Judge Martin Hoffman of Dallas has ordered Thompson & Knight to pay $960,000 to two former clients who alleged they sustained damages in connection with the firm’s representation of them in an oil and gas deal with Apollo Resources Inc.
Following a bench trial on Sept. 4, Hoffman, of the 68th District Court, signed an Oct. 18 final judgment in favor of plaintiffs Patriot Exploration LLC and Patriot Land LLC of Greenwich, Conn., against Thompson & Knight for $960,000 plus post-judgment interest and costs.
On Oct. 24, Thompson & Knight filed a request for findings of fact and conclusions of law. The firm will appeal the judgment, says Luke Ashley, general counsel for the Dallas-based firm.
The judge only considered damages during the one-day trial, according to Ashley and Robert Tobey, a shareholder in Johnston♦Tobey in Dallas who represented the plaintiffs at trial.
“The trial [was] limited to the issue of whether Patriot could recover for alleged loss of additional revenue they say they would have realized if they had been able to sell the assets in April instead of September of 2008,” Ashley says.
“They are saying they would have realized more money on the sale and they had an expert that made a calculation. We don’t think the expert’s method was proper and we think he ignored some undisputed evidence,” he says.
Tobey agrees the key issue at trial was the admissibility of the expert’s testimony.
In the original petition in Patriot Exploration LLC, et al. v. Thompson & Knight, the plaintiffs alleged they hired Thompson & Knight in September 2006 to represent them in some oil and gas transactions. Relying on advice from the firm, the plaintiffs entered into a participating agreement with Apollo Resources for some land and leases, although public records in Texas show the owner of the land and leases had assigned them to Apollo Natural Gas and not its affiliated company Apollo Resources.
The plaintiffs alleged that after Thompson & Knight failed to obtain a “corrective assignment” on the title issue from Apollo Resources and Apollo Natural Gas, the firm notified the Patriot companies in February 2008 that it was “ceasing its efforts to obtain execution of the documents” and it assumed the plaintiffs would get new lawyers.
The plaintiffs alleged their new counsel cleared up the title problem, but at a cost of $326,000 in legal fees, and they also had paid Thompson & Knight $51,839 for its work on the transaction.
The plaintiffs brought legal malpractice, breach of contract and unjust enrichment causes of action against Thompson & Knight.
In its May 24 first amended original answer, Thompson & Knight generally denied the allegations in the petition, claimed it was not liable because the plaintiffs’ own acts or omissions caused or contributed to the damages, and sought a take-nothing judgment.
Ashley and Tobey confirm that some disputed matters were resolved through mediation, the details of which are confidential, and the only remaining issue that went to Judge Hoffman was damages.
“There was an agreement to try the remaining claim to the court . . . to waive the jury,” Tobey says. “[T]he only issue being tried to the court was the remaining damage claim.”
The suit ended up in Dallas after a trip to New York. In 2008, the Patriot companies filed a virtually identical malpractice suit against Thompson & Knight in the Supreme Court of the State of New York in the County of New York. In 2011, a judge on the Supreme Court of the State of New York signed an order stipulating the parties agreed the plaintiffs would file a Texas suit within 90 days and Thompson & Knight would not raise statute of limitations defenses. [See "Legal-Mal Case Moves from NYC to Dallas," Texas Lawyer, June 20, 2011, page 1.]