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NY Attorney Escapes Fiduciary Breach Lawsuit in Texas (Correct)

Jan. 17, 2023, 6:31 PMUpdated: Jan. 18, 2023, 3:57 PM

A New York lawyer who is accused of wrongly advising a company to sign an unfavorable contract escaped a lawsuit in Texas because an attorney-client relationship wasn’t enough for a court in that state to have jurisdiction over him.

While an attorney-client relationship existed between Hinduja Global Solution, Inc. and Ali Ganjaei, there’s no evidence the lawyer sought clients or otherwise affirmatively promoted personal business in Texas, the Texas Court of Appeals, Fifth District said, affirming the trial court’s decision.

Dallas-based Synergy Global Outsourcing LLC brought a lawsuit in Texas for breach of contract against HGSI, with whom it had a long-standing business relationship, the appeals court said. Synergy procured customers for Illinois-based HGSI’s management services in exchange for a commission. Synergy alleged HGSI didn’t fulfill a contract—which allowed it to collect a stream of monthly payments in perpetuity—when it failed to fulfill its payment obligations.

HGSI asserted counterclaims for breach of fiduciary duty and conspiracy to cause breach of fiduciary duty against Synergy and Ganjaei. HGSI specifically claims that Ganjaei, the business’s legal counsel, gave the company bad legal advice by advising it to sign the perpetuity contract. It claims Ganjaei had a conflict of interest because he also worked for another organization, HBI Group Inc., which obtained a majority stock position in Synergy.

Ganjaei challenged the court’s personal jurisdiction over him, arguing that he’s a resident of New Jersey, and never lived in Texas. He also said he’s licensed to practice law in New York and has never performed legal services in Texas. The trial court granted his motion to dismiss for lack of personal jurisdiction, but HGSI appealed.

Because Ganjaei was sued in his individual capacity, “only his contacts in that capacity are relevant” to the jurisdictional question, the court said Jan. 13.

Ganjaei didn’t purposefully avail himself of the benefits and protection of Texas law because there is no evidence Ganjaei personally targeted the state, sought Texas assets, or sought customers there, the court said. “The record shows HBI, not Ganjaei acquired an interest in Synergy, and there is no assertion or evidence that HBI is Ganjaei’s alter ego,” the court added.

Justice Carolyn Wright, sitting by assignment, delivered the opinion. Justices Robbie Partida-Kipness and Erin A. Nowell were part of the panel.

Susman Godfrey LLP represented HGSI. Lynn Pinker Hurst & Schwegmann LLP represented Ganjaei.

The case is Hinduja Global Solution, Inc. v. Ganjaei, Tex. App., 5th Dist., No. 05-22-00052-CV, 1/13/23.

(Updates Jan. 17 story to reflect in headline that attorney is facing allegations of fiduciary breach)

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