Texas Court Pioneers Trial By Zoom In Atty Fee Dispute

By Daniel Siegal
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Law360 (April 22, 2020, 10:05 PM EDT) -- A Texas state court judge charted a new path for trials during the coronavirus pandemic Wednesday when he held a one-day bench trial through videoconferencing service Zoom, overcoming technical difficulties to hear a dispute over roughly $96,000 in attorney fees stemming from an insurance case.

Zoom advertising is displayed in New York City before the company's initial public offering on April 18, 2019. On Wednesday, the videoconferencing technology was used to conduct a bench trial in Texas. (AP)

Harris County Judge Beau Miller made the move to hold the trial online after the Texas Supreme Court issued a pair of emergency orders mandating that all hearings be conducted remotely for the time being. Courts across the country have suspended in-person proceedings to comply with social distancing requirements from public health authorities.

On Wednesday morning, the Zoom conference included Judge Miller; attorneys Richard Daly and John Black of Daly & Black PC, who represented plaintiff Adil Ahmed; James Old of Hicks Thomas LLP, representing insurer Texas Fair Plan Association; and Dwayne Newton, an expert called by the TFPA.

Judge Miller opened the proceedings by acknowledging that the bench trial had an audience, as it was being separately livestreamed on the court's website.

"The cat is out of the bag and we have some observers around the state and around the country maybe. Welcome to the 190th," he said, referring to the 190th District Court of Harris County.

The trial stems from an insurance dispute after Ahmed's house suffered damage during a hailstorm in in 2015 but TFPA refused to pay for repairs, saying the damage fell under the $9,506 deductible in his policy.

Ahmed sued, and an appraisal panel found that the damage was actually almost $23,000. TFPA paid Ahmed the roughly $13,000 owed under his policy but failed to pay any interest or attorney fees, which Ahmed contends were due because of its initial refusal.

Ahmed's attorneys argued to Judge Miller on Wednesday that TFPA should pay roughly $96,000 in attorney fees, with Daly saying during a brief opening statement that the fee amount was driven by TFPA's own choices in the suit.

"The defense chose a path of relentless litigation even after their people admitted they had improperly failed to pay the claim," he said. "We're going to ask you to award our client $96,000 in attorneys fees. That's the price of the bed TFPA made, and it's about time they lied in it."

Old countered during his opening statement that there was no question Daly's firm had put "a lot of effort and a lot of paper" into contesting motions in the suit, but Ahmed was not a prevailing party under the law and thus is not entitled to fees.

"All the fees were generated on claims that they did not win, cannot win, and in fact which they withdrew," Old said.

He noted that Ahmed had dropped the claims for breach of contract and bad faith denial of coverage that were in his complaint.

"TFP did everything it conceivably could do to make this case be efficient, make it cost effective and put whatever money was owed, if any, to Mr. Ahmed in his pockets," Old added.

The trial then proceeded with Black examining his partner Daly about the work they had put into their case and the data underlying the fee request.

TFPA's expert Newton — who said he usually practices in Harris County but had been stuck in California since early March — then testified that he believed Daly and Black were using too high an hourly rate in their calculations.

Judge Miller closed the day of testimony by asking the parties to submit proposed findings of fact and conclusions of law within two weeks, saying he would issue a written ruling after that.

Throughout the trial there were sporadic interruptions involving Zoom, most notably the several times the court reporter told the parties she could no longer hear what they were saying. At one point message notifications could be heard coming from Black's computer, which he attributed to his "family group chat" before turning the sounds off.

Judge Miller noted that more than 2,000 viewers had watched portions of the trial throughout the day.

All of the attorneys were wearing suits — the court's website had highlighted the need for counsel to wear professional attire, which has been a problem for some attorneys who have attended teleconference hearings during the pandemic.

Ahmed is represented by Richard Daly, John Black and Maria Gerguis of Daly & Black PC.

TFPA is represented by James Old and Maggie Neusel of Hicks Thomas LLP.

The case is Ahmed v. Texas Fair Plan Association, case number unavailable, in the 190th District Court of Harris County, Texas.

--Editing by Adam LoBelia.

For a reprint of this article, please contact reprints@law360.com.

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