Searching over 5,500,000 cases.

Buy This Entire Record For $7.95

Download the entire decision to receive the complete text, official citation,
docket number, dissents and concurrences, and footnotes for this case.

Learn more about what you receive with purchase of this case.

In re Rescue Concepts, Inc.

Court of Appeals of Texas, First District

September 19, 2017


         Original Proceeding on Petition for Writ of Mandamus

          Panel consists of Chief Justice Radack and Justices Keyes and Bland.



         This case arises from a discovery dispute following a failed land sale.[1] The trial court ordered relator, Rescue Concepts, Inc. ("Rescue Concepts"), to produce to real party in interest Jones Lang LaSalle Texas, Inc. ("JLL") communications between Rescue Concepts' representatives and Jacqueline Lucci Smith, a licensed attorney who negotiated the sale on Rescue Concepts' behalf. In its petition for writ of mandamus, Rescue Concepts asserts that the trial court abused its discretion in "ruling that email correspondence between an attorney, Jacqueline Lucci Smith, and her client, Rescue Concepts, Inc., was not privileged and ordering all emails produced without redactions."

         JLL, the firm that provided brokerage services to the attempted buyer of the Property, HouReal Corporation ("HouReal"), through JLL's agent James Peacock, argues in part that: (1) the trial court's determination regarding whether the attorney-client privilege applied is entitled to deference because it presented "'conflicting evidence' if not conclusive evidence that no attorney-client relationship existed" between Smith and Rescue Concepts; and (2) the trial court properly exercised its discretion in reviewing the communications in camera and refusing to apply the attorney-client privilege. Because we conclude that, as a matter of law, an attorney-client relationship existed between Smith and Rescue Concepts and the communications in question were confidential communications made to facilitate the rendition of professional legal services, we conditionally grant the writ of mandamus.


         Rescue Concepts provides emergency response training to military personnel and other first responders. It conducts its business, including firearms training, on a parcel of real property in Liberty County (the "Property"). Due to increased development in the area, the Property was no longer ideal for Rescue Concepts' business purposes, and it received unsolicited offers to purchase the Property. Rescue Concepts decided to retain the services of Jacqueline Lucci Smith, an attorney who had previously represented Rescue Concepts in other matters, to help it negotiate a sale of the Property and to provide advice regarding various legal concerns relevant to such a transaction. Smith is not a real estate broker.

         Rescue Concepts and Smith executed a letter of engagement "for legal representation related to the negotiation and sale of property owned by Rescue Concepts, Inc." paying Smith a "contingency of 3% of the gross sales price, " as an unqualified promise to pay. Under the "Scope of Employment" section, Smith's representation was limited to "the negotiation and sale of the property" as Rescue Concepts' "exclusive and only agent regarding the property." Under the "Withdrawal or Termination" section, Smith's "representation in this matter" is described as "an exclusive listing agreement." The letter also contained boilerplate language: Smith's firm expressed opinions, not guarantees, including "the value of the property"; Smith would determine fees "in accordance with the American Bar Association and the Texas Rules of Professional Conduct"; Smith would notify Rescue Concepts of the "Texas State Bar Grievance Process"; Smith would retain client files; and Smith thanked Rescue Concepts "for the opportunity to provide [it] legal services."

         Among other services provided pursuant to this engagement letter, Smith represented Rescue Concepts in its negotiations with HouReal for the purchase of the Property. HouReal was represented by Stephen Peacock, its president and a real estate broker employed by JLL, a real estate brokerage and advice firm.

         Eventually, Rescue Concepts and HouReal entered into a contract for the sale of the Property in which HouReal was to buy the Property from Rescue Concepts for $12 million by the closing date of January 7, 2015. The parties used the "Commercial Contract - Unimproved Property" form issued by the Texas Association of Realtors as a contract template, although Smith made some modifications to this form. Under the "Brokers" designation of the form contract, Smith's law firm, Lucci Smith Law, PLLC, was listed as Rescue Concepts' "Principal Broker" and Smith was listed as Rescue Concepts' "Agent." JLL was listed as HouReal's "Cooperating Broker" and Peacock was listed as HouReal's "Agent." Rescue Concepts' vice president and part owner, Melanie Liska, signed the contract for Rescue Concepts. Peacock signed the contract for HouReal.[2]Attached to the contract was an addendum of eight new provisions, including a confidentiality agreement and permitted exceptions to encumbrances and easements, which Smith drafted.

         The sale never closed. HouReal sued Rescue Concepts for breach of contract. Relevant here, Rescue Concepts counterclaimed for breach of contract and fraud, and it sued JLL and Peacock for fraud as well. Rescue Concepts alleged that HouReal breached the contract by failing to tender the balance of the earnest money and that HouReal, Peacock, and JLL knowingly misrepresented HouReal's ability to purchase the Property during the negotiation of the contract.

         Smith continued to represent Rescue Concepts as the parties proceeded to mediation and later stages of the litigation. During the discovery period, JLL made two requests for production relevant here. It requested "[a]ll communications between Jacqueline Lucci Smith and [Rescue Concepts] regarding the Property" and "[a]ll communications between Jacqueline Lucci Smith and [Rescue Concepts] regarding negotiations with Peacock." JLL asserted that it needed the requested communications to defend against Rescue Concepts' fraud claim because Peacock's representations were communicated to Rescue Concepts only through Smith.

         The parties understood these emails to include those sent both during the negotiation period for the sale of the Property-during which Smith sent numerous emails relaying information regarding the negotiations and addressing issues regarding the proposed financial and contractual terms-and after negotiations for the sale of the Property had ceased and litigation for breach of contract and fraud was imminent. During that time, Rescue Concepts and Smith discussed retention of counsel for litigation, injunctive relief, and mediation. Rescue Concepts objected to JLL's requests for production on the basis of attorney-client and work product privilege, and it later served a privilege log detailing the "To, " "From, " "Subject, " and "Received Date" fields along with the privilege asserted for each disputed email. JLL did not challenge Rescue Concepts' assertion of privilege at this time, and discovery continued.

         After the close of discovery and less than three weeks before the case's trial setting, JLL moved to compel production of the requested communications between Rescue Concepts and Smith. JLL argued that the requested communications were not privileged because they were made while Smith was performing services as a real estate broker, not as a lawyer. JLL supported its motion with a copy of the contract between Rescue Concepts and HouReal, which, JLL noted, identified Smith as Rescue Concepts' broker. In a subsequent motion, JLL further claimed that Rescue Concepts had waived the privilege under the offensive-use doctrine by asserting fraud claims based on Peacock's allegedly fraudulent statements. JLL requested that the trial court inspect the withheld communications in camera to determine whether they were privileged.

         Rescue Concepts responded by amending its objections and responses, and it re-asserted its attorney-client privilege. Rescue Concepts attached to its response its engagement letter agreement with Smith's law firm; affidavits from Smith and Rescue Concepts' vice president, Melanie Liska; and various emails between and among Smith, Peacock, and third parties, including an email in which Peacock introduced Smith to a third party as Rescue Concepts' attorney.

         In her affidavit regarding the nature of the relationship between her and Rescue Concepts, Smith averred that she was hired as Rescue Concepts' attorney both because of her prior representation of the company in other matters and "ongoing legal issues involved in re-platting [the Property], rumors of additional pipelines in the area and other legal issues impacting its Property and business." Smith averred that she negotiated contract terms and advised Rescue Concepts as to the legal ramifications of various contract provisions or conditions during the negotiations. Smith also averred that she identified herself as Rescue Concepts' attorney throughout her negotiations with Peacock, that Peacock had introduced Smith to a third party as Rescue Concepts' attorney, and that Peacock had on at least one occasion sought legal advice from her-advice that she refused to give on the basis of her attorney-client relationship with Rescue Concepts.

         Liska averred that Rescue Concepts retained Smith because she had regularly represented Rescue Concepts in other matters and was familiar with both the Property and Rescue Concepts' business generally. Because of Smith's prior representation of Rescue Concepts, Liska stated that Smith's "specialized legal knowledge and skill" allowed her to "analyze negotiations from both a legal and commercial perspective." For those reasons, Liska said in her affidavit that Smith was hired "not as a real estate broker, but as a lawyer."

         The trial court held a hearing on the motion to compel and determined that Smith was "wearing more than one hat" or rendering "hybrid" representation by providing both legal and non-legal services. The trial court opined that only those communications "between the lawyer and the client for the purpose of rendering legal services" were protected by attorney-client privilege. Therefore, the trial court ordered Rescue Concepts to produce the communications for an in camera inspection: "The only way I know how to sort that out is for me to look at them. I don't know any other way to do that. So that's what I'm going to order. Produce them in camera." Additionally, Smith offered and delivered to JLL some redacted emails responsive to its request.

         After inspecting the communications in camera, the trial court found that none of the communications were privileged and ordered that they be produced. Rescue Concepts moved for reconsideration and for leave to provide additional evidence in support of the privilege assertion. This evidence included a survey of the Property, the Certificate of Formation of Lucci Smith Law, PLLC, excerpts from the Texas Board of Legal Specialization Standard for Attorney Certification in the area of real estate law, [3] and a second affidavit from Smith describing the legal tasks she undertook on behalf of Rescue Concepts. The trial court granted both the motion for reconsideration and the motion to supplement evidence.

         At the hearing on the motion for reconsideration, Smith detailed legal tasks she performed during her representation and related her fear that, during her impending deposition, she could not assert privilege on oral communications with Rescue Concepts. Smith asserted that, as additional legal tasks, she prepared a 1031 IRS exchange document, was clearing the Property of invalid liens, as required by the contract, and was replatting the Property to expand the pipeline corridor at HouReal's request. Smith suggested the disputed emails related ...

Buy This Entire Record For $7.95

Download the entire decision to receive the complete text, official citation,
docket number, dissents and concurrences, and footnotes for this case.

Learn more about what you receive with purchase of this case.