Cheatham v. Pohl

690 S.W.3d 322

Mark Kentrell CHEATHAM, Sr., Luella Miller, Mark Cheatham, Jr. and Lacy Reese, Appellants

v.Michael A. POHL, Law Offices of Michael Pohl, PLLC, Robert Ammons, the Ammons Law Firm, LLP, Donalda Pohl, Edgar Jaimes, and Helping Hands Financing, LLC, Appellees

NO. 01-20-00046-CV

Court of Appeals of Texas, Houston (1st Dist.).

Opinion issued August 30, 2022

On Appeal from the 55th District Court, Harris County, Texas, Trial Court Case No. 2017-41110

Mark Wesley Collmer, Conrad Bruce Guthrie, for Appellee Donalda Pohl, Helping Hands Financing, LLC, Edgar Jaimes.

Brock C. Akers, Cordt C. Akers, Houston, Daryl L. Moore, Houston, Harris County, for Appellee The Ammons Law Frim and Robert Ammons.

Lance Christopher Kassab, David Eric Kassab, Houston, Nicholas Pierce, for Appellant.

Parth Gejji, Allison Standish Miller, Stephen Robert Bailey, George William Shepherd III, Houston, for Appellee Michael A. Pohl, et al.

Panel consists of Justices Kelly, Landau, and Hightower.

OPINION ON REHEARING

Sarah Beth Landau, Justice

A panel of this Court issued an opinion in this matter on January 27, 2022. Multiple parties moved for panel rehearing and en banc reconsideration. We grant the motions for panel rehearing, withdraw our January 27th opinion and judgment, and issue this opinion on rehearing and judgment in their place. The en banc motions are denied as moot.

This is a civil barratry suit. Two sets of wrongful-death claimants—from Louisiana and Arkansas—sued their Texas attorneys for barratry. More specifically, they alleged that the Texas attorneys and the wife of one of them set up a business arrangement to direct and finance Mississippi case runners to convince the grieving family members to hire one or both attorneys. The wife’s company allegedly would "loan" money to cover funeral expenses but only if the family retained her husband. The Mississippi middlemen described their work as attorney "marketing services," not case running. But the families asserted that the men would target potential clients in hospital rooms and at grave sites within days of catastrophic accidents. They allege that the Texas attorneys coordinated these efforts and funded them from their Texas offices.

All defendants moved for summary judgment on a number of theories, including that the Texas civil barratry statute does not apply to activity outside of Texas. The trial court granted summary judgment to all defendants. The clients appeal.

We reverse in part, affirm in part, and remand.

Background

The Texas attorneys—Michael Pohl and Robert Ammons—were retained by family members of people killed in automobile accidents. The family members live in Louisiana and Arkansas. The Texas attorneys filed suits on their behalf in those two states against various auto and product manufacturers, among others. Those claims settled. The clients then sued their attorneys, asserting civil barratry claims, among others.

The underlying wrongful-death suits

The Louisiana case arose from the death of Ladonna Cheatham and two of her children in a car accident in February 2014. Three of her surviving family members—Mark Cheatham Jr., Mark Cheatham Sr., and Luella Miller (collectively, the Cheathams)—entered into a contingency fee agreement with the Law Offices of Michael A. Pohl and subsequently consented to the association of the Ammons Law Firm, L.L.P. Pohl filed a lawsuit in Louisiana on their behalf. They later entered into a new representation agreement with Ammons alone. Their case settled.

The Arkansas case arose from the death of David Reese in a car accident in July 2014. His wife, Lacy Reese of Arkansas, hired Pohl, who associated with Ammons. Pohl filed a lawsuit in Arkansas on her behalf, which later settled.

This civil barratry suit begins

The Cheathams filed this civil barratry suit in Harris County in June 2017. Initially, they sued Michael A. Pohl and the Law Office of Michael Pohl, PLLC; Donalda Pohl, who allegedly ran a side company that offered funeral loans but only if her husband’s law firm was retained; and Robert Ammons and The Ammons Law Firm, LLP. The Cheathams alleged that Michael Pohl paid a sham company to solicit them, that Donalda Pohl ran a sham financing company to offer money to surviving family members who potentially had large tort claims as an incentive to hiring her husband’s firm, that the Mississippi-based case runners worked in coordination with the Texas lawyers and others to lead clients to Pohl’s firm, and that Pohl funded the project from Texas. They alleged that acts and omissions complained of occurred, in part, in Texas and that the tort occurred, in whole or in part, in Texas.

Reese joined the Cheathams’ barratry suit in April 2018. She too alleged that the Mississippi case runners solicited her to hire Pohl. She alleged that her barratry claim arose, in whole or in part, in Texas and that the acts and omissions occurred in Texas. Reese’s pleadings relied on the permissive joinder rule and, alternatively, the intervention rule. No parties challenged her entry into the suit at the time.

Eventually, more defendants were added to the suit. The sixth amended petition, filed in April 2019, lists Mark Kentrell Cheatham, Sr., Luella Miller, Mark Cheatham, Jr., as the plaintiffs and Lacy Reese as an "intervenor."¹ It lists Michael A. Pohl, Law Office of Michael Pohl, PLLC, Donalda Pohl, Helping Hands Financing, LLC (Donalda’s company),² Edgar Jaimes (Donalda’s employee and relative), Robert Ammons, and The Ammons Law Firm, LLP, as defendants.

The Cheathams and Reese assert claims for civil barratry, breach of fiduciary duty, civil conspiracy to commit barratry, aiding and abetting, and joint enterprise liability.

Ammons’s Louisiana action to obtain attorney’s fees out of Cheatham settlement

In August 2017—just two months after the Cheathams filed this barratry suit—Ammons filed a "petition for concursus" in Louisiana, asserting a claim for attorney’s fees out of the Cheatham settlement. See La. Code Civ. Pro. art. 4651 ("A concursus proceeding is one in which two or more persons having competing or conflicting claims to money, property, or mortgages or privileges on property are impleaded and required to assert their respective claims contradictorily against all other parties to the proceeding."); Ross v. Salomon, 756 So.2d 629, 631 (La. App. 2d Cir. 2000). Ammons deposited the Cheatham settlement funds—both the client’s portion and the attorney’s fee portion—into the registry of the Louisiana court and sought court-approved release of the attorney’s fees to him.

Cheatham responded by filing a motion with the Texas court overseeing the barratry suit to force Ammons to deposit "disputed settlement funds" into the Texas court’s registry and to pay out any "undisputed settlement funds," meaning the client’s portion of the settlement. He argued that Ammons was trying to circumvent the Texas court’s jurisdiction by going to the Louisiana court to get attorney’s fees that might be denied him in the Texas barratry suit.

Ammons responded. He argued that Cheatham’s motion was "moot" because all disputed settlement funds were already in the registry of the Louisiana court and, therefore, not available to be placed into the registry of the Texas court, as Cheatham was requesting.

The Texas trial court held a hearing in September 2017. The court opened by asking what was currently pending in the Louisiana court, pointing out that the Louisiana court did not have the civil barratry claim before it, and expressing concern whether the barratry claim "is going to get adjudicated somewhere else, where the issue is not really present." Ammons’s counsel responded that it seemed "like no problem …. The barratry issues are before you. All of the issues about the settlement are before the Louisiana court."

Cheatham accused Ammons of using the Louisiana proceeding to obtain an injunction that would interfere with Cheatham’s pursuit of the civil barratry claim in the ongoing Texas suit. The court responded that it could not prohibit Ammons from proceeding in Louisiana and then reassured Cheatham that, if he prevailed on his barratry suit, the Texas court still would be able to order Ammons to "pay here."

Ammons’s counsel took the position that no action was needed by the Texas court. He highlighted "the differences between the two cases," saying, "This is a barratry case. It’s not a lawsuit over the proceeds of a settlement."

The court asked about the release Ammons was seeking in the Louisiana matter. Ammons’s counsel responded that the release was to "those funds. That’s not the barratry."

The court agreed with Ammons’s characterization of the two proceedings as distinct from one another and discussed the importance of the Louisiana court not taking any action that would impact the Texas barratry claims:

It further sounds like [this] transcript can be used in Louisiana to make sure that judge doesn’t go contrary to the barratry claim that’s pending in my court…. [Ammons is] an attorney here. I mean, the barratry portion of it should be here because he’s a Texas licensed attorney. So, it sounds like it’s all going to go like it should. I think the motion in front of me is moot and therefore denied.

Ammons was not required to place the settlement funds into the registry of the Texas court because they were already in the registry of the Louisiana court.

One month later, the Louisiana court held a hearing on Ammons’s concursus petition. The record in this appeal contains the findings of fact the Louisiana court issued after that hearing. Summarized, the Louisiana court found that:

• one of the settling parties in the underlying wrongful death suit moved to enforce the Cheatham settlement, which Cheatham opposed, and the court later granted the motion to enforce;

• Ammons intervened in that suit, asserting a claim for disputed legal fees, which Cheatham also opposed by pleading that Ammons was not entitled to any attorney’s fees because the...