Attorney Jason M. Hatfield of Springdale recently received a $1.5 million award in a case tied to allegations of a scheme in which “runners” who were not lawyers handed out business cards at funerals to recruit plaintiffs for wrongful death suits.
Hatfield’s legal victory in the Probate Division of Washington County Circuit Court involves complex issues that are also being litigated in U.S. District Court in Fayetteville.
The conflict dates back to November 2020, when, Hatfield said, he began representing relatives of a 36-year-old woman, Flor Maribel Recinos Valle, who died in an auto accident involving a tractor-trailer operated by a driver for J.B. Hunt Transport Services Inc. of Lowell.
Hatfield was working to open an estate for the victim when attorney Steven Kherkher of Houston and his firm, Kherkher Garcia LLP, demanded that Hatfield “stand down” and not contact his clients again. Kherkher said he was representing the victim’s children, while Hatfield had been hired by Valle’s brother and her two adult children.
Hatfield did as requested, but he also attached an attorney lien on any settlement with J.B. Hunt in the case. J.B. Hunt eventually settled for an amount that hasn’t been made public, and $1.5 million of it was transferred to the court while Hatfield’s lien was pending.
Hatfield also filed a lawsuit in federal court in 2022 against Kherkher, his firm, Cesar Ornelas of Harlingen, Texas, and others for alleged violations of anti-racketeering laws. Hatfield said in the complaint that Ornelas is “an illegal and unethical professional case-runner” and has a long history of “being sued for illegal case running in Texas.”
Hatfield discovered what he called a long pattern of improper solicitation after fatal accidents, including the use of runners and misrepresentations aimed at getting grieving survivors to hire law firms the runners were working for, according to the lawsuit.
“Non-attorney case-runners were immediately dispatched from Texas to attend the funerals of the victims to secure contracts using promise of United States citizenship and payment of funeral expenses,” said the federal lawsuit, which was filed on behalf of Hatfield’s law firm by attorney Mark Henry of Fayetteville.
The defendants have denied his allegations of wrongdoing.
While the federal case is pending, Special Judge Gary Arnold in the probate case found after a Dec. 21 hearing that Hatfield’s lien was valid. He awarded Hatfield the entire $1.5 million that was being held in the court’s registry.
Arnold found that the witnesses who opposed Hatfield’s lien “were not credible. It is this Court’s specific observation that each such witness offered had been improperly coached.” Arnold ruled that the witnesses and evidence that supported Hatfield’s lien “were very credible.”
Arnold ruled that the estate’s contracts with Kherkher and local counsel Tony Pirani of Fayetteville are invalid, and they “are not entitled to any portion of the $1.5 million being held in the court’s registry.” Pirani, who wasn’t named as a defendant in the federal case, and Kherkher received a separate $300,000 payment that wasn’t at issue in the probate case.
Also invalid, Arnold ruled, were contracts that Valle’s estranged husband signed with the non-lawyer runner Ornelas and the “Nunez Law Firm” that he represented and Kherkher worked with.
The Nunez Law Firm contract predated Hatfield’s contract, Henry wrote in a pleading in the probate case. But that contract “was secured in person at the funeral home by nonlawyers,” Henry wrote. Henry also said that the Nunez firm is a “fictional entity.”
Recusal Sought
Pirani and Kherkher have asked for a reconsideration of the ruling or a new hearing. They have also asked that the order be stayed and that Arnold recuse from the case.
The attorneys wrote in a Dec. 28 motion that Arnold’s conduct in the case showed that he “holds a demonstrable bias” against Noe Jesus Mancia Polanco, the appointed representative and special administrator of Valle’s estate, certain family members and Pirani and Kherkher.
Pirani and Kherkher said in their motion that Arnold has “zero evidence of ‘coaching’ of any kind at any time, and zero evidence from which even an inference of such could reasonably derive.” They said that Arnold heard live testimony from only one witness.
“Because no fair, impartial, and unbiased judge could reasonably reach such an outlandish decision, and certainly not in the manner in which this Court did, such outrageous conduct alone constitutes, at a minimum, an objective ‘appearance of unfairness’ mandating recusal,” they wrote.
Henry said in his court filings that the order should stand.
“It appears to a reasonable reader that Mr. Pirani and Mr. Kherkher attack the integrity of this Court to manufacture a defense to a future disbarment proceeding or to avoid accountability for how they mishandled the Estate,” Henry said in a Jan. 3 filing. “Their conduct and arguments do not help the Estate, and they don’t have a lawful contract to represent the Estate.”
Henry said in a Dec. 1 court filing that “the record has been fully developed and includes some of the most persuasive and lucid testimony on the topic of the illegality and unethical aspects of the case procurement.
“These are very serious and compromising problems concerning the practice of law in Arkansas, together with the fact that these two families were in-person solicited at the most vulnerable time in their lives by parties engaged in the unauthorized practice of law,” Henry wrote.
A hearing in probate court was set for Wednesday, the day this issue of Arkansas Business went to press.
The case in federal court had a two-week trial scheduled to start Jan. 22, but that was continued as a result of Arnold’s decisions.
U.S. District Court Judge P.K. Holmes III wrote in his Jan. 10 order that he has to determine how the probate case rulings impact the federal case.
He said the case is not a simple one. “It is a multi-million-dollar RICO claim, with all the complexities of statutory standing and expanded proof that such a claim entails, accompanied by a gaggle of related state claims,” Holmes wrote.
As of Tuesday afternoon, a new trial date in federal court hadn’t been set.
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