Dallas Bar Association
HEADNOTES
Focus Construction/Real Property Law
August 2016 Volume 41 Number 8
DBA Wins State Bar Awards
Randy Johnston: Trial Lawyer of the Year by Alex Farr
The DBA received several awards at the State Bar of Texas Annual Meeting in June, including the Star of Achievement Award for the program “And Justice for All: Pro Bono Week,” and Headnotes was recognized for two awards, including Best News Article and Best Series of General Interest Articles. (Left to right) DBA Executive Director Cathy Maher; SBOT President Alan Dubois; Alicia Hernandez, Director of DVAP & Community Services; Jessica Smith, Communications/Media Director; and DBA President Jerry Alexander.
Focus
Construction/Real Property Law
Problems Representing Multiple Clients in Real Estate Transactions by Martin L. Camp
When does an attorney accused of malpractice win? I submit never. Oh you may ultimately prevail in court. The plaintiff might not succeed in a damage action. You might win in a grievance proceeding. But at what cost in time, money, anguish and reputation? Parties frequently own and develop real estate in entities such as LLCs and Limited Partnerships. Attorneys have to be very careful not to become “Counsel to the Situation.” The risk of grievance and malpractice claims is enhanced when the attorney does not make it clear whom he does and does not represent and what he is and is not engaged to do. Malpractice claims are generally based upon the tort of negligence. Cosgrove v. Grimes, 774 S.W.2d 662,664 (Tex. 1989). To succeed the plaintiff must show (i) duty; (ii) a breach of the duty; (iii) the breach proximately caused the injury; and (iv) damages. Id at 665. Privity is generally a requirement to show duty (attorney/client relationship). Barcelo v. Elliott, 923 S.W.2d 575,577 (Tex. 1996). When the attorney only represents one party in the transaction and all parties understand whom the attorney is representing, the likelihood of a malpractice claim is minimized. Non-clients can prevail despite the lack of privity if they can prove that the lawyer should have reasonably expected that the non-client would believe
the lawyer was representing him and the lawyer failed to advise of the non-representation. Burnap v. Linnartz, 914 S.W.2d 142, 148-49 (Tex. App.-San Antonio 1995, writ denied). Let’s look at a fact pattern that could lead to potential malpractice claims or liability if not handled property. John and Jack, as investors, and Bob, a real estate developer, visit attorney Peter. Peter has represented Jack in the past in the sale of some family land. Peter also represents Bob from time to time in his development business. The parties want Peter to draft a limited partnership agreement in which Bob will be the General Partner and John and Jack will be the limited partners. After the partnership is formed, they want Peter to represent the partnership in the purchase of an old hotel they plan to renovate. John and Jack will be asked to personally guarantee the renovation loan. Whom does or can or should Peter represent in this transaction? This depends upon the actions Peter takes to be certain he is not counsel to the situation. Failing to adequately address this conundrum and simply drafting the partnership agreement opens him up to claims in the future should the parties end up in disputes with each other or third parties. In the absence of a clearly defined role in this transaction, Peter runs the risk that all the parties will assume he is their lawyer and is representing
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Inside 6 Karen McCloud and David Kent Named Co-Chairs of Campaign 9 The New Transfer on Death Deeds in Texas 1 Adaptive Reuse: Recycling Buildings 1 7 Title Insurance 101 1
“The greatest challenge any trial lawyer faces, and for many the greatest source of internal strife, is the day you come to realize that, as a hired gun, when you “fire” someone is likely to get hurt—a successful trial lawyer is one who never fails to lose sight of that fact and who can take measured actions while still zealously representing his client.” Throughout his more than 40 years of practice, Randy Johnston, the 2016 Dallas Bar Association’s Trial Lawyer of the Year, has embraced a moral code and an approach to life both inside and outside of the courtroom that he developed as a young boy in his hometown of Pampa in the Texas Panhandle where he frequented the local cinema to watch the likes of Roy Randy Johnston Rodgers, Gene Autry and others stand up for the defenseless in the latest Westerns. “When I decided to become a lawyer, I wanted to make sure to always be one of the good guys, seeking justice and equity for my clients,” said Johnston. Johnston attended Brigham Young University on a track scholarship where he was an English major. Although he was drawn to the creativity of being a writer, and even considered a potential career in education administration, he recognized that many of the same skills could be utilized in a legal career. Johnston began attending law school at the University of Texas School of Law in 1971. “When I got to Austin, I thought I had died and gone to heaven—it is a wonderful city.” During the first five years of Johnston’s career he practiced labor and employment discrimination law at Baker Botts, but in 1979, returning to his primary passion discovered during his first year of law school, he decided to transition to a trial practice and joined the firm of Hewitt, Johnson, Swanson & Barbee in Dallas where he truly began to make his mark.
“He was the embodiment of cool, with his iconic pony tail, independence, and anti-establishment approach to practice—every young lawyer wanted to be him or work with him, and clients flocked to him because of his devotion to putting their interests first,” said longtime friend and colleague, Tom Melsheimer. “He was one of the first lawyers in town who took to suing other lawyers and did not care about what other people thought of him as long as he was pursuing justice for his clients— while that usually does not earn you many friends in the legal community, Randy did it with such grace and integrity that he ended up making even more friends!” “Randy Johnston is as fine a trial lawyer as I have seen, in practice or from the bench,” said the Honorable Marty Lowy (Fmr.). “His loyalty to his friends is fierce and unconditional. If I had to stand trial for my life, I would want Randy to be my lawyer. If I had to walk down a dark alley in the worst part of town, I know Randy would have my back.” Johnston credits Mike McKool, with whom he practiced during his time at Hewitt, Johnson, with reigning him in and teaching him to be more detail oriented, a skill Johnston admits he did not possess naturally. Johnston was also influenced by colleague Mark Davenport, a lawyer whom he shared office space with for a period of his career and who Johnston described as “the kind of guy that would take you out for a drink after defeating you in a lawsuit.” When he needs to bounce an idea of someone, Johnston periodically calls on fellow practitioners Rod Phelan and Frank Branson, as well as the Honorable Craig Smith of the 192nd Judicial District Court, who describes Johnston as not only a great trial lawyer, but also “A poet, musician,
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33rd Annual Philbin Awards Luncheon Tickets Now Available! KEYNOTE SPEAKER Jackson Walker
Friday, September 23 | Noon | Belo For tickets, log on to www.dallasbar.org