CHARLESTON – A prominent Charleston law firm has appealed a recent federal bankruptcy court ruling that remanded part of a case against him and his firm back to Kanawha County.
James F. Humphreys & Associates filed a notice of appeal July 21 in U.S. Bankruptcy Court. The firm also filed a motion for a stay pending the appeal.
On July 15, Judge Frank W. Volk of U.S. Bankruptcy Court for the Southern District of West Virginia filed a memorandum opinion and order remanding the flood damage case of an elderly Virginia couple against Humphreys individually back to Kanawha Circuit Court. But the firm’s bankruptcy means it won’t be remanded back to Kanawha County, Volk wrote.
Then, on July 19, Jim Humphreys filed the claim in federal bankruptcy court against James F. Humphreys and Associates LC. In the document, Humphreys says his firm, which is in Chapter 11 bankruptcy, would be on the hook for $13.5 million in a lawsuit filed against Humphreys and his firm by a Virginia couple who say Humphreys and his firm mishandled their flood damage case.
Essentially, the proof of claim says Humphreys values the alleged malpractice and fraud claims against him at $13.5 million and wants his firm to indemnify him, meaning the firm would need to pay him if the claims are found to be true.
Now, with the July 21 filings, the Humphreys law firm appeals Volk’s opinion and order as well as seeks the stay in the Kanawha County case.
In its memorandum of law supporting the stay, the firm says the stay is necessary and that it believes Volk’s remand order will be reversed. It says the firm would “suffer irreparable harm without a stay” and “that the Hornes [the Virginia couple] will suffer little (if any) harm from a stay, and that public policy favoring the wise stewardship of a bankrupt’s limited assets support a stay.”
The firm argues the remand “would almost certainly result in the immediate resumption of heated and protracted litigation in the circuit court of extraneous issues.”
“Every time that we flip the rock and expose him to sunlight, he wants to crawl back under another rock,” said Charleston attorney Rod Jackson, who is representing Ira Calvary Horne and Mavis Horne, the Virginia couple. “He’s kind of like a cockroach. He keeps not wanting to face a jury and have the evidence come out. But, it’s just a delaying tactic.
“Now, this appeal is him just looking for another rock, trying to delay. But there are only so many rocks. He’ll run out of them soon. I’ll be surprised if this appeal works.
“The Hornes are in their mid-80s. They’ve been waiting for their day in court.”
In 2014, Humphreys and his firm were sued by the Hornes, who claim he and his firm mishandled their flood damage case.
And last year, Humphreys and his firm were accused in a class action lawsuit of mishandling a mass tort asbestos exposure case against Celotex. The number of potential plaintiffs exceeds 500, according to the complaint.
“It is apparent that both discretionary abstention and equitable remand are appropriate as to the claims against Mr. Humphreys,” Volk wrote in his July 15 opinion and order. “It is, accordingly, ordered that the Hornes’ motion to remand be, and hereby is, granted to the extent of the claims pled against Mr. Humphreys …
“Judge (Jack) Alsop may proceed immediately with the adjudication of those claims.”
Jackson said he was pleased with Volk’s July 15 order.
“Jim Humphreys can run, but he can’t hide,” he said. “Even with all of the bankruptcy and machinations he’s attempted, he’s been exposed again. The fraud and the truth will come out.”
In January, Humphreys said his law firm had filed for Chapter 11 bankruptcy. The firm entered bankruptcy to “resolve all pending and potential claims against the firm in one forum and in a timely and equitable manner,” according to a statement from the firm.
In a January statement, Humphreys said the filing should not affect the day-to-day operations of the firm and cases it currently is handling. He said he hopes the issues can be “sorted out quickly and effectively in bankruptcy court, ultimately enabling the firm to continue offering effective legal representation.”
“Our first and foremost obligation is to our clients,” Humphreys said. “As painful and as difficult as it is to take this step, this action will allow us to move quickly and transparently to identify and pay these obligations, and settle any legitimate claims against the firm.
“I profoundly regret any inconvenience this situation has caused and I am determined to make sure each and every one of these clients is made whole.”
In October, Humphreys and his firm were listed in a class action by people who allege the firm mishandled a mass tort asbestos exposure case against Celotex. The number of potential plaintiffs exceeds 500, according to the complaint.
In the Celotex complaint, McCormick claims Humphreys and his firm negligently failed to follow procedure for properly submitting the plaintiffs’ claims against Celotex.
That came after a 2014 lawsuit in which Humphreys and his firm allegedly “failed completely” to pursue claims that an elderly Virginia couple’s home and property were damaged by flooding and rains resulting from Hurricane Camille in July 2001.
Jackson is representing both the Celotex plaintiffs and the Virginia couple in their claims against Humphreys.
After the firm filed for bankruptcy, Humphreys’ bankruptcy lawyers asked that the bankruptcy court blanket extend it to Humphreys. That happened. But Jackson and his team of attorneys moved that the case in total be moved back to Kanawha.
What Volk did in his order was allow the Horne case to proceed against Humphreys individually in Kanawha Circuit Court, but not against the law firm.
Jackson said he expects a hearing with Alsop on the case against Humphreys individually soon.
“I believe since he was ready to try the case in February, I’m optimistic the court will have a hearing to set a new trial date,” Jackson said. “I don’t know that, but I’m hopeful he will do so. Judge Alsop is very efficient.”
Humphreys is a former member of the West Virginia House of Delegates and state Senate. He also ran for the U.S. House of Representatives in 2000 and 2002, losing to Shelley Moore Capito both times.
In the bankruptcy filings, Humphreys and his firm are represented by Judith K. Fitzgerald, Beverly Weiss Manne, Jeremiah Vandermark and Danielle L. Dietrick of Tucker Arensberg PC of Pittsburgh as well as Julia Chincheck and Floyd E. Boone of Bowles Rice in Charleston.
In the Horne case, Humphreys and the firm are represented by Ben Bailey, Thomas Bennett and Eric Snyder of Bailey & Glasser LLP in Charleston. The Hornes are represented by Jackson and his office as well as John C. Palmer IV and Stephen D. Annand of Robinson & McElwee PLLC of Charleston.
U.S. Bankruptcy Court case number 2:16-ap-02004 (Kanawha Circuit Court case number 14-C-1684)