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					                                 NO. 05-0771



                                    IN THE
                               SUPREME COURT
                                  OF TEXAS
______________________________________________________________________________


                    IN RE: MICHAEL ANGELO BASCO, M.D.,

                                  Petitioner,

                                      V.

               ADOLPH CANALES, JUDGE OF THE 298TH DISTRICT
                   COURT OF DALLAS COUNTY, TEXAS,

                                    Respondent.
______________________________________________________________________________

                      PETITIONER’S BRIEF ON THE MERITS
______________________________________________________________________________



                                           David W. Townend
                                           TSBN 20155700
                                           The Townend Law Firm
                                           18601 LBJ Freeway, Suite 440
                                           Mesquite, Texas 75150
                                           (972) 686-0072
                                           (972) 686-0073 (Fax)

                                           ATTORNEY FOR PETITIONER
                                           MICHAEL ANGELO BASCO, M.D.



                 PETITIONER REQUESTS ORAL ARGUMENT
                                         NO. 05-0771

                                       IN THE
                               SUPREME COURT OF TEXAS


                         IN RE: MICHAEL ANGELO BASCO, M.D.,

                                           Petitioner,

                                               V.

                   ADOLPH CANALES, JUDGE OF THE 298TH DISTRICT
                       COURT OF DALLAS COUNTY, TEXAS,

                                            Respondent.

                        Appealed from the Court of Appeals
                          Fifth District of Texas at Dallas
                               No. 05-05-00520-CV
______________________________________________________________________________

                      PETITIONER’S BRIEF ON THE MERITS
______________________________________________________________________________

                          IDENTITY OF PARTIES AND COUNSEL

         1.   The Petitioner, Michael Angelo Basco, M.D. is the Plaintiff below, and he is

represented by David W. Townend, The Townend Law Firm, 18601 LBJ Freeway, Suite 440,

Mesquite, Texas 75150.

         2.   The Respondent, Adolph Canales, Judge of the 298th District Court of Dallas

County, Texas does not have counsel at this time.

         3.   Baylor Medical Center at Grapevine is the Defendant below and is represented by

James Mac Stewart, Stewart & Stimmell, 1701 Market Street, Suite 318, L.B. 18, Dallas, Texas

75202.


                                               -i-
                                                    TABLE OF CONTENTS


                                                                                                                                       Page


IDENTITY OF PARTIES AND COUNSEL . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . i

TABLE OF CONTENTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ii

INDEX OF AUTHORITIES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . iii

STATEMENT OF THE CASE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . v

STATEMENT OF JURISDICTION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . vii

ISSUE PRESENTED . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . vii

STATEMENT OF FACTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1

SUMMARY OF THE ARGUMENT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5

ARGUMENT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6

           A.         Standard of Review         ..............................................6
           B.         Conflict of Interest . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
           C.         Texas Rules of Professional Conduct . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
           D.         The Need for a Bright Line Rule . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
           E.         Mr. Stewart as a Witness . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23

PRAYER . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25

APPENDIX . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27

           A.         Certified Copy of Conformed Order Denying Motion to Disqualify Counsel

           B.         Jury Charge (not applicable)

           C.         Opinion and Judgment of the Court of Appeals and Order Denying Rehearing

           D.         Rules 1.05, 1.06, 1.09, 1.10, Texas Rules of Professional Conduct With
                      Commentary

           E.         Texas Bar Opinion No. 501
                                                                     -ii-
                                                   LIST OF AUTHORITIES

CASES                                                                                                                                 Page

Ayres v. Canales, 790 S.W.2d 554 (Tex. 1990) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9,24

Henderson v. Floyd, 891 S.W.2d 252 (Tex. 1995) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10,11,13,
                                                                                                          18,20,22

In Re: Bell Helicopter Textron, Inc., 87 S.W.3d 139 (Tex.App. - Fort Worth
       2002, orig. proc.) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15

In Re: Corrugated Container Anti-Trust Litigation, 659 F.2d 1341
       (5th Cir. 1981) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13

In Re: Epic Holdings, 985 S.W.2d 41 (Tex. 1998) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11,13,16,
                                                                                                       18,19,21,22

In Re: George, 28 S.W.3d 511 (Tex. 2000) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16,25

In Re: Meador, 968 S.W.2d 346, 351-352 (Tex. 1998) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14,22

In Re: Nitla S.A. de C.V., 92 S.W.3d 419, 422 (Tex. 2002) . . . . . . . . . . . . . . . . . . . . . . 6,7,21,22

In Re: Sanders, 153 S.W.3d 54 (Tex. 2004) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24

NCNB Texas National Bank v. Coker, 765 S.W.2d 398 (Tex. 1989) . . . . . . . . . . . . . . . . . . . 8,19

National Medical Enterprises v. Godbey, 924 S.W.2d 123, 134 (Tex. 1996) . . . . . . . . . . . 6,7,10,
                                                                                       11,13,18,21

P&M Electric Co. v. Godard, 478 S.W.2d 79 (Tex. 1972) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7

Petroleum Wholesale, Inc. v. Marshall, 751 S.W.2d 295 (Tex.App. - Dallas
       1988, orig. proc.) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13

Phoenix Founders, Inc. v. Marshall, 887 S.W.2d 831 (Tex. 1994) . . . . . . . . . . . . . . . . . . . . 9,11

Pollard v. Merkle, 114 S.W.3d 695 (Tex.App. - Dallas 2003) . . . . . . . . . . . . . . . . . . . . 14,18,19,
                                                                                                    21,22,23

Smirl v. Bridewell, 932 S.W.2d 743 (Tex.App. - Waco 1996) . . . . . . . . . . . . . . . . . . . . . . . . . . 20


                                                                   -iii-
Spears v. The Fourth Court of Appeals, 797 S.W.2d 654 (Tex. 1990) . . . . . . . . . . . . . . . . . . 8,21

Walker v. Packer, 827 S.W.2d 833, 839 (Tex. 1992) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6

RULES

Rule 1.05, Texas Rules of Professional Conduct . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14,15,20,
                                                                                                               21,22

Rule 1.05(b), Texas Rules of Professional Conduct . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20

Rule 1.06, Texas Rules of Professional Conduct . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11,21,22

Rule 1.09, Texas Rules of Professional Conduct . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10,11,12,14,
                                                                                                          15,20,21,22

Rule 1.09(a)(b)(c), Texas Rules of Professional Conduct . . . . . . . . . . . . . . . . . . . . . . . . . 12,20,21

Rule. 1.10, Texas Rules of Professional Conduct . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8

Texas Bar Opinion #501 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15




                                                                 -iv-
                                  STATEMENT OF THE CASE


        1.     Nature of the Case. This is an appeal of a mandamus proceeding filed in the

Court of Appeals arising out of a suit in which Petitioner, an obstetrician/gynecologist, alleged that

the Defendant below, Baylor Medical Center at Grapevine, wrongfully terminated his hospital

privileges. In that suit Petitioner moved to disqualify James M. Stewart and Stewart & Stimmel

from representing Baylor Medical Center at Grapevine because of a conflict of interest and because

Mr. Stewart is a potential witness.

        2.     Name of the Judge Who Signed the Order. The Honorable Adolph Canales,

Judge of the 298th District Court of Dallas County, Texas denied the Motion to Disqualify in an

Order signed March 31, 2005 (see Appendix).

        3.     Designation of the Trial Court. 298th District Court of Dallas County, Texas.

        4.     Disposition of the Case by the Trial Court. The trial court denied the Motion to

Disqualify after an evidentiary hearing without making any findings of fact or conclusions of law.

There has been minimal discovery, no depositions and a trial date is scheduled for September 25,

2006.

        5.     Parties in the Court of Appeals. The parties in the Court of Appeals include the

Petitioner and Relator, Michael Angelo Basco, M.D., the Respondent, Judge Adolph Canales of the

298th District Court of Dallas County, Texas, and the Real Party in Interest, James M. Stewart and

the firm of Stewart & Stimmel, filed a Response.

        6.     The District of the Court of Appeals. The Fifth Court of Appeals at Dallas.



                                                 -v-
       7.      Names of Justices Who Participated in the Decision in the Court of Appeals.

Justices Francis and Moseley joined in the majority opinion of July 6, 2005 and Justice David L.

Bridges filed a dissenting opinion.

       8.      Citation for the Court of Appeals Opinion. In Re: Michael Angelo Basco, M.D. v.

Adolph Canales, Judge of the 298th District Court of Dallas County, Texas, 2005 WL 1594454

(Tex.App. - Dallas Jul. 06, 2005)

       9.      Disposition of the Case by the Court of Appeals. The Court of Appeals denied

Petitioner’s Petition for Writ of Mandamus by an Order signed July 6, 2005 and denied Petitioner’s

Motion for Rehearing by an Order signed August 9, 2005.




                                               -vi-
                                 STATEMENT OF JURISDICTION

        This Court has jurisdiction pursuant to TRAP 53.1 to review a final decision by the Dallas

Court of Appeals and to grant a Petition for Review of a decision pursuant to TRAP 56.1(1)(2)(5)(6)

wherein a dissenting Justice filed a separate opinion and the decision is in conflict with a prior ruling

of the Dallas Court of Appeals involving an error on an important law question that should be

corrected and resolved by the Supreme Court.



                                        ISSUE PRESENTED

        Whether mandamus should issue to correct an abuse of discretion by the trial court in denying

Petitioner’s Motion to Disqualify James M. Stewart and Stewart & Stimmell from representing

Baylor Medical Center at Grapevine in the case pending below.




                                                  -vii-
                                     STATEMENT OF FACTS

       Petitioner sued Baylor Medical Center at Grapevine for the wrongful suspension and

termination of his clinical and medical staff privileges at the hospital. (App.- Third Amended

Petition and First Amended Motion to Disqualify.) There were three reasons given why Petitioner

was suspended - allegedly causing the injuries to a baby he delivered, delayed reporting of the Powell

lawsuit and alleged improper use of cytotec in his office.        One of the given reasons for the

suspension and termination of Dr. Basco’s privileges was his failure to timely inform Baylor Medical

Center at Grapevine of the fact that he had been sued in a medical malpractice case styled “Powell,

et al v. Basco, et al”. (Exhibit “G” to the Record.) Dr. Basco was sued in the Powell case in 1996

(Exhibit “G” of the Record) and he was defended in that medical malpractice lawsuit by Mr.

Winston Borum, a partner in the firm of Burford & Ryburn. (Record, p. 11.) James M. Stewart was

a member of the law firm of Burford & Ryburn at the time Mr. Borum was hired to defend

Petitioner, (Record, p. 5) and continued to be a member of the firm of Burford & Ryburn until May

12, 2000. (Record, pp. 5, 12-13.) Mr. Stewart did not work with Mr. Borum on the Powell case and

testified that prior to leaving the firm he could not recall whether he ever had conversations with Mr.

Borum on the subject of the Powell lawsuit and the Petitioner. (Record, p. 13.) After Mr. Stewart

left the firm of Burford & Ryburn in early May, 2000, he was retained by the medical staff of Baylor

Medical Center at Grapevine to prosecute a peer review case against Petitioner. (Record, p. 14.) A

letter notifying Petitioner of the causes for the termination of his privileges was written on the

letterhead of Mr. Stewart’s new law firm, Stewart & Stimmell. (Exhibit “G” to the Record.) After

Mr. Stewart left the firm of Burford & Ryburn, he admitted having conversations with Mr. Borum

on the subject of his representation of Dr. Basco in connection with the Powell lawsuit at a time

                                                 -1-
when he was representing Baylor Medical Center at Grapevine. (Record, p. 15.) Mr. Stewart agreed

that by November 17, 2000 he was representing Baylor Medical Center at Grapevine in a proceeding

to terminate Dr. Basco’s privileges and one of the grounds was a failure by Dr. Basco to timely

disclose to the hospital the fact he had been sued in the Powell lawsuit. (Record, pp. 19-21.) As

stated, Mr. Stewart admitted that he spoke with Mr. Borum on the subject of Dr. Basco and the

Powell lawsuit after leaving Burford & Ryburn, but prior to sending the November 17, 2000 letter

(Exhibit “G”; Record, p. 21).

       Mr. Borum wrote a letter on the Petitioner’s behalf dated February 2, 2000, at a time when

Mr. Stewart was still a member of the Burford & Ryburn law firm, which was sent to Baylor Medical

Center at Grapevine (Exhibit “E” to the Record) in which Mr. Borum advised the hospital that there

was a nuisance settlement and Dr. Basco had minimal legal liability in the Powell case. (Record,

p. 22.) Petitioner contends the reason that there was a delay in reporting the lawsuit, was that Mr.

Borum had given him legal advice, also while Mr. Stewart was a member of his firm, that according

to his understanding did not require him to report the Powell suit to Baylor Medical Center at

Grapevine until the case was resolved. (First Amended Motion to Disqualify Counsel.) When the

suit was resolved by a settlement in February, 2000, it was promptly reported to Baylor Medical

Center at Grapevine by Dr. Basco and through Mr. Borum’s letter to the hospital. (Id.) During the

hearing on the Motion to Disqualify, Mr. Stewart asserted a position that was contrary to Petitioner’s

contention and claimed Dr. Basco did not receive such advice from Mr. Borum. (Record, pp. 22-23.)

Mr. Stewart did not disclose how he learned whether Mr. Borum had given such advice. Although

Mr. Stewart acknowledged speaking with Mr. Borum on the subject of his representation of Dr.

Basco and the Powell lawsuit after he left the firm at a time when he was representing the hospital,

                                                 -2-
but prior to his sending the November 17, 2000 letter to Dr. Basco, Stewart claimed that he could

not recall the details of his conversation with Mr. Borum. (Record, p. 23.)

       Mr. Stewart was aware that Dr. Basco’s position in this lawsuit with respect to the delayed

reporting of Powell was that he relied upon advice of Mr. Borum and Mr. Stewart made it quite clear

that he disputed Dr. Basco’s position that he received and/or justifiably relied upon advice from Mr.

Borum. (Record, pp. 22-24.)

       Mr. Stewart was also aware that Dr. Basco was alleging in his lawsuit that his termination

by Baylor Medical Center at Grapevine was illegal and unjustified. (pp. 24-25.) He also

acknowledged that he has been hired by Baylor Medical Center at Grapevine in this case to defend

Baylor Medical Center at Grapevine against such charges. Id. Of necessity, Mr. Stewart will have

to advance positions that conflict with his former partner that Petitioner’s delayed reporting of the

Powell lawsuit was not justified based on reliance of counsel and Petitioner had more than minimal

liability in the Powell case and these facts justified the termination of privileges.

       Even though Baylor Medical Center at Grapevine learned of the Powell suit in February,

2000, it did not suspend Petitioner in February, 2000, in fact it did not suspend Petitioner until

September, 2000, a few days after Petitioner delivered a compromised baby. One of the reasons Dr.

Basco was summarily suspended related to an investigation that was being done into neonatal

injuries to a baby he delivered just days prior to his suspension to a patient named Samantha Bass,

whose name was later changed to Vann. Id. Dr. Basco alleged in his lawsuit that prior to his

suspension over the Bass case he informed Baylor Medical Center at Grapevine officials that its

nurses were negligent in causing this baby’s injuries and that they had altered the medical records.

Id. Although Dr. Basco was subsequently cleared by an internal hospital peer review of any wrong-

                                                  -3-
doing in causing the baby’s injuries and the hospital dropped this issue as grounds for termination,

Dr. Basco alleged in his suit that the hospital was aware that it was probably going to be sued by the

Basses and the stated reasons for his termination, delay in reporting the Powell case and his alleged

use of cytotec, were pre-texts for the hospital’s real reason for the termination of his privileges, to

destroy his credibility and prevent him from being an expert witness against the hospital in the Bass

case. Id. Dr. Basco contends in his suit that by the hospital terminating his privileges on false

charges, (late reporting of Powell and alleged improper use of cytotec in his office) it could use these

accusations to undermine his credibility as a witness against it in defense of the Bass lawsuit it knew

would be filed. In short, the hospital could argue in defense of a malpractice suit filed by Mr. and

Mrs. Bass that Dr. Basco could not be believed when he says the nurses were negligent and altered

records because it had to terminate his privileges because he was unethical and violated the hospital

by-laws - and that is exactly what Baylor Medical Center at Grapevine did when it and Petitioner

were sued by the Basses. Id.

        Cytotec is a drug that is not FDA approved for use as a cervical ripening agent in pregnant

patients but according to the hospital’s policies, can be used in the hospital with patient consent. Dr.

Basco used cytotec for his back pain, but did not use it as a cervical ripening agent on patients in his

office. A disgruntled ex-employee, months after she was terminated, told Baylor Medical Center at

Grapevine’s Chief of Obstetrics Dr. Basco used this drug on numerous, if not all, of his patients in

his office without consent. No patients or their files were ever identified by Baylor Medical Center

at Grapevine who received cytotec, yet Baylor Medical Center at Grapevine included this allegation

as a basis for termination of his privileges. A malpractice lawsuit was filed by Mr. and Mrs. Bass

in which both Dr. Basco and the hospital were named as defendants. Mr. Stewart was retained to

                                                  -4-
defend Baylor Medical Center at Grapevine. In that suit the plaintiff’s attorney amended his lawsuit

and alleged that Dr. Basco used cytotec on Mrs. Bass without her knowledge and consent - a count

which had no support in the evidence. Id.

       Mr. Stewart and his firm should be disqualified from defending Baylor Medical Center at

Grapevine against Petitioner’s suit because of a conflict of interest and because he is a witness and

participant in a conspiracy to wrongfully terminate his privileges to impair his credibility and make

him the fall guy in the Bass suit. (See, Plaintiff’s Third Amended Petition, First Amended Motion

to Disqualify Counsel.) The Bass suit was subsequently settled by the hospital paying a very

substantial non-disclosable sum to the plaintiff. Dr. Basco was urged by the hospital to contribute

his policy limits, but he refused to pay anything and he has subsequently been dismissed with

prejudice from the Bass lawsuit. The Texas Board of Medical Examiners and a medical panel of the

Texas Medical Association have cleared Dr. Basco on the cytotec allegations.

                               SUMMARY OF THE ARGUMENT

       The trial court abused discretion in not disqualifying Mr. Stewart and his law firm from

representing Baylor Medical Center at Grapevine in this lawsuit since it was undisputed that Mr.

Stewart was a partner in the law firm of Burford & Ryburn at the same time when Winston Borum,

a partner in that law firm, defended Petitioner in a malpractice suit, gave him advice he relied upon

with respect to the delayed reporting of the Powell lawsuit to Baylor Medical Center at Grapevine,

and wrote a letter to Baylor Medical Center at Grapevine expressing his opinion that Petitioner had

no liability in the Powell lawsuit. After Mr. Stewart left the firm of Burford & Ryburn, but at a time

when he was retained by Baylor Medical Center at Grapevine to terminate Petitioner’s privileges

based in significant part on his delayed reporting of the malpractice suit, Mr. Stewart had com-

                                                 -5-
munications with Mr. Borum on the subject of his representation of Petitioner although Mr. Stewart

claims not to recall the specifics of these communications. To whatever extent his termination from

that firm may have cut off an imputation of access to confidential information, his communications

with Mr. Borum after he left the firm re-established the assumed imputation of confidential

communications. Mr. Stewart and his firm are disqualified by Rules 1.05 , 1.06 and 1.09 of the

Texas Rules of Professional Conduct from representing Baylor Medical Center of Grapevine in this

lawsuit which bears a substantial relationship to the previous legal services the Burford & Ryburn

firm provided Petitioner. Mr. Stewart should also have been disqualified because he is a potential

witness on the allegation that Baylor Medical Center at Grapevine entered into a civil conspiracy to

wrongfully terminate Petitioner’s privileges on false pretenses in order to destroy his credibility as

a potential witness against Baylor Medical Center at Grapevine in a wrongful death lawsuit that was

certain to be filed by one of Petitioner’s patients for neonatal injuries caused by the nurses’

negligence.

                                 ARGUMENT & AUTHORITIES

       A.      Standard of Review. Mandamus is an extraordinary remedy and will only issue to

correct a clear abuse of discretion by the trial court for which there is no adequate remedy at law.

Walker v. Packer, 827 S.W.2d 833, 839 (Tex. 1992). There is no adequate remedy at law to correct

an abuse of discretion in denying a Motion to Disqualify Counsel by appeal. National Medical

Enterprises v. Godbey, 924 S.W.2d 123, 134 (Tex. 1996). The issue before this Court where the trial

court denies disqualification is whether or not the moving party can prove by sufficient evidence that

the trial court acted arbitrarily, unreasonably or without regard to guiding principles. In Re: Nitla

S.A. de C.V., 92 S.W.3d 419, 422 (Tex. 2002). Granting disqualification is a harsh remedy that may

                                                 -6-
disrupt a trial and disrupts a party the right of its chosen counsel. Id. The Court of Appeals may not

substitute its finding for the trial court’s finding unless the trial court could only reach one finding.

Id. On questions of law, this Court is not bound by the trial court’s conclusion. National Medical

Enterprises v. Godbey, supra at 134.

        The Court looks to the disciplinary rules for guidance but they are not binding standards.

Nitla, supra at 422. A court may grant disqualification if an attorney violates a disciplinary rule or

even if he does not violate a rule. Id. The burden is upon the Petitioner seeking disqualification to

show real prejudice. Id.

        B.      Conflict of Interest. This Court has issued many opinions on the issue of whether

mandamus should or should not issue to correct a trial court’s abuse of discretion in either granting

or denying disqualification because of a conflict of interest. One of the earlier decisions was P&M

Electric Co. v. Godard, 478 S.W.2d 79 (Tex. 1972). In that case the electric company initially

retained an attorney to represent it to sue the defendant to restrain the sale of a lease, however, this

attorney was undisputedly disqualified because he had previously represented the defendants in a

divorce proceeding where the subject of the lease was an issue. The question was whether the

subsequent attorney representing the power company should be disqualified because he represented

the first attorney throughout the disqualification proceedings. The Court noted that the guiding

principal on disqualification due to a conflict of interest is as follows:

                “The former client need show no more than that the matters embraced within the
                pending suit . . . are substantially related to the matters or cause of action wherein the
                attorney previously represented him, the former client.” Id. at 81.

The Court held that the first attorney who had previously represented one of the defendants in the

divorce case was unquestionably disqualified, but the subsequent attorney was not disqualified

                                                   -7-
because he was never a former partner of the disqualified lawyer, received no confidential

information from him and the fact he represented the disqualified attorney did not create a conflict.

Id. In NCNB Texas National Bank v. Coker, 765 S.W.2d 398 (Tex. 1989), the Court considered

whether the plaintiff bank’s law firm should be disqualified in a suit against a company that issued

credit insurance policies because its law firm had previously done some legal work for the defendant.

The issue turned on whether the two suits were so substantially related that it created a genuine threat

that confidences revealed to the former counsel would be divulged to the current adversary. Id. at

400. The Court first held that by proving the relationship, there is a conclusive presumption

confidences were imputed to the former attorney, and it was not necessary that the party prove what

confidences might be revealed. Id. at 406. The Court failed to order disqualification because the

trial court failed to find that there was a substantial relationship between the two representations that

a genuine threat existed of revealing confidential secrets. Id. at 400. In Spears v. The Fourth Court

of Appeals, 797 S.W.2d 654 (Tex. 1990) the Industrial Accident Board was sued for personal injury

by a claimant whose chair collapsed while he was attending a Board hearing. At the time of the

accident, an attorney who was the subject of the disqualification motion was an employee of the

Industrial Accident Board but was not involved in a “hands on” way in either the accident or

defending the IAB from the claim. Several days after the accident this attorney left the IAB and

subsequently represented the claimant in a personal injury claim against the IAB. At issue was

whether the trial court abused discretion in denying disqualification. Id. at 656 n. 3. The issue was

controlled by Rule 1.10, not Rule 1.09 of the Texas Disciplinary Rules of Professional Conduct

which does not presume confidences are shared among government employees. Rule 1.10 only

requires disqualification when the former government lawyer had actual hands on experience with

                                                  -8-
the case. Although the lawyer had received notice of the claim while she was still with the IAB, she

did not receive confidential information and did not work on the case for the IAB and therefore there

was no abuse of discretion in not ordering disqualification. The Court noted the mere possibility this

lawyer might be a witness was insufficient to compel disqualification. Id. at 658. In Ayres v.

Canales, 790 S.W.2d 554 (Tex. 1990) attorney Jack Ayres settled a wrongful death case and filed

a declaratory judgment suit to determine whether a referral fee was owed to a referring attorney. The

referring attorney sought disqualification of Mr. Ayres arguing that he should not be permitted to

participate in the suit as a witness and an attorney. The trial court granted the motion and ordered

that Mr. Ayres be precluded from participating as an attorney but the Supreme Court reversed,

holding the defendant showed no harm from Mr. Ayres serving a dual role as a witness and an

attorney. In Phoenix Founders, Inc. v. Marshall, 887 S.W.2d 831 (Tex. 1994) the firm of Thompson

& Knight represented Phoenix Founders which had obtained a judgment in federal court and filed

suit in state court to enforce it against the defendant. A legal assistant that had been employed with

Thompson & Knight during this period of time left Thompson & Knight for a brief period and went

to work for the defendant’s law firm, but she soon returned to work at Thompson & Knight. The

defendant filed a motion to disqualify. The trial court granted the defendant’s motion to disqualify

Thompson & Knight because there was evidence the legal assistant possessed confidential

information that she derived from the defendant lawyer’s firm, and this information was imputed to

Thompson & Knight. The Court reversed and noted that when an attorney as opposed to a paralegal

is involved, a former attorney is disqualified from a subsequent representation that embraces matters

that are substantially related to the facts in the prior suit because it is conclusively presumed that

confidential communications were disclosed in the prior representation. Id. at 833. The Court held,

                                                 -9-
however, the same imputation of confidences involving attorneys could not be made with legal

assistants and different rules apply and the Court held that the trial court abused discretion in

granting disqualification. In Henderson v. Floyd, 891 S.W.2d 252 (Tex. 1995) the trial court denied

the defendant’s motion to disqualify plaintiff’s counsel, however, the Supreme Court granted

mandamus and held this was an abuse of discretion. The plaintiff, Linda Reed, sued the defendant

for assault and her attorney hired a new attorney, Ken Lewis, a month before the trial to serve as co-

counsel for the trial. An associate in Ken Lewis’ firm, Bret Thomas, had previously been an

associate in the law firm defending the defendant and although the evidence was less than certain,

it appeared that he potentially had access to confidential information. The trial court denied

disqualification, however, the Supreme Court granted the writ of mandamus holding that under Rule

1.09, Texas Rules of Disciplinary Conduct, Thomas’ prior gaining of confidences of the defendant

in the very case disqualified his new firm, i.e., Ken Lewis’ firm, even though Mr. Thomas did not

participate in a substantial way in the prior representation of the defendant. Id. at 254. In National

Medical Enterprises v. Godbey, 924 S.W.2d 123 (Tex. 1996) the Supreme Court also held the trial

court’s refusal to grant a motion to disqualify plaintiff’s counsel was an abuse of discretion

correctable by the issuance of a writ of mandamus. The facts are somewhat complex. National

Medical Enterprises (NME) operated psychiatric hospitals that were the subject of state and federal

civil and criminal investigations. NME would from time to time retain counsel to represent officers

in such actions, and one attorney, Ed Tomko, was retained by NME to represent a former officer of

NME as well as a former medical director in the defense of civil and criminal proceedings. Ed

Tomko subsequently left his firm and joined the firm of Baker & Botts, and while with that firm, for

a brief period continued to provide some legal services for these individuals with NME. About a

                                                -10-
year and a half later, Baker & Botts’ attorneys who were not involved in representing NME’s former

officer or medical director sued NME on behalf of numerous psychiatric patients, alleging the

defendants engaged in a pattern of fraud and wrongdoing that was substantially similar to the

allegations in the civil and criminal investigations that Tomko was hired by NME to defend for its

former officer and medical director. The trial court denied the defendant’s motion to disqualify

because Baker & Botts never represented NME and there was no actual disclosure of confidences by

Tomko to the Baker & Botts attorneys. Id. at 126. The Court reversed, holding this was an abuse of

discretion because under Rules 1.09 and 1.06 (Comment 6) the matters - Tomko’s representation of

the former officer and medical director and the current lawsuit - were substantially related. Because

Tomko would be disqualified in representing the plaintiffs in the present lawsuit, so also would Baker

& Botts because there was an irrefutable presumption of shared confidences. Id. at 131. The Court

cited Henderson and Phoenix. Such a ruling the Court noted maintained society’s and the client’s

confidences in the system. Id. Under Rule 1.09 the issue of whether the pending suit is adverse to the

NME officer (Cronen) even though he was not named in it, was resolved in his favor because as the

Court noted he still could be sued civilly or criminally in matters relating to this litigation. The Court

held that the trial court’s refusal to grant disqualification is not correctable by appeal since the parties

should not have to wait until privileged disclosures are made to seek a remedy. Moreover, neither the

client nor society could be protected by allowing disclosure of confidential information. In Re: Epic

Holdings, 985 S.W.2d 41 (Tex. 1998) involved similar issues as NME. In that case Johnson & Gibbs

represented various entities and provided a broad range of legal services and advice including on how

to properly create and implement employee stock option plans. After a merger of these entities, a

former officer of Epic Holdings sued, represented by James Pennington, a lawyer in Jordan, Howard

                                                   -11-
& Pennington. Mr. Jordan had previously done substantial work for the defendant on the stock option

plans before he withdrew from Johnson & Gibbs. The co-plaintiff’s counsel was McKool & Smith.

Mr. McKool was a former director of Johnson & Gibbs and four members of his law firm were

previously members of Johnson & Gibbs. The trial court denied the motion to disqualify and the trial

commenced. During the trial it became apparent plaintiff’s strategy was to challenge Johnson &

Gibbs’ legal work, a mistrial was granted, the trial court recused herself, and another judge denied the

motion to disqualify. At issue was whether Rule 1.09 of the Texas Rules of Disciplinary Conduct

mandated disqualification. The Court rejected the plaintiff’s argument that Johnson & Gibbs only

represented Epic Holdings, the corporate entity and not an individual officer who was a principal in

Epic. Because of former representation of the same client there was an irrefutable presumption that

one attorney had access to confidential communications between the client and the firm, and the parties

seeking disqualification did not have to show an actual sharing of confidences. Id. at 49. The Court

held that the matters are substantially related within Rule 1.09 when a “genuine threat exists a lawyer

may divulge in one matter confidential information obtained in the other because the facts and issues

involved in both are so similar”. Id. at 51. The Court further held that the disqualification should not

be denied because the party could not prove an actual disclosure of confidences, because actual

disclosure of confidences need not be proven, as it is only the genuine threat of disclosure because of

the similarity of the matters that triggers disqualification. Id. at 51. Because Mr. Jordan and Mr.

Carter represented Epic Holdings and Mr. George on prior matters that are substantially similar they

were disqualified under Rule 1.09(a). Any member of their firm was disqualified under Rule 1.09(b),

and any former members of Johnson & Gibbs were disqualified under Rule 1.09 (c).



                                                 -12-
       In sum, three of this Court’s decisions, Henderson, NME and Epic Holdings support granting

disqualification of Mr. Stewart and his firm.

       Prior to the instant case, the Dallas Court of Appeals issued two key opinions on the subject

of disqualification because of a conflict of interest. The first was Petroleum Wholesale, Inc. v.

Marshall, 751 S.W.2d 295 (Tex.App. - Dallas 1988, orig. proc.). At issue was whether a former

associate in the plaintiff’s attorney’s law firm who undisputedly had access to confidential information

about the wrongful death case filed against Petroleum Wholesale, would trigger a disqualification of

the defendant’s law firm that hired the associate while the case was pending, even though the law firm

erected a Chinese wall around the new associate. This was a case of first impression. The court

approved the holding of In Re: Corrugated Container Anti-Trust Litigation, 659 F.2d 1341 (5th Cir.

1981), which held that the presumption of shared confidences of a client would apply not only to the

attorneys who handled the case, but to other members of the firm even after the firm dissolved. The

Dallas Court noted that there is an irrefutable presumption a client shares confidences with his lawyer

who shares those confidences with other members of his firm. Id. at 299. It was undisputed the former

associate had actual knowledge of confidential information, so the issue of whether there was a double

imputation of shared confidences was not at stake. The question was whether a Chinese wall was

sufficient to refute the irrefutable presumption that the associate, who had actual knowledge of

confidences, shared them with his new firm. The court answered the question in the negative, holding

that a strict standard is necessary because the need for attorneys to avoid public suspicion due to an

appearance of impropriety outweighs the defendant’s law firm’s need to represent this client. There

was no evidence substitute counsel was not immediately available to defend the defendant. Even

though no impropriety occurred this was not the question, since it was the relationship of the parties

                                                 -13-
and how they relate to each other that controls. Id. at 301. The court held the trial court abused

discretion in not granting disqualification. The second case from the Dallas Court of Appeals is

Pollard v. Merkle, 114 S.W.3d 695 (Tex.App. - Dallas 2003). There the husband sued for divorce and

was represented by the firm of Robertson & Holmes. The husband fired this law firm in March, 1994

and in June, 1994 this law firm hired Sally Bybee as an associate. In 1996 the husband sued Robertson

& Holmes for malpractice and Bybee left the law firm in December, 1997. The divorce case was still

pending, and in 2000 the husband’s wife retained Bybee to represent her in the divorce case against

her husband. The husband filed a motion to disqualify which the trial court denied. During the trial

Bybee made it clear she planned to call the husband’s former attorney, Mr. Holmes, to prove the

husband was a liar, a tax cheat and a womanizer. The trial court denied the motion to disqualify citing

Rule 1.09. The Dallas Court of Appeals reversed, citing In Re: Meador and Rules1.09 and 1.05, that

prohibit an attorney from knowingly revealing confidential information and using confidential

information of a former client to his disadvantage after the representation is concluded. Id. at 699.

Although Bybee never worked on the husband’s divorce case and denied that she had ever discussed

the divorce or malpractice case with Mr. Robertson or Mr. Holmes, it was clear from her statements

in court that she intended to call the husband’s former attorney, her former boss, to prove confidential

information Mr. Holmes learned from the husband while he was representing him in the divorce case.

The court held that even though she was hired after the firm was fired by the husband and did no work

on the case for the husband, the firm’s knowledge was irrefutably imputed to her. The tougher

question was what rules would apply once Bybee left the firm. Would she be prohibited from

representing the wife? Reviewing Comment 7 to Rule 1.09 the court held that normally a departing

attorney from a firm who lacks actual knowledge of confidential information derived solely from

                                                 -14-
imputation, is not automatically disqualified because “the attorney’s departure from a firm will

normally remove the imputation of knowledge and the attorney is free to undertake representation

adverse to that client”. Id. at 708. The departing attorney is not, however, free from the restrictions

of Rule 1.09 to use confidential information against the former client even if this evidence was

publicly disclosed in the malpractice suit. Id. at 701. Although Bybee testified she did not receive

personal information from either Robertson or Holmes, it is undisputed that she possessed confidential

information Mr. Holmes received from the husband while representing him she intended to use against

the husband during the divorce case in violation of Rule 1.05. The Dallas Court of Appeals concluded

“where the departing attorney seeks out the former client’s confidential information from her former

law partner and uses it to the former client’s detriment when representing the opposing party in the

very same case, disqualification is required”. Id. at 702. The court cited with approval In Re: Bell

Helicopter Textron, Inc., 87 S.W.3d 139 (Tex.App. - Fort Worth 2002, orig. proc.) where a law firm

was disqualified after it retained a non-lawyer consulting expert formerly retained by the opposing

party who had confidential information from a substantially related case. The Dallas Court of Appeals

rejected Bybee’s citation to Texas Bar Opinion 501 as controlling. Id. at 702. In that opinion the wife

had consulted with Attorney A about a prospective divorce, but she never retained him. Thereafter,

Attorney A’s partner, Attorney C, left the firm and subsequently was retained to represent the husband

in the divorce case. Attorney C had no actual knowledge of confidential communications. Id. at 703.

The court held this opinion did not apply because here Attorney A (Robertson & Holmes) actually

represented the husband and Attorney C (Bybee) acquired actual knowledge of the husband’s prior

confidential communications after she left the firm when she was representing the wife.



                                                 -15-
       In the instant case, the Dallas Court of Appeals held that there was no abuse of discretion in

the trial court’s denial of the motion to disqualify, citing In Re: George, 28 S.W.3d 511 (Tex. 2000).

It is difficult to understand why the majority below felt In Re: George was dispositive, as this was the

second of two opinions concerning the same issues. In the first mandamus proceeding, In Re: Epic

Holdings, 985 S.W.2d 41 (Tex. 1998) the Court ordered disqualification of attorneys representing a

plaintiff because those attorneys had previously worked at a law firm which represented the defendants

on a substantially similar issue. In Re: Epic Holdings was cited by Justice Bridges in his dissent in

support of his view that Mr. Stewart and his law firm should be disqualified. In Re: George dealt with

the issues of what procedures should be established to make sure any confidential information

contained in the disqualified counsel’s files would be shielded from transfer to the successor attorney.

As the Supreme Court and Justice Bridges noted, the former attorneys were disqualified because they

could not impermissibly question the work of their prior law firm. In Re: George at 515.

       Applying these cases to the facts, it is undisputed that Mr. Stewart was a member of the law

firm of Burford & Ryburn at the same time that Winston Borum, who was also a partner in that firm,

represented Petitioner in the defense of a medical malpractice lawsuit referred to as the “Powell” suit,

and at a time when Mr. Borum gave Petitioner advice regarding whether and when he should report

the fact he was sued or the resolution of the Powell lawsuit to Baylor Medical Center at Grapevine,

and at a time when Mr. Borum wrote a letter in February, 2000 to Baylor Medical Center at Grapevine

explaining that Petitioner had conformed with the standard of care in the Powell case, that his medical

practice was defended by numerous experts, and that the case involved a nuisance settlement for which

Petitioner only had nominal, if any, exposure. It was only after all of this legal work was completed

for Petitioner by his former partner that Mr. Stewart left the firm and undertook to represented Baylor

                                                 -16-
Medical Center at Grapevine in a proceeding to terminate Petitioner’s privileges in substantial part

because of his delayed reporting of the Powell lawsuit. His initial summary suspension in September,

2000 included charges over the unauthorized use of a drug called cytotec in his office and his actions

in causing injury to the fetus in the Bass case. After his suspension, but before Mr. Stewart sent him

a letter in November, 2000 notifying him Baylor Medical Center at Grapevine intended to terminate

his privileges, Petitioner was cleared by an internal hospital review of wrongdoing in the Bass case and

it was dropped as a basis for the peer review proceedings. Mr. Stewart sent a letter to Dr. Basco in

November, 2000, notifying him that the hospital intended to terminate his privileges over the delayed

reporting of the Powell suit and the cytotec issues. Mr. Stewart subsequently represented the Medical

Executive Committee in the peer review proceeding that terminated Dr. Basco’s privileges. In his suit

below, Petitioner alleges that the stated reasons for termination of his privileges were a sham because

he had no legal liability in the Powell case and the delayed reporting of the Powell case did not justify

termination because he had, in the opinion of his counsel, no legal liability and he relied on counsel’s

advice in the delayed reporting. Petitioner also alleged the cytotec allegations lacked any credible

foundational basis because there was no forensic evidence, and no patients testified or were identified

who were given cytotec without consent. The Texas Board of Medical Examiners and a panel of the

Texas Medical Association subsequently cleared him on the cytotec charges. Petitioner alleged that

the true reason for the hospital’s termination of his privileges was to neutralize him as a potential

adverse expert witness against it in a lawsuit that the hospital knew would be filed by the Bass family

arising out of the wrongful death of their baby due to the nurse’s negligence.




                                                  -17-
       At the evidentiary hearing, Mr. Stewart admitted he was a member of Burford & Ryburn

throughout the time that Winston Borum defended Petitioner in the Powell suit, gave Petitioner advice

about reporting the suit to Baylor Medical Center at Grapevine, and wrote a letter to Baylor Medical

Center at Grapevine on Petitioner’s behalf asserting that Dr. Basco had no legal liability in the case.

Therefore, while he was a member of this law firm there was an irrefutable presumption that he had

access to confidential information. In Re: Epic Holdings at 49. Mr. Stewart denied that he worked

on the case, but like the associate in Henderson v. Floyd, he was uncertain saying he could not recall

if he received actual confidential information about Petitioner while a member of the firm. He

contends that his departure from the firm in the summer of 2000 left him free to represent Baylor

Medical Center at Grapevine in the termination of Petitioner’s privileges and to defend Baylor Medical

Center at Grapevine in this lawsuit. At the evidentiary hearing Mr. Stewart admitted that after he left

the law firm and at a time when he was representing Baylor Medical Center at Grapevine in the

adverse proceeding against Petitioner, that he had conversations with Mr. Borum on the subject of his

representation of Petitioner on the Powell matter, however, Mr. Stewart claimed he had no recollection

of the substance of this conversation. Belying his faulty memory was other testimony by Mr. Stewart

which gave a hint of these communications, for he suggested that Dr. Basco was not being credible

when he contends he either received or justifiably relied upon advice from Mr. Borum in connection

with the delayed reporting of the Powell case. (TR, pp. 21-23.) Like the associate in Henderson v.

Floyd where this Court ordered disqualification, Mr. Stewart did not unequivocally deny actual access

to client confidences when he was with the firm and his leaving the firm does not undo the conflict of

interest that disqualifies him. Henderson v. Floyd, supra, NME v. Godbey, supra. Even if he had no

actual knowledge of confidences while with the firm, under the Pollard case, Mr. Stewart’s seeking

                                                 -18-
out his former partner and having communications with him on the subject of Mr. Borum’s

representation of Petitioner in the Powell matter reconnected him to the irrefutable presumption of

access to all confidential communications between Petitioner and his former partner and created a

genuine threat of disclosure of these confidences. Petitioner is not required to prove an actual sharing

of confidences. NCNB v. Coker at 406.

       There is no dispute but that these matters are substantially related. In this lawsuit Mr. Stewart,

will of necessity, have to challenge his former partner’s opinion that Petitioner had no liability in the

Powell case, otherwise the bare fact that Petitioner was sued in the Powell case and delayed reporting

based on advice of counsel would not be sufficient to justify the termination of his clinical and medical

staff privileges. Should Mr. Stewart have the right to challenge the opinions in Mr. Borum’s letter and

seek to prove Petitioner was negligent in causing the neonatal injuries in the Powell case? In Re: Epic

Holdings says “no”. Should Mr. Stewart be able to prove based on conversations with Mr. Borum

Petitioner is not credible? Pollard says “no”.       Should Mr. Stewart have the right to challenge

Petitioner’s assertion that he either received or justifiably relied upon advice from Mr. Stewart’s

former partner in the delayed reporting of the Powell lawsuit? In Re: Epic Holdings says “no”.

Petitioner does not have to prove confidential communications were passed between Mr. Borum and

Mr. Stewart, he only has to prove that there is a genuine threat that such confidences were conveyed

and may be used. In Re: Epic Holdings at 51. The Petitioner has discharged that burden with evidence

that Mr. Stewart either had actual access to confidences when he was with the firm or after leaving the

firm he sought out his former partner and had conversations with him regarding his representation of

Petitioner on the Powell matter which prove a genuine threat of disclosure of confidences to warrant

disqualification. Pollard v. Merkle, supra.

                                                  -19-
       C.      Texas Rules of Professional Conduct. Rule 1.05(b), Texas Rules of Professional

Conduct (Appendix “D”) requires a lawyer to maintain the confidentiality of attorney-client

communications and prohibits an attorney from revealing or using confidential information adverse

to a client without consent.      This rule prohibits a lawyer from representing a client if that

representation involves either a substantially related matter in which the new client’s interests are

materially and directly adverse to the interest of another client of the lawyer or his firm, or reasonably

appears to be or become adversely limited by the lawyer or law firm’s responsibility to another client.

Commentary 6 states that the meaning of “directly adverse” means that the “lawyer reasonably appears

to be called upon to espouse adverse positions in the same or related matter”. This rule extends to all

members, partners, shareholders and associates of a law firm. Smirl v. Bridewell, 932 S.W.2d 743

(Tex.App. - Waco 1996).

       Rule 1.09(a) (Appendix “D”) prohibits a lawyer from representing a person in a matter if it

would cause a violation of Rule 1.05 and result in wrongful use of confidential information and/or

involves a matter adverse to a former client on the same or substantially related matter. Rule 1.09(b)

and (c) extend this requirement to all members and associates of the firm and to lawyers who leave the

firm. (See Appendix “D”.) The comments in Paragraphs 4 and 5 to Rule 1.09 make it clear the

purpose behind this rule is to prohibit a lawyer from accepting another assignment if it is reasonably

likely to result in a client’s confidential communication being used adversely to him. Comment 6

states that departing members of the firm are prohibited from questioning the former attorney’s work

product.

       Rule 1.09 has most often been cited by this Court in deciding whether or not to disqualify.

Henderson v. Floyd, 891 S.W.2d 252 (Tex. 1995) (under Rule 1.09 the Court disqualified a new

                                                  -20-
plaintiff’s co-counsel because an associate in his firm had previously worked for the defense firm);

National Medical Enterprises v. Godbey, 924 S.W.2d 123 (Tex. 1996) (citing Rules 1.09 and 1.06

[Comment 6] the Court held the trial court abused discretion in not disqualifying the Baker & Botts

firm from suing NME since a member of that firm had previously represented NME officers on

substantially related matters); In Re: Epic Holdings, 985 S.W.2d 41 (Tex. 1998) (under Rule 1.09(a)

the Court held two lawyers who had formerly worked for Epic Holdings and a principal on prior

matters were disqualified; under 1.09(b) members of their firm were disqualified and under 1.09(c)

former members of the firm were disqualified). Pollard v. Merkle, 113 S.W.3d 695 (Tex.App. - Dallas

2003) cited Rules 1.09 and 1.05 as sources for the holding that an attorney may not knowingly reveal

or use confidential information of a former client to his disadvantage after the representation is

concluded and held pursuant to Comment 7 to Rule 1.09, that even though a departing attorney from

a firm lacked actual knowledge of confidential information, and was therefore not automatically

disqualified, she was disqualified by Rules 1.09 and 1.05 from using confidential communications

against the former client in a subsequent proceeding regardless of how the attorney learned of the

evidence.

       D.      The Need for a Bright Line Rule. This Court has repeatedly held that the Texas

Rules of Professional Conduct do not provide binding standards, only guidelines. Spears, supra at 656;

Nitla, supra at 422. In one case it is possible an attorney may violate a professional rule and not be

disqualified, and in another case it is possible there may not be a rule violation and the attorney will

be disqualified. Id. Since the Professional Rules are not binding, in the absence of an existing

Supreme Court decision on point on facts before a trial court, each Trial Judge must guess what

guidelines should be followed in ruling on a disqualification motion. This in turn leads to a lack of

                                                 -21-
uniformity and uncertainty in the law as evident by the conflicting results in the Dallas Court of

Appeals in Pollard and the instant case.

       This Court has been willing to establish bright line standards on disqualification issues where

an attorney secures confidential information either within or outside the context of discovery. In In

Re: Meador, 968 S.W.2d 346, 351-352 (Tex. 1998) this Court articulated six factors a trial court

should consider when deciding whether to disqualify an attorney who has reviewed confidential or

privileged documents outside the scope of discovery. In In Re: Nitla S.A. de C.V., 92 S.W.3d 419

(Tex. 2002) this Court announced a bright line two part test that would govern the trial court’s decision

of whether to disqualify counsel who reviewed privileged matters in the course of discovery. No

doubt, establishing a bright line test in these two circumstances established much needed certainty and

guidance to trial courts trying to make correct decisions while navigating through conflicting opinions

and non-binding Rules of Professional Conduct.

       To correct the inconsistency in the conflicting decisions by the Dallas Court of Appeals in

Pollard and in the instant case, where a departing attorney in one case is disqualified and the other is

not yet both sought confidential information from a former partner, respectfully, this Court should, but

is not required to announce a bright line rule.

       Mr. Stewart is disqualified by existing case law and Rules 1.09, 1.05 and 1.06 because the

matters are substantially related and (a) he did not prove he had no actual access to confidences while

with the firm, Henderson; (b) his conversation with Mr. Borum after he departed re-established the

irrefutable presumption of shared confidences and there is a genuine threat of disclosure, Pollard; and

(c) he cannot challenge Mr. Borum’s work. In Re: Epic Holdings. Although existing case law can be

used to decide this case, this Court is respectfully urged to adopt a clear standard which would hold

                                                  -22-
that in the absence of extraordinary circumstances or client consent, no present or former attorney in

a law firm may accept representation against the former client on any matter that is substantially

related. Such a rule would provide a clear bright line test that would eliminate ambiguity and provide

clear direction to trial courts as to the standard to apply regardless of whether the lawyer has departed

or had actual knowledge of confidences before or after departure.              It would eliminate most

disqualification issues on the subject from arising in the first place for attorneys would know they

could not accept legal matters adverse to a former client on substantially related matters. It would

avoid litigation being carved up piecemeal over disqualification issues and eliminate the need for

discovery that might have to be conducted to determine what the lawyer knew, when he knew it, what

he disclosed to who, and eliminate questions as to what should be done when the attorney claims he

cannot recall if he accessed privileged information. Such a rule would promote a greater confidence

both in the client and in society in the integrity of the legal system that insures client confidences will

remain privileged. The type of extraordinary circumstances that would create an exception to the rule

would be limited to one, for example, where an attorney who did not do legal work for the former

client, has no knowledge of confidences and departed the firm, and securing other counsel would

create a substantial financial hardship or there is a lack of available qualified attorneys.

        e.      MR. STEWART AS A WITNESS. In the Third Amended Petition the Plaintiff

alleged below that the hospital entered into a civil conspiracy with certain persons including Mr.

Stewart to use pretextual peer review actions to cause him to lose privileges at the hospital which

would be used to impair his credibility as an expert witness against the hospital in a lawsuit that was

certain to be filed by Mrs. Bass over the injuries to her baby. The Petitioner alleged that the delayed

reporting of the Powell lawsuit was pretextual, since the hospital did not act on the delayed reporting

                                                   -23-
to suspend his privileges for nine months, establishing that either it accepted Mr. Borum’s opinions

that Dr. Basco had no liability in the case or that there was justification for the delayed reporting which

should not warrant summary suspension or termination of privileges.

        The Petitioner alleges that the other stated reason against his privileges and his alleged use of

cytotec was not substantiated by any forensic evidence, patient files or patient testimony, but by the

testimony of a former disgruntled employee and Petitioner has been cleared on this charge by the

Texas State Board of Medical Examiners and a panel of the Texas Medical Association. Petitioner

was suspended days after Mrs. Bass delivered a brain injured child which Dr. Basco reported to the

hospital was caused by the negligence of Baylor’s nurses who altered records. Petitioner alleged by

using pretextual peer review to remove his privileges, the hospital would establish its ability to impugn

Dr. Basco as a potential witness against the hospital in a suit that was likely to be filed. Mr. Stewart

subsequently allegedly counseled Mrs. Bass on withdrawing life support for the newborn at a time he

knew he would likely be defending the hospital in a malpractice lawsuit. On a prior occasion the

hospital and Mr. Stewart used the same tactic against another obstetrician, i.e., bring about the unjust

removal of his privileges and accuse him of being unethical in a subsequent lawsuit that was filed

involving the wrongful death of a newborn.

        Petitioner has alleged that Mr. Stewart is a witness to this conspiracy and would have to be

deposed. Normally, an attorney is not precluded from serving both as a witness and an attorney, as it

is essential for the complaining party to prove prejudice by the attorney serving both roles. See, Ayres

v. Canales, 790 S.W.2d 554 (Tex. 1990). In In Re: Sanders, 153 S.W.3d 54 (Tex. 2004) (the Court

declined to disqualify the husband’s attorney in a divorce case merely because his attorney hired him

to perform carpentry work to offset legal fees). In this case there would be harm to the Petitioner for

                                                   -24-
Mr. Stewart serving as both an attorney for Baylor Medical Center at Grapevine and a witness because

of the same reasons that disqualify him, i.e., his prior membership in the law firm of Burford & Ryburn

that represented Dr. Basco and because Mr. Stewart had access to confidential communications that

Petitioner may have had with Mr. Borum after he left the firm of Burford & Ryburn. In short, Mr.

Stewart should not be able to stand up in court as the attorney of record for the hospital and assert to

a jury that he, as a witness, should be believed because he “knows what really happened” when

Petitioner was represented by his former law firm!

                                              PRAYER

       Petitioner respectfully prays that this Court conditionally grant a Writ of Mandamus to the

Honorable Adolph Canales, Judge of the 298th District Court of Dallas County, Texas unless he orders

the disqualification of Mr. Stewart and the firm of Stewart & Stimmel from representing the hospital

in the litigation below. The Petitioner further prays that Judge Canales be directed to conduct a

hearing within the guidelines of In Re: George, 28 S.W.3d 511 (Tex. 2000) to establish procedures to

insure that any confidential information Mr. Stewart and Stewart & Stimmel may have is not disclosed

to Baylor Medical Center at Grapevine or to the new counsel assigned to represent Baylor Medical

Center at Grapevine. Petitioner prays for such other and further relief, general and special, at law or

in equity, to which Petitioner may be justly entitled.




                                                 -25-
                                                         Respectfully submitted,

                                                         THE TOWNEND LAW FIRM

                                                         _________________________________
                                                          David W. Townend
                                                          TSBN 20155700
                                                          18601 LBJ Freeway, Suite 440
                                                          Mesquite, Texas 75150
                                                          (972) 686-0072
                                                          (972) 686-0073 (Fax)

                                                         ATTORNEY FOR PETITIONER
                                                         MICHAEL ANGELO BASCO, M.D.



                                    CERTIFICATE OF SERVICE

        This is to certify that I served a copy of Petitioner’s Brief on the Merits has been mailed to the
following attorneys of record: The Honorable Adolph Canales, judge of the 298th District Court of
Dallas County, Texas, at George L. Allen, Sr. Courts Bldg., 600 Commerce, Dallas, Texas 75202, and
the attorney for the real party in interest, Mr. Mac Stewart, Stewart & Stimmel, 1701 Market Street,
Suite 318, L.B. 18, Dallas, Texas 75202 on this ____ day of January, 2006.


                                                         __________________________________
                                                         David W. Townend




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APPENDIX




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