Disbarred Attorney Referral Fee Suit Revived: Texas Court Reopens $3.8M Claim Over Seven Referred Cases

A Texas court of appeals on November 5, 2026 revived a disbarred attorney referral fee lawsuit in which former lawyer R. Kent Livesay seeks more than $3.8 million in fees and costs from two law firms on seven cases he referred while still licensed. The court held that the trial court had no competent evidence for its finding that Livesay did the work only after his disbarment, the finding on which the firms' defense rested, so the claim goes back to the trial court rather than ending in a dismissal.

The ruling does not award Livesay anything. What it does is reopen a question that Texas plaintiffs' firms, referring lawyers and their clients have argued about for decades: when a lawyer refers a case, then loses his license before the case pays, who gets the fee that was promised to him? In Texas the answer turns almost entirely on timing, on what the referring lawyer did and when he did it, and the November 5 decision says a court cannot answer that question without proof.

What did the Texas appeals court decide in the Livesay fee case?

The appellate court reversed a trial court ruling that had thrown out Livesay's claims. According to Law360's report of the decision, the panel found the trial court lacked competent evidence to support its finding that Livesay performed the work at issue only after he was disbarred. A separate report of the same ruling says the lower court had accepted the firms' position and dismissed his claims, and that the appeals court concluded the evidence did not establish the firms' defense.

That distinction matters. The firms had argued that paying a former lawyer after his disbarment would violate the Texas Disciplinary Rules of Professional Conduct and a Texas Supreme Court order. Those arguments have force if the fee is payment for work done by a nonlawyer. They have much less force if the fee is payment for work a licensed lawyer completed before his license ended. By holding that the record did not show post-disbarment work, the court left the firms without the factual premise their legal argument needs, at least on the present record.

Put simply, the holding is evidentiary, not a declaration that disbarred lawyers are entitled to referral fees. The appellate court did not decide that Livesay's fee agreements are valid, that they complied with the fee-division rule, or that he is owed $3.8 million. It decided that the reason given for rejecting the claim was not supported by competent evidence.

How much is Livesay seeking from the law firms?

Livesay seeks more than $3.8 million in fees and costs, according to the November 5 report. The claim covers seven client cases that he referred to the firms while he was still a licensed Texas lawyer. The available reports do not identify the seven underlying cases, the clients, the case types, or the gross recoveries, and the split each referral agreement called for has not been made public in the reporting. Those details will matter on remand, because the size of any fee share under Texas Disciplinary Rule 1.04(f) is supposed to reflect either the services performed or the responsibility assumed, and the client must have agreed to the terms in writing.

Who is R. Kent Livesay?

Livesay is a former Texas lawyer who practiced from offices in McAllen and Arlington and who, by 2017, had become one of the most prominent faces of Texas hail-storm litigation, the wave of property-insurance suits that followed major hail events in the early and mid-2010s. The State Bar's disciplinary findings against him included sending case runners to solicit homeowners with hail-damaged roofs. His license history and criminal case run as follows.

Date	Event	Source type
2016	One-year suspension for professional misconduct	Disciplinary reports; regional legal press
June 2017	Indicted on insurance fraud and barratry charges tied to hail-damage lawsuits filed for homeowners who had not consented	Press reports of indictment
2018	Second one-year suspension for separate misconduct	Disciplinary reports
June 2018	Pleads guilty in Tarrant County and is sentenced to five years in prison; agrees to pay restitution and to testify about the scheme	Prosecutor's release; Insurance Journal; Dallas Morning News
July 6, 2018	Supreme Court of Texas accepts the resignation in lieu of discipline of Richard Kent Livesay, then 49, of Edinburg	State Bar Commission for Lawyer Discipline report
May 22, 2025	Appeal docketed as No. 14-25-00393-CV against Kaster, Lynch, Farrar & Ball, LLP and related parties	Appellate docket
Sept. 2025	Appeal stayed for mediation; motion to reinstate granted September 18, 2025	Appellate docket
Nov. 5, 2026	Court of appeals revives the fee claim, finding no competent evidence that the work was done only after disbarment	Law360; inkl

The criminal case was investigated by the Texas Department of Insurance fraud unit. Prosecutors said Livesay would appear at the homes of people with roof damage, say he was working with a roofing company, and have them sign paperwork; suits were then filed against insurers for homeowners who had not agreed to be represented. As part of the plea, he agreed to describe the wider barratry scheme, and later testified about how clients were recruited when he expanded into Tarrant County.

Technically, Livesay left the profession through a resignation in lieu of discipline rather than a contested disbarment judgment. News coverage of the November 5 ruling, and the parties' arguments as reported, describe him as disbarred, and the practical consequence is the same for this dispute: after July 2018 he could not practice law in Texas, and under Rule 5.04(a) a Texas lawyer generally may not share legal fees with a nonlawyer.

The parties and the docket

The reports of the November 5 ruling describe the defendants as two law firms. A public appellate docket for a fee appeal Livesay brought in 2025, No. 14-25-00393-CV in Houston's Fourteenth Court of Appeals, lists the appellants as R. Kent Livesay and The Law Office of R. Kent Livesay, PC, and the appellees as Kaster, Lynch, Farrar & Ball, LLP; Farrar & Ball, LLP; Kyle Farrar; and Wesley Todd Ball. The appeal arose from a judgment of the 152nd District Court, a Harris County civil district court. Both firm names are associated with Houston trial lawyers Kyle Farrar and Wesley Todd Ball, who are named individually.

The docket shows the appeal was filed on May 22, 2025, abated for mediation in September 2025, and reinstated on September 18, 2025, after mediation did not resolve it. The November 5 reporting does not reproduce the opinion's cause number or identify the authoring justice, and Texas moves civil appeals between its intermediate courts to equalize dockets, so the docket number is offered here as the case record for the dispute rather than as the citation of the opinion. None of the firm defendants' public statements about the ruling had been reported as of November 9.

Can a disbarred attorney collect referral fees in Texas?

Sometimes, but only on narrow conditions: under Texas Ethics Opinion 568, a lawyer may share a contingent fee with a suspended or disbarred lawyer if the fee-sharing agreement existed before the discipline and the disciplined lawyer fully performed his share of the work before it. If either condition fails, paying the fee is treated as sharing legal fees with a nonlawyer, which Rule 5.04(a) forbids.

That answer is the product of more than sixty years of Texas law moving in two directions at once.

Royden v. Ardoin and the forfeiture rule

The starting point is Royden v. Ardoin, 331 S.W.2d 206 (Tex. 1960). Attorney U. Stanley Ardoin had a contingent fee arrangement in a matter involving a 93-year-old widow's affairs; because of his own misconduct, his license was suspended for three months and he was enjoined from handling her property before he could complete the engagement. The Supreme Court of Texas treated the discipline as the equivalent of a voluntary abandonment of the case, and a lawyer who abandons a contingent fee engagement without just cause recovers nothing under the contract.

Ethics Opinion 432 (1986)

The Professional Ethics Committee applied Royden in Opinion 432, concluding that where a lawyer is disbarred or suspended before completing a contingent fee contract, paying that lawyer either under the contract or in quantum meruit for services already rendered would violate the then-applicable rules. Opinion 432 is the harshest statement of the rule and is the version most defense-side fee disputants cite.

Lee v. Cherry (1991)

Five years later, the Houston Fourteenth Court of Appeals confronted a referral fee owed to a forwarding lawyer who resigned his license before the referred case settled. In Lee v. Cherry, 812 S.W.2d 361 (Tex. App.—Houston [14th Dist.] 1991), the trial court had granted summary judgment declaring the referral contract unenforceable as fee sharing with a nonlawyer. The court of appeals reversed and remanded, distinguishing Royden where the forwarding lawyer had completed his part of the bargain before leaving practice. Justice Sears dissented, relying on Royden to argue the agreement was void. The parties returned to the same court in Cherry v. Lee, 899 S.W.2d 329 (Tex. App. 1995), which cited the 1991 decision for the principle that a lawyer may recover a contingent fee where the contract is executed and complete.

Ethics Opinion 568 (2006) and Opinion 592 (2010)

Opinion 568 reconciled these lines after the 2005 amendments to the fee rules. It concluded that a lawyer may share a contingent fee with a suspended or disbarred lawyer if the agreement predates the discipline and the disciplined lawyer fully performed the work beforehand. Opinion 592 then addressed the other end: a Texas lawyer may not enter into an agreement to share fees with a lawyer who is already suspended, and may not share fees under such an agreement, because a suspended lawyer is treated as a nonlawyer for Rule 5.04(a) purposes.

Authority	Year	Question	Answer
Royden v. Ardoin, 331 S.W.2d 206	1960	Can a lawyer disciplined mid-engagement recover on a contingent fee?	No; discipline treated as voluntary abandonment
Ethics Opinion 432	1986	Can a firm pay a disbarred lawyer on the contract or in quantum meruit?	No, if disbarment came before the contract was completed
Lee v. Cherry, 812 S.W.2d 361	1991	Is a referral contract with a lawyer who later resigned unenforceable as a matter of law?	No; summary judgment reversed and remanded (Sears, J., dissenting)
Rule 1.04(f) amendments	2005	Is a pure referral fee permitted?	No; fee division requires proportional services or joint responsibility plus written client consent
Ethics Opinion 568	2006	Can a lawyer share a contingent fee with a disbarred lawyer?	Yes, if the agreement predates discipline and the work was fully performed before it
Ethics Opinion 592	2010	Can a lawyer agree to share fees with a currently suspended lawyer?	No
Livesay fee appeal	Nov. 5, 2026	Can a court reject the claim on a finding of post-disbarment work?	Not without competent evidence supporting that finding

What are the Texas rules for referral fees under Rule 1.04(f)?

Texas Disciplinary Rule 1.04(f) permits a division of fees between lawyers who are not in the same firm only if the division is in proportion to the professional services each lawyer performs, or is made between lawyers who assume joint responsibility for the representation, and the client consents in writing to the terms of the arrangement before the association or referral. The client's consent must cover the basis on which the fee will be divided, and a client who has not received the required disclosures has not validly consented.

The 2005 amendments abolished the pure referral fee: a payment to a referring lawyer simply for sending the case, without performing work or assuming joint responsibility. Joint responsibility, in Texas practice, is not a label. Ethics guidance and firm compliance materials describe a referring lawyer who monitors the matter, stays available to the client, answers the client's questions, and remains financially and professionally accountable for the representation as if a partner of the handling firm. Opinion 688 (2020) added that a lawyer who withdraws early after providing limited services may face a pure-referral problem whatever the agreement calls the split.

This is where a disbarred attorney referral fee claim becomes difficult. Joint responsibility is an ongoing obligation. A referring lawyer who loses his license cannot keep monitoring the case, advising the client, or standing behind the representation. If the referral rested on joint responsibility rather than completed services, the firms can argue the referring lawyer's side of the bargain was never finished, which is the factual pattern Royden and Opinion 432 treat as forfeiture. If, on the other hand, the referring lawyer did the case work he was paid to do while licensed, the Opinion 568 framework points the other way.

Why timing decides a disbarred attorney referral fee claim

Every authority in the table above asks the same question in different words: was the disciplined lawyer's work done before the discipline? The trial court in Livesay's case answered no, finding he did the work only after his disbarment. The court of appeals held that finding had no competent evidentiary support.

That is a significant procedural posture for a fee dispute. A trial court finding of fact is ordinarily reviewed deferentially, and reversing it on the ground that there is no competent evidence means the appellate court concluded the record simply did not contain proof the firms needed. The firms' legal theory, that paying Livesay would mean sharing fees with a nonlawyer and violating a Supreme Court order, depended on the same fact. Without it, the theory could not support dismissal.

The case also illustrates a practical problem for referral-heavy personal injury practices. Contingency Fee cases referred in one year may not resolve for three, five or more years, and the referring lawyer's discipline can arrive at any point in that span. The firm that holds the file, and the fee, often has better records of who did what than the referring lawyer does, which makes the documentary record of the referring lawyer's work, and the client's written consent, central to how these disputes come out.

What happens next in the Livesay fee dispute?

The case returns to the trial court for further proceedings. On remand, the parties will litigate the questions the appellate ruling left open: when Livesay did whatever work he did on each of the seven cases; whether each referral agreement satisfied Rule 1.04(f), including written client consent obtained before the referral; whether the agreements rested on proportional services or joint responsibility; and whether any of the work, if done after July 2018, is severable from work done before. The firms may also renew arguments based on the order accepting his resignation, or seek further review in the Supreme Court of Texas by petition.

Because the appellate holding rests on the absence of competent evidence, the firms are not foreclosed from proving post-disbarment work with better evidence if the trial court reopens the record. Equally, Livesay has not established entitlement to any amount. A fee claim of this size, involving a lawyer whose license ended in a criminal plea, is also a candidate for renewed mediation, which the parties tried once in 2025.

What it means for personal injury firms, referring lawyers and clients

For handling firms. Referral agreements should be reviewed now, not when a check is cut. Firms that pay referral shares on settlement should know which agreements rest on proportional services and which on joint responsibility, and should keep the signed client consent and a contemporaneous record of the referring lawyer's actual work in the file. When a referring lawyer is suspended, resigns, or is disbarred while a case is pending, the safer practice is to calendar the event, preserve records of work done before it, and hold the disputed share in trust pending resolution rather than unilaterally keeping or paying it.

For referring lawyers. A joint-responsibility referral is a continuing commitment. A lawyer who wants a referral share to survive later events, including retirement, illness, or license problems, should build a record of completed work while licensed and should not rely on a pure referral label that Texas abolished in 2005. The Livesay ruling helps a referring lawyer only where the record does not show the work happened after the license ended.

For clients. The client's written consent to the fee division is a condition of any fee split under Rule 1.04(f). A dispute between lawyers over a referral share should not reduce the client's recovery; the split is drawn from the lawyers' fee, and the total fee still may not be unconscionable. Clients whose original lawyer is disciplined mid-case are entitled to an explanation of who is handling the matter and how the fee will be divided.

For the defense and insurer side. Hail-storm litigation remains a reference point in Texas tort-reform debates. The Livesay dispute is a reminder that the plaintiffs' bar itself polices referral economics through fee litigation, and that the ethics rules on fee division apply between plaintiffs' firms just as they do in the claims process.

FAQ

Can a disbarred attorney collect referral fees in Texas?

Only in limited circumstances. Under Ethics Opinion 568, a Texas lawyer may share a contingent fee with a disbarred lawyer if the agreement predates the disbarment and the disbarred lawyer fully performed the work before it; otherwise, payment is fee sharing with a nonlawyer barred by Rule 5.04(a).

What did the court decide in the Livesay case?

On November 5, 2026, a Texas court of appeals reinstated R. Kent Livesay's suit for more than $3.8 million in fees and costs, holding the trial court lacked competent evidence that he did the work on seven referred cases only after his disbarment. The case returns to the trial court.

Do Texas law firms have to pay a referral fee to a lawyer who was later disbarred?

Not automatically. Whether the fee is owed depends on whether the referral agreement complied with Rule 1.04(f), including the client's prior written consent, and whether the referring lawyer completed his work before the discipline took effect. Firms that cannot prove post-discipline work may not be able to rely on the disbarment alone.

Who is R. Kent Livesay?

He is a former Texas hail-storm litigation lawyer whose resignation in lieu of discipline the Supreme Court of Texas accepted on July 6, 2018, after a Tarrant County court sentenced him in June 2018 to five years in prison on insurance fraud and barratry charges.

Did the ruling award Livesay $3.8 million?

No. The ruling revives the claim and sends it back for further proceedings. The firms may still defeat it with evidence of post-disbarment work or noncompliance with the fee-division rules.