Appellate court reinstates State Rep. Muñoz’s appeal

A day after dismissing State Rep. Sergio Muñoz’s appeal due to a failure to pay the appropriate fee, the U.S. 5th Circuit Court of Appeals decided to reinstate it on Tuesday.

Muñoz, who is appealing a nearly $3 million judgment issued in September 2017 by U.S. District Judge Micaela Alvarez, filed a motion to reinstate the appeal on Monday upon the appellate court dismissing his case because of failure to pay a court fee on time.

Muñoz’s attorney, John Carroll, said the state representative paid the cost of a civil appeal, which is $505.

But the appellate court on Tuesday granted the motion from the September judgment. Alvarez made the ruling on 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.

Alvarez’s judgment concluded that Muñoz, D-Palmview, failed to disclose a business relationship with state District Judge Jesse Contreras during a case Muñoz took in Contreras’ courtroom.

The lawmaker sought relief from Alvarez’s judgment because he was “unfairly surprised when the court scheduled the parties for a ‘miscellaneous conference,’ and actually it was a trial on damages before the court,” court documents state.

Muñoz argues the delay was due to failing to docket the response deadline in the office docketing system, according to court documents.

“The truth of the matter is that defendants at the deposition of the defendants, produced boxes of responsive documents,” court documents state. “Additionally, the defendants even offered to permit the plaintiff to depose the defendants once they had a reasonable opportunity to review the boxes of documents that defendants produced to plaintiff …”

Muñoz 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 where Contreras was the presiding judge.

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

“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 held 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 the defendant Sergio Muñoz Jr., that was in existence when they were lawyers together and continued throughout 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 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 he never responded.

“Defendants and defendants’ counsel have also failed to appear or have arrived late to 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, the case was filed in federal court in December 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.”