Court Opinion

ID: 4041506
Source: CourtListenerOpinion
Date Created: 2016-09-28 22:50:01.858007+00
Date Added: 2024-06-11T14:28:32.123211
License: Public Domain

ACCEPTED
                                                                                06-14-00106-CV
                                                                       SIXTH COURT OF APPEALS
                                                                            TEXARKANA, TEXAS
                                                                            2/17/2015 1:24:11 PM
                                                                                 DEBBIE AUTREY
                                                                                          CLERK

                         NO. 06-14-00106-CV

                IN THE SIXTH COURT OF APPEALS                FILED IN
                                                      6th COURT OF APPEALS
                      TEXARKANA, TEXAS                  TEXARKANA, TEXAS
                                                      2/17/2015 2:01:00 PM
PETER G. MILNE, INDIVIDUALLY, PETER G. MILNE P.C., & HEALY   , MILNE
                                                          DEBBIE       &
                                                                   AUTREY
                                                               Clerk
                           ASSOCIATES, P.C.

                                                    Appellants

                                   v.

                        VAL RYAN & JOY RYAN

                                                    Appellees

               Appeal from the 4th Judicial District Court
                         Rusk County, Texas

                    ORAL ARGUMENT REQUESTED

                      BRIEF FOR APPELLANTS

                                 J. CHAD PARKER
                                 Cparker@theparkerfirm.net
                                 Bar Card No: 15489000
                                 FORREST F. MAYS
                                 Fmays@theparkerfirm.net
                                 Bar Card No: 24072228
                                 THE PARKER FIRM, P.C.
                                 3808 Old Jacksonville Rd.
                                 Tyler, Texas 75701
                                 (903) 595-4541 - telephone
                                 (903) 595-2864 - facsimile

                                 Attorneys for Appellants Peter G. Milne,
                                 Ind., Peter G. Milne, P.C.,
PETER G. MILNE
Pmilne@tylertaxlaw.com
Bar Card No. 24037118
327 W. Houston St.
Tyler, Texas 75702
903-593-9300 - telephone
903-593-9325 - facsimile
Attorneys for Appellant Milne &
Associates, P.C.

  i
                      IDENTITY OF PARTIES AND COUNSEL

Appellants/Defendants

      Peter G. Milne, Individually
      Peter G. Milne, P.C.
      Healy, Milne & Associates, P.C.

Counsel for Appellants

      J. CHAD PARKER
      Bar Card No: 15489000
      FORREST F. MAYS
      Bar Card No: 24072228
      THE PARKER FIRM, P.C.
      3808 Old Jacksonville Rd.
      Tyler, Texas 75701

      Attorneys for Appellants Peter G. Milne, Ind., & Peter G. Milne, P.C.,

      PETER G. MILNE
      Bar Card No. 24037118
      327 W. Houston St.
      Tyler, Texas 75702

      Attorneys for Appellant Healy, Milne & Associates, P.C.

Appellees/Plaintiff

      Val Ryan
      Joy Ryan

Counsel for Appellees

      James A. Holmes
      State Bar No. 00784290
      212 South Marshall
      Henderson, Texas 75654

                                        ii
                                           TABLE OF CONTENTS

IDENTITY OF PARTIES AND COUNSEL ...................................................................... ii

INDEX OF AUTHORITIES ........................................................................................ v-vi

STATEMENT OF THE CASE ................................................................................... ... vii

ISSUES PRESENTED ................................................................................................ viii

1.       Did the district court err by failing to meet the clearly-ascertainable
         requirement in its class definition contrary to Intratex Gas Co. v. Beeson, 22
S.W.3d 398, 403 (Tex. 2000)?

2.       Did the district court err by certifying claims of unconsionability under the
         Texas Deceptive Trade Practices Act against the Hicks Defendants in
         violation of Tex. R. Civ. P. 42(a)(2) and 42(b)(3) because individualized
         inquiries into whether such actions took advantage of the lack of
         knowledge, ability, experience or capacity of class members are imperative
         and cannot be resolved by only looking to Appellees claims?

3.       Did the district court err by certifying claims of unconscionability and
         breach of fiduciary duty against the Hicks Defendants where they are not
         typical of Appellees claims?

4.       Did the district court err in certifying claims for declaratory judgment
         against Appellants where the proposed claims for class-wide relief relate
         exclusively or predominately to money damages in violation of Tex. R. Civ.
         P. 42(b)(2).

STATEMENT OF FACTS ....................................................................................... 1–4

A.       The Appellees Claims ...............................................................................1–2

B.       The Hicks Defendants, the 2001 Permanent Injunction,
         and relationship with Appellants ...............................................................2-3

C.       Proceedings in the district court ................................................................3-4

SUMMARY OF THE ARGUMENT .............................................................................5–6
                                                         iii
STANDARD OF REVIEW ......................................................................................... 6–7

ARGUMENT............................................................................................................7-17

I.       The district court erred in its class definition and violated the clearly-
         ascertainable requirement of a class definition ........................................7–10

II.      The district court erred by certifying claims of unconscionability against the
         Hicks Defendants because common issues of law and fact do not
         predominate .............................................................................................10-14

III.     The district court erred by certifying claims of unconscionability
         and breach of fiduciary duty against the Hicks Defendant because
         they are not typical of Appellees claims ......................................................15

IV.      The district court erred in certifying claims for declaratory judgment
         against Appellants in violation of Tex. R. Civ. P. 42(b)(2) because the
         proposed claims for class-wide relief relate exclusively or predominately to
         money damages ......................................................................................16-17

CONCLUSION AND PRAYER ......................................................................................17

CERTIFICATE OF COMPLIANCE WITH RULE 9.4(E) ...................................................18

CERTIFICATE OF SERVICE ........................................................................................19

                                                          iv
                                      INDEX OF AUTHORITIES

Cases

Allison v. Citgo Petroleum Corp.,
      151 S.W.3d 402, 425 (5th Cir. 1998) ......................................................6, 16

Bailey v. Kemper Casualty Ins. Co.,
      83 S.W.3d 840, 847 (Tex. App. – Texarkana 2002, pet dism’d w.o.j) ....6, 7

Bolin v. Sears, Roebuck & Co.,
      231 F.3d 970, 978 (5th Cir. 2000) .............................................................16

Dafforn v. Rousseau Assocs., Inc.,
     1976–2 Trade Cases ¶ 61, at 219 (N.D. Ind.1976) .....................................10

East Texas Motor Freight v. Rodriguez,
      431 U.S. 395, 403 (1977) .......................................................................... 15

Entex v. City of Pearland,
      990 S.W.2d 904, 909 (Tex. App.–Houston [14th Dist.] 1999, no pet.) ......7

Forsyth v. Lake LBJ Inv. Corp.,
      903 S.W.2d 146, 149 (Tex. App.– Austin 1995, writ dism'd w.o.j.) ...........7

Gilchrist v. Bolger,
      89 F.R.D. 402, 406 (S.D.Ga.1981) .............................................................15

Henry Schein, Inc. v. Stromboe,
     28 S.W.3d 196, 200–01 (Tex. App.– Austin 2000, pet. dism'd w.o.j.)...6, 13

Hi–Lo Auto Supply, L.P. v. Beresky,
     986 S.W.2d 382, 386 (Tex. App.–Beaumont 1999, no pet.) ......................6

Intratex Gas Co. v. Beeson,
       22 S.W.3d 398, 403 (Tex. 2000) ..........................................................vi, 5, 9

                                                      v
Pellman v. Cinerama, Inc.,
     89 F.R.D. 386, 389 (S.D.N.Y.1981) .............................................................15

Peltier Enterprises, Inc. v. Hilton,
       51 S.W.3d 616, 623–24 (Tex. App. – Tyler 2000, pet. denied)................5, 12

Southwest Refining Co. v. Bernal,
     22 S.W.3d 425, 433 (Tex. 2000) ..................................................................11

Spera v. Fleming, Hovenkamp & Grayson, P.C.,
      4 S.W.3d 805, 810 (Tex. App.—Houston 1999, no pet .) ...........................11

Texas S. Rentals, Inc. v. Gomez,
      267 S.W.3d 228, 244 (Tex. App. – Beaumont 2008, no pet.).......................5

Wente v. Georgia Pacific Corp.,
     712 S.W.2d 253, 257 (Tex. App.—Austin 1986, no writ) .......................... 11

Statutes

Tex. Bus. & Com. Code Ann. § 17.45(5) (Vernon Supp.1998) .............................12

Rules

Tex. R. Civ. P. 42 ............................................................................. vi, 6, 11, 15–17

                                                       vi
                            STATEMENT OF THE CASE

Nature of the case        Val & Joy Ryan (“Appellees”) sued Defendants Richard
                          Hicks, Individually and d/b/a Elder Advisory Services
                          and Elder Advisory Tax Group, LLC (“Hicks
                          Defendants”), Appellants, and others for numerous
                          causes of action arising from Hicks’ provision of legal
                          services and/or Medicaid planning services purportedly
                          in violation of a 2001 injunction from the 114th District
                          Court, Smith County. Hicks was an independent
                          contractor of Appellants Peter G. Milne, P.C. and Healy,
                          Milne & Associates, P.C. over the period of 2005 to
                          2012. (4RR: 9, 11, 14.) Appellees sought certification of
                          approximately 450-575 members on claims of
                          unconscionability under the Texas DTPA, breach of
                          fiduciary duty, declaratory relief, and vicarious liability
                          under theories of partnership, joint enterprise, and civil
                          conspiracy. (2CR: 278–309; 6RR: 23–24.)

Trial court               4th Judicial District Court, Rusk County
                          Honorable Clay Gossett

Trial court’s disposition Entered Order of Class Certification that Granted
                          Appellees’ Motion and Supplemental Motions for Class
                          Certification as to claims of unconscionability and
                          breach of fiduciary duty against Hicks Defendants,
                          granted as to Appellees’ claims for declaratory relief and
                          vicarious liability under theories of partnership, joint
                          enterprise, and civil conspiracy against Appellants, and
                          denied as to Appellees’ claims for unconscionability and
                          breach of fiduciary duty against Appellants (3CR: 526.)

                                         vii
                              ISSUES PRESENTED

1.   Did the district court err by failing to meet the clearly-ascertainable
     requirement in its class definition contrary to Intratex Gas Co. v. Beeson, 22
S.W.3d 398, 403 (Tex. 2000)?

2.   Did the district court err by certifying claims of unconsionability under the
     Texas Deceptive Trade Practices Act against Richard Hicks in violation of
     Tex. R. Civ. P. 42(a)(2) and 42(b)(3) because individualized inquiries into
     whether such actions took advantage of the lack of knowledge, ability,
     experience or capacity of class members are imperative and cannot be
     resolved by only looking to Appellees claims?

3.   Did the district court err by certifying claims of unconscionability and
     breach of fiduciary duty against the Hicks Defendants where they are not
     typical of Appellees claims?

4.   Did the district court err in certifying claims for declaratory judgment
     against Appellants where the proposed claims for class-wide relief relate
     exclusively or predominately to money damages in violation of Tex. R. Civ.
     P. 42(b)(2).

                                       viii
                               STATEMENT OF FACTS

A.    The Appellees Claims

      Appellees Val & Joy Ryan moved Val’s parents from Louisiana to Autumn

Leaves Nursing Home in Henderson around November 2007. (6RR: 28-29.) The

Ryans spoke with Raymond Pyle, a social worker at Autumn Leaves, about Val’s

parents’ financial situation and Mr. Pyle furnished the Ryans with Richard Hicks

telephone number. (Id. at 29.) The Ryans called and made an appointment with Hicks

at his office in Tyler. (Id.) According to Mr. Ryan, Hicks notified the Ryans that they

needed to “stay away from the government, you don’t need the government to pay for

anything, you need to try to do this on your own.”(Id.) Ryan testified that Hicks

encouraged them to invest in National Note of Utah to help finance their parents’

nursing home expenses. (Id.) Ryan testified that the he and his wife went home to

think about it and then decided they wished to invest and called Hicks back to make

another appointment. (Id. at 29–30.) Hicks did not charge the Ryans anything for his

services related to the investment but did ask the Ryans whether they and their

parents were in need of various legal documents that could be drafted for them. (Id.

at 30.) They said they were and obliged his services for a fee of $3,000.00 which they

paid to Elder Advisory Services. (Id at 30–31, 38; 8RR: PX1H.) Ryan testified that

during these meetings, he heard the name Peter Milne referenced and was presented

with brochures and business cards bearing his name. (Id. at 31; 8RR: PX1C–PX1E.)

                                        Page 1
Ryan testified that once the documents were drafted, Hicks personally delivered them

to him and his parents at Autumn Leaves. (6RR: 36–38.)

       Ryan testified that he did not receive any Medicaid advice from Hicks other

than that Medicaid was not proper for their situation and they should pursue private

pay for their parents’ nursing home expenses. (6RR: 50.) Ryan testified that Hicks

represented to them that he was not a lawyer. (Id. at 51.) Ryan stated that he felt that

if it was necessary for them to meet Milne, that Hicks would have introduced them

and that they did not feel it was necessary to “check out his story” because Hicks had

a nice office. (Id.)

B.     The Hicks Defendants, the 2001 Permanent Injunction, and relationship
       with Appellants

       Hicks testified that he negotiated with the Texas Unauthorized Practice of Law

Committee in 2001 and entered an agreed injunction in the 114th District Court of

Smith County on the grounds that the Committee determined that providing Medicaid

planning services was considered the practice of law. (4RR: 10.) Hicks stated that,

after the injunction was entered, he changed the way he performed his services by

working in direct relationship with a law firm. (Id.) Appellant Peter G. Milne, P.C.

was formed in 2005. (3CR: 510.) Peter G. Milne, P.C. dissolved in 2007 and Healy,

Milne & Associates, P.C. was formed and operated from October 2006 until July

2010. (Id.) Peter G. Milne, P.C. was reinstated in 2010. (Id.) Hicks testified that he

and Milne entered an oral agreement whereby Milne would “assist me in cases where
                                        Page 2
we were assisting individuals with Medicaid planning once they were placed into a

nursing facility.” (4RR: 7.) For cases in which client intake originated with Hicks’

office, Hicks testified that he would obtain 75% and Appellants would receive 25%

of the fee. (4RR: 16.) For cases in which client intake originated with Milne’s office,

Hicks would obtain 60% of the fee and Appellants would obtain 40%. Hicks was an

independent contractor of Appellants Peter G. Milne, P.C. and Healy, Milne &

Associates, P.C. over the period of 2005 to 2012. (4 RR 9, 11, 14.)

C.    Proceedings in the district court

      Appellees’ live pleading is their Fifth Amended Petition and they have filed a

Motion and three supplemental motions for Class Certification. (1CR: 144, 106, 162,

2CR: 261, 3CR: 316.) Through those Motions they have sought certification of the

claims of unconscionability under the DTPA and breach of fiduciary duty against the

Hicks Defendants and Appellants, certification of theories of vicarious liability

through partnership, joint enterprise, and civil conspiracy, and a declaratory judgment

that Appellants were in violation of the 2001 injunction rendered against the Hicks

Defendants. Two hearings were held on the class certification motions. (5 RR, 6 RR.)

Appellees constructed a Master Exhibit List containing all people believed to

constitute potential members of the proposed Class. (2CR: 278–309.)

      Hicks served Amended Answers to Interrogatories on August 30, 2014, in

which he claimed that all of the services he provided to those on the Master Exhibit

                                        Page 3
List were enjoined services pursuant to the terms of the 2001 Permanent Injunction.

(2CR: 273.) Appellees supplemented their Class Certification Motion to alert the

district court of these developments. (2CR: 261.) However, of those on the Master

Exhibit List, 114 are what have been termed “acknowledged clients” to whom Hicks

and Appellants provided services jointly and in which both partook of the fee. (3CR:

392.) Another group containing 219 clients are “small case” clients whom Hicks

never disclosed to Appellants and for which Hicks retained the entire fee. (3CR:

392–393.) Another group containing approximately 127 people are “simple case”

clients whom Hicks alleges were made known by Milne but whom Milne authorized

Hicks to perform services that involved the practice of law and that he told Hicks he

could retain the entire fee. (3CR: 393.)

      The Court entered its Order on Class Certification on November 26, 2014.

(3CR: 526.)

                                       Page 4
                           SUMMARY OF THE ARGUMENT

      The district court erred by violating the clearly-ascertainable requirement of a

class definition by framing the class definition as a legal conclusion; i.e. the class

encompasses those who paid a fee for “enjoined services” performed by Richard

Hicks since January 1, 2005. This definition necessarily requires a determination on

the merits before the court can ensure the existence of a class which renders it

impossible to define at least a portion of the class until ultimate liability as to that

person is made. This violates Intratex Gas Co. v. Beeson, 22 S.W.3d 398, 403 (Tex.

2000).

      The district court erred by certifying claims of unconscionability against the

Hicks Defendants because common issues of law and fact do not predominate with

respect to the third and fourth elements of the unconcionability claims – whether the

Hicks Defendants’ actions took advantage of the lack of knowledge, ability,

experience, or capacity of the proposed Class to a grossly unfair degree. Such an

answer as to Appellees does not answer the question for the approximately 450-575

people that have been proposed as members of the Class and precludes certification.

See Peltier Enterprises, Inc. v. Hilton, 51 S.W.3d 616, 623–24 (Tex. App. – Tyler

2000, pet. denied); Texas S. Rentals, Inc. v. Gomez, 267 S.W.3d 228, 244 (Tex. App.

– Beaumont 2008, no pet.).

      The district court erred in certifying claims for unconscionable conduct and

                                        Page 5
breach of fiduciary duty against the Hicks Defendants because Appellees’ claims are

not typical of the proposed Class.

      The district court erred in certifying claims for declaratory judgment against

Appellants in violation of Tex. R. Civ. P. 42(b)(2) because the proposed claims for

class-wide relief relate exclusively or predominately to money damages. See Allison

v. Citgo Petroleum Corp., 151 S.W.3d 402, 425 (5th Cir. 1998).

                                STANDARD OF REVIEW

      An appellate court reviews the decision of the trial court in certifying or

refusing to certify the class for abuse of discretion. Bailey v. Kemper Casualty Ins.

Co., 83 S.W.3d 840, 847 (Tex. App. – Texarkana 2002, pet dism’d w.o.j)(citing

Hi–Lo Auto Supply, L.P. v. Beresky, 986 S.W.2d 382, 386 (Tex.App.-Beaumont 1999,

no pet.)). A trial court abuses its discretion only if it “fails to properly apply the law

to the undisputed facts or acts arbitrarily, unreasonably, or without reference to any

guiding principles.” Bailey, 83 S.W.3d at 847 (citing Henry Schein, Inc. v. Stromboe,

28 S.W.3d 196, 200–01 (Tex.App.-Austin 2000, pet. dism'd w.o.j.)). In conducting

this review, the court must view the evidence in the light most favorable to, and

indulge every presumption in favor of, the trial court's action. Bailey, 83 S.W.3d at

847 (citing Entex v. City of Pearland, 990 S.W.2d 904, 909 (Tex.App.-Houston [14th

Dist.] 1999, no pet.)). An appellate court may not substitute its judgment for that of

                                         Page 6
the trial court, even if it would determine the issues differently than the trial court.

Bailey, 83 S.W.3d at 847 (citing Forsyth v. Lake LBJ Inv. Corp., 903 S.W.2d 146,

149 (Tex.App.-Austin 1995, writ dism'd w.o.j.)).

                                      ARGUMENT

I.    The district court erred in its class definition and violated the clearly-
      ascertainable requirement of a class definition

      The district court’s Order on Class Certification states that Appellees and their

attorney are appointed to represent a class consisting of “All individuals and entities

who/which paid a fee for enjoined services performed by Richard Hicks since January

1, 2005.” For purposes of this suit, “enjoined services” means any of the services

listed in the 2001 injunction entered against HICKS by the 114 Judicial District Court

of Smith County, Texas. [sic] (4CR: 527.) In listing the issues of law and fact

common to the class, the Court included among them: “ 7. Whether the 2001

injunction requires that Hicks be an “employee” of a lawyer or law firm in order to

provide the enjoined services.” (4CR: 530.) The Court goes on to state that “The

Court finds that because Hicks’ violations of the 2001 injunction are uncontested and

have been admitted in open Court, the Court and the parties will concentrate the bulk

of their efforts on the following issues: . . . 1. Whether the law firms’ admitted failure

to “employ” Hicks violated the terms of the 2001 injunction . . . 4. Whether Plaintiffs

                                         Page 7
are entitled to declaratory judgment that Defendants violated the 2001 injunction.”

(4CR: 530 – 531.)

      The class is not clearly-ascertainable because the definition of “enjoined

services” under the 2001 injunction necessarily requires a determination on the merits

before at least a portion of the class meets the definition. Approximately 114 of the

proposed members of the Class belong to a group consisting of clients for whom the

Hicks Defendants and Appellants provided services jointly over the time duration that

the definition encompasses – the so-called “acknowledged clients”. (2CR: 175-179;

5RR: 19–20, 28–31.) For that group, a determination on the merits on three separate

issues must be resolved by the Court before the class is properly defined:

(1)   Whether Appellants are bound by the 2001 injunction either by virtue of

      participating in the 2001 proceedings or being a real party in interest when the

      injunction was rendered. (4CR: 477–478, 503–504);

(2)   Whether the Court may interpret the 2001 injunction of the 114th Judicial

      District Court. (4CR: 476, 502); and

(3)   If “yes” to Nos. 1 & 2, whether the 2001 Injunction required Hicks to be an

      “employee” of Appellant law firms to not be in violation of the Injunction.

      (8RR: 226–229)

      For a class definition to be objective and its members presently ascertainable,

the definition cannot require a determination of the merits. Deciding the merits of the

                                        Page 8
suit in order to determine the scope of the class or its maintainability as a class action

is not appropriate. Intratex Gas Co. v. Beeson, 22 S.W.3d 398, 404 (Tex. 2000). A

proposed class definition that rests on the paramount liability question cannot be

objective, nor can the class members be presently ascertained; when the class

definition is framed as a legal conclusion, the trial court has no way of ascertaining

whether a given person is a member of the class until a determination of ultimate

liability as to that person is made. Id. A fail-safe class that is based on resolving the

ultimate liability issue is bound only by a judgment favorable to plaintiffs but not by

a judgment favorable to defendants. Id. at 404–05. Certifying a fail-safe class

inevitably creates one-sided results. If the defendant is found liable, class membership

is then ascertainable and the litigation comes to an end. A determination that the

defendant is not liable, however, obviates the class, thereby precluding the proposed

class members from being bound by the judgment. The Texas Supreme Court does

not support such a result when “[r]ule [42] was never meant to be an exception to the

rules of res judicata or to provide a risk-free method of litigation.” Id. at 405 (quoting

Dafforn v. Rousseau Assocs., Inc., 1976–2 Trade Cases ¶ 61, at 219 (N.D. Ind.1976)).

While the trial court possesses significant discretion to modify the class definition or

even decertify the class as the case develops, the trial court must still certify only

those classes that are sufficiently defined and meet the Rule 42 requirements. Beeson,

22 S.W.3d at 405.

                                         Page 9
        Because a determination on the merits will be required to see whether

“enjoined services” were provided to members of the Class, the class is not presently

ascertainable and a fail-safe class has been constructed. What is particularly

damaging to Appellants about this fail-safe definition is that, even were these issues

to be resolved as a matter of law in their favor, the proposed Class would not be

bound by the judgment because they were not ascertainable when the Class was

certified and Appellants cannot rely on res judicata to prevent subsequent litigation.

        Because the class definition in this case is not precise, and its members cannot

be ascertained until the alleged ultimate liability issue is decided, the district court

abused its discretion when it certified the class. Id. at 405.

II.     The district court erred by certifying claims of unconscionability against
        the Hicks Defendants because common issues of law and fact do not
        predominate

        The district court’s Order on Class Certification granted Appellees’ Motion for

Class Certification as to their claims for unconscionable conduct. (4CR: 526.) The

Order defined the inquiry into unconscionable conduct as “whether the defendant

committed an act or practice that, to a consumer’s detriment, took advantage of his

lack of knowledge, ability experience or capacity to a grossly unfair degree.” (Id. at

528.)

        Under Rule 42, “common” questions must predominate over questions

                                         Page 10
affecting only individual class members. Tex. R. Civ. P. 42(b)(4). A common

question exists when the answer as to one class member is the same as to all. Spera

v. Fleming, Hovenkamp & Grayson, P.C., 4 S.W.3d 805, 810 (Tex.App.—Houston

1999, no pet .). Common questions that do not produce common answers do not

satisfy the Rule 42 commonality requirement. Wente v. Georgia Pacific Corp., 712
S.W.2d 253, 257 (Tex.App.—Austin 1986, no writ). The “predominance requirement

... is one of the most stringent prerequisites to class certification.” Southwest Refining

Co. v. Bernal, 22 S.W.3d 425, 433 (Tex. 2000). Courts determine if common issues

predominate by identifying the substantive issues that will control the outcome of the

litigation, assessing which issues will predominate, and determining if the

predominating issues are, in fact, common to the class. Id. at 434. The test for

predominance is not whether common issues outnumber uncommon issues, but

whether common or individual issues will be the subject of most of the litigant's and

court's efforts. If, after common issues are resolved, presenting and resolving

individual issues is likely to be an overwhelming or unmanageable task for a single

jury, then common issues do not predominate. Bernal, 22 S.W.3d at 434. Ideally, a

judgment in favor of the named plaintiffs should decisively settle the entire

controversy, and all that should remain is for other class members to file proofs of

claim. Id. It is improper to certify a class without knowing how the claims can and

                                         Page 11
will likely be tried. Id. at 435. Individual scrutiny by the trial court is necessary to

ensure that certification does not “restrict a party from presenting viable claims or

defenses without that party's consent.” Id.

      The Court granted certification of claims of unconscionability under the DTPA.

Unconscionability requires proof of (1) an act or practice that, (2) to a person's

detriment, (3) takes advantage of his lack of knowledge, ability, experience, or

capacity, (4) to a grossly unfair degree. Tex.Bus. & Com.Code Ann. § 17.45(5)

(Vernon Supp.1998). There must be a showing of what the consumer could have or

would have done if he had known about the information. See Peltier Enterprises, Inc.

v. Hilton, 51 S.W.3d 616, 623–24 (Tex. App. – Tyler 2000, pet. denied).

      The proposed class has ranged in approximation from between approximately

450-575 members depending upon the data being looked at. (2CR: 278–309; 6RR:

23–24.) Disparities between the variety of ages, education, experience, and capacity

of people who encountered the Hicks Defendants and engaged their services is

relevant to elements three and four of the unconscionability claims and Appellants

should be permitted to explore those issues to determine viable defenses. Bernal, 22

S.W.3d at 435. Inescapably individual differences cannot be concealed in a throng.

The procedural device of a class action eliminates the necessity of adducing the same

evidence over and over again in a multitude of individual actions; it does not lessen

                                        Page 12
the quality of evidence required in an individual action or relax substantive burdens

of proof. Henry Schein, Inc. v. Stromboe, 102 S.W.3d 675, 693–94 (Tex. 2002).

       Of the voluminous documents submitted to the Court at the certification

hearing on July 10, 2014, PX1 and DX1, DX3 & DX4 contains documents most

relevant to the appellate court’s review of the district court’s certification of the

unconscionability cause of action. PX1 contains files retrieved from the Hicks

Defendants pertaining to services provided by them to clients from 2005 onward.

(6RR: 18; 8RR: 155.) Of those files appearing in PX1, approximately 211 of them

contain no reference to Appellants. (8RR: 298–310) Only 24 of them contain

references to Appellant Healy, Milne & Associates, Inc either in an “engagement

letter” (contract) or other reference. (8RR: 315–317). Only 51 of them contain any

reference to Peter G. Milne or Peter G. Milne, PC either in an “engagement letter”

(contract) or other reference. (8RR: 318–320) In 16 of those files where reference was

made to Healy, Milne & Associates, PC or Peter G. Milne, PC, such references were

dated at times when Peter G. Milne, PC or Healy, Milne & Associates, PC were

terminated entities.1 Of those client files appearing in Exhibit PX1 all but the those

       1

Peter G. Milne, PC was formed January 12, 2005 and officially terminated December 12, 2007, but
performed no business from October 4, 2006 until its termination. Peter G. Milne PC was reinstated
effective July 27, 2010. (4CR: 509–525.) Healy, Milne & Associates, PC was formed on October
4, 2006 and terminated effective December 27, 2010, but performed no business from July 27, 2010
until its termination. (Id.) References were made to Peter G. Milne, PC or Healy, Milne &

                                            Page 13
appearing in the following footnote were clients whose dealings with the Hicks

Defendants appear to have taken place through a Power of Attorney (“POA”) or other

Responsible Party (“RP”).2 Appellants urge they should not be denied individual

inquiries into whether and to what extent each of these clients, or their POA or

responsible parties on their behalf, were taken advantage of due to lack of knowledge,

ability, experience, or capacity, if any. (5RR: 42–44; 6RR: 79–83.)

       Appellants would urge that they are in a unique position in this litigation by

virtue of the fact that the Hicks Defendants have not even filed an answer, let alone

shown any interest in asserting any defenses to the allegations being made by

Appellees. This makes Appellants’ interest in pursuing viable defenses that are not

but could otherwise be asserted by the Hicks Defendants all the more important.

Associates, PC in files pertaining to the following people at times when both entities were not
performing business or had terminated. Bohling, Robert, Boyd, Beatrice, Brown, Jimmy & Elizabeth,
Byrd, Ron, Cadena, Noe, Calendar, Odaysel, Chapa, Esther, Clark, Cochran, William, Bruce &
Laura, David, Robert, Millard, Derosset, Eads, Gerard, Finley, Doris, Guidry, Lula, Harris, Mary
Ruth, & Jones, Edward. (2CR: 279–287, 289–90.)
       2

 Askew, Bassett, Beasley, Benefield, Bland, Blomquist, Bohling, Bomer, Booth, Brady, Brown,
Jimmy & Elizabeth, Burgamy, Cable, Camp, Cannon, Carter, Catlett, Chandler, Chapa, C., Clark,
O., Cochran, Collins, Concepcion, Conner, Cordell, Craig, Dailey, Deaver, Denney, Dews, Dutoit,
Eckstadt, Elledge, Elliot, Fleming, Futch, Gaddie, Garcia, R., Gonzalez, J., Goodman, Goodner,
Grider, Grigg, Guidry, Guinn, Gurganus, Haight, Hallbrook, Hallette, Hancock, Hand, Heldt,
Heppner, Hernandez, H., Hernandez, P., Herwood, Higginbotham, Hippler, Honeycutt, H.,
Honeycutt, K., Hood, Florine, Hood, Floyd, Hooper, P.B., Hornbuckle, Horton, House, Huff,
Isaacks, Jackson, Nancy, Jackson, R., Jones, E., Jones, L., Jordan, Kirby, Lackey, Landon, Lavender,
Wiklund, Wilbanks, Williams, J., Williams, T., Wrentz,

                                             Page 14
III.   The district court erred by certifying claims of unconscionability and
       breach of fiduciary duty against the Hicks Defendant because they are not
       typical of Appellees claims

       The claims of the class representatives must be typical of the claims of the class

as a whole. Tex. R. Civ. P. 42(a); Gilchrist v. Bolger, 89 F.R.D. 402, 406

(S.D.Ga.1981); Pellman v. Cinerama, Inc., 89 F.R.D. 386, 389 (S.D.N.Y.1981). The

United States Supreme Court has defined the typicality requirement as mandating that

the representative “possess the same interests and suffer the same injury.” East Texas

Motor Freight v. Rodriguez, 431 U.S. 395, 403 (1977). Although it is not necessary

that the named representative suffer precisely the same injury as the other class

members, there must be a nexus between the injury suffered by the representative and

the injuries suffered by other members of the class. See Gilchrist, 89 F.R.D. at

404–05.

       The claims of unconscionability and breach of fiduciary duty against the Hicks

Defendants are not typical of Appellees’ claims. Unlike the acknowledged clients,

Appellees had no contract with Hicks. (2CR: 234–235, 5RR: 27, 6RR: 48.) Unlike

approximately 211 members of the proposed class for which there was no evidence

that Hicks represented Appellants’ involvement, Appellees have testified that it was

falsely represented to them that Appellants were involved. 6RR: 31, 8RR: 298–310.)

                                        Page 15
IV.    The district court erred in certifying claims for declaratory judgment
       against Appellants in violation of Tex. R. Civ. P. 42(b)(2) because the
       proposed claims for class-wide relief relate exclusively or predominately
       to money damages

       Injunctive or declaratory relief is not appropriate when “final relief relates

exclusively or predominately to money damages.” In Allison v. Citgo Petroleum

Corp., the Fifth Circuit held that “monetary relief predominates . . . unless it is

incidental to requested injunctive or declaratory relief.” 151 F.3d 402, 415 (5th Cir.

1998). Incidental means that “damages flow directly from liability to the class as a

whole on the claims forming the basis of the injunctive or declaratory relief.” Id. The

mere recitation of a request for declaratory relief cannot transform damages claims

into a [Rule 23(b)(2)] class action. Bolin v. Sears, Roebuck & Co., 231 F.3d 970, 978

(5th Cir. 2000). [Rule 23(b)(2)] states that certification is proper for a class seeking

“final injunctive relief or corresponding declaratory relief.” Id. Thus, the declaratory

relief must “as a practical matter afford[ ] injunctive relief or serve[ ] as a basis for

later injunctive relief.” Id.

       Similar to Bolin, Appellees seek declaratory relief under the Texas Uniform

Declaratory Judgment Act that the Hicks Defendants and Appellants were in violation

of the 2001 Injunction. However, “besides authorizing a declaratory judgment, the

declaratory judgment act does not create remedies otherwise unavailable to the

                                        Page 16
plaintiffs.” Id. at 977. In this case, there are no “specific claims that form the basis of

. . . the declaratory relief” – Appellees only seek a declaration that the Hicks

Defendants or Appellants are in violation of the 2001 Injunction for which monetary

damages are not an incidental result.

       Certification under Tex. R. Civ. P. 42(b)(2) was an abuse of discretion because

the only meaningful relief sought on behalf of the class is for monetary damages, not

declaratory relief.

                                CONCLUSION AND PRAYER

       Appellants would show that the district court abused its discretion by failing

to correctly apply the law to the undisputed facts or acted arbitrarily,

unreasonably, or without reference to any guiding principles by improperly

defining the class, certifying claims of unconscionability and breach of fiduciary

duty against the Hicks Defendants when common issues of law and fact do not

predominate and Appellees claims are not typical of the proposed Class, and

certifying claims for declaratory relief against Appellants upon which the relief

sought is predominately or exclusively monetary. Appellants respectfully request

that this Court reverse the judgment of district court and remand to the district

court to decertify the class.

                                         Page 17
          CERTIFICATE OF COMPLIANCE WITH RULE 9.4(e)

1.   This brief complies with the type-volume limitation of Texas Rule of Appellate
     Procedure 9.4(e)(i)(2)(B) because, according to the Microsoft Word 2010 word
     count function, it contains 2,683 words on pages 7-17, excluding the parts of
     the brief exempted by Texas Rule of Appellate Procedure 9.4(e)(i)(1).

2.   This brief complies with the typeface requirements of Texas Rule of Appellate
     Procedure 9.4(e) because it has been prepared in proportionally spaced
     typeface using Microsoft Word 2010 software in Times New Roman 14-point
     font in text and Times New Roman 12-point in footnotes.

                                             /s/ J. Chad Parker
                                            J. Chad Parker

                                     Page 18
                          CERTIFICATE OF SERVICE

      I certify that a true and correct copy of the Brief of Appellant PETER G. MILNE,
IND., PETER G. MILNE, P.C. was served by electronic service and/or email to the
following counsel of records on February 17, 2015.

James A. Holmes
Law Office of James Holmes, PC
212 South Marshall
Henderson, TX 75654
Via Email

Peter G. Milne
Peter G. Milne, PC
327 W Houston
Tyler, TX 75702
Via Email

                                               /s/ J. Chad Parker
                                              J. Chad Parker

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