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Wilkinson v. Commission for Lawyer Discipline

Court of Appeals of Texas, Ninth District, Beaumont

July 25, 2019

KRISTIN D. WILKINSON, Appellant
v.
COMMISSION FOR LAWYER DISCIPLINE, Appellee

          Submitted on March 6, 2019

          On Appeal from the 284th District Court Montgomery County, Texas Trial Cause No. 16-09-10238-CV

          Before McKeithen, C.J., Kreger and Johnson, JJ.

          MEMORANDUM OPINION

          CHARLES KREGER JUSTICE

         Kristin D. Wilkinson appeals a final judgment of disbarment following a jury trial. See Tex. Rules Disciplinary P. R. 3.15 (Feb. 26, 1991, Oct. 9, 1991), renumbered eff. June 1, 2018.[1] In a pre-trial order granting a motion for partial summary judgment, the trial court ruled that as a matter of law, Wilkinson violated a disciplinary judgment when she drafted and executed a trust document and powers of attorney while actively suspended from the practice of law. See Tex. Disciplinary Rules Prof'l Conduct R. 8.04(a)(7) (Oct. 17, 1989), amended eff. Oct. 1, 1994, amended eff. May 1, 2018.[2] The jury found that Wilkinson engaged in conduct involving dishonesty, fraud, deceit, or misrepresentation, and that Wilkinson committed a criminal act that reflects adversely on her honesty, trustworthiness or fitness as a lawyer in other respects. See id. R. 8.04(a)(2), (3) (Oct. 17, 1989), amended eff. Oct. 1, 1994, amended eff. May 1, 2018. In the final judgment, the trial court disbarred Wilkinson as a sanction for her professional misconduct. The three issues presented by Wilkinson in her brief contend: (1) the trial court erred by denying Wilkinson's plea to the jurisdiction; (2) there were defects in the charge and legally and factually insufficient evidence to support the jury's verdict; and (3) the trial court erred by granting the Commission's partial summary judgment, in denying Wilkinson's motion for reconsideration, and in denying her motion for summary judgment and her requests for jury questions.

         Appellant's Plea to the Jurisdiction

         Wilkinson filed a post-judgment plea to the jurisdiction in which she argued that neither the Commission nor the lawyer who filed a grievance had standing to make allegations against Wilkinson on behalf of the beneficiary of the trust. Wilkinson further argued that the trial court interfered with the jurisdiction of the 190th District Court of Harris County where the beneficiary of the trust filed an action against Wilkinson. Additionally, Wilkinson challenged the Commission's jurisdiction over the acts of a trustee in the administration of a trust when that trustee was not admitted to practice law in Texas. The trial court signed an order denying the plea to the jurisdiction on November 13, 2017.

         We review a challenge to the trial court's subject matter jurisdiction de novo. Tex. Dep't of Parks & Wildlife v. Miranda, 133 S.W.3d 217, 226 (Tex. 2004). Where a plea to the jurisdiction challenges the pleadings, we determine if the pleader has alleged facts that affirmatively demonstrate the court's jurisdiction to hear the cause, construing the pleadings liberally in favor of the plaintiff and considering the plaintiff's intent. Id. If a plea to the jurisdiction challenges the existence of jurisdictional facts, we consider relevant evidence submitted by the parties when necessary to resolve the jurisdictional issues raised. Id. at 227. If the relevant evidence is undisputed or fails to raise a fact question on the jurisdictional issue, the trial court rules on the plea to the jurisdiction as a matter of law. Id. at 228. The fact finder will resolve any fact question regarding the jurisdictional issue. Id. at 227-28.

         A court's subject-matter jurisdiction traditionally consists of the power, conferred by constitutional or statutory provision, to decide the kind of claim alleged in the plaintiff's petition and to grant relief. Sierra Club v. Tex. Nat. Res. Conservation Comm'n, 26 S.W.3d 684, 687 (Tex. App.-Austin 2000), aff'd on other grounds, 70 S.W.3d 809 (Tex. 2002). The Texas Supreme Court regulates the practice of law in Texas, exercises administrative control over the state bar, and adopts rules for the discipline of state bar members. In re State Bar of Texas, 113 S.W.3d 730, 732 (Tex. 2003); see also Tex. Gov't Code Ann. § 81.011 (West 2013). Each attorney admitted to practice in Texas is subject to the disciplinary jurisdiction of the Supreme Court and the Commission. Tex. Gov't Code Ann. § 81.071 (West 2013). The Commission files the disciplinary petition in a district court of the county of the attorney's principal place of practice. See Tex. Rules Disciplinary P. R. 3.03. (Feb. 26, 1991, Oct. 9, 1991), amended eff. Oct. 1, 1994, amended eff. Jan. 1, 2004, amended eff. Oct. 1, 2012. The county in which the disciplinary action is filed is a matter of venue, not jurisdiction, and can be waived. Acevedo v. Comm'n for Lawyer Discipline, 131 S.W.3d 99, 103-04 (Tex. App.-San Antonio 2004, pet. denied). Furthermore, the Commission acts not as or on behalf of a private litigant to redress a private wrong, but as an administrative agency under the administrative control of the Supreme Court to hold an attorney accountable for professional misconduct. Id. at 104.

         On September 1, 2016, the Supreme Court appointed a judge to preside over the disciplinary action against Wilkinson to be filed in a district court of Montgomery County, Texas. The Commission filed the petition in a Montgomery County district court on September 2, 2016. See Tex. Rules Disciplinary P. R. 3.01. (Feb. 26, 1991, Oct. 9, 1991), amended eff. Jan. 1, 2004, amended eff. Oct. 1, 2012. In its petition, the Commission alleged that Wilkinson was a licensed attorney and a member of the State Bar of Texas. The Commission alleged: (1) in 2011, Wilkinson received a judgment of partially probated suspension; (2) in 2013, the Texas Board of Disciplinary Appeals issued a judgment revoking her probation and ordered that Wilkinson be actively suspended from the practice of law from July 26, 2013, to July 25, 2015; (3) Wilkinson continued to practice law while on active suspension when in August 2014, she drafted and had executed an Irrevocable Living Trust Agreement and General Power of Attorney, by which the beneficiary transferred all of her assets to a trust with Wilkinson designated as the sole trustee; (4) on April 24, 2015, Wilkinson was removed as trustee in a proceeding filed in Probate Court Number One of Harris County; and (5) approximately $650, 000 of liquid assets diminished to about $200, 000 while Wilkinson was trustee. The Commission's petition invoked the trial court's subject matter jurisdiction to adjudicate the disciplinary action against Wilkinson as an attorney licensed in Texas in the exercise of the Supreme Court's administrative control over Texas attorneys.

         Wilkinson filed a general denial without seeking a transfer to another county. Wilkinson signed her original answer as "The Wilkinson Law Firm, Kristin Wilkinson, Attorney and Counselor at Law, by: /s/ Kristin Wilkinson" under the same State Bar Number as alleged by the Commission in its petition. Although she argued in the trial court and in her appeal that the actions for which she was disciplined were not taken in her capacity as an attorney, when the Commission filed the petition at the direction of the Supreme Court, Wilkinson was an attorney licensed in Texas subject to the disciplinary jurisdiction of the Supreme Court and the Commission. See Tex. Gov't Code Ann. § 81.071. Likewise, as an attorney, Wilkinson was subject to the Texas Rules of Disciplinary Procedure and the Texas Disciplinary Rules of Professional Conduct. Id. § 81.072(d) (West Supp. 2018). Furthermore, the Commission filed the disciplinary petition as an administrative agency of the Supreme Court, not on behalf of the beneficiary of the trust or the person who initiated a grievance. See Acevedo, 131 S.W.3d at 104. As an exercise of the Supreme Court's administrative control to hold an attorney accountable for professional misconduct, the disciplinary action did not interfere with the district court's jurisdiction over the litigation relating to the trust. See id.; see generally Favaloro v. Comm'n for Lawyer Discipline, 13 S.W.3d 831, 836 (Tex. App.-Dallas 2000, no pet.) (the trial court for the disciplinary proceeding did not interfere with the jurisdiction of the court in which the lawyer filed a suit against the state bar and the grievance committee). We conclude the trial court had the power to both try and enter judgment in the disciplinary action. See Tex. Rules Disciplinary P. R. 3.03, 3.09 (Feb. 26, 1991, Oct. 9, 1991). We overrule issue one.

         Charge Error and Sufficiency of the Evidence

         1. Charge Error

         Wilkinson's second issue complains of defects in the jury charge and claims the evidence is legally and factually insufficient to sustain the jury's verdict. The trial court submitted two questions to the jury. Question One asked, "Did Kristin Wilkinson engage in conduct involving dishonesty, fraud, deceit or misrepresentation?" The trial court instructed the jury that, "[t]he term 'fraud' denotes conduct having a purpose to deceive and not merely negligent misrepresentation or failure to apprise another of relevant information." The trial court instructed the jury that

[t]he term "misrepresentation" may be defined as one or both of the following: 1) The act or an instance of making a false or misleading assertion about something, usually with the intent to deceive. The word denotes not just written or spoken words but also any other conduct that amounts to a false assertion. 2) The assertion so made; an incorrect, unfair, or false statement; an assertion that does not accord with the facts.

         Question Two asked, "Did Kristin Wilkinson commit a criminal act that reflects adversely on her honesty, trustworthiness or fitness as a lawyer in other respects?" In connection with Question Two, the trial court instructed the jury that

[i]t is a "criminal act" to intentionally, knowingly, or recklessly misapply property held as a fiduciary in a manner that involves substantial risk of loss to the owner of the property or to a person for whose benefit the property is held.
A "fiduciary" includes a trustee, an attorney in fact or agent appointed under a durable power of attorney, or any other person acting in a fiduciary capacity.
A person acts in a "fiduciary capacity" when the business she transacts, or the money or property which she handles, is not hers or for her own benefit, but for the benefit of another person with whom she has a relationship implying and necessitating great confidence and trust and a high degree of good faith.
A person acts "intentionally" with respect to the nature or result of her conduct when it is her conscious objective or desire to engage in the conduct or cause the result.
A person acts "knowingly" with respect to the nature of or the circumstances surrounding her conduct when she is aware of the nature of her conduct or that the circumstances exist or that her conduct is reasonably certain to cause the result.
A person acts "recklessly" with respect to circumstances surrounding her conduct or the result of her conduct when she is aware of but consciously disregards a substantial and unjustifiable risk that the circumstances exist or the result will occur. The risk must be of such a nature and degree that its disregard constitutes a gross deviation from the standard of care that an ordinary person would exercise under all the circumstances as viewed from the actor's standpoint.

         At Wilkinson's request, the trial court instructed the jury that

A fact may be established by direct evidence or by circumstantial evidence or both. A fact is established by direct evidence when proved by documentary evidence or by witnesses who saw the act done or heard the words spoken. A fact is established by circumstantial evidence when it may be fairly and reasonably inferred from other facts proved.
A trustee must administer the trust solely in the interest of the beneficiary.
The trustee must administer the trust as a prudent person would, in light of the purposes, terms, and other circumstances of the trust.
A trustee must take all reasonable steps to secure possession of, and maintain control over, the trust property, and use the level of care and skill a person of ordinary prudence would use to preserve trust property. This duty applies not only to tangible property, but also to other rights of the trust estate. For example, a trustee must take reasonable actions to collect claims due to the trust estate.
Although a trustee may deposit trust funds in a bank or other financial institution, the trustee must use reasonable care in selecting the institution and must designate all such deposits as trust deposits. The trustee may not subject the property to unreasonable restrictions on withdrawal or leave it in non-interest bearing accounts for unduly long periods of time. Pending investment, distribution, or payment of debts, a trustee is authorized to deposit trust funds in a bank that is subject to supervision by state or federal authorities.
A trustee shall invest and manage the trust assets solely in the interest of the beneficiaries.
A beneficiary by written demand may request the trustee to deliver to each beneficiary of the trust a written statement of accounts covering all transactions since the last accounting or since the creation of the trust, whichever is later. If the trustee fails or refuses to deliver the statement on or before the 90th day after the date the trustee receives the demand or after a longer period ordered by a court, any beneficiary of the trust may file suit to compel the trustee to deliver the statement to all beneficiaries of the trust. The court may require the trustee to deliver a written statement of account to all beneficiaries on finding that the nature of the beneficiary's interest in the trust or the effect of the administration of the trust on the beneficiary's interest is sufficient to require an accounting by the trustee. However, the trustee is not obligated or required to account to the beneficiaries of a trust more frequently than once every 12 months unless a more frequent accounting is required by the court.
Unless the terms of the trust provide otherwise, the trustee is entitled to reasonable compensation from the trust ...

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