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In re Coley Thetford

Supreme Court of Texas

May 24, 2019

In re Verna Francis Coley Thetford, Relator

          Argued October 10, 2018

          On Petition for Writ of Mandamus

          Chief Justice Hecht delivered the opinion of the Court as to Parts I, II, III-A, and IV, in which Justice Green, Justice Guzman, Justice Lehrmann, and Justice Boyd joined, and a concurring opinion as to Part III-B, in which Justice Green and Justice Guzman joined.

          Justice Brown filed a dissenting opinion, in which Justice Devine, Justice Blacklock, and Justice Busby joined.

          OPINION

          NATHAN L. HECHT, CHIEF JUSTICE

         A guardianship is a court-sanctioned infringement of an incapacitated person's right to control her own property, liberty, and life in order "to promote and protect [her] well-being".[1] A guardian can provide essential care for the ward. But tragically, wards are also vulnerable to neglect, abuse, and exploitation.[2] There are more than 51, 000 open guardianships in Texas, [3] 8% more than there were five years ago.[4] And the number is growing, as the number of Texans over age 65 is expected to double by 2030, to six million.[5] Guardianship proceedings must ensure the appointment of guardians who will promote and protect the well-being of the incapacitated elderly and the disabled.

         Guardianship proceedings present difficult ethical issues for lawyers. Generally, a lawyer must act in a client's best interests, but guardianship cases can be emotionally charged. A ward's best interests may be hotly disputed and, because of her incapacity, difficult to discern. The issue before us is whether the Texas Disciplinary Rules of Professional Conduct[6] require that a lawyer be disqualified from representing one client who is applying to be appointed guardian for another current or former client, without that client's consent. We hold that the rules permit the representation in limited circumstances and that a trial court's decision regarding disqualification, based on a careful, thorough consideration of all the evidence, is entitled to great deference by an appellate court. We conclude that the trial court in this case did not abuse its discretion by refusing to disqualify counsel for the guardianship applicant. Accordingly, we deny mandamus relief.

         I [7]

         Jamie Rogers was born in Graham, Texas (pop. 8, 903), the county seat of Young County (pop. 18, 550), located about 90 miles west-northwest of Fort Worth. All her life, her uncle and aunt, L.D. and Verna Thetford, also lived in Graham, and at all times material to this case, she and her husband, Larry, lived about a mile from the Thetfords. Verna once taught school but for many years was the bookkeeper for the cow-calf operation she and L.D. ran on five pastures totaling about 1, 000 acres in Young and neighboring Jack Counties. As the Thetfords grew older, they relied on Jamie and Larry for support.

         In March 2012, the Thetfords loaned the Rogerses $350, 000 at 4% interest-more than the Thetfords were making on the funds at the bank-to purchase land that had belonged to Jamie's great-grandparents, Verna's grandparents. Alfred G. "Rusty" Allen, III, a lawyer practicing in Graham, represented the Thetfords in preparing the five-year note and the deed of trust. Jamie had worked for Allen's law firm as a legal assistant beginning when she was a senior in high school, though she was not working for the firm at the time of the loan. Allen was named trustee under the deed of trust.

         In July 2015, Verna, then 84, executed a will and power of attorney, prepared by Allen. In the will, Verna left her estate to Jamie if she survived Verna, and if not, to Verna's heirs. The power of attorney designated Jamie as Verna's attorney-in-fact and her preferred guardian if the need arose and authorized Jamie to make healthcare decisions for Verna if she were unable to do so herself, "including the choice of nursing home facilities". Jamie was not working for Allen's firm at the time. A month later, L.D., then 92 and suffering from dementia, moved from his and Verna's home to Brookdale Graham, an assisted living center.

         In 2016, Verna's mental state began to deteriorate. She verbally abused L.D. and his caregivers and interfered with their giving him his medications. Jamie and Larry assisted Verna in gathering her mail, running errands, and banking, but Verna often forgot what she had asked Jamie to do and accused Jamie of mismanaging her affairs. In December 2016, Verna was briefly admitted to the hospital twice, then transferred to Brookdale.

         Though Verna's driver's license had been revoked, she continued to insist on driving. In February 2017, she convinced one of her caregivers to take her from Brookdale to her home, where she retrieved the keys to a pickup and drove to the feed store for supplies for her cattle. On the way home, she struck a trailer pulled by another vehicle and left the scene, at first denying what she had done and admitting to it only later. The trailer was minimally damaged, and no charges were filed. But the incident prompted Jamie to disable Verna's vehicles and to monitor her more closely at Brookdale. Verna accused Jamie of stealing the pickup.

         The Rogerses' note to the Thetfords came due on March 15, with a $285, 000 balloon payment still being owed. Believing that L.D. lacked the capacity to agree to extend the note and concerned that Verna was in the same position, the Rogerses began efforts to refinance the note with a local bank but were still awaiting completion of an appraisal of the property when the note came due. Verna claimed that she asked Allen to write the Rogerses a demand letter but that he refused. Allen denies that Verna made the request. At the time, Jamie was working again for Allen's law firm. Verna asked a friend to drive her to the office of another Graham attorney, Stephen Crawford, who prepared a revocation of her power of attorney, which Verna executed in Crawford's office on March 27. Verna expressed to Crawford her desire to foreclose the deed of trust lien securing the Rogerses' note, and Crawford explained foreclosure would need to be initiated by Allen, the trustee, or Verna would need to appoint a successor trustee. Verna did not ask Crawford to write the Rogerses a demand letter.

         Two weeks later, on April 10, Jamie, represented by Allen, filed an application for temporary guardianship of Verna's person and a management trust for her estate. Attached to the application was a physician's certificate of medical examination from Verna's personal physician, Dr. Pete Brown; his office notes from his examination of her on March 29; and his affidavit. Brown wrote in his office notes that Verna "presents with change in mental status" that "was noted several months ago. The course has been progressively worsening. It is of severe intensity." In his affidavit, Brown averred:

2. I am a licensed medical doctor, authorized to practice medicine in the State of Texas and have been since 1980.
3. Verna Francis Coley Thetford has been a patient of mine since 2006, and I have seen her regularly and frequently since that time.
4. I last examined Mrs. Thetford on March 29, 2017, at which time I determined that she:
(A) Is legally blind;
(B) Is suffering from moderate dementia that is increasing in severity;
(C) Has deficits in short-term memory, immediate recall, recognizing familiar objects and persons, solving problems, reasoning logically, and grasping aspects of her situation;
(D) Lacks the ability to initiate and make business, managerial, and financial decisions;
(E) Lacks the ability to make, modify, rescind or revoke contracts;
(F) Lacks the ability to manage a personal bank account or her personal finances;
(G) Lacks the ability [to] safely operate a motor vehicle;
(H) Lacks the ability to make decisions regarding marriage;
(I) Lacks the ability to determine her own residence; and
(J) Makes poor decisions, has poor insight and judgment, and often acts irrationally.
5. Based on my examination of Mrs. Thetford on March 29, 2017, I determined that Mrs. Thetford was, and is, incapacitated as that term is defined by Section 1002.017 of the Texas Estates Code, which states that an "Incapacitated Person" is an adult who, because of a physical or mental condition, is substantially unable to: (a) provide food, clothing, or shelter for himself or herself; (b) care for the person's own physical health; or (c) manage the person's own financial affairs. It is my professional opinion, based upon my knowledge of and involvement with Mrs. Thetford, that she has become an "Incapacitated Person" over the past several months.

         The physician's certificate added that Verna's prognosis was "poor [and] increasing in severity" with no possibility of improvement, and that "no limitations [should be] placed on guardian's powers. Proposed ward needs assistance managing her affairs."

         Brown's office notes stated that "Verna is here for a mental status exam, she is alone and states that she does not need help and never has. Her niece Jamie was suppose[d] to be her[e] but Verna has 'Revoked' her." His affidavit added:

6. I did not see Mrs. Thetford on March 27, 2017, the date on which she purportedly executed a document revoking a Statutory Durable Universal and Health Care Power of Attorney and Designation of Guardian Before Need Arises, and Directive to Physicians, executed on July 22, 2015, that she had previously executed appointing Jamie Kay Rogers as her agent and attorney in fact, medical power of attorney and guardian before need arises. However, Mrs. Thetford's dementia and diminished capacity has been ongoing and increasing in severity, especially during the past few months. Based upon my knowledge of and involvement with Mrs. Thetford and her condition, it is my diagnosis that her incapacity, as that term is defined by the Texas Estates Code, was persistent, ongoing, and very likely present on March 27, 2017, and for several months before such date.

         Verna answered on April 17, represented by Robert E. Aldrich, Jr., an attorney in Fort Worth, and on April 28, moved to disqualify Allen as Jamie's counsel. The motion asserted that "Alfred G. Allen, III, at all times material to the matters involved in this proceeding, has represented [Verna]", that Allen had "obtained confidential information" during his representations of [Verna] that "could be used to [her] disadvantage . . . in the current matter", and that she objected to his representation of Jamie in violation of his fiduciary duties to her. The motion further alleged that Verna had asked Allen to foreclose the deed of trust lien securing her loan to the Rogerses and to help her change her will, but he had refused, and that "if successful in having Verna Thetford found incompetent," Jamie would "cement[ her] ability to inherit all of [Verna's] property". Verna attached to her response to Jamie's application for a temporary guardianship a statement from Scott Hilborn, Ph.D., a clinical neuropsychologist in Fort Worth, who stated that he had examined Verna on April 19. She was accompanied, Hilborn said, by Eddie Dalton, a "family friend and former employee," who "served as an additional informant." According to Hilborn, Verna believed that Jamie had been prompted to have her deemed incompetent because the Rogerses' note was coming due. After administering several tests to Verna, Hilborn concluded: "She does not meet criteria for a dementia at this time and she has the capacity to live independently, reasonably determine her place of residence, make medical decisions, manage her medications in her own best interest, and make financial decision[s] in her own best interest at this time."

         In a response to Verna's motion to disqualify Allen, Jamie asserted that the note to the Thetfords had been paid in full on April 28, with 18% interest for the delay. Jamie argued that "the Texas Disciplinary Rules of Professional Conduct place a mandatory duty on Allen to secure the appointment of a guardian for the person and . . . estate of Mrs. Thetford due to his reasonable belief that she lacks legal competence". Jamie's response cited Rule 1.02(g), which states:

A lawyer shall take reasonable action to secure the appointment of a guardian or other legal representative for, or seek other protective orders with respect to, a client whenever the lawyer reasonably believes that the client lacks legal competence and that such action should be taken to protect the client.

         L.D. died on April 29. On May 9, the trial court heard the motion to disqualify. Verna was represented by Aldrich and by an attorney ad litem appointed by the court, Toby L. Reddell, of Graham. Jamie was represented by Allen. Aldrich argued that "Allen admits his representation of Ms. Thetford", had "made a judicial admission" to that effect, and had "continually represented my client for a long time". "I don't think," Aldrich continued, "given the fact that in his response Mr. Allen admits his representation of Ms. Thetford, that we need to put on a bunch of evidence." Aldrich argued that Allen's representation of Jamie without Verna's consent was a conflict of interest under Rules 1.06(a) and (b), which state:

(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
(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 . . . own interests.

         Allen acknowledged that he was still representing Verna when he filed the application for guardianship on Jamie's behalf. Relying on Rule 1.02(g), Allen stated: "I stand here to tell the Court that it's my opinion I am doing what's in the best interest of Mrs. Thetford by representing Ms. Rogers in this application." At the conclusion of the 40-minute hearing, at which the court considered only counsel's arguments and the written statements of physicians Brown and Gilford, the court announced: "I'm going to deny the disqualification of counsel, but"-then speaking directly to Allen-"it's at your peril. If there's something brought under the disciplinary rules, someone else besides me is going to make a decision as to whether or not you violated that rule."

         For the rest of that day and all of the next, the court heard evidence on Jamie's application for temporary guardianship. Jamie, Larry, Verna's stepson, and two Brookdale caregivers testified that Verna needed a guardian. Verna, Crawford, and Dalton testified that she did not. In her hour-long testimony, Verna was asked by both Aldrich and Allen about the details of various matters, and she was able to recall some details but not others. At the conclusion of the hearing, the court signed an order appointing Jamie as temporary guardian for Verna for 60 days on a $2, 500 bond and appointing one of Verna's banks to manage her property. The order found:

2. There is substantial evidence that [Mrs. Thetford] may be an incapacitated person;
3. There exists an imminent danger that the physical health or safety of Mrs. Thetford will be seriously impaired and that Mrs. Thetford's estate will be seriously damaged or dissipated unless immediate action is taken;
4. There is an immediate need for the appointment of a temporary guardian and the creation of a Management Trust;
5. Alternatives to guardianship that would avoid the need for the appointment of a Temporary Guardian and the establishment of a Management Trust have been considered and determined not to be feasible;
* * *
9. It is in the best interest of Mrs. Thetford that a temporary guardian of the person be appointed to promote and protect Mrs. Thetford's well-being;
10. It is in the best interest of Mrs. Thetford that a Management Trust be established to protect and manage her estate;
11. JAMIE KAY ROGERS is a suitable person to act as Temporary Guardian and is not disqualified by law from acting as such; and
12. CIERA BANK is a suitable entity to act as Trustee of a Management Trust and is not disqualified by law from acting as such.

         The order broadly gave Jamie "all powers" over Verna's person and removed Verna's right to travel, make gifts, drive a vehicle, and execute legal documents and contracts.

         Verna sought review of the denial of the motion to disqualify by mandamus and appealed Jamie's appointment as her temporary guardian. The court of appeals denied mandamus relief with a summary opinion on June 15, and Verna petitioned for mandamus relief in this Court. We requested briefing.

         On October 9, Verna was re-evaluated by C. Munro Cullum, Ph.D., Chief of the Division of Psychology at U.T. Southwestern Medical Center. He reviewed all Verna's medical records and Hilborn's examination of her, and while he agreed that Hilborn had thoroughly tested Verna, he disagreed with Hilborn's conclusions. Interviewing Verna himself, Cullum found her to be "engaging", "oriented to time, place, and person", and "able to walk unassisted", but with "significant visual limitations and hearing loss". He noted that she "expressed concerns about a 'conspiracy' of various people and public officials collaborating to remove her independence, and strongly expressed the opinion that she does not feel that she has any problems with her cognitive abilities or needs assistance with managing her affairs." But Cullum observed that "such expressions are not uncommon in individuals with dementia and reflect a lack of awareness/denial, as well as some suspiciousness or paranoid ideation." He concluded:

Based upon my interviews with Ms. Thetford and others who know her, in addition to my review of medical records and neuropsychological data, it is clear that she meets full diagnostic criteria for dementia. She demonstrates a rather severe memory impairment as well as deficits in other cognitive abilities. A diagnosis of dementia is also consistent with the impression of her primary care physician who has known her for years, and is further supported by the results of Dr. Hilborn's neuropsychological evaluation which demonstrated significant impairments across multiple cognitive ability areas, including learning and memory, language, attention, and global cognitive functioning. These findings are quite consistent with the reports of those who know her well, all of whom provided examples of her forgetting recent information and decisions she has made.
As with other individuals who are diagnosed with a neurodegenerative dementia, her condition is likely to worsen over time, and there are no effective treatments available that would significantly improve her functioning. In addition to dementia, she has significant visual and hearing impairments, which together make her functionally incapacitated and unable to provide for many of her basic needs and manage her affairs.
Activities like cooking, managing medications and finances, keeping up with bills, etc. are beyond her abilities at this point. As such, Ms. Thetford's cognitive and functional limitations would place her safety in question if she were to attempt to live and manage her affairs independently, and she is also at risk for making poor decisions and forgetting things that she has decided. It is therefore in her best interest that [sic] to have a permanent guardian to assist with management of her estate and personal needs.

         Pending conclusion of the proceedings in this Court, the trial court extended Jamie's temporary guardianship and the management trust over Verna's estate without objection from Verna, and the court of appeals granted Verna's unopposed motion to abate her appeal. We heard argument on Verna's petition for mandamus on October 10, 2018.

         On March 5, 2019, Jamie notified the trial court of a significant change in Verna's circumstances.

On February 28, 2019, caregivers at Elmcroft (formerly Brookdale), in Graham, Texas, telephoned [Jamie] to report that [Verna] was hallucinating about a fire and could not be calmed down or controlled. [Verna] was apparently seeing fires on the ceiling, on the floors, and on the walls of her room. She was attempting to physically stomp out the fire she believed she was seeing, and she was pouring water on the walls, floor, and electrical outlets. There was no fire.
Because [Verna] would not calm down, was fighting with personnel and the caregivers called to the scene, and her refusal to take medicine voluntarily, Elmcroft personnel called 911. [Verna] refused to allow the EMT's to transport her to the Graham Emergency Room or to voluntarily take medication, so a sedative was administered at the instruction of [Jamie], and [Verna] was transferred to the Graham Emergency Room.

         Deeming Verna to be a danger to herself and others, Elmcroft refused to readmit her. Several days later, Jamie managed to have Verna accepted at the James L. West Center for Dementia Care in Fort Worth. Jamie paid some $11, 000 of the transfer expenses out of her own pocket and requested the trial court to allow reimbursement from Verna's estate. Over the course of the trial and appellate proceedings, Allen and Jamie's appellate counsel have been paid over $200, 000 in attorney fees from Verna's estate. Reddell, Verna's attorney ad litem, has been paid almost $9, 000 in attorney fees from the estate. Aldrich has requested payment of over $230, 000 of attorney fees from the estate, which the trial court has denied.

         By letter dated March 15, 2019, Reddell reported to the trial court that he had spoken with Verna at the James L. West Center; that she "was unwavering" in her intention to move back to her home in Graham or to move in with Dalton and his wife; but that the Center, "a polished facility," and Jamie were providing Verna everything she needed. "I firmly believe," Reddell ...


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