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A Houston law firm’s 20-year effort to collect a $38,000 judgment from a nonpaying client is back on track after an appellate court reversed the former client’s summary judgment victory and remanded the case to a trial court.

Two decades ago, Spencer & Associates represented Stephen Harper in a case, and he didn’t pay his legal fees, according to the Aug. 6 opinion in Spencer & Associates v. Harper. In a fee dispute, the firm in 1999 won a judgment against Harper for more than $33,200 in damages and $5,000 in attorney fees, plus 10 percent post-judgment interest.

“In the 20 years since the county court rendered its judgment, Harper has resisted all attempts to execute on the judgment,” said the opinion by Houston’s First Court of Appeals, which noted that since then, Spencer Law Firm lawyers have spent more than $166,000 of attorney time seeking to collect on the underlying judgment.

As part of that effort, the Spencer firm in 2013 conducted post-judgment discovery and litigation regarding nonexempt assets from Harper, his wife and her company, and other entities. Then in December 2016, the firm sued the Harper parties for common-law fraud, fraud by nondisclosure, conspiracy to commit fraud, and violation of the Texas Uniform Fraudulent Transfer Act. The suit alleged that Harper evaded collection efforts by serving as president and director of his wife’s company while reporting he did not earn income or assets. The firm also alleged Harper’s wife conspired to thwart its collection efforts by paying for her husband’s personal expenses so that he could claim he had no income.

The Harper parties countered that the firm’s lawsuit was part of a long line of harassing legal proceedings against Harper, and claimed that the firm over many years received voluminous financial documents, but could never prove that Harper possessed assets to satisfy the judgment.

The Harper parties won a summary judgment ruling on all of the firm’s claims, while Spencer & Associates got a take-nothing judgment.

In its appeal, the law firm argued it had raised fact issues on all of its claims, and that the trial court had erred in granting summary judgment for the Harper parties, the opinion noted.

For example, on its common-law fraud and fraud by nondisclosure claims, the firm produced evidence that Harper disclosed one bank account with a less than $1 balance, but didn’t disclose another with a more than $12,000 value. That account was drained of funds before the firm ever learned of its existence, according to the ruling.

For the conspiracy claim, the opinion said there was a fact issue because the firm presented evidence that Harper worked for his wife’s company and didn’t get a paycheck, but that the company directly paid for more than $200,000 in bills and expenses for Harper as its method of compensating him. The appellate court also found fact issues regarding the firm’s claim for violation of the Texas Uniform Fraudulent Transfer Act.

The First Court reversed the trial court’s summary judgment decision and remanded the case to the trial court.

Henke, Williams & Boll partner Kathleen Boll of Houston, who represents the Harper parties, said she disagrees with the opinion and plans to confer with her clients about seeking rehearing, or appealing the ruling.

“We think there is no evidence of causation or damages,” she said, noting that her clients deny the law firm’s allegations. “It’s not appropriate for a fraudulent transfer lawsuit.”

Spencer Law Firm senior counsel Dawn Meade, who represents her firm, didn’t return a call or email seeking comment before deadline.

Read the opinion: