Evertons argued that liability in this case “turns on
whether” the damage they suffered “resulted from Taboada and Orozco’s negligence
which would be covered under the policy or from intentional or reckless conduct in
upkeep and maintenance which would be excluded from coverage.” They contended
the “factual overlap creates an irreconcilable conflict for carrier-selected counsel”
who must develop evidence regarding Taboada and Orozco’s knowledge of the leaks, 11 their decisions whether to repair the leaks, and their intent regarding the water issues.
The Evertons asserted the “same facts would simultaneously determine both liability
and coverage.” They contend that Taboada and Orozco should be able to select
independent counsel and require the insurer to reimburse them. Finally, the Evertons
claim “they have an economic interest in Taboada and Orozco’s coverage under the
Mid-Century policy.”
In support of their request for injunctive relief, the Evertons asserted they
“face irreparable injury because once either insured communicates facts that could
defeat coverage under the joint policies, that harm cannot be undone.” They
contended that would permanently compromise their ability to recover for the
damage to their home. The Evertons asked that the trial court disqualify Long and
her law firm. They also sought a temporary injunction preventing “Mid-Century
from selecting counsel or directing” Taboada’s and Orozco’s defense and
prohibiting Taboada and Orozco “from discussing the facts of this litigation with
Mid-Century or any of its appointed attorneys.”
The Evertons attached Amanda’s verification in support of the Motion to
Disqualify Sarah Holley Long and Application for Injunctive Relief. They also
supported their Motion to Disqualify and Application for Injunctive Relief with the
same Amended Affidavit of Amanda Everton attached to their Amended Petition.
The Evertons also attached the following to their Motion: correspondence from Mid- 12 Century to Amanda denying her claims under Orozco’s homeowner’s policy and
automobile policy; Mid-Century’s reservation of rights letter dated November 8,
2024; the Agreed Temporary Injunction signed October 24, 2024; a copy of their
Amended Petition; and the Lodestar Affidavit of the Evertons’ Attorney with billing
records.
On November 25, 2024, Orozco filed his Motion to Disqualify Sarah Holley
Long and Application for Injunctive Relief. His Motion to Disqualify contained
similar allegations to the Evertons’ Motion to Disqualify and included the same
evidence. The exception was that Orozco included his unsigned verification and his
attorney’s Lodestar Affidavit.
On November 27, 2024, the Evertons filed separate Notices of Hearing setting
their Motion to Disqualify and the Temporary Injunction for hearing on December
6, 2024. On December 3, 2024, Orozco filed Notices of Hearing for his Motion to
Disqualify and Application for Temporary Injunction, which indicated they were
also set for hearing on December 6, 2024.
G. Orozco’s Crossclaim
On November 25, 2024, Orozco also filed his Original Crossclaim and
Application for Injunctive Relief. Orozco pleaded a crossclaim against Taboada for
negligence. He provided additional information about the timelines of the various
water line breaks and the timeline of his and Taboada’s divorce. Orozco cited an 13 indemnification clause from his and Taboada’s Final Decree of Divorce and sought
contribution from her under Texas Civil Practice and Remedies Code section 33.015.
Orozco also sued for declaratory judgment seeking a determination of his
“rights, status or other legal relations under his insurance policies with Farmers and
obtain a declaration of what those rights, status, and other legal relations thereunder.”
In conjunction with his claim for declaratory judgment, Orozco contended that the
independent counsel rule and Rule 1.06(b) allows for disqualification of the insurer’s
appointed counsel. Orozco asserted there was a “genuine controversy” between
himself, Taboada, and Farmers Insurance regarding the insurer’s “right to appoint
panel counsel to represent them[.]” That said, Orozco did not name Farmers or Mid-
Century as a defendant.
He attached an unsigned verification to his Crossclaim. By way of relief,
Orozco asked the trial court to: (1) declare that he and Taboada are entitled to control
their defense by engaging counsel of their choice at Farmers Insurance’s expense;
(2) award him reasonable attorney’s fees and costs; and (3) order Taboada to pay all
amounts assessed against Orozco pursuant to the indemnification clause in their
Final Decree of Divorce. He also requested general relief.
14 H. Taboada’s Responses to the Evertons’ and Orozco’s Motions to Disqualify and Application for Injunctive Relief
On December 4, 2024, Taboada filed her Response to Plaintiff’s Motion to
Disqualify Sarah Holley Long and Application for Injunctive Relief and Defendant’s
Motion for Sanctions. The same day, Taboada also filed her Response to Co-
Defendant’s [Orozco] Motion to Disqualify Sarah Holley Long and Application for
Injunctive Relief and Defendant Taboada’s Motion for Sanctions. Taboada argues
in both responses that neither the Evertons nor Orozco have standing to complain
about a conflict. She additionally contends that even if they did have standing, no
conflict exists, and they have not shown actual prejudice. Taboada distinguishes the
legal authority cited by the Evertons and Orozco. Among other things, she claimed
that they violated the local rules by scheduling the hearing when they did, and
Orozco presented an unsigned verification in support of his motion.
I. The Evertons’ Reply to Taboada’s Response to Motion to Disqualify
On December 5, 2024, the Evertons filed their Reply to Taboada’s Response
to Motion to Disqualify. In their Reply, they contend that under the independent
counsel rule, prejudice is presumed when there is an actual conflict of interest, which
they assert exists here. Particularly, they argue that an actual conflict exists because
the facts determining liability and coverage completely overlap. They also claim
they have standing. Alternatively, they contend that prejudice exists through Farmers
15 coercion of having Taboada write a “Letter Pleading” to defeat coverage while
unrepresented and that if they use Taboada’s statements to defeat coverage, the
Evertons “will likely be unable to recover their documented $100,000 plus in
damages.” They claim prejudice is “immediate and stems directly from the conflict
between Farmers’ interests and Taboada’s right to coverage.” The Evertons assert
that Rule 1.06(b) provides an independent basis for standing and disqualification,
which opposing counsel can do when a “conflict calls into question the fair or
efficient administration of justice.” The Evertons re-urge the trial court to disqualify
Long and the law firm she works for from representing Taboada. In support of their
Reply, the Evertons attached Taboada’s “Letter Pleading” with correspondence from
the insurance and policy declaration sheets, which they claim show insurance
company coercion.
J. Trial Court’s Rulings and Notice of Appeal
The docket sheet shows that on the scheduled hearing date of December 6,
2024, all parties appeared with counsel, that the motions were heard and taken under
advisement but did not indicate whether evidence was taken at the hearing. The notes
on the docket sheet also indicate that the motions were “heard and taken under
advisement[.]” On December 10, 2024, the trial court signed separate orders denying
the Evertons’ Motion to Disqualify Sarah Holley Long and Application for
Injunctive Relief and denying Orozco’s Motion to Disqualify Sarah Holley Long 16 and Application for Injunctive Relief. On December 30, 2024, the Evertons and
Orozco filed a Joint Notice of Appeal indicating they were pursuing an accelerated
appeal of the motions to disqualify and denial of temporary injunction.
II. ISSUES ONE AND TWO: DENIAL OF MOTION TO DISQUALIFY
In Appellants’ petition for writ of mandamus, they raise two issues
challenging the trial court’s denial of their Motion to Disqualify Taboada’s counsel.
In issue one, they contend the “trial court abused its discretion in refusing to
disqualify Mid-Century’s panel counsel when the facts for adjudication in the
liability suit will determine coverage[.]” In issue two, they argue the trial court
“abused its discretion by denying disqualification under Rule 106(b) of the Texas
Rules of Disciplinary Conduct” given the “incongruent interests of panel counsel,
the carrier, and the insureds when the facts for adjudication of liability and coverage
overlap preventing panel counsel from ethical representation of the insured[.]”
A. Standard of Review and Applicable Law
“‘Mandamus is available where a motion to disqualify is inappropriately
denied as there is no adequate remedy on appeal.’” In re Turner, 542 S.W.3d 553,
555 (Tex. 2017) (orig. proceeding) (quoting In re Columbia Valley Healthcare Sys.,
L.P., 320 S.W.3d 819, 824 n.2 (Tex. 2010) (orig. proceeding)). We review a trial
court’s refusal to disqualify a law firm under an abuse of discretion. See id. We may
issue a writ of mandamus to remedy a trial court’s clear abuse of discretion when 17 the relator lacks an adequate remedy by appeal. See In re Prudential Ins. Co. of Am.,
148 S.W.3d 124, 135–36 (Tex. 2004) (orig. proceeding); Walker v. Packer, 827
S.W.2d 833, 839–40 (Tex. 1992) (orig. proceeding). “In determining whether a trial
court abused its discretion, a reviewing court is generally bound by the record before
the trial court at the time its decision was made.” In re M-I L.L.C., 505 S.W.3d 569,
574 (Tex. 2016) (orig. proceeding). “A trial court abuses its discretion if it acts in an
arbitrary or unreasonable manner, without reference to any guiding rules or
principles.” In re Nitla S.A. de C.V., 92 S.W.3d 419, 422 (Tex. 2002) (orig.
proceeding) (per curiam) (citing Downer v. Aquamarine Operators, Inc., 701
S.W.2d 238, 241–42 (Tex. 1985)). Disqualifying a party’s counsel is a severe
remedy which “can result in immediate and palpable harm, disrupt trial court
proceedings, and deprive a party of the right to have counsel of his choice.” Id. “In
considering a motion to disqualify, the trial court must strictly adhere to an exacting
standard to discourage a party from using the motion as a dilatory trial tactic.” Id.
(citing Spears v. Fourth Ct. of Appeals, 797 S.W.2d 654, 656 (Tex. 1990)).
“In Texas, ‘standing’ denotes the presence of a real controversy between the
parties that will actually be determined by the judicial declaration sought.” Maddox
v. Vantage Energy, LLC, 361 S.W.3d 752, 756 (Tex. App.—Fort Worth 2012, pet.
denied) (citing Austin Nursing Ctr., Inc. v. Lovato, 171 S.W.3d 845, 849 (Tex. 2005)
(other citation omitted)); see Debes v. General Star Indem. Co., No. 09-12-00527- 18 CV, 2014 WL 3384679, at *2 (Tex. App.—Beaumont July 10, 2014, no pet.) (mem.
op.) (citations omitted); see also Sw. Elec. Power Co. v. Lynch, 595 S.W.3d 678, 685
(Tex. 2020) (discussing standing in context of UDJA). “To establish standing to
assert a claim for breach of contract, a party must prove privity to the agreement or
that it is a third-party beneficiary.” See Debes, 2014 WL 3384679, at *2 (citations
omitted). Insurance policies are contracts. Ulico Cas. Co. v. Allied Pilots Ass’n, 262
S.W.3d 773, 778 (Tex. 2008). Thus, the rights and obligations arising under
insurance policies and the rules applied to construe them are generally the same as
those pertaining to contracts. See id. “Whether an insurer has the right to conduct its
insured’s defense is a matter of contract.” N. Cnty. Mut. Ins. v. Davalos, 140 S.W.3d
685, 688 (Tex. 2004). Texas law generally prohibits an injured party from directly
suing the defendant’s insurer unless it is established by judgment or agreement that
the insured has a legal obligation to pay damages to the injured party. See In re Ill.
Nat’l Ins. Co., 685 S.W.3d 826, 835–36 (Tex. 2024) (orig. proceeding) (citations
omitted). This is referred to as the “no-direct action rule.” See id. at 836.
“The right to conduct the defense includes the authority to select the attorney
who will defend the claim and to make other decisions that would normally be vested
in the insured as the named party in the case.” Davalos, 140 S.W.3d at 688 (citing
State Farm Mut. Auto. Ins. Co. v. Traver, 980 S.W.2d 625, 627 (Tex.1998)). That
said, in certain circumstances, “an insurer may not insist upon its contractual right 19 to control the defense.” Id. If, under the insurance policy, the insurer has the right to
control the defense of a case the insurer is defending on an insured’s behalf, “the
insured cannot choose independent counsel and require the insurer to reimburse the
expense unless ‘the facts to be adjudicated in the liability lawsuit are the same facts
upon which coverage depends.’” Rx.com Inc. v. Hartford Fire Ins. Co., 426 F.Supp.
2d 546, 559 (S.D. Tex. 2006) (quoting Davalos, 140 S.W.3d at 689).
Texas Disciplinary Rule of Professional Conduct 1.06(b) provides that, absent
certain circumstances,
a lawyer shall not represent a person if the representation of that person: (1) involves a substantially related matter in which that person’s interests are materially and directly adverse to the interests of another client of the lawyer or the lawyer’s firm; or (2) reasonably appears to be or become adversely limited by the lawyer’s or law firm’s responsibilities to another client or to a third person or by the lawyer’s or law firm’s own interests.
Tex. Disciplinary Rules of Prof’l Conduct R. 1.06(b), reprinted in Tex. Gov’t Code
Ann., tit. 2, subtit. G, app. A. Comment 17 to rule 1.06 explains, “Where the conflict
is such as clearly to call in question the fair or efficient administration of justice,
opposing counsel may properly raise the question. Such an objection should be
viewed with great caution, however, for it can be misused as a technique of
harassment.” Id. R. 1.06 cmt. 17.
“A party moving for disqualification based on a violation of a disciplinary rule
must ‘establish with specificity’ that the disciplinary rule was violated.” In re 20 Thetford, 574 S.W.3d 362, 373–74 (Tex. 2019) (orig. proceeding) (quoting Spears,
797 S.W.2d at 656); see In re N.P.H., No. 09-15-00010-CV, 2016 WL 5234599, at
*9 (Tex. App.—Beaumont Sept. 22, 2016, no pet.) (mem. op.) (noting specificity
requirement).
If the claimed conflict relies merely on allegations of unethical conduct or on evidence showing only a remote possibility that a lawyer has violated a disciplinary rule or ethical rule, courts generally require that a party that files the motion to disqualify to produce evidence demonstrating that the moving party will be actually prejudiced by a decision denying the motion.
In re Ace Real Prop. Invests., LP, 2018 WL 915192, at *2 (Tex. App.—Beaumont
Feb. 15, 2018, orig. proceeding) (mem. op.) (quoting In re N.P.H., 2016 WL
5234599, at *8). “Even if a lawyer violates a disciplinary rule, the party requesting
disqualification must demonstrate that the opposing lawyer’s conduct caused actual
prejudice that requires disqualification.” In re Nitla S.A., 92 S.W.3d at 422 (citations
omitted); see also In re Users Sys. Servs., Inc., 22 S.W.3d 331, 336 (Tex. 1999) (orig.
proceeding) (where law firm may have violated “spirit” of the rule, the attorney’s
actions “did not cause any prejudice that would require disqualification”).
B. Analysis: As to the Evertons’ Motion to Disqualify
1. Alleged Disqualification Under the Independent Counsel Rule
Here, the Evertons attempted to disqualify Taboada’s counsel retained by the
insurance company based on the independent counsel rule. In the trial court, Taboada
21 responded that the Evertons did not have standing to disqualify Taboada’s counsel
retained by the insurer in this case. As to whether the Evertons have standing to seek
disqualification of Taboada’s insurance-retained counsel based on the independent
counsel rule, we agree with Taboada.
The record before us shows the insurance policy at issue was issued to Orozco
and covered Taboada. Thus, it was a contract between Orozco and Taboada and their
insurer, Mid-Century. See Ulico Cas. Co., 262 S.W.3d at 778. As noted above, courts
have explained that “[w]hether an insurer has the right to conduct its insured’s
defense is a matter of contract.” Davalos, 140 S.W.3d at 688. Here, that meant under
the policy at issue whether the insurance company could insist on defending the suit
with counsel of their choice was a matter of contract between Orozco, Taboada, and
Mid-Century. See id.; see also Ulico Cas. Co., 262 S.W.3d at 778.
The Evertons do not contend that they were in privity with Orozco and
Taboada’s insurance carrier nor do they assert they are third-party beneficiaries
under the insurance policy. That said, by seeking disqualification of Taboada’s
counsel retained by the insurer, they attempt to control how the defense is conducted
under the policy. Since the Evertons have not proven privity to the agreement or that
they are third-party beneficiaries, they cannot enforce a contractual right between
Orozco, Taboada, and the insurance company. See Debes, 2014 WL 3384679, at *2.
Although they have not sued, the Evertons seek to enforce—by way of 22 disqualification—how the insurance carrier defends the suit or who may represent
Orozco and Taboada under the policy. The general rule in Texas prohibits the
Evertons from doing so as a third party. See In re Ill. Nat’l Ins. Co., 685 S.W.3d at
835–36. As strangers to the insurance policy, there is not a justiciable controversy
between the Evertons and Orozco and Taboada’s insurance carrier. See Lynch, 595
S.W.3d at 685; Debes, 2014 WL 3384679, at *2. We conclude the Evertons lack
standing to seek disqualification of Taboada’s carrier-selected attorney based on the
independent counsel rule, which is a matter of contract. See Davalos, 140 S.W.3d at
688 (stating that whether an insurer has the right to conduct its insured’s defense is
a matter of contract); see also In re Ill. Nat’l Ins. Co., 685 S.W.3d at 835–36; Debes,
2014 WL 3384679, at *2.
2. Rule 1.06(b)
The Evertons also sought to disqualify Taboada’s counsel under Texas
Disciplinary Rule of Professional Conduct 1.06(b). While that rule allows opposing
counsel to raise the question “[w]here the conflict is such as clearly to call in question
the fair or efficient administration of justice,” the comments to the rules instruct that
such objections by opposing counsel “should be viewed with great caution” since it
“can be misused as a technique of harassment.” Tex. Disciplinary R. Prof’l Conduct
1.06 cmt. 17.
23 The trial court, in considering the Evertons’ Motion to Disqualify opposing
counsel based on rule 1.06(b), should have viewed it “with great caution.” See id.
The Evertons contend that lawyers who violate conflict-of-interest rules must be
disqualified, “because there is an irrebuttable presumption that a lawyer obtains a
client’s confidential information during representation.” We agree that there is such
a presumption, yet before it applies, the Evertons must first show that Taboada’s
attorney violated the conflict-of-interest rules. See In re Thetford, 574 S.W.3d at 373
(stating that “lawyers who violate the conflict of interest rules must be disqualified
because there is an irrebuttable presumption that a lawyer obtains a client’s
confidential information during representation[]”).
In their Motion to Disqualify, they contend “carrier-selected counsel would
face inherent conflicts between duties to Taboada and Orozco as clients and
responsibilities to Mid-Century as the source of business.” We first note that Orozco
has retained his own independent counsel. This generic statement about conflicts
Taboada’s carrier-selected counsel “would face” does not contain the requisite
specificity to show how counsel or her law firm has violated rule 1.06(b). See id. at
373–74; Spears, 797 S.W.2d at 656; In re N.P.H., 2016 WL 5234599, at *9. They
point to what they characterize as a “Letter Pleading” filed by Taboada, claiming the
insurance company coerced her statements. Yet, they do not explain whether this
particular attorney or particular law firm investigated this for the insurance company, 24 requested the statement, nor do they provide other details. The Evertons point to the
carrier’s reservation of rights letter to show this conflict, yet the Evertons’
allegations of intentional torts are what jeopardized coverage and prompted the
reservation of rights letter. Amanda Everton also “assisted” Taboada in filing the
insurance claim, according to her Amended Affidavit, which she used to support the
Motion to Disqualify. Given the circumstances, the trial court could have viewed
their Motion to Disqualify Taboada’s carrier-selected counsel as harassment or a
dilatory tactic since nothing in the record shows that Taboada desired
disqualification.
The Evertons also failed to show they have suffered “actual prejudice” that
disqualification under rule 1.06(b) requires. See In re Nitla S.A., 92 S.W.3d at 422
(citing In re Users Sys. Servs., Inc., 22 S.W.3d at 336–37); In re Ace Real Prop.
Invests., 2018 WL 915192, at *2. The Evertons argued in their Motion to Disqualify
that carrier-selected counsel could not fulfill their duties to Taboada and Orozco and
that they have an economic interest in Taboada’s and Orozco’s coverage under the
policy. The Evertons are concerned about their ability to collect a judgment absent
insurance coverage but provide no evidence to substantiate these concerns. These
concerns are speculative and do not rise to the level of showing “actual prejudice.”
See In re Nitla S.A., 92 S.W.3d at 422; see also In re Users Sys. Servs., Inc., 22
S.W.3d at 336–37; In re Ace Real Prop. Invests., 2018 WL 915192, at *2. 25 We conclude that the Evertons have failed to show with specificity that
Taboada’s carrier-selected counsel and her law firm violated rule 1.06(b), and they
have failed to show actual prejudice. See In re Thetford, 574 S.W.3d at 373–74;
Spears, 797 S.W.2d at 656; In re N.P.H., 2016 WL 5234599, at *9; see also In re
Nitla S.A., 92 S.W.3d at 422; In re Users Sys. Servs., Inc., 22 S.W.3d at 336; In re
Ace Real Prop. Invests., 2018 WL 915192, at *2.
C. Analysis: Orozco’s Motion to Disqualify
1. Alleged Disqualification Under Independent Counsel Rule
Unlike the Evertons, Orozco, as the insurance policy holder, does have
standing to enforce the policy terms and seek disqualification based on the
independent counsel rule, which is a matter of contract. See Davalos, 140 S.W.3d at
688; see also Ulico Cas. Co., 262 S.W.3d at 778. Orozco contends that he and
Taboada should be permitted to select their own counsel at Mid-Century’s expense.
See Rx.com, Inc., 426 F.Supp.2d at 559. That said, the record shows that Orozco in
fact retained his own independent counsel, who answered on his behalf and cross-
claimed against Taboada. Under these circumstances, we cannot say that he has
shown the independent counsel rule necessitates disqualifying Taboada’s carrier-
selected counsel.
26 2. Rule 1.06(b)
Orozco also argued that Taboada’s carrier-selected counsel should be
disqualified under Rule 1.06(b). The allegations he makes regarding disqualification
under rule 1.06(b) mirror those made by the Evertons. We again note that Orozco
has retained his own independent counsel, and he does not allege that Taboada’s
carrier-selected counsel has appeared for or represented him. For the same reasons
we outlined in our discussion of the Evertons’ Motion to Disqualify under rule
1.06(b), we likewise conclude that Orozco failed to show with specificity that
Taboada’s carrier-selected counsel and her law firm violated rule 1.06(b). See In re
Thetford, 574 S.W.3d at 373–74; Spears, 797 S.W.2d at 656; In re N.P.H., 2016 WL
5234599, at *9. We also conclude he failed to show actual prejudice given Taboada’s
continued representation by carrier-selected counsel where Orozco has retained his
own independent counsel. See In re Nitla S.A., 92 S.W.3d at 422; In re Users Sys.
Servs., Inc., 22 S.W.3d at 336; In re Ace Real Prop. Invests., 2018 WL 915192, at
*2.
We overrule issues one and two. We hold that Appellants have failed to show
that the trial court clearly abused its discretion when it denied their Motions to
Disqualify Taboada’s carrier-selected counsel. See In re Prudential Ins. Co. of Am.,
148 S.W.3d at 135–36; Walker, 827 S.W.2d at 839–40. Accordingly, we deny the
petition for writ of mandamus. 27 III. ISSUE THREE: DENIAL OF TEMPORARY INJUNCTION
In their third issue, Appellants contend the trial court abused its discretion by
denying their Application for Temporary Injunction that sought to enjoin Taboada
and Orozco from communicating with counsel retained by the insurance company
and from communicating with the insurance company to preserve coverage. In
support of this argument, they contend the trial court already found a probable right
to recovery. Among other things, Taboada responds that their request for a
temporary injunction constitutes an unconstitutional restraint on speech and
interferes with her contractual obligations.
“‘As a rule, we only decide constitutional questions when we cannot resolve
the issues on nonconstitutional grounds.’” Phillips v. McNeill, 635 S.W.3d 620, 630
(Tex. 2021) (quoting In re B.L.D., 113 S.W.3d 340, 349 (Tex. 2003)). “‘A temporary
injunction is an extraordinary remedy and does not issue as a matter of right.’”
Abbott v. Anti-Defamation League Austin, Sw., and Texoma Regions, 610 S.W.3d
911, 916 (Tex. 2020) (quoting Walling v. Metcalfe, 863 S.W.2d 56, 57 (Tex. 1993)
(per curiam)). The applicant seeking a temporary injunction “must plead and prove
three specific elements: (1) a cause of action against the defendant; (2) a probable
right to the relief sought; and (3) a probable imminent, and irreparable injury in the
interim.” Butnaru v. Ford Motor Co., 84 S.W.3d 198, 204 (Tex. 2002); see also 28 Abbott, 610 S.W.3d at 916. A temporary injunction applicant bears the burden of
production to offer some evidence establishing a probable right to recovery. In re
Tex. Nat. Res. Conservation Comm’n, 85 S.W.3d 201, 204 (Tex.
2002) (quoting Camp v. Shannon, 348 S.W.2d 517, 519 (Tex. 1961)). Showing (1)
a probable right to recovery and (2) a probable imminent and irreparable injury both
require the applicant to present evidence and, unlike “temporary restraining orders,
cannot be based upon sworn pleadings or affidavits unless the parties so agree.” In
re Marriage of Spiegel, 6 S.W.3d 643, 645 (Tex. App.—Amarillo 1999, no pet.)
(citations omitted); see also Millwrights Local Union No. 2484 v. Rust Eng’g Co.,
433 S.W.2d 683, 685–87 (Tex. 1968) (holding that absent the parties’ agreement,
the proof required to support a temporary injunction “may not be made by affidavit,”
and a “sworn petition does not constitute evidence supporting” a temporary
injunction); Sanadco Inc. v. Hegar, No. 03-14-00771-CV, 2015 WL 4072091, at *1
(Tex. App.—Austin July 3, 2015, no pet.) (mem. op.) (“Pleadings, even if sworn,
affidavits, and legal arguments will not support injunctive relief unless the parties
agree otherwise.”).
We review a trial court’s order denying a temporary injunction for an abuse
of discretion. See Abbott, 610 S.W.3d at 916; Walling, 863 S.W.2d at 58. “To
determine whether a trial court abused its discretion, we must decide whether the
court acted without reference to any guiding rules or principles -- in other words, 29 whether the trial court’s act was arbitrary or unreasonable so as to exceed the bounds
of reasonable discretion.” NMTC Corp. v. Conarroe, 99 S.W.3d 865, 868 (Tex.
App.—Beaumont 2003, no pet.) (citing Butnaru, 84 S.W.3d at 211). “[I]f some
evidence reasonably supports the court’s ruling[,]” the trial court does not abuse its
discretion. Henry v. Cox, 520 S.W.3d 28, 34 (Tex. 2017); see also Abbott, 610
S.W.3d at 916. “Without a reporter’s record, we have no way to determine what
evidence, if any, was adduced at the hearing, and therefore, whether the trial court
abused its discretion.” Sanadco Inc., 2015 WL 4072091, at *2; see also Lucas v.
Savage, No. 14-18-00836, 2019 WL 6317674, at *3 (Tex. App.—Houston [14th
Dist.] Nov. 26, 2019, no pet.) (mem. op.) (explaining that because court lacked a
reporter’s record from the hearing on the application for injunction, there was no
way to determine if appellant met his burden); In re Marriage of Spiegel, 6 S.W.3d
at 646 (“Without a reporter’s record we do not know what, if any evidence was
presented to the trial court.”). While the Rules of Appellate Procedure provide that
the court reporter is responsible for preparing, certifying, and timely filing the
reporter’s record, that responsibility is conditioned on the appellant filing a notice of
appeal, requesting the reporter’s record be prepared, and making payment
arrangements for the reporter’s record. See Tex. R. App. P. 35.3(b); In re Marriage
of Spiegel, 6 S.W.3d at 646.
30 B. Analysis
The clerk’s record establishes that the Evertons and Orozco filed an
Application for Temporary Injunctive Relief supported by Amanda’s Amended
Affidavit, but absent the parties’ agreement, this does not constitute evidence for
purposes of supporting a Temporary Injunction. See Millwrights Local Union No.
2484, 433 S.W.2d at 685–87; Sanadco Inc., 2015 WL 4072091, at *1; In re Marriage
of Spiegel, 6 S.W.3d at 645. Nothing before us shows that the parties agreed to allow
sworn pleadings or affidavits to constitute evidence supporting the Evertons’ and
Orozco’s Applications for Temporary Injunction. Therefore, the Appellants were
still required to present evidence at the hearing supporting their Application for
Temporary Injunction showing a probable right to recovery and probable imminent
and irreparable injury. See Millwrights Local Union No. 2484, 433 S.W.2d at 685–
87; Sanadco Inc., 2015 WL 4072091, at *1; In re Marriage of Spiegel, 6 S.W.3d at
645.
In this case, Appellants did not request the reporter’s record. When this Court
advised Appellants of the deadline to file their briefs, we noted that Appellants’
docketing statement indicated no reporter’s record would be filed. Absent a request
and payment arrangements, the court reporter had no duty to file a reporter’s record.
See Tex. R. App. P. 35.3(b); In re Marriage of Spiegel, 6 S.W.3d at 646. Here,
without a reporter’s record, the record is void of evidence adduced at the temporary 31 injunction hearing. The record does not show how the Appellants met their burden
entitling them to this extraordinary relief, and we conclude they have failed to
establish the trial court abused its discretion in denying their Application for
Temporary Injunction. See Lucas, 2019 WL 6317674, at *3; Sanadco Inc., 2015 WL
4072091, at *1; In re Marriage of Spiegel, 6 S.W.3d at 645; see also Abbott, 610
S.W.3d at 916 (stating that a temporary injunction is extraordinary relief).
Appellants contend that in the “October 24, 2024[,] Agreed Temporary
Injunction, the trial court found the Evertons demonstrated a probable right to
recover on their causes of action.” Importantly, the October 24, 2024 Agreed
Temporary Injunction sought to enjoin entirely different activity, namely the flow
of water onto the Evertons’ property. In contrast, the Appellants’ Application for
Temporary Injunction which was denied and is now at issue in this appeal involves
enjoining Taboada’s and Orozco’s communications—both with counsel and with
their insurance company. To the extent Appellants contend the trial court’s finding
of a probable right to recovery supporting the Agreed Temporary Injunction should
support the contested Temporary Injunction seeking to enjoin entirely different
conduct, that argument lacks merit. Appellants provide no authority, and we have
found none, that would indicate a trial court’s finding of a probable right to recovery
in the Agreed Temporary Injunction should carry over to a contested and separate
temporary injunction seeking to enjoin different conduct. 32 We overrule issue three.
IV. CONCLUSION
Having overruled the Evertons’ and Orozco’s issues on appeal, we affirm the
trial court’s denial of the application for temporary injunction and deny the petition
for writ of mandamus.
AFFIRMED, PETITION FOR WRIT OF MANDAMUS DENIED.
W. SCOTT GOLEMON Chief Justice
Submitted on August 25, 2025 Opinion Delivered December 18, 2025
Before Golemon, C.J., Johnson and Wright, JJ.