Mississippi Litigation Review & Commentary : Mississippi Personal Injury Lawyer & Attorney : Phillip W. Thomas Law Firm : MS Litigation Review & Commentary

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Jones Walker announced today that its merger with Watkins Ludlam (“WLS”) was effective on Friday. That will not stop the endless local speculation about the lawsuit filed against WLS and the seven WLS partners who led the negotiations with Jones Walker.

When talking about this lawsuit, many people talk about the unusual nature the Jones Walker– WLS merger. What lawyers expect to see in this situation is one of two things. One common scenario is when the larger firm (Jones Walker in this case) cherry-picks select lawyers from an existing firm to start a local office. That is what happened when Baker Donelson cherry-picked WLS lawyers to start the Baker Donelson Jackson office in 1995. But there are many other examples of this happening.

The second common scenario is for the larger firm to take all of the existing firms' lawyers and then weed-out the ones who it does not want over the next few years. Doing it that way would probably prevent a lawsuit like this, be better politically and give the firm time to evaluate which lawyers are worth keeping. A lot of people still expect to see this happen at the former WLS over the next couple of years.  

Word on the street is that Jones Walker made WLS terminate a certain number of lawyers before the merger. I'm not that familiar with WLS. But one criticism I've heard is that WLS terminated laterals with superior numbers at the expense of poorer-performing lawyers who were at WLS their entire careers. People supporting this contention point out that the plaintiffs (Hall Bailey and Vikki Taylor) where both laterals. If true, this suggests a politicization of the culling process that will be hotly-debated in the lawsuit.

Regardless of the opinion lawyers hold about the prospects of the lawsuit, most seem to be scratching their heads about why Jones Walker decided to merge with WLS the way it did. At this point, you can't yet say that Jones Walker avoided getting sued. The plaintiffs in the Bailey v. WLS case will undoubtedly conduct discovery of email between the WLS defendants and Jones Walker attorneys. If the plaintiffs find evidence to support a claim against Jones Walker, then they are likely to amend the complaint to name Jones Walker as a defendant.

Opinions on the prospects of the lawsuit differ. Defense lawyers seem to like the plaintiff's case more than plaintiff lawyers. Defense lawyers focus on the factual allegations and more naturally conclude that the plaintiffs were screwed by WLS. Plaintiff lawyers tend to focus on the entire case and question how the plaintiffs will prove damages.  

I believe that this difference in focus is attributable to the fact that defense lawyers practice in the firm environment and believe that their job is secure even if they have some bad years number-wise. Even defense lawyers without their own book of business feel like they have a lot of security in their job.  

Conversely, plaintiff lawyers typically practice alone or in small groups and view their job as having very little security. “Sure I just settled a case”, the plaintiff lawyer thinks, “but I may never make another dime.” Fear is the constant companion of plaintiff lawyers. Many defense lawyers, on the other hand, are not fearful about their job security even when they should be.

Personally, I still think that the case boils down to the allegations in paragraph 39 of the Complaint that the individual defendants negotiated sweet-heart deals for themselves at the expense of other WLS partners. If the plaintiffs can prove this, then the case is factually viable. But damages are a separate issue that will be hotly contested even if plaintiffs win on liability.

One thing I don't expect is a quick settlement. Very few cases settle quickly in today's litigation environment. And lawyers who are defendants are less likely to settle quickly than others. That might be counter-intuitive. But its true.              

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People predicting litigation over the unusual aspects of the merger between Watkins Ludlam and Jones Walker turned out to be right.

On October 14, former Watkins Ludlam shareholders Hall Bailey and Vikki Taylor filed suit against the seven Watkins Ludlam partners who negotiated the merger with Jones Walker. The Watkins Ludlam lawyers named as defendants were William Dossett, Dennis Miller, Neville Boschert, Aileen Thomas, Jeffrey Barber, Craig Landrum and Gary Snyder.  

Watkins Ludlam was also named as a defendant. But from my reading of the Complaint, the individuals are the target defendants. Jones Walker is not a defendant. The suit alleges breach of fiduciary duty and other claims.

Here is the Complaint, filed in the Circuit Court of Hinds County.

I view paragraph 39 as containing the most interesting allegation in the Complaint:

"Under terms of the agreement not disclosed to shareholders was the fact that the Watkins Ludlam Defendants negotiated for themselves financial terms materially better than that of other Watkins Ludlam shareholders similarly situated and in particular the Plaintiffs, whereby they achieved pecuniary gain at the expense of the Plaintiffs."

Danny Cupit of Jackson and John Shows of Flowood represent the plaintiffs.

My Take:

This is very interesting. As I stated in yesterday's post, I am preparing for trial and have limited time to blog this week. I will post my commentary about this lawsuit later (probably early week-after-next).

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Now retired Hinds County Circuit Judge Swan Yerger had a reputation for going out of his way to dismiss cases. Judge Yerger seemed to get reversed by the Mississippi Supreme Court more than any other judge in the state for defense rulings. It happened again last week in Compere v. St. Dominic.

The case was a medical-malpractice action. The plaintiff filed the action less than 60 days after providing defendants with pre-suit notice. The defendants moved for summary judgment based on the deficiency in the pre-suit notice. Judge Yerger took the matter under advisement.

Plaintiff filed a second complaint more than 60 days after giving pre-suit notice. Judge Yerger then dismissed the first case due to the notice defect and dismissed the second case finding it was an improperly filed action under the doctrine of priority jurisdiction.

Judge Yerger also assessed monetary sanctions against plaintiff's counsel for filing the second complaint. It's unclear whether defendants requested the sanctions or Judge Yerger did it on his own.   

The Supreme Court's Opinion:

A unanimous Supreme Court reversed the dismissal of the second complaint and imposition of sanctions and remanded the case for further proceedings. The Court reasoned that priority jurisdiction did not apply. Priority jursidiction applies: 

“when the same lawsuit has been filed in two different courts, not in the same court. More importantly, that doctrine presupposes a pending action that the plaintiff can proceed upon and obtain 'adequate relief.'”

The Court noted that defendants “fail to argue or cite any authority that a lawsuit should be dismissed with prejudice and with monetary sanctions under priority jurisdiction.”

Justice Lamar wrote the Court's opinion. James Bobo of Brandon represented the plaintiff. Lane Staines, Sharon Bridges, Jonathan Werne (all with Brunini), Ray McNamara and Stephanie Edgar (both with Watkins Ludlam) represented the defendants.

My Take:

James Bobo is a good guy,  so I am glad to see Judge Yerger's decision reversed. Cases like this are why Judge Yerger had a reputation for being pro-defense and unfairly dismissing cases. Most people would agree that cases should not be dismissed where there is no authority to support the dismissal.

Incidentally, Judge Jeff Weill replaced Judge Yerger on the Hinds County Circuit Court. Early reviews on Judge Weill have been favorable from both plaintiff and defense lawyers. 

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There have been rumors swirling for months that Jackson based Watkins Ludlam Winter & Stennis will merge with the New Orleans based Jones Walker firm. This would add to Jones Walker's presence as a regional firm. 

Virtually every Mississippi lawyer who I have talked to this week wants to talk about this rumor. Word is that the merger is taking place and most Watkins Ludlam lawyers will be a part of Jones Walker going forward. It sounds like Watkins Ludlam—one of Mississippi's venerable law firms—will no longer exist.

I am hearing that more than a few Watkins Ludlam lawyers will not be joining Jones Walker.

There have also been a lot of rumors about Brunini merging with Baker Donelson. I am hearing that there is no truth to that rumor.    

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The City of Canton is suing Nissan seeking a declaratory judgment that Canton's 2000 agreement to not annex the Nissan plant located outside Canton for at least 30 years is not binding on the City. Apparently, Canton wants to annex the Nissan plant so that it can collect taxes from Nissan. 

Here is the City of Canton's Complaint, which it filed in state court. Nissan removed the case to federal court.

One of the claims in the Complaint is for a declaration that Canton's 2000 agreement is not binding on subsequent city administrations. Huh? That argument sounds so bad that it makes me think I'm missing something.

A contract is not binding on a successor administration? So the agreement was actually only for the life of the 2000 administration? Even though the contract said 30 years? Really? Really? What am I missing here?

But it gets worse.

Here are the exhibits to the Complaint. Page 8 is part of a letter to the then Mayor of Canton that stated that a statute passed regarding the project specifically authorized Canton's administration to bind future administrations.

Barbara Blackmon of Blackmon and Blackmon in Canton represents the City of Canton. Mitchell Cowan with Watkins Ludlam in Jackson represents Nissan. U.S. District Judge Carlton Reeves presides in the case.

My Take:

Nissan appears to be a big favorite in this one. Why? Because a deal's a deal. I think that's Latin.

I don't see how Canton can get out of its 2000 agreement.   

So why did Canton make that deal in 2000? Probably because Canton stood to benefit from the Nissan plant due to its proximity to the plant. I'm sure that has been the case.

Also, it seems that Canton can annex every hotel, restaurant and gas station within miles of the Nissan plant. This would allow Canton to tax surrounding properties that benefit from the proximity to the plant.  

Several people have mentioned this lawsuit to me. Their comments are uniformly critical of the City of Canton. The public does not sympathize with Canton because the City receives economic benefit from the Nissan plant due to its proximity to the plant. It seems that most people in the state are rooting for Nissan in this one.  

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On Tuesday a federal court jury in the Western Division of the Northern District of Mississippi returned a plaintiff's verdict of $1.15 million in Whiteaker v. Fred's Stores of Tennessee. The case involved a trip and fall accident outside a Fred's Store in Southaven.

Here is the Complaint. The plaintiff alleged that the plaintiff tripped and fell on a wooden corral outside the store that was set up to create a maze that made it harder for shoplifters to get out of the store. The fall resulted in the plaintiff breaking both arms, injuring her neck and chest and breaking several teeth.

Here is Fred's Memo. Supporting Motion for Summary Judgment.

Here is the plaintiff's response.

Here is the Order denying the motion. The Court's opinion characterized plaintiff's case as weak, but involving fact questions for a jury. The judgment and verdict form were not filed on Pacer as of this posting.

The trial lasted two days with Judge Michael Mills presiding. Philip Stroud of Southaven and James Lees of Charleston, West Virginia represented the plaintiff. Robert Jolly and Scott Hollis of Watkins Ludlam's Olive Branch office represented Fred's.

Complaint.

Summary Judgement Memo.

Summary Judgment Response.

Order Denying Summary Judgment.

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When the economy crashed in 2008 many previously viable car dealerships went bankrupt due to the huge decrease in sales. Deuce McAllister Nissan in South Jackson was one of the dealerships that went out of business. The dealership was owned by Deuce McAllister, the former star running back for Ole Miss and the New Orleans Saints.

In December the Clarion-Ledger reported under the headline “McAllister files suit against Nissan” that Deuce and Nissan are in a $1.5 million lawsuit stemming from Deuce's personal guaranty of the dealership's operations. Deuce filed a counterclaim in response to Nissan’s Complaint. A more accurate news headline would have been “Deuce on the Hook for $1.5 Million Owed by Failed Nissan Dealership.”

On Thursday Kingfish posted links to the Complaint, Answer and Counterclaim, Nissan’s Motion to Dismiss Counterclaim and Deuce’s Amended Counterclaim. Nissan’s claims are primarily based on its Financing and Security Agreement with Deuce’s dealership and Deuce’s personal guaranty of the dealership’s obligations. You might think that Deuce has the home field advantage in the case, since it is pending in Jackson and everyone loves Deuce. You would be wrong.

Franchise and dealership agreements are drafted by the franchisor’s or manufacturer’s lawyers based on a company’s collective knowledge gained from many years of experience. The terms of the agreement are rarely negotiated and are heavily stacked in favor of the manufacturer/ franchisor. Nissan and other companies like it have been in many lawsuits seeking to collect under personal guarantees against individuals such as Deuce, and they almost always win.

Deuce claims that Nissan "was guilty of negligence in the performance of its obligations under the contracts.." and concealed information from Deuce. The counterclaim does not provide specific details of Nissan's alleged misconduct, nor does it cite any contractual provisions that Nissan breached.

I do not see a negligence theory working in this case. There were contracts between  the parties and the contracts controlled. Either Nissan breached its obligations under the contracts or it didn't, and I suspect that it didn't.

It is common for individuals in a similar position as Deuce to file a counterclaim against the manufacturer or even sue first in a preemptive strike in an attempt to gain leverage in negotiating a decent settlement. But it almost never works. It usually ends up being this simple: (1) the dealership, which is now in bankruptcy, owes Nissan the money; (2) Deuce is personally liable for the dealership’s obligations; so (3) Deuce has to pay Nissan the $1.5 million. If this was a football game, Deuce would be at least a two touchdown underdog to win the game. 

Nissan's attorneys are Jeff Barber and Chad Hammons at Watkins Ludlam. Deuce's lawyer is Joe Roberts of Jackson.