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Texas Lawyers Skirt Contract Breach Claims in Recovery Suit

April 19, 2022, 8:58 PM

MedStar Funding LC lost its breach of contract lawsuit seeking to recover money from a car accident lien against two personal injury attorneys because it didn’t timely plead the claim in the trial court, a Texas appeals court said Tuesday.

Lien buyer MedStar allegedly bought Urooj Sheikh’s medical liens after she suffered a car accident and sought medical treatment from four medical providers. MedStar sued Donal McRoberts, Sheikh’s lawyer, because he had signed an agreement to pay the interest after the recovery of damage, following the deduction of attorneys’ fees.

When Sheikh allegedly failed to pay the company, MedStar sued the law firm where McRoberts worked Willumsen & McRoberts Law Firm PC and lawyer Frode Willumsen for breach of contract, liability under a quantum meruit theory, and unjust enrichment.

The lawyers argued they were immune and moved for summary judgment. Dismissing the suit on attorney immunity would “invalidate Texas contract law” and allow attorneys to break contracts with “impunity,” MedStar argued.

But, MedStar didn’t plead a breach of contract claim against the law firm, the Texas Court of Appeals, Fourteenth District said. Although during a hearing MedStar focused on the breach of contract claim, it failed to actually plead the claim in its complaint, the court said.

It was only mentioned for the first time in an amended petition, but MedStar didn’t request or obtain leave from the trial court to file the amended petition, the court said. MedStar filed its amended petition only after the law firm moved for summary judgment.

A claim raised for the first time in a non-movant’s summary judgment response doesn’t become part of the live pleading that the movant must prove in order to prevail, Justice Kevin Jewell wrote in the opinion.

Justice Randy Wilson joined the opinion.

Justice Charles A. Spain dissented. The trial order isn’t final and is still interlocutory, therefore, the court of appeals doesn’t have subject matter jurisdiction on this case, Spain said.

MedStar Funding was represented by Lang & Associates PLLC. The two lawyers were represented by the Little Law Firm PC.

The case is MedStar Funding LC v. Willumsen, Tex. App., 14th Dist., No. 14-20-00312-CV, 4/19/22.

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; Carmen Castro-Pagán at ccastro-pagan@bloomberglaw.com