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Law360 (November 9, 2020, 5:45 PM EST ) A San Antonio law firm accused of double-crossing a Mexico-based mask provider during the COVID-19 pandemic is claiming that other parties lied to the firm's lawyer about the price a Texas agency actually paid for the masks.
Serna & Associates PLLC on Friday filed crossclaims and a third-party complaint in a suit that accuses the law firm and its principal Enrique Serna of fraud, conspiracy and other claims. The firm said that Online Transport International LLC executive Joseph Lassen and Lassen's business partner Austin Taylor lied about the price the Texas Department of Emergency Management was paying for masks.
"Lassen and Taylor lied to [Enrique] Serna about how much TDEM was paying for the masks — and pocketed the difference between what TDEM paid and what they told Serna that TDEM had paid," Serna & Associates said.
The case was launched in September by Mexican pharmaceutical and medical equipment supply company Happy Healthcare SA de CV, which alleged that Enrique Serna and his firm were withholding more than $3 million for more than 5 million masks the company provided for a Texas Department of Emergency Management deal.
Enrique Serna allegedly paid Happy Healthcare 55 cents per mask and then turned around and sold them through Florida-based Online Transport International LLC and Texas-based Taylor Bio Armor to the Texas Department of Emergency Management for $1.25 each. The lawyer had promised to split profits from the sale fifty-fifty with Happy Healthcare, but the Mexican company hasn't seen any profits, according to the suit.
Happy Healthcare's complaint said Enrique Serna, an attorney the company trusted and who had represented some of its U.S. affiliates in the past, approached the supply company in March with a business venture that would capitalize on the COVID-19 pandemic by selling large quantities of protective face masks to the Lone Star State.
Happy Healthcare supplied the masks in five different transactions, with the first three shipments on a pay-in-advance basis, according to court documents. Happy Healthcare received its accrual costs for the masks beforehand and was allegedly told by Serna it would receive its share of the profits once the Texas Department of Emergency Management paid him.
For the fourth shipment though, Serna convinced Happy Healthcare to provide the masks on credit, according to the suit. Serna agreed to pay Happy Healthcare about $475,000 for the shipment within 30 days, according to the complaint.
The fifth shipment, which contained 5 million masks, was valued at $3 million, which Serna allegedly told Happy Healthcare that OTI and Taylor Bio would pay for. OTI invoiced the state of Texas $6.225 million for the same shipment, according to the suit.
Happy Healthcare said that despite several communications and demands for payment, it hasn't received any of the money owed. In mid-August, OTI and its executive Lassen blamed the delayed payments on the state of Texas, accusing the Department of Emergency Management of not paying OTI its invoice amount. But "the truth is that TDEM had already paid OTI almost $3 million for the fifth shipment of masks," the complaint said.
Serna & Associates' Friday filing launched crossclaims against Online Transport, Taylor Bio Armor and Lassen, and third-party claims against Taylor and Taylor & Perry Investment Group LLC. Serna & Associates did not launch claims against Happy Healthcare.
"[Enrique] Serna acknowledges his role in bringing Happy Healthcare into business with Lassen, Taylor and the other OTI defendants and third-party defendants," the firm said. "But Lassen, Taylor and their affiliated entities defrauded both [Serna & Associates] and Happy Healthcare, causing millions of dollars in damages in the process."
Counsel for Online Transport, Taylor Bio Armor and Lassen told Law360 on Monday morning that he had not yet read Serna's filing.
Counsel for Serna, his firm and Happy Healthcare did not immediately respond to requests for comment.
Contact information for Taylor and Taylor & Perry Investment Group was not immediately available.
Happy Healthcare is represented by Jason M. Davis and Jay Hulings of Davis & Santos PC.
Online Transport, Taylor Bio Armor and Lassen are represented by Edward D. Burbach and Andres Medrano of Foley & Lardner LLP.
Serna and his firm are represented by Edward C. Snyder of Castillo Snyder PC.
Counsel information for Taylor and Taylor & Perry Investment Group was not immediately available on Monday.
The case is Happy Healthcare SA de CV v. Online Transport Intl LLC et al., case number 5:20-cv-01038, in the U.S. District Court for the Western District of Texas.
--Additional reporting by Katie Buehler. Editing by Jill Coffey.
For a reprint of this article, please contact reprints@law360.com.
