by Eleanor Mason, Staff Attorney for Justice Hassan, Fourteenth Court of Appeals
M.A. Mills, P.C. v. Knotts, 640 S.W.3d 323 (Tex. App.—Houston [14th Dist.] Jan. 20, 2022, no pet. h.) (Christopher, C.J.).
As a matter of first impression, the Fourteenth Court of Appeals in Knotts held that an agreement’s alleged violation of the Texas Disciplinary Rules of Professional Conduct did not render the agreement void on public policy grounds.
John Knotts recruited attorney Mickey Mills to take over his company, which had been struggling financially. As compensation, Knotts orally promised Mills $100,000 per month as well as an annual incentive bonus based on the company’s performance. Knotts failed to pay Mills’ annual bonus and Mills sued Knotts for breach of contract. The trial court granted Mills’ motion to dismiss the suit under the Texas Citizens Participation Act (“TCPA”).
On appeal, the court concluded that (1) Knotts satisfied his initial burden of showing that Mills’ claim fell within the TCPA’s scope, and (2) Mills, in response, satisfied his burden to establish a prima facie case for each element of his claim. The court then turned to Knotts’ argument that public policy rendered the parties’ agreement unenforceable because it violated Rule 1.08(a) of the Texas Disciplinary Rules of Professional Conduct, which establishes the standards applicable to a business transaction between an attorney and client.
The court delineated three reasons to support its conclusion that the alleged violation did not render the parties’ agreement void. First, the court reiterated that it must “exercise judicial restraint” when considering whether to hold an arm’s-length contract void on public policy grounds. Id. at 331 (internal quotation marks omitted). Second, the court pointed out that the preamble to the disciplinary rules specifically cautioned against using the rules as “procedural weapons,” which lent support “to the notion that a minor violation should not void an entire agreement.” Id.
Finally, the court referred to Texas Supreme Court precedent holding that a court should not refuse to enforce a contract simply because it contravenes a statute. See id. (citing Am. Nat’l Ins. Co. v. Tabor, 230 S.W. 397 (1921)). Noting that an attorney’s failure to comply with Rule 1.08(a) can result in disciplinary action, the court reasoned that, “[b]ecause that consequence is available, public policy does not demand the invalidation of the parties’ oral agreement.” Id. at 332.
The court reversed the trial court’s order granting Knotts’ TCPA motion to dismiss and remanded the case for further proceedings.
Livingston v. Gregurek, __ S.W.3d __, 2022 WL 678452 (Tex. App.—Houston [14th Dist.] Mar. 8, 2022, no pet. h.) (Zimmerer, J., majority; Hassan, J., concurring without opinion).
In this interlocutory appeal, the Fourteenth Court of Appeals held that venue in a wrongful death suit could be properly maintained in the county where the decedent suffered and died following a vehicle accident.
Robert Gray was driving in Tyler County when his car was hit by appellants’ lumber truck. Gray was seriously injured in the accident and life-flighted to a Harris County hospital, where he died eight days later. Gray’s wife and mother sued appellants in Harris County, asserting claims for negligence and gross negligence under the Texas Wrongful Death and Survival Statutes. Appellants filed a motion to transfer venue, which the trial court denied.
Appealing the denial of their motion to transfer, appellants argued that Harris County was not a proper venue because of the “derivative nature” of appellees’ wrongful death and survival claims. Id. at *3. In appellants’ view, the court only should consider where the alleged negligent acts or omissions resulting in the collision occurred, not where the decedent subsequently died.
Rejecting this argument, the court reasoned that “one thing must occur before either a wrongful death or survival action plaintiff may file a suit, a person must die.” Id. at *4. Therefore, Harris County—where the decedent sustained eight days of pain and suffering and ultimately died—“is a county where a substantial part of the events or omissions giving rise to the claims occurred.” Id.
The court affirmed the trial court’s order denying appellants’ motion to transfer venue.