HOUSTON – Tammy Tran and her law firm are suing Spark Funding, a lawsuit lending company that allegedly charged her interest under hidden calculation devices.
The suit was filed Aug. 13 in Harris County District Court and seeks $10 million in damages, plus attorney’s fees.
Law firms, like Tran’s, will sometimes procure high-interest litigation funding to fuel their mass-tort dockets.
For years, Spark has lent money to law firms “under the guise” of purchasing equity interests so it “can inflate the interest rate beyond the legal rate,” according to the lawsuit.
“Spark, and many merchant cash advance companies, are actually loan sharks charging interest under hidden calculation devices, at over hundreds of percent per year, with the Cognovit Judgments used as their lethal weapons,” the suit states.
Cognovit judgment refers to a judgment entered after a written confession by the defendant without the expense of ordinary legal proceedings.
Tran says she paid Spark like “clockwork” for years before learning the lender was charging her “hidden exorbitant interest at over 100% per year.”
She tried to settle the dispute with Spark amicably but on June 28 the lender “rushed” to a New York court to file and request the entry of a cognovit judgment, which was entered on July 23, according to the suit.
Tran claims the lender has also launched a slander campaign against her and her firm, telling third parties that she’s an “unqualified, substandard, no good lawyer.”
She is seeking declaratory relief and $5 million in general damages and mental anguish, plus an additional $5 million in punitive damages.
Tran is represented by William Boyd and Richard Fason, attorneys for the Patterson, Boyd & Lowery law firm in Houston.
Case No. 2019-55952