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OKLAHOMA COUNTY • CJ-2020-1027

Klingenberg & Associates, P.C. v. 1200 Shartel, LLC

Filed: Feb 20, 2020
Type: CJ

What's This Case About?

Let’s get one thing straight: a law firm is suing its own client—over unpaid legal bills. And not just any client, but a nonprofit housing project, a couple of defunct LLCs, and the woman who runs them all, Claudia Wright. The kicker? The law firm that’s suing her… is Klingenberg & Associates, P.C.—the very same firm that sent her a letter saying, “By the way, if we have to sue you to get paid, you’ll pay for that too.” Which is exactly what they’re doing. It’s like a legal version of Inception: a law firm billing a client for the cost of suing that same client over the bill. And we’re just here, popcorn in hand, watching the invoice spiral into infinity.

So who are these people? On one side, we’ve got Klingenberg & Associates, a small Oklahoma City law and accounting firm that specializes in tax disputes and, apparently, collecting on their own invoices. They’re run by Kenneth Klingenberg, with Grady Conrad and Joseph Pierce as the named attorneys—two guys who, based on the paperwork, seem to really enjoy sending sternly worded letters. On the other side: Claudia Wright, a woman who appears to be the puppet master behind a cluster of entities with names that sound like nonprofit housing initiatives or church basement projects. There’s 1200 Shartel, LLC; Hebrews Hospitality House, LLC (which, let’s be honest, sounds like a bed-and-breakfast run by a very niche religious group); Maney House Project, Inc., a nonprofit; and Wright House, Inc., which, given the name, we can only assume is either her family business or a real estate play on This Old House. Claudia is listed as the manager, officer, and likely sole decision-maker for all of them. The vibe? Passionate community builder. The reality? A woman whose companies are either “not in good standing” or barely hanging on. And now, apparently, also on the hook for nearly ten grand in legal fees.

Here’s how this all went down: back in August 2017, Claudia Wright hired Klingenberg & Associates to help her fight the Oklahoma Tax Commission. Classic move—nobody wins against tax authorities, but you’ve gotta try. The firm agreed, sent a very detailed engagement letter (because lawyers love letters), and laid out the terms: $350 an hour for the big guy, $250 for associates, $175 for CPAs, plus random fees for copies, parking, phone calls—basically, if it involved paper or time, it was getting billed. They asked for a $2,000 retainer, which is standard, like a deposit at a sketchy hotel. The letter even spelled out the nuclear option: “If we have to sue you to collect, you’ll pay for the lawsuit too.” And Claudia signed it. She initialed the deal like she was agreeing to a Netflix subscription, not a legal time bomb.

Then… nothing. Or at least, nothing paid. The firm did the work—filed forms, wrote letters, probably had at least one dramatic meeting with a tax auditor in a sad government office. But the payments stopped. The retainer ran out. No new money came in. By February 2020, the balance sat at $9,826.24, all of it over 120 days late—accounting speak for “you are so past due.” The firm sent a statement. It had a little table breaking down how long each chunk was overdue, like a financial horror movie timeline. The entire balance was in the “120+ Days” column. Ouch.

Now, here’s where it gets chef’s kiss ridiculous. Before filing the lawsuit, the firm did something very careful: they checked whether Claudia Wright was in the military. Why? Because of the Servicemembers Civil Relief Act (SCRA), a federal law that makes it really hard to sue active-duty soldiers. So they ran her name through the Department of Defense database. The result? “No,” she’s not on active duty. “No,” she hasn’t been in the last 367 days. “No,” her unit hasn’t been called up. The report is like a robot saying, “This human is not a soldier. You may proceed with legal violence.” And so they did. On February 17, 2020, Klingenberg & Associates sued Claudia Wright and all her corporate alter egos for breach of contract, unjust enrichment, and—wait for it—attorney’s fees for suing her. Yes, they’re demanding the court let them recover the cost of hiring themselves to sue themselves on her behalf. It’s legal cannibalism.

So what exactly are they claiming? First, breach of contract: “You hired us, we did the work, you didn’t pay. That’s a contract violation.” Second, unjust enrichment: “Even if the contract is shaky, you still got the benefit of our legal brainpower and didn’t pay. That’s not fair.” And third—and this is the spicy one—they want more attorney’s fees for the cost of filing this very lawsuit. Because, surprise, their original contract said you’d pay for collection costs if it came to this. So now they’re not just suing for $9,826.24—they’re suing for $9,826.24 plus the cost of suing. It’s like a gym charging you a late fee for not paying your membership, then charging you another late fee for not paying the first late fee.

And how much are they asking for? Right now, just under ten grand. Is that a lot? In the world of legal fees? Not really. Klingenberg’s top guy bills $350 an hour. That’s about 28 hours of work. For a tax dispute, that’s not excessive. But for a nonprofit housing project run by someone who may not have deep pockets? That’s a lot. Especially when the companies involved are “not in good standing”—a legal way of saying “the state has basically ghosted them.” This isn’t a Fortune 500 company stiffing its lawyers. This is a small-time operator who probably thought she was getting tax help, not a debt spiral.

So what’s our take? The most absurd part isn’t that a law firm sued a client. That happens. The absurdity is in the self-referential billing. They’re using a clause in their own contract—written by them—to justify charging more money to collect the money they’re already owed. It’s like a restaurant adding a “non-payment surcharge” to your bill, then adding a “surcharge collection fee” when you don’t pay that. And the fact that they included five defendants—four organizations and one person—when it’s clear Claudia Wright is the only real player? That’s overkill. It’s like bringing a flamethrower to a campfire.

But here’s the thing: we’re not rooting for the law firm. And we’re not rooting for Claudia Wright, either. We’re rooting for the receipt. We want to see the itemized bill. We want to know how many hours were spent drafting the engagement letter. We want to know if they billed 0.2 hours for “sighing and staring at unpaid invoice.” We want drama. We want petty line items. We want narrative. Because in the end, this isn’t just about money. It’s about pride. It’s about a law firm saying, “We may be small, but we will not be disrespected by a nonprofit housing LLC and its mysterious manager.” And honestly? That’s the kind of civil war we can get behind. Not because it’s fair. Not because it’s noble. But because it’s glorious. And because someone, somewhere, is definitely billing for this.

Case Overview

$9,826 Demand Petition
Jurisdiction
District Court of Oklahoma County, Oklahoma
Relief Sought
$9,826 Monetary
Plaintiffs
Claims
# Cause of Action Description
1 breach of contract Plaintiff seeks payment for professional services rendered to Defendants
2 unjust enrichment Plaintiff seeks payment for professional services rendered to Defendants
3 attorney's fees and costs Plaintiff seeks payment for attorney's fees and costs incurred in pursuing this action

Petition Text

2,581 words
IN THE DISTRICT COURT OF OKLAHOMA COUNTY STATE OF OKLAHOMA KLINGENBERG & ASSOCIATES, P.C., ) an Oklahoma professional corporation, Plaintiff, v. ) ) 1200 SHARTEL, LLC, an Oklahoma Limited Liability Company; HEBREWS HOSPITALITY HOUSE, LLC, an Oklahoma Limited Liability Company; MANEY HOUSE PROJECT, INC., an Oklahoma Non-Profit Corporation; WRIGHT HOUSE, INC., an Oklahoma Corporation; and CLAUDIA WRIGHT, as an Individual and as a Member and Manager of 1200 SHARTEL, LLC, and HEBREWS HOSPITALITY HOUSE, LLC, and as an Officer of MANEY HOUSE PROJECT, INC, and WRIGHT HOUSE, INC. Defendant. PETITION COMES NOW the Plaintiff, Klingenberg & Associates, P.C. by and through its attorneys of record, Grady R. Conrad and Joseph D. Pierce, and for its causes of action against Defendants, 1200 Shartel, LLC, an Oklahoma Limited Liability Company, Hebrews Hospitality House, LLC, an Oklahoma Limited Liability, Company, Maney House Project, Inc., an Oklahoma Non-Profit Corporation, Wright House, Inc., an Oklahoma Corporation, and Claudia Wright, as an Individual and as a Member and Manager of 1200 Shartel, LLC and Hebrews Hospitality House, LLC, and as an Officer of Maney House Project, Inc., and Wright House, Inc., alleges and states as follows: I. PARTIES 1. Plaintiff is an Oklahoma Professional Corporation, in good standing, doing business in the City of Oklahoma City, Oklahoma County, State of Oklahoma and is a professional corporation comprised of attorneys licensed by the Supreme Court of the State of Oklahoma to practice law in the State of Oklahoma. 2. Defendant, 1200 Shartel, LLC, is an Oklahoma Limited Liability Company, not in good standing, doing business in the City of Oklahoma City, Oklahoma County, State of Oklahoma. 3. Defendant, Hebrews Hospitality House, LLC, is an Oklahoma Limited Liability Company, not in good standing, doing business in the City of Oklahoma City, Oklahoma County, State of Oklahoma. 4. Defendant, Maney House Project, Inc., is an Oklahoma Not for Profit Corporation, in good standing, doing business in the City of Oklahoma City, Oklahoma County, State of Oklahoma. 5. Defendant, Wright House, Inc., is an Oklahoma Corporation, not in good standing, previously doing business in the City of Oklahoma City, Oklahoma County, State of Oklahoma. 6. Defendant, Claudia Wright, is an individual, and at all relevant times, domiciled in and residing in the State of Oklahoma and is the sole Member and Manager of Defendants, 1200 Shartel, LLC, and Hebrews Hospitality House, LLC, and as an Officer of Maney House Project, Inc., and Wright House, Inc.. II. JURISDICTION AND VENUE 7. The principal subject of the present action concerns professional legal and accounting services that were contracted for and rendered in Oklahoma City, Oklahoma County, State of Oklahoma. Therefore, this Court has subject matter jurisdiction of the present action. 8. This Court has personal jurisdiction of the parties by virtue of their respective minimum contacts with Oklahoma County, State of Oklahoma. 9. Venue is proper in Oklahoma County, State of Oklahoma. III. FACTUAL ALLEGATIONS 10. That in approximately August of 2017, Defendants engaged the Plaintiff to render professional legal and accounting services. 11. Plaintiff’s professionals performed work on behalf of the Defendants and billed the Defendants hourly for those services. 12. After applying all payments made by Defendants, there remains due and owing for said professional services, the amount of $9,826.24. A statement for said professional services is attached as Exhibit “A” and incorporated herein by reference. 13. That Defendant, Claudia Wright, is not a member of the Department of Defense. A copy of the Department of Defense Servicemembers Civil Relief Act (SCRA) report is attached as Exhibit “B” and is incorporated by reference. IV. FIRST CAUSE OF ACTION (BREACH OF CONTRACT) 14. Plaintiff incorporates by reference each and every material allegation contained in numerical paragraphs one through thirteen above as if fully set forth herein. 15. That Plaintiff and Defendants had a valid and enforceable contract. See Exhibit “C”. 16. That Defendants failed to pay for said professional services as agreed. 17. That Plaintiff was harmed as a direct result of Defendants’ inactions. 18. That Plaintiff is entitled to recover the amount owed by Defendants for said professional services. V. SECOND CAUSE OF ACTION (UNJUST ENRICHMENT) 19. Plaintiff incorporates by reference each and every material allegation contained in numerical paragraphs one through eighteen above as if fully set forth herein. 20. That as a result of the actions and/or inactions of Defendants, said Defendants has received the benefit from Plaintiff for professional services rendered. 21. That said professional services received by the Defendants are of value. 22. It would be unjust and inequitable for Defendants to receive said benefits free of charge. 23. That Plaintiff has been damaged as a result of Defendants' benefit from said professional services. VI. THIRD CAUSE OF ACTION (ATTORNEY'S FEES AND COSTS) 24. Plaintiff incorporates by reference each and every material allegation contained in numerical paragraphs one through twenty-three above as if fully set forth herein. 25. That the result of the actions and/or inactions of Defendants has caused Plaintiff to employ the services of an attorney for the prosecution of this action. 26. That Plaintiff is entitled to recover from Defendants the attorney's fees and costs associated with the prosecution of this matter. WHEREFORE, premises considered, Plaintiff, Klingenberg & Associates, P.C. prays for judgment against Defendants, 1200 Shartel, LLC, Hebrews Hospitality House, LLC, Maney House Project, Inc., Wright House, Inc., and Claudia Wright, for each of Plaintiff's causes of action against Defendants as more fully defined above, in an amount of $9,826.24, and for costs of this action to include attorney’s fees and costs, and for such other and further relief as this Court deems just and proper. Respectfully submitted, __________________________ Grady R. Conrad, OBA No. 32164 Joseph D. Pierce, OBA No. 32265 KLINGENBERG & ASSOCIATES, P.C. 330 N.W. 13th Street Oklahoma City, OK 73103 Telephone: (405) 236-1985 Facsimile: (405) 236-1541 [email protected] [email protected] ATTORNEYS FOR PLAINTIFF VERIFICATION STATE OF OKLAHOMA ) COUNTY OF OKLAHOMA ) SS: KENNETH W. KLINGENBERG, of lawful age, being first duly sworn on oath, deposes and says: That he is an authorized agent of Klingenberg & Associates, P.C., and he has read the within and foregoing Petition and the statements therein contained are true and correct as he verily believes under penalty of perjury. KENNETH W. KLINGENBERG SUBSCRIBED AND SWORN TO before me this 17th day of February, 2020. My Commission Expires: 11/26/2022 JOSEPH PIERCE NOTARY PUBLIC # 18011826 EXP. 11/26/22 STATE OF OKLAHOMA NOTARY PUBLIC My Commission No. 18011826 Klingenberg & Associates, P.C. 330 N.W. 13th Street Oklahoma City, OK 73103 (405) 236-1985 Claudia B. Wright Wright House, Inc. 1200 N. Shartel Ave. Oklahoma City, OK 73103 STATEMENT February 1, 2020 Amount Previous balance $9,826.24 Balance due $9,826.24 For your convenience we accept VISA, MASTERCARD, DISCOVER, or AMEX. Thank You! Current 30 Days 60 Days 90 Days 120+ Days $0.00 $0.00 $0.00 $0.00 $9,826.24 Department of Defense Manpower Data Center Status Report Pursuant to Servicemembers Civil Relief Act SSN: XXX-XX-2678 Birth Date: Last Name: WRIGHT First Name: CLAUDIA Middle Name: Status As Of: Feb-07-2020 Certificate ID: 9JRGQT162S84TFC <table> <tr> <th colspan="4">On Active Duty On Active Duty Status Date</th> </tr> <tr> <th>Active Duty Start Date</th> <th>Active Duty End Date</th> <th>Status</th> <th>Service Component</th> </tr> <tr> <td>NA</td> <td>NA</td> <td>No</td> <td>NA</td> </tr> <tr> <td colspan="4">This response reflects the individuals' active duty status based on the Active Duty Status Date</td> </tr> </table> <table> <tr> <th colspan="4">Left Active Duty Within 367 Days of Active Duty Status Date</th> </tr> <tr> <th>Active Duty Start Date</th> <th>Active Duty End Date</th> <th>Status</th> <th>Service Component</th> </tr> <tr> <td>NA</td> <td>NA</td> <td>No</td> <td>NA</td> </tr> <tr> <td colspan="4">This response reflects whether the individual left active duty status within 367 days preceding the Active Duty Status Date</td> </tr> </table> <table> <tr> <th colspan="4">The Member or His/Her Unit Was Notified of a Future Call-Up to Active Duty on Active Duty Status Date</th> </tr> <tr> <th>Order Notification Start Date</th> <th>Order Notification End Date</th> <th>Status</th> <th>Service Component</th> </tr> <tr> <td>NA</td> <td>NA</td> <td>No</td> <td>NA</td> </tr> <tr> <td colspan="4">This response reflects whether the individual or his/her unit has received early notification to report for active duty</td> </tr> </table> Upon searching the data banks of the Department of Defense Manpower Data Center, based on the information that you provided, the above is the status of the individual on the active duty status date as to all branches of the Uniformed Services (Army, Navy, Marine Corps, Air Force, NOAA, Public Health, and Coast Guard). This status includes information on a Servicemember or his/her unit receiving notification of future orders to report for Active Duty. Michael V. Sorrento Michael V. Sorrento, Director Department of Defense - Manpower Data Center 400 Gigling Rd. Seaside, CA 93955 The Defense Manpower Data Center (DMDC) is an organization of the Department of Defense (DoD) that maintains the Defense Enrollment and Eligibility Reporting System (DEERS) database which is the official source of data on eligibility for military medical care and other eligibility systems. The DoD strongly supports the enforcement of the Servicemembers Civil Relief Act (50 USC App. ? 501 et seq. as amended) (SCRA) (formerly known as the Soldiers' and Sailors' Civil Relief Act of 1940). DMDC has issued hundreds of thousands of "does not possess any information indicating that the individual is currently on active duty" responses, and has experienced only a small error rate. In the event the individual referenced above, or any family member, friend, or representative asserts in any manner that the individual was on active duty for the active duty status date, or is otherwise entitled to the protections of the SCRA, you are strongly encouraged to obtain further verification of the person's status by contacting that person's Service. Service contact information can be found on the SCRA website's FAQ page (Q33) via this URL: https://scra.dmcd.osd.mil/faq.xhtml#Q33. If you have evidence the person was on active duty for the active duty status date and you fail to obtain this additional Service verification, punitive provisions of the SCRA may be invoked against you. See 50 USC App. ? 521(c). This response reflects the following information: (1) The individual's Active Duty status on the Active Duty Status Date (2) Whether the individual left Active Duty status within 367 days preceding the Active Duty Status Date (3) Whether the individual or his/her unit received early notification to report for active duty on the Active Duty Status Date. More information on "Active Duty Status" Active duty status as reported in this certificate is defined in accordance with 10 USC ? 101(d) (1). Prior to 2010 only some of the active duty periods less than 30 consecutive days in length were available. In the case of a member of the National Guard, this includes service under a call to active service authorized by the President or the Secretary of Defense under 32 USC ? 502(f) for purposes of responding to a national emergency declared by the President and supported by Federal funds. All Active Guard Reserve (AGR) members must be assigned against an authorized mobilization position in the unit they support. This includes Navy Training and Administration of the Reserves (TARs), Marine Corps Active Reserve (ARs) and Coast Guard Reserve Program Administrator (RPAs). Active Duty status also applies to a Uniformed Service member who is an active duty commissioned officer of the U.S Public Health Service or the National Oceanic and Atmospheric Administration (NOAA Commissioned Corps). Coverage Under the SCRA is Broader in Some Cases Coverage under the SCRA is broader in some cases and includes some categories of persons on active duty for purposes of the SCRA who would not be reported as on Active Duty under this certificate. SCRA protections are for Title 10 and Title 14 active duty records for all the Uniformed Services periods. Title 32 periods of Active Duty are not covered by SCRA, as defined in accordance with 10 USC ? 101(d)(1). Many times orders are amended to extend the period of active duty, which would extend SCRA protections. Persons seeking to rely on this website certification should check to make sure the orders on which SCRA protections are based have not been amended to extend the inclusive dates of service. Furthermore, some protections of the SCRA may extend to persons who have received orders to report for active duty or to be inducted, but who have not actually begun active duty or actually reported for induction. The Last Date on Active Duty entry is important because a number of protections of the SCRA extend beyond the last dates of active duty. Those who could rely on this certificate are urged to seek qualified legal counsel to ensure that all rights guaranteed to Service members under the SCRA are protected WARNING: This certificate was provided based on a last name, SSN/date of birth, and active duty status date provided by the requester. Providing erroneous information will cause an erroneous certificate to be provided. KLINGENBERG & ASSOCIATES, P.C. KENNETH W. KLINGENBERG GRADY R. CONRAD JOSEPH D. PIERCE Attorneys at Law 390 N.W. 13TH STREET OKLAHOMA CITY, OKLAHOMA 73103 405-236-1985 FACSIMILE 405-236-1541 August 31, 2017 Claudia B. Wright 12000 N. Shartel Ave. Oklahoma City, OK 73103 RE: Fee Agreement Dear Ms. Wright: This letter is to confirm our engagement to perform legal and tax services for you in your dispute with the Oklahoma Tax Commission. These services include, but are not limited to, filing any necessary tax forms, correspondence and corresponding with the taxing authorities. Our fees for this engagement will be based upon the actual hours expended multiplied by the hourly rate. Current rates (subject to increases) for Klingenberg & Associates' professionals are as follows: Kenneth W. Klingenberg - $350/hr.; Associate Attorneys-$250/hr.; Certified Public Accountants-$175/hr. There may also be miscellaneous direct expenses such as copy costs, telephone costs, parking fees, mileage, court costs, etc., that will be included in your statements. It is customary for this office to receive a retainer in the amount of $2,000.00. If the retainer reaches a zero balance, we shall either request an additional retainer or bill you at the end of each month, depending on your case. If we send a statement at the end of the month with a balance due, payment on said statement must be made in full within ten days of the statement date. We will require that all outstanding statements and charges be paid on a current basis before providing any testimony services. If it becomes necessary to file suit to collect any unpaid balance, you agree to pay filing fees, costs of collection and any reasonable attorney fees. At the conclusion of our services, any remaining balance of the retainer in our trust account will be refunded to you. In the event that you disagree with or question any amount due under any invoice or statement, you agree to communicate such disagreement to us in writing within 30 days of the statement/invoice date specifying the question or reason for the disagreement. Any claim not made within this time period will be deemed waived. When this matter is over and our engagement has ended, if you so request, we will return any original documents or other materials provided by you. Otherwise, we will retain the file in accordance with our file retention policy. If you wish to obtain copies of other documents in our file, we will provide copies of such documents at your expense. We appreciate the opportunity to provide services to you and look forward to working with you. If this letter sets out our agreement as you understand it, please sign one copy where indicated below and return the signed letter to us. Sincerely, Joseph D. Pierce Understood and Agreed To: Claudia B. Wright
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