No New Trial For Texas Atty Over $6M Litigation Loan

By Michelle Casady
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Law360 (June 16, 2020, 7:01 PM EDT) -- A Texas state court judge won't give an attorney another shot to defeat claims he defaulted on a $6 million loan from a litigation funder, despite the attorney's argument his case was derailed by confusion over coronavirus-related court closures.

In an order made publicly available Tuesday, Harris County District Judge Elaine Palmer declined to overrule her April 2 summary judgment ruling in favor of litigation funder Series 1-Virage Master LP. She found in April that Sulphur Springs, Texas, law firm B. Gregg Price PC and principal B. Gregg Price owe Virage about $3.2 million in principal and nearly $2.8 million in interest.

Price, a personal injury attorney, had asked for a new trial, citing confusion over deadlines in the case as the coronavirus pandemic hit.

He told the court he believed the April 2 hearing had been canceled because of coronavirus-related closures of the courthouses. The motion had specified a hearing would take place, and Price's attorneys said they were not informed by Virage that the motion would instead be considered by the court on submission. When Price filed a response to the motion for summary judgment on April 1, Virage moved to strike it as too late to be considered, arguing Price busted the March 26 deadline to respond.

Price has argued that the note and the guarantee in this case contain electronic signatures and are not the signatures of Price or his firm and therefore can't be enforced because there's no evidence showing the parties intended to be bound by the Uniform Electronic Signature Act.

John C. Eichman of The Eichman Law Firm PLLC, who represents Price, told Law360 on Tuesday the fight for a new trial isn't over.

"With all due respect to the trial court, we disagree with the rulings and we do intend to appeal," he said. "Both Mr. Price and Gregg Price PC will be pursuing an appeal."

After filing suit in October, Virage asked Judge Palmer for final summary judgment on March 12, saying this dispute is a "simple promissory note case." Price personally guaranteed a loan in July 2015 and later defaulted, Virage said.

Virage alleged that Price defaulted on the loan both by failing to provide it with quarterly case status updates and by failing to give it 50% of fees the firm earned on 40 "litigation matters" that Virage's loan funded.

In April 2019, related entity Virage Capital Partners secured a $4 million judgment against Texas and New York law firm Berg & Androphy and its name partner. Harris County Judge Caroline Baker found the firm owed $2.8 million in principal plus interest and fees totaling more than $1.2 million.

And in late May, Virage Capital Management brought claims against Pierce Bainbridge, alleging that the firm defaulted and owes $65 million.

The firm vowed to appeal at the time, but a record of that appeal could not be located in online records Tuesday.

Counsel for Virage did not immediately respond to a request for comment Tuesday.

Virage is represented by Ashish Mahendru and Darren A. Braun of Mahendru PC.

Price is represented by Alan S. Gerger of The Gerger Law Firm PLLC and John C. Eichman of The Eichman Law Firm PLLC.

The case is Series 1-Virage Master LP v. B. Gregg Price PC and B. Gregg Price, case number 2019-74357, in the 215th District Court of Harris County, Texas.

--Editing by Stephen Berg.

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

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