Post by kinipela on Oct 29, 2010 10:16:31 GMT -5
Attorney found liable in fee dispute over Fen-phen suits
By MIKE TOLSON
Copyright 2010 Houston Chronicle
Oct. 27, 2010, 10:32PM
In a split verdict, a Harris County jury ruled Wednesday that plaintiff attorney George Fleming breached his fiduciary responsibility to former clients by improperly deducting expenses from them while computing their settlement of Fen-phen lawsuits, but it also decided he did not commit any breach of contract except with one of the 10 whose expense statement was not itemized.
Both sides claimed victory. Attorneys representing 10 disgruntled former clients said that the breach of fiduciary finding could have significant impact on the remaining 3,000-plus lawsuits against Fleming, even if the individual awards in some instances were very small.
"We're very pleased to get a clean finding on his liability," said Tim Lankau, one of the lawyers for the ex-clients. "We think it has big application to all of these clients. They did find he breached his duty and charged improper expenses. We felt this case was more important than the actual damages involved."
Cases taken at random
The jury awarded less than $90,000 in damages. Lankau and lead attorney Jeffrey Chambers explained that the 10 cases taken to trial were plucked at random and that many of the clients had small settlements to begin with. Some of the remaining thousands of clients have large settlements with a much more significant deduction of expenses, they said.
"The jury apparently compromised on the numbers," said Chambers. "We did not get all of the money we asked for. We got about half."
Fleming's lawyers said the jury agreed to find a fiduciary breach only as a compromise in order to end deliberations and a trial that had stretched to three weeks. They called the awards minimal.
"Even under the best case for them, the jury awarded practically nothing," said Ron Franklin, the lead lawyer for Fleming. "One of the plaintiffs got $36, for goodness' sake. When you try a case and get $36 for one of your clients, you lost. They can spin it all they want, but we're happy."
Franklin said he believes the way that the breach of fiduciary claim was submitted by District Court Judge Steven Kirkland to the jury was erroneous and could result in a reversal on appeal.
"We won, they lost," he said. "The jury found no breach of contract, except in one case because we did not give an itemized list. The jury found that all plaintiffs had waived any right to challenge the way the expenses were handled. And the plaintiffs even gave up their fraud claim while the jury was deliberating. We feel very comfortable about our position."
8,100 clients
The former Fleming clients who have signed on with Chambers and another firm alleged that he made them pay expenses he should have covered himself.
The heart of the issue was a $25 million screening program conducted by Fleming for potential claimants against the pharmaceutical giant Wyeth, which had manufactured the Fen-phen diet drug combination that had been prescribed to millions of Americans and caused heart problems among some. Fleming argued that his 8,100 clients who participated in a 2006 mass settlement with Wyeth should jointly bear the cost of the echocardiogram screening because it was the quality and extent of the program, including all the negative findings, that added legitimacy to their claims and made a settlement possible. The ex-clients claim the screening was simply a way for Fleming to acquire clients.
Chambers' 10 clients could get more money than the jury award if the judge agrees to a "disgorgement" of Fleming's fees. That is a means by which a judge can essentially punish a lawyer by taking away a portion of the attorney fees if there has been a breach of duty.
Chambers is hopeful that Kirkland will add significantly to the award. Franklin said the plaintiffs are using that process to pad a paltry verdict. "In essence they will try to get some relief from the judge after failing with the jury," Franklin said.
By MIKE TOLSON
Copyright 2010 Houston Chronicle
Oct. 27, 2010, 10:32PM
In a split verdict, a Harris County jury ruled Wednesday that plaintiff attorney George Fleming breached his fiduciary responsibility to former clients by improperly deducting expenses from them while computing their settlement of Fen-phen lawsuits, but it also decided he did not commit any breach of contract except with one of the 10 whose expense statement was not itemized.
Both sides claimed victory. Attorneys representing 10 disgruntled former clients said that the breach of fiduciary finding could have significant impact on the remaining 3,000-plus lawsuits against Fleming, even if the individual awards in some instances were very small.
"We're very pleased to get a clean finding on his liability," said Tim Lankau, one of the lawyers for the ex-clients. "We think it has big application to all of these clients. They did find he breached his duty and charged improper expenses. We felt this case was more important than the actual damages involved."
Cases taken at random
The jury awarded less than $90,000 in damages. Lankau and lead attorney Jeffrey Chambers explained that the 10 cases taken to trial were plucked at random and that many of the clients had small settlements to begin with. Some of the remaining thousands of clients have large settlements with a much more significant deduction of expenses, they said.
"The jury apparently compromised on the numbers," said Chambers. "We did not get all of the money we asked for. We got about half."
Fleming's lawyers said the jury agreed to find a fiduciary breach only as a compromise in order to end deliberations and a trial that had stretched to three weeks. They called the awards minimal.
"Even under the best case for them, the jury awarded practically nothing," said Ron Franklin, the lead lawyer for Fleming. "One of the plaintiffs got $36, for goodness' sake. When you try a case and get $36 for one of your clients, you lost. They can spin it all they want, but we're happy."
Franklin said he believes the way that the breach of fiduciary claim was submitted by District Court Judge Steven Kirkland to the jury was erroneous and could result in a reversal on appeal.
"We won, they lost," he said. "The jury found no breach of contract, except in one case because we did not give an itemized list. The jury found that all plaintiffs had waived any right to challenge the way the expenses were handled. And the plaintiffs even gave up their fraud claim while the jury was deliberating. We feel very comfortable about our position."
8,100 clients
The former Fleming clients who have signed on with Chambers and another firm alleged that he made them pay expenses he should have covered himself.
The heart of the issue was a $25 million screening program conducted by Fleming for potential claimants against the pharmaceutical giant Wyeth, which had manufactured the Fen-phen diet drug combination that had been prescribed to millions of Americans and caused heart problems among some. Fleming argued that his 8,100 clients who participated in a 2006 mass settlement with Wyeth should jointly bear the cost of the echocardiogram screening because it was the quality and extent of the program, including all the negative findings, that added legitimacy to their claims and made a settlement possible. The ex-clients claim the screening was simply a way for Fleming to acquire clients.
Chambers' 10 clients could get more money than the jury award if the judge agrees to a "disgorgement" of Fleming's fees. That is a means by which a judge can essentially punish a lawyer by taking away a portion of the attorney fees if there has been a breach of duty.
Chambers is hopeful that Kirkland will add significantly to the award. Franklin said the plaintiffs are using that process to pad a paltry verdict. "In essence they will try to get some relief from the judge after failing with the jury," Franklin said.