Jury says state Rep. Sergio Muñoz Jr. must pay $1.2 million for legal malpractice

A jury on Tuesday determined state Rep. Sergio Muñoz Jr. must pay $1.2 million in damages after losing a legal malpractice lawsuit.

After a two-day trial at the federal courthouse in McAllen, the jury took less than an hour to reach a verdict.

“I’m just happy it’s over,” said George Prussin, 77, of Florida, who filed the legal malpractice case against Muñoz in 2014.

Prussin co-owned The Law Funder, a company that financed lawsuits.

The Law Funder purchased a share of the proceeds in 21 lawsuits from Sevicios Legales de Mesoamerica, a Mexican law firm owned by a reputed case runner named Wilfrido “Willie” Garcia.

In 2005, when Garcia’s wife requested a divorce, The Law Funder hired attorneys in Hidalgo County to protect the company’s investment.

Attorney Ray Thomas of McAllen, who represented The Law Funder, asked Muñoz to join the legal team. Muñoz, though, had a major conflict of interest.

Sergio Muñoz Jr.

State District Judge Jesus “Jesse” Contreras, who handled the Garcia divorce, had created a professional corporation, Contreras & Muñoz P.C., with Muñoz in 2008.

“About a year after Law Funder retained Munoz, an intervenor in the Garcia divorce with a competing claim to the SLM receiver funds discovered this conflict and moved to disqualify Judge Contreras,” according to an opinion from the 5th U.S. Circuit Court of Appeals. “A different state-court judge heard the motion and ordered Judge Contreras disqualified. The state court subsequently voided all orders Judge Contreras had entered in the case, including the order appointing the receivers. At this point, Law Funder had expended almost $2 million in attorney fees and expenses trying to collect SLM’s debt. Left without enough funding to start over, Law Funder ceased pursuing its claims in the Garcia divorce.”

The Law Funder sued Muñoz for legal malpractice in 2014.

U.S. District Judge Micaela Alvarez signed a default judgment against Muñoz after he “materially impeded the discovery process” and didn’t show up for hearings.

Alvarez awarded The Law Funder nearly $3 million in damages. The total included $1.2 million The Law Funder couldn’t recover during the Garcia divorce and nearly $1.8 million in legal costs.

The 5th Circuit, however, disagreed with how Alvarez calculated the damages.

“In sum, Munoz’s negligence might have cost Law Funder the $1,200,000 it expected to recover from the SLM receivers, or it might have cost Law Funder whatever portion of $1,767,430 it incurred after Munoz’s negligence in fruitless pursuit of the SLM receiver funds,” according to the 5th Circuit opinion. “But we can envision no scenario in which Munoz’s negligence cost Law Funder both.”

The case returned to court Monday for a trial on damages.

Attorneys for Muñoz argued The Law Funder hadn’t proven his legal malpractice actually caused any damages.

“Do you know anything about this Prussin person?” said attorney John F. Carroll of San Antonio, who represented Muñoz. “Where is he even from?”

Carroll described the request for $1.2 million as nothing more than a money grab by The Law Funder.

“They chose to go against Sergio Muñoz, their own lawyer,” said attorney Francisco “Frank” Rodriguez of McAllen, who represented Muñoz.

Attorney Francisco Tinoco of McAllen, who represented The Law Funder, rejected those arguments.

“These are all excuses,” Tinoco said. “Not evidence.”

The jury deliberated for less than an hour Tuesday morning before awarding $1.2 million to The Law Funder.

Prussin said Muñoz never apologized for what happened.

“If I had done something wrong, I’d come and say: ‘I did something wrong. What do I got to do to make it right?’” Prussin said. “That’s the way I always learned from my dad, OK? I don’t think he learned that from his dad.”

Muñoz said he respected the legal process, but he didn’t believe the jury’s decision was supported by the evidence.

“We successfully appealed once before,” Muñoz said, adding that he plans to appeal again.