Searching over 5,500,000 cases.


searching
Buy This Entire Record For $7.95

Download the entire decision to receive the complete text, official citation,
docket number, dissents and concurrences, and footnotes for this case.

Learn more about what you receive with purchase of this case.

Sullo v. Kubosh

Court of Appeals of Texas, First District

November 19, 2019

GREGORY SULLO AND BRIAN ZIMMERMAN, Appellants
v.
FELIX MICHAEL KUBOSH A/K/A KUBOSH BAIL BONDING, PAUL KUBOSH A/K/A KUBOSH LAW OFFICE, Appellees/Cross-Appellants
v.
WILLIAM CARTER, SANDRA ARNAEZ, JASON ROCHA, EDUWIGIS SUASTE, SARA PADILLA, GRANT HIGHTOWER, WALTER LETHERMON, JONATHAN GLENN, KREGG GIBSON, GERRY CHANEY, JUAN ALVAREZ, JAIME GAYTKO, EDWARD CARNEY, PAUL COLLINS, CIRINO HERNANDEZ, PRESTON BAWA, MONICA WIRZ, EDRICH MACK, MERCY HAYES, JOSE ALAMO, RUBY SEPULVEDA, SEAN SIMON, KRISTAL OROZCO, JANET RAMIREZ-HERRERA, BALTAZAR MARTINEZ, SHELTON HARRIS, RANDALL STEVISON, BRIAN ARELLANO, FELIPE CAVAZOS, LARRY RICHARD, JEFFERY RHODES, HECTOR CUEVAS, CYNTHIA SANCHEZ, GINA TORRES, ROBERTO LARES, LEON TOUSANT, LINDA MARTIN, GREGORY BARNES, ELIZABETH GUERRERO, ALEICIA ROBERTS, ANA REYES, DERRICK RIVERS, DEVIN BARRIOS, CHRISTINA VILLANUEVA, PRISCILLA MUNOZ, JEANETTE MAYA, ERIC AYALA, FARID ABI-SAAB, JOE PECINA, ANDREW RAMIREZ, MAURICIO MENDEZ-BARRERA, MIGUEL DIAZ, PATRICK WASHINGTON, EARL HILTON, DOROTHY SCOTT, THOMAS PITTARD, JUANITA MARIN, JULIO TORRES, RAYMOND FORD, VIRGINIA KNAUFF, CHERRY AYO-VAUGHN, JOSE CAMPA, ONYEKACHI EKEZIE, RIGGO DOMINGUEZ, MARQUIS WILLIAMS, RICARDO TREVINO, JESUS CASTRO, EDUARDO VALDEZ, BOLIVAR SIERRA, EVA CASTILLO, GUSTAVO GARCIA, SETTEA MENEDO, MICHAEL YOUNGBLOOD, AND BRANDON NASH, Cross-Appellees

          On Appeal from the 333rd District Court Harris County, Texas Trial Court Case No. 2013-50819

          Panel consists of Justices Keyes, Kelly, and Landau.

          OPINION

          Evelyn V. Keyes, Justice

         This interlocutory appeal arises out of three consolidated lawsuits filed by William Carter and seventy-three other plaintiffs (collectively, "the Carter parties") against Felix Michael Kubosh, Kubosh Bail Bonding, Paul Kubosh, and Kubosh Law Office (collectively, "the Kuboshes") for violation of a civil statute prohibiting barratry. During the course of this litigation, the Kuboshes filed suit against Brian Zimmerman, the Carter parties' counsel of record, and Gregory Sullo, an attorney at Sullo & Sullo, LLP, a law firm that had initially represented the Carter parties before engaging Zimmerman to file suit on their behalf. Sullo, Zimmerman, and the Kuboshes all filed motions to dismiss the claims against them under the Texas Citizens Participation Act ("TCPA" or "the Act"). The trial court denied all three motions to dismiss.

         Sullo, Zimmerman, and the Kuboshes all appealed. Each of the appellants and cross-appellants argue that the trial court erred in denying their respective motions to dismiss under the TCPA.

         We affirm the trial court's denial of all three TCPA motions to dismiss.

         BACKGROUND

         Andrew Sullo and his brother, Gregory Sullo, are attorneys and partners in the Houston law firm of Sullo & Sullo, LLP. Andrew Sullo and Sullo & Sullo are third-party defendants in the underlying proceedings, but they were not parties to the TCPA motions discussed in this opinion and are not parties to this interlocutory appeal. Attorneys at Sullo & Sullo practice in multiple areas of the law, including, relevant to this case, defense and bonding services for traffic tickets and warrants arising out of unpaid tickets. Their competitors include Kubosh Bail Bonding, which is owned and operated by Felix Michael Kubosh, and Kubosh Law Office, which is owned and operated by Paul Kubosh.

         A. Civil and Criminal Statutes and Disciplinary Rule Prohibiting Barratry

         In 2011, the Texas Legislature passed Texas Government Code section 82.0651, entitled "Civil Liability for Prohibited Barratry." This statute provides, in relevant part:

(c) A person who was solicited by conduct violating Section 38.12(a) or (b), Penal Code, or Rule 7.03 of the Texas Disciplinary Rules of Professional Conduct of the State Bar of Texas, regarding barratry by attorneys or other persons, but who did not enter into a contract as a result of that conduct, may file a civil action against any person who committed barratry.
(d) A person who prevails in an action under Subsection (c) shall recover from each person who engaged in barratry:
(1) a penalty in the amount of $10, 000;
(2) actual damages caused by the prohibited conduct; and
(3) reasonable and necessary attorney's fees.
(e) This section shall be liberally construed and applied to promote its underlying purposes, which are to protect those in need of legal services against unethical, unlawful solicitation and to provide efficient and economical procedures to secure that protection.

Tex. Gov't Code Ann. § 82.0651(c)-(e). This statute became effective on September 1, 2011.

         Penal Code section 38.12(a), entitled "Barratry and Solicitation of Professional Employment," provides that a person commits the criminal offense of barratry if, with intent to obtain an economic benefit, the person:

(1) knowingly institutes a suit or claim that the person has not been authorized to pursue;
(2) solicits employment, either in person or by telephone, for himself or for another;
(3) pays, gives, or advances or offers to pay, give, or advance to a prospective client money or anything of value to obtain employment as a professional from the prospective client;
(4) pays or gives or offers to pay or give a person money or anything of value to solicit employment;
(5) pays or gives or offers to pay or give a family member of a prospective client money or anything of value to solicit employment; or
(6) accepts or agrees to accept money or anything of value to solicit employment. Tex. Penal Code Ann. § 38.12(a).
Section 38.12(b) provides that a person commits an offense if the person:
(1) knowingly finances the commission of an offense under Subsection (a);
(2) invests funds the person knows or believes are intended to further the commission of an offense under Subsection (a); or
(3) is a professional who knowingly accepts employment within the scope of the person's license, registration, or certification that results from the solicitation of employment in violation of Subsection (a).

Id. § 38.12(b).

         Penal Code section 38.12 dovetails with Rule 7.03(a) and (f) of the Texas Disciplinary Rules of Professional Conduct, which provides:

(a) A lawyer shall not by in-person contact, or by regulated
telephone or other electronic contact as defined in paragraph (f) seek professional employment concerning a matter arising out of a particular occurrence or event, or series of occurrences or events, from a prospective client or nonclient who has not sought the lawyer's advice regarding employment or with whom the lawyer has no family or past or present attorney-client relationship when a significant motive for the lawyer's doing so is the lawyer's pecuniary gain. . . .
. . . .
(f) As used in paragraph (a), "regulated telephone or other electronic contact" means any electronic communication initiated by a lawyer or by any person acting on behalf of a lawyer or law firm that will result in the person contacted communicating in a live, interactive manner with any other person by telephone or other electronic means. For purposes of this Rule a website for a lawyer or law firm is not considered a communication initiated by or on behalf of that lawyer or firm.

Tex. Disciplinary Rules Prof'l Conduct R. 7.03(a), (f), reprinted in Tex. Gov't Code Ann., tit. 2, subtit. G, app. A (Tex. State Bar R. art. X, § 9).

         B. Sullo's "Price Match Program" and Initial Contact with the Carter Parties

         Almost immediately after the civil barratry statute, Government Code section 82.0651, became effective in September 2011, Andrew Sullo informed individuals who inquired about bonds and representation for traffic tickets that were in "warrant status" that his office had a "price match program." Under this program, the individual would call a competing bail bond company to receive a quote for the price of the bond, and Sullo promised that his office would beat the quoted price by ten dollars. Prior to the individual's making the phone call, Sullo and the individual would review a "Disclosure & Agreement" form that described the price match program. This form included a paragraph that stated:

II. Potential Legal Action - Attorney [Sullo] has reason to suspect that upon Client [the respective individual] making Client's Price Match phone call to the bond company, the Bond Company will transfer the call to a law firm without Client's request or consent. Attorney believes this action may give rise to a civil cause of action against the bond company or law firm under a new barratry statute or other law which, if successful, may result in money damages for Client. In some instances, the bond company may also quote on behalf of an attorney or law firm which may also give rise to a cause of action. Client agrees to make this phone call knowing that these potentially illegal or unethical actions may occur by the bond company or law firm. After Client's phone call, Attorney will discuss with Client the potential for a legal cause of action by Client against the bond company. If Client wishes to pursue a legal cause of action against the bond company and Attorney believes a legal cause of action does indeed exist, Client will be required to sign a separate contact agreement with Attorney. By signing this Disclosure & Agreement, Client is not committed or obligated to hire Attorney to pursue a legal cause of action against the bond company.

(Emphasis added). The form also asked each individual for their permission to record their phone call to the competing bond company, stating, "This recording may be used, with Client's consent, to help prove the illegal and unethical action by the bond company or law firm."

         The program targeted the Kuboshes' law firm and bail bond company. Prior to the program participants' making their phone calls, Sullo provided each individual with a printed instruction sheet that set out certain questions for the participant to ask. These questions included whether the quoted price for the bond included attorney representation and whether the individual should report to the office of Kubosh Bail Bonding or Kubosh Law Office-which were located adjacent to each other-to complete paperwork.

         All seventy-four Carter parties called Kubosh Bail Bonding, and, in each case, an employee of Kubosh Bail Bonding answered the phone. When the Carter parties informed the employee that they had unpaid traffic tickets that were in warrant status, the employee transferred the call to Kubosh Law Office. A Kubosh Law Office employee then asked each of the Carter parties questions about their tickets, quoted them a price, and stated that the price included both the bond and legal representation because the office did not offer bonding services without legal representation. After the phone call ended, each of the Carter parties signed an attorney-client agreement with Sullo, in which the individual "retain[ed] Attorney to prosecute all claims against all necessary defendants arising from possible acts of barratry committed in attempting to obtain legal services." The representation contract included a provision allowing Sullo to associate with other attorneys and law firms to prosecute the case. Eventually, each of the cases was referred to Brian Zimmerman of Zimmerman Axelrad and Joe Fisher of Provost Umphrey. Each of the Carter parties ultimately signed a new attorney-client contract agreeing to the referral and to the division of any recovered attorney's fees among counsel.

         Most of the Carter parties made their phone calls to Kubosh Bail Bonding in September and October 2011, although several of the Carter parties made calls in 2012 and 2013. Seventy-two of the Carter parties met Sullo in his Houston office and made their phone calls there. Two of the Carter parties, Michael Youngblood and Brandon Nash, had traffic tickets from the City of Houston, but they were Beaumont residents, and both of these individuals met with Sullo in a conference room at the Beaumont office of Provost Umphrey to make their calls.

         C. The Civil Barratry Lawsuits

         Michael Youngblood, with Brian Zimmerman as his counsel of record, filed suit against the Kuboshes in Jefferson County, where he resided, on April 5, 2013. He asserted that the Kuboshes had violated the civil barratry statute, Government Code section 82.0651, and he alleged:

On or about September 19, 2012, Plaintiff contacted Kubosh Bail which is owned and operated by Michael Kubosh. Plaintiff had three traffic tickets on which he needed to post bonds because they were in "warrant status." Plaintiff contacted Kubosh Bail after receiving a Kubosh Bail Bonding business card containing Mike Kubosh's name, cell phone number, and office number. Based on this contact information, Plaintiff dialed the telephone number advertised on Mike Kubosh's bail bond business card. A certified transcript of the telephone conversation is attached hereto as Exhibit "A."
A representative for Kubosh Bonding Company answered the telephone and identified the business as "Kubosh Bonding Company." After Plaintiff informed the representative of Kubosh Bail that he needed a quote for bonds for traffic tickets, the representative placed Plaintiff's call on hold. Shortly thereafter, a different representative answered the telephone, and then identified the business as "Kubosh Law." See Exhibit "A." Upon information and belief, Kubosh Law is owned and operated by Paul Kubosh.
The Kubosh Law representative then quoted Plaintiff a price for a bond for his traffic cases. The representative from Kubosh Law further indicated that the price quoted for a bond included the posting of the bond as well as the fee for an attorney to represent Plaintiff on his traffic cases. Plaintiff never sought an attorney to represent him in connection with obtaining his bond. Id.

         He attached to his pleading a transcript of a conversation he had had with Michael Kubosh, which included a notation that an "unidentified male" whispered an instruction to Youngblood that he answer "no" to a particular question. This "unidentified male" was later identified as Andrew Sullo.

         William Carter, with Zimmerman as his counsel of record, filed suit in Harris County against the Kuboshes for violation of the civil barratry statute on August 28, 2013. Over the next two months, Carter amended his petition several times to add a total of seventy-one additional plaintiffs. The factual allegations in Carter's petitions were substantively identical to the allegations in Youngblood's petition. The Kuboshes answered Carter's lawsuit on September 30, 2013, and they asserted counterclaims, including claims for injunctive and declaratory relief relating to their contention that the civil barratry statute violated their constitutional rights.

         Brandon Nash, also with Zimmerman as counsel of record, filed a separate suit in Jefferson County against the Kuboshes for violation of the civil barratry statute on October 1, 2014. The factual allegations in his petition were substantively identical to the allegations in Youngblood's and Carter's petitions.

         D. The Kuboshes' Counterclaims and Third-Party Claims

         During the course of discovery on the Carter parties' claims and the Kuboshes' counterclaims in this litigation, the Kuboshes learned that Andrew Sullo had been involved with the Carter parties and their calls to the Kuboshes. On October 21, 2014, the Kuboshes amended their counterpetition against the Carter parties and filed a third-party action against Andrew Sullo and his law firm, Sullo & Sullo, LLP. The Kuboshes' amended counterpetition contained the following allegations:

[Andrew] Sullo orchestrated each and every Carter Plaintiff's and another 64 barratrously-solicited strangers' calls from Sullo's own [Sullo & Sullo] office (as well as other locations) to Kubosh Bonding using phone numbers Sullo provided each Carter Plaintiff, along with pretextual "price match" scripts, and previously-prepared form affidavit instructions listing Kubosh Law as the intended ultimate recipient of each Sullo-instructed call.
Sullo masterminded an attorney-crafted scheme to perpetrate a Fraud on the Court, defined in Black's Law Dictionary and case law as "a lawyer's or party's misconduct so serious that it undermines or is intended to undermine the integrity of the proceeding" such as "bribery of a juror and introduction of fabricated evidence." Sullo surreptitiously recorded every Carter Plaintiff's call. Sullo then filed this suit to retaliate against the Kubosh Brothers . . . .
This Court should dismiss the Carter Plaintiffs' claims because not even one "was solicited" by Kubosh Law, to use the passive-tense operative verb in the Civil Barratry Statute. Sullo and [Sullo & Sullo] have conspired with, and have been aided and abetted by their counsel, Zimmerman, and his firm, Zimmerman Axelrad, to barratrously solicit, file, and maintain the Carter Plaintiffs, Youngblood and Nash's frivolous lawsuits to reap undeserved economic benefits where their perceived pecuniary gain was a significant motivation for the filing and maintenance of these lawsuits.

         The Kuboshes' amended counterpetition sought injunctive and declaratory relief, arguing that the civil barratry statute was unconstitutional as applied to them. The Kuboshes also asserted claims for common-law fraud and civil conspiracy against the Carter parties, Andrew Sullo, and Sullo & Sullo, alleging that the Carter parties made their calls to the Kuboshes under false pretenses because they never intended to purchase bonding services from the Kuboshes.

         Additionally, the Kuboshes brought claims in this suit against the Carter parties, Andrew Sullo, and Sullo & Sullo for violation of the federal Racketeer Influenced and Corrupt Organizations Act ("RICO"), alleging that the Carter parties, Andrew Sullo, and Sullo & Sullo formed a criminal enterprise under RICO "to serve as a flexible vehicle for Third-Party Defendants Sullo and [Sullo & Sullo's] filing of a vengeful, Fraud on the Court lawsuits to destroy or degrade Sullo's competitors Michael Kubosh and Paul Kubosh by embroiling them in legally meritless but expensive and time-consuming 'civil barratry' litigation." The Kuboshes alleged violations of RICO as well as conspiracy to violate RICO.

         As predicate acts serving as the basis for RICO liability, the Kuboshes alleged that the Carter parties, Sullo, and Sullo & Sullo engaged in mail fraud and wire fraud. The Kuboshes alleged:

By sending and receiving courthouse correspondence and service copies of court filings in the U.S. mail, and by using the U.S. mail to communicate with one another in furtherance of their RICO scheme of fraudulently misrepresenting Sullo's efforts to barratrously orchestrate a Fraud on the Court to make money under the guise of conducting "price checks" of the Kubosh Brothers, each of the Carter Plaintiffs and Third-Party Defendants Sullo and [Sullo & Sullo] have engaged in mail fraud in violation of 18 U.S.C. § 1341.
By repeatedly using the telephone and by tying up the Kubosh Bonding and Kubosh Law telephone lines to fraudulently misrepresent themselves as ordinary consumers of bail bonding and/or legal services, while concealing such facts as Sullo's presence, Instructions, and interest in carrying out his . . . vendetta against the Kubosh Brothers, each of the Carter Plaintiffs and Third-Party Defendants Sullo and [Sullo & Sullo] have engaged in one or more acts of wire fraud in violation of 18 U.S.C. § 1343.

         The Kuboshes alleged that each "fraudulent 'price check'" call by the Carter parties "constituted a separate, independent act of wire fraud that together comprise a pattern of racketeering activity."

         In April 2015, the judicial panel on multidistrict litigation transferred Nash's and Youngblood's suits-both filed in Jefferson County-to the Harris County district court where Carter's suit was pending for resolution of pretrial matters. See Tex. Gov't Code Ann. § 74.162 (providing for transfer of "civil actions involving one or more common questions of fact pending in the same or different constitutional courts, county courts at law, probate courts, or district courts to any district court for consolidated or coordinated pretrial proceedings, including summary judgment or other dispositive motions, but not for trial on the merits"). All three suits currently remain pending in the Harris County district court.

         Although in the years this litigation has been pending the Carter parties have filed amended petitions in this case, adding factual details, the only cause of action they have asserted against the ...


Buy This Entire Record For $7.95

Download the entire decision to receive the complete text, official citation,
docket number, dissents and concurrences, and footnotes for this case.

Learn more about what you receive with purchase of this case.