Mostyn sues firm over attorneys' fees

By Marilyn Tennissen | May 19, 2008

Steve Mostyn

A Southeast Texas lawyer has filed suit against another law firm, alleging the firm kept all the attorneys' fees from a client the two jointly represented.

The Mostyn Law Firm, known in the area for filing hundreds of lawsuits against insurers over Hurricane Rita claims, filed suit against Johnson, Clifton, Larson and Schaller PC on May 8 in the Beaumont Division of the Eastern District of Texas.

Alleging fraud, breach of contract, negligent misrepresentation, breach of fiduciary duty, tortuous interference and civil theft, attorney Steve Mostyn is asking that a constructive trust be imposed on any profits received by Johnson Clifton from representation of Cynthia Becker.

Mostyn claims he spent time and money in Jefferson County furthering the representation of Becker as a joint venture based on Johnson Clifton's repeated communications.

"Further, plaintiff had a contractual relationship with its client, Cynthia Becker," the original complaint states. "Defendant tortuously interfered with plaintiff's contract causing harm in Jefferson County."

The Mostyn Law Firm is principally based in Jefferson and Harris counties and Johnson, Clifton, Larson & Schaller PC is an Oregon entity based in Eugene.

According to the complaint, the Mostyn Law Firm is a trial firm founded in 1999 by Steve Mostyn which focuses on trying cases in wide ranging disputes from personal injury matters to complex product liability disputes.

"Plaintiff has been very successful in a variety of cases and has unique expertise in product liability law," the complaint states.

The plaintiff claims the firm has been "extremely successful" in cases concerning defective electric seat heaters.

Mostyn says that Johnson Clifton called the firm seeking advice concerning its own seat heater cases which eventually led to Johnson Clifton asking Mostyn to "joint venture" the representation of Becker.

"The terms of the joint venture were that plaintiff and defendant would split the attorneys' fees received from Ms. Becker's case equally," the suit states.

Steve Mostyn claims he met with Becker in Oklahoma at the defendants' request. He says Becker retained him as her lawyer, and that he immediately began work on the case, including hiring experts, advancing substantial money to Becker and prosecuting the case.

"Defendants' greed caused them to convince Ms. Becker to fire plaintiff without cause," the suit alleges. "Defendants breached the joint venture and interfered with plaintiff's contract with Ms. Becker in an effort to keep all of the attorneys' fees for itself."

Mostyn hired the law firm of Arnold & Itkin LLP to represent his firm in the litigation.

Among allegations, the suit says that Mostyn can recover damages for quantum meriut because the defendant has been unjustly enriched by receiving ill-gotten gains from the representation of Becker.

Mostyn is seeking compensatory, actual and consequential damages against defendant jointly and severally, interest, exemplary damages, attorneys' fees for the present suit, a constructive trust over all profits made in the Becker case and that defendant have all of its profits disgorged and other just and proper relief.

The case has been assigned to U.S. District Judge Ron Clark.

Case No. 1:08-cv-260-RHC

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