Dykema Secures Reversal and Remand for Housing Investor as Fifth Circuit Overturns Jury Decision in High-Stakes Real Estate Dispute

The United States Court of Appeals for the Fifth Circuit reversed and remanded judgment in the appeal of Clapper et al. v. American Realty Investors Inc. et al. Dykema had appealed the jury decision in the United States District Court for the Northern District of Texas arguing that opposing counsel made a series of highly prejudicial comments at closing arguments.

The dispute began in 1999 arising out of an agreement regarding the acquisition and management of apartment complexes. In 2011, Clapper prevailed at trial over American Realty Investors, Inc. and was awarded a significant judgment. Clapper sued the Defendants in 2014 claiming they transferred assets on the eve of a prior trial to ultimately avoid paying a judgment in violation of the Texas Uniform Fraudulent Transfer Act, and under the doctrine of alter ego liability. The case went to trial in May 2021 and a jury returned a verdict in the Defendants’ favor.

Clapper appealed the 2021 judgment, arguing that the counsel for the Defense made prejudicial and improper remarks which irreparably prejudiced the jury verdict. In a per curiam opinion issued March 8, 2024, the Fifth Circuit reversed the district court judgment and remanded the case for further proceedings.

In its opinion, the Fifth Circuit described the remarks, noting that they “employed nearly every type of improper argument identified by our Court” and commented that the attacks of opposing counsel, “extend far beyond permissible hyperbole or ‘expressive language’ and were designed to bias the jury against Clapper and his counsel. … These attacks ‘unquestionably tarnish[ed] the badge of evenhandedness and fairness that normally marks our system of justice.’”

“We’re glad to see the Fifth Circuit carefully considered the trial record. Today’s opinion is a win for professionalism and integrity,” said Dykema Member Alison Ashmore. “We look forward to another trial where we can present our clients’ arguments again in a fair and civil court free of biased and improper language.”

Joining Ashmore on the Dykema team representing Clapper was Chris Kratovil, Jeff Fine, Brooke Bohlen, and Melanie Fry. The case is David M. Clapper v. American Realty Investors. Inc., Case Number: 21-10805.

Dykema’s litigators provide efficient, responsive, cost-effective counsel to secure clients results that provide the best opportunities for their businesses. Dykema lawyers try cases across the country for clients in every industry, and quickly position cases for early resolution obtaining favorable results while avoiding costs of lengthy litigation by using a variety of dispute resolution processes.