Fresh news — again, on behalf of, and with permission from, the Oxford Eagle:
Law firm asks court for a default judgment in Scruggs’ case
By Alyssa Schnugg
Staff Writer
A law firm fighting over legal fees with Richard "Dickie " Scruggs filed a motion this morning asking the court to enter a default judgment in its favor in light of a recent indictment against Scruggs for allegedly trying to bribe Circuit Court Judge Henry Lackey.
The motion, filed in the Lafayette County Circuit Court by the Jackson-based law firm of Jones, Funderburg, Sessums, Peterson & Lee, asks for a default judgment in its favor, as well as striking a motion to stay proceedings and compel arbitration that was ordered earlier this year; allowing an entry of default to be filed against Scruggs and the other attorneys in the Scruggs Katrina Group; determine the amount of damages to Jones’ firm and strike the defendant’s answers to the original complaint.
"If the court finds in our favor, we will only then have to go before the court to argue how much is owed to us, " said John Jones, a partner in the Jones Funderburg, Sessums, Peterson & Lee law firm.
Scruggs was indicted last week on charges of trying to bribe Lackey to get a favorable ruling in the Jones’ lawsuit.
"All facts as alleged indicate that because Judge Lackey was participating in a "sting’ operation with the (FBI), that all efforts — motions, briefs, arguments at a hearing on the issue on the part of the plaintiff — were pointless, " the motion reads. "Judge Lackey could not consider the plaintiff’s arguments on their merits as his focus was on bringing the alleged criminal actions of the indictees to the fore. "
The initial lawsuit against Scruggs was filed March 15 by Grady F. Tollison Jr. on behalf of the Jones’ firm. The lawsuit claims Scruggs is withholding money the Jones firm was owed for working on Hurricane Katrina insurance-related litigation. The Jones firm claims it is entitled to 20 percent of the all past attorney fees collected by the Scruggs Katrina Group it was once a part of before being "frozen out " by Scruggs and the other attorneys in the group who are also listed in the lawsuit — the Barrett Law Office, Nutt & McAlister and Lovelace law firms.
Scruggs was arrested last week, along with his son and law partner, Zach Scruggs, former state auditor Steven Patterson, Timothy Balducci and Sidney Backstrom on charges they engaged in a scheme to bribe Lackey. A federal grand jury indicted them on a 13-page indictment that accuses them of conspiring to bribe Lackey with more than $40,000 in cash during the Jones’ lawsuit.
Balducci entered a plea of guilty Tuesday and is awaiting his sentencing hearing. In his plea, he agreed to continue working with prosecutors in their case against the others.
On Wednesday, Jones’ firm filed a motion asking the court to take control of all fees collected by the Scruggs Katrina Group until the lawsuit is settled.
"Under our rules of professional conduct, when lawyers have to sue one another, the ones holding the funds are ethically bound to segregate those funds and place them into escrow, " Jones said. "The lawyer cannot spend or disperse the funds that the other lawyer claims they are entitled to. "
Jones said he wrote a letter to the Scruggs firm about two months ago asking them to provide proof they had in fact placed the funds into an escrow account.
"We never heard back from them, " Jones said. "We began to get nervous whether they weren’t complying. Once they were charged with trying to bribe Judge Lackey, we felt it was time to enforce their ethical obligation with this motion. "
–alyssa@oxfordeagle.com
