Texas-based 1776 Energy Partners has settled for nearly $5 million a legal malpractice claim against a San Antonio law firm after one of its lawyers botched a lawsuit so badly that they were forced to settle as defendants a suit the company had pursued as the plaintiff.
Dallas attorney Randy Johnston reached a $4.95 million settlement agreement with San Antonio law firm Brock Person Guerra Reyna and attorney Ricardo R. Reyna on claims that Mr. Reyna negligently represented 1776 in a dispute against former business partner Bobby Riley, and his company, Riley Exploration. The payment hit 1776 Energy’s bank account Monday.
Johnston and 1776 alleged that Reyna’s mistakes and lack of attention to the company’s lawsuit not only caused 1776 to lose its original claims against Riley, but left 1776 exposed to counterclaims of $160 million subsequently forcing them to pay a multimillion-dollar settlement.
While Johnston said the amount 1776 had to pay was confidential, he said it was “significant[ly]” more than what 1776 obtained from Reyna’s firm.
“They had a $5 million insurance policy, and they paid us $4.95 million,” Johnston told The Texas Lawbook. “We got essentially every dollar they had. It is way less than the damage that the client suffered but it’s all the insurance they had and all the money we could get.”
Reyna did not return a call from The Texas Lawbook seeking comment. Neither did Shawn Phelan, a Thompson Coe partner in Dallas, who represented Reyna in the settlement.
According to the firm’s website, Reyna is no longer an attorney at the firm that once included his name. The firm is now called Brock Guerra Strandmo Dimaline Jones, and Reyna is listed as an attorney in the Davis Law Firm’s San Antonio office.
A message left with John Guerra, the president and director of Brock Guerra, was not returned.
The matter Reyna handled for 1776 was a case in 116th District Court in Dallas before Judge Tonya Parker.
Johnston said that at a critical moment in the case, Reyna missed the deadline to respond to Riley’s requests for admissions. After missing the deadline, Reyna obtained permission from Judge Parker to file his responses late. According to Johnston, Judge Parker said she’d allow him to do so, as long as Reyna provided substantive answers without equivocations or qualifiers.
When Reyna’s responses were finally provided, they included so many qualifiers that Judge Parker deemed 170 requests as admitted. The legal effect, said Johnston, eliminated 1776’s original claim entirely.
Johnston told The Texas Lawbook that Reyna’s admissions included statements, in effect, demanding: “Admit your lawsuit is frivolous” and “Admit you should lose.”
“There are 170 of these things addressing everything imaginable… metaphorically, almost as extreme as admitting to sleeping with everyone,” Johnston said. “It’s not just screwing up, it’s going in front of a judge, the judge saying they’ll give you a second chance but don’t do this again, then doing [it].”
Faced with a counter-claim, said Johnston, Reyna continued to make strategic errors, at one point allowing the exclusion of the only two witnesses who might support 1776 against a fraud claim made by Riley. At another point Reyna failed to admit and qualify expert witnesses on time.
Johnston said the nature of the infractions surprised him because Reyna’s firm had a good reputation in the San Antonio legal market.
“I do not understand how on earth it could have happened,” Johnston said.