Hunton Beats Oil Company Financier's $124 Million Malpractice Suit
A New York judge said part of the suit boiled down to “dissatisfaction with ... strategic choices” made by the law firm.
April 09, 2019 at 05:19 PM
3 minute read
A predecessor firm of Hunton Andrews Kurth has beaten a legal malpractice suit brought by an oil company financing firm that sought more than $124 million,
The suit against Hunton & Williams was brought by Bison Capital Corp., which blamed bad lawyering for a poor result in Bison's contractual dispute with a Texas oil and gas company.
In an April 5 decision, Manhattan Supreme Court Justice Saliann Scarpulla said part of the suit boiled down to “dissatisfaction with … strategic choices” made by the law firm. Scarpulla concluded the firm had valid reasons to make the decisions that Bison had questioned and said the former client's suit could not go forward.
In its malpractice suit, which was filed in 2015, Bison alleged that Hunton failed to introduce key evidence in its federal lawsuit against ATP Oil & Gas, which was saved from bankruptcy in 2004 after Bison helped it forge a relationship with a major investment bank that supplied critical financing in the following years.
Bison hired Hunton to sue ATP, saying it was entitled to somewhere from $86 million to more than $120 million in fees, but Bison won barely $2 million at trial—an amount it failed to collect after ATP filed for bankruptcy.
Bison alleged Hunton committed malpractice and failed to honor its contractual commitment to have a key partner conduct important depositions.
However, Scarpulla said Hunton's decisions in the ATP litigation were defensible and said there was no way to calculate any damages that might have been avoided if the partner, Marty Steinberg, had conducted the depositions.
“Bison's contention that had [Steinberg] conducted the depositions and meaningfully participated in the trial preparations, Bison would have won the damages it sought in the underlying action, is pure speculation,” the judge wrote.
Hunton & Williams merged with Andrews Kurth in 2018 to form Hunton Andrews Kurth.
The decision follows a 2016 ruling from Scarpulla that dismissed most of the suit but allowed Bison to try again. Even then, she said most of Bison's allegations of malpractice were “plainly disagreements with Hunton & Williams' professional decisions.” She described Hunton at several points in last week's decision as “reasonable and prudent.”
Legal tactics that Bison sued over included Hunton's alleged failure to introduce Securities and Exchange Commission reports on ATP as evidence. But Scarpulla noted that the trial judge in the ATP case said such a move would be a “waste of time.”
Bison also alleged Hunton failed to put a junk bond financing expert on the stand to explain what was meant by “value” in Bison's agreement with ATP and Hunton did not immediately execute on the $2 million judgment.
Still, Scarpulla found that each of those moves was defensible and none of them clearly cut against Bison. She cut the final claim—for violations of the New York Rules of Professional Conduct—because private litigants cannot sue for alleged violations of the state ethics code, the judge said.
Richard Trotter, an associate at Tannenbaum Helpern Syracuse & Hirschtritt who represented Bison, and Caitlin Shadek, counsel at Sherman Wells Sylvester & Stamelman who represented Hunton & Williams, didn't respond to request for comment.
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