Mass exodus at Provost Umphrey ignites amended suit against former attorneys, Walter Umphrey staying at of the fray so far

By David Yates | Sep 29, 2015

The Provost Umphrey Law Firm and its partners, excluding the firm’s current managing partner, have sued several attorneys who left to start their own firm.

On Sept. 22 former PU attorneys Paul Ferguson Jr., Larry Hunter, Ryan Schaper and Cody Dishon answered the litigation – all of which take exception to the fact that the firm’s founder and managing partner, Walter Umphrey, is not counted among the plaintiffs.

Hunter, Schaper and Dishon left PU in August to work for the Ferguson firm.

Ferguson, a former PU equity partner, resigned from the Beaumont law firm on Aug. 3 and then filed a lawsuit against PU the following day in Jefferson County District Court.

Although Ferguson has since non-suited PU from that suit, the firm filed a lawsuit of its own against him on Aug. 24, seeking a court order to force the attorney into arbitration, court records show.

In turn, Ferguson filed a second suit on Sept. 1, naming PU equity partners Umphrey, Bryan Blevins, Edward Fisher, Joe Fisher, D’Juana Parks, James Payne and David Wilson as defendants.

That same day, PU amended its petition to name Hunter, Schaper and Dishon as defendants.

Ferguson maintains he and Umphrey hammered out a settlement agreement with an addendum before he left the firm.

On the day of his resignation, the PU partnership disseminated an unsigned memorandum criticizing the settlement agreement as “unconscionable and unenforceable” and directed Ferguson to immediately vacate the firm premises, according to Ferguson’s petition.

The following day, Aug. 4, Ferguson attended a meeting at the firm until Blevins, the current president of the Texas Trial Lawyers Association, banished him and forced him off the premises under threat of armed escort.

According to PU’s lawsuit, Ferguson is claiming he is not bound by a 2012 partnership agreement he signed and that he is entitled to “much more than a departing partner is entitled to receive” under the agreement.

In it’s amended petition, PU argues that the settlement agreement reached between Ferguson and Umphrey is not valid and enforceable.

According to PU, the settlement agreement purports to create rights and obligations to not only Ferguson, but Hunter, Schaper and Dishon as well.

PU further asserts the partnership agreement contains a broad and mandatory arbitration clause and is asking the court to grant its motion to compel arbitration.

Conversely, Ferguson, in his answer, argues Umphrey was the managing partner when he executed the settlement agreement, and as such he had “‘full, exclusive and complete discretion to manage and control, and shall make all decisions affecting the Partnership business’ as stated in Section 7.1 of Article VII of the Partnership Agreement.”

Ferguson further states that the equity partners bringing the suit only have a collective minority ownership interest of 46.58 percent.

“Plaintiffs do not allege that either Walter Umphrey, P.C., as Managing Partner, or Equity Partners owning the majority of the ownership interest authorized this suit,” Ferguson’s answer states. “Also, Plaintiffs do not allege that Walter Umphrey, P.C. is no longer the Managing Partner, or that (he) has been removed, replaced, or resigned as Managing Partner.”

Ferguson goes on to say that despite his former co-workers’ attempts to ignore the controlling documents, their suit is governed by the settlement agreement.

“The Settlement Agreement expressly takes precedence over the Partnership Agreement, and to the extent the Settlement Agreement conflicts with the Partnership Agreement, the Settlement Agreement shall control,” the answer states, adding that the settlement agreement contains its own arbitration clause that conflicts with the arbitration procedures in the partnership agreement.

The answers provided by Hunter, Schaper and Dishon all contend the equity partners lack the authority to bring the suit, and also echo Ferguson’s argument that Umphrey was in charge when the settlement agreement was executed.

PU’s case first landed in Judge Donald Floyd’s 172nd District Court.

A court order, dated Aug. 24, shows Floyd recused himself and that Judge Gary Sanderson, 60th District Court, referred the case to a visiting judge.

Judge Olen Underwood of the Second Judicial Administrative Region of Texas will now preside over the litigation, according to the court order.

Ferguson has handled several prized cases for PU, which includes scoring a $32 million jury verdict against Domino’s Pizza in 2013 – a top five verdict in Texas that year, according to the National Law Journal.

He is represented by Ricky Raven, attorney for the Houston law firm Reed Smith.

Attorney Fields Alexander of the Houston law firm Beck Redden represents PU.

Case Nos. B-197407 (Ferguson v. PU) and E-197460 (PU v. Ferguson)

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