In re Mabray

355 S.W.3d 16

In re Mary Lynn MABRAY, Relator.

No. 01–09–01099–CV.

Court of Appeals of Texas, Houston (1st Dist.).

Aug. 31, 2010.Reconsideration En Banc Overruled

Oct. 14, 2010.

Bruce K. Thomas, Dallas, TX, for Appellant.

Brenda Keen, Houston, TX, for Appellee.

Panel consists of Justices KEYES, HANKS, and HIGLEY.

OPINION ¹

LAURA CARTER HIGLEY, Justice.

By a petition for writ of mandamus, relator, Mary Lynn Mabray, challenges the trial court's October 30, 2009 order denying her motion to disqualify Brenda Keen, counsel from representing her husband, Gary Allen Mabray, and her motion to revoke consent to arbitration. Mary contends that Keen's representation of her husband, and the arbitration agreement itself, violate Texas public policy. We disagree. Accordingly, we deny mandamus relief.

Background

After 35 years of marriage, Mary discovered her husband Gary's alleged ongoing infidelity and sought a divorce. She retained Harry L. Tindall, and filed an action for divorce in September 2008. Gary retained Brenda Keen and filed an answer in October 2008.

On February 12, 2009, the parties and their counsel signed a four page document titled “Cooperative Law Dispute Resolution Agreement” (“the Agreement”). The Agreement states that the parties agreed to “effectively and honestly communicate with each other with the goal of efficiently and economically settling the terms of the dissolution of the marriage.”

The Agreement forbids formal discovery unless agreed upon, relying instead on “good faith” informal discovery. Specifically, the Agreement provides:

No formal discovery procedure will be used unless specifically agreed to in advance. The parties will be required to sign a sworn inventory and appraisement if requested by the other party.

We acknowledge that, by using informal discovery, we are giving up certain investigative procedures and methods that would be available to us in the litigation process. We give up these measures with the specific understanding that the parties will make to each other a complete and accurate disclosure of all assets, income, debts, and other information necessary for us to reach a fair settlement. Participation in this process is based on the assumptions that we have acted in good faith and that the parties have provided complete and accurate information to the best of their ability.

Neither party requested a sworn inventory and appraisement.

The Agreement also provides that, if the divorce was not settled by April 30, 2009, the cooperative law process would cease and the parties agreed to submit the divorce to arbitration. Specifically, the Agreement provides:

The parties further agree that if this case has not been settled by negotiation and an Agreed Final Decree of Divorce has not been submitted to and signed by the Court before April 30, 2009 then this matter will be submitted to binding arbitration pursuant to the Joint Motion for Referral to Arbitration and Agreed Order of Referral to Arbitration attached hereto and made a part hereof.

The parties agree to be bound by this agreement, the Texas alternative Dispute Resolution Procedures Act (chapter 154 of the Texas Civil Practice and Remedies Code), the Texas General Arbitration Law (chapter 171 of the Texas Civil Practice and Remedies Code), Section 6.601, Texas Family code, and the laws of the state of Texas.

The parties, through their counsel signed a “Joint Motion for Referral to Arbitration” that was filed on March 11, 2009. The motion asked the trial court to submit their case to arbitration on or before July 3, 2009, if the parties had not resolved their case by agreement by April 30, 2009, and also asked that a certain person, agreed to by the parties, be appointed as the arbitrator. The trial court signed the requested order on March 18, 2009.

An agreed final decree of divorce was not submitted to the court by April 30, 2009. Accordingly, the cooperative law process ceased by its own terms.

In May, the person appointed as the arbitrator discovered a conflict that prevented him from presiding over the arbitration proceedings. The parties subsequently agreed to a new person to act as arbitrator and submitted an agreed order to the trial court on July 2, 2009, representing “as evidenced by the signatures of their respective attorneys of record” that (1) they wanted a new arbitrator appointed; (2) the case was not resolved by agreement of the parties before April 30, 2009; and (3) they had agreed to amend the Agreement to provide that the case would be submitted to binding arbitration on or before August 31, 2009.² The trial court signed the order on August 12, 2009, ordering the parties to submit their dispute for arbitration before the newly-designated arbitrator on August 26, 2009—a date agreed to by the parties.

After the parties submitted this agreed order to the trial court, but before the trial court signed the order, Mary submitted a motion to substitute counsel. The order granting the motion to substitute counsel was signed by the trial court on August 7, 2009. Accordingly, Mary's new counsel, Stephen Shoultz, was appointed five days before the agreed order was signed.

On August 14, 2009, two days after the agreed order had been signed, Mary filed a motion to revoke her consent to arbitration. Specifically, she stated that Tindall had “forced” her to sign the Agreement while she was “emotionally distraught” over the divorce and under the influence of tranquilizers.

Six days after that, she filed a motion to disqualify Keen, Gary's counsel. Mary asserted that the Agreement sought to “contract around” Texas's collaborative law statute, section 6.603 of the Texas Family Code. Because Keen would be unable to continue to represent Gary in litigation under a collaborative law agreement once the collaborative process had failed, Mary contended that Keen must also be disqualified after the cooperative process failed.

Gary moved to enforce the Agreement and to compel arbitration, noting that the Texas collaborative law statute is inapplicable to cooperative law agreements.

At the hearing, Mary contended that Gary breached the cooperative law agreement by concealing assets, but Gary's counsel asserted that the arbitrator, not the trial court, should determine whether he breached the Agreement.³ The trial court agreed with Gary's counsel, noting that the parties had eschewed formal, sworn discovery unless made otherwise by agreement. The trial court granted Gary's motion, concluding that “[i]f they want to enter into an agreement which, apparently, they both signed, and call it Cooperative Law Agreement ... I don't think there's any assumption that they can't do that.”

On October 30, 2009, the trial court signed an order compelling arbitration, which provides, in part:

This case was not resolved by agreement of the parties before April 30, 2009, and the parties are required to arbitrate their divorce action pursuant to the Cooperative Law Dispute Resolution Agreement signed by the parties on February 12, 2009....

It is ordered that Mary Lynn Mabray's Motion to Disqualify Brenda Keen is hereby denied.

It is ordered that Mary Lynn Mabray's First Amended Motion to Revoke Consent to Arbitration and Request for Jury Trial is hereby denied.

The trial court filed findings of fact and conclusions of law. Subsequently, the trial court filed additional findings of fact and conclusions of law that state:

1. Brenda Keen is not required to withdraw as attorney for Gary Allen Mabray after the parties failed to reach a settlement under the Cooperative Law Dispute Resolution Agreement.

2. The Cooperative Law Dispute Resolution Agreement is not governed by Texas Family Code § 6.603.

3. The Cooperative Law Dispute Resolution Agreement does not violate Texas Public Policy.

4. Brenda Keen is not disqualified to represent Gary Allen Mabray.

In two points of error in her petition for writ of mandamus, Mary argues that the trial court abused its discretion in failing to disqualify Keen and in ordering the parties to submit to arbitration. For her first point of error, Mary does not contend that Keen's representation of Gary violates the Texas Disciplinary Rules of Professional Conduct. See In re Cerberus Capital Mgmt., L.P., 164 S.W.3d 379, 382 (Tex.2005) (holding disciplinary rules can provide guidelines relevant to a disqualification determination). Moreover, she does not assert that she divulged confidential information to Keen that could be used inappropriately in litigation. Nor does she state that she and Keen engaged in an attorney-client relationship. Instead, she contends generally that Keen must be disqualified because the collaborative law statute controls the agreement and because cooperative law agreements violate public policy in Texas.

In his response to the petition for writ of mandamus, Gary argues that Mary's petition is barred by laches.

Mandamus Review

Mandamus relief is available only to correct a clear abuse of discretion when there is no adequate remedy by appeal. Walker v. Packer, 827 S.W.2d 833, 839 (Tex.1992). A clear abuse of discretion occurs when a trial court “reaches a decision so arbitrary and unreasonable as to amount to a clear and prejudicial error of law.” Johnson v. Fourth Court of Appeals, 700 S.W.2d 916, 917 (Tex.1985) (orig. proceeding). The reviewing court may not substitute its judgment for that of the trial court when reviewing factual issues. Walker, 827 S.W.2d at 839–40. Even if the reviewing court would have decided the issue differently, it cannot disturb the trial court's decision unless the decision is shown to be arbitrary and unreasonable. Id. at 840. When a trial court improperly denies a motion to disqualify opposing counsel, there is no adequate remedy by appeal and mandamus relief is appropriate. In re Basco, 221 S.W.3d 637, 639 (Tex.2007). Mandamus review may be appropriate for an order granting a motion to compel arbitration when it is necessary “to preserve important...