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Competing orders from Texas state district judges in Austin and Corpus Christi are keeping lawyers hopping from courtroom to courtroom in a dispute over an Austin firm’s attempt to collect about $4 million in contingent fees. Austin’s Gray & Becker alleges about 700 clients owe the firm a one-third contingent fee from an $82 million arbitration award in asbestos litigation that alleges a class of about 3,500 civilian workers at the Corpus Christi Army Depot are owed hazardous-duty back pay. Gray & Becker partner Brian W. Bishop and shareholder Gary Becker say about 2,800 of the approximately 3,500 workers who received money from the arbitration award have turned over a total of about $16 million in fees. But the firm seeks another $4 million or so from about 700 other workers, leading to litigation and appeals in Travis and Nueces counties and apparently contradictory orders from 250th District Judge John K. Dietz of Austin and 319th District Judge Martha Huerta of Corpus Christi. The firm’s one-third fee totals about $27 million, but the lawyers have agreed to accept a 25 percent fee — about $20.5 million — from those who pay by Jan. 11. Gray & Becker didn’t get the chance to take its cut directly from the $82 million because the Department of the Army paid the money directly to the workers, instead of paying it to the firm to disburse. But the situation has become more complicated since the checks started going out in late November 2001 and judges in two counties began issuing orders. Dietz signed a writ of garnishment on Dec. 28, 2001, asking three banks and a credit union to freeze money in accounts of the depot workers who received checks but didn’t pay a fee to Gray & Becker. But on Jan. 3 in Corpus Christi, Huerta signed a temporary restraining order preventing the firm and the financial institutions from putting a hold on the accounts of about 350 disgruntled plaintiffs who allege they don’t owe Gray & Becker. Three days later, Dietz signed an order refusing to dissolve the writ of garnishment and finding Travis County has dominant jurisdiction in the dispute. On Jan. 9, he signed a temporary injunction preventing the disgruntled workers from taking or spending the fee money in their accounts and ordering them to turn the money they owe Gray & Becker over to the court’s registry by Jan. 11. “I used to be with the AG’s office, and we saw a lot of weird stuff. I have never seen anything quite like this one,” says Becker, who worked for former Texas attorneys general John Hill, Mark White and Jim Mattox. Becker says he’s never had so much trouble collecting a fee, but he expects to prevail. “We anticipate collecting all the money,” he says. That shouldn’t happen, says Corpus Christi solo practitioner Lucinda Juarez, who filed suit in Corpus Christi challenging the fee award on behalf of about 350 depot workers and alleging Gray & Becker doesn’t have a valid fee contract with unions representing the civilian workers. “It boils down to greedy lawyers trying to shove a final judgment down innocent people’s throats, tying up all of their money, including their paychecks, out of greed. It’s sad,” she says. ONE-THIRD RECOVERY In 1997, Gray & Becker was hired by three unions representing civilian workers at the Corpus Christi Army Depot to bring grievance and arbitration claims seeking back pay for asbestos exposure for civilians working at the depot. According to pleadings filed by Gray & Becker, the fee contracts with the unions call for a one-third fee of recovery of back pay for the employees and retirees. Following a hearing in 1999, an arbitrator in 2000 awarded the employees back pay plus interest totaling $82 million, an award substantially upheld in 2001 following an appeal to the Federal Labor Relations Authority. In September 2001, the arbitrator, John E. Barnard, signed an order that restates his intent that one-third of the money be paid to Gray & Becker for contractual attorneys’ fees. He found the Department of the Army is attempting to “undermine and defeat” the award by taking steps to make full payment of the award directly to recipients. Gray & Becker already had filed suit in state court in Austin against two former union presidents who alleged they did not have authority to sign the fee agreements. In that suit, Gray & Becker v. Lazaro Quintanilla, 53rd District Judge Scott H. Jenkins of Austin signed an order in September 2001 granting a partial summary judgment. Jenkins declared the fee agreements between Gray & Becker and the unions enforceable and found employees who received money obligated to pay one-third of their recovery to the lawyers. The defense lawyer for the former union presidents, Andrew Greenwell of Corpus Christi, subsequently intervened on behalf of the class of civilian workers at the depot. Greenwell, a partner in Harris & Greenwell, and lawyers from Gray & Becker negotiated a settlement. On Nov. 20, 2001, Dietz certified the settlement class and signed a final judgment in Gray & Becker v. George S. Sheldon. It calls for the intervenor plaintiffs to owe a reduced fee of only 25 percent as long as they pay it within 10 days of receiving their money from the government. The judgment says the intervenor plaintiffs would owe a larger one-third fee if they didn’t pay up within the 10 days. Because not all the workers paid the attorneys’ fee, Gray & Becker filed an application for a writ of garnishment against the Navy Army Federal Credit Union and three banks — Bank of America, Wells Fargo Bank of Texas and Frost National Bank. Dietz signed the garnishment order on Dec. 28, the day it was filed. But about 350 of the civilian workers hired Juarez to file Gary Lee Adams v. Brian Bishop. in Nueces County on Dec. 13. That suit alleges the contingent-fee contracts the unions signed with the lawyers on behalf of the civilian workers are not enforceable, and it alleges Bishop and Greenwell colluded to settle the litigation. On Jan. 3, Judge Huerta signed a temporary restraining order in that suit that prevents the credit union and banks, and Gray & Becker and Bishop, from intentionally freezing any funds of the plaintiffs or preventing them from withdrawing money reasonably necessary for living and other expenses. She also ordered the financial institutions to remove any hold on the plaintiffs’ accounts and ordered each plaintiff to post a $500 cash bond. The next day, however, Huerta signed another order releasing the bond money. Gray & Becker filed a writ of mandamus with the 13th Court of Appeals in Corpus Christi seeking to force Huerta to withdraw the order. But Juarez says Huerta’s order is justified because the garnishment interferes with the property rights of her clients. Meanwhile, in Austin, Juarez intervened in the garnishment suit on behalf of her clients, seeking an emergency motion to dissolve the writ of garnishment, and seeking relief from the 3rd Court of Appeals. Juarez says she wants the appeals court to overturn the writ of garnishment as well as the final judgment Dietz signed in November. Dietz signed an order on Jan. 7 denying Juarez’s motion to dissolve the writ of garnishment. He also found he has “dominant and exclusive jurisdiction” to enforce the writ and the November 2001 final judgment reflecting the class settlement negotiated by Gray & Becker and Greenwell. Juarez did not attend a hearing before Dietz on Jan. 9 on Gray & Becker’s temporary injunction motion and on several of her own motions, including a motion for change of venue. She says it’s because she was filing her writ of mandamus at the Austin appeals court at the time, but she suggests Dietz hasn’t been giving a fair hearing to her arguments. “I have a feeling that I could have brought Jesus Christ and hail Mary to testify on the witness stand, but it wouldn’t have mattered,” she says. CAUGHT IN THE MIDDLE The contradictory orders put the financial institutions in the middle. Frost Bank put the money in dispute into the court’s registry in Austin on Jan. 7, says the bank’s lawyer, Zachary Aoki, a senior attorney at Jenkens & Gilchrist in San Antonio who routinely handles garnishment actions for the San Antonio-based bank. Aoki says it’s appropriate to put the money in the court’s control because of the dueling orders. “We owe the money to somebody. We don’t know who [so we say], ‘Court, you deal with it. We don’t want to have the responsibility for it,’ ” he says. The lawyer for Wells Fargo, Houston’s James Pearson, says he’s instructing his client to obey the garnishment order. “We are knowingly disobeying the Corpus court’s order. That’s our position. We don’t know what else to do,” says Pearson, a partner in Pearson & Pearson. Rik Zafar, an associate with Houston’s Hirsch & Westheimer who represents Bank of America, declines comment. Robert Morris, a partner in Nicolas, Morris, Gilbreath & Smith of Corpus Christi, who represents the credit union, did not return a phone call seeking comment. But Bishop testified on Jan. 9 that the credit union has released about $600,000 to the employees in the wake of Huerta’s order and that some of the civilian workers told him they planned to spend the money so Gray & Becker wouldn’t get it. “They have no intention of paying us,” he told Dietz. Dietz, meanwhile, said during the hearing on Jan. 9 that he is “flabbergasted” to hear Huerta released the bond money. Becker says it totals about $175,000. Bishop says the temporary injunction Dietz issued on Jan. 9 is a “major victory” in Gray & Becker’s attempt to collect the fees. Greenwell says his interest is in the class settlement and he is unhappy to see people paying Juarez to fight it. “I believe the class settlement made a lot of sense. I worked hard to achieve it, and I don’t understand why these folks are fighting it,” he says. Greenwell says Dietz has not yet awarded him fees, but he says they are capped at $500,000 and would come out of money going to Gray & Becker.

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