Are Handshake Retainers a Sign of Shaky Attorneys, Experts or Both?

Being suspect of handshake agreements is a perspective reinforced by the recent case of a Texas hurricane damages expert witness who sued the attorney that retained him for $44,000 in unpaid fees from a verbal agreement, and the case continues some five years after the initial fees in dispute were billed.

In Scott Law Offices v. Quinney Holdings, LLC, NO. 01-19-00739-CV (Tex. App. Jul. 16, 2020), the construction damages expert witness, Darrell Quinney, sued the attorney, Danny Ray Scott and Scott's law firm in 2017 for failure to pay his invoices from February 2015 through April 24, 2016. In April 2018, Quinney and Scott entered into a Rule 11 Settlement Agreement, but Scott allegedly only paid the first two $500 installment payment. In March 2019, Quinney file Second Amended Petition to enforce the Settlement Agreement. Scott filed a motion to have the trial moved to the country where he now had his law office, some 150 miles. The trial court denied the motion. Scott appealed. The appeal was denied. The case continues.

This was not Quinney's first dispute over unpaid expert witness fees. He sued Houston attorney Steve Mostyn and Mostyn's law firm for $700,000 in May 2016, alleging breach of contract. For some 15 years, Mostyn had specialized in property damage cases, making an estimated $150 million in attorney's fees suing insurers in the aftermath of Hurricane Ike and every major hailstorm to strike Texas, using a mass-tort model he had created with aggressive advertising campaigns.

Mostyn had paid Quinney some $778,000, but had refused to pay the remaining $613,000 Quinney had billed. In March 2017, they settled out of court. In November 2017, Mostyn committed suicide, and with it went the lucrative insurance damage cases.

Quinney has had some bit of fame for his part in what has been labeled the “Progressive Claim Syndrome” which Texas insurers have fought against. The allegation is that the initial insurance claim reports little damage as small claims draw less attention from insurers. Then the claim is adjusted as the damages and types of losses claimed gradually increase, with new parties becoming involved in the claim, such as contractors, public adjusters and more attorneys.

In one example, USAA Texas Lloyd's Co. v. Menchaca, No. 13-13-00046-CV (Tex.App., Corpus Christi, July 31, 2014), the residential insurance claim was initially judge to be beneath the deductible. Quinney prepared an estimate of $29,600 when the lawsuit was first filed against USAA. Nearly a year later, another estimate, $38,439, then eight months later, another estimate, $76,348.

The jury ended up awarding only $11,350 in actual damages, not of course including the attorneys' fees. In a similar case with similar tactics, Bias v. Standard Guaranty Insurance Co., 385 Fed. Appx. 398 (5th Cir. 2010), Quinney's expert testimony and report were excluded as not being based on sufficient facts or data.

Of course, there may be good reasons for handshake agreements, and suing attorneys for expert witness fees and having expert testimony and reports excluded may not stop other attorneys from retaining such an expert witness. Maybe it should.