NO. 2005-33,432



IN THE DISTRICT COURT

HARRIS COUNTY, TEXAS

80th JUDICIAL DISTRICT



JEROME STUBBLEFIELD

v.

AMF, INC., MINSTAR, INC., TUBOSCOPE VETCO INTERNATIONAL, L.P. f/k/a TUBOSCOPE TUBOSCOPE VETCO INTERNATIONAL, INC. f/k/a AMF TUBOSCOPE, INC., SHELTON SMITH, individually and dba Shelton Smith & Associates and dba Smith & Hooper, and SHELTON SMITH, P.C., individually and dba Shelton Smith & Associates and dba Smith & Hooper



PLAINTIFF’S SECOND AMENDED PETITION



Plaintiff, JEROME STUBBLEFIELD, complains of Defendants, AMF, INC., MINSTAR, INC., and TUBOSCOPE VETCO INTERNATIONAL, L.P. f/k/a TUBOSCOPE VETCO INTERNATIONAL, INC. f/k/a AMF TUBOSCOPE, INC. (hereinafter collectively called the AMF Defendants), and of Defendants SHELTON SMITH, individually and doing business as Shelton Smith & Associates and doing business as Smith & Hooper, and SHELTON SMITH, P.C., individually and doing business as Shelton Smith & Associates and doing business as Smith & Hooper, (hereinafter collectively called Smith or the Lawyer Defendants), showing:

I. PARTIES, JURISDICTION AND VENUE

1. Plaintiff requests a Level 3 discovery control plan under TEX.R.CIV.PROC. 190.3.

2. Plaintiff brings this action to recover monies, damages, fee disgorgement, and exemplary damages against Defendants arising from breaches of fiduciary duties, fraud, negligent misrepresentations, aiding and abetting of breaches of fiduciary duties, conspiracy, and deceptive trade practices, and as a result of the voidness of the previous settlement of Plaintiff with the AMF Defendants, and by way of bill of review. All conditions precedent have occurred.

3. Plaintiff is an individual residing in Harris County, Texas.

4. Defendant, AMF, INC., is a corporation organized under the laws of New Jersey, with its home office in White Plains, New York, and has appeared herein.

5. Defendant, MINSTAR, INC., is a foreign corporation organized under the laws of some state other than the State of Texas, and has appeared herein.

6. Defendant, TUBOSCOPE VETCO INTERNATIONAL, L.P. f/k/a TUBOSCOPE VETCO INTERNATIONAL, INC. f/k/a AMF TUBOSCOPE, INC., is a Texas limited partnership consisting of one or more members and/or general or limited partners who are citizens of the State of Texas, and has appeared herein.

7. Defendant SHELTON SMITH is an individual who does or has done business at relevant times as Shelton Smith & Associates and as Smith & Hooper, and has appeared herein.

8. Defendant SHELTON SMITH, P.C. does or has done business at relevant times as Shelton Smith & Associates and as Smith & Hooper, and is a Texas professional corporation which has appeared herein.

9. The acts, transactions, and causes of action complained of occurred in whole or in part in Harris County, Texas, making venue proper pursuant to Texas Civil Practices & Remedies Code �15.001. The amount in controversy exceeds the minimal jurisdictional limits of this Court.

10. Limitations do not bar any cause of action herein, but to the extent that Defendants may so allege, the discovery rule applies to toll accrual of Plaintiff’s causes of action because Plaintiff did not discover and should not have discovered, in the exercise of reasonable care and diligence, the facts establishing the elements of Plaintiff’s causes of action alleged herein against Defendants, until such a time so that no applicable statute of limitations prohibits the bringing of this action against Defendants.

II. FACTS SHOWING LIABILITY OF AMF DEFENDANTS FOR WORKERS CONTRACTING

SILICOSIS DUE TO EXPOSURE TO SILICA DUST AT HOLMES ROAD PLANT

11. Plaintiff was a worker at an AMF Tuboscope, Inc. sandblasting plant in Houston, Texas. AMF was the parent company of AMF Tuboscope, Inc. at that time and MINSTAR was the successor parent company. The AMF Defendants controlled the finances and safety programs of the subsidiary AMF Tuboscope. The sandblasting plant was a coating facility where workers sandblasted and recoated oil field pipe. Silicosis has been a well known debilitating occupational disease for decades – even before the AMF Defendants got into the sandblasting business. Nevertheless, while the AMF Defendants effectively controlled the plant, the site was a very dangerous place to work because of the highly elevated levels of respirable silica and the lack of provision of proper respirators and other filtration systems to protect the workers. The AMF Defendants received multiple notices over the years of the dangerousness of the plant and took no actions to correct the condition or to protect the workers. Because of the negligence of the AMF Defendants, Plaintiff was exposed to gross amounts of silica dust which has ultimately caused him to contract silicosis.

12. The AMF Defendants undertook the duties to provide a reasonably adequate safety program, to provide a reasonably safe place to work, to provide adequate and safe instrumentalities at the workplace, and to provide careful and competent fellow servants to Plaintiff while employed at AMF Tuboscope, Inc. The AMF Defendants further assumed the duties to comply with the Occupational Safety and Health Administration regulations promulgated by the United States Department of Labor and relating to workplace safety. The AMF Defendants undertook these duties gratuitously, and/or for consideration, and/or because AMF Tuboscope, Inc. was unable to adequately aid and protect its employees from the dangers created in the workplace. Accordingly, the following provisions of the Restatement, The Law of Torts (Second), apply to this case:

�323. Negligent Performance of Undertaking to Render Services



One who undertakes, gratuitously or for consideration, to render services to another which he should recognize as necessary for the protection of the other’s person or things, is subject to liability to the other for physical harm resulting from his failure to exercise reasonable care to perform his undertaking, if



(a) his failure to exercise such care increases the risk of such harm, or



(b) the harm is suffered because of the other’s reliance upon the undertaking.



�324. Duty of One Who Takes Charge of Another Who is Helpless



One who, being under no duty to do so, takes charge of another who is helpless adequately to aid or protect himself is subject to liability to the other for any bodily harm caused to him by



(a) the failure of the actor to exercise reasonable care to secure the safety of the other while within the actor’s charge, or



(b) the actor’s discontinuing his aid or protection, if by so doing he leaves the other in a worse position than when the actor took charge of him.



13. The AMF Defendants’ assumption of the duties enumerated herein and their failure to exercise reasonable care in the performance of such duties proximately caused Plaintiff’s injuries and damages. Furthermore, AMF Tuboscope, Inc. relied upon the AMF Defendants’ assumption of these enumerated duties and that as a result of such reliance, Plaintiff suffered substantial injuries and damages. The AMF Defendants’ failure to exercise reasonable care in the assumption of these duties constituted negligence which was the proximate cause of Plaintiff’s injuries and damages. Furthermore, the AMF Defendants were negligent in one or more of the following particulars:

(a) in assessing the work areas of AMF Tubsocope through the safety department of AMF Inc. but failing provide this information in a manner that allowed AMF Tuboscope to properly assess the work hazards present;



(b) in injecting and controlling the respiratory protection program at AMF Tuboscope but failing to provide protective equipment which is applicable and suitable for the protection of Plaintiff while he was employed at AMF Tuboscope;



(c) in failing to provide a respirator based on the hazards to which Plaintiff, as an AMF Tuboscope employee, was exposed once AMF, Inc. through its own inspections and evaluations determined was suitable:



(d) in implementing and/or maintain a periodic air sampling program to determine the degree of hazard from respirable dust at the AMF Tuboscope plant but failing to enforce the conclusions and recommendations of those evaluations;



(e) in failing to provide, select and/or maintain proper exhaust ventilation systems at the AMF Tuboscope facility after completing an assessment of the respiratory hazards present at the subsidiary,



(f) in failing to maintain and/or reduce the concentration of respirable dusts and/or fumes at the AMF Tuboscope facility below the levels specified by the Occupational Safety and Health Act regulations by acting to intervene and prevent reduction of respirable silica dust;



(g) in failing to reduce the concentration of respirable dusts and/or fumes at the AMF Tuboscope plant to comply with the limitations and specifications of the protective equipment provided to Plaintiff by acting to intervene and refuse to provide the proper resiratory equipment;



(h) in failing to exercise reasonable care in the inspection and supervision of the operations of the AMF Tuboscope plant after affirmatively undertaking inspection and/or supervisory responsibilities;



(i) in failing to warn Plaintiff of the hazards created by heavy concentrations of respirable dusts and/or fumes which were present in excessive concentrations at the AMF Tuboscope facility; and



(j) in failing to administer and execute a medical screening program to periodically review the medical status of Plaintiff as an employee working in heavy concentrations of respirable dust and/or fumes once the Defendant had intervened in the safety program of AMF Tuboscope;



(k) in failing to institute, maintain and enforce a safe and proper respiratory protection program once AMF officials had inspected the facility, determined that little or no respiratory protection was being utilized by workers and instructed AMF safety personnel to correct the hazards created by an improper respiratory protection program.



Each of the foregoing particulars constitutes negligence, which were the proximate cause of Plaintiff’s injuries and damages.

14. Provisions of the Occupational Safety and Health Act regulations promulgated pursuant to the Occupational Safety and Health Act of 1970 are applicable in this case. The AMF Defendants violated provisions of 29 C.F.R. �1910 throughout the entire period that Plaintiff worked at AMF Tuboscope and proximately caused Plaintiff’s injuries and damages. Such violations constitute negligence per se as that term is understood in law. The AMF Defendants assumed the duty to provide a reasonably safe place to work for AMF Tuboscope employees like Plaintiff and consequently were required to follow Occupational Safety and Health Act regulations. Instead, the AMF Defendants’ chose to ignore and/or to refuse to follow the above OSHA regulations.

15. The AMF Defendants were in control of the AMF Tuboscope facilities located in Houston, Texas. By exercising this control, the AMF Defendants retained the power to direct the order in which work was done at the Tuboscope facilities. This authority included the promulgation of safety procedures and the direction of safety surveillance. The AMF Defendants also retained the authority to forbid work at the Tuboscope facilities from being done in a dangerous manner. Consequently, the AMF Defendants exercised supervisory control over the operations at the Tuboscope facilities. The AMF Defendants failed to exercise this supervisory control in a reasonable manner. Such a failure constitutes negligence which was the proximate cause of Plaintiff’s injuries and damages. The AMF Defendants were negligent in one or more of the following particulars:

(a) in failing to enforce safety regulations promulgated by the Occupational Safety and Health Administration for the protection of Tuboscope employees;



(b) in failing to promulgate and establish guidelines for respiratory protection for Tuboscope employees; and



(c) in failing to take the necessary remedial action for respiratory protection after the AMF Defendants directed and ordered air sampling programs at the AMF Tuboscope facilities.

16. As a proximate result of the AMF Defendants’ negligence, Plaintiff has suffered severe, permanent injuries. As a result of such injuries, they have sustained the following damages:

(a) Physical pain and mental anguish, past and future;

(b) Medical expenses, past and future.

(c) Loss of earnings, past and future;

(d) Physical incapacity, impairment, and disability, past and future;

(e) Disfigurement, past and future; and

(f) Shortening of life span and longevity due to the disease occasioned.

III. FACTS SHOWING LIABILITY OF AMF DEFENDANTS FOR IMPROPER AND

ILLEGAL MANNER IN WHICH AMF SILICOSIS CLAIMANTS CLAIMS WERE SETTLED

17. Shelton Smith is a lawyer who since 1985 had represented numerous silicosis claimants individually against the AMF Defendants. Prior to 1998, Smith had individually settled approximately forty (40) cases against the AMF defendants for a collective amount of approximately $40,000,000.

18. In 1998, Smith filed 21 individual lawsuits against the AMF Defendants. Smith thereafter submitted 21 separate settlement demands to the AMF Defendants on those cases. Meanwhile, Smith was accumulating and screening more potential AMF silicosis claimants. The AMF Defendants responded to the 21 settlement demands that they had no interest in individual settlements and were only interested in a global settlement of Smith’s growing inventory of AMF silicosis claimants. By the summer of 1999, Smith came to represent over 300 AMF silicosis claimants.

19.During the week of July 12, 1999, Smith and the AMF Defendants and representatives of some of the insurers for the AMF Defendants met to mediate all of Smith’s clients’ cases. Smith’s clients were not present at the mediation. The mediation process and the agreement and understandings reached pursuant thereto were kept secret from the clients whose claims were being negotiated. During the course of the mediation, the AMF Defendants made written group settlement offers on some 152 of Smith’s clients. Smith never conveyed any of the values contained in such offers to any of his clients. Many of the settlement values proposed by AMF in its group settlement offers far exceeded the amounts that Smith subsequently allocated and then recommended to his clients. At the conclusion of the mediation, Smith and the AMF Defendants agreed to settle all of Smith’s positively diagnosed clients as a group for $45,000,000, without agreeing on how to divide the fund among the claimants.

20. Smith and the AMF Defendants thereafter entered into a signed Rule 11 Agreement on behalf of their respective clients to memorialize the agreement for the group settlement. Under the Rule 11 Agreement, Smith agreed on behalf of his clients that his “clients will make specific individual settlement demands individually in compliance with the terms of this Rule 11 Agreement” and that AMF and its insurers “have the right to revoke the terms of all settlements if less than 95% of the positive diagnosed Plaintiffs identified in Exhibit “A” agree to the terms of individual settlements.” The terms, meaning, and effect of the Rule 11 Agreement were never disclosed to the claimants. Instead, the Rule 11 Agreement was the mechanism for the AMF Defendants to settle Smith’s inventory of AMF silicosis claimants while concealing the true nature of the conflict-ridden settlement.

21. Smith and the AMF Defendants thus entered into a global settlement of Smith’s inventory of AMF silicosis claimants for $45,000,000, which created undisclosed conflicts of interests for Smith and among the clients in violation of Disciplinary Rules 1.06(b) and 1.08(f). The AMF Defendants through their agents thereafter not only assisted Smith in concealing the aggregate settlement and the conflicts of interests from Smith’s clients, the AMF Defendants through their agents also made material misrepresentations to the AMF silicosis claimants including Plaintiff to induce them to settle their cases.

22. Smith secretly allocated the $45,000,000.00 fund among 179 and then 177 clients without their knowledge or consent as to the distribution, misrepresented to the clients that each allocation was the “final offer” from the AMF defendants and their insurers, and specifically instructed his clients not to discuss their settlement amounts with any of the other clients. Smith included Plaintiff within the group of 177 clients that were ultimately settled pursuant to the aggregate settlement agreement. Although the aggregate settlement created immense conflicts of interests for Smith and among his clients in violation of Disciplinary Rules 1.06(b) and 1.08(f), it enabled Smith to receive nearly $18,000,000.00 in attorney’s fee.

23. In order to facilitate the aggregate settlement, Smith put all of the settling clients who were not previously in suit, which was over 150 of the clients, into one or more of the previously pending lawsuits before completing the settlement so that Smith could fraudulently charge the clients a forty percent (40%) fee instead of a thirty-three and one-third percent (331/3%) fee. To hide the charade, Smith had each of his clients unwittingly execute a false affidavit wherein the client acknowledged that his “claim was negotiated individually and not as a part of an aggregate settlement” in violation of Disciplinary Rules 1.08(f) and 8.04(a)(3). To effect the allocated settlements, Defendants had each of the claimants unwittingly execute a settlement agreement and affidavit, and give a sworn statement, wherein the client acknowledged that he had silicosis, and that his case was individually negotiated and not as part of an aggregate settlement in further violation of Disciplinary Rules 1.08(f) and 8.04(a)(3). The Lawyer Defendants are estopped from denying that Plaintiff suffers silicosis.

24. Absent individual representation and negotiation, Smith proceeded negligently to ostensibly “settle” Plaintiff’s claim for a sum far less than fair value. In fact, the “settlement” received by Plaintiff was neither fair nor reasonable, but was grossly inadequate for the severe injuries visited upon such persons unfortunate enough to contract silicosis or related lung diseases. Smith did not properly evaluate each client’s claim or advise each that they were merely receiving an allocation out of an aggregate fund. Instead, Smith settled all of the claims for an unreasonably low amount so that he could secure a quick and easy, but very large, legal fee. The Lawyer Defendants compounded their defalcations to their clients when they made no provision for payment of future medical expenses related to their occupational lung diseases, a benefit prior clients of the Lawyer Defendants had received in their respective individual settlements with the AMF Defendants. To the contrary, the Lawyer Defendants failed to protect the rights of their clients to receive workers compensation benefits, benefits which they lost due to Smith’s lack of action.

25. In order to facilitate and conceal the aggregate settlement, the AMF Defendants required that each of the AMF silicosis claimants, including Plaintiff, execute a Settlement, Indemnity, Assignment and Release Agreement, containing the following statements:

Plaintiff and Defendants have been involved in lengthy settlement negotiations, involving a variety of settlement offers, and proposals. This agreement reflects the final settlement offer made by Defendants and accepted by the Plaintiff.



This statement is untrue. The AMF Defendants never made any such final offers to any of the AMF silicosis claimants, including Plaintiff. The Agreement continued:

Defendants’ payment of the settlement amounts stated herein are independent of its agreement to make payments to other plaintiffs in the same or related lawsuits. Plaintiff and Defendant have negotiated this settlement based upon the individual merits of the Plaintiff’s claims. Defendants have not made any aggregate settlement offer and this settlement is not part of any aggregate settlement.



This statement contains several falsehoods – Again, the Rule 11 Agreement specifically provided that the AMF Defendants and its insurers would “have the right to revoke the terms of all settlements if less than 95% of the positive diagnosed Plaintiffs” agreed to settle. Thus, the settlements were interrelated and dependent. The parties did not negotiate the claimants’ cases based on the merits of each case – the AMF Defendants agreed to pay $45,000,000 for the group and to let Smith allocate the funds among his clients. And, the AMF Defendants did make aggregate settlement offers and ultimately did make an aggregate settlement. The AMF Defendant’s lawyer inserted the foregoing statements into the Settlement, Indemnity, Assignment and Release Agreement at the express request of Smith for the purpose of misleading the AMF silicosis claimants as to how their cases were actually being settled.

26. The effect of the $45,000,000 settlement was that Smith made a nearly $18,000,000 fee for performing little in the way of legal services for his clients, while the AMF Defendants and their insurers wiped out a huge amount of future financial exposure with settlements for sums far less than the historical values for AMF settlements. As a result of the settlement, Plaintiff’s claim was settled for a sum which was far less than its fair value.

IV. CAUSES OF ACTION

27. Plaintiff brings the following causes of action against Defendants, incorporating the foregoing and all other paragraphs herein as if set out in full into each of the following causes of action. Plaintiff brings these causes of action in the alternative and without waiving any other cause of action.

A. BREACH OF FIDUCIARY DUTY BY LAWYER DEFENDANTS

28. The attorney-client relationship is a fiduciary relationship as matter of law. A fiduciary relationship is one of special trust and confidence. The law requires that all dealings between an attorney and client be characterized by the utmost good faith, candor and honesty. An attorney must affirmatively disclose to his client all material facts bearing on the client’s case, as well as the legal consequences flowing from the facts. The Lawyer Defendants committed breaches of fiduciary duties owed Plaintiffs, without limitation, in at least the following ways: i) failing to advise Plaintiff of any applicable AMF settlement offers made at mediation; ii) illegally entering into an aggregate settlement without Plaintiff’s full knowledge and informed consent; iii) failing to individually negotiate Plaintiff’s claim; iv) telling Plaintiff that he was receiving an individual settlement; v) misstating facts to persuade Plaintiff to accept the allocated settlement; vi) stating that AMF made a “final offer,” when in fact AMF had no such offer; vii) stating that the odds of sustaining a plaintiff’s verdict on appeal before the Supreme Court of Texas was 20% or less, when in fact the odds of a prevailing plaintiff winning on appeal substantially exceeds that percentage; viii) stating that Plaintiff could not receive lifetime medical benefits, when in fact lifetime medical was negotiable; ix) stating that the settlements were negotiated individually and not as part of an aggregate settlement, when in fact Defendants had entered into an aggregate settlement; x) secretly allocating the $45,000,000.00 without client knowledge or consent; xi) charging a forty percent (40%) instead of a thirty-three and one-third percent (331/3%) fee; xii) stating the Lawyer Defendants had adequately, fully and competently worked up Plaintiff’s claims for damages, when in fact they had done little work to prepare Plaintiff’s claim; and xiii) stating that the settlement amount was fair and reasonable, when in fact it was wholly unfair and inadequate. As a fiduciary, the Lawyer Defendants bear the burden of proof to establish that they did not breach fiduciary duties to Plaintiff.

B. FRAUD BY LAWYER DEFENDANTS

29. The Lawyer Defendants committed fraud upon Plaintiff in order to induce him to accept his allocated settlement and to execute documents necessary to conclude thr settlement. The Lawyer Defendants made numerous false oral and written representations, and withheld various material facts, without limitation, in at least the following ways: i) failing to advise Plaintiff of applicable AMF settlement offers made at mediation; ii) illegally entering into an aggregate settlement without Plaintiff’s full knowledge and informed consent; iii) failing to individually negotiate Plaintiff’s claim; iv) telling Plaintiff that he was receiving an individual settlement; v) misstating facts to persuade Plaintiff to accept the allocated settlement; vi) stating that AMF made a “final offer,” when in fact AMF had no such offer; vii) stating that the odds of sustaining a plaintiff’s verdict on appeal before the Supreme Court of Texas was 20% or less, when in fact the odds of a prevailing plaintiff winning on appeal substantially exceeds that percentage; viii) stating that Plaintiff could not receive lifetime medical benefits, when in fact lifetime medical was negotiable; ix) stating that the settlement was negotiated individually and not as part of an aggregate settlement, when in fact Defendants had entered into an aggregate settlement; x) secretly allocating the $45,000,000.00 without client knowledge or consent; xi) charging a forty percent (40%) instead of a thirty-three and one-third percent (331/3%) fee; xii) stating that the Lawyer Defendants had adequately, fully and competently worked up Plaintiff’s claim for damages, when in fact they had done little work to prepare Plaintiff’s claim; and xiii) stating that the settlement amount was fair and reasonable, when in fact it was wholly unfair and inadequate.

30. Such representations of fact were false when made or, in the alternative, the Lawyer Defendants made the representations recklessly, as a positive assertion, and without knowledge of their truth. The Lawyer Defendants made the representations to Plaintiff in order to persuade Plaintiff to settle his claim against the AMF Defendants. Each representation was material to Plaintiff, as each representation was a basis on which Plaintiff made a decision to settle. All such representations were made by the Lawyer Defendants, by the Lawyer Defendants’ principal, or by the Lawyer Defendants’s employees in the course and scope of their employment with the Lawyer Defendants. Further, the Lawyer Defendants intentionally withheld material information from Plaintiff which, due to the attorney-client and fiduciary relationship which existed, the Lawyer Defendants were required to disclose to Plaintiff. Each such omission was material to Plaintiff, as each such omission was a basis on which Plaintiff made the decision to settle. Given the attorney-client relationship, Plaintiff justifiably relied on such representations and omissions.

C. NEGLIGENCE BY LAWYER DEFENDANTS

31. In undertaking the legal representations and creating the attorney-client relationships, the Lawyer Defendants owed Plaintiff a duty to use ordinary care, that is, to do that which an attorney of ordinary prudence would have done under the same or similar circumstances. The Lawyer Defendants breached the duty of care and committed negligence in the representation of Plaintiff and in the settlements of Plaintiff’s claims, in at least the following ways: i) neglecting to advise Plaintiff of the AMF settlement offers made at mediation; ii) entering into an aggregate settlement when individual negotiations would have resulted in greater settlements; iii) not individually negotiating Plaintiff’s claim to obtain a greater settlement; iv) neglecting to negotiate lifetime medical benefits; v) negligently allocating the $45,000,000.00; vi) failing to adequately, fully and competently work up Plaintiff’s claims for damages, when in fact they had done little work to prepare each individual client’s claim; vii) neglecting to advise Plaintiff of all material facts relating to his case and settlement; and viii) negotiating and recommending a settlement amount that was neither fair nor reasonable. As such, the Lawyer Defendants conduct fell below the standard of care for lawyers in the same or similar circumstances.

D. NEGLIGENT MISREPRESENTATION BY LAWYER DEFENDANTS

32. As part of the Lawyer Defendants’ representation of Plaintiff, the Lawyer Defendants had a pecuniary interest in any settlement reached by Plaintiff with the AMF Defendants. In order to secure the illegal aggregate settlement, the Lawyer Defendants made numerous false oral and written representations to Plaintiff for his guidance in deciding whether to accept the allocated settlement and to execute documents necessary to conclude the settlement. Thus, Smith, while acting in the course of his profession and in connection with a transaction in which he had a pecuniary interest, supplied false information to his clients for their guidance in deciding whether to accept the allocated settlement amounts and to execute documents necessary to conclude the settlements. The Lawyer Defendants failed to exercise reasonable care or competence in communicating, without limitation, at least the following false information: i) failing to advise the clients of applicable AMF settlement offers made at mediation; ii) illegally entering into an aggregate settlement without Plaintiff’s full knowledge and informed consent; iii) failing to individually negotiate Plaintiff’s claim; iv) telling Plaintiff that he was receiving an individual settlement; v) misstating facts to persuade Plaintiff to accept the allocated settlement; vi) stating that AMF made a “final offer,” when in fact AMF had no such offer; vii) stating that the odds of sustaining a plaintiff’s verdict on appeal before the Supreme Court of Texas was 20% or less, when in fact the odds of a prevailing plaintiff winning on appeal substantially exceeds that percentage; viii) stating that Plaintiff could not receive lifetime medical benefits, when in fact lifetime medical was negotiable; ix) stating that the settlements were negotiated individually and not as part of an aggregate settlement, when in fact Defendants had entered into an aggregate settlement; x) secretly allocating the $45,000,000.00 without client knowledge or consent; xi) charging a forty percent (40%) instead of a thirty-three and one-third percent (331/3%) fee; xii) stating that the Lawyer Defendants had adequately, fully and competently worked up Plaintiff’s claim for damages, when in fact they had done little work to prepare Plaintiff’s claim; and xiii) stating that the settlement amount was fair and reasonable, when in fact it was wholly unfair and inadequate. Plaintiff justifiably relied on the information supplied by the Lawyer Defendants to his pecuniary detriment.

E. DECEPTIVE AND UNCONSCIONABLE PRACTICES BY LAWYER DEFENDANTS

33. The Lawyer Defendants’ actions violated the TEXAS DECEPTIVE TRADE PRACTICES ACT in at least the following ways in that the Lawyer Defendants knowingly engaged in false, misleading and deceptive practices, without limitation, in at least the following ways: i) failing to advise the clients of applicable AMF settlement offers made at mediation; ii) illegally entering into an aggregate settlement without Plaintiff’s full knowledge and informed consent; iii) failing to individually negotiate Plaintiff’s claim; iv) telling Plaintiff that he was receiving an individual settlement; v) misstating facts to persuade Plaintiff to accept the allocated settlement; vi) stating that AMF made a “final offer,” when in fact AMF had no such offer; vii) stating that the odds of sustaining a plaintiff’s verdict on appeal before the Supreme Court of Texas was 20% or less, when in fact the odds of a prevailing plaintiff winning on appeal substantially exceeds that percentage; viii) stating that Plaintiff could not receive lifetime medical benefits, when in fact lifetime medical was negotiable; ix) stating that the settlements were negotiated individually and not as part of an aggregate settlement, when in fact Defendants had entered into an aggregate settlement; x) secretly allocating the $45,000,000.00 without client knowledge or consent; xi) charging a forty percent (40%) instead of a thirty-three and one-third percent (331/3%) fee; xii) stating that the Lawyer Defendants had adequately, fully and competently worked up Plaintiff’s claims for damages, when in fact they had done little work to prepare Plaintiff’s claim; and xiii) stating that the settlement amount was fair and reasonable, when in fact it was wholly unfair and inadequate.

34. The Lawyer Defendants also knowingly engaged in unconscionable actions and courses of action in entering into the unethical aggregate settlement and failing to advise the clients of same, as well as in settling Plaintiff’s claims for woefully inadequate amounts and charging a forty per cent (40%) instead of a thirty-three and one-third per cent (331/3%) fee, thereby taking advantage of the lack of knowledge, ability, and experience of Plaintiff to a grossly unfair degree.

F. FRAUD BY AMF DEFENDANTS

35. The AMF Defendants committed fraud upon Plaintiff to induce him to accept the allocated settlement and to execute documents necessary to conclude the settlement. The AMF Defendants made numerous false representations to Plaintiff, without limitation, by representing:

(a) that the settlement reflected the final offer of the AMF Defendants, when in fact no such offer was made, no less a final such offer;

(b) that the settlements were independent, when in fact the AMF Defendants required 95% of Smith’s qualifying clients to participate in the settlement;

(c) that Smith and the AMF Defendantsd had negotiated the settlements based upon the individual merits, when in fact Smith merely allocated the $45,000,000.00 among his clients;

(d) that the AMF Defendants made no any aggregate settlement offers, when in fact they had made several aggregate settlement offers; and

(e) that each individual settlement was not part of any aggregate settlement, when in fact each such settlement was merely a part of a $45,000,000.00 aggregate settlement.

36. Such representations of fact were false when made or, in the alternative, the AMF Defendants made the representations recklessly, as a positive assertion, and without knowledge of their truth. The AMF Defendants made the representations to Plaintiff in order to persuade Plaintiff to settle his claim against the AMF Defendants. Each representation was material to Plaintiff, as each representation was a basis on which Plaintiff made a decision to settle. All such representations were made by AMF Defendants, by the AMF Defendants’ principal, or by the AMF Defendants’s employees and/or agents in the course and scope of their employment and/or agency with the AMF Defendants. Further, the AMF Defendants intentionally withheld material information from Plaintiff which the AMF Defendants were required to disclose to Plaintiff. Each such omission was material to Plaintiff, as each such omission was a basis on which Plaintiff made the decision to settle. Given the circumstances, Plaintiff justifiably relied on such representations and omissions.

G. NEGLIGENT MISREPRESENTATION BY AMF DEFENDANTS

37. The AMF Defendants had a pecuniary interest in any settlement reached by Plaintiff and the other AMF silicosis claimants with the AMF Defendants. In order to secure the illegal aggregate settlement, the AMF Defendants made numerous false representations to Plaintiff for his guidance in deciding whether to accept the allocated settlement and to execute documents necessary to conclude the settlement. The AMF Defendants failed to exercise reasonable care or competence in communicating to Plaintiff, without limitation, at least the following false information:

(a) that the settlement reflected the final offer of the AMF Defendants, when in fact no such offer were made, no less a final such offer;

(b) that the settlements were independent, when in fact the AMF Defendants required 95% of Smith’s qualifying clients to participate in the settlement;

(c) that Smith and the AMF Defendants had negotiated the settlement based upon the individual merits, when in fact Smith merely allocated the $45,000,000.00 among his clients;

(d) that the AMF Defendants made no any aggregate settlement offers, when in fact they had made several aggregate settlement offers; and

(e) that each individual settlement was not part of any aggregate settlement, when in fact each such settlement was merely a part of a $45,000,000.00 aggregate settlement.

Plaintiff justifiably relied on the information supplied by the AMF Defendants to his pecuniary detriment.

H. AIDING AND ABETTING BREACH OF FIDUCIARY DUTY BY AMF DEFENDANTS

38. The attorney-client relationship is a fiduciary relationship as matter of law. A fiduciary relationship is one of special trust and confidence. The law requires that all dealings between an attorney and client be characterized by the utmost good faith, candor and honesty. An attorney must affirmatively disclose to his client all material facts bearing on the client’s case, as well as the legal consequences flowing from the facts. Smith committed breaches of his fiduciary duties owed Plaintiff, without limitation, in at least the following ways: i) entering into an illegal and unethical aggregate settlement; ii) entering into a settlement agreement making the claimants’ settlements interrelated and contingent on each other; iii) failing to individually negotiate each client’s claim; iv) having the clients execute documents containing false statements; and v) failing to disclose the foregoing to the clients. The AMF Defendants knew that Smith was breaching his fiduciary duties to his clients including Plaintiff and moreover actively participated in such breaches. The AMF Defendants aided and abetted breaches of fiduciary duty to Plaintiff and the other AMF silicosis claimants, without limitation, by agreeing to have them read and execute settlement documents representing:

(a) that the settlements reflected final offers of the AMF Defendants, when in fact no such offers were made, no less final offers;

(b) that the settlements were independent, when in fact the AMF Defendants required 95% of Smith’s qualifying clients to participate in the settlement;

(c) that Smith and Shank had negotiated the settlements based upon the individual merits, when in fact Smith merely allocated the $45,000,000.00 among his clients;

(d) that the AMF Defendants made no any aggregate settlement offers, when in fact Shank had made several aggregate settlement offers; and

(e) that each individual settlement was not part of any aggregate settlement, when in fact each such settlement was merely a part of a $45,000,000.00 aggregate settlement.

I. CONSPIRACY

39. The AMF Defendants and Smith combined to accomplish an unlawful purpose and to accomplish a lawful purpose by unlawful means, in order to induce Plaintiff to induce him to accept the allocated settlements and to execute documents necessary to conclude the settlements. The AMF Defendants and Smith agreed and acted in concert to make numerous false representations to Plaintiff, without limitation, by representing:

(a) that the settlements reflected final offers of the AMF Defendants, when in fact no such offers were made, no less final offers;

(b) that the settlements were independent, when in fact the AMF Defendants required 95% of Smith’s qualifying clients to participate in the settlement;

(c) that Smith and Shank had negotiated the settlements based upon the individual merits, when in fact Smith merely allocated the $45,000,000.00 among his clients;

(d) that the AMF Defendants made no any aggregate settlement offers, when in fact Shank had made several aggregate settlement offers; and

(e) that each individual settlement was not part of any aggregate settlement, when in fact each such settlement was merely a part of a $45,000,000.00 aggregate settlement.

Plaintiff justifiably relied on the information supplied by the AMF Defendants and Smith acting in concert to his pecuniary detriment. Such misrepresentations caused actual and/or consequential damages to Plaintiff for which he brings suit to recover.

40. The AMF Defendants and Smith further conspired to induce Plaintiff and the other AMF silicosis claimants to induce them to accept their allocated settlements and to execute documents necessary to conclude the settlements, by agreeing and acting in concert for Smith to commit breaches of his fiduciary duties owed Plaintiff and his other AMF silicosis claimants, without limitation, in at least the following ways: I) entering into an illegal and unethical aggregate settlement; ii) entering into a settlement agreement making the claimants’ settlements interrelated and contingent on each other; iii) failing to individually negotiate each client’s claim; iv) having the clients execute documents containing false statements; and v) failing to disclose the foregoing to the clients. Such breaches of fiduciary duties caused actual and/or consequential damages to Plaintiff for which he brings suit to recover.

J. BILL OF REVIEW

41. Plaintiff incorporates all of the foregoing allegations and hereby asserts a bill of review to set aside the judgment previously entered by this Court in John George Baxter, et al. v. Tuboscope International, Inc., et al., 80th District Court, Harris County, Texas, with respect to Plaintiff’s action against the AMF Defendants.

K. VOID SETTLEMENTS

42. Aggregate settlements made in violation of Disciplinary Rule 1.08(f) are void. The AMF Defendants made settlements with Plaintiff and the other AMF silicosis claimants pursuant to an aggregate settlement in violation of Disciplinary Rule 1.08(f). The AMF Defendants defrauded and misrepresented facts to Plaintiff and the other silicosis claimants to induce them to accept the allocations made by Smith, with full knowledge that Smith was not complying with the disclosure and informed consent requirements of the rule.

L. FEE DISGORGEMENT

43. The Lawyer Defendants committed clear and serious breaches of their fiduciary and other duties owed Plaintiff, without limitation, in at least the following ways: i) failing to advise the clients of applicable AMF settlement offers made at mediation; ii) illegally entering into an aggregate settlement without Plaintiff’s full knowledge and informed consent; iii) failing to individually negotiate Plaintiff’s claim; iv) telling Plaintiff that he was receiving an individual settlement; v) misstating facts to persuade Plaintiff to accept the allocated settlement; vi) stating that AMF made a “final offer,” when in fact AMF had no such offer; vii) stating that the odds of sustaining a plaintiff’s verdict on appeal before the Supreme Court of Texas was 20% or less, when in fact the odds of a prevailing plaintiff winning on appeal substantially exceeds that percentage; viii) stating that Plaintiff could not receive lifetime medical benefits, when in fact lifetime medical was negotiable; ix) stating that the settlements were negotiated individually and not as part of an aggregate settlement, when in fact Defendants had entered into an aggregate settlement; x) secretly allocating the $45,000,000.00 without client knowledge or consent; xi) charging a forty percent (40%) instead of a thirty-three and one-third percent (331/3%) fee; xii) stating that the Lawyer Defendants had adequately, fully and competently worked up Plaintiff’s claims for damages, when in fact they had done little work to prepare Plaintiff’s claim; and xiii) stating that the settlement amount was fair and reasonable, when in fact it was wholly unfair and inadequate. Such breaches command fee disgorgement.

M. EXEMPLARY DAMAGES

52. Defendants’ actions, as set forth above, constitute fraud, malice, and gross negligence as those terms are defined in Texas Civil Practices & Remedies Code �41.001, entitling Plaintiff to recover exemplary damages.

Plaintiff prays that upon final trial he have judgment against Defendants setting aside the prior judgment and entering a new judgment for actual and exemplary damages, along with prejudgment and postjudgment interest as allowed by law, and along with judgment against the Lawyer Defendants, and costs of court, and for such other and further relief to which he may be justly entitled.



Respectfully submitted,



SMOOT LAW FIRM, P.C.





By: ___________________________

Steven M. Smoot

S.B.N. 18774300

4545 Mt. Vernon

Houston, Texas 77006

Telephone (713) 266-1113

Telecopier (713) 706-3622



ATTORNEYS FOR PLAINTIFF



Of Counsel:



MALONEY, MARTIN & MITCHELL, L.L.P. SKEPNEK LAW FIRM, P.A.

Frank W. Mitchell William J. Skepnek

S.B.N. 14209500 S.B.N. 00790054

3401 Allen Parkway 900 Massachusetts, Suite 601

Houston, Texas 77019 Lawrence, Kansas 66044

Telephone (713) 659-1600 Telephone (785) 331-0300

Telecopier (713) 659-6930 Telecopier (785) 331-0303



CERTIFICATE OF SERVICE



I hereby certify that a true and correct copy of the foregoing PLAINTIFF’S SECOND AMENDED PETITION was served on all counsel of record pursuant to TEX.R.CIV.PROC. 21 and 21a, on July _____, 2005, as follows:



David J. Beck/Troy Ford [ ] Certified Mail, Return Receipt Requested

BECK, REDDEN & SECREST, L.L.P. [ ] Telecopier: (713) 951-3720

1221 McKinney, Suite 4500 [ x ] Hand Delivery

Houston, Texas 77010



Phillip T. Bruns/Kim Reaves [ ] Certified Mail, Return Receipt Requested

GIBBS & BRUNS, L.L.P. [ ] Telecopier: (713) 750-0903

1100 Louisiana, Suite 5300 [ x ] Hand Delivery

Houston, Texas 77002



Willie Ben Daw III/Peri H. Alkas [ ] Certified Mail, Return Receipt Requested

DAW & RAY, P.C. [ ] Telecopier: (713) 266.3188

5718 Westheimer, Suite 1750 [ x ] Hand Delivery

Houston, Texas 77057



___________________________

Steven M. Smoot