Texas Serenity Academy, Inc. et al v. Glaze et al
Filing
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MEMORANDUM AND ORDER denying 22 MOTION for Sanctions; denying 25 MOTION for Sanctions; denying 35 MOTION for Default Judgment against Texas Serenity Academy, Inc.; denying 19 MOTION to Disqualify Plaintiffs' Counsels of Record; denying 24 MOTION for mandatory Indemnification(Signed by Magistrate Judge Frances H Stacy) Parties notified.(bwhite, )
IN THE UNITED STATES DISTRICT COURT
FOR THE SOUTHERN DISTRICT OF TEXAS
HOUSTON DIVISION
TEXAS SERENITY ACADEMY, INC.,
ET AL.,
Plaintiffs,
V.
SAMUEL GLAZE, ET AL.,
Defendants.
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CIVIL ACTION NO. H-12-0550
MEMORANDUM AND ORDER
Pending in this case that has been referred to the Magistrate Judge pursuant to 28 U.S.C.
§ 636(b)(1) and General Order No. 80-5 is Defendant Don R. Johnson’s Motion to Disqualify
Plaintiffs’ Counsel of Record (Document No. 19), Defendant Johnson’s Motions for Sanctions
(Document Nos. 22 & 25), Defendant Johnson and Defendant Oliver’s Motion for Mandatory and
Court Ordered Indemnification (Document No. 24), and Defendant Johnson’s Motion for Default
Judgment (Document No. 35). Having considered the motions, responses, the claims and issues in
this case, and the applicable law, it is ORDERED, for the reasons set forth below, that all the
foregoing motions (Document Nos. 19, 22, 24, 25, and 35) are DENIED.
I.
Background
This case centers around each sides’ claim to control a Texas Charter School, Texas Serenity
Academy School (referred to hereafter as “the School”). Defendant Don R. Johnson was, at one
time, the President of the Board of Directors of the School. He also appears to have initially formed
the non-profit corporation, Texas Serenity Academy, Inc., to operate the School. The School is
governed by the rules and regulations promulgated and enforced by the Texas Education Agency.
The events surrounding the claims in this case took place in November 2010. Plaintiffs
allege that Defendant Johnson, on November 29, 2010, approximately a year and a half after he had
voluntarily resigned from his position as President of the School Board, withdrew funds and closed
accounts belonging to “Texas Serenity Academy.”1 Plaintiffs further allege that Defendants Valton
Eason, and Freddie L. Oliver, along with three Houston Police Department officers, identified as
Samuel Glaze, Ray Irvin and Raphael Baez, acting at the behest of Defendant Johnson, entered the
School’s premises, ordered the individual Plaintiffs (Johnson, Jenkins, Vite-Gress, Rowe, Simmons
and Stewart) to vacate their offices or face arrest, and evicted and suspended without pay the
School’s principal, Plaintiff Foreman. Plaintiffs have asserted conspiracy and civil rights claims
under 42 U.S.C. § 1983 against all Defendants. Plaintiffs have also alleged state law claims of fraud,
theft, intentional infliction of emotional distress, false detention, invasion of privacy, trespass,
conspiracy, tortious interference with contractual relations, official oppression and breach of
fiduciary duty.
Each of the aforementioned motions were filed by Defendant Johnson, who is proceeding
in this case pro se. In the Motion to Disqualify and the Motion(s) for Sanctions, Johnson complains
that Plaintiffs’ counsel in this case, Tina Andrews and Kelly Evans, have represented him before and
1
Plaintiffs’ current pleading, their Fourth Amended Petition, which was filed in state court
prior to removal, does not clearly identify “Texas Serenity Academy.” While it appears that there
is a charter school named “Texas Serenity Academy,” and a non-profit corporation named Texas
Serenity Academy, Inc., Plaintiffs refer to the two interchangeably. Thus, is cannot be determined
from the parties’ pleadings or anything else in the record whether the two are separate, but related
entities, with Texas Serenity Academy, Inc. being the non-profit corporation that operates the School
or whether Texas Serenity Academy, Inc. and the School are one and the same. The distinction, if
there is one, may be significant given the parties’ differing views of Defendant Johnson’s role in
“Texas Serenity Academy.”
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should be disqualified from acting as counsel against him in this case pursuant to Rules 1.05, 1.06,
1.09, 1.10 and 1.12 of the Texas Rules of Professional Conduct. In addition, Johnson contends that
attorney Tina Andrews’ statements in a written filing that she has neither represented Defendant
Johnson in his personal capacity, nor practiced in bankruptcy court, are false, and subject to
sanctions. With the Motion for Indemnification, Defendant Johnson and Defendant Oliver seek,
based on their role(s) as Board members, an Order that both requires Plaintiff Texas Serenity
Academy, Inc. to pay their legal fees in this case and indemnify them in the event an adverse
judgment is entered against them. Finally, in his Motion for Default Judgment, Defendant Johnson
seeks a default judgment against Plaintiffs on the basis that Plaintiffs did not file a timely response
to Defendant Johnson’s Motion to Disqualify Counsel.
II.
Counsel-Related Motions (Document Nos. 19, 22 and 25)
Attorneys practicing before this Court must adhere to the Texas Rules of Professional
Conduct.2 With respect to Johnson’s claim that Rules 1.05 and Rule 1.09 require counsel’s
disqualification, Rule 1.09, Conflict of Interest, provides as follows:
(a) Without prior consent, a lawyer who personally has formerly represented a client
in a matter shall not thereafter represent another person in a matter adverse to the
former client:
(1) in which such other person questions the validity of the lawyer’s services
or work product for the former client;
2
Under the Local Rules of this District, “the minimum standard of practice shall be the Texas
Disciplinary Rules of Professional Conduct.” The Court is, however, “not limited by that code.”
Appendix A to Local Rules, “Rules of Discipline United States District Court Southern District of
Texas” at Rule 1A, 1B.
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(2) if the representation in reasonable probability will involve a violation of
Rule 1.05.
(3) if it is the same or a substantially similar matter.
TEX . R. PROF. CONDUCT 1.09. The key portion of Rule 1.05 prohibits an attorney from using
confidential information obtained from a former client against them. TEX . R. PROF. CONDUCT
1.05(b)(2). In determining whether the matters are “substantially related” the Court must apply a
two prong test. In re American Airlines, 972 F.2d 605, 614 (5th Cir. 1992), cert. denied, 507 U.S.
912 (1993). First, the moving party must prove an actual attorney-client relationship. Id. Second,
the moving party must prove a “substantial relationship” between the subject matter of the previous
relationship and the current dispute. Id. It is the movant’s burden to establish both prongs. Id. at
614; NCNB Tex. Nat’l Bank v. Coker, 765 S.W.2d 398, 400 (Tex. 1989) (the movant is required “to
establish a preponderance of the facts indicating a substantial relation between the two
representations”).
Here, while Johnson has pointed to several other cases in which he claims that Tina Andrews
represented him personally, Johnson has made no showing that any of those prior cases are
“substantially related” to the claims and allegations in this case. Of the prior cases identified by
Johnson, only one involved “Texas Serenity Academy” and it involved an alleged breach of a
construction contract for renovation work at the School. Johnson has not shown that the issues in
that case or any of the other prior cases were similar, much less substantially similar, to the issues
in this case. Furthermore, Defendant Johnson has made no showing that either Tina Andrews or
Kelly Evans obtained confidential information from him in any of the prior cases that they can use
against him in this proceeding.
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A “substantial relationship may be found only after the moving party delineates with
specificity the subject matters, issues and causes of action common to the prior and current
representations”. American Airlines, 972 F.2d at 614 (internal quotation omitted). Because
Defendant Johnson has not met his burden of showing that this matter is substantially related to any
matter in which either he or one of his companies was represented by Tina Andrews or Kelly Evans,
neither attorney is subject to disqualification under either Rule 1.05 or 1.09 of the Texas Rules of
Professional Conduct. See e.g., OneBeacon Ins. Co. v. T. Wade Welch & Assoc., 2012 WL 393309
(S.D. Tex. 2012) (Miller, J.) (finding prior work by attorney not substantially related to pending
case); M-I LLC v. Stelly, 2010 WL 2196281 *6-7 (S.D. Tex. 2010) (Ellison, J.) (denying motion to
disqualify where evidence relied on by movant was “too vague for the Court to conclude that the
matters are substantially related”).
As for Defendant Johnson’s argument that Rules 1.06, 1.10 and 1.12 also provide for
disqualification, he has not shown that any of those Rules are applicable in this case. Rule 1.06
provides:
(a) A lawyer shall not represent opposing parties to the same litigation.
(b) In other situations and except to the extent permitted by paragraph (c), a lawyer
shall not represent a person if the representation of that person:
(1) involves a substantially related matter in which that person's interests are
materially and directly adverse to the interests of another client of the lawyer or the
lawyer's firm; or
(2) reasonably appears to be or become adversely limited by the lawyer's or law firm's
responsibilities to another client or to a third person or by the lawyer's or law firm's
own interests.
Rule 1.10 provides:
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(a) Except as law may otherwise expressly permit, a lawyer shall not represent a
private client in connection with a matter in which the lawyer participated personally
and substantially as a public officer or employee, unless the appropriate government
agency consents after consultation.
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(c) Except as law may otherwise expressly permit, a lawyer having information that
the lawyer knows or should know is confidential government information about a
person or other legal entity acquired when the lawyer was a public officer or
employee may not represent a private client whose interests are adverse to that person
or legal entity.
Rule 1.12 provides:
(a) A lawyer employed or retained by an organization represents the entity. While the
lawyer in the ordinary course of working relationships may report to, and accept
direction from, an entity's duly authorized constituents, in the situations described in
paragraph (b) the lawyer shall proceed as reasonably necessary in the best interest of
the organization without involving unreasonable risks of disrupting the organization
and of revealing information relating to the representation to persons outside the
organization.
(b) A lawyer representing an organization must take reasonable remedial actions
whenever the lawyer learns or knows that:
(1) an officer, employee, or other person associated with the organization has
committed or intends to commit a violation of a legal obligation to the organization
or a violation of law which reasonably might be imputed to the organization;
(2) the violation is likely to result in substantial injury to the organization; and
(3) the violation is related to a matter within the scope of the lawyer's representation
of the organization.
Defendant Johnson has not made a prima facie showing that Rules 1.06, 1.10 or 1.12 apply to
attorneys Tina Andrews or Kelly Evans. Disqualification is therefore not available on that basis.
Finally, disqualification is not available based on Defendant Johnson’s arguments that Tina
Andrews and Kelly Evans made false statements to the state court in violation of Rule 3.03 of the
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Texas Rules of Professional Conduct. As Defendant Johnson has made no showing that any of the
statements he claims were false were made by counsel Andrews and/or Evans with knowledge that
the statements were false, Rule 3.03 does not apply.3
In his two Motion(s) for Sanctions, Defendant Johnson relatedly argues that Tina Andrews
falsely stated in a response to a motion to quash she filed in state court, see Document No. 19-1, that
she had never represented Johnson personally and that she had never practiced in bankruptcy court.
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Rule 3.03 of the Texas Rules of Professional Conduct provides:
(a) A lawyer shall not knowingly:
(1) make a false statement of material fact or law to a tribunal;
(2) fail to disclose a fact to a tribunal when disclosure is necessary to avoid assisting
a criminal or fraudulent act;
(3) in an ex parte proceeding, fail to disclose to the tribunal an unprivileged fact
which the lawyer reasonably believes should be known by that entity for it to make
an informed decision;
(4) fail to disclose to the tribunal authority in the controlling jurisdiction known to
the lawyer to be directly adverse to the position of the client and not disclosed by
opposing counsel; or
(5) offer or use evidence that the lawyer knows to be false.
(b) If a lawyer has offered material evidence and comes to know of its falsity, the
lawyer shall make a good faith effort to persuade the client to authorize the lawyer
to correct or withdraw the false evidence. If such efforts are unsuccessful, the lawyer
shall take reasonable remedial measures, including disclosure of the true facts.
Defendant Johnson claims that a statement made in a state court pleading that he received a cashier’s
check from Wells Fargo in the amount of $240,000.00 was false and that the bank records proved
that he never received such a check. This argument does not evidence that counsel knew the
statement as to the cashiers check was untrue at the time it was made. Moreover, in the current
pleading, Plaintiffs’ Fourth Amended Petition, Plaintiffs now allege that Defendant Johnson
withdrew $240,000.00 in funds – there is no mention of a cashier’s check. As for Johnson’s claim
that Tina Andrews’ statements as to her authority to act on behalf of Texas Serenity Academy are
false, the record shows that the state court, prior to removal, was sufficiently convinced of Andrews’
authority to act on behalf of Texas Serenity Academy. See Document No. 1-9 at pp. 15 of 21.
Neither statement by counsel has been shown to be knowingly false when made, and neither
statement would support counsel’s disqualification.
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Neither statement has been shown to be clearly false or objectively unreasonable. Andrews states
in response to the motion for sanctions that she
was not hired to represent defendant personally and was never paid by defendant to
represent him personally. Counsel was paid to represent several corporations owned
in part by defendant. Counsel has never practiced or represented anyone in
bankruptcy court and the records of the bankruptcy court will confirm that. The cases
defendant refers to wherein counsel may have represented defendant are cases
involving one or more of the companies in which defendant was part owner and the
companies were a defendant also.
Document No. 41 at 2. Based on this record, Rule 11 sanctions are not available.4
Defendant Johnson’s Motion to Disqualify (Document No. 19) and Motions for Sanctions
(Document Nos. 22 and 25) are all DENIED.
III.
Indemnification Motion (Document No. 24)
In the Motion for Indemnification, Defendant Johnson and Defendant Oliver, in reliance on
Sections 8.051 and 8.052 of Texas Business Organizations Code, seek an Order requiring Plaintiff
Texas Serenity Academy, Inc. to pay their attorneys fees in this case. Sections 8.051 provides as
follows:
(a) An enterprise shall indemnify a governing person, former governing person, or
delegate against reasonable expenses actually incurred by the person in connection
with a proceeding in which the person is a respondent because the person is or was
4
Under Fed. R. Civ. P. 11 sanctions may be imposed against a party who signs a pleading,
motion or other paper that is not well grounded in fact, not warranted by existing law or a good faith
argument for its extension, or introduced needlessly for the sole purpose of delay. City of El Paso
v. City of Socorro, 917 F.2d 7, 2 (5th Cir. 1990). “Rule 11 also permits sanctions where the factual
allegations are unsupported or are not likely to be supported after a reasonable opportunity for further
discovery. The signing attorney has a duty of reasonable inquiry, but his signature is not a guarantee
of the correctness of the legal theories argued, nor is it a guarantee of all alleged facts, especially if
the matter is not easily discovered by extrinsic evidence. Health Net, Inc. v. Wooley, 534 F.3d 487,
497 (5th Cir. 2008) (internal citations omitted).
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a governing person or delegate if the person is wholly successful, on the merits or
otherwise, in the defense of the proceeding.
Similarly, § 8.052 provides:
(a) On application of a governing person, former governing person, or delegate and
after notice is provided as required by the court, a court may order an enterprise to
indemnify the person to the extent the court determines that the person is fairly and
reasonably entitled to indemnification in view of all the relevant circumstances.
As neither Johnson nor Oliver have asserted a claim to indemnification in their pleadings, and as
Sections 8.051 and 8.052 are based on a party’s relative success on the merits and consideration of
“all the relevant circumstances,” an Order for indemnification is not available at this time.
Defendants Johnson’s and Oliver’s “Motion for Mandatory and Court Ordered Indemnification”
(Document No. 24) is DENIED.
IV.
Default Motion (Document No. 35)
In his Motion for Default Judgment, Defendant Johnson seeks a Default Judgment as against
Plaintiffs because Plaintiffs did not file a timely response to his Motion to Disqualify Counsel.
Notwithstanding the fact that the responses to Defendant Johnson’s Motion to Disqualify Counsel
were timely filed, see Document Nos. 31 and 39, a default judgment is only available if a party fails
to “plead or otherwise defend” – meaning that the party has not answered the claims against it. See
FED . R. CIV . P. 55. Because Plaintiffs’ responses to Defendant Johnson’s Motion to Disqualify
Counsel were timely, and because the timeliness of a response to such a motion would not provide
a basis for a default judgment in event, Defendant Johnson’s Motion for Default Judgment is
DENIED.
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V.
Conclusion and Order
Based on the foregoing and the conclusion that Defendants Johnson and Oliver have not
shown, as movants, to be entitled to the relief sought in their motions, it is
ORDERED that Defendant Don R. Johnson’s Motion to Disqualify Plaintiff’s Counsels of
Record (Document No. 19), Defendant Johnson’s Motions to Sanction (Document Nos. 22 & 25),
Defendant Johnson and Defendant Oliver’s Motion for Mandatory and Court Ordered
Indemnification (Document No. 24), and Defendant Johnson’s Motion for Default Judgment
(Document No. 35) are all DENIED.
Signed at Houston, Texas, this 5th day of December, 2012.
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