Landlord wins 30,000 suit against wealthy tenant.
The story in the press:
The owners of an upscale home in Dallas’ exclusive Preston Hollow neighborhood have won a complete defense victory and significant attorneys’ fees in a lawsuit filed by Dr. Craig Schwimmer, founder of The Snoring Center, and his wife, Shanon, following a two-year dispute over a security deposit.
Dallas attorneys Darrell W. Cook, Catherine A. Keith and Melissa J. Parker of Darrell W. Cook & Associates won the case on behalf of Oklahoma residents Olayinka and Akinola Ogundipe, who own the 5,100 square-foot property on Meaders Lane.
Dr. Schwimmer and his wife asked for more than $48,000 in their lawsuit, but they were awarded nothing and instead were ordered to pay more than $30,000 in damages and attorneys’ fees.
“Dr. Schwimmer signed a lease requiring him to maintain this lovely home, but instead he trashed much of the property and added insult to injury by filing this lawsuit,” says Mr. Cook. “Fortunately, the judge refused to let Dr. Schwimmer avoid his obligations and entered judgment for the full amount requested by my clients.”
The Schwimmers paid $16,000 in security deposits before moving into the house in 2013. Shortly after the doctor and his wife terminated the lease and moved out in June 2015, the Ogundipes discovered extensive damage to their yard and home. The owners then began collecting estimates for repairing damaged windows and woodwork, and restoring the poorly watered and maintained yard, which was filled with pet waste.
The Ogundipes refunded nearly $5,000 of the deposit and withheld the remaining amount for repairs. Shortly after, they were contacted by the Schwimmers’ attorney, Brian Hurst of Baker & McKenzie in Dallas, one of the country’s largest law firms.
Mr. Hurst sent an email cautioning the Ogundipes that he suspected they “would prefer not to incur the time and expense of defending a lawsuit in Texas. Nor would you want the existence of this lawsuit, which may be found in a title search, to interfere with your efforts to sell the house.”
The Schwimmers then sued for three times the deposit amount, claiming the damage amounted to normal wear and tear. They also accused the Ogundipes of violating the Texas Property Code by not refunding the deposit within 30 days. Mr. Cook countered by noting that the Schwimmers breached the lease by paying their rent late seven times in less than two years, and that their deposit was refunded only one day late, after the repair estimates were completed.
Following a bench trial, Judge King Fifer of Dallas County Court-at-Law #2 ruled in the Ogundipes’ favor and ordered that the Schwimmers take nothing. The judge also required the Schwimmers to pay more than $1,600 for additional repairs and $30,000 to cover the Ogundipes’ attorneys’ fees.
Lawyers representing brokers in Texas Association of Realtors arbitration.
We represent real estate agents and brokers in Texas Association of Realtors arbitration.
The Texas Association of Realtors arbitration process has many pitfalls that realtors are not told about. There are technical rules and references the state law that no one explains. As lawyers, we have been very successful in representing real estate agents and brokers in arbitration matters.
This is a story about a Texas Association of Realtors arbitration case we won for a Texas real estate broker that was simply impossible to believe, but it’s true.
We represent a Texas real estate broker who listed a property for a seller. The buyer initially viewed the property without an agent. But the buyer had a relative who was an agent. The buyer’s agent then proceeded to assist the buyer but agreed to zero commission to keep the price of the property lower.
The Sales Contract between the buyer and seller indicated in two separate places that no commission would be due to the buyer’s agent and this signed contract was emailed back and forth between our client and the buyers agent before execution and closing with no objections from the buyer’s agent.
The buyer’s agent further showed up at closing and made no objections to the fact that she was not receiving a commission at closing.
Nevertheless, the buyer’s agent filed an arbitration claim against our client (the listing broker) seeking 3% commission stating that the MLS listing offering 3% commission was the only relevant agreement between brokers and that the Sales Contract was irrelevant.
We took the matter to arbitration and after a full hearing involving multiple witnesses the Texas Association of Realtors Panel found unanimously in favor of the listing agent and no commission was awarded.
This was another example when the power at your disposal when you have a savvy and knowledgeable representative.
Writ of Garnishment + Foreign Judgment = Paid in Full
Writ of Garnishment + Foreign Judgment = Paid in Full
Some of our most interesting and successful work involves the enforcement and collection of foreign judgments issued by courts in other states. Relying on the Texas Uniform Enforcement of Foreign Judgments Act, we regularly help clients enforce and collect foreign judgments with speed and efficiency.
Typically, debtors are unaware that we have even started the process of domesticating a judgment from another state. Even though they know the judgment has been entered, they are almost always surprised to learn that we have been quietly working behind the scenes to make sure our client gets paid.
One of our favorite (and most reliable) tactics is to file the foreign judgment in a Texas court before waiting a few minutes to file a separate writ of garnishment with the debtor’s bank. When we do this, the debtor has no idea what is coming since the writ of garnishment will be served on their bank before they even know that the judgment has been domesticated in Texas.
That’s the same model we used in one foreign judgment case by domesticating a judgment and filing a writ of garnishment back-to-back. We received a fax the next day from the bank’s lawyer confirming the amount of the foreign judgment and letting us know that the debtor had plenty of funds to cover the full amount.
Within an hour, the debtor’s lawyer called and asked that we dismiss our garnishment in exchange for a payout over 60 days. Naturally, we declined since we already had access to the funds, and it was a good thing we did. We later learned that the debtor had just borrowed a large sum of money to pay off another obligation, which had yet to be funded. Our garnishment froze the account, and the rest is history.
A major factor in this case was the fact that our client had kept copies of the checks from the debtor’s bank account and their credit application. With that information in hand, we collected the entire judgment in 72 hours.
This story provides an important lesson and a question we ask all of our collections clients: “Are you accumulating bank account information for your customers?”
Motions to Compel Bring Pressure and Get Clients Paid
Getting Clients Paid with Motions to Compel
We were contacted by a lawyer who had won a significant Texas judgment against a local businessman. The judgment was issued in favor of a California doctor following a dispute over a business loan. This case demonstrates the value of a motion to compel.
Unfortunately, the lawyer who won the case had very little experience collecting judgments and he had already tried and failed to collect this one. After we were hired, we contacted the attorney for the judgment debtor and suggested a reasonable solution that was in everyone’s best interest. However, the other side was similarly unskilled in post-judgment remedies so they rejected our proposal and offered to pay our client zero.
Faced with a defendant who refused even first-level discussions, we launched a three-pronged attack aimed at making sure our client got paid.
First, we contacted the debtor’s lawyer with our written discovery requests, which our team has developed over the past 20 years to help identify hidden assets and potential weaknesses a debtor’s claims.
We then issued third-party discovery requests targeting the Texas companies where the local businessman held an interest.
Finally, we sent subpoena notices to two of the debtor’s family members seeking information about his business dealings because we believed they had direct knowledge of his business dealings.
We were met with resistance once again when the defendant’s third-party business affiliates never responded to our discovery requests and the debtor’s counsel provided wholly insufficient answers.
Undaunted, we then filed a series of motions to compel against both the debtor individually and his third-party business partners. The day the judge was set to decide the issues, the debtor agreed to resolve the case while we were sitting in the courtroom by paying our doctor client the $150,000 he was owed.
This is a good example of the tenacity we bring to each case. Even though our client and his original attorney thought they had no chance of collecting the judgment, our team put enough pressure on the defendant and his business partners to make sure our client was paid while avoiding the time and expense of more advanced post-judgment procedures.
Deposing the Husband.
Deposing the Husband, or any significant other, can be a powerful tool that leads to collection.
While credit card collections are not what we typically handle, our team was up to the task when a client bought a small package of credit card debt that originally was issued by a local bank. Although we didn’t know it going in, a recent marriage for the woman who owed the debt would be key to collecting every penny of what our client was owed.
Once we heard the full story, we accepted the engagement and filed a lawsuit. We were going up against the debtor’s excellent lawyer, who was very skilled in delay tactics. For example, after we filed our motion for summary judgment, her attorney convinced the judge to issue two continuances, which only delayed the proceedings.
After we presented our arguments in court, the judge issued a judgment favoring our client and we began our post-judgment procedures, which included sending the opposing counsel our interrogatories (i.e., questions we wanted the debtor to answer) and our requests for production of documents. As often happens, the debtor’s answers were insufficient. After several additional hearings, the judge eventually forced the debtor to fully disclose her assets and business dealings.
That’s when we served discovery on her employer and gathered all her employment documents. At this point, it unfortunately looked like there was little chance the woman could pay a meaningful amount of the debt, making her “judgment-proof.”
Since we never waste clients’ resources when there is clearly little chance of successfully collecting a debt, we decided that we should depose the woman and likely close the case file “for now.” We sometimes will close a case “for now” only to reopen it later once we believe the debtor can pay, which can happen within a few weeks, months or longer depending on the circumstances.
During the debtor’s deposition, we discovered that she had recently married, which we immediately saw as an opportunity. That’s because experience has taught us that, given the chance, debtors will rarely disclose the full extent of their debt to their significant others.
We responded by sending a deposition notice to her husband. Within a week, his wife was offering to settle. It was clear that she did not want us talking to her husband, so we advised our client to not settle for anything less than the full balance of the debt, including interest and attorneys’ fees. Since the documents we collected showed that a lump sum payment was not possible, we helped our client quickly negotiate a favorable settlement that allowed the debtor to pay the full balance owed over a 30-month period.
Our client was ecstatic since they felt this debt was uncollectible from the beginning. That’s why we always remind ourselves that you never know where a debtor’s weakness lies. The trick is a willingness to be relentless, which is our specialty.