A Tarrant County jury returned a verdict on Feb. 7 totaling $3.5 million in damages, plus a half interest in a company, in favor of North Richland Hills lawyer D. Kent Davis. The verdict came in a breach of fiduciary duty and fraud suit Davis filed against his former partner Ledford White and a company White owns, M&M Joint Venture.
"They were partners for almost 20 years, and it was a case of betrayal. My client absolutely could not believe what he came to learn, but I guess the jury couldn’t believe it either," says W. Bradley Parker, a shareholder in Parker McDonald of Bedford who represents Davis.
Jonathan D.F. Nelson, of counsel at Hill Gilstrap in Arlington who represents White and M&M, declines comment
Kent Davis, et al. v. Ledford White, et al. stems from a dispute between Davis and White after they decided to dissolve their firm White & Davis. Davis filed the suit on behalf of himself and D. Kent Davis PC — a corporation formed in March 1999 and dissolved in December 2009 — against White and M&M Joint Venture.
Davis and his PC allege in the 3rd Amended Petition, filed on Jan. 29, that Davis and White split "all revenue and expenses equally" as partners in White & Davis. In 1999, the plaintiffs allege, Davis and White bought land on a 50/50 basis and built an office building for the firm.
In 2006, Davis and his PC alleged in the petition, Davis and White decided to "wind up the firm." They alleged Davis was aware of "significant" work White had done for a client, identified in the suit as AI, and the client owed a "substantial receivable."
Davis and the PC alleged White assured Davis he need not worry about the receivable because White had exchanged the receivable for a 50 percent interest in a joint venture that owned 42 acres in Crowley. Davis later learned M&M owned the land.
"White further represented to Davis that upon the sale of the Crowley Tract, in whole or in part, Davis would receive exactly one-half of what White received as a result of the transaction(s)," Davis and his PC alleged.
Davis and the PC alleged that Davis later learned gas wells were operated on the land, and White received $641,000, among various payments, from the mineral interest in the land, but Davis did not receive a share.
In their first amended answer filed on July 2, 2012, White and M&M denied they ever owned a mineral interest in the Crowley Tract and deny Davis owned a half interest in M&M. As an affirmative defense, they also asserted Davis’ alleged damages are offset by money he owes to them, including monthly expenses from 2007 through 2009 and taxes on the professional building they built in North Richland Hills.
The jury found White failed to comply with a fiduciary duty to Davis and his PC, committed fraud against them, and found by clear and convincing evidence that they were harmed by the fraud, according to the verdict. The jury found, however, the harm to Davis and his PC did not result from malice.
The jury awarded Davis and his PC $374,672.50 on the breach of fiduciary duty finding and an equal amount on the fraud finding. The jury also found they should receive $2.8 million on the clear and convincing evidence finding along with a 50 percent interest in M&M.
Parker says he will ask 96th District Judge R.H. Wallace Jr. to enter a judgment totaling about $2.8 million. He says Texas law caps the punitive damages.
White, of Ledford E. White of North Richland Hills, did not return a telephone message seeking comment.
"We felt vindicated with the verdict and very fortunate and very blessed," says Davis, of Law Offices of Kent Davis.