Prestigious Pets Lawyer Warned to Settle Lawsuit, But Ignored Warning. Clients Lost, Could Face Bankruptcy
The lawsuit initiated by Prestigious Pets, Kalle McWhorter, and their lawyer Bill Richmond, has begun to implode in on the plaintiffs after Judge Jim Jordan of the 160th District Court of Dallas County dismissed the case in favor of defendants, Robert and Michelle Duchouquette. An application was filed September 26, 2016 on behalf of the Duchouquettes for an award of $166,000 in attorney fees, $1,700 in court costs, and $200,000 in sanctions against Prestigious Pets and Kalle McWhorter. They could face bankruptcy in the near future if the application is even partially successful.
It is important to note that, Attorney Paul Alan Levy wrote a lengthy 9-page letter on April 11, 2016 to Bill Richmond, (Prestigious Pets’ and Kalle McWhorter’s attorney) warning and urging them to consider settling the case as Levy felt that to move the case to full conclusion was ill-advised and would not serve Richmond’s clients well. The reason why Levy felt that the plaintiffs should settle is that they were a small business and would not likely be able to sustain a court judgment of such magnitude against them and be forced into bankruptcy.
From Paul Alan Levy’s letter to Bill Richmond, I have republished the excerpts from the opening and conclusion of his lengthy 9-page letter. In between the opening and conclusion, are four major lengthy discussion topics, in which Levy goes into great detail, explanation, and citation. (Emphasis is mine.)
Dear Bill:
It is unfortunate that your clients have sought to further chill the Duchouquettes’ free speech by upping the ante, transforming their former pro se complaint in the Texas Justice Court into a complaint in District Court seeking up to a million dollars in damages. However, Public Citizen is ready to help the Duchouquettes stand up to this bullying.
My purpose in writing this letter is to give your clients one last chance to dismiss their District Court complaint and to accept responsibility for the costs that their Justice Court complaint imposed on the Duchouquettes, before we file an anti-SLAPP motion under the Texas Citizens Participation Act (“TCPA”) in District Court as well as the counterclaims that we describe below. Our clients recognize that your clients are a small business and its owner, and it is not the Duchouquettes’ goal to put them out of business-just to rid themselves of this suit and recover the attorneys’ fees they have been billed to defend it so far. Therefore, we hope that we’ll be able to resolve the matter amicably before our next court filing and the press attention that is likely to accompany it.
To explain our position and why your clients may wish to settle the matter, I will lay out the legal landscape as I see it in some detail, in the hope that it helps you drive home to your clients some of the risks they face in proceeding further.
The Newly Identified Plaintiff, Kalle McWhorter, Has No Viable Claims
(Argument, rationale, and case citation follows…)The New Complaint Does Not Present Defamation Claims That Would Withstand a Motion to Dismiss Under the TCPA
(Lengthy argument, rationale, and case citation follows…)The Claims Under the Nondisparagement Clause Are Also Subject to Dismissal under the TCPA
(Lengthy argument, rationale, and case citation follows…)Your Clients Have Exposed Themselves to Counterclaims
(Argument, rationale, and case citation follows…)Appeal of JP Denial of Anti-SLAPP Motion
Conclusion
We urge your clients to consider carefully whether it is in their interest to proceed any further with their litigation against Robert and Michelle Duchouquette. Two weeks ago, defendants’ counsel Alex More told you that so long as Prestigious Pets was willing to dismiss its claims and make the Duchouquettes whole for the attorney fees that they owed to their private counsel as provided by section 27.009(a), defendants would be willing to waive their claim for deterrence damages under section 27.009(b ). Writing this letter and otherwise preparing to defend the lawsuit you have now filed in the District Court has implicated additional fees. We fully recognize that your client operate a small business, and we have no desire to expend time that could lead to an award of attorney fees so substantial as to threaten their financial well-being. We would very much prefer to see this case end with the recognition that filing the lawsuit in the District Court and the Justice Court was a mistake in judgment from which the plaintiffs are willing to walk away.Consequently, if your clients are ready to dismiss their claims immediately and with prejudice, we are prepared to forgo any claims for attorney fees beyond those previously charged for the proceedings before the Justice Court. If, on the other hand, we have to prepare a motion to dismiss under the TCPA and pursue counterclaims under the DTPA, we will be ready to seek a full award of attorney fees with a clear conscience.
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In his November 28, 2016 affidavit, Paul Alan Levy wrote to the court the following:
1. My name is Paul Alan Levy. I have been principal counsel for the Duchouquettes since the outset of the litigation in this Court.
2. I have read Kalle McWhorter’s affidavit, including an assertion about supposed settlement discussions. Since I entered this case, as counsel, Prestigious Pets and Kalle McWhorter have been represented by counsel. Consequently, I have not communicated with them since entering the case. But I have communicated with plaintiffs’ counsel on several occasions, attempting to persuade him to engage in discussions about possible resolutions of this case short of litigation, either resolving the case in its entirety or at least narrowing the issues presented for decision by the Court. However, to the best of my knowledge, Kalle McWhorter was never a party to those communications.
3. My efforts to reach out to plaintiffs’ counsel included sending him a detailed letter before we filed our motion under the Texas Citizens Participation Act, laying out many of the problems I perceived with his clients’ claims. advising him that pursuing the litigation could be very costly for his clients, and offering to allow plaintiffs to dismiss their lawsuit in this Court without any payment of fees for the time we had already spent on the case. A copy of that letter is attached as Exhibit 1G. When I discussed the matter with Mr. Richmond after he had seen the letter, he did not tell me either that the plaintiffs wanted to settle the case, or what terms the plaintiffs would require or accept to withdraw the litigation.
4. In filing the motion for an award of attorney fees and sanctions, I was aware of the possibility that the amount sought to be awarded might exceed plaintiffs’ ability to pay (although I have no information about their actual financial situation). For that reason, I contacted Mr.Richmond to let him know what the amounts we would be seeking, urging him to make a counterproposal. He never got back to me.
5. Had he responded with a showing of his client’s finances, that is certainly a matter that we would have taken into consideration in deciding about a possible settlement of the fees claim. I have told him that privately. See also Exhibit 1H (blog post dated September 27, 2016).
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