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Brewer & Pritchard5/26/2005
In this appeal from a summary judgment, Brewer & Pritchard appeals a judgment in favor of Nick Johnson and James W. Chang on the grounds that the trial court: (1) abused its discretion in denying discovery on the remanded claims, and (2) erred in granting summary judgment. We reverse and remand as to cause number 14-04-00540-CV. Cause number 14-04-00360-CV is dismissed as moot.
I. Background
In April 1995, while Chang was employed by Brewer & Pritchard, he and Henry King, a close personal friend, were together on a ski vacation when King's father, Herbert King, and several members of a delegation from China were severely injured in a helicopter crash that occurred near Flower Mound, Texas. Chang returned home two days later and talked to two members of Brewer & Pritchard about the possibility that the firm might be retained to represent the crash victims. One of the Brewer & Pritchard partners, Patrick Gaas, discussed with Chang how to structure a contingent fee agreement and issues that could arise. Gaas explained to Chang the possibility of referring the case to another firm and how to structure a referral fee agreement.
Chang scheduled meetings for Henry King with several personal injury lawyers and firms. Chang accompanied King at all of those meetings. One of the attorneys they consulted was Nick Johnson, a close friend of Chang's since they had been in law school together. Henry King and Johnson were also friends. They had become acquainted six or seven years earlier through Chang. Chang billed to Brewer & Pritchard's business development file faxes to and from Henry King, Nick Johnson, and another personal injury lawyer in Houston. Chang also billed to the same file long distance telephone calls to the hospital where Henry King's father was being treated and to the hotel where the King family was staying, and Chang billed shipping charges on a package from Henry King to the same file.
Five days after the crash, Henry King signed a contingent fee agreement with Nick Johnson during or shortly after a meeting at which Chang was present. Johnson told King at that meeting that he would refer the case to the firm of Jamail & Kolius. The next day, Johnson referred the case to Jamail & Kolius for fifty percent of the net fee. Joe Jamail and Johnson subsequently met with other victims of the crash who were hospitalized in Fort Worth, and Jamail and Johnson were retained to represent them as well as the survivors of a victim who was killed in the crash. All the claimants other than the King family were citizens of China, and suit was filed in federal court.
About two months after the crash occurred, Chang left Brewer & Pritchard to work for another firm that had a corporate securities practice. The helicopter crash suit was settled in October 1996, and Nick Johnson received a $3,000,000 fee. It is unclear from the record whether that fee was solely referable to the Kings' claims or whether it also included a fee from the other crash victims who were citizens of China. About a year later, Chang left the firm with which he had been working and formed a partnership with Nick Johnson and Riley Burnett.
Brewer & Pritchard first sued Johnson and Chang in October 1996, when the helicopter crash suit was settled. Brewer & Pritchard contended Chang breached a fiduciary duty owed to Brewer & Pritchard and that Johnson knowingly assisted Chang in committing that breach. Specifically, Brewer & Pritchard alleged Chang directly or indirectly profited by receiving or arranging to receive all or part of Johnson's referral fee. Brewer & Pritchard sought actual and exemplary damages. When Brewer &
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