October 2011 Headnotes

Page 1

Dallas Bar Association

HEADNOTES

Focus Tort & Insurance Law

October 2011 Volume 36 Number 10

Vision, Leadership & Commitment to Access to Justice by Alicia Hernandez

Most attorneys believe in the concept that the justice system should be open to all people. No one should be barred from seeking redress from the courts. Everyone’s voice should have the opportunity to be heard. Impartial jurists and juries of peers should make thoughtful decisions based on

fairness and the rule of law. This is, after all, America. But the road to the courthouse is perilous. It is oftentimes a slow and unsteady journey. Deadlines and details run rampant. Obstacles are thrown in the path. Laws and procedures are not clear. Courthouses are intimidating and seemingly impervious structures of brick and mortar,

Andy Payne and Jim Mitchell

Focus

flesh and blood to be respected, entrusted, and feared. Attorneys are professionals, but they have families to support, bills to pay, and have not gone unscathed by the tough economic times. And even the most reasonable legal fees are insurmountable to significant numbers of people. For those who cannot afford the journey through the legal process, they simply do not go. Their rights are not protected. They never have an opportunity to have Hon. Deborah Hankinson wrongs remedied. Those who have preyed on them proceed unchecked and unhindered on to the next victim. And, then, we have the leaders. These are the people with vision, generous hearts, and compassion. Their strong beliefs in the justice system lead them to make the road to the courthouse a reality for those who otherwise would only see it as a dream. Andy Payne and Jim Mitchell, of Payne Mitchell Law Group LLP, are two of those leaders. Plaintiff’s attorneys in

their private practices, they understand real world problems of ordinary people. They have stood up to the challenge by making a $25,000 kickoff donation to the 2012 Equal Access to Justice Campaign benefitting the Dallas Volunteer Attorney Program. Andy Payne and Jim Mitchell have donated $101,750 to the campaign since 2007. Because of their generosity, the troubles of DVAP’s clients, ordinary people simply trying to raise families, work for a living, and contribute to society as best they can, are able to open the courthouse doors and be given the equal access promised to Continued on page 15

Torts & Insurance Law

What Is A QSF And When Should It Be Used? Birth of the QSF

by Tab Keener

A Qualified Settlement Fund (QSF) allows taxpayers involved in litigation to receive settlement funds and potentially avoid tax ramifications until the funds are otherwise paid to the taxpayer. Oftentimes a QSF is used in mass tort or other types of class action litigation. A defendant or its insurer may pay money into the QSF, often through a structured settlement, and receive a release of claims by court order while multiple claimants decide upon an allocation among themselves. Insurance companies and large selfinsured businesses typically resist the use of a QSF. Their concern is magnified when a suit involves a single injury and derivative claimants (as in wrongful death and survival actions). The uncertainty is the belief that claimants may have essentially received the economic benefit of the money immediately upon payment into the QSF. The worry is that taxpayers, if taxed, would be motivated to sue the entity funding the settlement to offset the unexpected tax liability.

Structured settlements became popular in the late 1970’s and 1980’s. Insurance companies funding structured settlements became concerned that payments made to an entity, rather than the claimant, would not be tax deductible—as they clearly would be if paid to an individual. Defendants and their insurance carriers wanted to make sure that they could deduct payments in the year in which they were paid rather than when the money was distributed. Congress enacted Section 468B of the Internal Revenue Code in 1986 to address such concerns. When Section 468B was first enacted it only addressed a “Designated Settlement Fund.” Section 468B was later amended to add an additional section giving the Secretary of the Treasury additional authority to draft regulations further addressing the potential tax ramifications of such a fund. Through a series of regulations, the QSF was created. To be a QSF, a fund must first be “established pursuant to an order of, or approved by, the United States, any state (including the District of Columbia)… and is

subject to the continuing jurisdiction of that governmental authority.” Second, the fund must be “established to resolve or satisfy one or more contested or uncontested claim asserting liability…” The third and final requirement is that the fund must be a “trust under applicable state law, or its assets are otherwise segregated from the assets of the transferor (and related persons).”

Using a QSF When Only a Single Injury Is Involved Defendants and their insurers often have concern about the potential future tax liability associated with a QSF, which is afforded different tax treatment than a typical settlement annuity. A settlement annuity grows tax free to the benefit of the claimant while earnings in a QSF are taxable to the fund itself. A taxpayer could face serious tax ramifications because of the doctrines of constructive receipt and economic benefit. This is especially true in the case of a young minor child who would have many years of earnings growth. After reaching

Inside 3 Timothy Mountz Selected for Professionalism Award 9 Losers, Winners & Stowers 11 Texas Legislature Codifies The Attractive Nuisance Doctrine 13 Who Pays And How Much When Multiple Policies Apply?

the age of majority, the child could bring suit contending that she was not adequately protected through the creation and use of the QSF and should now be entitled to recover the amount of lost earnings due to unfavorable tax treatment. The risk is whether the tax benefits of a structured settlement are lost when a QSF is created and periodic payments begin that only benefit a single claimant or derivative claimants. To alleviate these problems, claimants and their attorneys may suggest providing additional indemnification and promises to execute a Compromise Settlement Agreement. Such indemnification can add to uncertainty if unfavorable tax treatment were to occur. However, no revenue ruling or regulation clearly describes how a QSF is used when dealing with a single claimant or single injury involving derivative claimants and a structured settlement funds the QSF. Until additional regulations are promulgated, at least be aware that unfavorable tax treatment is a possibility that could   HN undo a hard-fought settlement. Tab H. Keener is a Shareholder with Downs Stanford, P.C. He can be reached at tkeener@downsstanford.com.

DBA MEMBER REMINDER: Your 2012 DBA DUES STATEMENT will be mailed to your office or home on October 13, 2011. 2012 DBA DUES must be paid by December 31, 2011 to continue receiving ALL your member benefits. Thank you for your support of the Dallas Bar Association!


2 He a d n o t e s l D a l l a s B a r A s s o ciation

Calendar

October Events

OCTOBER 7-BELO Noon

October 2011

FRIDAY CLINICS

“Medicare Set Asides, Medicare Liens and Reporting Under the Medicare Secondary Payer Act,” Sally Stalcup. (MCLE 1.00)*

Visit www.dallasbar.org for updates on Friday Clinics and other CLEs.

MONDAY, OCTOBER 17 Noon

OCTOBER 14-NORTH DALLAS** Noon

“Collaborative Law: A Legislative Update and Creative Uses of the Process for Lawyers,” Aimee Pingenot and Chris Farish. (MCLE 1.00)* At Two Lincoln Centre, 5420 Lyndon B. Johnson Frwy., Dallas, TX 75240. Parking is available in the Visitor’s Lot located in front of the entrance to Two and Three Lincoln Centre. There are several delis within the building. Food is allowed inside the Conference Center. Thank you to our sponsor Griffith Nixon Davison P.C. RSVP to kzack@dallasbar.org.

MONDAY, OCTOBER 3 Noon

Tax Law Section “Nuts & Bolts of Partnership Tax Drafting,” John A. Eliason. (MCLE 1.00)*

Legislative Forum Speakers Rep. Rafael Anchia and Sen. John Carona. Sponsored by the Public Forum Committee.

Peer Assistance Committee

TUESDAY, OCTOBER 4 Noon

Corporate Counsel Section “A New World for Whistleblowers - The Anatomy of a Dodd-Frank Bounty Hunter Claim and the Ethical Implications for In-House Counsel,” Roger W. Bivans. (MCLE 1.00, Ethics 0.50)*

Government Law Section “Hi, We’re Here to Help You! Selected Ethics Issues for Local & State Government Lawyers Arising in Federal Criminal Investigations and Prosecutions,” Pete Haskel. (Ethics 1.00)* Tort & Insurance Practice Law Section “Recent Legislative Changes and the Escabedo Case,” Mary Margaret Black, Brian Lauten, Kirk Pittard, Tex Quesada, Dick Sayles, Paula Sweeney and William Toles. (Ethics 1.00)* Morris Harrell Professionalism Committee

6:30 p.m. Annual Evening Ethics Program “Annual Evening Ethics Program,” John Browning, Bob Davis, Laura Benitez Geisler, Frank E. Stevenson II, Mark Shank, Nancy Thursby and Justice Kerry FitzGerald, moderator. Free for DBA members, $90 for non-members. RSVP required, contact kzack@dallasbar.org. (Ethics 3.00)*

DAYL Board of Director’s Meeting

WEDNESDAY, OCTOBER 5 Noon

FRIDAY, OCTOBER 7 Noon

Friday Clinic – Belo “Medicare Set Asides, Medicare Liens and Reporting Under the Medicare Secondary Payer Act,” Sally Stalcup. (MCLE 1.00)*

Transition to Law Practice Committee “Legal Writing for the Beginning Lawyer,” Chad Baruch. All are welcome. (MCLE 1.00)*

MONDAY, OCTOBER 10 Noon

Alternative Dispute Section “Mediating Consumer Debt Cases-Credit Cards and Foreclosure, Attorney’s Perspective,” Maureen Kersey, Esq. (MCLE 1.00)* Real Property Law Section “Oil and Gas Law for Real Estate Lawyers,” Eric C. Camp. (MCLE 1.00)* DAYL Foundation Board Meeting

TUESDAY, OCTOBER 11 Noon

Business Litigation Section Topic Not Yet Available

Mergers & Acquisitions Section “Joint Venture Issues and Structuring,” Rodney Moore. (MCLE 1.00)*

DAYL Equal Access to Justice Committee

5:30 p.m. Dallas Women Lawyers Association Louise Raggio DWLA Judicial Reception at the Mansion at Turtle Creek. 6:00 p.m. Home Project Committee

WEDNESDAY, OCTOBER 12

7:45 a.m. Dallas Area Real Estate Lawyers Discussion Group Noon

Family Law Section “What Family Law Attorneys Need To Know About Subpoenaing Health Records,” Hon. Dennise Garcia and Brandon Kulwicki. (MCLE 1.00)*

Employee Benefits & Executive Compensation Section “Compliance Update: What’s Required by YearEnd?” Jared Pope. (MCLE 1.00)*

House Committee Walk Through

Public Forum Committee

DAYL Judiciary Committee

DAYL Lunch & Learn. For more information contact cherieh@dayl.com.

5:15

LegalLine—Volunteers welcome. Second floor Belo.

5:00 p.m. Bankruptcy & Commercial Law Section “Bankruptcy Trustee Panel Presentation,” Erin Lovall, Jeffrey H. Mims, Daniel J. “Corky” Sherman and Robert Yaquinto, Jr. (MCLE 1.00)* 5:30 p.m. 20th Annual Employment Law Evening Seminar “Recent Case Law and Statutory Developments,” Hal K. Gillespie and Mark A. Shank. Registration $20. RSVP to bkyle@littler.com. (MCLE 1.50)* 6:00 p.m. DAYL Annual Meeting

THURSDAY, OCTOBER 6

8:00 a.m. From Yellow Pages to Facebook Pages An exciting FREE legal media training program brought to you by Androvett Legal Media & Marketing and the DBA Media Relations Committee. Speakers: Mike Androvett, Verdell Christophersen, Gene Major, Pat Rafferty and Scott Parks. (MCLE 3.50, including Ethics 1.00)* Free for members. Non-members: $35. RSVP to jsmith@dallasbar.org. Noon

Construction Law Section “Learning to Color With the Black and White Crayons - Not the Gray Ones. Ethical Issues That Arise in Representing Construction Companies,” Jeffrey Brannen. (MCLE 1.00)*

Judiciary Committee “A Conversation with Judge Jane Boyle and Judge Reed O’Connor.” (MCLE 1.00)*

Family Law Section Board Meeting

E-Mentoring Committee

DAYL CLE Committee

St. Thomas More Society

THURSDAY, OCTOBER 13 11:30 a.m. DAYL Barristers for Babies Noon

28th Annual Stephen Philbin Awards Luncheon Recognizing Excellence in Legal Reporting. Keynote speaker Thomas A. Mesereau, Jr. (MCLE 1.00, Ethics 0.50)* Tickets $40. Tables $400. Register online at www.dallasbar.org/philbins. Labor & Employment Law Section “Arbitration of Employment Cases From the Arbitrator’s Perspective,” Alyson Brown, Keith Clouse, Cecilia Morgan and Karen Willcutts. (MCLE 1.00)*

TUESDAY, OCTOBER 18 Noon

Franchise & Distribution Section “Trade Dress Protection and Enforcement in Franchising,” Paul Russell. (MCLE 1.00)*

International Law Section Topic Not Yet Available

Law in the Schools Committee

DAYL Elder Law Committee

DAYL Animal Welfare Committee

DVAP New Lawyer Luncheon. For more information, contact reed-brownc@lanwt.org.

E-Mentoring Committee

6:00 p.m. J.L. Turner Legal Association

FRIDAY, OCTOBER 14

8:00 a.m. Annual Conference of the Professions “Professional Ethics and Social Networking: Like?” Carrie James, Ph.D. at Prothro Hall, SMU School of Law. (Ethics 3.00)* For more information or to register, log on to www.smu.edu/Provost/Ethics/ NewsRoom/Events/COP.aspx. Noon

Friday Clinic – North Dallas** “Collaborative Law: A Legislative Update and Creative Uses of the Process for Lawyers,” Aimee Pingenot and Chris Farish. (MCLE 1.00)* At Two Lincoln Centre, 5420 Lyndon B. Johnson Frwy., Dallas, TX 75240. Parking is available in the Visitor’s Lot located in front of the entrance to Two and Three Lincoln Centre. There are several delis within the building. Food is allowed inside the Conference Center. Thank you to our sponsor Griffith Nixon Davison P.C. RSVP to kzack@dallasbar.org.

Trial Skills Section “Selecting a Jury in the 21st Century,” David Beck. (MCLE 1.00)*

Celebrate Pro Bono Week—“Texas C-Bar Presentation,” co-sponsored by the Dallas Volunteer Attorney Program and Texas C-Bar. (MCLE 1.00)*

American Immigration Lawyers Association

5:00 p.m. DVAP Belo Legal Clinic. For more information, contact reed-brownc@lanwt.org. 6:00 p.m. Dallas Hispanic Bar Association

WEDNESDAY, OCTOBER 26

7:45 a.m. Dallas Area Real Estate Lawyers Discussion Group Noon

Legal Ethics Committee

Celebrate Pro Bono Week—“Human Trafficking 101: Recognizing and Addressing Modern Day Slavery in Your Family, Employment, and Criminal Law Cases,” co-sponsored by the Dallas Volunteer Attorney Program and Mosaic Family Services. (MCLE 1.00)*

Noon

Energy Law Section “Wind Energy,” Becky Diffen. (MCLE 1.00)*

Noon

Environmental Law Section “Gas Drilling Issues for the City of Dallas,” Kris Sweckard. (MCLE 1.00)*

Health Law Section “An Overview and Update on Litigation and Issues Involving Privacy of Health Records,” Katie DolanGalaviz. (MCLE 1.00)*

Noon

Criminal Law Section “Prosecution of Child Pornography Cases,” Asst. US Attorney Camille Sparks. (MCLE 10.00)*

Law Day Committee

Mentoring Committee

Library Committee

Senior Lawyers Committee

Pro Bono Activities Committee

DAYL Young In-House Lawyers CLE

Celebrate Pro Bono Week—“How to Do a Pro Bono Texas Divorce,” co-sponsored by the Dallas Volunteer Attorney Program and DAYL Equal Access to Justice Committee. (MCLE 1.00)*

Municipal Justice Bar Association

5:15

LegalLine—Volunteers welcome. Second floor Belo.

Non-Profit Law Study Group

THURSDAY, OCTOBER 20 Noon

Minority Participation Committee

Christian Legal Society

Dallas Gay & Lesbian Bar Association

3:30 p.m. DBA Board of Directors

FRIDAY, OCTOBER 21

Probate, Trusts & Estates Section “Probate Litigation: Top Ten Mistakes of Estate Planners,” Jim Hartnett Jr. (MCLE 1.00)*

5:30 p.m. Pro Bono Awards This star-studded event is hosted by the Dallas Volunteer Attorney Program. RSVP to gosalj@lanwt.org.

CLE Committee

Christian Lawyers Fellowship

Noon

11:30 a.m. Financial Literacy Townhall Meeting “Free financial forum,” Rosa Rios, Alfreda Norman, Ilyce Glink, Pamela Yip and Todd Mark. Open to the public. Sponsored by DBA Public Forum Committee ad CCCS of Greater Dallas.

5:30 p.m. Sarah T. Hughes Reception. Sponsored by the Dallas Bar Foundation. For more information, contact ephilipp@dallasbar.org.

TUESDAY, OCTOBER 25

WEDNESDAY, OCTOBER 19

Solo & Small Firm Section “Practical Tips for the Tech-Savvy Small Law Office (pt. 2),” Christine Krupa Downs and John H. Phillips. (MCLE 1.00)*

Publications Committee

Celebrate Pro Bono Week—“A Family Law Primer for NonFamily Law (Pro Bono) Attorneys,” co-sponsored by the Dallas Volunteer Attorney Program and City Square Legal Action Works. (MCLE 1.00)*

8:30 a.m. Criminal Justice Forum Featured Speakers: Barry Sorrels, Hon. Cathy Cochran and Craig Watkins. (MCLE 6.50, Ethics 1.00)* Register online at www.dallasbar.org. Cosponsored by the CLE Committee.

MONDAY, OCTOBER 24 Noon

Computer Law Section Topic Not Yet Available

Securities Section “PwC Securities Litigation Study Update,” Doug Branch and Lawrence F. Ranallo. (MCLE 1.00)*

THURSDAY, OCTOBER 27

6:00 p.m. An Evening With David Brooks Benefiting the Sarah T. Hughes Diversity Scholarships. Dinner presented by Comerica Bank and Reception presented by Ernst & Young. Hosted by the Dallas Bar Foundation. Tickets $300. To purchase, call (214) 220-7487.

FRIDAY, OCTOBER 28

9:00 a.m. Celebrate Pro Bono Week—Will Intake Clinic, co-sponsored by the Dallas Volunteer Attorney Program and The Senior Source. (MCLE 1.00)* Noon

Intellectual Property Law Section “Copyright Law & The Music Business: Terminations, Renewals and Contract Disputes,” Tamara Bennett. (MCLE 1.00)*

Celebrate Pro Bono Week—“Assisting Clients With Disabilities in Medicaid Hearings,” co-sponsored by the Dallas Volunteer Attorney Program and Disability Rights of Texas. (MCLE 1.00)*

1:00 p.m. Sports & Entertainment Section “Sports Law Bootcamp,”at Hully & Mo’s in the Quadrangle. (MCLE 4.00)*

MONDAY, OCTOBER 31

9:00 a.m. DBA Blood Drive. Save a life—donate today! For more information, contact mdilda@dallasbar.org. Noon

DAYL Solo & Small Firm Committee

If special arrangements are required for a person with disabilities to attend a particular seminar, please contact Cathy Maher at 214/220-7401 as soon as possible and no later than two business days before the seminar. All Continuing Legal Education Programs Co-Sponsored by the DALLAS BAR FOUNDATION. *For confirmation of State Bar of Texas MCLE approval, please call Teddi Rivas at the DBA office at 214/220-7447. **For information on the location of this month’s North Dallas Friday Clinic, contact KZack@dallasbar.org.


October 2011

D al l as Bar A ssoci ati on l Headnotes 3

Tim Mountz Selected for Professionalism Award by Timothy G. Ackermann

Tim Mountz was not the first President of the Dallas Bar Association to give away the keys to a Habitat for Humanity home built by members of our bar, nor the last. He wasn’t the first to get his hands dirty (I have pictures), nor the last. But he was our President the year that I co-chaired the Home Project Committee and had the honor of standing next to him. We were proud of our profession that day. We presented a four-bedroom house built and paid for by our members and other members of the legal community to a family who had worked and sweated alongside Tim and other members of the bar. And as the bar’s President, he was proud of what we had accomplished. We now recognize Timothy W. Mountz for his own considerable talents, accomplishments and character. A former Dallas Bar Association President, Mountz is the 2011 recipient of the Morris Harrell Professionalism Award. The Dallas Bar Association and the Texas Center for Legal Ethics and Professionalism present this award annually to the “attorney who best exemplifies, by conduct and character, truly professional traits who others seek to emulate and who all in the bar admire.” Mountz will receive the award at the DBA’s Annual Meeting on Friday afternoon, November 4, 2011, at the Belo Mansion. Mountz first practiced law, after graduating law school in 1979, with Morris Harrell, the namesake and first recipient of this award. For 18 years, at Rain Harrell Emory Young & Doke, and at the firm’s successor, Locke Purnell Rain Harrell, P.C., Mountz was proud to represent clients and practice law with Harrell. Doing so, Mountz has said, “left an indelible stamp on me, and made me feel good about the practice of law at the end of every day.” Colleagues of Mountz and Harrell certainly appreciate the symbolism in Mountz

winning an award named for his mentor. Brad C. Weber, the Chair of Board of Directors of the Dallas Bar Association, noted that Mountz “learned how to be a true professional from practicing law with Mr. Harrell.” Weber added: “This award will mean so much to Tim, in part because it’s named after Tim’s great mentor, Morris Harrell.” “Morris Harrell certainly would agree that Tim is deserving of this award,” said Timothy W. Mountz former Dallas Bar Association President Harriet Miers. “He would be thrilled that Tim is receiving it, as am I.” Ambassador Robert W. Jordan remarked that “Tim displays the same devotion to professionalism that we admired so much in Morris, in both his advocacy for clients and in his bar leadership. I know Morris would be tremendously proud of Tim for receiving this honor bearing his name.” Mountz was born in Louisville, Kentucky and graduated from high school there in 1973 where he was elected president of his senior class and voted “Most Likely to Succeed.” He came to Dallas to attend Southern Methodist University and received a B.A., with high honors. At Duke Law School, he enjoyed the trial advocacy and moot court programs, and worked for two years on the Duke Law Journal’s Editorial Board. While in law school, Mountz formed what he has called “his first equity partnership”— marrying Janet Lee Taylor. They have two daughters, Christina and Taylor Anne. Although Mountz was the first lawyer in his immediate family, Mountz had the benefit of sound counsel of another lawyer, his fatherin-law, Robert C. Taylor, who suggested he consider Harrell’s firm when Mountz was interviewing. And when it comes to service, Mountz recognizes the example set by his own father.

Wade Mountz is the former CEO of a large hospital system who served as president of the American Hospital Association, and was recently inducted into the Health Care Hall of Fame. Mountz’s own record of service and bar leadership, moreover, is extensive. He is a former President of the Dallas Association of Young Lawyers and was also Chair of the Board of the Texas Young Lawyers Association, serving on that board for five years. Mountz joined Baker Botts L.L.P. in 1997, where his practice focuses on professional liability litigation, securities litigation, SEC investigations and enforcement proceedings and complex business litigation. While practicing there, he has been recognized many times as a “Texas Super Lawyer,” and been included many times in The Best Lawyers in America. After joining Baker Botts, Mountz continued his service to the bar. In 1997, he began over 10 years of service on the Dallas Bar Association’s Board of Directors, and served as its Chair in 2001. He also recently served for five years on the Board of Directors of the State Bar of Texas, receiving a Presidential Citation for his service.

He was also, of course, the 2005 President of the Dallas Bar Association. Mountz focused his presidency on the core values of professionalism and service. To promote those values, the Dallas Bar Association sponsored two key programs. The first program, described by Weber “one of Tim’s greatest accomplishments as DBA President,” focused on new lawyers and included discussion groups in which law students were presented with legal situations involving professionalism issues. The second program, for the Dallas legal community generally, included judicial panels and an interactive ethics program sponsored by the Texas Center for Legal Ethics & Professionalism. “I can’t think of a person more deserving than Tim Mountz to receive the Morris Harrell Professionalism Award,” said Weber. We congratulate him on this well  HN deserved award. Tim Ackermann practices patent, trademark and copyright law at The Ackermann Law Firm. He is Co-Chair of the Publications Committee of the Dallas Bar Association. He can be contacted at tim@ ackermannlaw.com.


4 He a d n o t e s l D a l l a s B a r A s s o ciation

October 2011

Headnotes

President's Column

Honoring the Profession by BARRY SORRELS

The 36th Annual Hispanic National Bar Association Convention was held recently in Dallas and we were pleased to have been a part of it.

Hispanic National Bar Association Convention

With the help of the Dallas Hispanic Bar Association (DHBA), we welcomed lawyers, legal scholars, politicians, and celebrities from across the nation into our city and into our legal community. The CLE programming at this convention was top-notch. I was fortunate to be a part of a program in which Kacy Miller, President of Courtroom Logic Consulting, interviewed Jose Baez, the criminal defense attorney who tried the Casey Anthony trial. He spoke about jury selection in the trial, while Fox News regular, Geraldo Rivera provided insights about the media coverage of the trial. It was very interesting to see these two men juxtaposed: one who tries the case in the court of law and the other who discusses the case in the court of public opinion. Truly, this panel was only one of many excellent presentations put on by the HNBA. The convention was a mighty success thanks to the hard work of Judge Teresa Guerra-Snelson, president of the DHBA, and Christie Villarreal, counsel for AT&T Services in Austin, who co-chaired the Host Committee. I congratulate them on their efforts in organizing the events of the convention and getting the DBA involved. With their help, we were able to host the convention’s opening reception with HNBA Board of Governors and members of the DHBA at the Belo Mansion. This event was well-attended by the HNBA Board and DHBA members; importantly, also present were the DBA Board of Directors including officers who preside over our sister bar associations. I am grateful for the attendance of our DBA board members; it is critical we take advantage of these opportunities to actively support the inclusion of minority bar associations and promote diversity within the legal community of our city. October is a big month this year at the Dallas Bar Association. We have three signature events which I am really looking forward to: the Androvett Legal Media and Marketing Seminar, the Stephen Philbin Awards, and the Criminal Justice Forum.

Androvett Legal Media & Marketing

On October 6, at the Belo Mansion, we are hosting the second half of the training seminar put on by Androvett Legal Media & Marketing. The first half was a media training seminar to help lawyers capitalize on opportunities to speak with members of the media. This half-day session will focus on how to market your firm in the information age. What I really like about this program is that it is one of those CLE’s you would have to pay a lot of money to attend if you weren’t a member of the Dallas Bar Association. I hope that you will take advantage of this great opportunity to learn skills that will help you grow your practice. I will be there, and I hope to see many of you there, too. To register, contact jsmith@dallasbar.org.

Stephen Philbin Awards

Each year, the DBA honors members of the media and presents awards for their achievements in reporting legal stories and issues. Media coverage of the law includes everything from proposed legislation to courtroom drama and jury verdicts. The media informs the general public of what’s happening in the legal world and how it might affect them. Good legal reporting educates the public and checks the power of government. Journalists and reporters, in their exercise of the First Amendment of the U.S. Constitution, keep our society strong and free; I am looking forward to celebrating their contributions at the Philbin Awards on October 17. This year, the keynote speaker is Tom Mesereau, the California criminal defense attorney who represented Michael Jackson to multiple acquittals in a highly publicized trial. He is nationally famous for that trial work in particular, but he also spends a great deal of his time and resources providing free legal services and counseling to the poor. As a criminal defense attorney, I am as impressed by his skills in the courtroom as his commitment to seeing that the poor and disenfranchised receive competent legal representation. His efforts in the courtroom and outside the courtroom help protect and strengthen our Sixth Amendment right to assistance of counsel in criminal prosecutions. As a sentinel for the Sixth Amendment who has faced intense media exposure throughout his legal career, I am excited to hear what he will say about the journalists who guard our First Amendment. Purchase your tickets at www.dallasbar.org/philbins.

Criminal Justice Forum

Later that week, on October 21, the Dallas Bar Association is hosting a Criminal Justice Forum. Judges, prosecutors, and defense attorneys who practice at Frank Crowley Courthouse are coming together in a summit-style CLE to collaborate on implementing new methods and procedures to improve the criminal justice system in Dallas County. I am pleased to announce participation from Dallas County District Attorney Craig Watkins, Texas Court of Criminal Appeals Judge Cathy Cochran, District Clerk Gary Fitzsimmons, and County Clerk John Warren. At least 10 sitting Dallas County judges will be participating in presentations and panels. We are lucky to practice law in a county in which the district attorney, criminal district court judges, county criminal court judges, and defense attorneys are willing to engage in a dialogue about working together on the system. Thanks to all of you who have agreed to participate, and thanks to Bruce Anton, of Sorrels Udashen & Anton; Hon. Roberto Canas, Jr., County Criminal Court No. 10; Hon. Elizabeth Crowder, Criminal District Court No. 7; Hon. Carter Thompson, Criminal District Court No. 5; and Dallas County Public Defender Lynn Pride Richardson; for their work as co-chairs of the Criminal Justice Forum. I expect we will have a good turnout. Please register at www.dallasbar.org to   HN attend this free event.

SAVE THE DATE to join us for the Dallas Bar Association’s

Fall Fiesta

honoring our Newest DBA members & Newly Licensed Attorneys!

Tuesday, November 15, 2011 5:30pm to 8:00pm The Belo Mansion For more information or to become a Sponsor, please contact Kim Watson kwatson@dallasbar.org or (214) 220-7414

Published by: DALLAS BAR ASSOCIATION 2101 Ross Avenue Dallas, Texas 75201 Phone: (214) 220-7400 Fax: (214) 220-7465 Website: www.dallasbar.org Established 1873 The DBA’s purpose is to serve and support the legal profession in Dallas and to promote good relations among lawyers, the judiciary, and the community. OFFICERS President: Barry Sorrels President-Elect: Paul K. Stafford First Vice President: Sally Crawford Second Vice President: Scott McElhaney Secretary-Treasurer: Sean Hamada Immediate Past President: Ike Vanden Eykel Directors: Brad C. Weber (Chair), Jerry C. Alexander (Vice Chair), Kim Askew (At-Large), Penny Brobst Blackwell (President, Dallas Association of Young Lawyers), Eric Blue (President, J.L. Turner Legal Association), Hon. Rob Canas ( Judicial At-Large), Wm. Frank Carroll, Rob Crain, Laura Benitez Geisler, Hon. Martin Hoffman, Michael K. Hurst, Monica Latin (At-Large), Karen McCloud, Eunice Kim Nakamura (President, Dallas Asian American Bar Association), Mary Scott, Hon. Teresa Guerra Snelson (President, Dallas Hispanic Bar Association), Diane M. Sumoski; and Michele Wong Krause. Advisory Directors: Chip Brooker (President-Elect, Dallas Association of Young Lawyers, Victor N. Corpuz (President-Elect, Dallas Asian American Bar Association), Lori Hayward (President-Elect, J.L. Turner Legal Association) and Carlos Morales (President-Elect, Dallas Hispanic Bar Association). Delegates, American Bar Association: Rhonda Hunter, Hon. Douglas S. Lang Directors, State Bar of Texas: Andy Payne, Christina Melton Crain, Beverly Bell Godbey, Frank E. Stevenson, II, Ike Vanden Eykel HEADNOTES Executive Director/Executive Editor: Catharine M. Maher Communications / Media Director & Headnotes Editor: Jessica D. Smith In the News: Judi Smalling Art Director: Thomas Phillips Advertising: Karla Howes PUBLICATIONS COMMITTEE Co-Chairs: Vincent J. Allen and Timothy G. Ackermann Vice-Chairs: Lea N. Clinton and Natalie L. Arbaugh Members: H. Joseph Acosta, Kevin Afghani, Nelson Akinrinade, Vance L. Beagles, Jason Bloom, Barbara Boudreaux, Jeremy Camp, Noel Chakkalakal, Y.W. Peter Chen, Ryan Cosgrove, Sally Crawford, Weston Davis, Pat Driscoll, David Drummer, Dawn E. Fowler, Jennifer Gajak, Constance Hall, James Holbrook, Dyan House, Victor Johnson, Harold Jones, Adam Kielich, Michelle Koledi, Cherika Latham, Jamie McKey, Patrick McLain, Thomas L. Mighell, Clay Miller, Jennifer Mitchell, Heather Bailey New, Emmanuel Obi, Jenna Page, Kirk L. Pittard, Elizabeth Pletan, Irina B. Plumlee, Laura Anne Pohli, Robert Ramage, Juan Renteria, Bryon Romine, John Roper, Gregory W. Sampson, Mary Scott, Barry Sorrels, Thad Spalding, Paul K. Stafford, John C. Stevenson, Amy E. Stewart, Scott Stolley, Roxana Sullivan, Sherry Talton, Peter S. Vogel, Suzanne R. Westerheim, Elisabeth Wilson, Sarah Q. Wirskye, Sarah Woodell, Angela Zambrano and Viktoria Ziebarth DBA & DBF STAFF Executive Director: Catharine M. Maher Accounting Assistant: Shawna Bush Communications / Media Director: Jessica D. Smith Controller: Sherri Evans Director of Community Services: Alicia Hernandez Events Coordinator: Rhonda Thornton Executive Assistant: Michelle Dilda Executive Director, DBF: Elizabeth Philipp LRS Program Assistant: Biridiana Avina LRS Interviewer: Marcela Mejia Law-Related Education & Programs Coordinator: Amy E. Smith Membership Coordinator: Kimberly Watson Projects Coordinator: Kathryn Zack Publications Coordinator: Judi Smalling Receptionist/Staff Assistant: Teddi Rivas DALLAS VOLUNTEER ATTORNEY PROGRAM Director: Alicia Hernandez Managing Attorney: Michelle Alden Volunteer Recruiter: Chris Reed-Brown Paralegals: Whitney Breheny, Lakeshia McMillan, Andrew Musquiz, Jigna Gosal, Tina Douglas Data Entry/Office Support: Patsy Quinn Copyright Dallas Bar Association 2011. All rights reserved. No reproduction of any portion of this publication is allowed without written permission from publisher. Headnotes serves the membership of the DBA and, as such, editorial submissions from members are welcome. The Executive Editor, Editor, and Publications Committee reserve the right to select editorial content to be published. Please submit article text via e-mail to jsmith@dallasbar. org (Communications Director) at least 45 days in advance of publication. Feature articles should be no longer than 750 words. DISCLAIMER: All legal content appearing in Headnotes is for informational and educational purposes and is not intended as legal advice. Opinions expressed in articles are not necessarily those of the Dallas Bar Association. All advertising shall be placed in Dallas Bar Association Headnotes at the Dallas Bar Associationís sole discretion. Headnotes (ISSN 1057-0144) is published monthly by the Dallas Bar Association, 2101 Ross Ave., Dallas, TX 75201. Non-member subscription rate is $30 per year. Single copy price is $2.50, including handling. Periodicals postage paid at Dallas, Texas 75260. POSTMASTER: Send address changes to Headnotes, 2101 Ross Ave., Dallas, TX 75201.


October 2011

Focus

D al l as Bar A ssoci ati on l Headnotes 5

Tort & Insurance Law

What the Insurance Code Giveth, the Courts Cannot Taketh Away by Robert M. Hoffman and Jaclyn M. O’Sullivan

Several appellate decisions indicate that policy proceeds alone cannot be trebled under the Texas Insurance Code (TIC). This article explains where these decisions went wrong. The insurance code provides a private cause of action for unfair or deceptive insurance practices, whereby insureds can recover actual damages and attorney’s fees (as well as other relief the court deems proper). TIC § 541.060. Insureds can also recover an additional two times the amount of actual damages for knowing violations. TIC § 541.152(b). In Great American v. AFS/IBEX Financial Services, 612 F.3d 800, 808 (5th Cir. 2010), the district court found coverage under the policy but dismissed the Section 541 claims because the insured “failed to plead and prove injuries separate from those that flowed from” the insurer’s breach of contract (i.e., no injury beyond policy proceeds). On appeal, the insured argued that it did not need to prove a separate injury to maintain its extra-contractual claims and that the insurer’s denial of insurance proceeds, standing alone, entitled it to recover on its extra-contractual claims. The Fifth Circuit disagreed. The only support cited was Parkans International LLC v. Zurich Insurance Co., 299 F.3d 514, 519 (5th Cir. 2002), a case where the Fifth Circuit found no policy coverage and, understandably, held that the insured must prove damages independent of policy proceeds to recover on its extra-contractual claims. Such is the law in Texas—if there is no policy coverage then TIC claims fail without an independent injury. But in Great American, coverage did in fact exist.

EVENING ETHICS Tuesday, October 4 6:30 to 9:30 p.m. At the Belo Mansion (Ethics 3.00)

SPEAKERS • John Browning • Bob Davis • Laura Benitez Geisler • • Frank E. Stevenson II • Mark Shank • • Nancy Thursby • Justice Kerry FitzGerald (moderator)

No charge for DBA members. ($90 for non-members). $10 light buffet available. RSVP is required. Contact kzack@dallasbar.org.

BELO LEGAL CLINIC II Tuesday, October 25 From 5 to 9 p.m. At the Belo Mansion VOLUNTEERS NEEDED! Bilingual attorneys and support (Spanish Language) are needed. Lawyers report at 6:15 p.m. to provide legal advice to those who cannot afford an attorney. Paralegal and law student volunteers report at 5:00 p.m. to perform intake/financial screening and assist with clinic coordination. Mentor-attorneys will be available to assist. Sponsored by the Dallas Volunteer Attorney Program, a joint project of the Dallas Bar Association and Legal Aid of NorthWest Texas. To volunteer, contact Chris Reed-Brown, DVAP recruiter, at (214) 243-2243 or reed-brownc@lanwt.org.

Other courts also confused this issue by extrapolating Provident American Insurance Co. v. Castañeda, 988 S.W.2d 189 (Tex. 1998) beyond its holding. There, the insured sued under the TIC, but the court found that the insurer had a reasonable basis to deny the claim. The court addressed whether the insured was entitled to recover damages equivalent to policy benefits if the insurer failed to acknowledge communications about the claim or to adopt reasonable standards for investigating claims (both prohibited under the TIC). The court observed that, where the insurer did not wrongfully deny coverage, such conduct must be a producing cause of damages separate from those otherwise resulting from a wrongful denial. Thus, Castañeda stands for the unremarkable proposition that when a coverage denial is not actionable under the TIC, then an insured must prove damages independent of policy proceeds. The leading Texas Supreme Court decision addressing multiplied damages based on a finding of a knowing violation is Vail v.

Texas Farm Bureau Mutual Insurance Co., 754 S.W.2d 129 (Tex. 1988). In Vail, the policyholders sued for breach of contract and violations of the TIC. The jury awarded unpaid policy benefits as actual damages; then, upon a knowing finding, trebled that amount. The insurer argued that the policyholders could not recover under the TIC because “the amount due under the policy solely represents damages for breach of contract and does not constitute actual damages in relation to a claim of unfair claims settlement practice.” The court disagreed, holding that “an insurer’s unfair refusal to pay the insured’s claim causes damages as a matter of law in at least the amount of the policy benefits wrongfully withheld.” The court reasoned that “[i]t would be incongruous to bar an insured— who has paid premiums and is entitled to protection under the policy—from recovering damages when the insurer wrongfully refuses to pay a valid claim. Such a result would be in contravention of the remedial purposes of the DTPA and the Insurance Code.” In Twin City Fire Insurance Co. v.

Davis, 904 S.W.2d 663, 666 (Tex. 1995), the court held that the insured’s breach of contract damages would not support a claim for breach of the duty of good faith and fair dealing (and related punitive damages). The insured argued that this contradicted Vail, but the court disagreed. “Vail was only concerned with the insurer’s argument that policy benefits improperly withheld were not ‘actual damages in relation to a claim of unfair claims settlement practices.’ In rejecting the insurer’s argument, we held that policy benefits wrongfully withheld were indeed actual damages under the DTPA and Insurance Code.” Vail remains good law today. When carriers wrongfully deny coverage, policy proceeds are “actual damages” and can be trebled in the advent of knowing viola  HN tions. Rob Hoffman is a partner at Gardere Wynne Sewell LLP and Jaclyn O’Sullivan is a third year student at SMU’s Dedman School of Law. They can be reached at rhoffman@gardere.com and josullivan@smu.edu, respectively.


6 H e a d n o t e s l D a l l a s B a r A s s o ciation

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8 He a d n o t e s l D a l l a s B a r A s s o ciation

October 2011

The Art of Insurance by Jamie K. Baker

Art collectors and exhibitors face insurance issues when newly-discovered artworks by famous artists are found to be fakes. Likewise, insurance is a significant issue when ownership of Nazi-era stolen art is questioned or an art heist occurs. The FBI estimates that art crime is responsible for $6 billion in losses annually worldwide. D. Steinberg, The $25 Billion Art Move, (Wall Street Journal, June 24, 2011). These stories make the headlines, yet title disputes, art destroyed in transit and commercial entrustment issues are more often at the core of art insurance claims. Individual collectors, galleries, museums, universities, corporations and auction houses all have different insurance needs. For the private collector with artworks valued above $200,000, fine art insurance offers greater protection than a standard homeowner’s policy, including worldwide coverage and coverage for breakage. For all categories of insureds, one issue that arises particularly with a theft or loss claim is the proper valuation of the artwork. Appraisal is integral in

obtaining proper coverage. It is advisable to insure an art collection based not on a fixed figure, but instead at market value which can increase over time. In the event of theft or loss, insurance benefits will be calculated on the amount for which the artwork could have been sold on the date of loss, rather than the historical (likely lower) purchase price. Insurers and collectors may alternatively agree to submit the issue of valuation to an appraiser at the time of loss. It should be noted that third party expert opinions on art valuation, and even authorship, are not foolproof. For example, in Hahn v. Duveen, 234 N.Y.S. 185 (N.Y. Sup. Ct. 1929), the experts disagreed whether Leonardo DaVinci painted the defendant’s painting. In fact, experts seem to uniformly agree that for insurance purposes, art valuation can be a significant challenge. Industry consensus on value may change with time and trends. The insured should give special attention to a policy’s valuation clause to avoid uncertainty when a loss occurs. Different insureds may also have different needs resulting from the different risks implicated. For galleries and museums, art insurance needs may involve a

ABA Coming to Dallas in 2013!

combination of property, general liability and title insurance protections. For these institutions, art losses can implicate very different and unusual risks, particularly regarding works on loan or in transit. For auction and consignment houses, special issues of entrustment may also arise if a loss occurs to artwork onsite, which typically belongs to sellers. Another consideration regarding art insurance is the important difference between provenance and legal title of an artwork. Insurance issues may arise where a party has full legal title to a piece of art, but asserts a claim based on misrepresentation as to the artwork’s provenance. According to ARIS, a New York title insurer which first introduced fine art title insurance to art collectors, “provenance relates to the location and prior possessors of an artwork from its creation to the present, whereas legal title relates more broadly to the past and present full right, interest and ownership of the work, which may or may not overlap with physical possession of the art.” The Dallas Morning News recently reported that the Kimbell Art Museum in Fort Worth had discovered one of its

Renaissance era sculptures was associated with a repository for artwork purchased or stolen by Nazis. The Kimbell’s director explained their policy of returning works of art if it is learned they were improperly sold or looted in continental Europe during the Nazi era. Luckily, this particular sculpture did not need to be returned because the museum’s documentation showed it had good ownership. Authenticity, authorship and attribution are generally not covered by title insurance. Nonetheless, some experts advocate in favor of making title insurance mandatory for all art sold in auction houses and displayed in museums that might be Holocaust-looted. T.M. Cooley, 9 Journal of Practical and Clinical Law 223 (2007). Today, there are only a handful of lawyers in the United States practicing in this niche market. Texas lawyers interested in this fascinating area of insurance   HN law will find it an open field. Jamie K. Baker, Of Counsel at Thompson Coe, is an art collector and practices insurance law. She is a Dallas Bar Association member and an advisory board member of Texas Accountants and Lawyers for the Arts. She may be reached at jbaker@thompsoncoe.com.

PUBLIC FORUM

“LEGISLATION SESSION SUMMARY” SPEAKERS: REP. RAFAEL ANCHIA and SEN. JOHN CARONA Monday, October 3, Noon, at Belo RSVP to sevans@dallasbar.org Sponsored by the DBA Public Forum Committee.

The ABA will hold its mid-year meeting in Dallas in early 2013. President-Elect Laurel Bellows (center), of the Bellows Law Group, P.C., visited Belo in September. She is pictured with Kim Askew and DBA President Barry Sorrels.

DVAP’s Finest John O’Connor

John O’Connor is a commercial litigation associate in the Dallas office of Weil, Gotshal & Manges, where he also serves as a member of the firm’s Pro Bono Committee. John has volunteered at DVAP intake clinics since 2007, conducting client interviews throughout the Dallas area. John is currently working full-time at DVAP through Weil’s Lend-a-Lawyer program, where, for three months, he is dedicating his time solely to working on DVAP cases and staffing DVAP clinics while the firm pays his salary and benefits. John is currently working on a wide range of DVAP cases, including several in the areas of family law, probate, landlord/tenant disputes, and consumer law, both at the trial and appellate level. Thank you for all you do, John!

Pro Bono: It’s Like Billable Hours for Your Soul. To volunteer or make a donation, call 214/748-1234, x2243.


Oct o b e r 2 0 1 1

Focus

D al l as Bar A ssoci ati on l Headnotes 9

Torts & Insurance Law

Losers, Winners & Stowers by Paul K. Stafford

In the law, as in the game of life, there are winners and losers…but there is also Stowers. In Stowers, the court articulated the duty of an indemnity company to its insured, stating that “[t]he indemnity company is held to that degree of care and diligence which a man of ordinary care and prudence would exercise in the management of his own business.” The court held that the insurer breached its duty, and awarded damages of $14,103.15 to a furniture company, thus establishing the Stowers doctrine. Under that doctrine, upon an excess verdict on a covered claim, a policyholder has a cause of action against its liability insurer for negligently refusing a reasonable settlement offer within policy limits. G. A. Stowers Furniture Co. v. American Indemnity Co., 15 S.W.2d 544 (Tex Comm’n App. 1929). The Stowers doctrine is triggered through a Stowers demand, which requires a written demand to settle a case within policy limits in exchange for a full and final release of the claim. In accordance with Stowers and its progeny, an insurer that rejects a reasonable settlement offer could be liable to its insured. In Texas, there is also “lawsuit reform.” In May, 2011, Governor Perry signed into law House Bill 274, a/k/a “Loser Pays,” which became effective on September 1, 2011. H.B. 274 provides, among other things, that plaintiffs in civil cases who file a lawsuit and “lose” that lawsuit will be required to pay the court costs and attorneys’ fees

of those defendants whom they sued. In addition, and as in other jurisdictions and the Federal Rules, H.B. 274 addresses frivolous lawsuits by providing for the “dismissal of causes of action that have no basis in law or fact on motion and without evidence.” Trial courts must also grant or deny motions to dismiss within 45 days of filing, and award attorneys’ fees and costs to the prevailing party. H.B. 274 effectively penalizes a litigant for rejecting a settlement offer that is ultimately greater than what the judge or jury awards at trial. In fact, under H.B. 274, sometimes even the “winner” pays. H.B. 274 awards attorneys’ fees to defendants if they make a settlement offer, the offer is rejected, and if the jury finds for the plaintiff and makes an award that is less than 80 percent of the settlement offer. H.B. 274 also eliminates the distinction between economic and non-economic damages found in previous “loser pays” laws and expands the amount of recoverable attorneys’ fees and costs to the total amount of the damages awarded. Therefore, a plaintiff could “win” damages at trial, but subsequently “lose” all of the recovery to the “loser,” although they could not lose more than the total amount of the recovery. How will the Stowers doctrine fare in light of H.B. 274? More aptly, what new or nuanced interpretation, if any, will be given to the terms “ordinary care,” “prudence” and “reasonable?” The answer to these questions are yet to be determined; however, litigators, the business community, and other interested persons are best served through awareness of the changes resulting

from H.B. 274, as well as its potential impact on the litigation strategy and settlement decisions of an indemnity company. Litigators should advise their clients that, in light of H.B. 274, an indemnity company may be more likely to increase the number of liability claims that are denied, or to decrease the dollar amounts of settlement offers with the intention of prevailing at trial and recovering attorneys’ fees and costs. Such decisions by an insurer may be more easily justified through H.B. 274 as “reasonable” or “that degree of care and diligence which a man of ordinary care and prudence would exercise in the management of his own business.” H.B. 274 also addresses the designation of responsible third parties by providing that limitations may bar a defendant from joining a responsible

third party if the defendant “failed to comply with its obligations, if any, to timely disclose that the person may be designated as a responsible third party under the Texas Rules of Civil Procedure.” Accordingly, litigators must diligently investigate all potential parties and responsible third parties as soon as practicable in a claim or pending case, and should promptly disclose the person or entity as a potential party or responsible third party. In sum, the Stowers doctrine creates tension between policyholder and insurer to settle a case. Expect that tension to   HN increase under H.B. 274. Paul K. Stafford is President-Elect of the DBA and is principal attorney at The Stafford Law Firm, focusing on insurance, commercial, and business litigation. He can be reached at paul.stafford@staffordfirm.com.

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10 H e a d n o t e s l D a l l a s B a r A s s o ciation

October 2011

Use Technology to Get Paid The Law Firm Merchant

by Bob Black

Technology and trends are changing faster than most non-superheroes can keep up with, much less an attorney attempting to run both a law practice and a business. How do you defend yourself against the onslaught of new technology with options changing on a weekly basis? One of the most critical areas where this holds true is how attorneys accept payments, especially in regards to credit card processing. Historically, law firms have not considered themselves as “traditional businesses” but as professionals practicing law. While it is true attorneys have an ethical and sometimes higher calling to uphold justice, in reality, they have to run a successful business first, which involves getting compensated for their work.

Money Talks…

With technology, attorneys now have the ability to control cash flow through the use of credit cards and electronic payments. By doing so, you gain control of your accounts receivables and ultimately your overall practice. Traditionally, law firms do not perform credit checks or report delinquent clients to credit agencies. By allowing your firm to accept credit card payments, you can effectively shift your receivables to the card-issuing banks. Visa and MasterCard banks have already established the creditworthiness and financial capability of your clients.

In the world of merchant accounts, law firms are unique business entities. Unlike a restaurant or retail store, law firms have special considerations when dealing with credit cards and client funds. Whether you are considering accepting credit cards or already offer an electronic payment option, using stateof-the-art technology will ensure you are paid quickly and securely. Some other tips to ensure a successful transition to the modern ways of getting paid as a Law Firm Merchant: Protect your trust and IOLTA accounts. Do not allow your merchant provider access to your trust account. Most merchant agreements will require you to give access to this account in the event of a chargeback or fraud. There are merchant services specific to law firms that correctly protect and safeguard your trust accounts. Communicate to your Clients. Let clients know what your payment expectations are on the front end by including due dates, late fees and payment options as part of your fee agreement. It is much easier to establish these guidelines while your client is new and eager to get started. More importantly, continue to communicate to your clients what payment options you provide by including credit card logos or adding ‘Major Credit Cards Accepted’ to your invoices and website. Use the Technology You Have. Once you make the decision to accept credit cards,

be sure to use the payment option that best suit your needs. Depending on your area of practice, and more importantly where you interact with your client there are different choices to accept payment. For example, there are many options to accept credit cards with smart phones, including iPads and laptops. Let Your Clients do the Work. By taking time to establish payment options on your website, clients can run their own credit cards. Not only does this provide a convenience to clients, but frees up the time you would normally spend processing credit card payments. It is not necessary to be a website developer or have a degree in computer science to embrace credit card payments, just a smart attorney that knows how to get paid. By using technology as a payment tool, you give clients flexible payment options while allow

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ing yourself to get paid quickly and securely. So, with technology moving at a rate that is “faster than a speeding bullet,” throw on your Super-Lawyer cape and take back control of your receivables and ultimately your practice.

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The LawPay Merchant Account, is a custom payment solution designed by AffiniPay for attorneys. The LawPay Merchant Account complies with ABA and state requirements for managing client funds. As a member benefit of DBA, law firms save up to 20–25 percent off standard credit card fees. If you are currently accepting credit cards, we encourage you to compare your current processor with the LawPay Merchant Account. Contact LawPay at (866)   HN 376-0950 or www.LawPay.com.

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Oct o b e r 2 0 1 1

Focus

Dal l as Bar A ssoci ati on l Headnotes 11

Torts & Insurance Law

Texas Legislature Codifies The Attractive Nuisance Doctrine by Michael C. Smith

This summer the Texas Legislature enacted Section 75.007 of the Texas Civil Practices & Remedies Code in response to a new Restatement of Torts that adopts a broad duty owed to entrants upon another’s property. Section 51 of the Restatement (Third) of Torts proposes a unitary standard of reasonable care for all entrants on land except the undefined “flagrant trespasser.” The Restatement’s new standard differs significantly from Texas common law, which has long imposed varying duties on property owners depending on the entrant’s status as an invitee, licensee or trespasser. Two Restatement contributors advocate the new standard despite characterizing it as “a major departure from the first and second restatements.” Other ALI advisors warn the new standard is “fundamentally unsound” because there is no public policy need to change the Restatement’s approach, and it will create confusion as to what is a “flagrant trespasser.” In Section 75.007, the Texas Legislature codified the common law duty that Texas property owners owe to trespassers and the attractive nuisance doctrine. A “trespasser” is defined as “a person who enters the land of another without any legal right, express or implied.” The new statute goes on to provide that an

“owner, lessee, or occupant of land does not owe a duty of care to a trespasser on the land and is not liable for any injury to a trespasser on the land, except that an owner, lessee, or occupant owes a duty to refrain from injuring a trespasser willfully, wantonly, or through gross negligence.” This is the duty expressed over 55 years ago by the Texas Supreme Court in Burton Constr. & Shipbuilding Co. v. Broussard, 273 S.W.2d 598, 603 (Tex. 1954). Section 75.007 does differ slightly from the former common law attractive nuisance doctrine. Over 60 years ago, the Texas Supreme Court adopted that doctrine from Section 339 of the Restatement of Torts. Banker v. McLaughlin, 208 S.W.2d 843, 847 (Tex. 1948). And in 1997, the Texas Supreme Court observed that the Restatement (Second) of Torts “still correctly states the doctrine.” Tex. Utils. Elec. Co. v. Timmons, 947 S.W.2d 191, 193-94 (Tex. 1997). Under the common law attractive nuisance doctrine in Texas, property owners owe a duty to exercise ordinary care to make reasonably safe or warn of the condition that has allured “children of tender years” to the property. In effect, property owners owe trespassing children the same duty owed invitees. Historically, Texas courts only applied the doctrine when the plaintiff was, at most, 12 years old. The Timmons

court declined to set an age limit, holding instead that the doctrine applies depending on whether “the child is still too young to appreciate the danger.” Section 75.007’s sponsors sought to restrict the attractive nuisance exception by limiting it to children younger than 16 and creating a rebuttable presumption that children 14 and older appreciate the risk of highly dangerous artificial conditions. These limits failed to make the final bill. As a result, Section 75.007(c) provides that an owner, lessee or occupant of land may be liable for injury to a child caused by a highly dangerous artificial condition on the land if: The owner knew or reasonably should have known that children were likely to trespass in the place where the artificial condition exists; The owner knew or reasonably should have known the artificial condition existed, and realized or should have realized the condition involved an unreasonable risk of death or serious bodily harm to such children;

The injured child was too young to discover the condition or realize its harm; The owner’s utility in maintaining the condition and burden to remove the danger were slight compared to the risk to the child; and The owner failed to exercise reasonable care to eliminate the danger or otherwise protect the child. The statute follows, almost verbatim, the Texas Supreme Court’s adoption of the Restatement (Second) of Torts. The difference is that Section 75.007(c) requires injury by a “highly dangerous” artificial condition for liability to exist; Timmons and the Restatement (Second) of Torts refer only to an artificial condition. Section 75.007(d) also creates civil immunity for the owner, lessee or occupant of land who defends persons or their property from a trespasser using justifiable force as rec  HN ognized under the Penal Code. Michael C. Smith, a member of Cobb Martinez Woodward PLLC, is a member of the Tort & Insurance Practice Section of the DBA. He can be reached at msmith@cobbmartinez.com.

All members are invited to “Legal Writing for the Beginning Lawyer” October 7, Noon, at Belo Speaker: Chad Baruch of The Law Office of Chad Baruch RSVP to ahernandez@dallasbar.org. Co-sponsored by the Transition to Law Practice Committee and Dallas Association of Young Lawyers

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12 H e a d n o t e s l D a l l a s B a r A s s o ciation

October 2011

Would You Recognize Human Trafficking If You Saw It? by Laura G. Burstein, Esq.

What comes to your mind when someone mentions human trafficking? Imagine the following scenario. One day your spouse casually mentions that she has befriended a sad young woman at the local park who nannies for a family in the neighborhood. The nanny speaks French to the children, and because she also speaks French, your spouse struck up a conversation with her. The parents of the young children brought the nanny to the U.S. from their home in Africa. After several conversations, the nanny began to talk about problems in the home where she works. She tells your spouse she works 15 hours each day caring for the children and then must cook and clean for the family; she is not allowed to leave the home except to take the children to the park; and lately she has been feeling poorly but her employers will not take her to a doctor. The girl is worried whether her parents are receiving the money for her work as her employers agreed when she took the job. She says that her employers are unkind and treat her rudely, but that she cannot leave because they have her travel

and identity documents and she has no access to money to return home. This story is a clear example of human trafficking. If that surprises you, it may be due to the fact that there are numerous misconceptions about what human trafficking actually is. The biggest myth about human trafficking is that it is obvious. It is not. It is a hidden crime that is occurring wherever there is money to be made and as such, it is an issue you may come across in either your personal or professional life. The key is learning how to recognize it. “Human trafficking” is simply a euphemism for modern day slavery and refers to the activity of one person holding another person in a situation of compelled service through the use of force, fraud or coercion. The U.S. government defines human trafficking in the Trafficking Victims Protection Act (TVPA) of 2000 and the Reauthorization Acts (TVPRA) of 2003, 2005 and 2008, in two separate contexts—sex trafficking and labor trafficking. Sex trafficking is defined as a situation in which commercial sex is induced by force, fraud or coercion, or in which the person induced to perform such act has not

Civil Attorney Advisors Needed for Mock Trial Teams Advisors are needed to instruct teams for the 2011-2012 mock trial season (a civil case). Firms and partners can adopt teams as well. Dates and times vary. To sign up, please email the coordinator, Amy Smith at asmith@dallasbar.org.

attained 18 years of age. Labor trafficking is the recruitment, harboring, transportation, provision or obtaining of a person for labor or services, through the use of force, fraud or coercion for the purpose of subjection to involuntary servitude, peonage, debt bondage or slavery. (8 CFR §214.11(a)). The key to identifying human trafficking is determining whether the labor or services were performed as a result of force, fraud or coercion. People are trafficked for numerous reasons and victims can be foreignborn (with or without legal status), U.S. citizens, men, women, children, and of all ages. Traffickers can be anyone: friends, neighbors, family members, business owners, organized crime, diplomats, governments, pimps, managers, gangs and overseas employment agencies. It is present world-wide and in all trade sectors, not just the sex trade. Labor trafficking in the U.S. is more common than most realize, comprising the predominance of cases of human trafficking uncovered. While there are a multitude of different fact scenarios encountered, two recent cases located in Texas and neighboring states share remarkable similarities. Both involved over 600 victims employed by two different manufacturing companies. Workers were recruited from Asia to keep labor costs low, and the employees were provided onsite housing and meals. The company housing was located adjacent to the worksite and severely restricted the workers’ movement and freedom. The facilities were fenced in and continuously monitored by guards. Workers were not allowed to exit the camp except during specified times and only if accompanied by a company guard. Travel outside the camp was limited to either the local

superstore or a nearby church. The living arrangements were substandard, with 10 to 20 men sharing a room and single bathroom and sleeping in bunk beds. Although the workers were being paid, both the hourly rate and number of hours of work per week were substantially less than promised and the workers earned a fraction of what was promised. The workers feared leaving the job because each took out substantial loans exceeding $10,000 to cover the “visa processing fees” charged by the overseas recruiting company, which they believed would likely endanger their families should they fail to pay. The million dollar question is what you, as counsel for one of these companies, should do upon learning these facts. You obviously have an obligation to advise your client as to the multitude of liabilities involved, however, further action clearly presents a significant ethical dilemma. What if one of the workers came into your office seeking help—would you know what relief is available and appropriate? Human trafficking is happening all around us. Recognizing the signs and knowing the elements of the crime can help you better advise your clients, or refer and assist victims. For further information, or if you believe a person is being trafficked, please contact Laura G. Burstein at Mosaic Family Services, Inc. or attend the Pro Bono Week CLE on this topic on Wednesday, October 26, noon, at Belo. Mosaic Family Services is a local community-based nonprofit serving immigrant victims of crime, including vic  HN tims of human trafficking. Laura G. Burstein, Esq. is the Legal Program Director for Mosaic Family Services. She can be reached at laurab@mosaicservices.org.

BUSINESS LEADERSHIP SYMPOSIUM Presented by Texas Wesleyan Law Review

November 4, 2011 Texas Wesleyan School of Law Fort Worth, Texas The Texas Wesleyan Law Review is pleased to host a Business Leadership Symposium this fall on the general legal issues that today's corporate attorneys must face as both legal professionals and business leaders. Parties interested in attending the symposium, please contact: Kate Echols Texas Wesleyan Law Review, Symposia Editor txwesccsymposium@gmail.com

Please visit our website for additional information or to register for the symposium:

http://www.law.txwes.edu/LawReview/UpcomingSymposia/tabid/1504/Default.aspx

Approval for CLE credits will be sought for this event.

BUSINESS LEADERSHIP SYMPOSIUM November 4, 2011 • Texas Wesleyan School of Law


Oct o b e r 2 0 1 1

Focus

Dal l as Bar A ssoci ati on l Headnotes 13

Torts & Insurance Law

Who Pays And How Much When Multiple Policies Apply? by Micah Skidmore

“Less is more.”—Architect Ludwig Mies van der Rohe While sometimes less may indeed be more, more should never be less. But, when multiple policies apply to a single claim, policyholders can sometimes feel as though they would be better off with only one policy. If, for example, a long-tail environmental claim or latent construction defect claim triggers coverage under a series of liability or property policies, each subject to a deductible or self-insured retention (SIR), those carriers responding to the claim may each insist on satisfaction of a separate deductible/SIR before the insured may recover. Will an insured with the foresight to purchase continuous insurance coverage have to satisfy multiple deductibles/SIRs before accessing the benefits of any policy? As a general rule, when multiple policies are triggered by a single “occurrence,” the insured has the right, under Texas law, to choose which policy will respond to the claim, including whichever policy has the lowest deductible. Nonetheless, in the

event that the insurer, chosen to respond to a given claim, exercises its right of subrogation to pursue coverage from so-called “other insurance,” the question remains whether the insured is required to satisfy one or more deductibles or SIRs, to which that “other insurance” may be subject. Fortunately, however, there are other means to protect the insured against attempts by insurers to “stack” deductibles or SIRs. Many policies do not specify the means by which a deductible or SIR must be satisfied. Absent an express limitation, the insured may be able to satisfy the requirement of a retention or deductible under one policy using the proceeds of another policy. There are, for example, a number of decisions from courts in California and Florida concluding that unless a policy unambiguously requires exhaustion of a deductible or SIR by the insured, the insured may satisfy such SIR or deductible with so-called “other insurance” also implicated by the same occurrence or loss. At least one Texas court has similarly concluded that an insured “may satisfy the self-insured retention by making its payment in whatever form it wants.”

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Pak-Mor Mfg. Co. v. Royal Surplus Lines Ins. Co., 2005 U.S. Dist. LEXIS 34683, at *29–30 (W.D. Tex. Nov. 3, 2005). Alternatively, when coverage is afforded by two policies with differing deductible/SIR obligations, the deductible under one policy may be allocated between those policies providing coverage. Those authorities permitting allocation of a deductible or SIR reason that an insurer whose coverage obligations are prorated is not entitled to demand the payment of a full deductible or SIR. Still other authorities require that the insurer with the smaller of the two deductibles/SIRs pay the amount of the larger deductible, with any excess loss apportioned between both carriers. In this instance, the insured is required to pay only the cost of the smaller deductible or SIR. However, because the deductible or SIR obligation under many liability and property policies is triggered by an “occurrence” or “accident,” avoiding the “stack-

ing” of SIRs or deductibles depends on the existence of a single “occurrence.” Whether a loss arises from one or more “occurrences” depends, in part, on the subject policy’s definition of “occurrence.” Some policies specify that continuous or repeated exposure to substantially the same general conditions shall be deemed to be one “occurrence.” Otherwise, Texas courts apply a “cause” analysis to determine whether a set of facts involves one or more “occurrences” by determining the number of events that “cause” the underlying loss or liability. Provided that a given loss or claim involves only a single “occurrence,” an insured should never be required to pay more than one deductible or self-insured retention. To conclude otherwise would deny the insured the benefit of the insurance purchased and violate principle that   HN more should never be less. Micah E. Skidmore is an associate at Haynes and Boone, LLP. He can be reached at Micah.Skidmore@haynesboone.com.

NEED BILLABLE HOURS? Join the DBA Lawyer Referral Service Log on to www.dallasbar.org/dallas-lawyer-referral-service or call (214) 220-7499.

Speaker: Carrie James, Ph.D., Harvard Graduate School of Education Ethics 3.00

Friday, October 14, 8:00 to 11:45 a.m. at Prothro Hall at SMU School of Law.

For more information or to register, log on to www.smu.edu/Provost/Ethics/NewsRoom/Events/COP.aspx. Sponsored by the DBA, the Dallas County Medical Society, U.T. Southwestern Medical Center, and the SMU Maguire Center for Ethics and Public Responsibility.

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14 H e a d n o t e s l D a l l a s B a r A s s o ciation

October 2011

Judicial Profile: Hon. Jeanine Howard by Philip Ray

Judge Jeanine Howard is grateful for her job, loves what she does and is hopeful that she does it well, but her path to the bench is far from traditional. Judge Howard attended St. Thomas Aquinas Catholic School for eight years before transferring to Hillcrest High School. After graduation she moved to Denton to study sociology at North Texas State University (now called UNT). She worked at Sears, then at First Denton National Bank before moving back home to Dallas. After nine months of training at Executive Secretarial School, she worked as a legal secretary before getting a spot as a secretary at General Dynamics/Lockheed Martin. The aeronautical giant allowed for tuition reimbursement, funding her attendance at TCU night school where she was quite proud of her straight A’s and cum laude status as she earned a degree in Business Management. She then went on to SMU Law School, where she was Order of the Coif. During her third year, she met her husband Steve. They married in October of ’87 and had their first child, Holly, the following year. Judge Howard initially practiced

civil law for more than two years focus- sometimes borrowing a good friend’s ing on deposition preparation and conference room if necessary. A large research. When she found out the Dis- portion of her work involved appeals trict Attorney’s office was hiring in the with the client staying as a guest of the spring of 1990, she longed for the oppor- State. By running a virtual office, she tunity to get into the courtroom. When could spend time with her family on her none other than John Vance called own schedule. With both girls near graduation in her at 8:00 p.m. one night to offer her 2005, Judge Howard began the job, she thought it was exploring the possibility of some kind of practical joke. becoming a judge. Having She accepted the job and experience in private pracwhile she was in the Distice, experience in the District Attorney’s office her trict Attorney’s office, and second daughter, Theresa, an understanding of appelwas born. late law and trial work, As her daughters grew, she felt uniquely situated she longed to spend more to serve the people of Daltime at home and found las County. In her time on a way to strike a balance the bench, she believes she between motherhood and has. the practice of law. She She’s most proud of her had seen and experienced First Friday program. At any some of the pitfalls of given time, between 10 and office dynamics early on in Judge Jeanine Howard 15 young offenders, (ages her career and wanted to streamline her professional life to make 17 to 22) who lack structure or parental more room for her personal life. She guidance, meet directly with the judge had typed her way through law school; once a month while on supervision in so preparing her own documents came addition to their other obligations. Revnaturally, eliminating the need for staff erend Ronald Wright assists her in reachassistance. Rather than opening an ing these wayward young people to help office, she met clients at their conve- align their intentions and keep them nience—sometimes at a Starbucks and succeeding while on probation. Her goal

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for them, and for all those on probation, is to correct whatever behavioral patterns that led to putting the defendant squarely in the lights of law enforcement. While meeting financial obligations is important, she will often reduce recommended fines and supervision fees (for cause) to keep the focus on reporting and participating in probation. She would never want poverty to interfere with a person successfully turning their life around. She always tells the people in her court, “Don’t ever let money be a reason you don’t report.” In her courtroom, Judge Howard prefers all pleas on the record, lawyers and clients dressed for court in a respectful way, and please, no cell phones. She enjoys the camaraderie of the legal community and enjoys having lawyers that appear in her court stop by to get to know her better. If you do, you may find she shares your interests in authors James Patterson or Mary Higgins Clark. Ask her about her treasured willow tree and you will find yourself engaged in a conversation with an avid gardener who enjoys taking the time to hand water her plants as a way to unwind after a long day at the Crowley courts building. Philip Ray is a criminal law attorney with Law Office of Philip D. Ray. He can be reached at philipdraylaw@gmail.com.

You are Invited!

“Banking on Justice”

Dallas Women Lawyers Association Judicial Reception

The Supreme Court of Texas requires attorneys to place IOLTA accounts at eligible banks—those that pay interest rates comparable to other similarly situated accounts.

October 11, 5:30 to 7:30 p.m. at The Mansion on Turtle Creek, 2821 Turtle Creek Blvd., Dallas

To see a list of committed banks or for more information on Prime Partners, contact the Texas Access to Justice Foundation at www.teajf.org or 512-3209-0099.

2011 Louise B. Raggio Award to be presented.

THE CATHOLIC FOUNDATION Presents

T HE A DVISORS S ERIES For Estate and Wealth Management Professionals

“Wealth Transfer Developments with Practical Significance to Everyday Estate Planning” Program will be modified to fully reflect any legislative developments affecting the estate and gift taxes and income taxes affecting wealth transfer planning

Jeffrey N. Pennell

Richard H. Clark Professor of Law, Emory University, Atlanta, Georgia  December 7, 2011 The Belo Mansion, 2101 Ross Avenue, Dallas 7:30 a.m. Breakfast $75 per person 8:00 a.m. Program 2 Hours of Continuing Education Credit Available Presenting Sponsors: Carter Financial Management Gardere Wynne Sewell LLP For more information and to register, visit www.catholicfoundation.com


Oct o b e r 2 0 1 1

Dal l as Bar A ssoci ati on l Headnotes 15

Vision, Leadership & Commitment to Access to Justice continued from page 1

them. In their cases, child support is established, access and visitation to children is respected, unscrupulous landlords are punished, and homes are saved from wrongful foreclosure. This is all done through their support of the hard work of volunteer attorneys who use their time and talents doing only what lawyers can do—keep the justice system alive and accessible to others. Justice Deborah Hankinson, of Hankinson Levinger LLP, is another one of these leaders. As a former Justice on the Texas Supreme Court, she worked tirelessly on a statewide and national level to champion the cause of legal aid to the poor. Justice Hankinson is, again, leading by example by making a kickoff donation to the Equal Access to Justice Campaign of $25,000. A donor since 2003, Justice Hankinson has donated $191,000 to the campaign over the years. Because of her deep commitment to the issue of equal access to justice, Justice Hankinson was one of the driving forces behind the creation of the Texas Access to Justice Commission, which works to ensure that

low-income Texans have access to justice in civil legal matters. She has been instrumental in obtaining millions of dollars in funding for legal aid to crime victims. And, she has been a constant and true friend of the Equal Access to Justice Campaign. AT&T has also stepped forward to support the 2012 Campaign with a $15,000 donation to the Campaign. The AT&T Legal Department, under the leadership of Wayne Watts, has also developed its pro bono contribution. AT&T in-house attorneys staff legal clinics and represent pro bono clients. They are setting the bar for all in-house lawyers in Dallas. The law firm of KoonsFuller, led by CEO and Managing Partner Ike Vanden Eykel, has also made a kickoff donation to the 2012 Campaign of $10,000. KoonsFuller is one of the original donors to the campaign in 1994, and the firm has donated $252,500 since then. The attorneys of KoonsFuller, a family law firm, have also played an important role in mentoring and training volunteer attorneys as well as representing pro bono clients. Through their contributions, DVAP has been able

Celebrating 29 Years!

DVAP’s Pro Bono Awards Celebration Presented by the Dallas Volunteer Attorney Program Wednesday, October 26, 5:30 to 7:30 p.m. The Pavilion at the Belo Mansion Complimentary hors d’oeuvres, beer & wine Please RSVP by October 21 to popee@lanwt.org.

to provide many pro bono clients with the same caliber of service that KoonsFuller clients would receive. Mike McKool, of McKool Smith, also kicked off this year’s campaign with a $10,000 gift. Mr. McKool, Founder and Chairman of McKool Smith, has donated to the campaign since it started in 1994. His total contribution to the Equal Access to Justice Campaign is $192,800. The generous and thoughtful donations of our Campaign kickoff leaders will make an important contribution to DVAP’s ability to provide access to justice to the poor in Dallas during the coming year. DVAP has a tough order to fill. Twenty-five percent of the Dallas County population or 611,168 people qualify for free legal aid from DVAP. This number has grown two and a half times over the last decade. There are an additional 423,276 people in Dallas County who fall within DVAP’s eligibility guidelines and could potentially qualify for legal help after a review of expenses such as rent or mortgage payments and child care. To qualify for legal help, an individual must not have income of more than $13,612 per year, and a family of four must

not have income of more than $27,938 per year. The Dallas Volunteer Attorney Program is about helping ordinary people with real world problems and making the dream of access to justice a reality. Andy Payne, Jim Mitchell, Justice Deborah Hankinson, the AT&T Legal Department, KoonsFuller and Mike McKool are leading our charge of helping poor Americans seek justice under law. For more information on the Campaign or the Dallas Volunteer Attorney Program, please contact Alicia Hernandez at (214) 220-7499 or ahernandez@dallasbar.org. Recognition levels and donor benefits are available. In addition, all individual donors at the $1000 level and above and all firm and corporate donors at the $5,000 level and above will be recognized in an ad in the Dallas Morning News during the week of December 19, 2011, and in Texas Lawyer   HN in January or February 2012. Alicia Hernandez is the director of the Dallas Volunteer Attorney Program and the DBA director of community services. She can be reached at ahernandez@dallasbar.org.

Save the Date!

PRO BONO WEEK 2011 Monday, October 24 to Friday, October 28 A free CLE will be held at lunch each day at Belo. DVAP Pro Bono Awards—Wednesday, October 26—Belo—5:30-7:30 p.m. For more information, contact Jigna vyas Gosal at (214) 243-2247 or gosalj@lanwt.org. Sponsored by the DBA Pro Bono Activities Committee and the Dallas Volunteer Attorney Program in conjunction with the ABA National Pro-Bono Celebration.


16 H e a d n o t e s l D a l l a s B a r A s s o ciation

October 2011

After Hours Mark Shank

Finding His Balance By Caleb D. Trotter

Every attorney knows that finding a healthy balance between work and the rest of our lives can be a difficult undertaking. Albert Einstein once said that “[l]ife is like a bicycle. To keep your balance you must keep moving.” If one truly must keep “moving” to find a balance in life, Gruber Hurst Johansen Hail & Shank LLP partner and renowned Dallas litigator Mark Shank has found a perfect way to keep his—literally and figuratively. A commercial litigator for over 30 years, Mark is no stranger to the pressures that come along with a career in law. He is Board Certified in Civil Trial Law, as well as Labor and Employment Law, by the Texas Board of Legal Specialization. Mark also has a lengthy record of leadership, most notably serving as the president of both the Dallas Young Lawyers Association and the Dallas Bar Association. Mark has been selected to the American College of Labor Lawyers and the American Board of Trial Advocates, and has been named as one of the Best Lawyers in America for 17 straight years. With such a profound involvement in the community, on top of a demanding legal practice

and being a husband and father, it is a wonder that Mark finds the time to indulge his other life passion: barefoot water-skiing. When he was 12 years old, Mark moved with his parents to a small community in central Missouri called Lake of the Ozarks. It just so happened that his parents’ business was right next to the local water ski show. Mark learned how to ski barefoot at the age of 13, and progressed so quickly that soon he was the featured barefoot skier in that local ski show. After graduating from the University of Missouri-Columbia School of Law, Mark moved from Missouri to Texas to begin his legal career. Like many others, Mark soon lost touch with his beloved pastime, and nearly 12 years went by before he picked it up again. Over the years Mark’s self-professed “need for speed” has taken him from St. Louis, Missouri, to Lake Travis and Lake Texoma, all the way to a private lake in Sun Valley, Idaho, and even skiing with World Freestyle Champion Andrew DeVillars. Mark explained the total release and focus that is needed to barefoot ski: “We spend a lot of time bouncing from issue to issue. There is a lot of stress associated with our lives, and barefoot ski-

ing is so difficult … if you change your balance point just a tiny bit, down you go. You can’t be thinking about the law when you’re barefoot skiing.” Mark keeps his balance not only

on the water, but also in life—a strong   HN example for all of us. Caleb Trotter is an associate at Munsch Hardt Kopf & Harr, P.C. He can be reached at ctrotter@munsch.com.

CIC School Supply Drive

Benefit for Jobseekers The Dallas Bar Association now offers an online Career Center open to attorneys who are new to the profession or looking to make a career transition, as well as job opportunities for other positions (paralegal, law firm administrator, legal secretary) available in the Dallas area legal community. The DBA Career Center, powered by Job Target, is now available at www.dallasbar.org/ career-center. Employers now have a way to reach Dallas area attorneys—and the more than 10,000 members of the DBA.

Mark Shank

With our online Career Center you can post job openings, review resumes and create “employer accounts” to manage online recruiting efforts. This outstanding resource allows attorneys and legal professionals seeking jobs to post resumes and create a “jobseeker” account that manages all their activities. Users will also be able to conduct comprehensive job searches and receive email alerts about openings in specific areas of interest. Log on to www.dallasbar.org/careercenter to begin your job search.

From Yellow Pages to Facebook Pages

The Community Involvement Committee hosted a school supply drive to collect supplies for W.W. Samuel High School in Dallas. The result was a success! Christina McCracken, of Gordon & Rees, LLP, is the Committee Co-Chair and Paul Herring, Attorney at Law, was Chair of this project. A big thanks to all who participated.

Marketing Has Changed… And You Should Too Join the Dallas Bar Association and Androvett Legal Media & Marketing for a free information-packed seminar on building your practice with proven marketing strategies and tactics.

Thursday, October 6 8am-12pm Belo Mansion 3.5 hours Texas CLE credit provided (including 1 hour of ethics CLE)

Marketing’s Shifting Paradigm - You’ll get a sense of both the technology drivers and the ways you can put them to use in building your law practice. Branding for Law Firms - Learn how law firms are using simple marketing principles to set themselves apart from the competition. Online Presence - From websites to social media, you’ll gain a better understanding of how these important digital resources can drive a practice. The Right Tool for the Job - See how your message and your target can drive where you spend your money and devote your time. The Ad Rules - A Panel Discussion with Gene Major, Director of Advertising Review for the State Bar of Texas; Pat Rafferty, State Bar Ad Rules Committee member; a law firm marketing director and law firm principal. Moderated by former Ad Rules Committee Chairman Mike Androvett.

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October 2011

Focus

Dal l as Bar A ssoci ati on l Headnotes 17

Torts & Insurance Law

Is Deposition Perjury Subject to the Court’s Contempt Power? by Robert Gilbreath and Richard Smith

This May, the Texas Supreme Court issued its opinion in the case of In re Coy Reece, 341 S.W.3d 360 (Tex. 2011). As counsel for the opposing parties in the mandamus, we disagree with one another on the court’s resolution of the case. Nevertheless, we agree it is an opinion that litigators will be citing for years to come on the issues of a trial court’s authority to hold a party in contempt and the appellate court’s authority to review trial court decisions by mandamus. In Reece, the Supreme Court considered whether perjury occurring outside the court’s presence is punishable as contempt. Reece was held in contempt for lying during his deposition and sentenced to jail time. Reece argued that perjury is not punishable as contempt unless it obstructs the court’s operations and that his perjury did not do so. Previously, no Texas court had held that perjury had to obstruct or impede the court. But Texas courts had imposed

that requirement for constructive contempt, i.e., contempt occurring outside the court’s presence. Thus, the Supreme Court concluded that Reece’s deposition perjury was not contempt unless it obstructed the trial court in the performance of its duties. Federal courts have long required proof of obstruction before perjury may be punished as contempt. The U.S. Supreme Court explained, in In Re Michael: “All perjured relevant testimony is at war with justice, since it may produce a judgment not resting on truth. Therefore, it cannot be denied that it tends to defeat the sole ultimate objective of a trial. It need not necessarily, however, obstruct or halt the judicial process. For the function of trial is to sift the truth from a mass of contradictory evidence, and to do so the fact finding tribunal must hear both truthful and false witnesses.” The Texas Supreme Court agreed, noting that it was “loath to contemplate a system where litigants and their attorney

Ken Burns at Belo

scour transcripts searching for any misstatement for the sole purpose of accruing the opponent of contempt and ultimately securing the opponent’s confinement.” The court stressed, however, that while a trial court cannot imprison a litigant for perjury unless the false testimony obstructs the court in the performance of its duties, trial courts retain a wide array of sanctions to deter and punish such discovery abuse. Finding that Reece’s perjury did not impede the trial court in the performance of its duties, the Supreme Court ruled that holding him in contempt and confining him to jail was improper. But even if the trial court had erred by holding Reece in contempt, did the Texas Supreme Court have jurisdiction to address it? In cases where a litigant has been jailed for contempt, Texas courts have held that the way to seek relief is through a writ of habeas corpus. But while the Supreme Court has some habeas jurisdiction in civil cases, it is limited to cases where the party has been jailed for “violation of an order, judgment, or decree previously made, rendered, or ordered by the court or judge in a civil case.” Tex. Gov’t. Code § 22.002(e). Although Reece admitted his perjury, he had not violated any previous order by the trial court. Thus, the only court with

jurisdiction to issue habeas corpus was the Court of Criminal Appeals. Unfortunately for Reece, that court declined to exercise its jurisdiction because the underlying lawsuit was a civil case. The Supreme Court recognized that it did not have authority to free Reece through habeas corpus. Nevertheless, the Court agreed that mandamus was proper because Reece had been unable to obtain habeas corpus review from the Court of Criminal Appeals. Thus, the Legislature’s limitation on the Supreme Court’s habeas jurisdiction did not impede the court’s ability to achieve the same result by issuing a writ of mandamus instead. The decision in Reece is a clear indication of the Supreme Court’s expanded willingness to exercise its mandamus jurisdiction in recent years. A writ that was once formalistic and constrained has become more “practical and prudential.” See In re Prudential Ins. Co., 148 S.W.3d 124, 136 (Tex. 2004). For litigators, clients, and even trial judges, the lesson is that almost any ruling is open to mandamus review if the issue is sufficiently   HN interesting or compelling. Robert Gilbreath is a partner with Hawkins, Parnell, Thackston & Young and is board certified in civil appeals by the Texas Board of Legal Specialization. He can be reached at rgilbreath@hptylaw.com. Richard Smith is a partner at Lynn Tillotson Pinker & Cox. He can be reached at rsmith@lynnllp.com.

CONTRARY TO POPULAR BELIEF

LAWYERS HAVE HEARTS TOO

The Dallas Bar Association, DBA Business Litigation Section and the World Affairs Council of Dallas Ft. Worth hosted documentary film maker Ken Burns at the Belo Mansion on August 17. More than 650 people attended to hear about his new film Prohibition. After a short preview of the film, Talmage Boston, of Winstead P.C., interviewed Burns about the project.

0,000. t of a heart attack is $76 The average lifetime cos needs. r you fit t bes disability solutions that Get protected. Health and

www. Sbotit .com

bers of the Bar Exclusively protecting mem 40 years. rly nea for ilies fam ir and the

Ted M. Akin Voted # 1 Best Individual Mediator/Arbitrator in Dallas - Texas’ Best Survey

H H H H H H H H 3023 Hester Avenue Dallas, Texas H 75205-3525 (214) 821-6370 H www.judgeakin.com

4,000+ Cases Mediated Full-Time Mediator for 21 Years 90%+ Settlement Rate 35 Years of Judicial Experience Justice Retired, 5th Court of Appeals of Texas Member - National Academy of Distinguished Neutrals Member - The Association of Attorney Mediators Distinguished Mediator - Texas Mediator Credentialing Association Panel - FINRA Dispute Resolution Panel - CPR: International Institute for Conflict Prevention & Resolution

Mediator H Arbitrator H Special Judge


18 H e a d n o t e s l D a l l a s B a r A s s o ciation

In the News

October 2011

October

FROM THE DAIS

Sally Helppie, of Vincent Lopez Serafino Jenevein, P.C., was the key presenter for the El Paso Lawyers for the Arts program held during the Plaza Classic Film Festival.

KUDOS

Seema Tendolkar, of Wick Phillips Gould & Martin, LLP, has been appointed to Board of Captain Hope’s Kids, a charitable organization to support homeless children in Dallas.

Kathryn Murphy, of Goranson, Bain, Larsen, Greenwald, Maultsby & Murphy, PLLC, spoke at the annual Family Law on the Front Lines course in Austin.

Leslie R. Chaggaris and Timothy L. Evans, of Thompson & Knight LLP, have been named Fellows of the Dallas Association of Young Lawyers (DAYL) Foundation.

Pat Cowlishaw, of Jackson Walker L.L.P., moderated a panel discussion at the North Dallas Chamber of Commerce’s Energy Series. John Holden, of the firm, spoke at the State Bar of Texas’ 37th annual Advanced Family Law Course in San Antonio.

Marshall J. Doke Jr., of Gardere Wynne Sewell LLP, has been appointed Chair of the Standing Committee on Audit following his re-election by the American Bar Association Board of Governors to a three-year term.

Chad Baruch, of The Law Office of Chad Baruch, moderated a panel on Legal Writing, with panelists Magistrate Judge Irma Ramirez and Judge Albert Diaz of the U.S. Fourth Circuit Court of Appeals, at the Hispanic National Bar Association Annual Convention in Dallas.

Leo J. Jordan, of Lewisville, Texas, was the recipient of the American Bar Association Tort Trial & Insurance Practice Section’s inaugural James K. Carroll Leadership Award, for outstanding leadership qualities and service to the section. Julie E. Blend has become a Shareholder at Dealey, Zimmermann, Clark, Malouf

Criminal Justice Forum

Free for All!

Speakers: Barry Sorrels, Hon. Craig Watkins, Hon. Cathy Cochran And more! MCLE 6.00, including Ethics 1.25 Friday, October 21, 8:30 a.m. to 3:00 p.m. at Belo. For more information or to register, log on to www2.dallasbar.org/events/register/crimjust_signup.asp For questions, contact ahernandez@dallasbar.org.

& Blend, P.C.

Thorne & Carr PLLC as Senior Counsel.

Joseph P. Griffith, of Greenberg Traurig, LLP, has been elected president of the Dallas Chapter of the Federal Bar Association.

Angela M. Lopez has joined Badmus Law Firm, PLLC.

John M. Jackson, of Jackson Walker L.L.P., was reappointed to the Cedar Hill City Council’s Community Development Corporation Board for a two-year term. Grover Hartt, III, a Senior Litigation Counsel with the Department of Justice Tax Division based in Dallas, has received a Presidential Rank Award from President Obama. These awards are the highest that can be given to senior government executives and professionals and recognize achievements on a national level. The award was conferred upon Hartt not only for his successes in court, but also his frequent speaking and writing activities.

ON THE MOVE

Courtney Barksdale Perez has joined The Stafford Law Firm as Of Counsel.” Greta A. Matzen has joined Taber Estes

John F. Guild has joined Gruber Hurst Johansen Hail Shank LLP as Associate. Cathy Wi Richardson has joined the firm Scheef & Stone, L.L.P. P. Caleb Patterson has joined Constangy, Brooks & Smith, LLP. Chais L. Sweat has joined Dykema Gossett PLLC as Associate. Stephanie N. Clouston has joined Alston & Bird LLP as Partner. Roger J. Allen has joined Holmes, Diggs & Eames P.L.L.C. Mel Wolovits has joined BURDIN Mediations as Mediator. News items regarding current members of the Dallas Bar Association are included in Headnotes as space permits. Please send your announcements to Judi Smalling at jsmalling@dallasbar.org.

BLOOD DRIVE! Monday, October 31 | 9:00 a.m. to 4:00 p.m. The Belo Mansion Please have a good meal, drink plenty of fluids before your donation, and bring your photo ID. Reserve the best time for you and your firm today. Visit www.dallasbar.org/blooddrive. Questions call Michelle Dilda at (214) 220-7474


October 2011

Classifieds

Dal l as Bar A ssoci ati on l Headnotes 19

October

OFFICE SPACE

Dallas Centre Suites. Executive and virtual suites with breathtaking views of Dallas on the SW corner of Greenville Ave. Services include full time receptionists with call screening and client greeting with 24/7 onsite building security. Administrative, Notary, Paralegal, and Secretarial Support/ Services provided as needed. Beautifully furnished Conference Rooms, Day Suites and Training Room, which allow you to set up and operate your business in an elegant and professional environment. For leasing information contact Tanya Rodriguez at (972) 479-8800 or at TRodriguez@dallascentresuites.com. Second month free with a 12 month contract! Time is Money! Centrally located 3 miles from County Courthouse & 2 miles from downtown! Quality office space starting at $933/mo. for 622 SF., including electricity and free garage parking. 9 miles to Love Field Airport. Minutes to DART rail, Baylor University Medical Center, Dallas Arts District, SMU, Oak Lawn, West Village. Uptown Tower. 4144 N. Central Expressway. (972) 490-7348. Campbell Center I: AV rated law firm has a window office (15x15) for sublease in Class A Bldg. Space is new with exceptional finish out and elevator exposure. All amenities included. Call Joy (214) 361-1262. North Dallas. Law firm located at Lincoln Centre has two partner size offices, one associate size office and cubicles available. Easy access to Tollway and LBJ, two conference rooms, break room/kitchen, phones, copiers, postage machine, and fax. Email: dallasipfirm@gmail.com for more information.

Office space available within small real estate law firm located at 4054 McKinney Avenue. Shared conference and break room, copier, DSL & phone equipment are available if needed. No long term commitment and a total monthly rate of $650.00. For inquiry, please call (214) 520-0600. Tired of sterile office buildings and elevators? One large office ($1,200) with fire place and one small office ($600) available (together or separately) in historic home in Uptown. These unique offices have great client appeal. Receptionist service and conference room available. Picture of home at www.texascrimlaw.com. Call Mick (214-720-9552). Free Rent-SMU, Yale/Central. Partner office and secretarial space. Beautiful 12th floor view of SMU/Bush Library/ Park Cities. Professionally decorated, beautifully furnished. Overflow business. Receptionist, elegant conference room, kitchen, DSL, door signage, restaurant, bank, parking, DART. Office $1,095.00/ mo., secretarial space $300.00/mo. (214) 369-9888. Office Space: Downtown Dallas Minutes from Courthouses. Two office spaces available. Perfect for attorney and legal assistant/secretary. One large two window office and one inside office space with phone system, conference room, reception area, kitchen, Internet, copier, fax, 24-hour access and parking. Contact (214) 651-8144. North Dallas Tollway office spaces. Hardwood floors and mahogany paneled walls in common areas. Two available, one with adjacent mahogany secretarial carrel. Amenities: three conference

Teach Dallas ISD Students –Nov. 14-18 Volunteers are needed to teach in secondary classrooms this fall. Times and class sizes vary. Curriculum is available. Deadline to sign up is Nov. 1, please email asmith@dallasbar.org.

rooms, copier, postage meter and two kitchens. Receptionist services available. Please call Kristi at (972) 934-4100.

POSITION AVAILABLE

Dallas boutique business, commercial, bankruptcy, and construction litigation firm seeks experienced litigator. Candidate must have first chair trial experience and have taken expert deposition. Stable work record necessary. Compensation negotiable. Some portable hourly clientele and involvement in one or more associations a plus. Firm offers first-rate office environment. This is an excellent opportunity for the right attorney. Respond to: oaklawnfirm@aol.com. Advancement Officer Specialist (Director Of Planned Giving) - Job ID# 900034 – Southern Methodist University - (Salary commensurate with experience and qualifications). The Director of Planned Giving, in the Office of Planned and Endowment Giving, supports the University’s fundraising efforts by serving all the schools and units, regional offices, and corporate & foundation relations in directing the University’s efforts to build a planned giving program, including both current and deferred gifts of non-cash assets by managing a portfolio of planned giving prospects, overseeing Planned Giving program development and management, training and advising colleagues, managing stewardship of SMU’s Dallas Hall Society and the SMU Planned Giving Council. Bachelor’s degree is required. An Advanced degree is preferred. A minimum of five years of professional work experience is required. Some work experience that includes developing and maintaining relationships is also required, preferably in evaluating, analyzing and/ or recommending charitable giving options and/or in service to constituents who are potential charitable giving prospects. The ideal candidate will have experience in a complex institutional environment where coordination,

teamwork, and communication are of paramount importance. Experience that includes an established track record of closing on a broad range of planned gifts or as an estate and gift planning or trust advisor, is preferred. Work experience that includes working in development in higher education or for a nonprofit is desirable. Program or project management that includes budget development and oversight and/or supervisory experience of staff is preferred. Experience that includes volunteer committee management is a plus. Some travel is required. Candidates must submit a cover letter for full consideration. For a full job description, and to apply, visit www.smu.jobs. SMU is AA/EO employer committed to excellence through diversity. Palmer & Manuel, LLP, a 13-attorney firm in Campbell Centre, seeks one experienced business litigation and one experienced family law attorney. Applicants should have substantial portable business. The firm’s compensation formula allows attorneys to keep a substantial portion of their fees. See the firm’s website at www.pamlaw.com. Please reply to spalmer@pamlaw.com.

SERVICES

Mexican Law Expert - Attorney, former law professor testifying since 1997 in U.S. lawsuits involving Mexican law issues: FNC motions, Mexican claims/ defenses, personal injury, moral damages, contract law, corporations. Co-author, leading treatise in field. J.D., Harvard Law. David Lopez, (210) 222-9494. dlopez@pulmanlaw.com. Diamond And Gold Buyer. Buying all types of Diamonds, Immediate Cash Paid. Consignment terms available @ 10-20% over CASH. For consultation and offers please call (214) 739-0089 Place Your Ad Here! For affordable classified advertising rates call Judi Smalling at (214) 220-7452.

FREE FINANCIAL LITERACY TOWNHALL MEETING FEATURED SPEAKERS INCLUDE: • Rosa Rios, U.S. Treasurer • Ilyce Glink, author

Wednesday, October 19, 11:30 a.m. to 1:30 p.m., at Belo Open to the public. Co-Sponsored by the DBA Public Forum Committee and CCCS of Greater Dallas.

DBA Annual Meeting

The Annual Meeting is Friday, November 4 in the Pavilion. A reception begins at 3:30 p.m. and the meeting begins at 4:00 p.m. If you wish to run for a position, you must contact Cathy Maher cmaher@dallasbar.org (214) 220-7401, no later than Thursday, November 3 at 5:00 p.m. to receive information about service on the Board. You are required to complete a biographical form prior to the meeting. Following the meeting all DBA resident members with an e-mail address on file will receive an online ballot. If you wish to vote online, please make sure the DBA has your e-mail address by visiting the DBA website at www.dallasbar.org, or call Kim Watson at (214) 220-7414 before 5 p.m. on Thursday, November 3, 2011. Please update your spam software to allow the e-mail ballot to enter your inbox from DallasBar@BallotBoxOnline.com. If you receive an online ballot but wish to vote by hard copy, please contact Cathy Maher at (214) 220-7401 to request that a paper ballot be mailed to you. Only those resident members without an e-mail address on file with the DBA will be mailed a hardy copy of the ballot.

PARKING OPTIONS AROUND BELO Please plan to arrive at your noon meetings early. Parking is limited at Belo during the noon hour. To view other parking options in the area, log on to: www.thedallasartsdistrict.org/plan-your-visit/parking/index.htm


20 H e a d n o t e s l D a l l a s B a r A s s o ciation

October 2011

YOUR CAUSE In 1983, Judge Merrill Hartman led a group of Dallas visionaries to create the first volunteer attorney program in North Texas. Today, the project is known as DVAP, the Dallas Volunteer Attorney Program. DVAP attorneys help families living at or below the Federal poverty guidelines who cannot afford an attorney in civil cases. In honoring her friend, Lisa Blue said of Judge Hartman, “For Merrill, ‘Justice for All’ was not a slogan, it meant access to the Courts started with access to a lawyer.” This year, funding for DVAP faces uprecedented challenges due to state budget cuts, lower interest rates on IOLTA accounts, and reductions in institutional giving. Among the many remarkable projects organized by you, the members of the Dallas Bar Association, this may be the most important collective effort we endeavor. As we embark on the 2011-2012 Equal Access to Justice campaign, please consider helping our cause. For those of you in leadership positions, please educate your firm members about this important effort and consider a coordinated giving campaign. To the many champions of DVAP who have given so generously in the past, thank you for setting our example. You have taught us that DVAP is what we do, that DVAP is our cause. For more details and to donate: www.dvapcampaign.org Or contact Alicia Hernandez - (214) 220.7499 Email: ahernandez@dallasbar.org Rob Crain EAJ Co-Chair

Chris Lewis

214.522.9404 www.CrainLewis.com


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