Reverse and Render : Texas Appellate Lawyer & Attorney : Cowles & Thompson Law Firm : Court of Appeals, Texas Supreme Court

The Dallas Court of Appeals has held that a settlement agreement by Rule 11 did not support summary judgment because the client challenged her counsel's authority to sign the Rule 11.  In this case, a plaintiff settled a case by a Rule 11 Agreement.  Later, she brought suit against the same party she had settled with years before.  The defendant alleged affirmative defenses based on the Rule 11.  The plaintiff filed an affidavit that she had not authorized her counsel to sign the Rule 11.  The trial court granted summary judgment for the defendant based on the Rule 11 agreement.

The court of appeals held that while an attorney is presumed to have authority to execute a Rule 11 agreement, the presumption may be overcome with evidence.  Note that case law indicates that an attorney's authority to settle a case may be different than the authority to prosecute or defend.  Compare Dunlap v. Villareal, 91 S.W.2d 1124, 1125 (Tex. Civ. App.--San Antonio 1936, no writ) (holding an attorney retained for litigation is presumed to possess authority to enter into a settlement on behalf of a client) with Johnson v. Rancho Guadalupe, Inc., 789 S.W.2d 596, 598 (Tex. App.--Texarkana 1990, writ denied) (noting that there is no implied authority for an attorney to release the very right or interest he is employed to protect).  As a result, the court of appeals reversed because the plaintiff filed an affidavit calling into question that attorney's authority.  The court's opinion in Karle v. Innovative Direct Media Ltd. Co. can be found at this link.

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In a brief memorandum opinion, the Dallas Court of Appeals affirmed that attorneys may be deposed as fact witnesses while counsel in the underlying litigation.  Here, the trial court denied a party's motion to compel the deposition of the opposing party's lawyer.  The court of appeals stated that "[t]he mere fact that a fact witness is acting as an attorney in the case will not prevent his deposition from being taken when it is otherwise proper."  Whether the testimony is privileged or admissible "cannot be determined until his deposition is taken."  The opinion does not address the issue of admitting the testimony at trial or calling the attorney as a witness in light of Disciplinary Rule 3.08.  Accordingly, the Court granted the petition for writ of mandamus and ordered the trial court to grant the party's motion to compel.  The Court's opinion in In re Glassman can be found at this link.

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The Houston (14th) Court of Appeals recently held that a fee agreement that included a mandatory arbitration agreement does not violate public policy.  In this case, the attorney had included an arbitration clause requiring arbitration in Harris County under the Federal Arbitration Act (FAA)according to American Arbitration Association rules.  When the client brought suit against the attorneys for malpractice, the attorneys moved to compel arbtiration under the fee agreement.  The client made four arguments in response.  The court first rejected the argument that the Texas Arbitration Act (TAA) should apply, instead of the FAA, because the agreement specified the FAA.  The court also held in dicta that even if the TAA did apply, the arbitration clause was not invalid because the client's malpractice claim was not a personal injury claim.  Further, the court rejected the argument that the clause was unconscionable based on the special relationship between attorney and client and opined that the matter was best left to the legislature.  In doing so, the court dismissed an opinion by the Texas Ethics Commission on the subject as "advisory."  Finally the court rejected the argument that including the clause in the fee agreement violated Disciplinary Rule 1.08(g) by "limiting the lawyer's liability to a client for malpractice."  The court stated that "an agreement to arbitrate does not, in fact, limit a party's liability; it merely denominates a procedure for determing that liability."  Accordingly, the court granted the writ of mandamus directing the trial court to grant the motion to compel arbitration.  The court's opinion in In re Pham can be found here.

In dissent, Justice Seymore would have affirmed the trial court because the client was unaware of the clause and her counsel failed to fully explain it.  The dissent would hold attorneys to a higher standard by requring counsel to fully explain the consequences of agreeing to arbitration or "offer the prospective client the opportunity to seek advice from another source before signing" the agreement.  The dissent can be found here.

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The Dallas Court of Appeals vacated a portion of a district court's order directing the Office of Attorney General to remit payments to a private company that collects and disburses child-support payments for a fee.  Pursuant to Texas Government Code sec. 22.002(c), the court of appeals held that only the Texas Supreme Court has the authority to issue a writ of injunction against officers of the executive branch.  The court found that the portion of the order directing the OAG to remit payments to the private company was void.  The court's opinion in In the Interest of A.B., Jr. can be found at this link.

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