In this edition of Litigation Roundup, the University of Houston gets a retaliation lawsuit tossed on appeal, a group of investors in a Dallas-area chain of hot chicken restaurants settles its suit with a hospitality group and the Fifth Circuit sides with the National Labor Relations Board in a suit involving fired plant workers.
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Dallas County District Court
Hot Chicken Investor Suit Put on Ice
Seven days after a group of investors in Lucky’s Hot Chicken filed suit accusing a hospitality group of breach of contract, securities fraud, breach of fiduciary duty and negligent misrepresentation, the claims were dropped voluntarily.
The lawsuit named Vandelay Hospitality, Hunter Pond and Lou Olerio as defendants and was seeking damages in excess of $1 million. Vandelay operates several restaurants, including Hudson House, Drakes, East Hampton Sandwich Co., D.I. Mack’s and Montecito’s, according to the lawsuit.
The investors alleged that after opening two Lucky’s locations in Dallas, the defendants sought to raise $1.8 million from investors to fund the opening of four more locations in Oak Lawn, Pleasant Grove, Richardson and Arlington.
By January 2022, the capital was raised and the locations for the new restaurants had been secured, the suit alleges, and the investors believed the hot chicken restaurants would soon be opening.
“These expectations were in line with the defendants’ representations,” the suit alleges. “Unfortunately, as the future would slowly reveal, just about everything related to the project as to defendants promises and representations would prove false.”
Communication with Vandelay, Pond and Olerio waned, according to the investors, and no Lucky’s opened by the end of the year.
“Lucky’s Oak Lawn finally opened to the public in February 2023,” the suit alleges. “In less than four months, it was closed. Plaintiffs learned of the closure by one of them driving by the restaurant and not by communication from defendants. None of the other three locations were ever opened and defendants abandoned the project never having accounted for the use of Plaintiffs’ money.”
In a notice of nonsuit without prejudice filed Aug. 31, Lucky’s and the investors asked the court to sign an order that would end the lawsuit. The Dallas Morning News reported a confidential settlement was reached between the parties.
The case was assigned to Dallas County District Judge Aiesha Redmond.
The plaintiffs are represented by Jay K. Gray and Andrew A. Bergman of BergmanGray.
Counsel for the defendants did not file an appearance before the suit was dropped.
The case number is DC-23-12930.
Dallas Luxury Apartment Co. Sued over Mistaken Eviction
The operators of a 26-story luxury apartment building in Dallas have been sued by a former tenant who alleges he was mistakenly evicted from his unit while he was at work and that all of his and his 9-year-old daughter’s belongings, including an urn with his grandmother’s ashes, were thrown into a dumpster.
The lawsuit, brought by Johnny Abney, names Gaston & Good Latimer, which does business as The Hamilton at The Epic, and Westdale Asset Management as defendants.
In an amended petition filed Aug. 30, Abney alleges that The Hamilton staff mistakenly emptied his apartment, unit 2311, rather than unit 2312 and have refused to apologize or rectify the incident.
“Imagine being a young, single, hardworking father, and having to tell your little girl that you can’t pick her up for your time together this week because you don’t want her to see that not only are all of her belongings gone forever, but that you can’t even make her dinner because you no longer have spatula to your name, let alone dining table for her to sit at,” the lawsuit states.
Abney is bringing charges for invasion of privacy, conversion, trespass, violations of the Texas Theft Liability Act and gross negligence. He is seeking compensatory and exemplary damages
The lawsuit was filed Aug. 17 and has been assigned to Dallas County Judge Dale Tillery.
Abney is represented by Jason H. Friedman and Melissa A. Miles of Friedman & Feiger.
Counsel for the defendants had yet to file an appearance as of Monday.
The case number is DC-23-11868.
Fourteenth Court of Appeals
UH Won’t Face Ex-Employee’s Retaliation Suit
A former business administrator who worked in the University of Houston’s College of Medicine cannot proceed with a lawsuit accusing the school of firing her for filing a complaint with the Equal Employment Opportunity Commission alleging race-based discriminated.
In an Aug. 31 ruling, a three-justice panel of the court found sovereign immunity barred Monique Sheppard’s claims because she failed to prove the non-retaliatory reasons the university gave for her termination were pretextual.
Sheppard, who is Black, alleged her white supervisor “disrespected her, made racist comments about Black women, and created a hostile work environment,” according to the opinion. The university has argued it fired Sheppard following warnings about her poor performance, which included unprofessional behavior, errors in her work, refusing meetings and declining to help others.
“As we have discussed above, Sheppard offered no evidence to counter the University’s evidence that there had been various issues with Sheppard’s work product, performance, and professionalism before she engaged in protected activity,” the panel wrote. “The University also presented evidence of continued issues with Sheppard’s work product, communication, and unprofessional conduct after she filed a complaint and charge.”
UH appealed in June 2022, the same month Harris County District Judge Donna Roth had denied a motion to dismiss the suit.
Justices Meagan Hassan, Jerry Zimmerer and Charles A. Spain sat on the panel.
UH is represented by Yvonne D. Bennett of the Texas attorney general’s office.
Sheppard is represented by David C. Holmes of Houston.
The case number is 14-22-00453-CV.
U.S. Court of Appeals for the Fifth Circuit
NLRB Ruling Upheld Over Firing of Power Plant Workers
A finding by the National Labor Relations Board that an employer violated the National Labor Relations Act when it laid off employees without notifying their union and by threatening to fire employees who opted for union representation was recently upheld on appeal.
In an Aug. 29 ruling, the panel upheld the decision against The Atlantic Group, a subsidiary of Day & Zimmerman that provides maintenance and other services to nuclear and fossil fuel powerplants.
According to the opinion, Atlantic entered a five-year contract with Comanche Peak Nuclear Power Plant in Glen Rose, Texas, in January 2020 to provide maintenance for the plant, which was owned and operated by Luminant Generation Company.
In February, Atlantic employees at the plan started a campaign to be represented by the International Brotherhood of Electrical Workers, Local Union 220, according to the opinion. Atlantic’s site superintendent made comments to bargaining-unit employees prior to the unionization vote “indicating that employees would be left jobless if they proceeded with the union.”
In May the vote took place, and most employees opted to have the union represent it in the collective bargaining process.
The union requested that Atlantic Group recognize it and bargain with it, according to the opinion, but Atlantic refused while its appeal of the representation election was pending before the NLRB. In July Atlantic laid off employees without notifying the union and without providing an opportunity to bargain.
The NLRB found those actions violated the law.
Judges Patrick E. Higginbotham, James E. Graves Jr. and Dana M. Douglas sat on the panel.
The NLRB is represented by its own David A. Seid, Timothy L. Watson, Milakshmi Rajapakse and Ruth E. Burdick.
The Atlantic Group is represented by John V. Jansonius and David Schlottman of Jackson Walker.
The case number is 22-60442.
Ex-Police Sgt. Gets Suit Against his Former Chief Revived
A former patrol sergeant with the Alamo Police Department who alleged his former chief of police orchestrated a scheme to have him fired and arrested on bogus charges had his lawsuit partially revived.
In a Sept. 7 ruling, a panel of judges determined Southern District of Texas Chief Judge Randy Crane had wrongly tossed all claims brought by Rodney Guerra against former Alamo Police Chief Baudelio Castillo, other officers in the department and the city of Alamo.
The panel revived only Guerra’s Fourth Amendment false arrest claim against Castillo.
Trouble began for Guerra, according to the opinion, after an Alamo police officer arrested a “strong political supporter of the city’s mayor” on a charge of driving while intoxicated in July 2018.
The suspect called Castillo, urging that the charges be dropped. Castillo in turn called Guerra and told him to tell the police officer to drop the charge. Guerra supported his subordinate and refused, an act which “unwittingly stoked the maliciousness, vengefulness, and ire” of Castillo who was “furious” at appearing “worthless in the eyes of the mayor.”
Castillo directed an investigator to “find a way to get rid of Guerra,” according to the opinion, and honed in on the alleged unauthorized use of a pair of reading glasses left behind by a former probationary officer who was no longer with the department.
Castillo allegedly told Guerra that he needed to resign or face criminal prosecution and Guerra refused. He was fired and an arrest warrant for Class B misdemeanor theft was issued against him.
When Castillo learned about a month later that the district attorney was planning to drop the charge, he instructed his investigator to “change and draw up some new statements and affidavits to obtain a new arrest warrant,” according to the opinion.
Guerra was held in jail overnight but all charges were dismissed against him based on lack of evidence in May 2019.
“Guerra’s complaint presents Castillo as the sole moving force behind a deliberate, long-term conspiracy to create and file affidavits Castillo knew to be false, with the purpose of exploiting the criminal justice system to arrest, detain, and torment Guerra for crimes Castillo knew he did not commit,” the panel held. “Castillo, moreover, ordered the sham investigations that served as the bases for the false affidavits and pushed the investigations forward despite knowing Guerra was innocent.”
Chief Judge Priscilla Richman and Judges Carolyn Dineen King and Stephen A. Higginson sat on the panel.
Guerra is represented by Claudia M. Gonzalez of Edinburg.
Alamo is represented by J. Arnold Aguilar of Aguilar & Zabarte. Castillo is represented by John-Michael Wyman Hayward and Ricardo Navarro of Denton, Navarro, Rocha, Bernal & Zech.
The case number is 22-40196.