Jury finds attorney negligence, legal malpractice, and breach of fiduciary duty on part of Houston firm sued by former client.
On Nov. 11, a jury in the 234th District Court found Houston-based firm Andrews Kurth was negligent when representing plaintiff Scott Martin. Andrews Kurth had advised Martin to sign a settlement agreement to end a business dispute, which led to millions in litigation expenses was later ruled to be unenforceable. Martin was awarded nearly $200 million in damages and attorney fees.
On Nov. 13, the plaintiffs submitted a proposed final judgment asking 234th District Judge Wesley Ward to order the plaintiffs to recover from Andrews Kurth $167 million in actual damages on the
attorney negligence finding, $29,120,515 in attorney fees, prejudgment interest, costs and postjudgment interest.
Martin and SKM Partnership Ltd., a partnership of Scott and his wife, Kim Martin, had alleged in the fourth amended petition that Andrews Kurth advised Martin to sign a settlement agreement. The agreement was intended to end a family business dispute, but instead that dispute ended in years of litigation and an appeals court opinion that the agreement was not enforceable, the plaintiffs alleged in Martin v. Andrews Kurth.
The plaintiffs set a hearing to enter judgment for Nov. 23, but Andrews Kurth filed a motion to continue the hearing until no earlier than Dec. 14.
“Plaintiffs want to rush to judgment. But the formation of a judgment in a case of this size and complexity should [be] done carefully and with ample time for the parties to brief issues,” Andrews Kurth alleges in the motion to continue hearing.
Defense attorney Murray Fogler said his client’s postverdict motions will provide the firm’s response to the verdict. Andrews Kurth will file a motion for judgment notwithstanding the verdict, said Fogler, a partner in Fogler, Brar, Ford, O’Neil & Gray of Houston.
Bob Jewell, managing partner of the firm, provided this written statement: “We are disappointed and respectfully disagree with the jury’s verdict. We will remain committed to the postverdict and appellate process and are confident that we will ultimately be vindicated.”
Plaintiffs attorney Philip Werner, a senior partner in Werner Ayers, did not immediately return a telephone message seeking a comment.
The jury found that Andrews Kurth was negligent, and that there was no relationship of trust and confidence between Martin and his brother, Ruben Martin. The jury found that Ruben Martin did not engage in oppressive conduct with respect to Martin Resource Management Corp. (MRMS), a family business, which caused injury to Scott Martin, and found that Ruben Martin did not commit fraud against Scott Martin. However, the jury found that Andrews Kurth was responsible for all of the injury to Scott Martin.
The jury also found that Andrews Kurth failed to comply with its fiduciary duty to Scott Martin, causing $1,672,563 in damages to him. It found that Scott Martin should have discovered the breaches of fiduciary duty on Andrews Kurth’s part by September 2013.
On the negligence finding, the jury found the loss in the value of Scott Martin’s ownership interest in MRMC was $167 million if calculated as of Oct. 2, 2012; $99 million if calculated as of Aug. 12, 2010; and $82 million if calculated as of June 18, 2008.
Because the verdict was not unanimous, the jury did not decide if the injury to Scott Martin resulted from malice.
In the fourth amended petition in Martin v. Andrews Kurth, Martin and SKM alleged that in January 2008 a business dispute between Martin and his brother, Ruben, had ‘deteriorated” to the point that litigation between them was “imminent.” At that time, the plaintiffs alleged, Andrews Kurth had been representing Scott Martin and SKM for several months in connection with disputes over the direction and management of MRMC, the Martin family business.
The plaintiffs alleged that Andrews Kurth advised Scott Martin to sign a settlement agreement, and he signed it on the presumption that it was an enforceable contract. However, the plaintiffs allege, a few months after drafting the settlement agreement, Andrews Kurth filed suit against Ruben Martin to enforce it, but that was a “doomed effort,” and the firm billed more than $3 million in fees and costs for that work.
“Although Scott won some damages at trial, the settlement agreement was ultimately held to be unenforceable on appeal,” the plaintiffs alleged, adding that terms in the settlement agreement inserted by the defendants were relied upon by the appellate court.
The plaintiffs alleged that seven other suits subsequently “engulfed” them, and the disputes and litigation did not conclude until October 2012, when Scott Martin and SKM agreed to sell their shares in MRMC back to the company.
The plaintiffs brought legal malpractice, breach of fiduciary duty, malicious and intentional conduct in breaching fiduciary duties and agency and respondeat superior causes of action against the defendant.
Originally posted by Brenda Sapino Jeffreys on TexasLawyer.com.
Attorney Negligence Representation – Ball & Bonholtzer Trial Attorney – Los Angeles