Category Archives: Business Law

A. Lewis Ward Recognized in Texas Lawyer Top Verdicts

Texas Lawyer Top Verdicts

Texas Lawyer Top Verdicts and Settlements for 2015 ranked A. Lewis Ward the ninth top verdict in contracts litigation, a judgement totaling $3,039,960

HOUSTON — Recently announced Texas Lawyer Top Verdicts and Settlements for 2015 ranked A. Lewis Ward the ninth top verdict in the area of contracts litigation. Ward represented clients who were induced into a real estate transaction by fraud. The Texas Lawyer Top Verdicts report listed the jury award at $888,537, which includes only the damages resulting from fraudulent inducement.

Combined with damages for breach of contract from another defendant, who settled before trial, the total award is $3,039,960.

Proving fraud by inducement is a difficult legal task. This case was very challenging due to the complexity of relationships and trouble obtaining documentation.

“Despite the number of witnesses, and several defendants representing multiple separate legal entities, we were able to uncover and present credible documentary evidence and testimony to make believers of the jury,” said A. Lewis Ward.

– – –

The details of this case portray a complex and well-conceived fraudulent scheme, which Ward used to sway the jury’s view. Juries are known to be skeptical of a plaintiff’s own negligence. Uncovering a paper trail that revealed intentional, coordinated acts of deception by the three defendants was key in establishing a sympathetic view of the plaintiffs.

Texas real estate law provides for “common law fraud,” but proof of “statutory fraud” is required in order for the plaintiff to receive payment of legal fees. Ward successfully forced one defendant into a settlement over breach of contract and that defendant was compelled to testify against the other defendants. This witness was key in proving the high standard of statutory fraud.

Texas Lawyer Top Verdicts and Settlements

The Texas Lawyer Top Verdicts and Settlements report is a special publications of Texas Lawyer, previously a weekly legal newspaper and now a primarily web-based news publication. Texas Lawyer is a member of the American Lawyer Media family of publications and the American Lawyer Media Law.com network of sites. Texas lawyer continues to publish Texas Lawyer monthly magazine, the Texaslawyer.com online edition, the In-House Texas Monthly, CLE seminars, and various books, practice guides, directories and e-newsletters.

About A. Lewis Ward

Lewis Ward graduated from South Texas College of Law and was admitted to the Texas Bar in 1977 and to the U.S. District Court, Southern District of Texas in 1988. Over four decades in law, he has handled thousands of legal matters and distinguished his legal practice by helping clients achieve millions of dollars in verdicts and settlements. He is an active member in the civic and business community, having served on boards of directors for the Robert Cummings Memorial Scholarship Fund and Ensource Corporation; as a member of the Enterprise Bank Advisory Council; and as vice president and president for the Southwest Houston Chamber of Commerce and Success Connect Chapter of Business Networking International.

A Tale of Fraud, Deception and Legal Justice

A. Lewis Ward Earned Texas Lawyer Recognition for a Top Contract Dispute Verdict in Texas

In all areas of the law, litigation is best avoided. It is time consuming, expensive, stressful, and unfortunately, exceedingly challenging for attorneys and clients alike. Sometimes, however, justice is possible only by taking a case to trial. Last year, A. Lewis Ward obtained a judgment of $3,039,960, delivering relief to deserving clients and ranking as the ninth contract dispute verdict for 2015 in Texas, according to Texas Lawyer, a weekly legal publication.

This distinguished accomplishment would not be possible without the most important component of Mr. Ward’s law practice – his clients. Ward shares this victory with those who place their trust in him and his extensive experience as a personal injury and business law attorney.

The suit in question involved Mr. Ward’s clients and three opposing individuals, all of whom were “in” on what would turn out to be a deal gone very wrong. Out of respect, real names of the clients and the opposing parties are not disclosed in this tale.

The client, Sally’s corporation, owned a piece of property worth about $1.2 million. For various reasons, Sally decided to sell the property. A potential buyer, Eric, came along with his acquaintance, Leroy. Eric wanted Leroy’s business experience and financial backing, in order to ensure that an agreement could be made and that Sally was comfortable with the risk involved. Leroy, showing a bank statement with a $450,000.00 balance and a loan pre-approval letter for $7.5 million dollars and boasting a very high net worth, convinced Sally to form a contract of sale with Eric.

Needless to say, the agreement was not upheld by Eric and Leroy. In fact, “Leroy” was not really Leroy, but Leroy’s brother, Bob. With Leroy and Eric’s knowledge, Bob had impersonated Leroy, in order to sway Sally’s decision to do business. Imagine that! It turns out that Bob had a prior criminal conviction for fraud, leading him to impersonate his brother to avoid discovery of his criminal background. Eric was friends with brothers Leroy and Bob and knowingly participated in Bob’s deception, with the real Leroy’s endorsement.

Successful Contract Dispute Verdict

Ultimately, Eric settled the claims against him for breach of contract, but Leroy and Bob fought until the very end. Ward showed the jury that Leroy and Bob were guilty of fraud in inducing Sally’s corporation to enter into a contract with Eric for his purchase of the real estate. Without the prior criminal conviction of Bob being allowed into evidence, Ward still proved that Sally and her company were fraudulently induced to form the contract with Eric.

The sad truth is, people like Eric, Leroy, and Bob are out there. They commit fraud, scheme and scam, and do their worst to cheat good, hard-working people out of time, assets, and money. In A. Lewis Ward’s Legal Blog, examples are reported of similar instances and hard lessons learned. As a reminder, one can never be too careful. But, when the stakes are high and a mistake is made, A. Lewis Ward seeks justice for clients who deserve nothing less. Occasionally, something rewarding like ranking as a top contract dispute verdict in Texas Lawyer occurs as a reinforcement for the work and the people Ward represents.

Be Smart — Whether You Are The Hunter Or The Hunted

M&M Liens - Texas Property Code

A. Lewis Ward assists small business contractors with debt collections enabled by M&M Liens

The recent experience of two clients illustrates the advantage of having and the disadvantage of not having a mechanic’s and materialman’s lien (M&M Lien).

Subcontractor Who Benefits From An M&M Lien

A gentleman came to me having completed work as a subcontractor on a commercial project, yet he was unable to get paid. As a first step toward securing payment, A. Lewis Ward & Associates prepared and delivered to the general contractor and to the property owner, in accordance with Chapter 53 of the Texas Property Code, Subchapters A-E, notice that the unpaid balance was due but not paid. Due to a disagreement with the general contractor, the property owner retained the funds and would not pay my client directly. Why?

If the owner paid either the general contractor or my subcontractor client directly, he would be exposed to a lawsuit from the other.

The next step to secure payment for my subcontractor client will be to file suit against the owner to foreclose on my client’s M&M Lien and against the general contractor for breach of contract. At that point, the owner will likely tender the funds into the court’s registry, which will make those funds available to pay my client for the judgment I expect to obtain against the general contractor. Thus, we avoid chasing a general contractor who has no assets, and the lengthy process of foreclosing on a high-priced piece of real estate.

Contractor Who Suffers From Lack Of An M&M Lien

The flip side of this coin is exemplified by another client who came to me for help in collecting funds due for residential roofing work. This contactor’s contract did not comply with the Texas Property Code, and thus, did not support a viable M&M Lien.

The homeowner refuses to pay and, now, the contractor must sue the homeowner in a standard breach of contract action without the benefit of an M&M Lien.
Had our client’s contract been properly prepared and the transaction handled as required by Chapter 53 of the Texas Property Code, our client would have a valid, enforceable lien. As a result, there is a good chance that the mere threat of foreclosure of the lien would have motivated the homeowner to pay the amount due, without a lengthy and costly court case.

Property Owners Be Aware

Contractors who furnish labor or materials to improve real property are protected under Texas business law by the provision known as a mechanic’s and materialman’s lien, which protects contractors, trade workers and suppliers with the ability to foreclose on real estate if there is compliance with the Texas Property Code.

Whether you are the hunter or the hunted, be aware of your rights and obligations under the Texas Property Code – it can save you money and a great deal of time!

Mechanic’s and Materialman’s Liens – A Powerful Tool for Debt Collections

Texas Mechanics Liens - M&M Liens

A. Lewis Ward helps business owners protect themselves and recover debts by properly filing and supporting Texas Mechanics Liens, know as M&M Liens

Mechanic’s and materialman’s liens (M&M liens) can be a very useful tool for debt collections, especially in collecting delinquent accounts. This tool is available to contractors, laborers, suppliers, architects and others who provide labor, services or materials for the improvement of real property.

An M&M Lien is a remedy for debt collections provided under Texas business law and that you must comply with strictly for your lien to be enforceable. Failure to comply with these strict statutory requisites can not only result in an unenforceable lien, but may result in you having to pay attorney’s fees and court costs to the real estate owner if he prevails in an action against you to remove the lien.

The requirements to be met and the applicable deadlines depend upon whether the project is public or private; whether it is residential or commercial; and whether you are a general contractor or a derivative claimant, e.g., subcontractor, laborer, etc.

An M&M Lien claimant usually must provide a notice of the amount due but unpaid within a certain time period in a specifically required manner to very specific persons before filing an M&M Lien affidavit. The M&M Lien affidavit must then be filed within the prescribed time after the accrual of indebtedness (which has a definition that varies according to the type claimant) and contain the information described in the statute. When these things are properly completed, the claimant has a “perfected lien.”

The “perfected mechanic’s and materialman’s lien” can assist a claimant in the following ways:

  1. A subcontractor or other similarly situated claimant can trap funds for his payment in the hands of the real property owner. If the owner does not force the general contractor to pay the subcontractor or withhold funds as instructed, the owner and his property can become liable to the subcontractor.
  2. This subcontractor, by perfecting his lien, effectively stops the land owner from selling the property without first paying the subcontractor (it is possible to bond around the lien). Because of the owner’s plans to sell, this often puts the subcontractor in a very strong position.
  3. Even if the owner has no plans to sell the improved real property, the pending M&M Lien can adversely affect any banking relationship with respect to the subject property and his credit generally.
  4. The subcontractor can foreclose on his M&M Lien, and the court must award costs and attorney’s fees as are equitable and just.

Businesses involved in or affiliated with the construction industry should keep a watchful eye on their accounts receivable – the notice of amount due but unpaid, the first step in perfecting a mechanic’s and materialman’s lien, can be due as soon as 45 days after the end of any month in which labor, services or materials are furnished.

Contact A. Lewis Ward & Associates for assistance in filing a “perfected M&M Lien” and protecting your business and personal interests.

Texas Supreme Court Denies Petition, Guarantees Jury Trial for Client of A. Lewis Ward & Associates

Commercial Litigation in Texas Courtrooms

A. Lewis Ward has been successfully litigating business law matters in Houston, Texas courtrooms for more than 30 years

HOUSTON – On October 12, 2012, the Texas Supreme Court  dismissed a petition to review an appellate decision won by A. Lewis Ward & Associates before the Fourteenth Court of Appeals on May 8, 2012. This was the final step that guarantees a jury trial for Ward’s client.

“Everyone deserves his or her day in court, and my client has been prevented from this justice for too long,” said A. Lewis Ward, attorney. Ward has fought on behalf of his client to establish the right to a jury trial since the district court granted a summary judgment in favor of the opposing party on January 13, 2011.

The Fourteenth District Court of Appeals in Houston overturned that summary judgment on May 8, 2012, which did not end the fight for a fair trial. The opposing party made a last attempt to avoid going to trial by filing a petition with the Texas Supreme Court to reconsider the judgment of the Court of Appeals. The Texas Supreme Court’s refusal to hear the petition is the last delay and Ward’s client is now guaranteed her day in court.

A. Lewis Ward has cited evidence that his client stands to receive redress in the amount of $300,000.00 or more and has pledged to press this case to ensure that justice is done for his client. A jury trial date is expected to be set very soon.

2016 Update: Jury Verdict in Favor of ALW Client

A prominent Downtown Houston real estate owner had granted the 99-year lease and then seized the property from the rightful tenant. A. Lewis Ward successfully swayed the jury to believe that the lease was valid and they awarded $100,000 in damages. This case is now on appeal to receive the full $330,000 in damages as demonstrated by the evidence.

Legal Contracts – If You Signed It, You Are Probably Stuck With It

Read it before you sign it

Legal Contracts are often binding

A. Lewis Ward helps consumers and business owners with legal contracts, other legal matters and avoiding legal mistakes

All too often I hear from people explaining how they are faced with a big problem, that they are being dumped on by a company or another party, and surely something should be done about it.

Many times, in actuality, the other party is within their legal rights because of a written legal contract signed by the person complaining. All too often, people sign documents that they do not read or that they do not understand, which can cause serious trouble!  Legally speaking, you are presumed to have read and understand any document or agreement that you sign.

Generally, it matters not that you did not read it or that you did not understand it. Therefore, if you have not read it or if you do not understand it, please do not sign. If you have a question about legal contracts, it may cost very little or nothing to simply pick up the telephone and ask an attorney to explain it to you.

This is not to say that you are always stuck with every legal contract you sign. There are legal concepts with fancy names such as fraud in the inducement, misrepresentation, mistake of law, and mistake of fact which can be and are employed to set aside legal contracts when the facts make it possible. There are also breaches of the contract – sometimes even anticipatory breaches – that might enable you to terminate a contract which you have signed. But, without these factors being present, you can usually be made to comply with an agreement that you signed or pay damages for your failure to do so.

When it comes to important transactions, I suggest that you get the document or contract in advance – these are often preprinted forms. In the privacy of your home or office, without being rushed, review the document or agreement. Although the wording may be somewhat difficult or strange, you should be able to figure out who is who in the agreement. But, there may be concepts or other terms which carry important legal significance which you do not understand. In that event, you should call an attorney for assistance. If you do not have the time and forethought to review an important document or agreement in this fashion, nevertheless read it before you sign it – even if it causes the other party to wait while you do so.

If it doesn’t feel right, don’t sign it!! Do not let being in a hurry or your enthusiasm to do this deal cloud your thinking. The delay and disappointment may be small relative to the damage you do to yourself.

With Overdue Debt Collections – Time Is Money

practical steps in managing debt collectionsThe old adage “time is money” is very true when it comes to overdue debt collections and accounts receivable. With few exceptions, the longer you delay overdue debt collections, the more trouble you will have collecting. If you have to extend credit, adhering to the following guidelines can put more money in your pocket and save you stress.

Be aware of the exact date your account receivable is due

If you do not receive payment by that day, you should immediately contact your debtor in writing to advise them that the account is past due and obtain a date certain within the next seven to ten days when you will receive payment. If you then do not receive payment within seven to ten days, or another specific date by agreement, contact them again in writing with stronger language insisting that payment is due.

Thirty days past due

Then, if payment is not made before the account becomes more than thirty days past due, send a letter advising that you will file suit against them if the account is not paid immediately, giving them a finite period of time to make payment.

Although the law does not require you to send this letter threatening suit in any particular manner, it is a good idea to send the communication via certified mail, return receipt requested. We suggest also sending a copy of that communication by fax, email and/or first class mail so your customer’s receipt of it is ensured and expedited. Too, some people think they accomplish something by refusing to accept or claim certified mail and substantial time may elapse before you learn that your letter was never accepted or claimed. Generally speaking, delivery is deemed to occur when an addressee refuses delivery.

Filing a lawsuit for overdue debt collections

This written demand also perfects your right to recover attorney’s fees for overdue debt collections. It is not necessary that you employ an attorney to present your claim to your customer. This can be done easily by you, thereby saving you the expense of attorney’s fees. In this letter, you should state that if filing a lawsuit becomes necessary, you will sue the customer for prejudgment interest due (this is a statutory six percent per annum rate in the absence of any contrary agreement), court costs, and attorney’s fees. If the account is less than $10,000 and you cannot or do not wish to employ an attorney, you can represent yourself when filing the claim in a justice of the peace court.

If you are engaged in construction or a related enterprise, timely management of your accounts receivable also helps you perfect your right to file a Texas mechanics and materialman’s lien (M&M Lien). In these professions, there are strict requirements that must be met in order to qualify to file the M&M Lien affidavit.

If your account is experiencing serious financial difficulty, their filing bankruptcy is always a possibility. You can reasonably infer that your account may be in arrears with other obligations also. Therefore, you may be in a situation of “early bird gets the worm,” dictating that you must proceed with all haste – “the wheel that squeaks the loudest gets the grease” is another old, but true aphorism!

Read more about debt collections and M&M liens

What’s the Worst That Can Happen?

Improving Your Legal Health

Your legal health in contract agreementsIn any matter that will have a substantial impact on your life or livelihood, ask yourself “What is the worst thing that can happen and how do I prepare for it?” Do whatever is necessary to make this habitual. It is the first step toward your legal health. In this true story, my friend and client suffered a $1 million loss, which was worse than anything he had imagined happening to him.

I received a call from my entrepreneur client saying he needed help immediately because his company had developed a software program that had been stolen and it was going to cost the company approximately $800,000.00 over the next three to five years. His company had invested about $150,000.00 developing this software that was expected to be very popular in the theft identity/identity restoration arena. They had entered into a confidentiality and nondisclosure agreement with a nationally-known security company. His partner had worked with the security company lawyers to prepare a marketing agreement, which was related to the agreement concerning the development of the program; and the company was to be the exclusive representative of the security company to sell and distribute the software to banks. However, on a recent visit to his bank, he had seen documents which were a mirror image of the program he and his company had developed.

Unfortunately, I also learned that this company did not seek the advice of an attorney in preparing the written agreements with the national security firm. The terms and provisions of the marketing agreement were very heavily weighted in favor of the security company, whose lawyers prepared the agreements.

These gentlemen had exhausted their resources developing the software program and had no funds left to pay an attorney to seek redress. Conversely, the probability of success and the amount known to be in controversy was not sufficient to motivate a good attorney to pursue their rights and pay all expenses on a contingency fee basis. Combining the $150,000.00 they invested in development of the program with the $800,000.00 they anticipated earning during the next three to five years adds up to a total loss of about $950,000.00 — a very expensive mistake!

These entrepreneurs made two serious mistakes:

  • they did not admit to themselves that they were ignorant about the legalities of protecting themselves and
  • they “got into bed” with the other party’s attorneys and trusted them, something entrepreneurs — nor you — should ever do!

How much do you think it may have cost to employ an attorney for assistance with the legal agreements? And how much do you think that attorney’s advice would have been worth? In this case, it would have been worth a million dollars.

Admitting your ignorance of how to protect yourself is the first step towards better legal health. The next step is to never trust the other party or his attorney to protect your interest.

Read more about Your Legal Health

Written vs. Oral Contracts In Business Law

Many Oral Contracts May Be Binding, But Take Precautions

There are certain contracts that must be in writing to be enforceable: a contract concerning an interest in real property; an agreement to stand good for the debt or obligation of another person; and an agreement to perform any act or service which cannot be performed within one year or less. Otherwise, oral contracts are usually enforceable. But, oral contracts can present enforcement problems, as illustrated by these true stories.

The Compaq Controversy

A few years ago I was asked to assist in developing a contract to be used in doing business with Compaq Computer Corporation (this was before Compaq was bought by HP). My client had left his salaried position, gone into business for himself, and was anxious to get this project from Compaq. After preparing a simple contract for him I did not hear back for several months. Then, one day he calls and tells me how the written contract was submitted but Compaq never signed it. He had been so interested in adding a feather to his cap he proceeded doing business with Compaq on a verbal basis. The project had a tight deadline and he put a blood and guts effort into the project and incured substantial payables getting it finished. After he successfully completed the project, Compaq refused to pay his final invoice.

This put him in a very bad situation. He owed close to $70,000.00 to subcontractors who had worked on credit based upon their trust and belief in him. Furthermore, there was nothing to compensate himself for all of the many weeks that he spent working on the project. Can you say STRESS?!

Upon review, we discerned that Compaq’s key personnel had been guilty of misrepresentation and fraud in dealing with my client. The agreement was not one that the statute of fraud required to be in writing to be enforceable. When Compaq responded to my demand letter by offering a small fraction of the amount due, we filed a lawsuit. That lawsuit was a full blown “fight to the death” kind of controversy with Compaq, which of course, was represented by a large defense firm here in Houston. After working on the case for 18 months, attorney’s fees had reached about $90,000.00. And even though Compaq’s attorneys had declared they would never agree pay more than $75,000.00 to settle the case, they realized we were serious about trying the case and finally settled just prior to trial.

Although my client made an informed decision to settle instead of trying the case, after paying litigation expenses, attorney’s fees and the subcontractors he owed, there was little left for him, personally. Even though he won, he lost!

An Expensive Mistake

A second story which illustrates the difficulties and expenses which can arise out of not using a written agreement is a case which was recently completed.

Although my client had a preprinted proposal which a prospective customer may sign and convert the proposal into a written contract, he did not use it this time. The homeowner made a down payment and my client installed a nice fence on the homeowner’s property. But, when he went to collect the balance of money due for labor and materials, the homeowner claimed that my client was mistaken about the terms and provisions of their verbal agreement. The homeowner argued that he only owed a small part of the balance due, and then refused to pay even that.

My client came to me and we sent a demand letter, which was ignored. A lawsuit was filed to collect about $2,000.00 and you would think it involved a federal question. The parties have engaged in discovery and my attorney’s fees have far exceeded the original $2,000.00.

Although he prevailed, in the final analysis my client was not a “winner.” Look at the stress and lost production he suffered because he failed to put a simple agreement in writing.

Of course, the moral in both of these stories is to get the agreement in writing. Difficulties definitely arise as a practical matter with oral contracts because controversy frequently develops over the terms of the parties’ agreement. Although litigation still happens when written contracts are used, the controversy usually evolves around disputed facts or the meaning of particular words.