In the latest battle between Megatel Homes and property developers, a unanimous jury in Collin County this week issued a ruling in favor of 13MC, clearing the way for the redevelopment of the former Collin Creek Mall property in Plano to continue.
C. Gregory Shamoun of Shamoun & Norman, who represented 13MC in the trial, told The Texas Lawbook in a recent interview that from the beginning, he tried to “keep it simple” for the jury that was given what he said was “one of the most complex” charges he’s seen in 35 years of practicing law. It took the 12-person jury that heard a week of testimony about three hours on Monday to determine Megatel waived its right of first refusal to purchase the property from 13MC via a breach of contract.
13MC is an affiliate of Centurion American, whose CEO and president is Dallas developer Mehrdad Moayedi. The ruling means the $1 billion redevelopment of the former mall that developers plan to turn into a mixed-use project can continue. It also means that lots under contract with other homebuilders can be conveyed.
“But this was a very toxic case,” Shamoun said. “[Megatel] has been in litigation with my client for years now.”
The jury rejected Megatel’s counterclaims for fraudulent transfer, tortious interference and breach of contract. Megatel was seeking $35 million in damages. Shamoun said he will be asking Collin County District Judge Christine Nowak, who presided over the trial, to award him more than $1 million in attorney fees as the prevailing party in this case.
“And Mr. Moayedi’s affiliate companies are actively pursuing their damages against Megatel for the fraudulent liens that they have filed in the state of Texas,” Shamoun said, referencing cases proceeding in arbitration against Megatel.
The fight between Megatel and various property development companies owned by Moayedi has been ongoing for years, spawning litigation in state and federal court — including dueling RICO suits — as well as arbitration.
Jeff Tillotson of Tillotson Johnson & Patton, who represented Megatel, told The Lawbook his client is evaluating options regarding an appeal or challenge to the jury’s verdict.
“This is one of many battles we’ve had,” Tillotson said. “We won Round 1 last April. On this particular version, they prevailed.”
The basis of any appeal could come down to the jury charge, he said.
“Given the jury instructions the court gave, I think the jury found it difficult to find for us,” he said. “Although, I believe based on at least one of the notes they sent out they were looking to give our theory credit, but it wasn’t in the jury instruction.”
Tillotson said he told the jury during opening statements that his client had not forfeited the right of first refusal to purchase the lots. Instead, he argued, the right of first refusal was reinstated after 13MC’s deal with a third party “kept changing.”
“We argued each time the deal changed they had to bring it back to us,” Tillotson said. “They argued if you miss it the first time, it doesn’t matter. This is a contractual interpretation battle the court appeared to leave to the jury… but didn’t leave them an ability to enact our theory.”
“That’s where this went wrong.”
The Round 1 victory Tillotson referred to came in a trial before Dallas County District Judge Aiesha Redmond. Jurors determined Megatel owed Moayedi’s homebuilding entities — CADG Mercer and others — zero damages in a promissory note dispute in which CADG was seeking about $2.5 million.
Monday’s verdict was also a victory for two other parties to the lawsuit: Moayedi and VM Fund, which provided $122 million in financing for the redevelopment.
Richard A. Sayles of Sayles Law Firm, who represented VM Fund, issued a statement praising the verdict.
“This decision clarifies the ownership rights and is an overwhelmingly positive event for the development of the property,” he said. “We’re gratified by this prompt and decisive win for our clients, and what this signals for the future of Plano and Collin County.”
Moayedi was represented by Stephen Khoury of Kelsoe Khoury Rogers & Clark PC.
The case number is 493-00579-2022.