Minns & Arnett File Lawsuit Against K&L Gates Alleging Malpractice and Breach of Fiduciary Duty on Behalf of Quantum Materials Inc.
Summary: AmLaw 100 law firm K&L Gates is being sued by a Texas-based client, Quantum Materials, Inc., for professional malpractice and breach of fiduciary duty in a lawsuit filed by attorney Michael Minns of Houston-based Minns & Arnett. HOUSTON, Texas, October 17, 2018 – Quantum Materials, Inc. (otcqb:QTMM), an international, publicly traded nanotechnology manufacturer headquartered in San Marcos, Texas, has filed suit against K&L Gates alleging malpractice and breach of fiduciary duty. Quantum is represented by attorney Michael Minns of Minns & Arnett, a Houston litigation law firm.
The lawsuit stems from a basic conflict of interest after K&L Gates sat on the board of directors’ meetings for Quantum Materials as their counsel. When a dispute later arose with two lenders, the financial institution engaged K&L Gates to represent them in a lawsuit against Quantum. Thus, K&L Gates was representing the lender in a lawsuit against their own client. K&L Gates argued in Court that they had recently stopped representing Quantum although there was no letter of resignation and they had not been fired. While making that argument, they still had all of Quantum’s files.
In the lawsuit Quantum has filed against K&L Gates, the Petition claims that some of the technical ’defaults’ had, in part, been created by legal malpractice or fiduciary violations committed by K&L Gates while working on behalf of Quantum. In essence, K&L Gates was suing Quantum while in possession of Quantum’s confidential legal files and presumably also holding the confidential legal files for the lenders who were suing Quantum.
In its Petition, Quantum requests a jury trial to prohibit K&L Gates from disseminating confidential attorney-client information. The company seeks relief for the monetary damages caused by the firm’s actions, as well as more than $100,000,000 in punitive damages if the jury decides the firm was in criminal violation of insider trading laws.
“My client hired K&L Gates with the logical expectation that the firm would work in Quantum’s best interests. Instead, the actions of the law firm have created financial harm to this company and its shareholders,” said Michael Minns, Lead Counsel for Quantum Materials. “There’s a reason law firms are not allowed to have access to the attorney/client confidential information of the other side – it’s unfair.”
Minns & Arnett is a trial and appellate law firm based in Houston, Texas which tries Federal cases all over the United States. The firm focuses on complex tax matters and professional malpractice cases, with a concentration in criminal tax defense. The firm has litigated cases from New York to California, in Alaska and Hawaii, Texas and Jersey.
SOURCE: Minns & Arnett
COURT: Hays County 274th District Court
CAUSE NUMBER: 18-2393