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IN THE CHANCERY COURT FOR WILLIAMSON COUNTY, TENNESSEE

RALPH W. MELLO, )
)
Plaintiff, )
)
v. )
Docket No. 37626
)
HARE, WYNN, NEWELL & NEWTON, )
)
Defendant. )

FIRST AMENDED COMPLAINT

Comes now the Plaintiff, Ralph W. Mello, and files this amended complaint for

compensatory and punitive damages for failing to honor Plaintiff's attorney's lien on the

proceeds of a settlement, for failing to honor the assignment of proceeds of a

settlement to Plaintiff, for breach of duty to satisfy a statutory lien as well as an

equitable lien, for conversion, and for breach of contract.

For Plaintiff’s complaint Plaintiff alleges as follows:

1. Plaintiff is an attorney and resident of Williamson County, Tennessee.

2. Plaintiff maintained a law office in Williamson County, Tennessee from

1992 until December 31, 2002.

3. Defendant Hare, Wynn, Newell & Newton (hereinafter "Hare Wynn") is a

law firm located in Birmingham, Alabama which was involved in the False Claims Act

litigation in Tennessee which is discussed further herein.

4. In 1994 A. Scott Pogue (hereinafter "Pogue") came to Plaintiff’s law office

in Williamson County, Tennessee and retained Plaintiff and Larry L. Crain (hereinafter

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"Crain") to represent him in filing a False Claims Act case against several defendants

including Diabetes Treatment Centers of America, Inc.

4. On or about June 23, 1994 Plaintiff did represent Pogue and prepared

and filed a False Claims Act case against several defendants, including Diabetes

Treatment Centers of America, Inc., in the United States District Court for the Middle

District of Tennessee.

5. Between 1994 and 2002 Plaintiff was lead counsel and spent in excess of

1734 hours in handling Pogue’s case.

6. In 1995 Plaintiff, Pogue, and Crain agreed to bring in the law firm of

Helmer, Martins & Morgan from Cincinatti, Ohio (hereinafter "Helmer") to assist with the

litigation.

7. In 2002 it was agreed between the Plaintiff and Pogue, as well as by

Crain and Helmer, that Hare Wynn would be brought into the case to help litigate the

case. At the request of Plaintiff, all parties further agreed that Plaintiff would no longer

be involved in the litigation of the case.

8. At that time, on or about June 25, 2002, Plaintiff entered into a new fee

agreement with Pogue which replaced the previous fee agreement Plaintiff had with

Pogue. A copy of that agreement is attached hereto as Exhibit A.

9. Crain, Helmer and Hare Wynn were also parties to that agreement.

11. In or around 2005 Pogue agreed to a settlement with the United States of

America and with HCA which allotted the sum of $1,500,000.00 to the settlement of a

portion of Pogue’s False Claims Act case.

12. Pogue received a portion of that settlement as a relator's share.

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13. After the partial settlement of Pogue’s False Claims Act case in 2005

Plaintiff brought an action in this court to, among other things, determine the rights of

the parties under the June 25, 2002 agreement.

14. Hare Wynn intervened in that action.

15. The June 25, 2002 fee agreement contained an arbitration clause and this

court ordered an arbitration to be held.

16. An arbitration was held and a decision rendered. A copy of the arbitration

award is attached hereto as Exhibit B.

17. Hare Wynn was aware of the arbitration decision.

18. This court then entered an order incorporating the arbitration award. A

copy of this court's order is attached as Exhibit C.

19. Hare Wynn was aware of this court’s order.

20. As a result of the arbitration award and court order Plaintiff received 7.5%

of Pogue's relator's share of the partial settlement as provided for in the agreement.

21. Pursuant to the provisions of T.C.A. § 23-2-102 Plaintiff has an attorney's

lien on Pogue's right of action and share of any recovery in the False Claims Act case.

22. Hare Wynn was, and is, aware of Plaintiff's attorney's lien and the

assignment contained in the fee agreement.

23. On February 22, 2007 Pogue filed a petition for bankruptcy protection in

the United States Bankruptcy Court for the Northern District of Alabama.

24. As a part of the Bankruptcy action, all rights of Pogue in the False Claims

Act case were transferred to James G. Henderson as liquidation trustee.

25. In or around February 17, 2009, before James G. Henderson was

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appointed as Liquidation Trustee, Hare Wynn came to Nashville to negotiate a

settlement of Pogue's False Claims Act case with the remaining defendant, American

Healthways Services, Inc. f/k/a Diabetes Treatment Centers of America, Inc.

26. On or about March 31, 2009 Hare Wynn deliberately and intentionally

executed a settlement agreement with the defendants that provided for a relator's share

of $ 8,120,000.00 to be paid directly to "Relator".

27. Hare Wynn intentionally made no provisions in the settlement agreement

for the recognition or satisfaction of Plaintiff's statutory attorney's lien, or equitable lien,

or of the assignment received by Plaintiff in the June 25, 2002 fee agreement.

28. Hare Wynn deliberately and intentionally had the entire $ 8,120,000.00

relator's share wired to Hare Wynn.

29. Plaintiff was entitled to the immediate possession of his share of the funds

received by Hare Wynn as the relator’s share, which was the amount of $ 609,000.00.

30. Hare Wynn then deliberately and intentionally, paid the entire $

8,120,000.00 over to James G. Henderson in reckless disregard of Plaintiff's statutory

attorney's lien, equitable lien, and of the assignment received by Plaintiff in the June 25,

2002 fee agreement.

31. Such reckless disregard constitutes a breach of Hare Wynn's duty to

satisfy Plaintiff's attorney's lien, Plaintiff's equitable lien, and of the assignment

received by Plaintiff in the June 25, 2002 fee agreement out of the litigation proceeds

received.

32. By undertaking the handling of the litigation and settlement of Pogue's

False Claims Act action Hare Wynn had a duty to arrange for the satisfaction of

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Plaintiff's attorney's statutory lien, and equitable lien, and of the assignment received by

Plaintiff in the June 25, 2002 fee agreement out of any proceeds received.

33. Hare Wynn's failure to make provisions in the settlement agreement for

the recognition or satisfaction of Plaintiff's attorney's statutory lien, and equitable lien,

and of the assignment received by Plaintiff in the June 25, 2002 fee agreement out of

the proceeds received by Hare Wynn constitutes a breach of that duty and of Plaintiff's

statutory attorney's lien, equitable lien, and assignment interest.

34. As a direct and proximate result of Hare Wynn's breach Hare Wynn is

liable to Plaintiff for the amount of his 7.5% contingency fee and for additional damages

sustained by Plaintiff.

35. As a direct and proximate result of Hare Wynn’s breach Plaintiff has

suffered damages including, but not limited to, loss of use of the funds belonging to

Plaintiff and expenses in trying to obtain the funds.

36. Hare Wynn’s actions make it responsible to Plaintiff for trover and

conversion.

37. As a direct and proximate result of Hare Wynn's breach and conversion

Plaintiff has suffered damages including, but not limited to, loss of use of the funds

belonging to Plaintiff and expenses in trying to obtain the funds.

38. Hare Wynn’s actions make it responsible to Plaintiff for breach of contract.

39. As a direct and proximate result of Hare Wynn's breach of contract

Plaintiff has suffered damages including, but not limited to, loss of use of the funds

belonging to Plaintiff and expenses in trying to obtain the funds.

WHEREFORE Plaintiff prays as follows:

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1. That proper process issue requiring the defendant to appear and defend

this action.

2. That the Plaintiff be awarded the amount of his lien as well as additional

compensatory damages and punitive damages against Hare, Wynn, Newell and

Newton in an amount to be determined at trial.

3. That the Plaintiff be awarded prejudgment interest and post judgment

interest on any damages awarded.

4. For such other and further declaratory and other relief as the Court

deems appropriate.

Respectfully submitted,

Ralph W. Mello, Atty.


809 Division Street
Nashville, TN 37203
(615) 345-6000

CERTIFICATE OF SERVICE

I hereby certify that a true and correct copy of the foregoing First Amended
Complaint was mailed via the U.S. Postal Service postage prepaid to the following
person this the 2nd day of March, 2010.

Leon Ashford, Registered Agent

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Hare Wynn Newell & Newton
2025 3rd Avenue North
8th Floor
Birmingham, AL 35203

___________________________
Ralph W. Mello

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