Two Thirty Nine Joint Venture v. Joe

60 S.W.3d 896, 2001 Tex. App. LEXIS 8613, 2001 WL 1468195
CourtCourt of Appeals of Texas
DecidedNovember 20, 2001
Docket05-98-01775-CV
StatusPublished
Cited by26 cases

This text of 60 S.W.3d 896 (Two Thirty Nine Joint Venture v. Joe) 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
Two Thirty Nine Joint Venture v. Joe, 60 S.W.3d 896, 2001 Tex. App. LEXIS 8613, 2001 WL 1468195 (Tex. Ct. App. 2001).

Opinions

OPINION

BARBARA ROSENBERG, Justice (Assigned).

Two Thirty Nine Joint Venture (239 JV) brought suit for malpractice and breach of fiduciary duty and duty of loyalty against Harry J. Joe, individually, and his law firm, Jenkens & Gilchrist, P.C. (J & G). The basis of the suit was that Joe and J & G breached their duty of loyalty to 239 JV when neither Joe nor the law firm disclosed that Joe, as a member of the Irving City Council, would or could take positions that would affect the real estate transactions in which J & G represented 239 JV. Joe filed a motion for summary judgment based on official immunity, which the trial court granted. Then, J & G filed a motion for summary judgment based on Joe’s immunity, whether 239 JV had produced evidence to support each element of a malpractice claim, and other grounds. The trial court granted J <& G’s motion. In three points of error, 239 JV challenges the summary judgments, asserting (1) the trial court abused its discretion in failing to grant a motion for continuance when that motion was filed and heard within three months of the suit’s filing; (2) Joe’s summary judgment was improper because fact issues exist as to Joe’s official immunity; and (3) J & G’s summary judgment was erroneously granted. Because we conclude that the trial court abused its discretion in failing to grant a motion for continuance on Joe’s motion for summary judgment, we reverse and remand the cause of action against Joe. Because we conclude that an attorney’s duty of care includes disclosure of any conflict of interest that may affect the attorney’s representation of that client’s interest and that neither legislative nor official immunity protects an attorney from that private duty, we reverse and remand the summary judgment in favor of J & G.

FACTUAL AND PROCEDURAL BACKGROUND

Beginning in 1992, J & G attorneys represented 239 JV in its formation and business activities of acquiring, developing, and selling 239 acres located in Valley Ranch, a master-planned community located in Irving, Texas. By August 1994, 239 JV had sold all but an eleven-acre apartment tract. On August 18, 1994, 239 JV entered into a contract for the sale of that acreage. The contract was reviewed by William Thau, a J & G shareholder, and he provided legal advice to 239 JV on the sale of this acre[901]*901age. The contract provided a review period ending September 17,1994.

On September 4, 1994, the Sunday before Labor Day, the Irving City Council posted a three-day notice of a special meeting at which the council would consider an ordinance that would place a moratorium on apartment development. On September 7, at the special council meeting, Joe, a member of the Irving City Council and a partner in J & G, made the motion to adopt the moratorium, and the council passed the ordinance unanimously. On or about that same date, because of the City of Irving’s moratorium on the building of apartments, the purchasers rejected the contract for sale of the eleven-acre apartment tract.

After learning that Joe was a member of J & G, members of 239 JV met with Joe. Joe was told of J & G’s representation of 239 JV for the sale, of the apartment property. The 239 JV members urged Joe to support the interests of the venture, and, if he could not, they asked him to declare a conflict of interest and withdraw from any further leadership role, discussion, or vote on the moratorium. Subsequently, on December 15, 1994 and May 18, 1995, Joe voted twice to extend the moratorium. On June 22, 1995, when 239 JV requested a waiver of the moratorium, Joe abstained from the council vote.

On April 18, 1997, 239 JV filed suit against Joe and J & G. On May 12, 1997, they answered. On June 12, 1997, Joe filed his motion for summary judgment based on immunity. 239 JV filed a motion for continuance for time to obtain discovery for purposes of the summary judgment issues. The trial court denied the motion for continuance and granted Joe’s motion for summary judgment.

After discovery, J & G filed a motion for summary judgment on six independent grounds. The trial court granted J & G’s motion without stating the grounds. This appeal followed.

THE MOTION FOR CONTINUANCE

In 239 JVs first point of error, it complains that the trial court abused its discretion in denying 239 JVs first motion for continuance of Joe’s summary judgment. Joe responds that no discovery is necessary to determine the official immunity defense that is the basis of his motion for summary judgment.2

[902]*902When a party contends that it has not had an adequate opportunity for discovery before a summary judgment hearing, it must file either an affidavit explaining the need for further discovery or a verified motion for continuance. Tenneco Inc. v. Enter. Prods. Co., 925 S.W.2d 640, 647 (Tex.1996); see Tex. Rs. Civ. P. 166a(g), 251, 252. It is within a trial court’s discretion to grant a continuance until the requested discovery is completed. Levinthal v. Kelsey-Seybold Clinic, P.A., 902 S.W.2d 508, 510 (Tex.App.—Houston [1st Dist.] 1994, no writ). We will not disturb the trial court’s denial of a motion for continuance except for a clear abuse of discretion. Villegas v. Carter, 711 S.W.2d 624, 626 (Tex.1986); Verkin v. Southwest Ctr. One, Ltd., 784 S.W.2d 92, 94 (Tex.App.—Houston [1st Dist.] 1989, writ denied).

In deciding whether the trial court abused its discretion in denying a rule 166a(g) motion for continuance, we consider the length of time the case had been on file, the materiality of the discovery sought, whether the party seeking the continuance had exercised due diligence in attempting to obtain the discovery sought, and what the party expects to prove. Laughlin v. Bergman, 962 S.W.2d 64, 65-66 (Tex.App.—Houston [1st Dist.] 1997, pet. denied); Me Ax Sign Co. v. Royal Coach, Inc., 547 S.W.2d 368, 370 (Tex.Civ. App.—Dallas 1977, no writ); see Tex.R. Civ. P. 252.

239 JV filed its petition April 18, 1997; Joe and J & G filed answers on May 12; Joe filed his motion for summary judgment on June 12; and the trial court granted Joe’s motion on July 11. Thus, the suit had been on file three months before summary judgment was granted. Trial courts have abused their discretion in denying continuances when cases have been on file for three, Levinthal, 902 S.W.2d at 510, six, Verkin, 784 S.W.2d at 94-95, and eleven months, Laughlin, 962 S.W.2d at 66, when due diligence and materiality of discovery are established.

To establish due diligence, 239 JV’s counsel filed a motion for continuance with an affidavit stating he had not had an adequate opportunity for discovery before a summary judgment hearing. The motion stated that counsel needed additional time to conduct discovery regarding whether Joe acted as a councilman and J & G’s representation of 239 JV. In his affidavit, lead counsel stated that, while the suit had been on file two months, lead counsel was in an out-of-town trial from the time of Joe’s answer to the suit until June 10. Joe’s motion for summary judgment was served June 12 and was set for July ' 11. Correspondence between 239 JVs counsel and appellees’ counsel shows that on June 17, 239 JV’s counsel attempted to depose Joe and others.

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Bluebook (online)
60 S.W.3d 896, 2001 Tex. App. LEXIS 8613, 2001 WL 1468195, Counsel Stack Legal Research, https://law.counselstack.com/opinion/two-thirty-nine-joint-venture-v-joe-texapp-2001.