One of the enduring law firm-client relationships of the past generation in Texas has been that between the family of Dallas billionaire Ross Perot and the Dallas-based firm of Hughes & Luce, LLP. The firm long represented Perot personally and his various companies, including EDS while Perot was building the company into a computer-services giant before selling it to General Motors in the mid-1980’s for $2.4 billion. The firm has continued to represent the Perot family over the years, including Ross Perot, Jr., who has become a wealthy real estate developer in the Dallas area.
Well, based on this Ft. Worth Star-Telegram article, it’s safe to say that the Perot family’s relationship with Hughes & Luce is at an end. Ross Perot Jr. is suing the firm in Tarrant County (Ft. Worth) District Court for malpractice in connection with the firm’s allegedly botched handling of Perot’s attempted acquisition of a mothballed $20,000 Air Force trainer jet for a planned aviation museum. Perot Jr. alleges in the lawsuit that the firm’s handling of the failed purchase cost him millions in legal fees and exposed him to federal criminal charges.
How’s that for a divorce petition?
The lawsuit stems from Perot Jr.’s attempt to purchase a Northrop T-38 Talon from the commissioners of Carbon County, Utah in order to donate the jet to the Alliance Heritage Museum, a nonprofit organization that for years ran an annual Fort Worth air show to raise money for a brick-and-mortar museum. Unfortunately, a private party such as the museum apparently cannot possess an Air Force jet and attempting to do acquire one exposes one to a federal criminal laws, a small detail that Perot Jr.’s lawsuit claims that Hughes & Luce initially overlooked. Then, after the expenditure of a couple of million in attorneys’ fees, Perot Jr. contends that a couple of Hughes & Luce lawyers belatedly discovered that Perot and the Alliance museum project may have amounted to a criminal conspiracy to obtain aircraft parts illegally, which is a federal offense. Perot Jr. asserts that Hughes & Luce even researched their own legal exposure in that conspiracy and then billed him for that research.
Although a good offense is not usually the best defense in legal malpractice cases, Hughes & Luce is apparently ignoring that general rule in this particular lawsuit. Earlier this month, the firm filed an answer and a counterclaim for about $375,000 in unpaid legal fees that contends that Perot Jr. concealed crucial information from the firm, tried to hide government-owned property and — contrary to the firm’s advice — even lobbied an active Air Force officer who Perot Jr. was recruiting for a job to help stop the criminal investigation of Perot Jr. According to the article, Perot Jr. spokesman Mark Palmer — who used to work in investor relations for Enron (it’s really a small world in Texas business, isn’t it?) — denied the firm’s charges on behalf of Perot Jr.
Apparently, Perot Jr. and the firm attempted to mediate the dispute prior to the lawsuit being filed, so this one may have some legs. Stay tuned.