Two Texas firms are seeking a declaratory judgment that they are entitled to keep a contingency fee from a Travis County lawsuit they settled in July.
In separate petitions filed on Sept. 18 in Harris County, Chris L. Gilbert Law of Dallas, which does business as Gilbert PC, and Prebeg, Faucett & Abbott of Houston, allege that Austin-based The Yoga Lounge (TYL), which does business as Vosea Advisors, and five unnamed individuals tortiously interfered with a legal contract they had with some clients, and aided and abetted and/or conspired to tortiously interfere with the contract.
Gilbert and Prebeg Faucett each seek a declaratory judgment that TYL is not a party to their agreement with the clients, they owe no duties to TYL, TYL is entitled to no part of the contingency fee, the agreement is valid and enforceable, and they satisfied their contractual obligations to their clients.
Each firm seeks up to $500,000 in damages, including actual and punitive damages, from the defendants.
Telephone numbers for TYL and Vosea Advisors, or for the company’s agent, were not available online or through directory information.
But Jason Snell, an attorney for TYL, said on Sept. 25 that the declaratory judgments Gilbert and Prebeg Faucett filed in Harris County on Sept. 18 are “completely frivolous and a defensive measure that should not have happened.”
As alleged in Chris L Gilbert Law PC v. The Yoga Lounge LLC, two Texas companies and two individuals at the companies hired Gilbert on March 19, 2015, with a contingency fee agreement, to investigate a potential lawsuit and file it if the firm determined there was a basis to do so. On July 31, 2015, Gilbert filed a suit in Travis County on behalf of the corporate clients.
Gilbert alleges in the petition that on June 6, 2016, TYL bought a minority interest in the corporate clients “but did not assume any rights in, or control over, the clients’ lawsuit that was the subject of the agreement.”
Gilbert alleges that on Feb. 22, the client retained Prebeg Faucett for the underlying suit and entered into an amended joint representation agreement that provided that once the suit was resolved, both firms would be entitled to a contingency fee.
The firm alleges TYL had knowledge of the agreement but was not a party to it.
Gilbert alleges the underlying suit was settled on a confidential basis on July 14, 2017, and both firms collected a confidential contingency fee.
On Sept. 15, Gilbert alleges in the petition, a lawyer purporting to represent TYL sent a demand letter to both firms and the clients, demanding, among many things, that the contingency fee be placed in a constructive trust. Gilbert alleges the demand “threatens to somehow mollify the months-old settlement.”
The demand letter was not attached as an exhibit to the petitions.
Gilbert alleges that other individuals acting on behalf of TYL have conspired to tortiously interfere with the agreement and the firms’ fee.
Prebeg Faucett makes similar allegations in Prebeg, Faucett & Abbott v. The Yoga Lounge.
John Browning, an attorney at Passman & Jones in Dallas who represents Gilbert, said his client “absolutely” contends the firms are entitled to the contingency fee.
“Mr. Gilbert and his firm look forward to vigorously defending their hard-won reputations,” Browning said.
Stephen Abbott, a partner in Prebeg Faucett who filed the lawsuits along with Gilbert, did not immediately return a telephone message seeking comment.
In a recent development, TYL filed a petition in state district court in Travis County on Sept. 21 seeking a declaratory judgment that the settlement agreement in the underlying suit is null and void because it had invested $250,000 in the corporate clients in 2016, and should have been asked to consent to the settlement.
“Plaintiff never consented to the settlement, nor was it ever given the opportunity, and plaintiff does not approve the settlement,” TYL alleges in the petition, adding that it also disagrees with the distribution and characterization of the settlement funds.
Among several things, TYL asks for a temporary restraining order to prevent defendants, which include Gilbert and Prebeg Faucett, from spending, transferring or secreting the settlement money and to place them into a constructive trust until the matter is resolved. TYL also brings a breach of contract cause of action against the corporate clients, which TYL identifies as Pop Austin Art and Pop Austin Management.
Browning, Gilbert’s lawyer, did not immediately respond to a request for comment on the Travis County suit. Neither did Abbott.