A Brooklyn, N.Y., litigation-funding company has filed eightsuits in Harris County district court over the past few months against Houston lawyer Randolph Michael Nacol II, also known as Michael Nacol. It alleges he breached contracts by failing to return its interest in settlements. Some of the petitions also name as defendantsformer clients of Nacol’s firm and the firm’s former bookkeeper Syndi Lockett.
Now, Nacol faces more litigation: On Jan. 11 two former clients who were sued by the funding company sued him, his firm, Lockett and two former associates over how their settlement funds were distributed.
Nacol, of Law Offices of Michael Nacol, has not filed answers in any of the breach of contract suits, which were filed from Sept. 19, 2012, through Jan. 11 by Plaintiff Funding Holding Inc., also known as LawCash. A telephone number for Nacol’s firm is not working, and a residential listing was not available online. He did not respond to an email sent through the State Bar of Texas’ website.
David Kassab, of Kassab Law Firm of Houston who represents those two former clients, says he has not been able to locate Nacol.
In answers filed in three of the suits brought by LawCash in January, Lockett — who is a defendant in six of the eight suits — denies the allegations and seeks a take-nothing judgment. Her attorney, William B. Clarkson, a partner in Clarkson & Rochna in Houston, did not return a telephone message seeking comment.
Lew Fidler, general counsel for LawCash, says, “Other than confirm the fact we have filed a number of lawsuits for what we believe is due cause, I’m not going to comment on pending litigation.”
Geoffrey H. Bracken, a partner in Gardere Wynne Sewell in Houston who represents LawCash in the Harris County litigation, did not return a telephone message seeking comment.
Former Clients Sue
In seven of the breach of contract suits, LawCash names former clients of Nacol’s firm as defendants. Two of those former clients, Robin Banks and Eugene Johnson, both of Port Arthur, filed Robin Banks, et al v. Michael Nacol, et al., in the 152nd District Court against Nacol, his firm, Lockett, and former associates Lori L. Brown and Jeff Musslewhite. No answers have been filed in that suit.
Banks and Johnson allege in their petition that they hired Nacol’s firm for a personal injury suit stemming from an accident that happened July 23, 2010. They allege in the petition that the “Lawyers” — which the petition uses to refer collectively to Nacol, Brown and Musslewhite — advised them to settle the suit but failed to use settlement proceeds to pay LawCash or medical providers, as the lawyers promised. As a result, Banks and Johnson allege in the petition, LawCash sued them in November 2012 for “breach of contract, conversion and conspiracy.”
“[N]ot only did the Lawyers retain their fees in excess of $200,000, but they seemingly retained over $250,000 in settlement proceeds that were supposed to be used to pay the clients’ lien holders and medical providers thereby forcing Plaintiffs, their own clients, to defend themselves in subsequent lawsuits brought as a result of this nonpayment,” Banks and Johnson allege in the petition.
While their PI suit was pending, Banks and Johnson allege in the petition, Banks borrowed $110,000 from LawCash for medical bills and Johnson borrowed $30,000.
“The Lawyers deducted their fees in excess of $200,000 and supposedly paid the liens and expenses in excess of $250,000, while Banks received a mere $65,000 and Johnson received only $25,000,” the plaintiffs allege.
Brown, now a partner along with Musslewhite in Brown & Musslewhite in Houston, declines comment but says Nacol “terminated” her employment in August 2012.
Musslewhite, who says he left Nacol’s firm last fall, says he was a firm employee and did not disburse settlement money.
“Once the settlements were reached, it was out of our hands,” Musslewhite says.
A residential number for Lockett in Sugar Land has been changed and the new number is “unknown,” according to a recording.
Banks and Johnsonbring negligence, negligent misrepresentation, breach of fiduciary duty, fraud and misapplication of fiduciary property causes of action against all defendants except Lockett and allege they violated the Texas Deceptive Trade Practices Act. They bring aiding and abetting the breach of fiduciary duty, fraud and civil conspiracy causes of action against Lockett. They seek actual and punitive damages, attorney fees, mental anguish damages and fee forfeiture, jointly and severally, against all the defendants.
Banks and Johnson filed Banks after LawCash named them as defendants in breach of contract suits filed on Nov. 21, 2012. In those petitions, LawCash alleges it had a “first lien security interest” in proceeds of the settlement, but Nacol, Lockett, Banks and Johnson failed to pay it a share of the settlement proceeds.
In handwritten answers on Dec. 19, 2012, Banks and Johnson, each write that after the settlement, Nacol and Lockett had “possession of all monies.”
“I had no idea they didn’t pay LawCash until I was served this law suit. The Law Office of Michael Nacol has since closed and I have no way of contacting him,” Banks wrote.