What’s the quickest way for a firm to start recovering $1.25 million its former managing partner took from it? For Dehay & Elliston, the answer is an agreed judgment.

The Dallas firm filed suit on April 16 against its former managing partner W. Scott Berry. And on April 22, Dallas County Court-at-Law No. 5 Judge Mark Greenberg signed an agreed judgment between Dehay & Elliston and Berry, which results in a judgment of "common-law fraud, fraud by non-disclosure, actual fraud, false pretenses, theft and breach of fiduciary duty" against Berry.

Berry, who is no longer employed by the firm and represents himself in the matter, declines comment. Missy Leon, a partner in DeHay & Elliston who represents the firm, did not return a call seeking comment.

But Ed Tomko, a white-collar defense lawyer and partnerin Dallas’ Curran Tomko, says DeHay & Elliston saved itself two things in the agreed order: time and money.

"Obviously, they are saving the cost of litigation," Tomko says. "And they are trying to set up a situation to give him ample opportunity to pay them back and that he won’t use bankruptcy as a means to avoid it."

"If they go to trial, it would take six months to a year, at least, to get this resolved. And, here, it’s moving right away," Tomko says.

The background to the dispute, according to the original petition in DeHay & Elliston v. W. Scott Berry, is as follows.

Until Jan. 1, Berry was a non-equity partner and independent contractor at DeHay & Elliston, which the petition refers to as DE, and also had served as DE’s managing partner during part of his tenure. DE maintained a credit card account with American Express (Amex) for firm-related charges. Berry had possession of the firm’s Amex card by virtue of his previous position as DE’s managing partner, according to the petition.

On March 4, DE’s partners discovered Berry had improperly used DE’s Amex card for personal and other non-firm-related expenses over a number of years.

"All of the non-firm-related purchases Berry made or instructed his assistant to make on DE’s Amex card were unauthorized, inappropriate, and without the knowledge of any DE partner," according to the petition.

When Berry received DE’s Amex statements, he allocated non-firm-related transactions to certain non-firm-related entities and also designated transactions relating to his personal charges as firm expenses on the statements. After making the designations, Berry gave the statements to DE’s accounting department. Berry also instructed his assistant and DE’s comptroller not to reveal to any DE partner that he was charging personal andnon-firm-related expenses to DE’s Amex card, according to the petition.

Two DE equity partners confronted Berry about the fraudulent Amex charges on March 18.

"At that time, Berry admitted he was aware the charges were unauthorized and inappropriate," the petition states.

In addition to his "embezzlement of firm funds" via the Amex card, the firm alleged that Berry also "caused DE to pay the health insurance premiums for several individuals who were not employed by DE, without any DE partners’ knowledge or authorization."

On March 18, Berry "admitted he had instructed his assistant to enroll those individuals in DE’s benefits plan and caused DE to pay the insurance premiums for them," according to the petition.

In addition to agreeing that the debt he owes DE is "nondischargeable" in a U.S. bankruptcy court and "shall not be discharged in any bankruptcy proceeding" filed by Berry, Berry also stipulates in the agreed judgment "that he acted alone in his fraudulent misconduct and no other partner of DE conspired with him or had knowledge of his fraudulent misconduct and breaches of fiduciary duty."

The agreed judgment also puts Berry on a plan to repay DE with his first installment of $100,000 due on or before Oct. 15. Berry must make increasingly larger payments on his debt to the firm until Oct. 15, 2019, when he must make a final payment of $225,000 including all accumulated interest at a rate of 10 percent a year.

Paul Coggins, a former U.S. attorney for the Northern District of Texas who is now a partner in the Dallas office of Locke Lord, agrees with Tomko that the agreed judgment ties up the civil matter neatly for the firm and Berry.

However, Coggins adds, "The criminal authorities are not bound by anything that happens in civil court," and the civil judgment cannot prevent a state or federal prosecutor from pursing criminal charges. No criminal charges have been filed against Berry.

"Having said that, the question the becomes: Who is the victim?" Coggins says. "If the victim has gotten a resolution, that makes it less likely that the case will be pursued criminally."