HOT "CITES"
A QUESTION OF ETHICS, BUT
WHOSE...?
by Janet E. Cook, RP
What Can Happen in the Legal Assistant Profession When a Legal Assistant is Under the Supervision of an Attorney Whose Ethical Handling of a Case Situation Becomes Not Only Questionable, But Sanctionable?
Have you given substantial thought why every legal professional seminar and specialty testing reserves a segment of its program to the study of ethics? Ever given thought to the fact that an ethical situation could culminate to the point legal assistants could find themselves testifying in Court regarding instructions given by a temporary supervising attorney, who happened to be the legal assistant’s supervising attorney’s co-counsel on a particular case? Would you be surprised to learn that hearings of this type can extend into weeks, that it could become necessary to subpoena a Court’s telephone records to substantiate testimony given at the hearings, that judicial decisions can be made which ultimately affect innocent parties in the case (i.e. Plaintiffs’ pleadings could be stricken), that an appeal process could become necessary to reinstate Plaintiffs’ pleadings, and that a Judge could be requested to recuse him/herself because of potential bias of a Court, due to a court coordinator’s clerical error? This error, involving the mishandling of privileged documents, would eventually become an ethical dilemma. Could you imagine a Judge formally being recused, the hearings continued in another Court and, after listening to the testimony, a Court could impose sanctions upon a supervising attorney for his breach of ethical standards? Is it hard to comprehend that a supervising attorney could instruct co-counsel’s legal assistant and his own staff to retain privileged documents negligently dispersed by a court coordinator, thereby placing co-counsel’s legal assistant and his own staff in an ethical situation ultimately culminating in the above?
The above synopsis consequences from the mishandling of a situation are some of the many reasons why so much time is devoted to reviewing ethical fact scenarios at seminars, testing procedures, meetings and other conferences. What are “ethics”? How do we define “ethics”? It has been said “ ‘Ethics’ create the guideposts for measuring conduct or electing a course of behavior in matters affecting the interrelation between the judicial system, lawyers, legal assistants, and clients.”1 Is this why almost every seminar conducted for attorneys and legal assistants has some segment of its program devoted to the subject of ethics? Although the legal profession is replete with seminars, conferences, Canons, Model Codes and Rules of Professional Conduct for the legal professional to review and apply, what happens when a supervising attorney fails to adhere to these standards?
When a legal assistant undertakes any form of certification or speciality testing the legal assistant knows that fact situations regarding ethics will appear on the test and the legal assistant will be instructed to “select” the response that would be considered the most appropriate answer for the illustrated scenario. Are potentially ethical concerns immediately obvious to the legal assistant when an ethical situation presents itself outside the multiple choice arena in which most of us are exposed to ethics questions? Is it safe to assume that by providing ethics discussions at seminars and conferences every legal assistant is adequately exposed to recognizing ethical concerns? And what about legal assistants who never attend seminars or conferences where ethics discussions are presented? How are those legal professionals being educated to be alert to potential ethical concerns?
If a legal assistant questions an instruction given by a supervising attorney as potentially evolving into an ethical concern, how can the legal assistant best address the concern? Ideally, the legal assistant might seek advice from another attorney and have him/her speak with the supervising attorney, but this is not always possible. However difficult the situation, a legal assistant or any nonlawyer working for an attorney does not have authority to disregard a supervising attorney’s instructions assigned to the legal assistant or nonlawyer. Review of the Model Rules of Professional Conduct, as adopted by the American Bar Association and the numerous Canons adopted by various legal assistant organizations, reveal that there are no provisions identified in the Rules and Canons which allow legal assistants to disregard direct instructions from a supervising attorney and thereby determine for themselves how they shall proceed with the assignment. That is what the Rules and Canons governing the employment of the legal assistant or nonlawyer are all about. They are designed, among other things, to put the attorney in the forefront of the decision making process, not the legal assistant or the nonlawyer. Rule 5.3 RESPONSIBILITIES REGARDING NONLAWYER ASSISTANTS as set forth in the Model Rules of Professional Conduct states in part: “With respect to a nonlawyer employed or retained by or associated with a lawyer: (c) a lawyer shall be responsible for conduct of such a person that would be a violation of the Rules of Professional Conduct if engaged in by a lawyer if: (1) the lawyer orders or, with the knowledge of the specific conduct ratifies the conduct involved; or (2) the lawyer is a partner in the law firm in which the person is employed, or has direct supervisory authority over the person and knows of the conduct at a time when its consequences can be avoided or mitigated but fails to take reasonable remedial action.”2 Therefore, attorneys are held to strict accountability for acts of the legal assistant or nonlawyer working under the attorney’s supervision. Strict accountability for the acts of the legal assistant or nonlawyer is a compelling phrase. But somehow, being relieved of accountability probably would not totally appease a legal assistant’s aggrieved professional dignity when the legal assistant is ordered by the lawyer1 to perform duties that breach the legal assistant’s own professional integrity.
Canon 3 of the National Federation of Paralegal Associations, Inc. (“NFPA”) Model Code of Ethics and Professional Responsibility states: “A PARALEGAL SHALL MAINTAIN A HIGH STANDARD OF PROFESSIONAL CONDUCT. EC-3.1 A paralegal shall refrain from engaging in any conduct that offends the dignity and decorum of the proceedings before a court or any other adjudicatory body and shall be respectful of all rules and procedures. EC-3.2 A paralegal shall advise the proper authority of any action of another legal professional which clearly demonstrates fraud, deceit, dishonesty, or misrepresentation. EC-3.3 A paralegal shall avoid impropriety and the appearance of impropriety.”3
Maintain, refrain, advise and avoid. These are great action verbs and they are applicable to any situation, but conceivably not immediately at the onset of what eventually could become an ethical concern. What would be considered contributing factors to an ethical concern as it begins to manifest itself into an ethical dilemma and how do contributing factors affect a potentially ethical concern? What if the legal assistant is under the supervision of a temporary supervising attorney, but not the legal assistant’s own employer? What if the legal assistant is given cause to question the temporary supervising attorney’s instructions? What if the legal assistant determines that the temporary supervising attorney is violating the ethical standards as set forth in the Rules and Canons? What if the legal assistant’s employer is not available for consultation? Should the legal assistant report the temporary supervising attorney’s conduct to the proper authority, without benefit of consultation with the legal assistant’s employer? What if there was no other source available for the legal assistant to consult? Or what if the legal assistant consults other attorneys and is advised to continue under the supervision of the temporary supervising attorney until the legal assistant’s employer could be consulted? And, what if the legal assistant is a new employee to the firm, perhaps for only two-and-a-half weeks?
As one might surmise, contributing factors definitely produce the possibility for a legal assistant to be exposed to an ethical situation, and conceivably, when the legal assistant least expects it. Therefore, legal assistants must never consider themselves immune from being involved in an ethical situation. We cannot regale ourselves into thinking perhaps, as legal assistants that: 1) we are invulnerable to a situation because of the years of experience we possess; 2) we always control the ability to avoid the very appearance of impropriety; or 3) as legal assistants we shall refrain from engaging in any conduct that offends the dignity and decorum of the proceedings before a court ... and procedures.3 Certainly legal assistants shall refrain from offensive conduct, but realistically, initially carrying out the instructions of a supervising attorney would not always be identified as offensive conduct at the onset of what can potentially become a question of ethical consequences. As legal professionals we cannot become proverbial ostriches, sticking our heads in the sands of our profession, thinking that we are impervious to unpleasant and potentially ethical situations. Sometimes unethical situations present themselves in the most unlikely circumstances and that is why legal assistants should seize every opportunity to educate and inform themselves on matters concerning ethics. If you haven’t already, obtain copies of the Canons and Rules that govern the legal profession. Don’t just read them and then file them away. Study them, memorize them, and apply them to fact situations you encounter in your employment. Subscribe to legal assistant magazines and journals. Attend seminars where you know ethics will be discussed. Listen intently if someone speaks on a situation in which they had the misfortune to become involved. Learn from someone else’s experience, but whatever you do, DO NOT PASS JUDGMENT ON WHAT YOU THINK SHOULD HAVE BEEN DONE. Always remember you were not there, and because of a legal professional’s willingness to share their experiences, you become the benefactor of a learned experience. Take the opportunity to grow from another legal professional’s personal experience. One of the redeeming benefits of a career within the legal profession is learning continues every day you remain in the legal profession. As is evidenced by the number of lawsuits filed each day, the legal profession is not all black or all white—most of the legal profession exhibits shades of grey, and it is the grey areas of life in which we learn the most.
1 William R. Park, NALA Manual For Legal Assistants; Ch.2—Ethics, West Publishing Co. 1979
2 ABA Model Rules of Professional Conduct
3 NFPA Model Code of Ethics and Professional Responsibility
Janet E. Cook, RP, is a Board Certified Legal Assistant in Personal Injury Trial Law, Texas Board of Legal Specialization and a PACE registered paralegal. She is a member of DAPA, LAD and NFPA, and has been employed as a litigation paralegal with the Dallas firm of Demarest, Smith, Jones, Giunta & Moore, P.L.L.C. since 1996, working exclusively with Frank G. Giunta.
MY CALL TO JURY DUTY
(TALK ABOUT WANTING TO SCREAM!)
by Nancy C. McLaughlin, CLAS
It was a dark and stormy night...No, wait, let me back up a bit. About two weeks prior to the dark and stormy night, I received a card in the mail notifying me that I was to report for jury duty on May 12, 1999. I live in a small county that shall remain nameless for reasons that should become apparent. Although set, most cases never actually go to trial. Therefore, they give you a telephone number and ask that you call after 5:00 p.m. the day before the setting to determine if you need to be there. I placed the card on my bathroom mirror as I knew that I would be sure to see it and be reminded to call.
Now it’s two weeks later, May 11, 1999 and it is a “dark and stormy night.” On my 40-mile drive home from the office I saw the thunder clouds moving in from the northwest and they looked menacing. Around this time two years ago, Central Texas was struck by devastating tornados, one of which crossed the highway that I travel everyday. For this reason, my neighbors and I are very cognizant of threatening weather systems. When I arrived home, the television went on immediately and as I suspected, my county was under a severe storm watch. As the evening progressed, the weather got worse and by 7:30 p.m., we were under a tornado watch. Now, as most of you are aware, a watch means that something bad is happening now! In this case a tornado had been sited and was “on the ground” approximately 30 miles from my home and heading our way. Fortunately, I have a neighbor, Mike, that has a room downstairs in his home that had literally been carved out of a hill. In my neck of the woods that means “carved out of stone,” so that’s where I headed. But, not immediately—I have five dogs and a cat that also needed shelter from the storm. The first thing I did was grab my cat, put her in her carrier and then on my way out the door, I picked up my weather radio. I dropped both off at my neighbor’s and then returned home to put leashes on the dogs. In the meantime, a couple of other neighbors had also asked if they could take shelter in Mike’s house. Now, you should understand, I have five dogs, Mike has two, and the other neighbors have three, so we would have an “interesting” situation if I had taken my “kids” over at that time. As I was already frazzled, I yelled out the back door to Mike that I was going to remain in my home and watch the weather reports. If I saw that the tornado was anywhere close to us, I would grab the dogs and head his way. My pups were going crazy because when I put on the leads, they thought we were going for a walk. By the time I got them calmed down, the weather system had passed and we were in the clear with not a drop of rain having fallen at my house. So, back across the street I went to collect the cat and the radio.
Upon awakening the next morning, I saw the card on the bathroom mirror and realized in all the excitement that I had forgotten to call the court. I began calling the Court at 6:00 a.m. and all it did was ring—-no recorded message telling me if I needed to be in Court. I then called the District Clerk’s Office and was connected with an operator who informed me that no one was answering at the extension I requested. Well, duh, I already knew that. The Courthouse is about 25 miles north of my house and my office is 40 miles south, so now I had a conundrum. What should I do, go to the Courthouse or to work? I opted for work.
As soon as I walked in the door, I called the Court and this time, they answered. I couldn’t quite understand what the man said when he answered the telephone so the only thing I was sure of was that I had reached someone involved with the County court system. I explained that I had been trying to call and had received no answer. He stated that the reason was that this particular court did not have an answering machine. I asked why they listed a number if there was no one there to answer and he replied that “they” were supposed to have taken the number off the cards they sent out for his court. I explained that I was in Austin and that there was no way I could be at the Courthouse by 9:00 a.m. He informed me that I needed to report. Needless to say by this time I was thoroughly “p——- off,” but, fortunately for me (as shall become evident later), I held my tongue.
I called my answering service to tell them I would be out of the office and to let my attorney know. Then, I was off. I left my office at 8:15 a.m. and arrived at the Courthouse at 9:20 a.m. How I did it, I don’t know. I suppose the “Jury God” who looks after those of us who are late for jury duty was looking out for me.
I realized on the way that I was to report to the Justice of the Peace Court which was not in the main Courthouse. Where they had listed a phone number that didn’t answer, they had gone a step further and failed to provide us with the address for Court, although they did tell us where to park. I found a lot at the intersection noted on the card, parked, and then ran to the County Clerk’s office to ask where I could find the JP Courts. Fortunately, it was just across the street. Upon arrival , a woman asked if I was a juror or a Defendant (must have been my demeanor) and when I replied, “Juror” she directed me to a small room just to the right of the front door. Inside I found around 15-20 people (50 had been called) sitting at small tables waiting for the arrival of the Judge. There we all sat for another 30 minutes before being advised that the County Attorney was “held up” in another matter and to “please be patient.” Around 11:30, the Judge (who I realized was the person with whom I had spoken that morning and had almost told what a ridiculous system his Court had in place) announced that two of the four cases had settled. He said that Court would reconvene at 2:00 p.m, but before he dismissed us, he wanted to go ahead and chose nine people who would return for voir dire. He asked that we call out our jury number and name. Several did and then there was silence, so, I spoke up with my information. At this point, as I recall, seven of us had responded. He then said, “Do I have any more volunteers?” I said, “Volunteers? I didn’t know we were volunteering.” He said, “You do now.” I shut up. A couple more “volunteered” and we were dismissed. At some point in time, the County Attorney had arrived and I explained that I was a Legal Assistant and asked if I would even be considered for the panel. His reply, “I’ll be glad to have you!” As I left, I spoke to a woman who had been sitting in the courtroom, at which time I expressed my dismay at how the morning had gone. She informed me that she was one of the Defendant’s whose case had been dismissed. I couldn’t believe it—a Defendant had been in the room, sitting and talking with the jurors before her case had been resolved.
With time to kill, I went to lunch and the grocery store. Before I returned to the Courtroom, I wanted to call my office. The only pay telephone nearby was outside the main Courthouse. An elderly lady was standing at the phone, so I sat on a bench to wait my turn. She didn’t seem to be saying anything, so I tuned in to her conversation, or in this case, the lack thereof, to see if she was actually talking to anyone. Finally, she began to talk and I realized that she was calling the telephone company to report trouble on her home line. I knew this could be an extremely long call so I returned to the Court at 2:00 p.m. to again sit and wait. At 2:15 p.m. the Judge informed us that the Defendant would arrive at 2:30 p.m and we would begin voir dire. While waiting, I struck up a conversation with two of the other “volunteers”—a young woman and an older lady. I wondered out loud as to what kind of case we would hear, if called, and stated that I assumed it would be some type of traffic violation issued by the DPS. The younger woman said she didn’t understand why anyone would have a trial for a traffic ticket in that everyone knows that the officer would not have issued a citation if the Defendant wasn’t guilty. I was shocked! This woman had found the Defendant guilty and we had not even seen his face. I explained that there could be a lot of reasons why the Defendant had pled “not guilty” and that we should wait to make any decisions until we had heard the evidence. At that point, the older woman chimed in with a long story about how she had received a ticket and she was not guilty. By this time, it was 2:30 p.m. and sure enough, the Defendant finally appeared on the scene.
Now I have to describe this poor man. I figure he was somewhere in his late 30’s or early 40’s with a very full head of graying hair. He had on the older type of sweat pants, blue with a white stripe down the side, a gray t-shirt and tennis shoes. A note here to all legal assistants who deal in litigation: No matter how smart you assume your client to be, always emphasize that you only have one opportunity to make a first impression. Our initial impression of this Defendant was not good, and, it only got worse. The Judge announced the charges: Failure to Maintain a Current Vehicle Inspection and Towing a Vehicle Without a Permit. Yahoo! I was excited now. The Judge then asked the Defendant, who I shall refer to as “Tweety Bird” (if you knew his real name, you would understand the reference), if he was ready to answer the charges. Mr. “Bird” stated that he was ready on the towing permit charge, but not the vehicle inspection. The Judge stated that he felt that the Defendant had had plenty of time to get ready for his “day in Court” to which Mr. “Bird” replied in a whining voice, “Judge, I’ve been sick.” Obviously, this did not hold water with His Honor, so we proceeded with voir dire. The County Attorney, a good old boy in the greatest sense of the word, began by introducing himself and the defendant and then he read the charges. At this point, my friend the older woman, spoke up and asked if the Defendant was driving a tow truck, or if he just had a vehicle attached by a chain to the back of his car because if he was just helping out a friend, she could not see anything wrong with that. The County Attorney turned to the arresting officer and asked him which it was. I couldn’t believe it! We were in voir dire and they were giving testimony. Finally, it was over and it was time to pick a jury. Can you say “Hallelujah?” The Judge asked if anyone felt that they could not sit on the jury and render a fair verdict and naturally, no one said anything. So, what did he do? He went down the list and picked the first six. I was number seven. Therefore, at 3:30 p.m., after having spent hours in the Courtroom and having driven 130 miles, I was dismissed!
I called the Court several days later to find out what had happened to Mr. Bird. I was not surprised to find that the jury had found him “guilty” on both counts for which he was fined a whopping $50., plus court costs. Me, a week later, I received my $6.00 check for my service to the Community.
If you read closely, you will find that there are lessons to be learned from my experience. One I pointed out earlier. Another is don’t lose your temper with someone you don’t know, it could be a Judge! Finally, don’t ever assume that juries are going to give your client the benefit of the doubt. Many don’t subscribe to that old adage of “A Defendant is innocent until proven guilty.” It is the attorney’s job to get across to the panel that they must listen to all of the evidence BEFORE making a decision.
Next time I am called for jury duty, I’m going to bring a fat book!
FAMILY MEDIATION
by David W. Simpson, Assistant Director, Harris County Dometic Relations
I. Introduction
Statistics reflect that fifty percent of all marriages end in divorce. As a result, the family legal system is overburdened with pending matters. Recognizing that a trial is often the worst possible environment in which to dissolve a marriage, the courts have turned to mediation to resolve these disputes. To assist their attorney and client, Legal Assistants must be aware of the family mediation process.
II. Mediation
Mediation is a process whereby a neutral third party facilitates communication between two parties in dispute. Mediation seeks to minimize the hostility through which a divorce litigant must move and encourages communication between the parties. Parents are encouraged to work cooperatively in an effort to devise a mutually workable solution to the issues. The process allows for self-determination and self-direction.
The preamble to the ABA’s Divorce and Family Mediation Standards of Practice defines mediation as:
A process in which a lawyer helps family members resolve their disputes in an informative and consensual manner. This process requires that the mediator be qualified by training, experience, and temperament; that the mediator be impartial; that the participants reach decisions voluntarily; that their decisions be based on sufficient factual data; and, that each participant understands the information upon which decisions are reached. Preamble, Divorce and Family Mediation Standards of Practice, Task Force on Mediation, Section of Family Law, (ABA, 1986).
III. Mediation in Texas
The Texas Legislature encourages alternative dispute resolution, particularly mediation, in family matters. Current Texas law provides that a family litigant must attach a signed mediation acknowledgment to a petition for litigation under Title 1 or Title 5 of the Texas Family Code. See Tex. Fam. Code Ann. Section 3.522 and 102.0085 (Vernon 1999).
In addition, the majority of Texas family law judges require mediation prior to setting the case for trial. Some judges require mediation prior to setting a temporary orders hearing. In Harris County, preference in setting hearings is given to matters in which the parties have participated in alternate dispute resolution. Harris County Local Rules of the Family District Courts, Rule 3.2.2, Preference for ADR.
IV. The Logistics of Family Mediation.
a. Length. Family mediations occur over a half day, full day or multiple sessions.
b. Videos. Parties litigating children’s issues may be required to view a video prior to beginning a mediation session, i.e., “Don’t Forget The Children,” “Children of Divorce,” etc. These videos remind parents to consider their children when attempting to resolve their disputes.
c. Attorneys. Parties should have their attorneys present at mediation. In an effort to save money, a party’s attorney may be on telephone standby to answer questions or to review a faxed mediation agreement. In cases where domestic violence or extreme conflict exists, the attorney should be present. As a general rule, the absence of an attorney risks agreements based on insufficient disclosure or unequal bargaining power.
d. Opening Statement. At the beginning of the mediation session, the mediator provides an opening statement which:
1. Details the experience of the mediator,
1.1 Explains the mediation process,
1.2 Identifies the mediators understanding of the disputed issues,
1.3 Assures confidentiality,
1.4 Asks for a commitment of both parties that they are at the mediation in good faith to resolve the issues in the case, and
1.5 Requests that each side make a non-confrontational opening statement.
The mediator will also suggest the use of first names during the session, identify the location of the restrooms, prohibit foul language and verbal abuse, and assure the parties a break at their request.
V. Mediation Styles: Caucus or Pure Form
a. Caucus. After the opening statement, the mediator makes the determination whether to mediate in caucus or pure form. In the caucus format, the mediator separates the parties in two different rooms and shuttles back and forth between the parties to assist with narrowing issues. The caucus format allows each party to tell their story in a nonconfrontational atmosphere. This format allows the mediator to listen well, be sympathetic and remind each party of the reality of the situation – without compromising their confidentiality. The caucus format is important where the parties cannot communicate with each other in the same room.
b. Pure. In the pure format, the parties remain in the same room. The parties are encouraged to communicate their concerns and respond to the other party’s concerns. The mediator sits around the table and guides the discussion based on the responses.
VI. Mediated Settlement Agreement
If the mediation results in a partial or full agreement, then it is reduced to writing in a “Mediated Settlement Agreement.” This Agreement can be binding if it contains the following sentence, in bold print and underlined:
THIS AGREEMENT IS BINDING AND IS NOT SUBJECT TO REVOCATION.
The Agreement is then filed with the Court. The final order is drafted pursuant to the Agreement.
VII. Benefits of Mediation
a. Cost. Mediation fees vary. A one-day session costs between $1000 and $2000. The cost is paid by the parties—the percentage to be determined by the Court or the parties. Mediation cost is usually less than trial.
a.b Time. Mediation can result in a settlement prior to a trial.
a.c Emotional. Parents, who successfully reach an agreement in mediation, have not testified against each other in an open forum. The hostility is mitigated.
a.d Flexibility. The parties create their own order, with the approval of the court. The parties can customize their visitation order or property settlement.
a.e Success Rate. Resolution occurs in the majority of cases. Mediation also serves as a catalyst for future settlement.
VIII. Choosing a Mediator.
The Texas Civil Practice and Remedies Code govern mediation training. A Texas mediator must attend forty (40) hours of basic mediation training. Texas family mediators are required to have an additional 24 hours of specialized mediation training. Mediation training includes classroom instruction and practice sessions.
Family mediators can be attorneys or professionals in the fields of psychology, sociology, social work etc. However, family mediation works best when the mediator is a lawyer qualified in family law mediation. There is no substitute for expertise and experience.
IX. Forms of Mediation
a. Public Mediation.
Many Texas counties have a Domestic Relations Office or other alternative dispute resolution center that provide mediation. In addition, many law schools also have mediation clinics that serve the public. Public mediation is often free, but available only to parties under an income cap. Mediations are offered on a first come basis for parties ordered to mediation and may only mediate issues that involve children.
b. Private Mediation.
Private mediators should be selected based on their expertise (both as a family law practitioner and family mediator) and cost. Family mediators can be specialized in the following areas.
1. Children’s Issues—Mediators with background training in the social sciences area may specialize in child specific mediation. These mediators custom build sessions allowing for multiple appointments between the parties and the children.
1.1 Property—Mediators may have additional financial training providing additional expertise in the area of property dissolution, i.e. retirement accounts, stocks, tax implications, etc.
1.2 Domestic Violence— In situations involving family violence, most experts do not recommend mediation. Recognizing the inappropriateness of mediation in domestic violence cases, the 76th Legislative provided for a “mediation waiver” for victims involving in family law cases. A victim may file an “Objection to Mediation” alleging that he or she is a victim of abuse perpetrated by the other party. Filing of this objection will result in a waiver from any mediation requirements.
X. Mediation Preparation
Mediation is more likely to result in a settlement agreement if the client, attorney and mediator have been fully prepared. Mediation should be approached with the seriousness of trial.
a. Prepare Your Client
All mediation parties must be educated consumers. A detailed letter should be sent to your client before the mediation which:
1. Provides date, time, location (including directions) and telephone number for the mediator;
1.2 Explains the mediation process, including the opening statement, caucusing, role of the mediator, and potential length of the mediation session;
1.3 Includes a copy of the confidential mediation statement sent to the mediator and a request that your client review the document for addition terms and conditions;
1.4 Discusses the effect of signing a binding mediated settlement agreement;
1.5 Includes a copy of the Rules and forms which the mediator requires; and
1.6 Lists the mediator’s fees and terms of payment.
At the meeting with your client, the mediator’s fee should be collected and relevant Texas family law, i.e. standard possession order, guideline child support, property distribution, etc., should be explained. The best case/worst case scenario should be compared with the expense and delay if the case is tried.
b. Prepare Your Attorney
Ensure that your attorney has the following documents prior to preparing for mediation:
1. Financial Information Statement, including proof of current income;
1.1 Documents reflecting cost of insuring the children;
1.2 Current account statements of bank, savings, retirement, 401K and mutual fund accounts;
1.3 Inventory & Appraisal; and
1.4 Proposed Property Division.
If discovery has been propounded but not completed, this information may be required before a party will mediate in good faith.
c. Preparing The Mediator
A confidential mediation statement should be prepared setting forth the case history, contested issues and suggested outcome. The confidential mediation statement should be forwarded in advance to the mediator with a copy of the current pleadings, a Financial Information Statement and a Proposed Property Division.
XI. Conclusion
Good mediation advocacy involves planning and preparation. The Legal Assistant plays a vital role in this process. Legal Assistants are in constant contact with clients. A Legal Assistant usually knows which issues a client is willing to compromise and should provide the attorney with creative solutions that meet the needs and concerns of the parties.
Mediation may narrow the issues, result in a partial resolution or completely resolve the dispute. Regardless of how many issues are resolved, the parties communicated and created any resulting agreement. The goal of family mediation is to serve as a catalyst for cooperation and improve communication between the parents, which ultimately benefits the children.
DAVID W. SIMPSON, J.D. is the Assistant Director, Harris County Domestic Relations Office. David attended the University of Houston where he received his B.S. in 1988 and his J.D. in 1992 from the University of Houston Law Center. He is certified by the Texas Board of Legal Specialization in Family Law. He holds certificates in Basic and Family Mediation, A.A. from the White Mediation Institute, 1994 and Ad Litem Training, Family and Probate Courts. David is often a featured speaker with the Continuing Education Section of the State Bar of Texas and is a volunteer mediator with the Harris County Dispute Resolution Center.
Submitted by Elizabeth Bruton, Austin, Texas
“INTEREST” IN OIL AND GAS
by Lauren H. Ottman, CPL
Stating that someone has an “interest” in oil and gas is not as clear as you may think. There are several types of interest having very different characteristics associated with each. Possessing a basic understanding of the various types of ownerships in oil and gas and the importance of clearly stated conveyances of these interests is necessary to aid legal professionals in successfully supporting their attorneys. Many different issues involving mineral or royalty interest owners may arise that require the services of the legal profession. However, one paper can not possibly discuss all of them. To help gain a fundamental knowledge of oil and gas interests, the following is a brief description of those things that would be of greatest assistance when faced with problems or questions involving title to mineral ownership.
“Mineral Interest” can be defined as fee simple interest with the main determining characteristic being the power to explore, drill and produce the minerals. Mineral interest owners own the exclusive right to lease their ownership to a third party for the privilege to exploit the minerals. In some cases, the mineral ownership may have been severed from the surface ownership by grant or by reservation, creating two separate estates in one piece of property. In the instance of severed property, the mineral estate is generally considered to be the dominant estate and, as the dominant estate, a mineral owner has the right to reasonably use the surface in order to fully develop the minerals. This right to enter the surface and explore for oil and/or gas is passed to the Lessee when an oil and gas lease is executed by the mineral owner, the Lessor.
When a lease is granted by the Lessor, the operating interest under the lease is referred to as the “working interest” and the Lessee, who now owns the leasehold rights, will bear all expenses associated with the exploration of the minerals. In exchange for the lease, the Lessor will receive a bonus and will retain a “royalty interest”. A bonus is a cash consideration paid by the Lessee for the execution of the lease. The royalty interest is a non-expense bearing interest in the production and may be in the form of proceeds from the sale of production or may be a portion of the actual production of the oil and\or gas itself. Receiving the actual product rather than a portion of the proceeds from the sale of the product is known as taking royalty in kind. The royalty interest is normally expressed as a fraction and represents the mineral owner’s fractional share of any minerals that are produced. It should be noted that many issues and law suits have arisen in recent years regarding post production costs associated with the production of gas and the lessor’s obligations to share in these costs. Careful investigation of these issues and cases should be made when drafting royalty provisions in oil and gas leases. One of the most discussed cases involving post production costs is Heritage v. Nations Bank and is an excellent source of study for an understanding of the views from both sides of the issue.
Another form of non-expense bearing interest is referred to as a “non-participating mineral interest” or “non-executive mineral interest”. This type of interest represents ownership of the minerals in place but does not include the right to join in the execution of an oil and gas lease. The non-executive mineral owner does, however, share in the bonus and rentals under any leases the executive mineral owner may enter into and will receive it’s proportionate share of any royalties agreed to by the lease. A similar interest to a non-participating mineral interest is a “non-participating royalty interest”.
Like the non-participating mineral interest, the non-participating royalty interest is also an expense-free interest. Unlike the non-participating mineral interest, though, it does not share in bonus or rental payments as it is only an interest in produced minerals . Many times this type of ownership is a grant of interest for a specific term, i.e. 20 years or for as long as production is obtained from the specified property. Careful review of the instrument creating this type of interest is necessary to determine whether it is perpetual or for a specified term and to ensure it is, in fact, a non-participating royalty rather than a mineral interest. One of the most difficult title questions has been the determination of whether a deed creates a mineral or a royalty interest. Countless cases have been heard in the Texas courts attempting to ascertain the intent of a conveyance. Two of the most recent cases involving this question are worth studying to better understand the dilemmas facing title examiners and the courts. In 1995, French v. Chevron and in 1997 Temple-Inland Forest Product Corp. v. Henderson Family Partnership both made important determinations regarding mineral versus royalty interest conveyances.
Preparation of mineral conveyances are commonly requested instruments. Basic rules of thumb used in the drafting of these conveyances help all parties encountering the documents after they are filed of record to have a clear understanding of the intent of the transfer. After obtaining a correct legal description of the property in question, determining the interest type being transferred, such as mineral, royalty or working, is of inordinate significance. Accurate descriptions of ownership maintain clear title when property is transferred through sale, grant or bequest. When preparing instruments such as deeds, exhibits, assignments and inventories, clear and concise descriptions of oil and gas properties, including interest type, are of utmost importance. Additionally, when less than 100 percent of a property is owned, the actual percentage of ownership and the specific percentage being transferred should be carefully and correctly stated to avoid questions of over conveying. Lastly, and of equal importance, is explicit rendition of property when granting oil and gas leases.
As any title attorney or landman can attest to, inaccurate, erroneous and imprecise conveyances can create title nightmares that are both expensive and difficult to cure. When preparing title opinions on any mineral property, an attorney will inevitably encounter ‘grey’ areas in the chain of title. Curative items are a part of any title opinion. For this reason, it is important to stress to owners of mineral interests to take responsibility for their assets and make sure items are properly filed of record that clearly and precisely state the current status of the mineral property and that any instruments affecting mineral properties are correct and clearly understood. When legal professionals have a basic understanding of ownership, conveyances and leasing, they can better assist their attorneys in helping owners of mineral interests to complete that task, making record title ownership of mineral properties cleaner and clearer.
Lauren Hartwell Ottman, CPL, has worked in the field of oil and gas since 1979. She became certified as a Professional Landman in 1995. A graduate of Sam Houston State University, she is a member of the American Association of Professional Landmen, the Dallas Association of Professional Landmen and serves on the Board of Directors for the Dallas Association of Petroleum Landmen. Lauren is currently employed in the Oil and Gas Property Management department at the Texas Scottish Rite Hospital for Children in Dallas, Texas.
UCC Filers Beware
Even a Missing Hyphen Can Be Hazardous to Your Health
by John Robinson (reprinted from “Capitol Times,” 2nd Quarter 1999, the
quarterly newsletter of Capital Services, Inc.)
Even a seemingly minor mistake on a UCC-1 financing statement may be fatal. A recent U.S. Fifth Circuit decision held that a slight error in the spelling of a debtor’s name can render a filing ineffective if a subsequent creditor conducting a computerized search of the official records fails to discover the filing. ITT Commercial Fin. Corp. v. Bank of the West, 1999 WL 20899.
The court noted that the Texas Secretary of State’s search program ignores hyphens (treating them as blank spaces) so that a hyphenated name is treated as two separate words. In this case, a search of the official records using the debtor’s correct legal name (Compu- Centro, USA, Inc.) did not reveal the
filing.
Subsequent creditors should not be required to search for possible variations of a debtor’s name. To be protected, they need only conduct a search under the legal name of the debtor. If that does not reveal the filing, then it is “seriously misleading, and ineffective” reasoned the court.
Secured parties must, therefore, determine the exact legal name of their borrower and be certain that UCC filings are prepared correctly in order to insure the priority of their lien!
© 2000, Legal Assistants Division State Bar of Texas