Fifth Circuit Slams Texas Lawyers Over ‘Highly Improper’ Attacks

Two trial lawyers from Texas were chastised by the US Court of Appeals for the Fifth Circuit for launching “a barrage of personal attacks” against opposing counsel in a long-running fraud case.

The three-judge panel found in a Friday ruling that the defendants’ counsels’ closing argument “irreparably prejudiced the fairness of the trial,” spurring the need for a new trial in a case that’s already bounced back and forth between various district-level and appellate courts for a quarter-century.

Stephen Khoury of Dallas and C. Gregory Shamoun, who practices in Farmers Branch, Texas, “employed nearly every type of improper argument identified by our court, including highly improper and personal attacks against opposing counsel,” as well as remarks about the wealth of plaintiff David Clapper and insinuations that Clapper had lower moral standards “because he was from Michigan.”

The judges also admonished Shamoun for throwing a box of tissues at Andrew Mychalowych, Clapper’s counsel with SMV Law Offices in Troy, Michigan, while taunting Mychalowych for having “a potentiality of crying,” according to the ruling written by Chief Judge Priscilla Richman and Judges Patrick Higginbotham and Jennifer Walker Elrod.

Khoury, Shamoun, and Mychalowych could not be reached for comment.

The underlying legal tussle started in 1999, when the defendants in the current matter, American Realty Investors, Inc., sued Clapper for breaching an agreement regarding the acquisition and management of various apartment complexes, according to the ruling. Though American Realty prevailed at trial in 2004, Clapper appealed and the case was remanded.

Following an appeal of a second trial, the district court in 2016 entered final judgment in Clapper’s favor for more than $50 million.

After related litigation resulted in a win for American Realty, Clapper again appealed for a new trial, in part on grounds that “the Defendants’ attorneys made prejudicial remarks during closing argument.”

The appellate judges concurred, finding that “repeated improper statements including attacks against opposing counsel, references to Clapper’s wealth, matters not in the record, appeals to local bias, and suggestions of Clapper’s bad motives, abandoned all ‘dignity, order, and decorum.’”

The case is David M. Clapper et al v. American Realty Investors, Inc. et al, 5th Cir., Docket No. 21-10805, 8/16/21.