Sealed Lexington case alleges lawyers, medical center had arrangement

(The State) Tucked away in a vault at the Lexington County courthouse is a copy of a lawsuit alleging that an arrangement between prominent local lawyers and a nationally known burn treatment center in Georgia made millions of dollars for the lawyers.

The lawsuit is sealed. It was settled last fall, without a trial and for an undisclosed amount of money, shortly after it was filed. No one can read it.

But it alleges an arrangement between two Lexington lawyers, the Burn Center at Augusta, and a man named Kevin Johnston, who served as a paid intermediary for the attorneys, according to a copy of the suit obtained by The State newspaper.

Lawyers are not supposed to use go-betweens to get in touch with prospective clients.

The two lawyers named as defendants, Billy Walker Jr. and Kirkland Morgan of the Walker & Morgan firm, have long been prominent in the Lexington legal community. They are known for their personal injury practice, whereby – according to their law firm’s Internet site – they have won cases and collected millions of dollars representing victims of burns of all kinds.

The lawsuit, filed against the attorneys by the man who said he worked as their intermediary, claims the lawyers didn’t pay him for bringing them a batch of lucrative cases several years ago. And it describes a business relationship between the three of them and the Burn Center to sign patients up for what seem to be promising lawsuits.

The Burn Center also benefited because it received ample compensation for medical bills when a case was won or settled – money the Center might not have gotten had the lawyers not done good work on the case, Walker and Morgan said in interviews last week.

The Burn Center, whose formal name is Joseph M. Still Burn Center, had no comment last week when asked about its association with the lawyers. No specific doctors or administrators were named in the suit.

Both Walker and Morgan asserted that everything they have done with respect to Burn Center cases and patients is ethical, legal and to the benefit of all concerned.

“When we settled (Johnston’s) lawsuit, there’s a mutual confidentiality agreement,” Walker said. “We are walking a tightrope about what we can tell you, and what we can’t. Rather than get into the merits of this case (in a trial), we said we want to get rid of the case, we want to settle it, and we don’t want to drag anybody into the case.”

Morgan said he hopes people realize that allegations in the lawsuit are “not evidence of anything but simply claims that can be factually incorrect.”

Although Johnston was paid as a contractor, any additional money he got was “a bonus” and not a percentage of any lawyers’ awards, Walker and Morgan said.

“We had no agreement for anybody to refer cases in exchange for any pay, and we had no access to any confidential information except through an attorney-client relationship with a firm that does collection work for the many medical practices that staff the actual burn unit,” Walker said.

To do that, Walker said, his firm abided by the federal patient confidentiality guidelines known as HIPAA and otherwise followed applicable laws. Some of the methods his law firm used to evaluate claims are proprietary and need to be kept confidential, he said.

The complaint against Walker and Morgan obtained by The State was brought by Kevin Johnston, who holds a dentist’s license.

Johnston, who is about 60 and is not in active dental practice, declined through a friend to speak to The State. Last year, he hired Cam Lewis of the Columbia law firm of Lewis, Babcock and Griffin. Lewis filed the lawsuit Sept. 18.

Lewis could not be reached last week. But a lawyer at his firm, Ryan Heiskell, said, “The dispute was settled out of court, and the terms of the agreement are confidential.”

According to the Lexington County clerk of court’s office, the case was sealed on Nov. 21 by Judge Tony Russo.

ETHICS QUESTIONS

An ethics law professor at University of South Carolina who read Johnston’s six-page complaint said that if true, the allegations against the two lawyers represent potentially serious violations of lawyers’ ethics codes.

“The complaint makes very serious allegations of unprofessional conduct – but they are just that – allegations,” professor Greg Adams said. “The case never got tried. Nothing ever got proven. So there’s not a determination of what actually happened.”

A professional inquiry sorting through all the facts would be necessary to make a final determination of whether the lawyers’ conduct was proper, Adams said.

Under those rules, lawyers can’t share legal fees with non-lawyers except for a few, narrow exceptions. The rules also prohibit a lawyer or a lawyer’s agent from using a middle man to solicit a client, Adams said.

In any case, the arrangement described in the complaint is not commonplace, Adams said.

THE COMPLAINT

In his complaint, Johnston alleged that Walker and Morgan, and their law firm, owed him $650,000 for work he had done vetting patients at the Burn Center for the lawyers, who subsequently used the information to get clients who eventually were paid millions of dollars to settle their cases.

Walker and Morgan “would review intake information on burn victims admitted to the Burn Center for the purposes of gaining clients,” Johnston’s complaint said.

After the lawyers determined which cases would make good lawsuits, Johnston would “investigate the cases and meet with burn victims and/or their families and obtain authorization for the defendants (Walker and Morgan) to represent the burn victim in a lawsuit against the entity at fault for the burn victim’s injuries,” the lawsuit said.

Johnston was “responsible for getting burn victims to sign fee agreements with Defendants under which Defendants were entitled to a percentage of any recovery obtained from the party or parties at fault for the burn victim’s injuries,” the complaint alleged.

Through the process, Johnston was the “primary client contact with the burn victims” and was the primary contact with the Burn Center, the complaint alleged.

Under the arrangement, the suit alleged, Johnston had a “fee agreement” under which he investigated, consulted and obtained burn victim cases and was supposed to get a percentage of the recovery for each successful case.

“As a part of this relationship, Plaintiffs (Johnston and his consulting firm) obtained multiple cases for Defendants that resulted in millions of dollars of recovery for the burn victims and in fees for Defendant,” the complaint said.

For several years, the arrangement worked well, the suit asserts.

But in recent years, Johnston delivered a number of cases involving gas can explosions, “which resulted in millions of dollars of recovery for the burn victims,” the complaint said. Walker and Morgan had “promised” to pay Johnston and his firm 5 percent of any recovery – or some $650,000 – but they refused to, the complaint said.

When Johnston asked for his money, the lawyers refused to pay him, the lawsuit said. They then fired him.

THE LAWYERS SPEAK

The two lawyers said the dispute in the lawsuit concerns a specific set of burn injuries related to defective plastic gas cans made by Blitz of Oklahoma, a company that eventually went out of business because of the damages it had to pay to victims of its gas cans.

Blitz was the nation’s leading gas can producer and sold more than 14 million gas cans yearly until the lawsuits over defective cans drove it out of business, according to news articles.

The Walker & Morgan law firm was one of just a few law firms in the nation that handled Blitz cases. Their lawsuits argued that Blitz’s cans were susceptible to “flashback” explosions when gasoline vapors followed the vapor trail back into the container. An easy and cheap fix could have been installed on the cans that would have prevented numerous deaths and injuries, the lawyers argued.

Walker said, “We spent a few million dollars trying to develop a legal products liability theory about these cases.”

When a final settlement of $160 million was reached with Blitz involving nearly 100 lawsuits, millions were paid to Walker & Morgan’s clients, and Johnston took the position he was owed money in about 35 of those cases, the lawyers said. Walker and Morgan disagreed, and that’s how the lawsuit got started, they said.

For years the firm has had a proper and legal relationship with the Burn Center’s collection agency and the center, the lawyers said.

“We’re proud of the work we’ve done for the Burn Center,” Walker said. “The Burn Center has to get paid by those who have the ability to pay. But most patients don’t have the ability to pay them. So for them to survive, the Burn Center has to be able to collect what they can from those who are responsible.”

Collecting money from the entities that caused the burns allows the victim to be compensated, saves taxpayers money and has allowed the Burn Center to become a large and effective major medical treatment facility, Walker said.

Johnston’s lawsuit was unfortunate, the lawyers said.

“We didn’t like to get sued, but we did get sued, and we defended ourselves, and we reached a resolution without admitting or denying anything,” Morgan said.

 

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