lukegilman.com : The Blawgraphy
Life of a Law Student, University of Houston Law Center

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Please note: I'm no longer updating this particular blog, but keep it around for archival purposes. Visit me at the current blog at www.lukegilman.com

MBM Financial Corp. v. Woodlands Operating Co., L.P.

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In MBM Financial Corporation v. The Woodlands Operating Co., No. 08-0390 (Tex. Aug. 28, 2009) the Texas Supreme Court reversed a plaintiff’s judgment for $1,000 in damages and almost $150,000 in attorney’s fees. Video of Oral Argument is available from St. Mary’s Law School. (Oral Argument Transcript) Justice Brister’s opinion begins:

Since Jarndyce v. Jarndyce, there have been charges that some cases benefit the lawyers more than the clients. But suits cannot be maintained solely for the attorney’s fees; a client must gain something before attorney’s fees can be awarded. While making losing parties bear their own attorney’s fees may add injury to insult, the American Rule has long been that each party pays its own lawyers.

In this case, the plaintiff obtained a judgment for $1,000 in damages and almost $150,000 in attorney’s fees. But there was no evidence to support the amount of the $1,000 award, and it is too large to constitute nominal damages. As the award to the client must be set aside, the attorney’s fee award must also. Accordingly, we reverse and render a take-nothing judgment.

MBM Financial Corporation v. The Woodlands Operating Co., No. 08-0390 (Tex. Aug. 28, 2009), appealed from Montgomery County and the Ninth District Court of Appeals, Beaumont. Jennifer Bruch Hogan, (Houston) argued for petitioner. Karen D. Smith (Woodlands) argued for respondent/cross-petitioner.

My favorite exchange comes at 26:55.

Smith: They rely upon the Gulfstates case, I think, out of this court to attempt to say that this court has made a determination that a finding of whether or not a finding of zero or nominal damages does not allow recovery of attorney’s fees.

Justice (???): What distinguishes that case is the DTPA.

Smith: Not only that your honor, but the other thing I would do with all due respect, I know Justice Jefferson you authored that opinion and Justice Hecht joined in it, but I think there’s a problem with the Gulfstates case.

Justice (???): What?!?!?

With greatest respect I say that and I’ve read it several times to be sure that couldn’t be the case…

As soon as you hear “with all due respect…” you know something good is coming.

TED Talks: Misha Glenny investigates global crime networks

Organized crime has grown by leaps and bounds in the past decade, to what Glenny now estimates as 15% of the world’s GDP. Glenny has written McMafia: A Journey Through the Global Criminal Underworld, attributing the remarkable its growth to the collapse of Communism, the rise of globalism and the deregulation of international finance markets.

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Lessig on Corruption

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Ari Kaplan Speaks at University Houston Law Center, Wednesday November 16th

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Ari Kaplan will be appearing for a lunch session at the University of Houston Law Center this Wednesday, Sept. 16th. After practicing as a lawyer for nine years in New York, Kaplan has become a public speaker and career advisor for law students and legal professionals and most recently authored The Opportunity Maker: Strategies for Inspiring Your Legal Career Through Creative Networking and Business Development (Thomson-West, 2008).

His session, particularly relevant in the current legal market, shows law students, lawyers and other professionals how they can stand out in today’s stagnant economy.

Hope to see you there!

Law Professor Returns Royalties to Class for Textbook to Avoid Conflict of Interest

In the blog post Ask Your Teachers for a Rebate, Yale Law Professor Ian Ayres notes his practice of returning the royalty he earns when students buy the contracts text he assigns in order to avoid the financial incentive of self-dealing.

Instead of just trying to get the best book for my class (and to do so I should weigh both quality and price), I might also consider assigning my own book and increasing my profit. This is a self-dealing transaction, which would be presumptively illegal if professors owed a fiduciary duty to students.

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