Case Notes

Jury Finds George Fleming, Firm Breached Fiduciary Duty to Clients

After a four-week trial, a 215th District Court jury in Houston found attorney George Fleming and Houston-based Fleming & Associates breached their fiduciary duty to 10 clients they represented in fen-phen litigation. But both sides are claiming victory in the case.

Franklin Cardwell & Jones shareholder Ronald G. Franklin of Houston, an attorney for Fleming and Fleming & Associates, says the Oct. 27 verdict is a win for his clients because the award is “minuscule.” The jury awarded the 10 plaintiffs in Kinney, et al. v. Fleming, et al. about $86,000. The damages awarded to the plaintiffs range from $36 to $73,596.

All 10 plaintiffs also had alleged breach of contract against Fleming and the firm, but Franklin says the jury found the defendants breached their contract with only one plaintiff. Her contract required Fleming and the firm to provide her with an itemized list of expenses, which they did not provide. Still, Franklin dismisses that finding as “a footnote.” Franklin also points out that the plaintiffs nonsuited fraud allegations against Fleming and the firm while the jury was deliberating. In an Oct. 27 order, the court dismissed the fraud allegations with prejudice.

Jeffrey W. Chambers, a Ware, Jackson partner in Houston who represents the plaintiffs, says his firm represents more than 600 former Fleming & Associates clients who allege they were charged for improper expenses. The Oct. 27 verdict involved the first 10 of those plaintiffs to go to trial, Chambers says.

As alleged in the plaintiffs' seventh amended petition, filed Dec. 22, 2009, Fleming and Fleming & Associates charged the firm's clients approximately 54% of their total recovery in a 2006 settlement with pharmaceutical company Wyeth. The clients alleged they sustained heart-valve injuries after taking the diet-drug combination known as fen-phen.

The Kinney plaintiffs alleged in their amended petition that Fleming and his firm charged them proportionate shares of $29 million the firm spent for echocardiograms performed on prospective clients. The plaintiffs further alleged that they never agreed to pay those costs and that Fleming and his firm did not disclose prior to the settlement that they were shifting those costs to their clients. To be able to include as expenses the costs for testing thousands of prospective clients, Fleming and his firm had a study done of echocardiogram testing of the nonparticipants in the settlement, the plaintiffs alleged in the amended petition.

The defendants denied the allegations. Franklin says, “The disputed echocardiogram charges were a litigation expense that made the settlement possible.” He says the echocardiogram expenses were one category in the $38 million in expenses. The plaintiffs were told all the expenses were incurred in developing the liability and damages against Wyeth, he says. Fleming did not return a telephone call seeking comment.

Chambers says the 10 Kinney plaintiffs' share of the testing costs was only about $140,000. He also says the trial court will consider to what extent Fleming and his firm may have to disgorge legal fees received from the 10 plaintiffs. But Franklin isn't worried. He says he is confident there will never be a judgment entered in Kinney, because he believes the court's charge to the jury was defective. If there is a judgment, Franklin says his clients will appeal.

However, Chambers says 215th District Judge Kirkland “carefully crafted” the jury charge. Notes Chambers, “Mr. Franklin may not like it, but it was the pattern jury charge for breach of fiduciary duty.”

' Mary Alice Robbins, The Texas Lawyer

Jury Finds George Fleming, Firm Breached Fiduciary Duty to Clients

After a four-week trial, a 215th District Court jury in Houston found attorney George Fleming and Houston-based Fleming & Associates breached their fiduciary duty to 10 clients they represented in fen-phen litigation. But both sides are claiming victory in the case.

Franklin Cardwell & Jones shareholder Ronald G. Franklin of Houston, an attorney for Fleming and Fleming & Associates, says the Oct. 27 verdict is a win for his clients because the award is “minuscule.” The jury awarded the 10 plaintiffs in Kinney, et al. v. Fleming, et al. about $86,000. The damages awarded to the plaintiffs range from $36 to $73,596.

All 10 plaintiffs also had alleged breach of contract against Fleming and the firm, but Franklin says the jury found the defendants breached their contract with only one plaintiff. Her contract required Fleming and the firm to provide her with an itemized list of expenses, which they did not provide. Still, Franklin dismisses that finding as “a footnote.” Franklin also points out that the plaintiffs nonsuited fraud allegations against Fleming and the firm while the jury was deliberating. In an Oct. 27 order, the court dismissed the fraud allegations with prejudice.

Jeffrey W. Chambers, a Ware, Jackson partner in Houston who represents the plaintiffs, says his firm represents more than 600 former Fleming & Associates clients who allege they were charged for improper expenses. The Oct. 27 verdict involved the first 10 of those plaintiffs to go to trial, Chambers says.

As alleged in the plaintiffs' seventh amended petition, filed Dec. 22, 2009, Fleming and Fleming & Associates charged the firm's clients approximately 54% of their total recovery in a 2006 settlement with pharmaceutical company Wyeth. The clients alleged they sustained heart-valve injuries after taking the diet-drug combination known as fen-phen.

The Kinney plaintiffs alleged in their amended petition that Fleming and his firm charged them proportionate shares of $29 million the firm spent for echocardiograms performed on prospective clients. The plaintiffs further alleged that they never agreed to pay those costs and that Fleming and his firm did not disclose prior to the settlement that they were shifting those costs to their clients. To be able to include as expenses the costs for testing thousands of prospective clients, Fleming and his firm had a study done of echocardiogram testing of the nonparticipants in the settlement, the plaintiffs alleged in the amended petition.

The defendants denied the allegations. Franklin says, “The disputed echocardiogram charges were a litigation expense that made the settlement possible.” He says the echocardiogram expenses were one category in the $38 million in expenses. The plaintiffs were told all the expenses were incurred in developing the liability and damages against Wyeth, he says. Fleming did not return a telephone call seeking comment.

Chambers says the 10 Kinney plaintiffs' share of the testing costs was only about $140,000. He also says the trial court will consider to what extent Fleming and his firm may have to disgorge legal fees received from the 10 plaintiffs. But Franklin isn't worried. He says he is confident there will never be a judgment entered in Kinney, because he believes the court's charge to the jury was defective. If there is a judgment, Franklin says his clients will appeal.

However, Chambers says 215th District Judge Kirkland “carefully crafted” the jury charge. Notes Chambers, “Mr. Franklin may not like it, but it was the pattern jury charge for breach of fiduciary duty.”

' Mary Alice Robbins, The Texas Lawyer