Bradley Files Again

Lawsuit-Happy Developer Sues His Own Lawyer

illustration by Doug Potter

Gary Bradley spends more time at the courthouse than Lance Ito. While Bradley, the flamboyant developer of the about-to-be-annexed Circle C Ranch development in southwestern Travis County, has proven his skill at developing real estate, he has also shown himself to be a lawyer's dream. He is to lawsuits what Pamela Anderson is to swimsuits. Of course, all high-profile entrepreneurs have their legal battles, but Bradley -- who has been involved in more than half a dozen major lawsuits since 1990 -- seems to have had more than his share. And over the past few months, his legal battles have gotten nastier and more frequent. So nasty, in fact, that Bradley has now sued Terry Bray, the lawyer who, for more than a decade, has helped Bradley navigate through a myriad of land deals and legal battles.

Before getting into the details of Bradley's latest litigation, here's a quick review of his other flirts with Lady Justice: In 1990, Bradley and James Gressett were sued by First Gibraltar Federal Savings Bank for non-payment of four loans they received from the failed Gibraltar Savings Association of Houston. The suit also sought repayment of a fifth loan, a $15 million personal note. A short time later, according to a June 17 story in the Austin American-Statesman, Bradley and Gressett countersued First Gibraltar, alleging fraud and breach of contract, and asked for more than $100 million. The litigation dragged on for five years, until finally, his appeals exhausted, Bradley was left to face a $53 million judgment in favor of First Gibraltar. In 1994, a company called Talex Investments, apparently headed by Bradley's business associate Hamid Noshirvani, bought some of Bradley's defaulted loans from the Federal Deposit Insurance Corporation for $1 million. A year later, Talex sued Bradley in Travis County. After an eight-day trial, Talex won a $3.58 million judgement against Bradley. Also in 1994, Bradley got involved in the case known as Quick et al. v. City of Austin. The suit was filed by a group of small landowners who live outside the city who claimed they were harmed by the Save Our Springs Ordinance. (The Texas Supreme Court heard arguments on the case on Nov. 3.) But Bradley, who was managing Circle C, was allowed to intervene in the case and was one of the main witnesses for the plaintiffs. He was represented in the case by attorneys from his long-time law firm, Graves Dougherty Hearon & Moody.

Bradley's most recent legal tussles stem from a 1995 land deal in which Bradley, after losing control of Circle C to developer Freeport-McMoRan, met with Freeport chairman Jim Bob Moffett and agreed to buy the residential part of the development. Bradley agreed that his company, Phoenix Holdings, would purchase the property from Freeport's Circle C Land Corporation (CCLC) for $18 million. Bradley also planned to buy the commercial real estate portion of Circle C for an additional $33.5 million. At the 1995 meeting, Bradley and Moffett agreed to the terms of the sale, including the disposition of millions of dollars worth of municipal utility district bond proceeds. (Circle C is served by several MUDs which collect water and wastewater fees from local residents. Those fees are then used to pay off the bonds.) Jim Bob's lawyers and Bradley's lawyers then drew up a sales agreement that detailed the deal. Later, when Bradley found out the contract drawn up by Graves Dougherty did not spell out how the MUD bond payments were to be divided, he contacted CCLC representatives to tell them of the alleged error. But, according to Bradley's side of the story, Moffett's company told him tough luck. So Bradley had to buy the land or lose the $8.5 million in earnest money that he'd already put down.

After the deal closed, the two sides couldn't agree on the MUD fees, so on Feb. 7 of this year, Freeport filed a suit called Circle C Land Corp. v. Phoenix Holdings Ltd., in which Freeport claims it is entitled to "$3,803,069.00 in MUD Reimbursements currently available for distribution."

In a spread-the-blame move, Bradley's company then tried to add its law firm Graves Dougherty as a co-defendant in the lawsuit filed against it by CCLC. But on Sept. 29, the court denied the motion. That same day, Phoenix filed a separate suit of its own against Graves Dougherty and lawyers Bray and Alan Haywood, who are partners in the firm. "The Firm breached the duties it owed to Phoenix and as a direct and proximate result of the breach of the duties owed by the Firm, Phoenix has been damaged," says the suit filed by Bradley's attorney, Eric Taube. The suit does not specify the amount of damages being sought.

That Bradley would sue Bray for malpractice seems especially ironic in light of the couple's 10-year attorney-client relationship. After all, it was Bray who aided Bradley's successful fight against Austin at the Texas Lege in 1995 by helping draft the language contained in HB 3193. That controversial bill created a special water district for Circle C, which allowed the development to escape Austin's more stringent water quality laws. (Of course the bill was declared unconstitutional in August by Judge Scott McCown; surely Bradley doesn't hold that against Bray.) Graves Dougherty also represented Bradley through the bulk of the litigation that sought to overturn S.O.S.

And, according to the June 17 issue of the local daily, Graves Dougherty also helped set up a company called Talex Holdings, Inc., one of a panoply of companies that Bradley has used over the past few years. According to the American-Statesman, Talex holds the deeds to Bradley's office building at 1111 W. 11th.

While some may cluck their tongues over Bradley's seeming ungratefulness to his former consigliere, others say that Bradley was obliged to take the trip to court. Taube, the lawyer Bradley has hired to sue Bray, told the Chronicle, "What's ironic, unfortunately, is that [Bradley's] in the position where he doesn't have any choice." Taube said Bradley, as the head of Phoenix, has a fiduciary duty to the other owners of Phoenix to seek redress for the harm done to the company by Graves Dougherty's alleged mistake. In the court pleadings, Taube contends that, "As a direct and proximate result of the Firm's negligent drafting of the Purchase and Sales Agreement and related documents Phoenix was sued in the Declaratory Judgment Action," by Circle C Land Corp. And, says Taube, Bradley "didn't sue. He got sued. He's the defendant in the Circle C case. The whole issue in the Graves Dougherty case relates to the same facts and circumstances as the Circle C lawsuit." Indeed, Bradley's position is that the CCLC's lawsuit against his company and the one he filed himself are so closely aligned that his lawyer filed a motion to consolidate the discovery process in the two cases in order to save time and money. The motion was denied.

So maybe no one is too surprised that Bradley sued Bray. Malpractice claims against lawyers have become commonplace, notes Chuck Herring, an Austin attorney who has written a textbook on the subject called Texas Legal Malpractice and Lawyer Discipline. Herring says that the average lawyer can expect to be sued three times during his or her career for malpractice, and real estate lawyers like Bray are more prone to attract claims than are their colleagues in other specialties. Herring says that a survey done by the American Bar Association a few years ago found that malpractice claims involving real estate were second only to claims involving personal injury law.

Of Bray, Herring said he is "viewed as one of the leading real estate lawyers in Austin. He has a good reputation as a real estate lawyer." But, added Herring, "That doesn't mean he can't make mistakes. Lawyers, at their best, are human."

If there is a judgment against Graves Dougherty, Bray, or Haywood, the award will likely be covered by the firm's malpractice insurance.

Calls made to Bradley and Bray were not returned. Clark Heidrick, the president of Graves Dougherty, told the Chronicle, "We are disappointed that Mr. Bradley filed the suit," and refused to say much more. "Now that it's been filed at the courthouse, everything that we have to say about it will be said there." No hearings have been set in Phoenix's suit against Graves Dougherty. The CCLC case against Phoenix has been scheduled for trial on February 23.

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