A former client has sued Gordon & Rees, the managing partner of the firm’s Dallas office and a firm senior counsel, alleging they changed his hourly attorney-fee agreement to a contingency contract to benefit the defendants, who successfully settled his employment case.
But Gordon & Rees and Dallas office managing partner Robert Bragalone say the former client’s allegations are false and that the change in the attorney-fee contract was the client’s idea. The hourly-fee contract was for a nonlitigation matter prior to the former’s client’s suit, according to Bragalone, who says he speaks on the firm’s behalf.
Gordon & Rees senior counsel Joshua P. Martin says the allegations in the petition "are completely meritless" and he’s not a proper party to the suit.
The plaintiff’s lawyer, Mark A. Ticer of Dallas’ Law Office of Mark A. Ticer, says, "It is unfortunate that Mr. Bragalone is mistaken and or misinformed. We look forward to presenting our case to a Dallas County jury."
According to the petition filed April 25 in Dallas County Court-at-law No. 1, the background to Zephuren James Hughes v. Gordon & Rees, Robert A. Bragalone and Joshua P. Martin, is as follows.
Hughes hired Gordon & Rees, Bragalone and Martin on an hourly basis to assist Hughes in an employment dispute Hughes had with a company with which he used to be affiliated. Hughes paid the defendants several thousand dollars. Prior to the engagement, Hughes had secured certain concessions from the company where he used to work, including a payment plan of over a million dollars in cash and payment for his medical insurance for a period of time, among other things, according to the petition.
Later, during the litigation, the defendants "decided a contingency fee agreement should be used to address the same matters as the hourly fee contract," he alleges in the petition.
"In advising Hughes to sign a new fee agreement more financially beneficial to the Defendants, Defendants failed to provide Hughes with the proper counsel, instructions and/or advisements, including but not limited to, taking steps to have Hughes consult with another attorney to evaluate the contingency agreement in light of an existing hourly fee contract for the same matter," the petition alleges.
In accordance with the contingency fee agreement, the defendants are laying claim to 40 percent of the cash portions of the settlement, 40 percent of the noncash components of the case and 40 percent of the defendants’ perceived value of a counterclaim filed by the company against Hughes that was later dismissed, Hughes alleges in the petition.
The petition alleges breach of fiduciary duty, breach of contract and violations of the Texas Deceptive Trade Practices Act.
Martin says he should not be a defendant in the suit.
"I did not negotiate the fee agreement. I didn’t sign the fee agreement. I’m not a party to any contract with the plaintiff. I’m not in line to receive any compensation, regardless of what the fee ends up being," Martin says.
In a emailed statement, Bragalone writes that the hourly fee agreement was for "non-litigation on an unrelated matter in August of 2011. It was very limited in scope and pertained only to a review of some proposed changes to a contract and some tax advice."
More than a year later in September 2012, Hughes decided to sue his former employer "on new and unrelated claims," Bragalone writes.
"He requested a contingent fee agreement to level the playing field with his corporate opponent — the classic reason our system promotes contingent fees where the courthouse doors would be closed to the David’s harmed by the Goliath’s of the world," Bragalone writes in the statement.
"The risks and benefits of the various fee arrangements were fully explained and the client was counseled both verbally and in writing that he may wish to consult with another attorney," Bragalone writes in the statement. "He reiterated his request for a contingent fee and was thrilled when the Firm agreed to his request. Then the Firm took the risk and secured a great result for our client."
In an interview, Bragalone says, "He never complained about any of this. He let us represent him until the very end. And when the first payment hits the trust account, then he gets a lawyer."