GULFPORT, Miss. (CN) - In a legal malpractice complaint, 153 plaintiffs claim a law firm had them falsely diagnosed with silicosis "to extort global settlements" of millions of dollars from Halliburton, 3M and other underlying defendants.
Lead plaintiff Earnest Poindexter sued John O'Quinn & Associates PLLC, Danziger & De Llano LLP, eight individuals, and O'Quinn's law firm under other names, in Harrison County Court.
In the complaint, the plaintiffs claim the attorneys and professionals associated with their firms participated in a "scheme to improperly diagnose plaintiffs with silicosis in order to further their efforts to amass as large of a silicosis docket as possible to extort global settlements from the underlying defendants all to the detriment of the health and well-being of their clients."
Silicosis, which comes from exposure to silicon, is a deadly lung disease associated with a greatly increased risk of tuberculosis and lupus.
"This case arises out of the horrific and unfortunate malfeasance committed by The O'Quinn Law Firm ... its attorneys and referring lawyers during the representation of thousands of clients who were diagnosed with the devastating and potentially fatal disease of silicosis," the complaint states. "For over ten years, O'Quinn, at the leadership of its principle attorneys, John M. O'Quinn ... and Richard Laminack ... in addition to the medical experts hand-selected by the Firm, led clients, the judicial system, defendants in the underlying case and opposing counsel to believe that its clients had silicosis in order to 'fuel a silicosis litigation machine' and generate millions of dollars in attorney's fees and expenses. At the end of the day, Mr. O'Quinn, Laminack, the Firm and its attorneys placed their interests and the interests of the screening companies involved above those of its clients. This is the sad reality of O'Quinn's approach to mass-tort litigation and this is the story of the residual victims of that approach, their clients.
"O'Quinn represented approximately three-thousand (3,000) clients who were occupationally exposed to silica-containing products and materials and diagnosed as having silica related diseases ... against numerous manufacturers and distributors of silica related products, materials and/or protective equipment. ... Plaintiffs, like other Silicosis Clients, were solicited by attorneys and other individuals, law firms, or screening companies to undergo medical screening to determine if they had silicosis. Plaintiffs were then solicited to enter into contracts with law firms who promised to litigate their silicosis claims against the Silicosis Defendants. These law firms subsequently referred Plaintiffs to O'Quinn. As much as 98 percent of O'Quinn's silicosis docket came from referring law firms. The referring law firms included Danziger & De Llano, LLP, Paul Danziger, Rod De Llano ('Danziger') and Stacie F. Taylor ... among others ... all of which remained jointly responsible for any wrongful acts committed by O'Quinn or its attorneys." [All ellipses mark shortened titles, not elision of information: i.e. ('Silicosis Defendants'), and the like.]
The complaint adds: "After filing the silicosis lawsuits, O'Quinn utilized Dr. Harron's reports to obtain global settlements out of some of the underlying defendants. By January of 2004, O'Quinn had entered into global settlements with underlying defendants Moldex, 3M, Air Liquide, Halliburton and Clemtex which, if properly processed, totaled over $55 million dollars. The settlements were typically based off of various factors including the clients' exposure history with each Silicosis Defendants' product, the clients' lung function to radiographic reading ... and whether the client had been diagnosed with any diseases linked to silicosis such as Lupus, Tuberculosis, Rheumatoid Arthritis, Lung Cancer, or Scleroderma, just to name a few.
"Although O'Quinn began receiving the settlement funds for different Silicosis Defendants as early as 2002, O'Quinn and its attorneys wrongfully retained the settlement proceeds for its own use. O'Quinn and its attorneys failed to distribute the funds in a timely manner or apply the proceeds to the expenses, thus forcing the Silicosis Clients, including plaintiffs, to incur unnecessary interest and unnecessary costs for future expenses had the funds been distributed timely. For example, O'Quinn received settlement money and negotiated settlements from a number of Silicosis Defendants in late 2002 and early 2003. However, by February 2004, Defendants still had not disbursed any of the settlement proceeds to Plaintiffs. Even more egregious, whenever various Silicosis Clients would call O'Quinn to inquire about their settlements, the staff, including [Richard] Laminack, [John M. O'Quinn & Associates managing partner Christian] Steed and others, under the direction of Mr. O'Quinn would, directly or indirectly, make misrepresentations concerning the clients' settlements rather than tell the clients the truth and issuing a disbursement. Indeed, despite having clients' settlements in O'Quinn's possession for 'many many months,' one of the attorneys, Tracy Molter, requested permission to disburse partial funds to the clients because she was simply 'running out of things to tell these folks.' It is obvious that the Firm under the direction of Mr. O'Quinn, Laminack, Steed, [Thomas] Pirtle, [Buffy] Martines and any other attorney managing or working the silicosis docket, held Plaintiffs' funds hostage in order to pay future expenses and interest to the benefit of the Firm and to the detriment of Plaintiffs.
"Another serious issue with the representation related to the deduction of 'general expenses.' None of the Plaintiffs authorized the firm to deduct an arbitrary general expense from their settlements in their initial agreements with the Firm or the referring attorneys. A few of the Plaintiffs signed contracts directly with O'Quinn which mentioned nothing about 'Silica General Expenses.' Nonetheless, O'Quinn charged Plaintiffs an arbitrary 3 percent of these general expenses and forced the Plaintiffs to sign affidavits subsequently agreeing to have 'Silica General Expenses' and the arbitrary 3 percent pro-rata portion of these general expenses deducted from their settlements prior to O'Quinn releasing any of their settlement funds. Thus, O'Quinn and its attorneys held Plaintiffs' settlement funds hostage unless they signed a new agreement consenting to a 3 percent pro-rata general expense charge. ...
"In addition, a 'huge number' of client case specific charges were being billed to Silicosis General simply because 'employees didn't take time to look up client case numbers.' In the same regard, O'Quinn, under the management of Mr. O'Quinn, Laminack and Pirtle, permitted numerous charges to be billed to Silicosis General for work done in the Texas State cases that had nothing to do with the Mississippi MDL. Thus, Plaintiffs, who were never part of the Texas State litigation, were charged expenses for their cases that they never actually incurred. These excess charges were never disclosed to Plaintiffs and Plaintiffs were never reimbursed for these excess charges.
"By 2003 the litigation expenses for O'Quinn's silicosis docket was 'out of control.' Just two years into the litigation, expenses for the 3,000 clients amounted to over $10 million dollars. Approximately $1.7 million was paid to the referral lawyers for screening cases and hundreds of thousands went to N&M [Inc.] for screening and referring O'Quinn the cases. Rather than spend money on securing evidence of liability, O'Quinn, led by Mr. O'Quinn, Laminack and Pirtle, squandered hundreds of thousands of dollars through frivolous conduct. The Firm would bill its' overhead as 'expenses' to the clients. In fact, the Firm billed Mississippi Bar Admission fees, office supplies, pens, paper, folders and other office items as 'expenses.' In just one instance, the Firm spent over $60,000.00 on an 'elaborate' database to manage the silicosis docket that not one employee ever put a scrap of information into other than general contact information already contained in other databases. Additionally, employee travel expenses were overly excessive. There were dinner tabs for $1,000.00, $100.00 bottles of wine and liquors, and expensive cigars, all of which were billed to the clients, including Plaintiffs, and charged to Silicosis General. There were hotel charges at various casinos in Mississippi and Las Vegas billed to Silicosis General. Moreover, instead of flying coach, employees of the Firm would unnecessarily upgrade to first-class and simply bill the clients, including Plaintiffs. Most egregious however, Mr. O'Quinn billed thousands of dollars in flights on his private jet to the Silicosis General file.
"Additionally, the Firm's attorneys, all under the management of Mr. O'Quinn and Laminack, unreasonably increased the expenses in the silicosis cases through carelessness and disregard. These attorneys hired medical experts and paid up front fees of $20,000.00 or more to render an expert report only to find out that the experts were not qualified experts in the first place or that they were not the type of experts that the Silicosis Defendants required in order to settle. O'Quinn still billed these charges to Plaintiffs and other Silicosis Clients. Further, the Firm incurred 'thousands and thousands of dollars' in unnecessary hotel and meeting room costs caused by the Firm's employees scheduling depositions for plaintiffs and fact witnesses and then canceling said depositions because the Firm's employees simply did not want to attend. Mr. O'Quinn and Mr. Laminack permitted such conduct to occur. More egregious however is that O'Quinn and its attorneys would (on numerous occasions) bill two-to-three day trips as expenses to cover a hearing that lasted only a few hours. All these charges were billed to Silicosis General of which Plaintiffs had to pay their arbitrary, non-authorized 3 percent share." (Parentheses in complaint.)
The complaint continues: "Aside from the expense-related errors mentioned above, the Firm at the hands of Laminack, Pirtle and Martines and under the management of Mr. O'Quinn, committed numerous errors while processing a number of the settlements with the Silicosis Defendants. Due to O'Quinn's delay, many Plaintiffs who had both asbestosis and silicosis cases were denied their higher silicosis claim with defendants like 3M and Halliburton because their asbestosis attorney would settle the asbestosis claim and when the client signed a release it would also release any pending silicosis claim. This occurred because of O'Quinn's unreasonable delay in processing the settlements and because its attorneys wholly failed to communicate with the asbestosis attorneys, investigate the clients other competing claims or otherwise ensure that their clients would receive the higher claims.
"In addition, the Firm improperly, and in violation of the rules governing professional conduct, failed to fully investigate and assess individual claims and entered into 'aggregate' or 'global' settlements with 3M for approximately $26 million and then intimidated or coerced Plaintiffs into the settlement. This was done even though the Firm and the attorneys therein knew that the way they were handling the aggregate settlements were prohibited under Burrow v. Arce
, 997 S.W.2d 229 (Tex. 1999). The Firm and its attorneys made no individual negotiations on behalf of the Plaintiffs and, even knowing potential 'Arce
issues' where present, signed off on the settlement without following the dictates of Arce
"Further, the Firm continuously permitted Plaintiffs' claims to be wrongfully dismissed against a number of Silica Defendants. In 2004, the Firm and its attorneys, including Laminack, were aware that numerous Silicosis Clients' cases had been wrongfully dismissed before releases had been signed or settlements had been paid. Yet, the Firm and its employees chalked them off as a loss and did not 'waste time checking every lawsuit [they] filed against the Court records to see which cases have or have not been dismissed." Instead, they figured '[w]hat's done is done.' These wrongful dismissals were never disclosed to the effected Silicosis Clients." (Brackets in complaint.)
And, the complaint states: "Additionally, the Firm, under the direction of Mr. O'Quinn, Laminack, and Pirtle, failed to file Verified Fact Sheets ... for approximately 223 clients, including, based on information and belief, some of the Plaintiffs herein, as required by the Court in the MDL. As a result, these clients' cases were prejudiced and, based on information and belief, dismissed. When asked by Laminack why the Fact Sheets were not filed, 'no one ha[d] an answer.' Recognizing the problem, Laminack stated in a silicosis meeting on January 5, 2005, 'if we have 200 cases dismissed because we didn't do our homework is [sic] a real problem because we don't have that much malpractice coverage.' Although recognizing the obvious problem, these dismissals were never disclosed to the effected Silicosis Clients, which may include Plaintiffs." (Brackets in complaint.)
"Furthermore, the Firm failed to process and/or finalize settlement agreements. In his February 25, 2005 resignation letter to Laminack, Joseph Gibson, one of the Firm's employees, uttered the inevitable truth affecting the Firm's silicosis docket: '[w]e are going to lose every settlement we have made because we won't process them.' This is exactly what happened to the Firm's settlements with silica defendants, Sanstorm, Moldex and many others. The vast majority, if not all, of the Plaintiffs were all entitled to settlement proceeds with Sanstorm (also known as Air Liquid). On November 7, 2002, Pirtle, on behalf of the Firm, entered into a Rule 11 Agreement with Sanstorm. The settlement with Sanstorm was for approximately $5,250,000.00. By February 25, 2005, Gibson informed Laminack that 'Sandstorm [sic] will stand by their settlement if we send it out now.' However, the paperwork never went out and the clients never received any settlement proceeds from Sanstorm. Had the Firm simply enforced the Rule 11 Agreement and processed the settlement, Plaintiffs would have obtained their portion of the settlement. Neither the Firm, its attorneys, nor the referring lawyers ever disclosed the missed Sanstorm settlement to Plaintiffs. ...
"The above claims, settlements and/or bankruptcies are likely not the only claims/settlements that Plaintiffs missed out on due to the Firm's delay in processing and litigating their claims. Thus, Plaintiffs seek any and all claims and monies they were entitled to." (Brackets and parentheses in complaint.)
On page 35 of the 68-page complaint, the plaintiffs continue: "Furthermore, the Firm and its attorneys failed to ensure that those Plaintiffs with Lupus, Tuberculosis, Rheumatoid Arthritis, Lung Cancer, or Scleroderma (the 'Big-5' diseases), received the proper settlement amounts from the settling Silicosis Defendants. For instance, Silicosis Defendants Halliburton, 3M and Moldex would pay Plaintiffs higher settlement amounts if they had a medical report linking one of the foregoing Big-5 diseases to silicosis. Many Plaintiffs had such reports and medical documentation. However, the Firm and its attorneys failed to ensure that such reports were submitted and that Plaintiffs received the appropriate (and much greater) settlement amounts."
The plaintiffs seek damages for negligence, gross negligence, breach of fiduciary duty, breach of contract, constructive fraud, fraud, and negligent misrepresentation. They also seek damages from O'Quinn and Laminack for negligent supervision.
"The Firm, and these attorneys, at minimum, are liable for knowingly and deceitfully leading Plaintiffs on to believe that they had been diagnosed with a fatal disease all in an effort to create a mass-silicosis docket and generate millions of dollars in fees and expenses and keep themselves, and the experts and screening companies that they retained, gainfully employed for roughly a decade. Such conduct represents a horrible and grave breach of fiduciary duty," the complaint states.
It adds: "Many of the Plaintiffs come from lower class, hardworking backgrounds who have spent their lives as laborers, foundry workers and sandblasters, which required them to work in uncomfortable environments, not in air conditioned luxury office buildings located at the Penthouse of the Lyric Centre. Because of their modest professions, many of these individuals simply cannot afford health insurance and do not possess the means to consult with a regular physician. Thus, they relied on the advice of their lawyers, the Firm, Mr. O'Quinn, Laminack, Pirtle, Martines, the referring attorneys and the doctors. ...
"Meanwhile, the Firm under the direction of Mr. O'Quinn, Laminack, and Pirtle, and at the expense of their clients, continued to 'fuel a silicosis litigation machine' by having their medical professionals diagnose as many clients as possible with silicosis. The evidence demonstrates that the Firm funded mass screenings of clients to be carried out by Danziger or [Stacie] Taylor, who would work with the screening companies to screen clients, sign them up and then refer them to O'Quinn. Indeed, O'Quinn paid approximately $1.7 million to Danziger for advertising and screening silica cases. With this money, Danziger placed ads in newspapers and sent various letters to solicit cases and paid for 'mobile vans' to take X-rays and conduct silicosis and asbestosis screenings in rented spaces at union halls, hotels and community centers. At the screenings, which were advertised as 'free', would be attorneys or representatives acting on behalf of O'Quinn or the referring firms. Knowing that the diagnosis would be contrary to medical standards and unreliable, N&M and Dr. Harron had Plaintiffs sign a statement that they could not 'sue them for medical malpractice.' Although O'Quinn employed Dr. Harron and N&M to conduct the medical screenings, no one from the law firm or any of the referring firms ever advised Plaintiffs not to sign the medical release or otherwise explained to them their rights. Instead, they furthered the scheme to improperly diagnose Plaintiffs with silicosis in order to further their efforts to amass as large of a silicosis docket as possible to extort global settlements from the underlying defendants all to the detriment of the health and well-being of their clients."
The complaint names Drs. Ray Harron and Andrew Harron, but does not name either of them, nor the other doctors, as defendants. The pertinent paragraph states: "Under the direction of the Firm or the referring law attorneys, N&M and/or RTS and its staff would often perform the initial X-Ray and Pulmonary Function Tests ('PFTs') on Plaintiffs, both of which were required to make a diagnosis of silicosis. O'Quinn and its staff would collect the occupational and exposure histories from the Plaintiffs required to make the silicosis diagnoses. All of this information would then be provided to the medical professionals hand selected by the Firm and its attorneys and the referral lawyers including, initially, Dr. Ray Harron, Dr. Andrew Harron, Phillip H. Lucas and Dr. Barry Levy, among others. These medical professionals provided the Firm with medical reports and opinions diagnosing Plaintiffs with silicosis and various silicosis related diseases including Lupus, Tuberculosis, Rheumatoid Arthritis, Scleroderma or even Lung Cancer. Over the course of the silica litigation, the Firm paid over $1.7 million to Dr. Harron and N&M for their medical screenings, reports and referrals."
The complaint states: "For each of the approximately 2,000 clients represented by O'Quinn in the MDL, N&M was paid $335 per positive diagnosis for a chest X-ray and full exam. But if N&M referred the case, they were paid an additional $350-450 referral fee. Because of this fee structure, Mr. [Heath] Mason, the owner of N&M, testified that the emphasis was on attracting as many people as possible to the screenings and creating as many positive diagnoses as possible; as he stated, 'From a business standpoint of mine, you had to do large numbers.'"
Mason is not named as a defendant.
The lawsuit states that "from the outset of the litigation where a client did not actually have silicosis, the Firm, Mr. Q'Quinn, Laminack, Pirtle, and Martines knew that the information being provided to their medical professionals to make the necessary silicosis diagnosis was incorrect, thereby rendering any opinions by such professionals erroneous. But this was never disclosed to Plaintiffs. ...
"In the end, the Firm, Mr. Q'Quinn, Laminack, Pirtle and Martines, and later Steed and [nonparty Mike] Lowenberg, as well as the referring attorneys, were able to generate approximately $30 million in attorneys' fees and hundreds of thousands of dollars for the medical professionals and screening companies that they employed. They did this by placing their interests above those of their clients and by lying to their clients, the judicial system, Congress and the Silicosis Defendants; convincing them all that Plaintiffs had silicosis. Millions of dollars were the priority; Plaintiffs' health and wellbeing were afterthoughts indeed. ...
"Plaintiffs suffered injuries, both financially and mentally, in that they lived their lives believing they had been diagnosed with the incurable disease of silicosis while Mr. O'Quinn, the Firm and its attorneys and the referring lawyers reaped the profits of any false diagnosis, which was a product of their own making. ...
"The Firm and the referring attorneys, including Taylor, were involved in a conspiracy to have O'Quinn breach its fiduciary duties to Plaintiffs by falsely diagnosing them with silicosis. Moreover, based on information and belief, the Firm and its attorneys willfully suppressed the truth as to the activity or inactivity taking place on Plaintiffs' silicosis lawsuits."
Plaintiffs seek "the maximum allowable amount" of damages, and punitive damages, costs and attorneys' fees.
They are represented by F. Douglas Montague III with Montague, Pittman & Varnado of Hattiesburg.
Here are the defendants named on page 4 of the complaint, after more than three pages of plaintiffs: John M. O'Quinn & Associates, PLLC dba The O'Quinn Law Firm, John M. O'Quinn & Associates L.L.P., John M. O'Quinn, P.C., John M. O'Quinn Law Firm, PLLC, T. Gerald Treece, independent executor of the Estate of John M. O'Quinn, deceased, Richard N. Laminack, Buffy Martines, Thomas W. Pirtle, Paul Danziger, Rod R. De Llano, Danziger & De Llano, LLP Stacie F. Taylor and Abel Manji.