Court Opinion

ID: 9676845
Source: CourtListenerOpinion
Date Created: 2023-08-24 05:35:53.476331+00
Date Added: 2024-06-11T18:16:51.840994
License: Public Domain

Justice JAMES.
The majority’s opinion today paves the road for the State Bar to discipline attorneys based on determinations in private malpractice actions in tort. Attorneys will not only need to consider defending the suit before them when a former client brings them into civil court, but they must simultaneously defend that allegation as if facing probation, suspension, resignation, or even disbarment from their chosen profession. However, I conclude the facts before us do not withstand a fairness assessment in reviewing the court’s application of offensive collateral estoppel. Accordingly, I would resolve issue one in Goldstein’s favor, and I respectfully dissent.
Collateral Estoppel
This case involves the offensive use ■ of collateral estoppel, and the majority identified the applicable standard of review: “abuse of discretion.” Parklane Hosiery Co. v. Shore, 439 U.S. 322, 331, 99 S.Ct. 645, 58 L.Ed.2d 552 (1979); see also Scurlock Oil Co. v. Smithwick, 724 S.W.2d 1, 7 (Tex.1986) (citing Parklane Hosiery with approval). While I agree with the majority’s application of the first Parklane Hosiery factor considering judicial economy, I disagree with the conclusion the majority reaches in applying the second Parklane Hosiery factor, that involving fairness.
In addressing the Parklane Hosiery fairness factors, the majority concludes the trial court did not abuse its discretion in applying collateral estoppel for three reasons. First, the majority contends Gold-stein had adequate incentive to vigorously defend the malpractice action. Second, the disciplinary action was foreseeable because of the allegations in Ginsburg’s suit. And third, the majority states Goldstein has not directed the Court to any procedural safeguards he was deprived of in the malpractice action. I disagree with both the majority’s conclusion and its reasons upon which it bases the conclusion.
In determining if the application of offensive collateral estoppel was unfair to Goldstein, we should go beyond Parklane Hosiery and incorporate a fairness assessment similar to that used in Neely. See Neely v. Com’n for Lawyer Discipline, 976 S.W.2d 824, 827 (Tex.App.-Houston [1st Dist.] 1998, no pet.). As part of this fairness assessment, to determine if offensive collateral estoppel was appropriately applied in this case, we need to look at the nature of the proceedings, the issues considered in each, and the consequences faced in each proceeding. Id. Although the majority distinguishes Neely based on the facts in the case before us and those in Neely, the application of offensive collateral estoppel in the present case should be due the same fairness assessment. Id. In distinguishing Neely, the majority cites no authority supporting its. determination. Because I disagree with the majority’s conclusion when applying this fairness assessment, and because I reach a different conclusion, I dissent from the majority’s opinion.

Nature and Consequences of Proceedings

A disciplinary proceeding is brought by the. Commission solely for the purpose of maintaining appropriate standards of professional conduct within the profession. See Tex.R. Disciplinaey P. preamble, 1.02, reprinted in Tex. Gov’t Code Ann., tit. 2, subtit. G app. A-l (Vernon Supp.2003); see also Two Thirty Nine Joint Venture v. Joe, 60 S.W.3d 896, 924 (Tex.App.-Dallas 2001, pet. granted) (FitzGerald, J., dissent-*817mg) (quoting 1 J. Hadley EdgaR, JR. & James B. Sales, Texas ToRts and Remedies § 12.02[l][a][ii][A] (2000)). In a disciplinary hearing, the considerations include the nature and degree of the misconduct; the seriousness of and circumstances surrounding the misconduct; the loss or damage to the client; the damage to the profession; the assurance that those who seek legal services in the future will be insulated from this type of misconduct; the profit to the attorney; the avoidance of repetition; the deterrent effect on others; the maintenance of respect for the legal profession; the conduct of the attorney during the course of the action; the trial of the case; and other relevant evidence concerning the attorney’s personal and professional background. TexR. Disciplinary P. 3.10(A)-(L). More importantly, a disciplinary action is quasi-criminal in nature. Distinguished from a disciplinary action, though, a suit in legal malpractice is a private action in tort. See Willis v. Maverick, 760 S.W.2d 642, 644 (Tex.1988). It involves a private claim, brought by a client who alleges damages resulting from an attorney’s breach of duty. See Peeler v. Hughes & Luce, 868 S.W.2d 823, 827-28 (Tex.App.-Dallas 1993), aff'd, 909 S.W.2d 494 (Tex.1995).
The consequences of a disciplinary proceeding arising from professional misconduct may include disbarment, resignation in lieu of disbarment, suspension, probation of suspension, reprimand, restitution, and payment of attorneys’ fees and costs. Tex.R. DisciplinaRY P. 1.06(T). In a malpractice action, on the other hand, an attorney does not face the consequence of disbarment or even suspension. The consequences in a malpractice action are damages. Accordingly, an attorney is motivated by different concerns in a malpractice action than he is in a disciplinary proceeding. See Neely, 976 S.W.2d at 829.
In the malpractice case, Goldstein was sued by a former client. The disciplinary action, on the other hand, was brought by the permanent committee of the State Bar of Texas, which is the licensing agent of Texas attorneys. The majority states that because he faced losing $4.8 million, Gold-stein had adequate incentive to vigorously defend the malpractice action. This seems to imply that the dollar amount an attorney faces losing in a judgment or sanctions should be a deciding factor in our determination. I disagree. Our personal value placed on a dollar amount is insufficient— standing alone — to determine if an attorney had adequate incentive to vigorously defend an action. The $4.8 million Gold-stein faced as a possible judgment was sought because that is the amount Gold-stein had received from his client; Gold-stein faced only non-recurring economic damages in the suit by Ms. Ginsburg. However, when disciplinary proceedings were brought against him, he faced the loss of his ability to generate future income earned by practicing law. Facing consequences of losing an amount of money he had received in error is clearly different than facing the prospect of losing the ability to generate any future income.

Comparison of the Issues

In continuing this fairness determination, we should compare the issues presented in each of the proceedings. As the majority states, collateral estoppel applies when a party against whom it is asserted had a full and fair opportunity to litigate the ultimate isspe in the prior suit. Tex. Dep’t of Pub. Safety v. Petto, 44 S.W.3d 575, 579 (Tex.2001). “Ultimate issue,” however, does not refer to a claim or cause of action; “[ujltimate issues are those factual determinations submitted to a jury that are necessary to form the basis of a judgment.” Tarter v. Metro. Sav. & Loan *818Ass’n, 744 S.W.2d 926, 928 (Tex.1988) (emphasis added).
To assess this factor, we should ask whether the same ultimate issue litigated by Goldstein in the malpractice suit was used as the determinative issue presented in the Commissioner’s disciplinary suit against Goldstein. The court identified its determinative issue as the finding that the property was a product of a contingent fee.1 This finding was used to determine the violation of both rule 1.04(a) and rule 1.04(d).2 The ultimate issue in the malpractice case, on the other hand, was whether the property constituted a “fair gift or bonus” because it was this particular factual determination submitted to the jury that the court used to form its judgment there was a contingent fee, not in writing, and Goldstein failed to provide his client an accounting of the proceeds and fee. See Tarter, 744 S.W.2d at 928. The property could have been determined not to be a “fair gift or bonus” without it comprising a contingent fee. Therefore, whether the property constituted a contingent fee or was not a “fair gift or bonus” are distinct issues.
The majority states, “Goldstein has not directed us to any procedural safeguards he was deprived of in the malpractice action that he would have been entitled to in the disciplinary action.” The majority, however, reviews the procedural differences in distinguishing Neely, asserting that Goldstein had the benefit of a jury trial in the malpractice case; the sanction hearing in Neely was not before a jury. The majority paints with too broad a stroke, though, because I cannot conclude Goldstein actually reaped the benefit of a jury trial when considering the effect of collateral estoppel. The determination of the issue of whether the fee was a contingent fee in the malpractice action was not before the jury. The court determined the issue. It was not “submitted to a jury.” See Tarter, 744 S.W.2d at 928. The majority cites no authority to support the independent finding of a contingent fee in the absence of the issue being submitted to a jury — in either the malpractice or the disciplinary proceeding.
In the disciplinary hearing, the court identified its finding that the property was the product of a contingent fee as the basis for its conclusion Goldstein violated rule 1.04(a). See Tex. DisciplinaRY R. Peof’l Conduct 1.04(a), (d), reprinted in Tex. *819Gov’t Code Ann., tit. 2, subtit. G app. A (Vernon Supp.2003) (Tex. State BaR R. art. X, § 9). Rule 1.04(a) prohibits an attorney from charging an illegal or unconscionable fee. Whether a fee was illegal or unconscionable presents distinct questions of fact. The court below identified the fact of contingency as the basis for its conclusion. Therefore, it appears the court decided the violation of rule 1.04(a) on the basis of fee illegality — not unconscionability. As I stated above, the issue of contingency is distinct from the issues considered in the malpractice case.
Finally, the majority also states the disciplinary action was foreseeable because of the allegations in Ms. Ginsburg’s malpractice trial. However, even if the issues could be seen as the same in each suit, the determination of the issue in the malpractice trial is suspect. Goldstein raised to the trial court — and to this Court — his concern over the accuracy of the testimony in the malpractice case. During the disciplinary hearing, testimony revealed that Ms. Ginsburg had filed a new lawsuit against her ex-husband. The premise of that lawsuit calls the factual determinations reached in the malpractice trial into grave doubt because Ms. Ginsburg essentially recanted the allegations she made in her malpractice trial. I do not think we should ignore the implications her perjured testimony may have on the validity of the trial court’s decision to proceed with its earlier-determined summary judgment invoking the doctrine of collateral estoppel from the malpractice trial. However, this is just what the majority does by not addressing the perjury allegation or its effect in analyzing the fairness issues. I likewise do not think we should determine whether a subsequent disciplinary action was foreseeable to the attorney-defendant if the issue is raised that the outcome of the malpractice case may have been based on perjured testimony.
Conclusion
Malpractice actions present a different nature of proceedings than a disciplinary action. See Neely, 976 S.W.2d at 827. The consequences an attorney faces in each action are strikingly different. Additionally, the determinative issue in the case below — contingency—was not the same as that fact issue presented for the jury to determine in the malpractice case. See Tarter, 744 S.W.2d at 928. Accordingly, the facts before us do not withstand a fairness assessment. See Neely, 976 S.W.2d at 827. Furthermore, the finding on which the trial court based collateral estoppel was shown to be based on suspect testimony. I would hold, therefore, that under the facts of this case, the trial court abused its discretion by incorrectly applying the doctrine of offensive collateral estoppel. See Beaumont Bank, N.A. v. Buller, 806 S.W.2d 223, 226 (Tex.1991). Accordingly, I would resolve Goldstein’s first issue in his favor as it applies to the court’s findings that Goldstein violated rules 1.04(a) and 1.04(d). Furthermore, in determining offensive collateral estoppel was incorrectly applied, I would conclude there was no evidence Goldstein violated rules 1.04(a) or 1.04(d) before the court during the first phase of the trial — before sanctions.3 Without any evidence before the trial court, I would conclude the Com*820mission failed to prove Goldstein violated either rule 1.04(a) or 1.04(d). See generally Kindred, v. Con/Chem, Inc., 650 S.W.2d 61, 63 (Tex.1983); Durban v. Guajardo, 79 S.W.3d 198, 207 (Tex.App.-Dallas 2002, no pet.). Because of this resolution, I would not address Goldstein’s fifth, seventh, or eighth issues; each of these complains of the findings involving the contingent fee.
Because I would resolve issue one in favor of Goldstein, I cannot assume the trial court would have imposed the same sanction had it known the contingency fee agreement violations were not before it pursuant to its partial summary judgment applying offensive collateral estoppel. Accordingly, I would vacate the trial court’s judgment of disbarment and remand this case to reconsider the issue of sanctions.

. The court identified the finding that the fee was a contingent fee as its basis for finding Goldstein violated rule 1.04(a) — prohibiting an attorney from charging an illegal or unconscionable fee — because the mere use of a contingent fee iñ a divorce proceeding raised ethical concerns. I decline to address this issue as it is not necessary for my resolution of this appeal. See Tex. Disciplinary R. Prof'l Conduct 1.04(a). I instead address only whether the court erred in using collateral estoppel to determine whether the fee had been a contingent fee.

. The relevant portions of rule 1.04 state:
(a) A lawyer shall not enter into an arrangement for, charge, or collect an illegal fee or unconscionable fee. A fee is unconscionable if a competent lawyer could not form a reasonable belief that the fee is reasonable.
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(d) A fee may be contingent on the outcome of the matter for which the service is rendered, except in a matter in which a contingent fee is prohibited by paragraph (e) [prohibited in a criminal case] or other law. A contingent fee agreement shall be in writing and shall state the method by which the fee is to be determined.... Upon conclusion of a contingent fee matter, the lawyer shall provide the client with a written statement describing the outcome of the matter and, if there is a recovery, showing the remittance to the client and the method of its determination.
Tex. Disciplinary R. Prof’l Conduct 1.04(a), (d).

. During the trial, the court allowed testimony relating to the fees to be introduced during the first phase of the trial but noted it was a trial before the court. When the Commission objected to testimony on grounds the testimony went to the issues resolved by the collateral estoppel, the court stated it would "allow ... the questions on the sanction basis only.” Later during the trial, the court further stated, "One final reminder, we are not litigating the prior findings with regard to the motion for partial summary judgment.”