Authorlee v. Tuboscope Vetco International, Inc.

274 S.W.3d 111, 2008 WL 4006259
CourtCourt of Appeals of Texas
DecidedOctober 7, 2008
Docket01-06-00719-CV
StatusPublished
Cited by21 cases

This text of 274 S.W.3d 111 (Authorlee v. Tuboscope Vetco International, Inc.) is published on Counsel Stack Legal Research, covering Court of Appeals of Texas primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Authorlee v. Tuboscope Vetco International, Inc., 274 S.W.3d 111, 2008 WL 4006259 (Tex. Ct. App. 2008).

Opinions

OPINION

SAM NUCHIA, Justice.

In six issues, appellants, who were settling plaintiffs in the underlying lawsuit, [113]*113seek to overturn the trial court’s denial of their motion for new trial. Appellants argue here, as they did in the trial court, that their agreed judgment should be set aside as “void as against public policy” because their trial lawyers did not tell them it was an aggregate settlement and because their trial lawyers, along with the appellees, committed fraud.

We affirm.

BACKGROUND

History

This is a dispute about the propriety of settlements in a mass tort case. Before the lawsuit at issue in this appeal, appellants’ trial attorney, Shelton Smith, had represented other plaintiffs in silicosis cases against appellees, the “AMF defendants,” establishing a course of conduct for negotiating and resolving these claims with Daniel Shank, counsel for the AMF defendants. This course of conduct included evaluating the merits of each plaintiffs case based on work history, medical diagnosis and impairment, and other factors that might have impacted the outcome at trial. In those prior 40 lawsuits, Smith had recovered about $40 million in settlements for his clients.

Initial Settlement Negotiations

Appellants were among 176 plaintiffs who sued Tuboscope Veteo International, Inc., AMF, Inc., and Minstar, Inc., along with other defendants, for injuries they alleged were caused by their occupational exposure to silica while working for AMF Tuboscope in Midland, Texas. In January 1999, appellants’ trial attorneys, Shelton Smith and Scott Hooper, approached ap-pellees with vague, initial settlement demands. In one letter, Smith wrote:

I am presently representing 55 former AMF Tuboscope sandblasters who suffer from silicosis or mixed dust pneumo-noconiosis as a result of their employment at Tuboscope. Each of these 55 men has a serious occupational lung disease ....
As of this date, I have filed 25 lawsuits against AMF, Inc. The other 30 diagnosed cases are ready to be filed. There may be more....

From January through May, Smith and Hooper had a series of conversations — in person, by telephone, and by mail — with Daniel Shank, counsel for the AMF Defendants. They spoke about factors that would be involved in any settlement. Shank proposed, on behalf of his clients and their insurers, that all of Smith’s silicosis claims be settled at one time, using the term “global” in several communications. Shank wrote:

At this point in time, my client and its insurers are not interested in negotiating a settlement in individual cases on a case-by-case basis. Furthermore, my client and its [insurance] carriers are not interested in negotiating a resolution of cases on a subgroup basis. However, my client and its carriers are interested in a global settlement proposal. Accordingly, if you wish to resolve these cases, I would suggest that you proceed with preparing a global settlement proposal.... If the parties seem reasonably in contact with each other, then it may be appropriate for all parties to proceed with a global mediation....

To the extent that my client and its insurers are not able to proceed with a global resolution of these matters, please be advised that my client and its insurers are not interested at this time in negotiating settlements on a piece- . meal, case by case or subgroup basis. Rather, they would prefer pursuing a global approach without being distracted by piecemeal or subgroup negotiations.

[114]*114Shank later testified that he and his clients were interested only in a global resolution to ensure that cases with similar liability and damages would settle for similar amounts. He said, “We were dealing with the strategy where he would hitch his wagon to a highly valued case and then later on we would be fighting about whether or not an apple is an apple or an apple is an orange.”

Preparing for Mediation

The parties agreed to go to mediation in July. Before mediation, Shank suggested that they evaluate the first 21 cases to determine a method for resolving Smith’s inventory of claims. Shank suggested this because he had more information on those 21 plaintiffs than on the other plaintiffs: they had deposed the plaintiffs, reviewed their medical records, and obtained “defense IMEs.”1 In addition, Smith sent Shank several boxes full of information about individual plaintiffs, including information on all the appellants. However, only some plaintiffs had complete case evaluations, including diagnosing medical reports and social security records verifying employment at AMF Tuboscope. For example, only summaries but no medical reports were available for Anthony Au-thorise.

Smith also contacted his clients before mediation. In a June 30, 1999 letter, Smith told his clients, “There are vei-y important events in July regarding your AMF Tuboscope case.” He invited about half of the plaintiffs to a meeting to provide details about the upcoming mediation and stressed the importance of attending the meeting. With the invitation, Smith sent a report with questions and answers about the status of the litigation. In this report, Smith explained:

We have a mediation scheduled for the second week of July. This is a negotiation session where we will meet with attorneys and insurance representatives for AMF and discuss settlement possibilities for our AMF clients. Your case could potentially be discussed at this three day session.
To prepare for the possibility of discussing your case, we have computerized a large amount of information about you. Some of that information is printed on the Client Information Sheet. We need you to review that information right now.
[[Image here]]
We know you have questions. But with the AMF mediation a few days away and since we represent more than 300 AMF clients, we simply cannot provide our typical personalized service for the next two weeks. We need to focus all of our attention on preparing for this session with the AMF attorneys.
[[Image here]]
NO ONE ELSE EXCEPT YOU AND YOUR SPOUSE MAY ATTEND. THIS WILL BE A MEETING PROTECTED BY ATTORNEY-CLIENT PRIVILEGE, NO FRIENDS OR OTHER PERSONS MAY ATTEND.
[[Image here]]
A very detailed overview of the AMF cases will be presented. Shelton Smith is your lead attorney who has successfully pursued cases against AMF for 15 years. He will be reviewing the current situation and will be discussing details of your case. Shelton has settled more than 40 cases against AMF.
[115]*115[[Image here]]
Because of space limitations, we are only meeting with about half our clients on July 10. Another meeting or meetings will be held this summer for the rest of our clients. ONLY THOSE CLIENTS WITH AN INVITATION LETTER SHOULD ATTEND THE MEETING.
[[Image here]]
Though it is possible that some of these cases could be resolved soon, nothing is certain. Anything could happen. It is possible that a reasonable solution involving your case may not be resolved for months or possibly even years.

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Authorlee v. Tuboscope Vetco International, Inc.
274 S.W.3d 111 (Court of Appeals of Texas, 2008)

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Bluebook (online)
274 S.W.3d 111, 2008 WL 4006259, Counsel Stack Legal Research, https://law.counselstack.com/opinion/authorlee-v-tuboscope-vetco-international-inc-texapp-2008.