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Lawyer Left Out of Musicians’ Settlement Loses Dispute Over Fees

Oct. 20, 2022, 6:36 PM

A Texas lawyer lost an appeal to gain attorneys’ fees in connection with a $750,000 settlement between his clients and Texas musician A.B. Quintanilla III, because there is no evidence that Quintanilla intentionally left him out of the agreement.

David W. Showalter represented Alex and Rolando Ramirez, who were members of the cumbia group Kumbia Kings with Quintanilla, in a fight for a bigger cut of the profits after their success, the Texas Court of Appeals, Thirteenth District said Thursday.

Showalter didn’t have standing to sue his former clients’ adversary for contingency fees owed by those clients, the court said.

Showalter accused Quintanilla of interfering with his fee agreement by offering a “covert settlement” that didn’t compensate him for the underlying lawsuit.

But there is no clear evidence that Quintanilla intended to defraud Showalter by settling the claims against the Ramirez brothers, the court said. There’s no evidence that Quintanilla knew that Showalter owned an interest in any claim held by the Ramirezes, the court said.

Showalter testified that he had a contingency fee agreement with his clients, but he didn’t say that he owned an interest in the claim, the court said.

The settlement, which happened without Showalter’s knowledge, was approved by a Texas judge after more than a decade of litigation, the court said. The agreement explicitly states that the Ramirezes hadn’t assigned any claims to any other party.

A judge in 2012 ruled Quintanilla committed fraud and breach of fiduciary duty and ordered him and his music label, Iron Tigga LLC to pay the brothers $393,266 plus $65,000 in attorneys’ fees. Days after the ruling, Quintanilla filed for bankruptcy.

Quintanilla and his father Abraham, who was indebted to Quintanilla, later settled with the Ramirezes for $750,000 in an agreement that settled all claims made in the initial lawsuit and a 2018 writ of garnishment proceeding.

The appeals court granted Quintanilla’s motion to dismiss under the Texas Citizens Participation Act, an anti-strategic lawsuit against public participation law, which was intended to protect citizens from retaliatory lawsuits that seek to intimidate or silence them on matters of public concern.

Showalter’s claims were barred by the anti-SLAPP law because they were based on or in response to Quintanilla’s exercising of his right to petition, through communications in or pertaining to a judicial proceeding, the court said.

Justice Nora Longoria delivered the opinion. Justices Leticia Hinojosa and Clarissa Silva joined.

Harris & Greenwell LLP represented Quintanilla. Higdon, Hardy & Zuflacht LLP represented the lawyer.

The case is Iron Tigga LLC v. Law Offices of David W. Showalter LLP, Tex. App., 13th Dist., No. 13-21-00459-CV, 10/20/22.

To contact the reporter on this story: Janet Miranda in Houston at jmiranda@bloombergindustry.com

To contact the editors responsible for this story: Rob Tricchinelli at rtricchinelli@bloomberglaw.com; Patrick L. Gregory at pgregory@bloomberglaw.com