United States Bankruptcy Judge Craig Gargotta entered a judgment today against a San Antonio attorney, his law firm, and his wholly owned company in favor his former clients, a South Texas ranching business. The attorney had represented his former clients in an environmental contamination suit. But despite billing and collecting millions of dollars in hourly fees for that representation, the attorney sued his clients claiming he was entitled to an additional contingent fee award of up to $18 million. The clients brought counterclaims for fraud and breach of fiduciary duty concerning the attorney’s billed expenses and related transactions.
The case was arbitrated pursuant to arbitration provisions in the attorney’s retention agreements. The arbitrator issued an award on April 30, 2020. The arbitrator denied the attorney’s claim for a contingent fee and found the attorney had committed fraud and breached his fiduciary duties to his former clients, awarding them monetary damages and a property interest collectively worth over $15 million.
Before a judgment could be entered in state court, the attorney filed for bankruptcy and sought to vacate parts of the arbitration award. Judge Gargotta denied this request, confirmed the arbitration award in its entirety, and entered a final judgment in favor of the clients for the full amount of the award.
David Prichard, David Montpas, and Daniela Gonzales, along with Tony Canales of Canales & Simonson in Corpus Christi, represented the clients in the arbitration proceeding. The attorney was represented by Steve Fleckman of Austin as well as Ricardo Cedillo and Les Strieber of San Antonio.
In the bankruptcy court, the clients were also represented by David Gragg and Natalie Wilson of Langley & Banack in San Antonio. The attorney was represented by Scott Lawrence of Dallas and Jason Davis and Caroline Small of San Antonio.
Jon Christian Amberson, PC et al. v. James Argyle McAllen, et al, Adv. Pro. No. 20-05046-CAG, in the United States Bankruptcy Court for the Western District of Texas, San Antonio Division.