Lawyer ends up with cash as Port Arthur, marketer walk away empty handed

David Yates Feb. 13, 2008, 7:30am

Attorney George Gordon failed to sway jurors. He couldn't get them to buy the argument that the city of Port Arthur owed his client, Bill Diamond, $75,000 in marketing services rendered for the Port Arthur Economic Development Corporation's Business Park on Spur 93.

However, Gordon's defeat still netted him a tidy sum as jurors decided he should receive $250 an hour for his services rendered litigating the case for the past three years.

The trial of the city of Port Arthur vs. Bill Diamond began Feb. 5 in Judge Donald Floyd's 172nd Judicial Court and wrapped up Feb. 12.

The city sued Diamond in January 2005 after the Port Arthur Section 4A Economic Development Corporation paid him $30,000 for marketing services. The city claimed PAEDC had entered into a contract with Diamond that violated its bylaws.

After he was sued, Diamond fired back with a counter suit, claiming the city owed him $75,000 for unpaid services.

Representing the city, Carl Parker accused Diamond in his closing remarks of "trying to take another bite of the apple" by billing and suing the city for $75,000 in alleged rendered services. "Don't let him do it," Parker said.

Jurors were tasked to decipher who was owed what by sifting through contracts and listening to a week's worth of testimony from former and current city officials.

In his closing remarks, Gordon said the city purposely entered erroneous contracts as evidence in order to "mislead and confuse jurors."

After nearly two days of deliberations, a frugal jury left the city of Port Arthur and Diamond empty handed, granting only attorney's fees to Gordon.

The case

On March 2, 2004, Port Arthur City Council approved a resolution that allowed for the hiring of Diamond and agreed to pay him $30,000 for marketing service relating to the Business Park. The city said that was before it learned that Diamond had already entered into a contract with PAEDC on Feb. 25, 2004.
According to the PAEDC Bylaws, all programs and projects of the EDC must be approved by the city council.

Deborah Echols, the city's assistant financial director, testified that Diamond had sent invoices to the PAEDC for his services before the resolution was approved in March 2004, and that Diamond had been paid $15,000 in unapproved funds.

"All of (PAEDC's) expenditures must be approved by council - otherwise, it's not a valid contract," Echols testified, adding that the PAEDC is only allowed to spend $5,000 without council's permission.

Shortly after passing the resolution, the city learned it had been paying Diamond for services "not authorized by city council," court documents stated.

And five months later, on Aug. 10, 2004, City Attorney Mark Sokolow sent at letter to Diamond informing him that the PAEDC voted that he needed to return any monies paid to him for services rendered.

"On Dec. 11 you indicated … that you would cease doing work as to the marketing matters until you received proper authorization," Sokolow said in his letter to Diamond. "The City Council did not approve the marketing contract until March 2, 2004, and that was for services to be provided after March 15."

Diamond refused to give back the money and the city responded with a lawsuit.

On Aug. 3, 2005, Diamond fought back and filed his counter-suit against the city, claiming that he was still owed $70,242.31 for his marketing services.

"Diamond provided services to PAEDC … (and) PAEDC received a benefit," Diamond's counter-claim stated. "PAEDC accepted those services provided by Diamond and PAEDC became bound to pay Diamond his designated charges, which were reasonable and customary for such services."

The defense argues that there was a clause - which the city is simply ignoring - in Diamond's contract that permitted him to be paid for past services before the March 2004 resolution and fiscal year, so long as he billed the PAEDC and not the city.

According to testimony, PAEDC's former director, Ike Mills, had authorized Diamond to receive payment for his services.

Mills said Diamond accomplished all he was asked to do and should get paid for his services.

However, the city stuck by its guns and contended all city expenses are paid through the same financial department, making PAEDC bills city bills.

"PAEDC is and arm of the city," Parker said. "You can't take public funds and spend them anyway you want to."

Gordon is an attorney with the Baggett, Gordon & Deison law firm in Conroe.

Case No. E173-959

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