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The story in the press:

The owners of an upscale home in Dallas’ exclusive Preston Hollow neighborhood have won a complete defense victory and significant attorneys’ fees in a lawsuit filed by Dr. Craig Schwimmer, founder of The Snoring Center, and his wife, Shanon, following a two-year dispute over a security deposit.

Dallas attorneys Darrell W. Cook, Catherine A. Keith and Melissa J. Parker of Cook Keith & Davis won the case on behalf of Oklahoma residents Olayinka and Akinola Ogundipe, who own the 5,100 square-foot property on Meaders Lane.

Dr. Schwimmer and his wife asked for more than $48,000 in their lawsuit, but they were awarded nothing and instead were ordered to pay more than $30,000 in damages and attorneys’ fees.

“Dr. Schwimmer signed a lease requiring him to maintain this lovely home, but instead he trashed much of the property and added insult to injury by filing this lawsuit,” says Mr. Cook. “Fortunately, the judge refused to let Dr. Schwimmer avoid his obligations and entered judgment for the full amount requested by my clients.”

The Schwimmers paid $16,000 in security deposits before moving into the house in 2013. Shortly after the doctor and his wife terminated the lease and moved out in June 2015, the Ogundipes discovered extensive damage to their yard and home. The owners then began collecting estimates for repairing damaged windows and woodwork, and restoring the poorly watered and maintained yard, which was filled with pet waste.

The Ogundipes refunded nearly $5,000 of the deposit and withheld the remaining amount for repairs. Shortly after, they were contacted by the Schwimmers’ attorney, Brian Hurst of Baker & McKenzie in Dallas, one of the country’s largest law firms.

Mr. Hurst sent an email cautioning the Ogundipes that he suspected they “would prefer not to incur the time and expense of defending a lawsuit in Texas. Nor would you want the existence of this lawsuit, which may be found in a title search, to interfere with your efforts to sell the house.”

The Schwimmers then sued for three times the deposit amount, claiming the damage amounted to normal wear and tear. They also accused the Ogundipes of violating the Texas Property Code by not refunding the deposit within 30 days. Mr. Cook countered by noting that the Schwimmers breached the lease by paying their rent late seven times in less than two years, and that their deposit was refunded only one day late, after the repair estimates were completed.

Following a bench trial, Judge King Fifer of Dallas County Court-at-Law #2 ruled in the Ogundipes’ favor and ordered that the Schwimmers take nothing. The judge also required the Schwimmers to pay more than $1,600 for additional repairs and $30,000 to cover the Ogundipes’ attorneys’ fees.

We represent real estate agents and brokers in Texas Association of Realtors arbitration.

The Texas Association of Realtors arbitration process has many pitfalls that realtors are not told about. There are technical rules and references the state law that no one explains. As lawyers, we have been very successful in representing real estate agents and brokers in arbitration matters.

This is a story about a Texas Association of Realtors arbitration case we won for a Texas real estate broker that was simply impossible to believe, but it’s true.

We represent a Texas real estate broker who listed a property for a seller. The buyer initially viewed the property without an agent. But the buyer had a relative who was an agent. The buyer’s agent then proceeded to assist the buyer but agreed to zero commission to keep the price of the property lower.

The Sales Contract between the buyer and seller indicated in two separate places that no commission would be due to the buyer’s agent and this signed contract was emailed back and forth between our client and the buyers agent before execution and closing with no objections from the buyer’s agent.

The buyer’s agent further showed up at closing and made no objections to the fact that she was not receiving a commission at closing.

Nevertheless, the buyer’s agent filed an arbitration claim against our client (the listing broker) seeking 3% commission stating that the MLS listing offering 3% commission was the only relevant agreement between brokers and that the Sales Contract was irrelevant.

We took the matter to arbitration and after a full hearing involving multiple witnesses the Texas Association of Realtors Panel found unanimously in favor of the listing agent and no commission was awarded.

This was another example when the power at your disposal when you have a savvy and knowledgeable representative.

Writ of Garnishment + Foreign Judgment = Paid in Full

Some of our most interesting and successful work involves the enforcement and collection of foreign judgments issued by courts in other states. Relying on the Texas Uniform Enforcement of Foreign Judgments Act, we regularly help clients enforce and collect foreign judgments with speed and efficiency.

Typically, debtors are unaware that we have even started the process of domesticating a judgment from another state. Even though they know the judgment has been entered, they are almost always surprised to learn that we have been quietly working behind the scenes to make sure our client gets paid.

One of our favorite (and most reliable) tactics is to file the foreign judgment in a Texas court before waiting a few minutes to file a separate writ of garnishment with the debtor’s bank. When we do this, the debtor has no idea what is coming since the writ of garnishment will be served on their bank before they even know that the judgment has been domesticated in Texas.

That’s the same model we used in one foreign judgment case by domesticating a judgment and filing a writ of garnishment back-to-back. We received a fax the next day from the bank’s lawyer confirming the amount of the foreign judgment and letting us know that the debtor had plenty of funds to cover the full amount.

Within an hour, the debtor’s lawyer called and asked that we dismiss our garnishment in exchange for a payout over 60 days. Naturally, we declined since we already had access to the funds, and it was a good thing we did. We later learned that the debtor had just borrowed a large sum of money to pay off another obligation, which had yet to be funded. Our garnishment froze the account, and the rest is history.

A major factor in this case was the fact that our client had kept copies of the checks from the debtor’s bank account and their credit application. With that information in hand, we collected the entire judgment in 72 hours.

This story provides an important lesson and a question we ask all of our collections clients: “Are you accumulating bank account information for your customers?”

Getting Clients Paid with Motions to Compel

We were contacted by a lawyer who had won a significant Texas judgment against a local businessman. The judgment was issued in favor of a California doctor following a dispute over a business loan. This case demonstrates the value of a motion to compel.

Unfortunately, the lawyer who won the case had very little experience collecting judgments and he had already tried and failed to collect this one. After we were hired, we contacted the attorney for the judgment debtor and suggested a reasonable solution that was in everyone’s best interest. However, the other side was similarly unskilled in post-judgment remedies so they rejected our proposal and offered to pay our client zero.

Faced with a defendant who refused even first-level discussions, we launched a three-pronged attack aimed at making sure our client got paid.

First, we contacted the debtor’s lawyer with our written discovery requests, which our team has developed over the past 20 years to help identify hidden assets and potential weaknesses a debtor’s claims.

We then issued third-party discovery requests targeting the Texas companies where the local businessman held an interest.

Finally, we sent subpoena notices to two of the debtor’s family members seeking information about his business dealings because we believed they had direct knowledge of his business dealings.

We were met with resistance once again when the defendant’s third-party business affiliates never responded to our discovery requests and the debtor’s counsel provided wholly insufficient answers.

Undaunted, we then filed a series of motions to compel against both the debtor individually and his third-party business partners. The day the judge was set to decide the issues, the debtor agreed to resolve the case while we were sitting in the courtroom by paying our doctor client the $150,000 he was owed.

This is a good example of the tenacity we bring to each case. Even though our client and his original attorney thought they had no chance of collecting the judgment, our team put enough pressure on the defendant and his business partners to make sure our client was paid while avoiding the time and expense of more advanced post-judgment procedures.

Deposing the Husband, or any significant other, can be a powerful tool that leads to collection.

While credit card collections are not what we typically handle, our team was up to the task when a client bought a small package of credit card debt that originally was issued by a local bank. Although we didn’t know it going in, a recent marriage for the woman who owed the debt would be key to collecting every penny of what our client was owed.

Once we heard the full story, we accepted the engagement and filed a lawsuit. We were going up against the debtor’s excellent lawyer, who was very skilled in delay tactics. For example, after we filed our motion for summary judgment, her attorney convinced the judge to issue two continuances, which only delayed the proceedings.

After we presented our arguments in court, the judge issued a judgment favoring our client and we began our post-judgment procedures, which included sending the opposing counsel our interrogatories (i.e., questions we wanted the debtor to answer) and our requests for production of documents. As often happens, the debtor’s answers were insufficient. After several additional hearings, the judge eventually forced the debtor to fully disclose her assets and business dealings.

That’s when we served discovery on her employer and gathered all her employment documents. At this point, it unfortunately looked like there was little chance the woman could pay a meaningful amount of the debt, making her “judgment-proof.”

Since we never waste clients’ resources when there is clearly little chance of successfully collecting a debt, we decided that we should depose the woman and likely close the case file “for now.” We sometimes will close a case “for now” only to reopen it later once we believe the debtor can pay, which can happen within a few weeks, months or longer depending on the circumstances.

During the debtor’s deposition, we discovered that she had recently married, which we immediately saw as an opportunity. That’s because experience has taught us that, given the chance, debtors will rarely disclose the full extent of their debt to their significant others.

We responded by sending a deposition notice to her husband. Within a week, his wife was offering to settle. It was clear that she did not want us talking to her husband, so we advised our client to not settle for anything less than the full balance of the debt, including interest and attorneys’ fees. Since the documents we collected showed that a lump sum payment was not possible, we helped our client quickly negotiate a favorable settlement that allowed the debtor to pay the full balance owed over a 30-month period.

Our client was ecstatic since they felt this debt was uncollectible from the beginning. That’s why we always remind ourselves that you never know where a debtor’s weakness lies. The trick is a willingness to be relentless, which is our specialty.

Temporary Restraining Orders save companies everyday.

Time was truly of the essence when we met with our soon-to-be client one morning around 9:30 a.m. Sitting across the table, he told us the incredible story of how his company’s payroll had been hijacked by an employee who was demanding $60,000. This was literally a “bet the company” situation.

The problem arose when the employee, a manager, made sure that he alone had access to an administrative software program that processed the company’s payroll. He then changed all the passwords only two days before payroll was due and issued his illegal demand for cash.

After attempting a workaround by contacting the software provider, the company’s shareholders learned that it would take at least two weeks to implement a new program so employees could be paid. With the clock already ticking, our client told us that his company would collapse if he didn’t meet payroll.

Based on our experience in similar cases, we set out with the single-minded goal of convincing a judge to issue a temporary restraining order (TRO) that would force the manager to reset the passwords before payroll was due.

The labor-intensive process kicked off when we immediately began collecting affidavits to include in our TRO application. It was all hands on deck since we needed to get in front of a judge that afternoon.

After several hours of focused work to develop our case, we submitted the TRO request by 3:30 p.m. and were soon on our way to see the judge. After hearing our arguments, the judge granted the TRO in our favor. By 5:30 p.m., the manager had complied with the judge’s order and our client had rightful access to their software once again.

Later that night, I received an email from our new client, who I’d known for less than a day. It read:

[The defendant] nearly cost my family, extended family and my marriage everything. Your firm pulled my chestnuts out of the fire today. 65 families will continue on because of it.

It’s days like this that remind me and our entire team that we have the greatest job in the world.

What does it mean to say someone is “judgment-proof?”

We frequently hear opposing counsel tell us that the debtor is “judgment-proof.” Most of them have no idea what they are talking about. We especially enjoy it when opposing counsel is a family friend of the debtor and tells us something like, “I’ve known these people a long time, I (insert: go to church with them, live next door to their parents, dated their sister, etc.) and they just don’t have anything. They are Judgment-Proof.”

This lawyer isn’t usually a collections specialist. Frequently they are family law attorneys, personal injury attorneys, attorneys who work with a big national firm or even work as in-house counsel for a company. Do you you think they’ve ever seen a client subjected to the forensic accounting that is post-judgment discovery? The answer is no. They have no idea what’s coming. Most of the time, these debtor’s are not judgment-proof. And they cannot withstand the close scrutiny of post-judgment procedures.

But some debtor’s are referred to by us as “judgment-proof.” What does that mean? In simple terms, it means we don’t see an avenue to collect sufficient funds to warrant the client expending resources for now. So we close the file “for now.” We explain our rationale to the client and we’ll come back to it in a year. Or two, or whenever. But the issue isn’t dead.

So fine, tell us you’re judgment-proof. We’re game.

Foreclosure, eviction and collecting debt.

This case happened in Austin. Foreclosure and eviction is what follows.

We were originally hired to foreclose on a condominium situated on the outskirts of the University of Texas campus. We followed our usual foreclosure procedures and obtained title to the property.

The client then entered into prolonged negotiations with the debtor to resolve the debt. The negotiations continued for over six months. At that point in time the debtor had not made payment on the debt for more than a year. Eventually, no resolution was found and we were instructed to evict the debtor from the property.

When the Sheriff puts your stuff on the street.

We filed the eviction in the justice court and prevailed. The debtor appealed. We then went to trial again in the County Court and prevailed again.

We had an agent of ours  stop by the condominium a few days later to see what the debtor’s plans were for moving out. But the debtor said, “there was no foreclosure.” One of the worst cases of denial we have ever seen.

When the Sheriff puts your stuff on the street.

We then moved forward with a writ of possession. The debtor retained a lawyer in Austin to seek a temporary restraining order to stop the execution of the writ of possession. Just before the debtor’s property was to be put on the street we appeared before a judge in Austin. The judge denied the temporary restraining order and we went forward with the writ of possession as you can see in the attached photo.

The client then sold the condo at a profit and all’s well that ends well.

Relentless pursuit of the debtor is our playbook for collecting debt.

In this case we were stymied by the debtor from learning about his assets. As you will see, we relentlessly pursued the debtor. He even did some time in jail.

But the judgment was collected in full. But not immediately…

The timeline of events:

• March 24, 2014 – Default Judgment entered against the defendant.
• March 27, 2014 – An an abstract of the debt was recorded in several counties where we thought the debtor might have property.
• May 12, 2014 – We sent post-judgment discovery to the defendant.  The defendant ignored the discovery.
• June 25, 2014 – Because the defendant refused to answer the discovery, we filed a motion to compel the defendant to respond.
• July 24, 2014 – The judge ordered the defendant to respond to our discovery- but the defendant ignored the judge’s order and never answered the discovery.
• August 12, 2014 – Because the defendant refused to do what the judge ordered him to do, we we filed a motion with the court for the defendant to be held in contempt.
• October 16, 2014 – The judge held a hearing but the defendant did not appear. So the judge issued an Order for Writ of Attachment. This order told law enforcement personnel to arrest the defendant. At that point the Sheriff went to the Defendant’s home and arrested him.
• October 18-19, 2014 – The Defendant was jailed, posted bond and then was released
• Late October 25, 2014 – We entered into a settlement with the Defendant that called for a payment plan. The client agreed that the Defendant did not need to answer the post-judgment discovery so long as payments were made. So we did not dismiss our motion for contempt, just in case.
• February 2015- The Defendant made three months of payments and then the Defendant stopped making payments.
• March 4, 2015 – We filed our 2nd Motion for Contempt since the Defendant has still not answered the post-judgment discovery we sent to them.
• May 14, 2015 – The hearing was held and this time the Defendant appeared. He promised to provide the discovery answers so the judge issued an order, but did not require any jail time.  However, no answers were given.
• June 5, 2015 – Because the answers the Defendant promised to the judge were not delivered, we filed our 3rd Motion for Contempt, again seeking jail time for the Defendant.
• June 2015- The Defendant put his homestead up for sale.
• July 20, 2015 – The sale of homestead was held up briefly by the abstract previously filed. The Defendant decided that rather than request a release of his homestead (something we would be required to give him had he asked) that he would just pay the judgment in full out of the proceeds. At this point he was exhausted and just gave in.
• July 29, 2015 – Release of judgment filed.

We represent lawyers in collecting fees.

An unwritten rule says lawyers should never sue their clients, even if they refuse to pay their legal bills. But at the firm we’ve been blazing a new path by representing attorneys in Texas and across the nation in disputes over unpaid legal fees.

During the past 10 years, law firms have experienced a staggering 10 percent drop in the amount they collect versus what they bill their clients, according to a 2016 report from Georgetown University Law Center.

Darrell W. Cook and Melissa J. Parker recently helped the Atlanta-based law firm Hanks Brookes, LLC, prevail in a claim against State Bank of Texas. The case was filed after the Dallas-based bank refused to pay Hanks Brookes for nearly $13,000 in work under a contract signed by bank president Chan Patel.

Hanks Brookes was hired to help collect court judgments against two people who previously were sued by State Bank of Texas. Hanks Brookes was never paid and hired the firm to sue the bank, which contested the amount owed and asked the court to force Hanks Brookes to pay its legal fees.

Judge Craig Smith of 192nd District Court in Dallas ruled in favor of Hanks Brookes after a one-day trial and awarded the firm the full invoice amount along with $12,000 in attorneys’ fees for the firm. While the dollar figures are small compared to other debt collection cases the firm has handled over two decades, this result should help reverse the notion that lawyers and law firms should simply walk away when their clients refuse to pay.

In addition to representing law firms in fee fights, Cook Keith & Davis helps attorneys and business clients recover judgments in Texas and across the U.S.

Many lawyers and law firms are great when it comes to winning court judgments, but few know how to collect them. We are the splinter you can’t get out of your finger. We will not go away until our clients’ are paid what they’re owed, whether it’s an invoice for legal services or a judgment.