State Rep. Muñoz ordered to pay nearly $3 million in legal malpractice case

A federal judge ordered state Rep. Sergio Muñoz Jr. to pay nearly $3 million in restitutions in connection with legal malpractice after concluding that the lawmaker failed to disclose a business relationship with state District Judge Jesse Contreras during a case Muñoz took in Contreras’ courtroom.

U.S. District Judge Micaela Alvarez “ordered, adjudged and decreed” in a nearly three-year-old lawsuit that the plaintiff — Law Funder LLC — recover $2.98 million from Muñoz and the Law Offices of Sergio Muñoz Jr., according to court documents.

Muñoz, D-Palmview, previously represented Law Funder, which is a litigation funding company. In May 2011, Law Funder retained the services of Muñoz for representation in a divorce case in which Contreras was the presiding judge.

Almost a year later, multiple motions were filed to disqualify and/or recuse Contreras due to a corporate relationship with Muñoz, according to court documents.

Muñoz and his counsel did not return multiple calls requesting comment. Muñoz did, however, contact the executive editor of The Monitor and called this a private matter.

“At no point did defendants advise Law Funder that they had a pre-existing business relationship or a professional corporation, Contreras & Muñoz P.C., with Judge Contreras,” court documents read.

In July 2012, a hearing was heard before state senior District Judge Dick Alcala, of San Antonio, where the court ruled to disqualify Contreras from hearing the divorce case “because of the corporate association with defendant Sergio Muñoz Jr., that was in existence when they were lawyers together and continued through the time Muñoz appeared for Law Funder,” court documents further read.

Alcala also disqualified Contreras “because Judge Contreras arguably had an interest in the subject matter of the litigation and the court resolved that doubt in favor of disqualification,” according to court documents. Alcala then entered an order disqualifying Contreras.

Law Funder “sustained a significant amount of damages,” which eventually led to Law Funder retaining the representation of McAllen attorney Francisco Tinoco, who then filed suit in federal court against Muñoz and his law offices for legal malpractice, court documents read.

Muñoz was served with an initial request to produce documents and failed to produce any, court documents state. Law Funder then filed a motion to compel production, in which Muñoz “promised to act in good faith and turn over appropriate documentation.”

Law Funder served Muñoz with its second request to produce documents in September 2016, but Muñoz never responded.

“Defendants and defendants’ counsel have also failed to appear or have arrived late at three hearings held specifically for the purpose of resolving discovery disputes,” court documents state. “Plaintiff’s counsel also informs the court that defendants failed to ‘produce a single document’ in response to the plaintiff’s subpoena duces tecum . In sum, this case was filed in federal court in December of 2014, and after almost two years, discovery has not been completed.”

Law Funder’s motion was granted by Alvarez.

“The court grants plaintiff’s motion,” Alvarez ruled, according to court documents. “Defendants’ answer is stricken.”