Houston attorney Harry C. Arthur won a $52,000 final judgment on Sept. 9 against Nationwide Property and Casualty Insurance Co. But the verdict isn’t for a client; it’s for himself — for contingency fees from a case in which he was terminated before the settlement.
Arthur says other lawyers didn’t want to represent him. He recalls them asking, “Why’s a jury going to care about you, the lawyer?”
Nationwide will appeal, says David Bradley, a partner in Walter, Balido & Grain in Houston, who represents the insurance company.
“The applicable case law favors Nationwide. Harry Arthur was terminated and did not advise anyone of his fee interests. We think legally [the judgment] will be overturned on appeal,” Bradley says.
Arthur filed an amended petition in Harry C. Arthur v. Paul E. Licata, et al.,on July 16 in 151st District Court in Harris County, alleging that David Joya was either tossed or dove into a pool’s shallow end and fractured vertebra in his neck in 2007, becoming a quadriplegic. The pool accident happened at a home covered by a Nationwide insurance policy.
The next year, Arthur continued in the amended petition, Joya hired Arthur on a 40 percent contingency basis. Arthur contacted Nationwide and identified himself as Joya’s retained lawyer.
But later in 2008, Joya’s brother sent a letter to Arthur telling him that Joya had terminated Arthur as his counsel. Although fired, Arthur alleged in his amended petition, he had not lost his rights to the contingency fee, following State Bar of Texas rules.
Joya hired Paul E. Licata, then Nationwide paid a $275,000 settlement to Joya and Licata, Arthur claimed in the amended petition. Arthur sued for what he alleged were his contingency fees per his contract with Joya, which were not contained in the settlement amount. Arthur’s petition claimed he was due 40 percent of the settlement, as well as roughly $1,000 in expenses.
In the same amended petition, Arthur alleged Nationwide knew of his rights, failed to protect them and disregarded them. Therefore, he alleged, he was due damages. He also claimed that Joya’s settlement with Nationwide was invalid because Joya did not have “the mental capacity” to execute a settlement or to give his brother power of attorney, because of a deteriorating mental and physical condition.
Arthur initially had named only Licata as a defendant in his Feb. 22, 2010, original petition; Arthur then named Nationwide as a defendant in a petition filed June 10, 2010, in a separate case filed in the 125th District Court. On April 19, 2011, 151st District Judge Michael Engelhart granted Nationwide’s request and ordered the two cases before his court.
In a Feb, 13 answer, Nationwide denied the allegations and stated as an affirmative defense that it had no legal duty of any kind to Arthur under the facts of the case. In an earlier, unsuccessful motion for summary judgment, filed June 24, 2011, Nationwide argued that Arthur’s only claim, if any, was against his former client, since Arthur had no contract with Licata, who handled the underlying case to its conclusion.
In a motion for summary judgment filed Dec. 29, 2010, Licata argued that Arthur’s contract with Joya was nonexistent or invalid, that there was no evidence he had tortiously interfered and no evidence of damages, since Arthur allegedly had not contacted the insurance company or evaluated the dollar figure of Joya’s claim at the time he was terminated. He argued that Arthur “is not entitled to the benefit” of Licata’s due diligence to evaluate and negotiate a settlement.
On May 25, 2012, Engelhart granted Licata’s motion for summary judgment and dismissed Licata from Harry C. Arthur.
“I was pretty clear he didn’t have a case against me, and the judge agreed,” says Licata.
On July 18, a jury returned a verdict deciding that: a contract existed between Arthur and Joya, which assigned the lawyer a portion of his the injured man’ claim; Nationwide knew of that agreement; and, therefore, Nationwide owed Arthur $45,000 in damages. In his Sept. 9 final judgment, Engelhart added interest to make the award $52,000.
Arthur says he finally got Eric Nielsen, a lawyer in Houston who previously worked with him, to agree to represent him against Nationwide. Nielsen did not return a call seeking comment. But, Arthur jokes: “He was the only fool I could find to handle this for me. But he did alright.”