Court Opinion

ID: 9777981
Source: CourtListenerOpinion
Date Created: 2023-08-29 20:29:29.073789+00
Date Added: 2024-06-11T07:33:02.901130
License: Public Domain

BENAVIDES, Justice,
dissenting.
In our opinion delivered December 31, 1985, we reversed a trial court judgment that found in favor of appellee by setting aside an initial judgment for the appellants against the appellee and by entering a take-nothing judgment in favor of appellee. The trial court’s take-nothing judgment was based on a settlement and release between the parties. The facts have been previously set out in our original opinion delivered December 31, 1985. The appellee has timely filed his motion for rehearing, asserting that we erred in reversing the trial court and reinstating the original judgment against the appellee on the basis set forth in our opinion holding that the compromise settlement release was rendered void and unenforceable by the violation of Disciplinary Rule 5-106. Supreme Court of Texas, Rules Governing The State Bar of Texas art. X, § 9 (Code of Professional Responsibility) DR 5-106 (1984). I now believe that I was mistaken and would find that we erred in reversing the trial court. The violation formed the only basis for our December 31, 1985, opinion reversing the trial court.
In finding that the rule made the settlement unenforceable, we relied heavily on Fleming v. Campbell, 537 S.W.2d 118 (Tex.Civ.App.-Houston [14th Dist.] 1976, writ ref’d n.r.e.), and found the reasoning “to be sound.” I agree that Fleming was correctly decided, but I find Fleming is neither controlling nor related to the main issue in the appeal before us, because the following circumstances existed in Fleming, but not in this case:
1. The wrongdoer or attorney violating the Code of Professional Responsibility (DR-107) was the litigant.
2. The wrongdoer sought relief for himself.
3. The wrongdoer (plaintiff in Fleming) sought relief for himself from another attorney (defendant in Fleming).
4. A violation of DR-107 was held to violate public policy against a member of the group of professionals that it was intended to regulate, and not against an innocent non-attorney litigant.
In the appeal before us, the original jury verdict in favor of the appellants had been received arid judgment entered when the compromise settlement agreement was made. The release was executed by the appellants; the attorney for appellants received a check as trustee for appellants; a check for part of appellants’ bank payment pursuant to the release agreement was de*235livered; the settlement check was sent to appellants by their attorney. All of this occurred before appellants renounced the authority of their attorney, and is reflected further in the trial court’s Findings of Fact and Conclusions of Law. [The release covered all matters known or unknown, and appellants were aware of the jury verdict, although not directly aware of the entry of judgment.]
The settlement agreement was not illegal or invalid on its face, and there is no finding or assertion that appellee was aware of the DR 5-106 violation on the part of appellants’ attorney, Gonzalez. I do not believe public policy considerations should extend to holding the settlement agreement void against the appellee under such circumstances. Neither appellee nor his attorney violated DR 5-106. Neither appellee nor his attorney participated in, encouraged, or knew of the wrongdoing or violation by appellant’s attorney. Our original decision is even more onerous on the appellee because the same rules formulated to regulate attorneys provide that his own attorney cannot communicate with the other litigant except through (in this case) the appellants’ wrongdoing attorney, so that appellee could not have discovered the violation.
In the case of Lewis v. Davis, 145 Tex. 468, 199 S.W.2d 146 (1947), cited in Fleming and contained in the quotation from Fleming in our original opinion, one of the parties (both non-lawyers) sought to avoid a partnership contract as it pertained to certain acquired interests because neither of the parties were registered or licensed dealers under the Texas Securities Act at the time of the making of the agreement. The parties were not shown to have entered into the contract for an illegal purpose. There was no assertion that the parties sought to do anything illegal, or that the parties sought to sell or become dealers in securities without registering under the law when they entered into the contract, and the court therefore held that enforcement of the contract under such conditions would not be against public policy or be rendered unenforceable. Davis sets out general rules relating to public policy considerations vis-a-vis illegal transactions and parties affected by such cases. In its opinion, the Supreme Court stated the following:
... When two constructions of a contract are possible, preference will be given to that which does not result in violation of law. Great Northern R. Co. v. Delmar Co., 283 U.S. 686, 51 S.Ct. 579, 75 L.Ed. 1349; 12 Am.Jur. pp. 793, 794, Sec. 251. See also Texas Employers’ Ins. Ass’n v. Tabor, Tex.Com.App., 283 S.W. 779. A contract that could have been performed in a legal manner will not be declared void because it may have been performed in an illegal manner. Labbe v. Corbett, 69 Tex. 503, 6 S.W. 808; 12 Am.Jur. p. 647, Sec. 153. According to the foregoing settled rules, the contract by which the parties associated themselves together, as alleged in the petition, must be held valid and not illegal.
Lewis, 199 S.W.2d at 149. While Lewis does not specifically control the appeal before us, it is interesting to note that the Supreme Court reviewed the Securities Act and its purpose in its analysis. Likewise, my review of the Code of Professional Responsibility leads me to conclude that DR 5-106 was not intended to regulate the litigants but the attorneys, and I do not find its violation in this case even suggests a public policy consideration against a non-wrongdoing, non-lawyer litigant.
Even assuming that there might be some furtherance of public policy in our original decision holding the settlement void, I would hold that it does not outweigh the established rule that the misconduct of one attorney will not vitiate a settlement agreement so that a litigant is not bound by the agreement. Texas Employers Insurance Ass’n v. Wermske, 162 Tex. 540, 349 S.W.2d 90 (1961). “The general rule is that the relationship of attorney and client is one of agency. Under this rule, the omissions, as well as the commissions, of an attorney are to be regarded as the acts of the client whom he represents; and his neglect is equivalent to the neglect of the *236client himself.” Wermske, 349 S.W.2d at 93.
In Martin v. Trevino, 578 S.W.2d 763 (Tex.Civ.App.-Corpus Christi 1978, writ ref'd n.r.e.), our Court rejected a claim from a physician against defendant (physician’s patient) and the defendant’s attorney. The thrust of that opinion as to the physician’s claim against the attorney based on the patient’s attorney’s alleged violation of his professional responsibility was that the attorney is not liable to the adverse party’s claim for his actions on behalf of his client, and we held that in such a case the remedy for the violation of the attorney’s professional responsibility was public, not private. Martin v. Trevino, 578 S.W.2d at 770. While I admit that this blanket assertion would not bar all private actions against an attorney for professional responsibility violations as suggested in appellee’s motion for rehearing, I certainly would agree that if a non-lawyer litigant cannot' sue his adversary’s attorney for a breach of professional responsibility performed in the service of the adversary (because such remedy would be public and not private), that under the circumstances here, the non-wrongdoing litigant should not lose his otherwise lawful settlement because of his adversary’s attorney’s violation. The suggestion by the majority on rehearing that appellee might seek, in a separate action against Gonzalez, the difference between the settlement and judgment amounts, flies in the face of our holding in Martin. Moreover, I fail to appreciate why appellee should be the one to bring suit against Gonzalez for a violation of DR 5-106, rather than appellant, who chose Gonzalez and whose best interest Gonzalez had a duty to protect.
I do not feel that the violation involved herein gives rise to appellants’ private to be relieved from their contract because the violation was performed by their own agent. DR 5-106 was not intended to regulate the behavior of an attorney as to his client’s adversary or to create a private right or remedy against the non-wrongdoing litigant in favor of the litigant whose own attorney violated DR 5-106. Considerations of public policy do not require that the violation that was complained of herein create a remedy to defeat an innocent wrongdoer from an adversary’s wrongdoing attorney.
Estoppel was not before this Court and should not form a basis for the result as found by the majority on rehearing. Notwithstanding, I disagree that appellee was estopped to enforce the settlement agreement. The “review condition” in the settlement agreement, does not rise to a level that creates a violation of the DR 5-106 by the appellee’s attorney. The review condition was not even exercised with respect to appellant’s individual settlement.
Settlements should be encouraged and not impeded, and voluntary settlements are favored as being in the interest of the law. State v. Cook, 407 S.W.2d 876 (Tex.Civ.App.-Waco 1966, writ ref’d n.r.e.). The settlement offer became binding when it was accepted. Fail v. Lee, 535 S.W.2d 203 (Tex.Civ.App.-Fort Worth 1976, no writ). The favored status of voluntary settlements, especially with the trend toward multi-party litigation in an ever growing litigious society, should dictate against the extension of the law to create a private remedy against an innocent litigant in favor of the litigant who hired the wrongdoing attorney. I believe our original holding would tend to thwart the public policy in favor of voluntary settlements and would have a chilling effect on the settlement of lawsuits.
I would grant the motion for rehearing and affirm the decision of the trial court.