A business dispute arose 10 years after a sale of shares. Now, a firm and one of its lawyers find themselves as defendants in litigation.
A former client of Weycer, Kaplan, Pulaski & Zuber of Houston filed a professional negligence lawsuit against the firm and shareholder Marilyn Sims over how they allegedly represented him and his company in connection with a shareholder agreement.
Yacoub Al-Masri and St. Mary’s Home Health Inc., both of Houston, allege in a June 25 petition that Sims and Weycer Kaplan breached their duty of care to them “by failing to give legal advice or relevant information when legally obligated to do so” or, alternately, by failing to inform Al-Masri they were not representing him and/or St. Mary’s.
Sims did not return a telephone message or respond to an email seeking comment.
In response to the allegations, Weycer Kaplan shareholder Mark Levine says, “The firm and Ms. Sims deny Mr. Al-Massi’s allegations in their entirety and will defend themselves vigorously.”
The petition is filed in the 133rd District Court in Harris County.
Al-Masri and St. Mary’s allege in the petition that Al-Masri, his wife and a business partner each held 500 shares of stock in the company. In March 2001, Sims and the Weycer Firm were retained to prepare or review a new shareholder agreement because Al-Masri’s wife had decided to give up her stock in the company.
The plaintiffs allege that the company bylaws gave Yacoub Al-Masri the right to acquire all of his wife’s shares, and with those shares he would have a controlling two-thirds interest in the company. However, the plaintiffs allege that Al-Masri didn’t discover until 2011 that 2.5 of his wife’s shares were instead transferred to his business partner.
The plaintiffs allege Sims and/or the firm had a previous attorney-client relationship with Al-Masri’s business partner before they were retained to work on the shareholder agreement, but that was not disclosed to Al-Masri.
“Al-Masri believed that in reviewing and/or preparing the Shareholder Agreement, Sims and the Weycer Firm were representing both he and St. Mary’s,” the plaintiffs allege in the petition.
The plaintiffs allege that Al-Masri operated the company for nearly 10 years after the revised shareholder agreement, generating profit, but a dispute arose in 2011, and his business partner alleged that changes to the shareholder agreement in 2001 provided him with 2.5 shares from Al-Marsi’s wife, which prevented Al-Masri from exercising “full control” of the company.
The plaintiffs allege that was the first time Al-Masri was made aware of the transfer of the shares or the effect the transfer would have on his ability to control St. Mary’s.
The plaintiffs allege that Al-Masri’s business partner sued him, alleging he had veto power over Al-Masri’s decisions about the company because of the 2.5 share transfer, and that litigation settled, “resulting in a significant legal injury to Al-Masri and St. Mary’s.”
Plaintiffs’ attorney Kevin M. Madden, of Law Offices of Kevin Michael Madden of Houston, says he cannot discuss potential damages because of a confidential settlement in the underlying litigation.
Levine notes that Weycer Kaplan did not represent Al-Masri in the underlying litigation.