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Houston lawyer Hector Cardenas won a special victory in early August when a jury in Cameron County, Tex., awarded members of the Mexican-American Balli family $2.6 million in a trial on allegations that a lawyer from New York City defrauded them out of decades worth of oil and gas rights. Cardenas isn’t just a representative of the family; he’s a member. “My grandmother signed one of the 11 deeds in the case,” Cardenas says. Those deeds to land on Padre Island, Tex., were sold by descendents of Padre Nicolas Balli — a priest and the island’s namesake, granted the land by King Carlos of Spain in 1765 — to lawyer Gilbert Kerlin beginning in 1938. A prominent retired Wall Street lawyer, Kerlin, 90, is worth nearly $70 million, and an oil expert testifying for the Balli heirs says about half of that fortune came from royalties on the Padre Island land. Padre Island is a coastal resort area on the Gulf of Mexico and includes a national seashore encompassing 133,000 acres of barrier islands, said to be the longest undeveloped barrier island in the world. In a complicated patchwork of overlapping deeds and titles, nearly 300 heirs allege Kerlin promised to pay them oil and gas royalties from the land, but never did. Court records show some of the Balli heirs were paid as little as $10 for their land, and family members complain that the Spanish-speaking landholders may not have understood what they were doing. First, Cardenas, now a partner in the Monty Law Firm of Houston, had to resuscitate the case. Murray Fogler of Houston’s McDade Fogler Maines, originally filed the suit against Kerlin in 1993. Cardenas says Fogler, sensing that the family members had a legitimate deed claim but seeing limited money to recoup, later withdrew from the case and the suit was dismissed. “I just felt from the standing of a lawyer it was going to be a major battle, and I think they still have a long battle in collecting,” Fogler says. He notes that the Balli family is emotionally involved in the case and says he is pleased for them. “They feel personally vindicated, and I feel that’s great.” Cardenas says his mother turned to him for help, as the case died on the vine. Cardenas filed a motion to reinstate the suit one day before a 30-day deadline and then went shopping for help. Cardenas says he presented the case to the firm where he was working at the time, Houston’s O’Donnell, Ferebee & McGonigal, but the firm declined to take it. Several other Houston firms also declined. Cardenas says one attorney told him the family had no case at all. Cardenas says he successfully persuaded family friend and Brownsville, Tex., lawyer Frank Costilla to serve as local counsel after a year of searching. But Costilla only agreed to assist, since he is not an oil and gas attorney. Cardenas later met with Austin’s Tom McCall, a partner in McCall & Ritchie, and finally had a legal team taking shape. McCall served as lead lawyer, and Britton Monts, a partner in Dallas’ Monts & Ware with a history of working with McCall’s firm, also came on to assist. “We put together such a good team,” Cardenas says. LONG HAUL The plaintiffs’ lawyers worked on the case for over five years and put in about 5,000 hours. But while they scored a victory for many Mexican-Americans who say their land rights were wrongfully taken from them by Anglos over the years, the legal team fell short of its goals, and the payoff to heirs may be small. The jury awarded far less than the $11 million in actual damages, interest and legal fees being sought by the plaintiffs. Of the $2.6 million awarded, $1.2 million would be split among the numerous heirs — a formula has yet to be decided — leading to an average payment of just $4,000. Approximately $1.5 million is owed to the lawyers for their work. The jury was not swayed by a call for $25 million in punitive damages and on Aug. 9 awarded none at all. Cardenas says he believes the jury vote on actual damages was a close one, with some on the panel who agreed to the actual damages then holding the line on punitive damages. “Am I surprised? No,” Cardenas says. “Disappointed? Yes.” Still, the Balli clan legal team is headed back to court. Cardenas says they will file a motion for accounting, seeking interest and disgorgement on profits that Kerlin has made from the disputed land. Specifically, Cardenas says the Balli heirs will seek from 6 to 10 percent interest, from 1961 to the present. He says that could boost overall damages to the range of $10 million to $40 million. “They’re not through with us,” Cardenas says. Of course, the other side could appeal. One of the lawyers representing Kerlin, M. Steve Smith, of Houston’s M. Steve Smith and Associates, declines to comment. Local counsel for Kerlin, Horacio Barrera of Brownsville’s Martinez & Barrera, was tied up with another trial and did not return calls from Texas Lawyer. McCall says he isn’t sure what the defense may do. He says Kerlin’s lawyers have been tightlipped and adds that everybody involved in the case spent nearly three months in court trying it. Notes McCall, “The case was a long case, and I think most of us wanted to get back into the office and see what’s left of our practice.”

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