T. Edward Williams and William LLP v. Kaboomracks, Inc., RWVK, LLC and Robert Van Kirk

CourtCourt of Appeals of Texas
DecidedDecember 17, 2024
Docket01-23-00214-CV
StatusPublished

This text of T. Edward Williams and William LLP v. Kaboomracks, Inc., RWVK, LLC and Robert Van Kirk (T. Edward Williams and William LLP v. Kaboomracks, Inc., RWVK, LLC and Robert Van Kirk) 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.

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T. Edward Williams and William LLP v. Kaboomracks, Inc., RWVK, LLC and Robert Van Kirk, (Tex. Ct. App. 2024).

Opinion

Opinion issued December 17, 2024

In The

Court of Appeals For The

First District of Texas ———————————— NO. 01-23-00214-CV ——————————— T. EDWARD WILLIAMS AND WILLIAMS LLP, Appellants V. KABOOMRACKS, INC., RWVK, LLC AND ROBERT VAN KIRK, Appellees

On Appeal from the 190th District Court Harris County, Texas Trial Court Case No. 2022-26492

MEMORANDUM OPINION

Appellants T. Edward Williams and Williams LLP (collectively, the

“Williams Parties”) appeal the trial court’s entry of a default judgment against them,

as well as the trial court’s denial of their motion to set aside the default judgment.

We affirm. Background

This case began as a legal malpractice action. The Williams Parties are a

lawyer and his law firm. Appellees Kaboomracks, Inc., RWVK, LLC, and Robert

Van Kirk (collectively, “Appellees”) are engaged in a business relating to the sale

of cryptocurrency mining hardware. They claim the Williams Parties were negligent

in representing them in an arbitration proceeding, which resulted in an adverse award

and ultimately a judgment against them. Appellees filed this suit to recover the

damages they allegedly suffered because of the Williams Parties’ professional

negligence.

The Underlying Litigation and Events Giving Rise to This Malpractice Suit.

Appellees’ business operations are in Texas. T. Edward Williams

(“Williams”) is an attorney based in New York; he is licensed to practice law in New

York and Colorado. Williams LLP is Williams’s New York law firm (the “Williams

Firm”). Both Williams and the Williams Firm say they are residents of New York

and Colorado.

In 2019, Williams contacted Van Kirk about a lawsuit pending in New York

state court involving an alleged theft of bitcoin mining equipment. The parties

apparently agree the Williams Parties advised Appellees in connection with the New

York state lawsuit.

2 At the same time the New York suit was pending, a “related” arbitration

proceeding was being conducted in New York. Appellees were parties to the

arbitration. Appellees contend they engaged the Williams Parties to represent them

in the arbitration proceeding; the Williams Parties disagree.

The arbitration proceedings resulted in an adverse award against Appellees.

The prevailing parties in the arbitration sued Appellees in New York state court to

have the arbitration award confirmed as a judgment. Appellees apparently believed

the Williams Parties were representing them in the suit to confirm the arbitration

award, while the Williams Parties believed they had not been engaged in that

capacity. Accordingly, neither Appellees themselves nor the Williams Parties

appeared for Appellees in the suit to confirm the arbitration award, and Appellees

defaulted. The New York state court entered the arbitration award as a judgment

against them in the amount of $47,830.00, plus interest and costs. The New York

judgment was later domesticated as a Texas judgment, and Appellees paid $58,946

to satisfy it. They also paid $16,565 in attorney’s fees to the Williams Parties.

This Malpractice Suit and Appeal.

Appellees sued the Williams Parties in Texas, claiming the adverse arbitration

award and judgment entered against them in the New York proceedings were caused

by the Williams Parties’ negligence and breach of fiduciary duty. In response, the

Williams Parties, represented by Williams, filed an “Entry of Special Appearance”

3 in July 2022, arguing the Texas trial court lacked personal jurisdiction over them.

The bases for the Williams Parties’ special appearance were that they were “not

residents of this state,” Appellees had “fabricated this suit,” and they did not receive

service of “Plaintiff’s Complaint.” Although Williams “certif[ied]” the special

appearance was “meritorious,” neither Williams nor the Williams Firm swore to the

facts stated in it. The Williams Parties did not set the special appearance for a hearing

or take other action to bring it to the trial court’s attention; instead, they state in their

brief that they “awaited a trial setting on the special appearance.”

The case then went dormant for several months, and the trial court notified

the parties it would be dismissed for want of prosecution. Appellees filed a verified

motion to retain, in which they informed the trial court they intended to file a motion

for default judgment. The Williams Parties did not respond to the motion to retain,

nor did they set their special appearance for hearing.

A short time later, Appellees filed a motion for default judgment and set it for

hearing. It was supported with copies of the returns of service of the citations on

Williams and the Williams Firm; a “soldier’s and sailor’s affidavit” stating that

Williams was not a member of the armed services; a certificate of the last known

addresses for Williams and the Williams Firm; the declaration of Kaboomracks,

Inc.’s CEO setting out the liquidated damages amounts Appellees claimed they had

suffered as a result of malpractice by Williams and the Williams Firm; and an

4 affidavit from Appellees’ counsel on the attorney’s fees they had incurred in this

matter.

The record shows that the Williams Parties were served with both Appellees’

motion for default judgment and the notice of hearing. The record also confirms that

the Williams Parties opened the electronic service copy of the notice of hearing. But

the Williams Parties did not respond to the motion for default judgment or appear at

the hearing, nor did they set their special appearance for hearing.

The trial court entered a default judgment for Appellees. It awarded them

$75,511 in actual damages, $2,750 in attorney’s fees, post-judgment interest, and

costs. The default judgment states that it “disposes of all parties and all claims and

is a final judgment and is appealable.” The trial court signed the default judgment

on December 5, 2022.

The Williams Parties contend they became aware of the default judgment nine

days later, on December 14, 2022, while “speaking with the Clerk about a status

update on when the [trial court] would rule on [their] Special Appearance.”

Later that day, the Williams Parties moved to set aside the default judgment.

The motion to set aside did not claim lack of timely notice of the judgment, nor did

it state that it was made subject to the Williams Parties’ special appearance. While

the motion to set aside includes jurisdictional arguments, the Williams Parties also

made substantive arguments about the merits of the case, claiming that Appellees

5 “and their attorney have made up lies and perpetuated fraud on [the trial court]. To

put it simply, [Appellees] cannot maintain a suit against the [Williams Parties]

because they know correctly that the [Williams Parties] never represented them in

any shape, form, or fashion.” Appellees opposed the motion to set aside, and the trial

court denied it in a written order entered on January 26, 2023.

On February 24, 2023, the Williams Parties, now represented by Texas

counsel, moved for a new trial. Appellees opposed this motion as well, and the trial

court signed an order denying it on March 20, 2023.

The Williams Parties appealed. Their notice of appeal states that they are

appealing the trial court’s default judgment, as well as the order denying their motion

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T. Edward Williams and William LLP v. Kaboomracks, Inc., RWVK, LLC and Robert Van Kirk, Counsel Stack Legal Research, https://law.counselstack.com/opinion/t-edward-williams-and-william-llp-v-kaboomracks-inc-rwvk-llc-and-texapp-2024.