In this week’s edition of Litigation Roundup, Sidley is representing the Texas Medical Association in its Administrative Procedure Act challenge to the No Surprises Act, CenterPoint is ordered to pay $16 million to an injured worker and a Texas real estate developer is accused by the SEC of a $26 million fraud.
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Harris County District Court
CenterPoint Hit With $16M Final Judgment in Injured Worker Suit
A $16 million final judgment was recently entered against CenterPoint Energy Houston Electric stemming from a jury’s August verdict finding it liable for injuries suffered by former tower climber Garett Wilder who fell 40 feet from an electrical pole.
Harris County District Judge Cory Sepolio entered judgment Sept. 19. Wilder was injured in March 2019 while ascending a CenterPoint pole in Tomball when the step bolt he was attached to detached from the pole. Wilder suffered a traumatic brain injury, fractured his spine and shattered the bones in his feet and ankles.
Bryan O. Blevins Jr. and Matthew C. Matheny of Provost Umphrey represented Wilder, alongside Daniel D. Horowitz III.
“We are rooting for Mr. Wilder and hope that CenterPoint will accept the will of the jury and pay the money Mr. Wilder desperately needs as a result of that horrific day three years ago,” Blevins said in a news release.
On Sept. 16, CenterPoint’s legal team — Jessica Barger and Brian Cathey of Wright Close & Barger and H. Dwayne Newton and R.L. Pete McKinney of Newton Jones & McNeely — filed a motion asking the court to disregard the jury’s findings.
“At trial, Wilder adduced no evidence, and obtained no jury finding, that CenterPoint had actual knowledge of the danger that caused his injury, as required by Chapter 95,” CenterPoint argued. “Moreover, while the jury answered ‘yes’ to the control question submitted by the court (over plaintiff’s protest), there was no actual evidence introduced at trial establishing that CenterPoint exercised the requisite degree of control over the manner of [independent contractor] L.E. Myers’s work.”
The case is Garett Wilder v. CenterPoint Energy Houston Electric, 2019-31428.
Partnership Says Member Embezzled to Run Failed Texas Legislature Campaign
James Guillory Jr., who earlier this year lost a campaign to become the Texas state representative for District 131, has been sued by his hotel business partners who allege he was caught “with his hand squarely in the cookie jar.”
“Guillory Jr. has used the stolen funds to advance his own (failed) political campaign for the Texas Legislature,” the lawsuit filed by CenterPointe Hotels alleges. “He has also used the stolen funds for various personal expenses, and, to cover debts he incurred on a separate and unrelated hotel project that he is also involved in.”
CenterPointe Hotels filed suit Sept. 21, alleging Guillory had been stealing from the partnership that was founded in July 2013 to purchase and operate a Hampton Inn. According to the lawsuit, the franchise agreement the partnership signed with Hilton to operate the Hampton Inn could be immediately terminated based on Guillory Jr.’s allegedly wrongful conduct.
CenterPointe is represented by John Zavitsanos, Shawn Bates, Christian Adriatico and Thomas Cooke of Ahmad Zavitsanos & Mensing. Counsel information for Guillory Jr. wasn’t available Monday afternoon.
The case is CenterPointe Hotels et al. v. CenterPointe Partners et al., case number 2022-60359.
Eastern District of Texas
Sidley Reps TMA in Challenge to No Surprises Act
The Texas Medical Association has sued the U.S. Department of Health and Human Services, the Department of Labor and the Department of Treasury, arguing that while the No Surprises Act was intended to stop extreme billing practices, it has also unnecessarily hampered arbitrators who are trying to make final determinations about the costs of medical bills.
The Administrative Procedure Act challenge was filed Thursday and takes particular issue with provisions of the act involving the “qualifying payment amount,” which is the median of the insurer’s contracted rates for items or services, calculated by the insurer.
The law requires arbitrators consider the QPA first and forbids them from giving weight to nay other circumstances “unless they determine that a variety of extrastatutory criteria are met,” which TMA argued will grant insurers a “windfall.”
“The combined effect of the challenged provisions is to arbitrarily and unreasonably privilege the QPA above the other statutory factors, discouraging arbitrators from giving weight to any other information and placing a thumb on the scale in favor of the offer closest to the QPA.”
TMA is represented by Penny Packard Reid, Kelsey M. Taylor, Eric D. McArthur, Brenna E. Jenny, Madeleine Joseph and Jaime L.M. Jones of Sidley Austin, counsel had not yet appeared Monday afternoon for the government.
The case is Texas Medical Association et al. v. U.S. Department of Health and Human Services, case number 6:22-cv-00372.
Western District of Texas
Match Group Accused of Patent Infringement
Travis County-based Street Spirit IP filed a federal lawsuit against Match Group, which operates dating websites OKCupid and Tinder, accusing it of infringing U.S. Patent No. 8,850,535 that relates to identify verification and management for social networks.
William P. Ramey and Jeffrey Eugene Kubiak are representing Street Spirit in the lawsuit that was filed Friday in U.S. District Judge Xavier Rodriguez’ courtroom.
Counsel for Match Group hadn’t filed notice of appearance Monday afternoon.
The case is Street Spirit IP v. Match Group, case number 6:22-cv-1001.
Northern District of Texas
Texas Real Estate Developer Accused in $26M Securities Suit
The U.S. Securities and Exchange Commission filed suit Friday against Timothy Barton and his company, Carnegie Development and affiliates, accusing the real estate developer of raising about $26 million in unregistered, fraudulent securities offerings from more than 100 investors.
The government alleges most of the allegedly duped investors are Chinese nationals who purchased the securities offerings between March 2017 and June 2019.
“To implement his scheme, Barton partnered with [Stephen T.] Wall, an experienced Texas home builder, and [Haoqiang] Fu, a Chinese businessman, to offer and sell investment loans issued by a series of single purpose ‘Wall’ entities,” prosecutors allege. “Barton, Wall, and Fu chose this naming convention to capitalize on investors’ confidence and trust in Wall, who had previously sold homes to Chinese investors solicited by Fu.”
Wall and Fu also are named as defendants. As of Monday afternoon, counsel had not filed notice of appearance for any of the defendants.
On Monday the U.S. Attorney’s Office for the Northern District of Texas announced Barton had been criminally indicted on seven counts of wire fraud, one count of conspiracy to commit wire fraud, and one count of securities fraud.
The government is represented by Keefe M. Bernstein, David B. Reece and James E. Etri of the SEC.
The case is SEC v. Barton et al., case number 3:22-cv-02118.
The Dallas Business Journal published a report on the SEC’s lawsuit as well.
Fifth Court of Appeals
Client’s Suit Against Attorney Over $2.75M Mostyn Loan Sent to Arbitration
A lawsuit brought against Samuel Boyd of Boyd & Associates by his former client, Sylvester Davis, stemming from a $2.75 million loan from trial lawyer Steve Mostyn — who died in 2017 — was ended by a Texas appellate panel recently.
The Sept. 20 ruling affirms a trial court’s February 2021 ruling that confirmed an arbitration award in favor of Boyd. Davis sued in June 2018, alleging that after Boyd assisted him in obtaining the litigation funding loan from Mostyn in March 2012, Boyd falsely represented that Boyd was owed $1.25 million of the loan.
Boyd moved to compel arbitration in the case based on a clause in the representation agreement between Boyd and Davis. The arbitrator sided with Boyd, awarding him $16,611 in fees, according to the opinion.
In trying to keep the arbitration award from being confirmed by the trial court, Davis argued that his lawsuit wasn’t related to Boyd’s representation of him in an underlying qui tam lawsuit, and there was no arbitration agreement governing this dispute.
Justices Lana Myers, Leslie Osborne and Erin A. Nowell sat on the panel.
Davis is represented by Michael D. West of West & West.
Boyd is represented by Nicole T. LeBoeuf.
The case is Sylvester Davis v. Samuel Boyd, case number 05-21-00154-CV.
Dallas County Judge Pinged for ‘Unreasonable’ Delay
On Friday Michael E. Robinson and The Robinson Law Firm got a ruling from the Fifth COA telling Dallas County District Judge Staci Williams that her 10-month delay in ruling on the attorney’s motion to withdraw was “unreasonable.”
Robinson, who represented himself in the matter, had filed a motion to withdraw from representing Deylan Walker in an underlying defamation suit in October 2021, citing a breakdown of communication and the attorney-client relationship.
Walker opposed Robinson’s withdraw, telling the court in a November 2021 motion that it was his attorney who’s responsible for the lack of communication, and arguing he hadn’t found new counsel as Robinson represented to the court.
“We do not adopt a ‘six-month rule’ or ‘ten-month rule’ or fix any similar bright-line demarcation for cases in which parties seek mandamus relief to compel expeditious disposition of motions,” the panel held. “All we hold is that—based on particular facts and circumstances here — 10 months from filing the motion to withdraw and six months from the trial court’s hearing of the motion without ruling presents an unreasonable time warranting mandamus relief.”
Justices Bill Pedersen III, Ken Molberg and Dennise Garcia sat on the panel.
The case is In re Michael E. Robinson et al., case number 05-22-00579-CV.