David Ayers

As part of their representation of Scott Martin in a large variety of matters, Philip Werner and David Ayers represented Scott in a shareholder derivative and individual suit involving its investment in Martin Resources Management Corporation (“MRMC”), a closely-held energy corporation in the business of transportation, storage, terminaling and processing of energy resources.

Werner and Ayers prosecuted causes of action against members of management and the Board of Directors for, among other claims, shareholder oppression, breach of fiduciary duty, wrongful entrenchment and dilution, abuse of control, gross mismanagement, and fraud stemming from the Directors’ alleged improper issuance of well over $50 million of MRMC stock for the purpose of entrenching management and diluting certain minority shareholders.

MRMC and the MRMC Employee Stock Ownership Trust also opposed Martin and KCM in this action, and, along with the other defendants, asserted counterclaims for over $20 million in alleged damages against all plaintiffs and other third parties. After two years of intense litigation, the case settled favorably for Martin and KCM in excess of $300,000,000 on October 2, 2012.

In response to Scott Martin’s lawsuit against MRMC in Harris County, MRMC (under the direction of Scott’s brother), sued Scott in Longview (Gregg County), Texas. In that case, MRMC alleged that Scott breached his fiduciary duty by filing the Harris County lawsuit, alleging that the act of filing the lawsuit caused MRMC to lose financing. The potential liability to Scott was massive, and Scott – who lived in Houston, not Longview – faced a very well-funded corporate opponent that was well-known in Gregg County. MRMC presented a damage model of over $80,000,000 while arguing for a total award (with punitive damages) of $150,000,000. Such a judgment would have been catastrophic to Scott.

After a two-week jury trial in Gregg County, the jury returned a very favorable verdict to Scott: an award of just under $2 million. The entire dispute, including nearly a dozen other related cases, settled within the next year.

On behalf of Scott Martin and his partnership, Philip Werner and David Ayers sued Andrews Kurth for malpractice after a Texas appeals court refused to enforce a settlement agreement when an earlier version of the agreement contained provisions that would have protected Scott. Because the later agreement cancelled all prior negotiations, the earlier version was unenforceable as well, leaving Scott with none of its protections. In November 2015, a Harris County jury in 234th District Court found that Andrews Kurth committed malpractice and awarded our clients economic damages totaling $197.6 million. The National Law Journal reported this as the sixth largest verdict in 2015 and it has been reported as the largest jury verdict ever in a legal malpractice case. The case settled under a confidentiality agreement in March 2016, before entry of judgment.

We defended a law firm accused of tortious interference and fraud based on allegations that the law firm, in pursuing enforcement of an arbitration award, wrongfully prevented the transfer of certain securities. According to the plaintiff, the decline in the value of the stock during the period of the so-called “hold” caused the plaintiff damages. The district court granted summary judgment in favor of our law firm client, reasoning that the law firm’s qualified immunity and privilege protected it from the plaintiff’s claim. The First Court of Appeals, in a reported opinion, affirmed the district court’s take-nothing judgment.