Spain v. Montalvo

921 S.W.2d 852, 1996 Tex. App. LEXIS 1572, 1996 WL 195434

• Court: Court of Appeals of Texas
• Decided: April 24, 1996
• Docket: 04-95-00898-CV
• Status: Published

Opinions

OPINION

RICKHOFF, Justice.

This is an original proceeding concerning respondent’s order which disqualified petitioner’s attorney, Gary M. Poenisch, from representing her in a conversion action against her former attorney, Jeffrey L. Pfeifer.¹ The ground asserted for disqualification is Rule 3.08 of the Texas Disciplinary Rules of Professional Conduct, i.e., the lawyer-witness rule. Although we find the trial court did not abuse its discretion in ordering Poen-isch’s disqualification, we do find the order to be overly broad. Therefore, the petition for writ of mandamus is conditionally granted to direct the reformation of the scope of the order.

Factual Background

Real party, Jeffrey Pfeifer, represented relator in two family law matters. The first case was a paternity suit involving relator’s nine-year-old daughter, Brittany Spain.² The second suit was a divorce action in which the custody of relator’s four-year-old daughter, Taylor Alexandra Spain, was contested.³ Ten days before trial of the second suit, Pfeifer obtained a court order permitting him to withdraw from the case.

On the day trial was originally scheduled, relator and her new attorney, Gary Poenisch, objected to Pfeifer’s withdrawal, alleging inadequate notice of the hearing on the motion to withdraw. The presiding judge overruled relator’s objection, but postponed the trial for 45 days to allow new counsel time to prepare for the trial.

Later that day, Poenisch, now apparently retained as relator’s counsel in the divorce and custody action, sent a written request to Pfeifer for relator’s “files,” referencing by style and number the divorce and custody action. Pfeifer released a “file” with the same style and cause reference to Poenisch’s courier that same day.

Two days later, Poenisch notified Pfeifer by letter (again referencing only the divorce action) that the files delivered were incomplete because Pfeifer had not included the paternity action file, he had only sent a copy, rather than the original, of the divorce action file, and he had not included the documents produced by Spain in response to written discovery in the divorce action. Poenisch demanded that the original of all files related to Debra Spain be delivered that day.

Pfeifer responded that all of the documents in the divorce action file were copies because the originals were on file at the courthouse. He refused to relinquish the paternity action file because it was a closed case, and his representation of Spain was withdrawn only as to the divorce and custody action. He stated that he was searching for the alleged missing discovery documents and would deliver them if found.⁴ Poenisch immediately faxed a reply which threatened that a conversion action and grievance complaint would be filed against Pfeifer based on his intentional failure to deliver Spain’s files. Nine days later, Spain filed the underlying conversion action. Pfeifer answered and filed counterclaims against Spain and Poen-iseh alleging: (1) the filing of a frivolous, baseless lawsuit brought solely for harassment; (2) malicious prosecution; and (3) abuse of process. Pfeifer’s counsel also moved to disqualify Poenisch on the ground that he was a fact witness to this dispute and “[i]t was not fair that Plaintiffs attorney participate as both advocate and witness in the same case.”

On November 1, 1995, the Honorable Frank Montalvo heard argument on the motion to disqualify Poenisch and granted the motion, staying all proceedings for 90 days to enable relator to find new counsel. Poenisch sought extraordinary relief from this court to get the order of disqualification rescinded. We granted leave to file the petition for writ of mandamus.

The Standard of Review

A party seeking mandamus relief must demonstrate that the trial court has committed a clear abuse of discretion or violated a duty imposed by law. Johnson v. Fourth Court of Appeals, 700 S.W.2d 916, 917 (Tex.1985). The Supreme Court emphasizes that the petitioner must also show that she has no adequate remedy on appeal. Walker v. Packer, 827 S.W.2d 833, 842 (Tex.1992); State v. Walker, 679 S.W.2d 484, 485 (Tex.1984). An order granting or denying a disqualification motion is properly reviewed through an application for writ of mandamus. See NCNB Tex. Nat’l Bank v. Coker, 765 S.W.2d 398, 399-400 (Tex.1989); Robert K. Wise, The Lawyer-Witness Rule: A Comparison of a Lawyer’s Ability to Be Both a Witness and an Advocate Under the Texas Code of Professional Responsibility and the Texas Disciplinary Rules of Professional Conduct, 31 S.Tex.L.Rev. 651, 662 n. 32 (1990).

In this review, we look to disciplinary rule 3.08 for guidance in determining whether the respondent abused his discretion in disqualifying Poeniseh as attorney of record and prohibiting him from working in the capacity of attorney for Spain in the conversion action. See Spears v. Fourth Court of Appeals, 797 S.W.2d 654, 656 (Tex.1990); Ayres v. Canales, 790 S.W.2d 554, 557 & n. 2 (Tex.1990). The rule sets forth the considerations relevant in a disqualification proceeding, and “a trial court order that disqualifies an attorney in order to prevent a violation of Rule 3.08 is appropriate when warranted.” Ayres v. Canales, 790 S.W.2d at 556-57 n. 2.

Disqualification of Counsel

Poeniseh argues that the trial judge abused his discretion when he ordered that relator be “disqualified as attorney of record for Plaintiff, and cannot work in the capacity as the attorney for Plaintiff in this cause.”⁵

Rule 3.08 of the Texas Disciplinary Rules of Professional Conduct forbids a lawyer from accepting or continuing employment as an advocate before a tribunal when he knows or reasonably believes he may be a witness necessary to establish an essential fact on behalf of his client.⁶ Tex.DisciplinaRY R.Peof.Conduct 3.08 (1994), reprinted in Tex. Gov’t Code Ann., tit. 2, subtit. G app. (Vernon Supp.1996) (State Bae Rules art. X, § 9). Rule 3.08 reads in full, as follows:

Rule 3.08. Lawyer as Witness

(a) A lawyer shall not accept or continue employment as an advocate before a tribunal in a contemplated or pending adjudicatory proceeding if the lawyer knows or believes that the lawyer is or may be a witness necessary to establish an essential fact on behalf of the lawyer’s client, unless:

(1) the testimony relates to an uncontested issue;

(2) the testimony will relate solely to a matter of formality and there is no reason to believe that substantial evidence will be offered in opposition to the testimony;

(3) the testimony relates to the nature and value of legal services rendered in the ease;

(4) the lawyer is a party to the action and is appearing pro se; or

(5) the lawyer has promptly notified opposing counsel that the lawyer expects to testify in the matter and disqualification of the lawyer would work substantial hardship on the client.

(b) A lawyer shall not continue as an advocate in a pending adjudicatory proceeding if the lawyer believes that the lawyer will be compelled to furnish testimony that will be substantially adverse to the lawyer’s client, unless the client consents after full disclosure.

(c) Without the client’s informed consent, a lawyer may not act as advocate in an adjudicatory proceeding in which another lawyer in the lawyer’s firm is prohibited by paragraphs (a) or (b) from serving as advocate. If the lawyer to be called as a witness could not also serve as an advocate under this Rule, that lawyer shall not take an active role before the tribunal in the presentation of the matter.

Id.

At the hearing, movant’s counsel told the trial judge that Poenisch would be a material witness. Movant’s counsel argued: “He is the one alleging what happened. He is the one that is alleging that parts [of Spain’s file] were missing.” In response to Poenisch’s assertion that he could simply introduce the letters and would not have the take the stand, the trial judge made the following inquiry:

THE COURT: Isn’t that part of the facts of the case? In other words, Mr. Estrada, isn’t that precisely what your client is going to dispute? I mean, your client is going to say, “No. We sent the files. He lost them.” I mean, isn’t that what the dispute is about?

MR. ESTRADA: That is what the whole suit centers around, Your Honor.

THE COURT: ... And you [Poenisch] are going to have to take the witness stand and say, “I took the file. The file was in this shape. And on top of that” — I mean, I presume you are going to say — I mean, I am not trying to even make the suggestion that this is the case. But presumably you are going to say, “The file not only was in bad shape, but it was incomplete when I got it.” I mean, isn’t that what we are talking about here?

The trial judge later inquired:

THE COURT: ... Whereas, the concern I have here — and I am going to turn to Mr. Estrada and ask you: Are you disputing — is your client going to dispute the circumstances surrounding the demand of the file and the return of the file and whether the file was complete or not complete and that kind of thing?

MR. ESTRADA: Absolutely. Absolutely.

The trial judge then concluded:

THE COURT: I am looking at these letters and they, basically, substantiate my ruling, and that is the fact that the defendant in this ease is going to contest, for lack of a better word, the gravamen of your lawsuit. In other words, the gravamen of your lawsuit is the files were not returned. I mean, if you look at it strictly from a conversion point of view, the thing that was converted were the files, and he is contesting that. I mean, that is a material issue of fact.

The content of Spain’s files is clearly a material issue in the conversion action. If the files were complete as delivered, Pfeifer did not exercise control over any of Spain’s property. Spain’s allegation that the files were incomplete is based on Poenisch’s review of the files. Poenisch will, therefore, have to testify as to what documents were missing. Moreover, Spain has alleged an “intentional” conversion of her files. All actions taken in connection with the demand for the files were taken by Poenisch, and all replies to Pfeifer’s responses were made by Poenisch. Thus, there are only two witnesses privy to the circumstances surrounding the demand and response, Pfeifer and Poenisch. Spain alleges in her petition: “The defendant acted with an evil intent to harm plaintiff. Defendant’s conversion of the property was intentional, willful, wanton and without justification or excuse, and was done with gross indifference to the rights of the plaintiff.” The only witness Spain can call to prove these allegations is Poenisch.

The facts of this case, therefore, are in line with those contemplated in Warrilow v. Norrell, 791 S.W.2d 515 (Tex.App.—Corpus Christi 1989, writ denied). That case involved a claim for breach of good faith and fair dealing on the part of an insurer and was an appeal from a trial court’s failure to disqualify the attorney, rather than a mandamus. Id. at 517, 520. At trial, the attorney testified regarding (1) the contents of various documents and his correspondence with the insurer; (2) conversations and actions between himself and the insurer; and (3) circumstances surrounding the underlying liti-gatiqn. Id. The court held the attorney’s testimony was material, necessary and crucial to the plaintiffs assertion of bad faith. Id. The court noted that the attorney was called upon to testily as to the negotiations “he personally conducted” in the underlying cause of action. Id. The court held the trial court abused its discretion in failing to disqualify the attorney. Id.

Poeniseh will be called upon to testify regarding the contents of correspondence between himself and Pfeifer. Poeniseh will be called upon to testify regarding the content of Spain’s files as delivered. Poeniseh is the only person, other than Pfeifer, who can be called upon to testify regarding the circumstances surrounding the demand for the files. The subject matter of Poenisch’s testimony is at the very heart of the dispute in this case.

Having concluded Poenisch’s testimony is clearly necessary to establish an essential fact on Spain’s behalf, we must determine if any of the exceptions in Rule 3.08(a) apply so as to permit Poeniseh to continue to represent Spain. Clearly, Spam’s testimony will not fall within any of the first four exceptions, i.e., his testimony will be contested; his testimony does not relate to a matter of mere formality; his testimony does not relate solely to the nature and value of legal services; and he is not a party appearing pro se.

The final exception would have allowed continued representation if: (1) Poeniseh had promptly notified opposing counsel that he expected to testify in the matter; and (2) disqualification would work substantial hardship on Spain. Poeniseh did not notify Estrada that he expected to testify. In fact, Poeniseh argued at the disqualification hearing that he would not be required to take the stand.

Setting aside Poenisch’s failure to provide the proper notice for the moment, comment seven to rule 3.08 explains this final exception is based upon a balancing of the interests of the client with the interests of the opposing party, for example, the opposing party may be unfairly prejudiced were the attorney to testify as to contested matters. Tex.DisciplinaRY R.PROf.Conduct 3.08 & emt. 7 (1994); see also Ayres v. Canales, 790 S.W.2d at 557 & n. 4. The policy reasons for the rule must be considered in this balancing. These policy reasons include: “(1) the attorney may be more impeachable for interest and, therefore, a less effective witness; (2) the attorney’s role as advocate may handicap the opposing counsel in challenging the credibility of the attorney; (3) it may place the testifying advocate in the unseemly and ineffective position of arguing his own credibility; and (4) the roles of advocate and witness are inconsistent because the function of an advocate is to advance his client’s cause and that of a witness is to state facts objectively,” and it may be unclear to the fact finder whether a statement by the testifying attorney should be taken as proof or as an analysis of the proof. Warrilow v. Norrell, 791 S.W.2d at 521 n. 6; Tex.DisciplinaRY R.PROf.Conduct 3.08 & cmt. 4 (1994). It is highly conceivable that the testimony Poeniseh will be called upon to give will be in direct contradiction to the testimony of Pfeifer; therefore, Poeniseh will be required to advocate that his testimony is more credible than Pfeifer’s. This will require Poeniseh to act as an advocate to bolster his own credibility immediately upon vacating the witness chair. Indeed, it is difficult to understand how Poeniseh could contend otherwise. Allowing such a situation to arise would be untenable.

When the client’s right to counsel of his choice and the need to maintain ethical standards of professional responsibility clash “[T]he preservation of public trust both in the scrupulous administration of justice and in the integrity of the bar is paramount ...” and “[The client’s recognizably important right to counsel of his choice] must yield, however, to considerations of ethics which run to the very integrity of the judicial process, (citations omitted) ... [C]ounsel should resolve any doubt in favor of preserving the integrity of his testimony and against his continued participation as trial counsel. If counsel fails to voluntarily withdraw as trial counsel in such a situation the trial court is vested with broad discretion to order withdrawal.

United Pacific Ins. Co. v. Zardenetta, 661 S.W.2d 244, 248 (Tex.App.—San Antonio 1983, no writ). We cannot find that the trial court abused its discretion by disqualifying Poeniseh under these circumstances in order to prevent a violation of Rule 3.08. See Mauze v. Curry, 861 S.W.2d 869, 870 (Tex.1993) (orig. proceeding); Warrilow v. Norrell, 791 S.W.2d at 520.

Scope of Order

The order goes too far when it bans Poenisch from representing Spain in any professional capacity on this case. Rule 3.08(c) only bans the lawyer-witness from representing his client before the tribunal. This implies that the attorney may still assist his client in preparation for trial. The Model Rules Committee of the State Bar of Texas which drafted the commentary to these rules reached the same conclusion when it stated, “This rule does not prohibit the lawyer who may or will be a witness from participating in the preparation of a matter for presentation to a tribunal.” Rule 3.08 comment 8. This portion of the order creates a clear abuse of discretion for which Spain has no adequate remedy on appeal.

Conclusion

We conditionally grant the petition for writ of mandamus and direct Judge Montalvo to reform his order of disqualification in accordance with this opinion.

1 . The underlying suit is styled Debra Ann Spain v. Jeffrey L. Pfeifer, Cause No. 95-CI-14086, in the 288th District Court of Bexar County, Texas.

2 . The paternity action is styled In the Interest of Brittany Elizabeth Spain, A Child, Cause No. 94-CI-15443, in the 225th District Court of Bexar County, Texas. The Hon. David A. Peeples rendered final judgment in this case on August 24, 1995.

3 . The divorce and custody action is styled In the Matter of the Marriage of Debra Ann Spain and Charles Emmet Spain, Jr., and In the Interest of Taylor Alexandra Spain, A Child, Cause No. 94-CI-13203, in the 288th District Court of Bexar County, Texas. Trial was set for September 11, 1995. After the withdrawal of Mr. Pfeifer, the trial was reset for October 16, 1995. According to Mr. Pfeifer’s counsel, the divorce and custody action was ultimately resolved through mediation.

4 .Pfeifer also related in his letter of September 13, 1995, his attempts to provide Spain with proper notice of the hearing on his motion to withdraw. That issue is disputed in the underlying conversion action and is not before this court at this time.

5 . Order on Defendant’s Motion to Disqualify Gary M. Poeniseh as Attorney of Record for Plaintiff, Debra Ann Spain v. Jeffrey L. Pfeifer, No. 95-CI—14086 (288th Dist.Ct., Bexar County, Texas, Nov. 15, 1995).

6 . The State of Texas overhauled its rules for governing the conduct of licensed attorneys in 1989. The operative rules became effective on January 1, 1990, and are known as the Texas Disciplinary Rules of Professional Conduct. They are located in volume 3 of the Government Code at article X, section 9. In 1994, the Supreme Court amended Rule 3.08 to add the limiting phrase "as an advocate before a tribunal” to the first sentence.