Henry Law Firm v. Cuker Interactive, LLC, 021220 FED8, 19-1391

Docket Nº:19-1391
Party Name:Henry Law Firm Plaintiff- Appellee v. Cuker Interactive, LLC Defendant Adel Atalla Defendant-Appellant
Judge Panel:Before SMITH, Chief Judge, BEAM and ERICKSON, Circuit Judges.
Case Date:February 12, 2020
Court:United States Courts of Appeals, Court of Appeals for the Eighth Circuit

Henry Law Firm Plaintiff- Appellee


Cuker Interactive, LLC Defendant

Adel Atalla Defendant-Appellant

No. 19-1391

United States Court of Appeals, Eighth Circuit

February 12, 2020

Submitted: September 25, 2019

Appeal from United States District Court for the Western District of Arkansas - Fayetteville

Before SMITH, Chief Judge, BEAM and ERICKSON, Circuit Judges.


Cuker Interactive ("Cuker") retained the Henry Law Firm ("the firm") to represent it in a diversity action against Walmart, Inc. ("Walmart") in the Western District of Arkansas. When Cuker failed to pay the firm's invoices, the firm commenced this action seeking payment from Cuker and its president, Adel Atalla, who had provided a personal guarantee for the legal services agreement between Cuker and the firm. Atalla moved to dismiss or, in the alternative, for summary judgment. The firm resisted Atalla's motions and cross-moved for summary judgment. The district court1 denied Atalla's motions for dismissal and for summary judgment and granted summary judgment in favor of the firm. Atalla appeals. We have jurisdiction under 28 U.S.C. § 1291, and we affirm.

I. Background

Cuker2 is a California-based designer of websites that retained the firm to represent it in litigation that Walmart commenced in 2014. In 2016, Cuker's relationship with its original lawyers had broken down, at least in part because of payment issues. Cuker's soon-to-be-former attorney introduced Adel Atalla to Mark Henry, the sole proprietor and manager of the Henry Law Firm. The firm has its principal place of business in Arkansas. Atalla is Cuker's president and resides in California.

At the time that Cuker entered into negotiations with the firm, all parties were aware that Cuker had cash flow difficulties and had fallen behind in its payment of legal bills. Under these circumstances, the firm was only willing to accept the retainer if Atalla personally guaranteed the contract. Atalla and Henry negotiated the terms of the agreement through calls and emails, and on March 9, 2016, Atalla signed the legal services agreement twice: once in his capacity as "president" and once in his capacity as "personal guarantor." The firm accepted the retainer, and on March 21, 2016, Henry noted his appearance as lead counsel in the Walmart litigation.

Under the terms of the March 9, 2016 contract, Cuker and Atalla as "guarantor" are "together" the "Client." The contract provided for an initial retainer of $50, 000 with monthly deposits of $25, 000. It further provided that whenever the trust account balance fell below $30, 000, Cuker would make a deposit to raise the balance to $50, 000.

During the course of representation Atalla mainly interacted with the firm from his home state of California. He met with Henry and other attorneys in California, and he communicated with Henry via telephone and email. While Atalla did not attend the Walmart trial, he traveled to Arkansas three times in connection with the firm's work on the Walmart case. He met with Henry at the firm for a two-hour status update on the Walmart case. Atalla attended a deposition of a Walmart employee conducted at a different Arkansas law firm. And he attended a court-mandated settlement conference.

Cuker fell behind in its payments to the firm as the case neared trial. Henry continued his representation of Cuker, and the case against Walmart proceeded to trial in April 2017. At the conclusion of the trial, the jury returned a verdict in favor of Cuker and awarded damages in the amount of $12, 438, 665. Cuker and Walmart stipulated to reduce the jury award to $10, 197, 065. The district court partially granted...

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