Dallas lawyer Russell DePalma missed a deadline to file an appeal, which “forced” an insurance company to pay a “highly inflated” $2.275 million to settle litigation, the insurer and a company it insured allege in a lawsuit filed in Harris County.
National American Insurance Co. (NAICO) and Oklahoma-based Okie Foundation Drilling Co. Inc. seek more than $1 million in damages and fee forfeitures from DePalma and two firms where he formerly worked — FisherBroyles and Greenberg Traurig. DePalma, a former partner in FisherBroyles and former counsel with Greenberg Traurig, is now senior counsel at Shore Chan DePumpo of Dallas.
NAICO and Okie bring negligence and breach of fiduciary duty causes of action against DePalma, FisherBroyles and Greenberg Traurig in National American Insurance Co., et al. v. Russell DePalma, et al., which was filed on July 15 in the 151st District Court.
DePalma did not return a telephone message. Neither did Ralph Santos, Texas co-regional operating shareholder for Greenberg Traurig, nor James Fisher II, managing partner of Atlanta-based FisherBroyles who also manages the Dallas office.
However, Stratton Horres, a partner in Wilson Elser Moskowitz Edelman & Dicker of Dallas, who represents DePalma and FisherBroyles, provided this statement: “As you know, while there is much I’d like to say, I am restrained from commenting on pending litigation, particularly on a lawsuit that has just been filed. However, I can emphatically tell you that my clients Russell DePalma and FisherBroyles, LLP, have done nothing wrong, and this lawsuit is without merit. As most attorneys are aware, claims such as these are often unfounded. We will aggressively defend our clients in this matter, and their professional reputations will be vindicated.”
Greenberg Traurig provided this statement: “Mr. DePalma is no longer at the firm. The actions alleged in the complaint are not related to his time here.”
The plaintiffs allege in the petition that NAICO hired DePalma on Jan. 7, 2011 to appeal the verdict on Okie’s behalf in an underlying suit, Krystal Thompson, et al. v. Rent-A-Crane of Oklahoma Inc., et al., which was tried in 2010 in the 190th District in Harris County. The plaintiffs allege in the petition that Okie’s share of the judgment in that suit was $4,212,076.
The plaintiffs allege in the petition that NAICO believed that reversible error by the trial court led to a “disproportionate assignment” of Thompson damages to Okie, and other errors at trial “made it probable that the judgment would be reversed.”
As alleged in the petition, DePalma told NAICO the Thompson judgment was signed on May 9, 2011, and the deadline to file an appeal was Sept. 6, 2011.
“DePalma and GT [Greenberg Traurig] did not disclose or inform Okie and/or NAICO that DePalma had mis-calendared the relevant deadlines, and that the true deadline to file a notice of appeal was August 8, 2011,” the plaintiffs allege in the petition.
The plaintiffs allege that in July 2011, DePalma notified them he was leaving Greenberg Traurig and would join FisherBroyles on Aug. 1, 2011, and on Aug. 9, 2011, he sent an engagement letter from his new firm to NAICO.
On Aug. 31, 2011, DePalma informed NAICO that he had failed to timely file a notice of appeal and it was “now impossible to perfect an appeal.” As a result, NAICO was “forced” to settle the case on behalf of Okie for $2,275,000, the plaintiffs allege in the petition.
The plaintiffs are represented by Jimmy Williamson, Michael Kerensky and Cyndi Rusnak, all of Williamson & Rusnak of Houston.
Kerensky says the plaintiffs seek millions in damages, but the amount can’t be determined without expert testimony. The actual damages are not just what NAICO paid to settle the underlying litigation, he says.
“It’s what was paid versus what they should have paid,” he says.