in Re Waleed Khan and Wythe II Corporation

• Court: Court of Appeals of Texas
• Decided: February 12, 2009
• Docket: 09-08-00539-CV
• Status: Published

Opinion

In The

Court of Appeals

Ninth District of Texas at Beaumont

____________________

NO. 09-08-00539-CV

IN RE WALEED KHAN AND WYTHE II CORPORATION

Original Proceeding

MEMORANDUM OPINION

This original proceeding concerns the process required when an attorney intervenes in his client's suit for the purpose of recovering attorney's fees out of settlement proceeds. In this case, the trial court ordered the funds to be released in an interlocutory order signed sixteen days after the attorney filed the intervention. ⁽¹⁾ Because due process was not provided in this case and an appellate remedy would be inadequate, we conditionally grant partial relief and direct the trial court to vacate its order. We hold the trial court must provide adequate notice and an opportunity to be heard as required by the applicable rules of civil procedure before adjudicating disputed issues between the attorney and the attorney's client. All other relief sought in this proceeding is denied.

Waleed Khan and Wythe II Corporation ("Wythe") filed a petition for writ of mandamus and prohibition in which they sought to prevent the release of funds on deposit in the registry of the trial court. This Court stayed the trial court's order and directed the relators to bring their petition into compliance with the form required for original proceedings. See Tex. R. App. P. 52. The relators filed an amended petition for writ of mandamus in which they raise eight issues. We grant partial relief.

First, the relators seek mandamus relief against the District Clerk. We may issue such writs as are necessary to enforce our jurisdiction. Tex. Gov't Code Ann. § 22.221(a) (Vernon 2004). Our writ power ordinarily extends only to judges of district and county courts. Tex. Gov't Code Ann. § 22.221(b) (Vernon 2004). In this case, the relators have not shown that the district clerk has acted in a way that deprives this Court of jurisdiction. See In re Smith, 263 S.W.3d 93, 95 (Tex. App.-Houston [1st Dist.] 2006, orig. proceeding). We deny the relators' request for a writ of mandamus or prohibition to the district clerk.

Although Wythe and its president, Waleed Khan, petitioned this Court in this proceeding, Khan is not a party to the suit in the trial court. The settlement proceeds at issue in this case are not Khan's, but Wythe's. Khan suggests he is entitled to mandamus relief because the attorney billed him personally. The order at issue in this original proceeding neither orders Khan to perform any act in his individual capacity nor affects him as an individual litigant in the underlying litigation. See In re Choice Homes, Inc., 174 S.W.3d 408, 411-12 (Tex. App.-Houston [14th Dist.] 2005, orig. proceeding)("To have standing a party must be affected by the controversy at hand."). Because Khan has not shown that he is entitled to extraordinary relief in his individual capacity, we deny his request that a writ of mandamus or prohibition issue.

In its sixth, seventh, and eighth issues, Wythe asks this Court to disqualify the trial judge and vacate his orders because while in private practice he acted as plaintiff's counsel in litigation in which the lawyers received a large contingent fee. Wythe has not shown that it made any attempt to follow the procedures for determining the trial judge's disqualification or establishing grounds for recusal. See Tex. R. Civ. P. 18a, 18b; In re O'Connor, 92 S.W.3d 446, 448 (Tex. 2002); see also Tex. Const. art. V, § 11. Wythe has not shown that it is entitled to mandamus relief relating to issues six through eight.

In its third issue, Wythe contends the trial court "erred in denying a continuance and discovery before purporting to grant an order disposing of [the disputed funds.]" Issue five contends mandamus is an appropriate remedy because Wythe has no adequate remedy by appeal. The attorney, who is the real party in interest, filed "Intervenor's Motion to Enforce Settlement Agreement" on November 26, 2008. According to the real party in interest, the trial court commenced a hearing on the motion on December 1, 2008, but adjourned the hearing to provide an opportunity for Wythe to obtain counsel and scheduled a hearing on a motion to withdraw as counsel of record filed by the real party in interest. The trial court granted the motion to withdraw at the beginning of the hearing on December 12, 2008. At that time there were motions on file to continue both the motion to enforce the settlement and for the underlying case. Newly retained counsel explained that he needed to engage in discovery on former counsel's claim for attorney's fees. The trial court proceeded with the evidentiary hearing, at the conclusion of which Wythe re-urged its motion for continuance so that it could obtain additional witnesses.

By filing a pleading, an intervenor joins the case and unless the intervention is struck the intervenor becomes a party to the suit for all purposes. In re Roxsane R., 249 S.W.3d 764, 772 (Tex. App.-Fort Worth 2008, orig. proceeding); Tex. Workers' Comp. Comm'n v. Hartford Acc. & Indem. Co., 952 S.W.2d 949, 953 (Tex. App.-Corpus Christi 1997, pet. denied); Tex. R. Civ. P. 60. The intervention must comply with the rules of civil procedure. Kenseth v. Dallas County, 126 S.W.3d 584, 602 (Tex. App.-Dallas 2004, pet. denied) ("Although it is true that a discharged attorney may sometimes intervene in his former client's lawsuit in order to collect his fees, such an intervention--at the threshold--must comply with the rules of civil procedure."). An intervenor against whom no affirmative relief is sought occupies the position of a plaintiff and his claim is disposed of in the same manner as any other claim. See Welch v. Hrabar, 110 S.W.3d 601, 608 (Tex. App.-Houston [14th Dist.] 2003, pet. denied); see, e.g., Law Offices of Windle Turley, P.C. v. French, 140 S.W.3d 407, 410 (Tex. App.-Fort Worth 2004, no pet.) (intervening attorney's claims resolved by summary judgment); Rapp v. Mandell & Wright, P.C., 127 S.W.3d 888, 893 (Tex. App-Corpus Christi 2004, pet. denied) (intervening attorney's claims tried to jury); In re Hoover, Bax & Slovacek, L.L.P., 6 S.W.3d 646, 649 (Tex. App.-El Paso 1999, orig. proceeding) (intervening attorney's claims severed into separate suit).

In this case, the trial court adjudicated the attorney's claim against Wythe without a trial setting or a motion for summary judgment. ⁽²⁾ Former counsel did not withdraw as counsel for Wythe and new counsel did not substitute as counsel for Wythe until after the hearing commenced. Wythe's new counsel brought the lack of notice and opportunity to prepare to the attention of the trial court when Wythe presented its motion for continuance. The trial court abused its discretion by refusing to grant Wythe's requests for a continuance and in proceeding to decide the case without providing the notice required to conduct a trial. Tex. R. Civ. P. 245, 246. Because the trial court ordered the immediate release of the funds in an interlocutory order entered without due process, an eventual appeal would not be an adequate remedy. See generally In re Prudential Ins. Co. of Am., 148 S.W.3d 124, 135-36 (Tex. 2004) ("An appellate remedy is 'adequate' when any benefits to mandamus review are outweighed by the detriments."). We sustain Wythe's issues three and five.

Wythe challenges the merits of the trial court's order in issues one, two, and four. Wythe contends the contingent fee contract is unenforceable. The merits of the claims are subject to appellate review following a trial or a summary judgment. Accordingly, we hold an appellate remedy is adequate and deny the relief sought in issues one, two, and four. ⁽³⁾

We hold the trial court abused its discretion in ordering the disputed funds to be disbursed following a preliminary hearing held on eleven days' notice. We are confident that the trial court will vacate its order of December 12, 2008, and that all further proceedings will be set in due course in the manner required by the rules of civil procedure. The writ shall issue only if the trial court does not comply.

PETITION CONDITIONALLY GRANTED.

PER CURIAM

Submitted on December 29, 2008

Opinion Delivered February 12, 2009

Before McKeithen, C.J., Kreger and Horton, JJ.

1. The settling defendant deposited the disputed funds into the registry of the court.

2. This is an active case with pending claims in addition to those the attorney asserts against Wythe. The trial court did not order separate trials. See Tex. R. Civ. P. 174.

3.

We do not consider the merits of the issues raised in these issues, and our opinion and judgment in this mandamus proceeding neither approves nor disapproves of the trial court's ruling on the merits of the dispute in the court below.