Court Opinion

ID: 2993454
Source: CourtListenerOpinion
Date Created: 2015-09-23 06:11:45.614215+00
Date Added: 2024-06-11T18:01:16.244365
License: Public Domain

Opinion issued September 22, 2015

                                     In The

                              Court of Appeals
                                    For The

                         First District of Texas
                          ————————————
                              NO. 01-15-00016-CV
                           ———————————
           IN RE TEXAS TECHNICAL SERVICES, INC., Relator

            Original Proceeding on Petition for Writ of Mandamus

                                OPINION

      In this original proceeding, relator Texas Technical Services, Inc. (TTSI),

seeks mandamus review of the trial court’s October 6, 2014 order disqualifying the

law firm of Lambright & Associates (“Lambright”) from representing TTSI in the
underlying proceeding. 1 TTSI contends that Lambright should not have been

disqualified or, in the alternative, that the trial court abused its discretion in

disqualifying Lambright from acting as TTSI’s counsel even outside the presence

of the jury. We hold that the trial court abused its discretion in disqualifying

Lambright and, accordingly, we conditionally grant the writ of mandamus.

                                     Background

The Employment Suit

       In 2012, after Derek Frantz left employment with TTSI and went to work for

real party in interest, Parking Guidance Systems (PGS), TTSI sued PGS

contending Frantz was violating non-compete and non-disclosure obligations. The

trial judge granted TTSI injunctive relief, enjoining Frantz from working on certain

parking projects in Houston and surrounding counties.             PGS, with Frantz’s

involvement, continued to pursue a sole source contract for parking systems with

Dallas-Fort Worth Airport (DFW).

       Thereafter, Lambright attorneys sent multiple written communications to

DFW regarding the employment suit and Frantz’s alleged violations of the

injunction. For example, on November 22, 2013, a Lambright attorney wrote to

DFW:

1
       The underlying proceeding is Parking Guidance Systems, LLC v. Texas Technical
       Services, Inc., No. 2014-16785, in the 133rd District Court, Harris County, Texas,
       the Honorable Jaclanel McFarland, presiding.

                                           2
             [W]e understand that Mr. Frantz has continuously worked on
      the DFW parking improvement project from Fall 2012 to at least
      Spring 2013, and that he is out there, once again, in direct violation of
      Court orders. TTSI respectfully requests you to honor the Courts’
      [sic] Orders and that you require your subcontractors to do the same.
      TTSI will endeavor to minimize the impact these issues have on your
      operations. Be advised, however, that should Mr. Frantz continue to
      violate the Orders of the 129[t]h District Court (of which you now
      have express knowledge), TTSI will proceed to enforce its judicially
      recognized rights against him and any third parties that aid or assist
      him.

      Legal counsel for DFW responded to Lambright, expressing his view “that

the [injunction] (in the form provided to me) probably does not preclude Mr.

Frantz from participating in the [DFW] transaction.”         A Lambright attorney

replied: “the two injunctions you have been sent clearly establish that DFW

parking jobs are off-limits for Frantz.” The attorney also told DFW’s counsel to

“deal with Mr. Frantz at your own risk.”

      On February 4, 2014, the Operations Committee of DFW recommended that

the DFW Board of Directors award the DFW parking contract to PGS. Two days

later, a Lambright attorney wrote to DFW’s counsel:

             We have learned that DFW intends to award the sole-source
      Terminal D parking guidance contract to Parking Guidance Systems,
      LLC-Derek Frantz’[s] (via his wife) company. Derek is heavily
      involved in this company, and now they have been joined in our
      lawsuit. I was under the impression from the below correspondence
      and past telephone conversations that DFW would not be doing
      business with Frantz. Given your explanation to me that the reason
      behind the sole source contract was that they were the contracting
      party on Terminal A, and that your concern was whether Derek Frantz
      could be involved in our litigation, I find it extremely interesting that

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        DFW decided to award it to PGS, who as an entity had no prior
        history with DFW (given the fact it was set up by Derek’s wife and a
        friend only last May). Maybe your client’s diligence as to the party
        they were contracting with (PGS) wasn’t as thorough as it needed to
        be.

Shortly thereafter, DFW informed PGS that it was no longer going to be awarded

the contract.

The Underlying Suit

        PGS sued TTSI alleging tortious interference with a contractual and business

relationship between PGS and DFW. PGS alleges that Lambright “engaged in a

systematic and deliberate attempt to disrupt the business relationship between PGS

and DFW Airport and [to] cause DFW to withdraw the contract award [from]

PGS.”

        TTSI moved for summary judgment on PGS’s tortious interference claim

and on its affirmative defenses, and set the hearing on the motion for October 6,

2014. On September 29, 2014, PGS filed its response to TTSI’s motion for

summary judgment and also filed a motion to continue the hearing on the motion

for summary judgment.        On the same day, it filed its motion to disqualify

Lambright and set it for hearing one hour before the trial court was to hear TTSI’s

motion for summary judgment. The basis for PGS’s motion is that Lambright’s

attorneys’ testimony is essential to prove PGS’s interference claim, because it was

the attorneys’ communications with DFW that constituted the intentional act of

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interference that caused PGS to lose the DFW contract. Therefore, PGS argued,

Lambright was disqualified under the Texas Disciplinary Rules of Professional

Conduct because its attorneys cannot act as an advocate and witness. See TEX.

DISCIPLINARY RULES PROF’L CONDUCT R. 3.08(a), reprinted in TEX. GOV’T CODE

ANN., tit. 2, subtit. G, app. A (West 2013).

      On October 6, 2014, the trial court held a hearing on PGS’s motion to

disqualify. The trial court granted the motion to disqualify and continued the

hearing on TTSI’s summary judgment motion. The order granting PGS’s motion

to disqualify states, “it is ORDERED that Lambright & Associates be disqualified

from representing Defendant in the above-referenced litigation.”

      TTSI moved for reconsideration of the order, arguing that the Lambright

attorneys’ testimony was not essential and that disqualification was not warranted.

During the hearing on TTSI’s motion to reconsider the trial court stated “My ruling

stands. If y’all want to work on an order that says that you can work on a case but

not be—not represent them in court in front of a jury, I don’t really have a big

problem with that. But you’re still disqualified until y’all give me another order.

Your motion to reconsider is denied at this point.”

      TTSI sought mandamus relief. It asks us to order the trial court to vacate the

order disqualifying Lambright from representing TTSI in the underlying

proceeding.   In the alternative, TTSI requests that this Court “instruct Judge

                                          5
McFarland to revise her disqualification order to permit Lambright & Associates to

represent TTSI in all matters outside the presence of the jury.”

                    Standard of Review and Applicable Law

      Mandamus is appropriate to correct an erroneous order disqualifying counsel

because there is no adequate remedy by appeal. In re Sanders, 153 S.W.3d 54, 56

(Tex. 2004).    We review disqualification orders under an abuse of discretion

standard. Id.

      Rule 3.08 of the Texas Disciplinary Rules of Professional Conduct states:

      (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 case;

             (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.

                                          6
TEX. DISCIPLINARY RULES PROF’L CONDUCT 3.08(a). Although Rule 3.08 was

“promulgated as a disciplinary standard rather than one of procedural

disqualification,” Texas courts “have recognized that the rule provides guidelines

relevant to a disqualification determination.” See Sanders, 153 S.W.3d at 56

(citing Anderson Prod. Inc. v. Koch Oil Co., 929 S.W.2d 416, 421 (Tex. 1996)).

      The Texas Supreme Court has emphasized that “[d]isqualification is a severe

remedy.” Id. at 57 (quoting Spears v. Fourth Ct. of App., 797 S.W.2d 654, 656

(Tex. 1990)). It can “cause immediate harm by depriving a party of its chosen

counsel and disrupting court proceedings.” Id. Consequently, in considering a

motion to disqualify, the district court must strictly adhere to an exacting standard

to discourage a party from using the motion as a dilatory tactic. Spears, 797
S.W.2d at 656. “‘Mere allegations of unethical conduct or evidence showing a

remote possibility of a violation of the disciplinary rules will not suffice’ to merit

disqualification.” Id.

      It is only appropriate to disqualify an attorney due to his status as a potential

witness if the attorney’s testimony is “necessary to establish an essential fact.”

Sanders, 153 S.W.3d at 57 (quoting TEX. DISCIPLINARY RULES PROF’L CONDUCT

R. 3.08(a)). The fact that an attorney serves, or may serve, as both a representative

and as a witness does not in itself compel disqualification. Id.; see also In re

Garza, 373 S.W.3d 115, 118 (Tex. App.—San Antonio, orig. proceeding) (stating

                                          7
disqualification under Rule 3.08 is not appropriate unless party seeking

disqualification establishes “a genuine need for the attorney’s testimony and that

the testimony goes to an essential fact”).         Rather, the party requesting

disqualification must demonstrate that the opposing attorney’s dual roles as

attorney and witness will cause the party actual prejudice. Ayres v. Canales, 790
S.W.2d 554, 557–58 (Tex. 1990).

                                     Analysis

      PGS sought disqualification on the basis that the testimony of Lambright’s

attorneys was necessary to prove an act of willful and intentional interference,

which is an element of PGS’s tortious interference claim. TTSI argues that the

trial court abused its discretion in disqualifying Lambright because the testimony

of Lambright’s attorneys is not essential to prove TTSI’s alleged interference

inasmuch as TTSI has produced the written communications between Lambright

and DFW, and does not dispute their contents.       TTSI asserts that the written

communications “are what they are” and that the central contested issue in the case

is causation, i.e., whether Lambright’s communications caused DFW to rescind its

award of the contract to PGS. This causation evidence, TTSI asserts, can only be

established through testimony of DFW employees.

      The elements of tortious interference with an existing contract are (1) an

existing contract subject to interference, (2) a willful and intentional act of

                                        8
interference with the contract, (3) that proximately caused injury, and (4) actual

damages or loss. Prudential Ins. Co. of Am. v. Fin. Rev. Servs, Inc., 29 S.W.3d 74,

77 (Tex. 2000). To prevail on its tortious interference claim, PGS bears the burden

to prove that a contract existed between PGS and DFW, and that TTSI or its agent,

Lambright, willfully and intentionally interfered with that contract and proximately

caused DFW’s termination of the contract with PGS, damaging PGS.

      TTSI does not dispute the existence or content of its attorneys’ written

communications with DFW’s counsel, but PGS nevertheless argues that it needs

the testimony of Lambright’s attorneys to establish that the alleged interference

was willful and intentional. PGS also argues that it requires the testimony of

Lambright because verbal communications occurred between Lambright and

DFW. PGS contends that the Lambright attorneys’ testimony is necessary because

all of the communications with DFW were made by Lambright. We disagree.

      Although PGS repeatedly asserted in the trial court and in its response to the

mandamus petition that Lambright’s attorneys’ testimony is necessary to show that

the alleged interference was willful and intentional, PGS never explained what

essential facts it needs to prove through the testimony of the Lambright attorneys,

or why the written communications would not be sufficient to establish an

intentional act of interference. See In re VSDH Vaquero Venture, Ltd., No. 05-14-

00958-CV, 2014 WL 4262167, at *2–3 (Tex. App.—Dallas Aug. 28, 2014, orig.

                                         9
proceeding) (mem. op.) (disqualification movant must identify the essential facts

that attorney’s testimony would establish).       Simply stating that Lambright’s

attorneys’ testimony is necessary to establish one of the elements of its interference

claim, without further explanation, is insufficient to meet PGS’s significant burden

to show that the testimony is necessary to establish an essential fact. See id.; In re

Hormachea, No. 04-04-00581-CV, 2004 WL 2597447, at *2 (Tex. App.—San

Antonio Nov. 17, 2004, orig. proceeding) (mem. op.) (mere fact that attorney

participated in allegedly defamatory press conference was not enough to prove that

his testimony was “necessary” or “essential” in defamation suit against his clients).

      Moreover, the fact that Lambright attorneys verbally communicated with

DFW personnel, without more, does not demonstrate that the testimony of the

Lambright attorneys is necessary to establish an essential fact. To the contrary, if

PGS needs testimony about those verbal communications, PGS can elicit testimony

from DFW personnel regarding these communications. See Sanders, 153 S.W.3d

at 57 (trial court did not abuse discretion in denying motion to disqualify where

there was no evidence testimony was not available from another source); In re

Stone, No. 14-13-00311-CV, 2013 WL 1844267, at *2 (Tex. App.—Houston [14th

Dist.] Apr. 19, 2013, orig. proceeding) (mem. op.) (disqualification improper

where record shows that lawyer is not the only person who can testify regarding

particular facts). Because PGS can procure testimony regarding the content of

                                         10
these communications from another source, it has not met its burden to show that

the testimony from Lambright’s attorneys is necessary. See In re Stone, 2013 WL
1844267, at *2.

      Thus, the record does not support the conclusion that testimony from

Lambright’s attorneys is “necessary to establish an essential fact” or that PGS

genuinely needs the attorneys’ testimony.       TEX. DISCIPLINARY RULES PROF’L

CONDUCT R. 3.08(a); Sanders, 153 S.W.3d at 56 (fact that attorney serves, or may

serve, as both a representative and as a witness does not in itself compel

disqualification); see also In re Garza, 373 S.W.3d at 118 (disqualification is not

appropriate unless party seeking disqualification establishes “a genuine need for

the attorney’s testimony”). Because “[d]isqualification is a severe remedy,” and

the record does not show any essential fact that could be established only by

Lambright’s attorneys’ testimony, we hold that the trial court abused its discretion

in disqualifying Lambright. Sanders, 153 S.W.3d at 57 (quoting Spears, 797
S.W.2d at 656); see In re VSDH Vaquero Venture, Ltd., 2014 WL 4262167, at *2–

3 (trial court abused discretion in disqualifying attorney where record did not

identify essential fact that attorney’s testimony was needed to establish); cf. Mauze

v. Curry, 861 S.W.2d 869, 870 (Tex. 1993) (trial court abused discretion in failing

to grant motion to disqualify where attorney filed affidavit as expert witness which

was necessary to establish essential fact).

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                                   Conclusion

      We hold that the trial court abused its discretion by disqualifying Lambright

& Associates from serving as TTSI’s attorneys. Accordingly, we direct the trial

court to vacate its order disqualifying Lambright & Associates from representing

TTSI in the underlying proceeding and to enter an order denying the motion to

disqualify. Our writ of mandamus will issue only if the trial court does not

comply.

                                             Rebeca Huddle
                                             Justice

Panel consists of Justices Keyes, Huddle, and Lloyd.

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