in Re Synergy Natural Resources, LLC, Trailers for Less, Gary M. Riebschlager

Citation: Not availableDocket: 04-17-00601-CV

Court: Court of Appeals of Texas; January 9, 2018; Texas; State Appellate Court

Original Court Document: View Document

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The Fourth Court of Appeals in San Antonio conditionally granted a petition for a writ of mandamus filed by Synergy Natural Resources, LLC, Trailers for Less, and Gary M. Riebschlager, challenging the trial court's decision to disqualify Riebschlager as counsel. The background involves Circle Bar A Inc. (CBA) suing Synergy for unpaid fees related to two trailers, leading to a default judgment against Synergy, which claimed it had not been served with the lawsuit. Riebschlager represented Trailers for Less, the owner of the trailers, and filed a motion to dissolve the writ of execution issued against them. During a hearing on this motion, CBA sought to disqualify Riebschlager, citing a conflict of interest as he represented two clients with opposing claims to the trailers. The trial court granted the disqualification without admitting further evidence beyond CBA's email correspondence. Riebschlager, unaware of CBA's motion prior to the hearing, was later allowed to respond, but the disqualification order was signed the following day. Subsequently, Riebschlager filed a motion for a new trial regarding the default judgment, which was later struck by the trial court. CBA filed for sanctions against Riebschlager, which led to a $2,500 attorney's fee order against him, while Riebschlager did not appear at the sanctions hearing.

Mandamus relief is a rare judicial remedy designed to correct a clear abuse of discretion by a trial court when no adequate remedy by appeal exists. A trial court is deemed to have abused discretion if its decision is arbitrary, unreasonable, or results in a significant legal error. To meet the standard for mandamus, the relator must demonstrate that only one reasonable decision could have been made by the trial court.

Mandamus can be invoked to rectify an erroneous disqualification of counsel due to the lack of an adequate appellate remedy, as disqualification can severely disrupt proceedings and deprive a party of their chosen representation. Courts are required to apply a strict standard when assessing disqualification motions to prevent their misuse as tactical delays. The burden lies with the party seeking disqualification to specifically demonstrate a breach of disciplinary rules, which, while providing guidance, do not serve as the sole criteria for disqualification. A lawyer may be disqualified in certain situations even without a specific rule violation, but mere claims of unethical behavior or minimal evidence of a rule breach are insufficient for disqualification.

According to Rule 1.06 of the Texas Rules of Disciplinary Procedure, a lawyer cannot represent opposing parties in the same litigation or represent a client when their interests are materially adverse to another client without proper consent and disclosure of potential conflicts. In CBA's motion to disqualify, the specific provision of Rule 1.06 relied upon was unclear, although CBA later claimed that Synergy and Trailers for Less are opposing parties under Rule 1.06(a).

CBA argues for disqualification of Riebschlager under Rule 1.06(b), claiming that Trailers for Less is the true owner of the trailers and that Synergy's contract breach negatively impacts this ownership, giving Trailers for Less a direct cause of action against Synergy. However, CBA did not demonstrate that Riebschlager's dual representation would cause actual prejudice to CBA, as required by legal precedent. CBA's assertions were vague and conclusory, lacking concrete evidence of harm during the hearing. The burden of proving actual prejudice rested with CBA, which it failed to meet. Consequently, the trial court erred in disqualifying Riebschlager. The court conditionally grants the petition for writ of mandamus, ordering the withdrawal of the August 11, 2017 disqualification order, and consequently the August 24, 2017 order imposing sanctions and striking Riebschlager's motion for a new trial. The writ will be issued if the trial court does not comply within fourteen days.