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Parker v. State Farm Mutual Automobile Insurance Co.9/23/1999
This Court affirmed the trial court's judgment on July 22, 1999, and ordered sanctions against appellant. Rehearing was granted on appellant's motion, and the July 22, 1999, opinion is withdrawn. We substitute this opinion in its stead. This opinion differs only in the amount of sanctions imposed.
This is an appeal from the granting and denial of cross-motions for summary judgment. We affirm the trial court's judgment. Further, we levy sanctions against appellant's attorney, Carlos Peniche, who in succession: (1) wrongfully endorsed a co-payee's name on a settlement check; (2) sued the payor, State Farm, for acting to prevent the consequences of his own misconduct; and (3) frivolously appealed the trial court's judgment against his client. Our levy of sanctions deals solely with counsel's third act of misconduct, the frivolous appeal.
Facts and Procedural History
Appellant, Tony Daniel Parker, was involved in an automobile collision on March 3, 1995, with Kenneth Alvis, who was insured by appellee, State Farm Mutual Automobile Insurance Company ("State Farm"). Parker initially retained the Law Offices of Mae Nacol & Associates, P.C. ("Nacol & Associates") to represent him in an action against Alvis for personal injuries. Through Nacol & Associates, State Farm offered to settle Parker's claims against Alvis for $10,000. Parker rejected the offer. Nacol & Associates withdrew from its representation of Parker and so notified State Farm on August 26, 1996.
Parker then retained Carlos Peniche as his attorney on February 13, 1997. State Farm sent a letter to Peniche on February 18, 1997, informing him that the $10,000 offer "for full and final settlement" was still on the table. Peniche and State Farm agent David Hamilton exchanged a series of faxed letters concerning Nacol & Associates' letter notice to State Farm claiming a lien for attorney expenses as well as possible medical provider liens totaling $11,370.90. Hamilton suggested that Peniche contact Nacol & Associates directly about the liens, and repeated State Farm's $10,000 offer in full and final settlement. On February 26, 1997, Peniche faxed State Farm a three-page letter strenuously expressing his opinion that the liens were invalid. In the letter, he accepted State Farm's offer of $10,000 "in full settlement," and requested a settlement check without Nacol &Associates;as a payee.
On February 28, 1997, State Farm sent a letter to Peniche enclosing a "RELEASE" to be executed by Parker and a settlement check in the amount of $10,000. The settlement check was payable to Tony Parker, Attorney Carlos A. Peniche, and Nacol & Associates. Parker executed the release on March 3, 1997, and Peniche's office forwarded it to State Farm. However, without permission, Peniche endorsed Nacol & Associates' name to the settlement check, and deposited it into his trust account.
Mae Nacol became aware of the unauthorized signature and executed an affidavit of forgery stating she did not authorize Peniche to endorse the check on her firm's behalf. Nacol forwarded the affidavit to State Farm, which in turn notified its bank, Bank One, of the improper signature. Bank One then contacted Frost National Bank, Peniche's bank, which removed the $10,000 from Peniche's account and returned it to Bank One. State Farm then filed an interpleader action and placed the $10,000 sum into the registry of the 234th District Court of Harris County, Texas.
Represented by Peniche as his attorney, Parker sued State Farm for breach of contract and wrongful conversion. State Farm filed a motion for summary judgment, and Parker filed a cross-motion for summary judgment.
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