Local law enforcement set to cash in on illegal game room proceeds through asset forfeiture

Game room bonanza to be tapped by law enforcement agencies 

To be sure, HPD and Harris County are not in the business of running gambling operations, not to mention illegal ones, but that does not mean that law enforcement cannot share in the profits from this particular kind of vice; - as a bounty for cracking down on it, as it were.

In a slew of civil forfeiture lawsuits filed last week, the County's District Attorney's Office seeks court approval to keep loads of cash and gold seized in raids on illegal gaming operations that the owners had stashed away in bank safe deposit boxes and other hiding places. Compared with the typical seizures of property in connection with criminal investigations, such as small-scale drug busts, the amounts are staggering. $313,023.03 in Cause No. 201563147 and $271,200.00 in Cause No. 201563133, plus 27 gold bars and 4 watches.

In personal injury cases, the amounts of damages, if quantified in the pleading at all, are not particularly meaningful because they are not liquidated. The dollar amount sought may be considered newsworthy in a high-profile case, but it is no more than the price tag that the plaintiff or the plaintiff's lawyers put on the injury, and the court or the jury will have to determine the amount, if any damages are awarded at all.

But in the case of forfeiture proceedings, the money is already in the hands of law-enforcement, and has been accounted for. The only issue is whether the authorities gets to keep it as "contraband" rather than having to return it to the people from which the assets were seized in the course of a criminal investigation culminating in a raid and/or arrest.

The forfeiture cases are filed by the District Attorney's Offices in the name of the State of Texas and therefore show the State as the Plaintiff.

Strangely, in these type of civil proceedings (albeit relating to criminal cases), the amount of money is used in lieu of the name of the defendant(s) in the case style. The individuals from whom the money or other assets were taken are identified in the body of the pleading, and in the sworn notice of seizure signed by an officer involved in the law enforcement operation. They may contest the seizure, but if they are guilty of the underlying crime, it may make little sense, assuming they even have the wherewithal to mount a legal challenge.

Forfeiture is governed by Chapter 59 of the Code of Criminal Procedure, but Harris County such cases are filed in civil district courts.

Because of its large size and caseload, Harris County has many district courts that divide the caseload among them by case type: criminal, family, juvenile, and nonfamily civil cases.

Memorial Hermann faces class-action accusing the nonprofit hospital system of fleecing ER patients without insurance by charging them astronomical rates

Memorial Hermann Hospital System does not only sue scores of patients over unpaid hospital bills, it is also charging emergency room patients a multiple of the rates paid by private insurers and government programs such as Medicare, according to a class-action petition filed last week in Harris County District Court. 

The pleading alleges that the rates charged are grossly excessive, and that they far exceed the reasonable value of the services provided. The lawsuit was filed on behalf of one former Memorial Hermann ER patient, who complains that her bill was excessive, and seeks class certification on behalf of other whose hospital bill was not covered by insurance, and who were similarly overcharged.
 
Memorial Hermann has a practice of suing patients with unpaid bills on "sworn account" (with bills attached that have all meaningful detail removed, ostensibly for privacy reasons), leaving patients sued for the cost of medical treatment (excessive or otherwise) virtually without recourse to challenge the reasonableness of the bills, especially if they cannot afford legal representation, and do not know how to fight a sworn-account suit and contest the reasonableness of the amounts printed on the hospital's billing statement. Additionally, the law firm that handles the non-profit hospital's debt collection litigation routinely requests and receives substantial attorney's fees.
           
The class-action seeks a declaratory judgment that Memorial Herman's billing practices for ER patients without insurance, -- i.e. self-pay patients -- are improper and excessive, and that the hospital system is only entitled to be paid for charges that are reasonable. The lawsuit also challenges the contracts that ER patients are forced to sign upon admission as meaningless because no information is provided about the billing rates to which the patients purportedly agree (making the price an "open term" in the contract), and that the charges are - in fact - not standard because the rates for other patients are much lower and are either set by the government or negotiated with private insurance providers, with different rates resulting depending on the particular payor and the deal negotiated with it.    

EXCERPTS FROM THE CLASS ACTION PETITION 

Cause No. 2015-61950, Nataliya Shahin, on behalf of herself and all others similarly situated, v, Memorial Hermann Health System, e-filed with the Harris County District Clerk on October 16, 2015, and assigned to the 333rd District Court.  

Contractor sues defunct Fish & The Knife sushi restaurant for cost of installing margarita machine

Contractor sues defunct sushi bar and restaurant 

alleging they failed to pony up   

In a lawsuit filed October 14, 2015 in Harris County District Court Eric Damshekan alleges that the Fish & The Knife Sushi Bar & Grill restaurant, formerly at 7801 Westheimer, did not pay his bill for installation of a margarita machine.

Damshekan states that he filed a contractor's lien in January 2015 for $2,467.00 and now seeks to foreclose the lien to collect the amount owed. He also requests attorney's fees and court costs. The Original Petition was signed by Adam W. Fomby with the Houston law firm FOMBY & ZARGHOUNI LLC. Public records show that Fish & The Knife, Inc. has forfeited its right to do business in Texas.

Damshekan filed the contractor's lien against the property and has named the property owner as a defendant in addition to the restaurant. According to HCAD data, the land is appraised at a value in excess of $2 mil.

A Latin American beef-centric concept -- Churrasca Brazilian Steakhouse -- has since replaced the ill-fated fish & knife sushi club at 7801 Westheimer.
 

Cause No. 2015-61100; Eric Damshekan v Fish & The Knife Inc. d/b/a Fish & The Knife Sushi Bar & Grill, and Karia Y WM Houston Ltd; filed with the Harris County District Clerk 10/14/2015 and assigned to the 80th District Court.

FISH & KNIFE IN COURT

It is not the first lawsuit against the failed restaurant. In January 2015, CINTAS-R.U.S., L.P., filed suit against Fish & The Knife, Inc. on a textile rental services contract in county court, and later obtained a default judgment for $13,260.23 (most of which represented charges for the remainder of the contract term) and $2,500 in attorney's fees.

The hospitality services company attempted to have the judgment executed, but the effort was unsuccessful as the sushi operation on the corner of Westheimer and Stoney Brook had been shut down, and no assets were seized. Accordingly to the Constable's official report, the fish-and-knife signage was still on display.

Cause No. 1057339;  CINTAS RUS LP V FISH & KNIFE INC., Harris County Civil Court at Law No. 2.

Earlier, in July 2014, another contractor, International Hardwood Flooring LLC, sued both the restaurant and the property owner on an unpaid bill for flooring, which had also resulted in a mechanic's lien. That lawsuit was likewise filed in a county court at law and resulted in a summary judgment in favor of the contractor that also confirmed the lien and authorized foreclosure. The claim against the restaurant was dropped. The property owner satisfied the judgment and the contractor filed a release.

Cause No. 1049629; International Hardwood Flooring, L.L.C. vs. Fish & The Knife, Inc and Karia Y WM Houston, Ltd., Harris County Court at Law No. 1.

Not your typical property tax protest - Chief Appraiser sues Valero over Appraisal Review Board's reduction of appraised value of oil company's property

Sands Stiefer, Chief Appraiser of the Harris County Appraisal District (HCAD) yesterday filed suit against Valero Refining Company of Texas, requesting that the order of the Appraisal Review Board reducing the appraised value of Valero's property for 2015 tax year, which the Board entered as a result of Valero's administrative protest, be set aside as too low. 

Stiefer v Valero Refining Company of Texas 

Acting in this official capacity, Stiefer complains about the Appraisal Review Board's reduction of the total appraised value of the subject property from $423,898,900 to $300,000,000, characterizing the adjusted value "far lower than the actual market value of the subject property as of January 1, 2015." 

"If allowed to stand," the pleading continues, "such value would permit the subject property to escape its fair share of the tax burden in Harris County, Texas, thereby increasing the tax burden on other taxpayers in the County." 

Stiefer asks the court for a judicial determination of value, and to increase the appraised value of the property on the appraisal roll.  

The petition was filed for Stiefer by Andrea Chan, an attorney with OLSEN & OLSEN, L.L.P., a law firm with offices at that Wortham Tower on Allen Parkway. 

Case info: Cause No. 2015-60014, Sands Stiefer, in his capacity as Chief Appraiser of the Harris County Appraisal District v. Valero Refining Company of Texas, filed 10/8/2015 with the Harris County District Clerk, and assigned to the 295th District Court.

THE SUBJECT PROPERTY: VALERY REFINERY 

AT 9701 MANCHESTER ST HOUSTON TX 77012 

HCAD ACCOUNT 0401980000012 Land and Improvements 

Breakdown by value of land and value of improvements 

 HCAD ACCOUNT 0401980000103 Pollution Control 

Owner of Komodo's Pub in Midtown files lawsuit against roofing contractor over water damage and lost profits caused by temporary closure

MIDTOWN BAR SUES ROOFING CONTRACTOR OVER RAIN DAMAGE 

In a petition filed October 6, 2015 in Harris County District Court, Komodo's owner alleges that the bar hired Strata Roofing & Construction LLC to repair its roof for $15,580.00 and that the contractor's workers "allowed rain to flood the premises", forcing it to shut its doors for 12 business days.

As a result, the petition states, the popular neighborhood bar suffered damages in the form of $15,000 in lost profits, $6,000 in wages paid to employees while it was closed, and incurred additional expenses of $500 for paint.

The pleading further alleges that the contractor refused to pay for the alleged damages after having been sent a demand letter, and that the roofing company instead filed a mechanic's lien on the property located at 2004 Baldwin St. Houston TX 77002 for $9,640.00 on August 31, 2015.

Komodo says that the underlying contract for roofing repairs was signed on June 21, 2015 and that under the term of the contract Strata Roofing accepted responsibility for any damage that was directly caused by water intrusion during rainfall. It claims that the damages would not have occurred but for the contractor's negligent conduct in performing the job.

Komodo seeks relief for breach of contract, negligence, and also makes a claim under the Deceptive Trade Practices Act (DTPA). It seeks a total of $21,500 in actual damages, attorney's fees, interest, and court costs. Additionally, Komodo seeks a judicial declaration that the lien filed by the contractor is invalid. It requests that it be awarded its attorney's fees on the breach of contract claim, and also references the Property Code and the Declaratory Judgments Act as a basis for recovering attorneys fees that were necessary to remove the mechanic's lien filed by the contractor, which it claims is invalid.

Komodo's is an assumed name of Lizzard's Midtown, Inc, which was formally named as the plaintiff in this civil action. The company's law firm is MONSHAUGEN & VAN HUFF, P.C. and one its owners, Albert T. Van Huff, signed the original petition. Two other lawyers are also shown on the address block: Stephanie B. Donaho and Amy L. Schlaffer.

Defendant STRATA ROOFING & CONSTRUCTION, LLC has not yet been served with citation and has not answered the lawsuit. Therefore, it is not known who will represent them, and how they will defend the lawsuit. Based on their filing of a mechanic's lien in the property records of the Harris County Clerk's Office, which indicates that they have not been paid the full contracted-for price for the job, they will likely assert a counterclaim against the owner of the bar.

CASE INFO: Cause No. 2015-59375, Lizzard's Midtown, Inc. v. Strata Roofing & Construction, LLC, filed 10/6/2015 with the Harris County District Clerk, and randomly assigned to the 234th District Court, Harris County, Texas.

Attorney sues over bad advice about how to structure lawfirm to reduce tax bite

Catherine Benouis, a family law solo based in Austin, sought the advice of other professionals on how to restructure her lawfirm to minimize her tax bill and ran afoul of IRS rules as a consequence, according to the petition filed on her behalf on October 7, 2015 by another lawyer, Laura Richards Sherry, with Dallas-based THE HARRIS FIRM, in Harris County District Court.

 

Suing both in her own name, and in that of the lawfirm entities - CATHERINE BENOUIS, P.C. and BENOUIS LAW LTD, LLP - Benouis states that she had been practicing as a sole practitioner and that she was provided faulty legal and accounting advice regarding the benefits of reorganizing of her practice, which was supposed to relieve her from having to pay self-employment tax under a limited partnership structure.

She alleges that she later had to amend her tax returns and pay past-due self-employment tax because the IRS determined that the limited partnership structure does not provide a basis for non-payment of self-employment tax with Benouis as the sole individual partner in the partnership, performing the majority of legal services on behalf of the law firm, and acting as a partner rather than as an ordinary investor. She alleges that the Defendants represented the scheme as viable and legal when they should have known better.

Benouis names six defendants. The list includes both individuals and entity defendants: Loren R. Cook; Loren R. Cook, P.C.; Loren R. Cook & Associates, Ltd, LLP; Conrad Cook & Associates, Ltd, LLP; Ronald Mcelmurry; and November Consultants, LLC.
 
In her 19-page original petition Benouis invokes theories of fraud, negligence, negligent misrepresentation, and breach of fiduciary duty in addition to breach of contract. She also pleads the discovery rule, apparently because at least some of the causes of action would otherwise be time-barred. Benouis sues for restitution of the fees she paid the defendants, back taxes, penalties, and interest owed to the IRS, which she attributes to the defendants' wrongful conduct, and professional fees paid to CPAs for assistance with the IRS audit and the amendment of the tax returns.

Excerpt from Original Petition in Attorney's suit complaining of
faulty tax advice, and the financial aftermath of following it 

Interestingly, it appears that she seeks to hold the defendants liable for the self-employment taxes that she was ultimately not able to avoid, rather than merely the penalties and other costs resulting from their nonpayment and the need to file amended tax returns.

Cause No. 2015-59511, assigned to the 80th District Court, Harris County, Texas.

Harris County files suit to cash in on Volkswagen emissions test scandal ... and here is a copy of the complaint

Harris County loses no time and files suit against Volkswagen and Audi over their manipulation of vehicle emissions testing, alleging violations of Texas state law, and seeking monetary damages, but not injunctive relief. 
   

Apparently they were in such a hurry that the case, filed September 30, 2015 with the Harris County District Clerk and assigned to 234th District Court (Judge Wesley R. Ward), was erroneously classified as an appeal from a Texas Alcoholic Beverage Commission (TABC) decision. But the benefits of the County hiring multiple private lawfirms to help it go after the VW bonanza are already paying off, -- not in terms of spoils, but in terms diffusion of responsibility. No telling really who can take credit for the mistake. Multiple lawyers' names are on the pleading, four of whom signed the original petition (elsewhere called complaint). The County Attorney's signature appears on the top of the signature and address blocks (which is significant under Rule 8), but the Civil Case Information Sheet was filled out and signed by one of the private attorneys. At least it won't have any substantive effect on the lawsuit. Case type categories and case information sheets are merely for statistical reporting purposes. 

RULE 8 OF THE TEXAS RULES OF CIVIL PROCEDURE 

ORIGINAL PETITION BY HARRIS COUNTY, TEXAS

AGAINST VOLKSWAGEN GROUP OF AMERICA, INC. 

AND AUDI OF AMERICA, LLC  

VOL