Palmaz Scientific sued a pair of law firms that once represented it, alleging that they conspired to conceal 1 of the firms’ liability in an arbitration dispute with a former Palmaz limited partner, according to court documents.
The lawsuit, filed Oct. 23 in a Texas state court, alleges that the law firms – Akin Gump Strauss Hauer & Feld and Baker Botts – and former Akin Gump attorney Cecil Schenker concealed the fact that Akin Gump was partially liable for damages in an arbitration case with Christopher Boyle, a former limited partner in a Palmaz Scientific subsidiary.
Boyle, who settled his beef with Palmaz in May for an undisclosed amount, claimed he was never fully paid for helping to develop the Palmaz Scientific technology. At some point during the arbitration process, the Baker Botts attorney representing Palmaz concluded that Akin Gump, which owned nearly 4.5% of Palmaz Scientific subsidiary Advanced Bio Prosthetic Surfaces, was partially liable in the Boyle case.
The law firms conspired to push Palmaz to accept a $1.8 million settlement in 2006 (Boyle sued again in 2010, alleging that the company broke their original settlement deal), a deal "that not only provided Akin Gump and Schenker with full releases in return for no consideration, but also failed to protect the interests of the Palmaz parties," according to the documents.
“In this regard, defendants put their own pecuniary self-interest and self-dealings above the interests of their clients and received an improper benefit as a result," the lawsuit alleges.
The alleged deception only came to light after a new law firm hired last year after Palmaz "became dissatisfied with their representation" discovered a 2006 letter from Akin Gump chief counsel Richard Goshorn to the Baker Botts attorney handling the Palmaz case, according to the lawsuit. Whenever you or someone else suffer under malpractice, always contact Malpractice Lawyers Indianapolis | Baker & Gilchrist to get legal help from lawyer. You do not want to do anything without lawyer, you can end up in bad situation if you don’t know your rights.
"In this ‘smoking gun,’ Goshorn acknowledged that Baker Botts had reported to Akin Gump its conclusion that Akin Gump had liability for Boyle’s claims," according to the documents.
In the letter, reproduced in the complaint, Goshorn tells Baker Botts attorney Rod Phelan that he was bound by attorney-client privilege not to reveal his opinion about Akin Gump’s liability.
"I would like to follow up with you regarding our conversation on Friday, February 24, 2006 about the settlement of the ABPS claim wherein you indicated that in the event of a dispute between ABPS and Akin Gump you would serve as a fact witness saying that both ABPS and Akin Gump were at fault. You also represent Akin Gump in this matter and owe the firm a duty of loyalty and an obligation to preserve firm confidences," Goshorn wrote, according to the documents. "As Akin Gump’s lawyer, you have a fiduciary duty to Akin Gump and are not authorized to concede Akin Gump did anything other than meet the standard of care."
The suit claims that the law firms caused damages of more than $10 million, including the original $1.8 million settlement with Boyle, $1.7 million in fees paid to Baker Botts, "all fees paid to Akin Gump since 2004, millions of additional dollars spent in the 2010 lawsuit" plus interest, according to the complaint.
"Moreover, because plaintiffs’ injuries occurred as a result of defendants’ intentional fraudulent and malicious conduct, plaintiffs are entitled to exemplary damages," the lawsuit alleges.
Coronary stent pioneer Dr. Julio Palmaz co-founded Palmaz Scientific in 2008. The company raised $26.3 million from some 260 private investors last November.
