Hanners v. State Bar of Texas

860 S.W.2d 903, 1993 Tex. App. LEXIS 2525, 1993 WL 218639
CourtCourt of Appeals of Texas
DecidedJune 23, 1993
Docket05-92-01099-CV
StatusPublished
Cited by75 cases

This text of 860 S.W.2d 903 (Hanners v. State Bar of Texas) is published on Counsel Stack Legal Research, covering Court of Appeals of Texas primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Hanners v. State Bar of Texas, 860 S.W.2d 903, 1993 Tex. App. LEXIS 2525, 1993 WL 218639 (Tex. Ct. App. 1993).

Opinion

OPINION

LAGARDE, Justice.

After James Hanners did not appear at an attorney disciplinary action initiated against him by the State Bar of Texas, the trial court entered a post-answer default judgment disbarring him from the practice of law in Texas and ordering him to pay restitution to the victims of his misconduct. Hanners generally asserts, in seven points of error, that the trial court erred by (a) denying his motion *906 for a new trial, (b) taking judicial notice of a letter allegedly notifying him of the trial date, (c) granting trial amendments by the State Bar, (d) awarding excessive damages, and (e) denying his request for a jury trial on damages pursuant to rule 243 of the rules of civil procedure. For the reasons that follow, we affirm the trial court’s judgment.

FACTUAL BACKGROUND

On April 8, 1991, the State Bar of Texas filed a disciplinary petition against James Hanners in state district court, seeking his disbarment from the practice of law in Texas. The petition alleged that Hanners committed various acts in violation of the Texas Disciplinary Rules of Professional Conduct. 1 In May 1991, Hanners filed a pro se motion to transfer venue from Travis to Dallas County, a general denial, and special exceptions. He also filed a cross-claim against Bradley E. Brown and James Kozacki, whose complaints about Hanners led to the disciplinary action.

Hanners did not appear at trial on January 9, 1992. In his absence, the State Bar presented the following evidence in a trial before the court: Hanners agreed to represent John Miller Warren in his claim for insurance benefits arising from an automobile accident. Warren was treated for his injuries at Brown Chiropractic Clinic. International Life Insurance Company thereafter mailed to Han-ners a check in the amount of $825 made payable to the order of “Brown Chiropractic Clinic.” Hanners did not notify the clinic that he had received the check. According to the testimony of a handwriting expert, Hanners endorsed the check in the names of “Brown Chiropractic Clinic” and “James M. Hanners, Attorney at Law.” The check was deposited in the operating account of “James M. Hanners & Associates” on July 20, 1990. Hanners did not pay the clinic until Dr. Brown filed a criminal complaint against him.

The State Bar also presented other evidence of Hanners’ misconduct. In May of 1990, Hanners agreed to represent James Kozacki in his personal injury lawsuit against Martinetti’s Motel in Illinois state court. Herbert Rothbart and Joseph Condon, the attorneys who originally filed suit on Ko-zacki’s behalf, asserted an attorney’s lien upon the settlement proceeds. Hanners eventually agreed, without Kozacki’s consent, to pay $5000 from the settlement proceeds to satisfy the lien.

Kozacki’s claim was settled for $25,000. Hanners secured Kozacki’s signature on the settlement agreement authorizing the $5000 payment to Rothbart and Condon by tricking him into believing that he was signing something else. On July 17, 1990, Hanners received at his office a $25,000 settlement check from Gulf Insurance Group payable to the order of “James Kozacki and James M. Hanners.” Hanners endorsed the check with his own signature. At Hanners’ direction, his secretary, Cheri Ray, forged Kozaeki’s endorsement on the check. On July 18,1990, Hanners deposited the check in his law office operating account. Hanners’ records indicated that he owed Kozacki between $3834 and $4675 of the proceeds, not including the $5000 payable to Rothbart and Condon. Hanners never paid Kozacki, Rothbart, or Condon the money that he owed them.

After it presented this evidence to the trial court, the State Bar requested permission to make oral trial amendments to the disciplinary petition. Specifically, the State Bar sought to delete its allegation that Hanners had violated section 8.04(a)(2) of the Texas Disciplinary Rules of Professional Conduct. The State Bar also sought to amend its disciplinary petition to reflect that (1) Hanners agreed to pay $5000 to Kozacki’s former lawyers without Kozacki’s consent and (2) Hanners fraudulently obtained Kozacki’s signature on the settlement agreement authorizing the $5000 payment. The trial court granted the amendments.

After hearing this evidence, the trial court concluded that Hanners violated rule 1.14(a) of the Texas Disciplinary Rules by failing to hold funds belonging to a third person in a separate account designated as a trust or escrow account. See Tex.DisciplinaRY *907 R.PROF.Conduct 1.14(a) (1989). The trial court also ruled that Hanners violated rule 1.14(b) by failing to promptly notify third persons of his receipt of funds in which the third persons had an interest. See Tex.Disciplinary R.PROF.Conduct 1.14(b) (1989). Finally, the trial court ruled that Hanners failed to comply with rule 8.04(a)(3), which prohibits Texas lawyers from engaging in conduct involving dishonesty, fraud, deceit, or misrepresentation. See Tex.DisciplinaRY R.Prof.Conduct 8.04(a)(3) (1989).

Based on Hanners’ acts of professional misconduct, the trial court entered judgment disbarring Hanners from practicing law in Texas. The judgment also ordered Hanners to pay restitution in the amount of $5000 to Rothbart and Condon, plus pre- and post-judgment interest, and $9675 to Kozacki, plus pre- and post-judgment interest. Finally, the judgment required Hanners to pay $12,-500 to the State Bar for attorney’s fees.

After learning of the judgment, Hanners filed a motion for new trial. He appeared at a hearing on the motion and testified that he had no knowledge of the trial setting until after the default judgment was entered. He further testified that his defense counsel withdrew on October 9, 1991, and assured him that there was no trial setting at that time. Hanners claimed that he relied on his former counsel’s assurance and did not intend to default. He also alleged that he had a meritorious defense to the disciplinary action and offered to reimburse the State Bar for its expenses in bringing the action.

The State Bar’s attorney, David Wise, argued that Hanners had notice of the trial setting. As proof he pointed to a copy of a notice letter in the court’s file dated August 26,1991, informing Hanners of a trial setting on January 6, 1992. Hanners did not claim that the address listed for him in the letter was incorrect. Instead, he argued that the information in the court’s file did not indicate whether the notice had ever been mailed or received.

Wise testified that he appeared for trial on both January 6 and 7, 1992, but the judge was occupied with other matters and could not proceed to trial. On January 7, the judge directed Wise to contact Hanners and tell him that his case would be tried on January 9. Wise called the law office of James Hanners on January 7 and left a message informing Hanners of the trial setting and asking him to return the phone call. Hanners stated that he was out of town that week and did not receive the message until after the judgment was entered. After hearing the evidence presented by both sides, the trial court denied Hanners’ motion for a new trial.

LACK OF NOTICE

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Bluebook (online)
860 S.W.2d 903, 1993 Tex. App. LEXIS 2525, 1993 WL 218639, Counsel Stack Legal Research, https://law.counselstack.com/opinion/hanners-v-state-bar-of-texas-texapp-1993.