Oct 22, 2013

Verdict Reached in Water Company Ownership Dispute

Susman Godfrey wins high-profile defense verdict in San Antonio

Susman Godfrey San Antonio Water Exploration Co. Tom Hall et al v. Dillon Water

A jury rejected claims by two San Antonio attorneys that they were entitled to part ownership in a water exploration company after representing one of its owners in a previous lawsuit.

After a four-week trial in San Antonio's 225th Judicial District Court, jurors rejected claims by lawyers Thomas C. Hall and Blake Deitzmann that their contingent-fee agreement for representing Dean Davenport entitled them to a 22.5% ownership interest in Davenport's company, Water Exploration Co. (WECO).

High-stakes litigation firm Susman Godfrey LLP represented Davenport in the lawsuit. The firm is one of the few well-known plaintiffs' law firms to handle an equal number of defense cases.

The case centered on a 2009 high-profile San Antonio lawsuit in which the plaintiffs represented Davenport in a dispute with his two partners in WECO, which now has a long-term contract to provide drinking water to the San Antonio Water System. After the jury returned a $70 million verdict in Davenport's favor, Davenport settled with his two partners, in 2009 and 2010, recovering some cash and gaining 100 percent ownership of the company as part of the two settlements.

In this lawsuit, plaintiffs Hall and Deitzmann claimed their contingent-fee agreement entitled them not only to 33.5% of the cash Davenport recovered—which they were paid—but also to a 33.5% ownership interest in the 66% of WECO that Davenport recovered through the settlements. At the trial, the plaintiffs asked the jury to award at least $24.6 million in damages as the current value of their alleged ownership interest and at least $18 million in punitive damages for a total of $42.6 million in damages.

In addition to rejecting the plaintiffs contract claims for an ownership interest, the jury also rejected plaintiffs' claims that Davenport committed fraud by misrepresentation and fraud by concealment and their claim for conversion. The jury found instead that Davenport was required to pay only $230,000 in contingent litigation expenses advanced by the plaintiffs in the underlying litigation.