Anglo-Dutch Petroleum International, Inc. v. Greenberg Peden, P.C.

267 S.W.3d 454, 2008 Tex. App. LEXIS 7178, 2008 WL 4355069
CourtCourt of Appeals of Texas
DecidedAugust 26, 2008
Docket14-07-00343-CV
StatusPublished
Cited by11 cases

This text of 267 S.W.3d 454 (Anglo-Dutch Petroleum International, Inc. v. Greenberg Peden, P.C.) is published on Counsel Stack Legal Research, covering Court of Appeals of Texas primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Anglo-Dutch Petroleum International, Inc. v. Greenberg Peden, P.C., 267 S.W.3d 454, 2008 Tex. App. LEXIS 7178, 2008 WL 4355069 (Tex. Ct. App. 2008).

Opinion

OPINION

WILLIAM J. BOYCE, Justice.

Anglo-Dutch Petroleum International, Inc. and Anglo-Dutch (Tenge) L.L.C. (collectively, “Anglo-Dutch”) appeal the trial court’s judgment in favor of Greenberg Peden, P.C. and Gerard J. Swonke in connection with this fee dispute between a client and an attorney.

We affirm the trial court’s judgment.

Overview

This appeal arises from a contingency fee agreement dated October 16, 2000. It is undisputed that the client, Anglo-Dutch, entered the fee agreement. It is undisputed that Anglo-Dutch’s president, Scott V. Van Dyke, signed the fee agreement on behalf of Anglo-Dutch. It is undisputed that the attorney, Swonke, also signed the fee agreement. It is hotly disputed whether Swonke signed the fee agreement on behalf of himself individually or on behalf of the Greenberg Peden law firm, where he was “of counsel” at the time.

Swonke contends he signed on behalf of himself individually and can recover fees individually. Anglo-Dutch contends Swonke signed on behalf of the law firm and cannot recover fees individually. Greenberg Peden disclaims rights to or interest in the disputed fees. The law firm assigned any interest under the October 16, 2000 fee agreement to Swonke; released Anglo-Dutch from liability to Greenberg Peden for the disputed fees; and acknowledged that Greenberg Peden is not entitled to receive money from Anglo-Dutch under the agreement.

The trial court concluded that the October 16, 2000 fee agreement is ambiguous with respect to the capacity in which Swonke signed, and submitted that issue to the jury. The jury sided with Swonke on that issue, finding that he signed the fee agreement with Anglo-Dutch on behalf of himself individually and not on behalf of Greenberg Peden. The jury further answered that Anglo-Dutch failed to comply with the fee agreement; that Swonke complied with his fiduciary duty to his client Anglo-Dutch; and that Van Dyke did not commit fraud against Swonke. The jury awarded $1 million as contract damages to Swonke for Anglo-Dutch’s failure to comply with the fee agreement. The trial court signed a final judgment in conformity with the jury’s findings awarding contract damages and additional statutory attorney’s fees to Swonke. See Tex. Civ. Prac. & Rem.Code Ann. § 38.001 (Vernon 2008).

Anglo-Dutch assails the trial court’s final judgment in favor of Swonke on multiple grounds. Resolution of Anglo-Dutch’s appellate challenges requires a detailed discussion of the evidence adduced at trial and the circumstances surrounding execution of the October 16, 2000 fee agreement.

Facts

Swonke joined Greenberg Peden as “of counsel” in 1987. 1 This status gave Swonke discretion to choose his clients and *459 gave Greenberg Peden a right of first refusal regarding clients and matters Swonke brought to the firm. Swonke remained as “of counsel” to Greenberg Pe-den until the firm dissolved in 2001.

The “of counsel” relationship between Swonke and Greenberg Peden operated under a fee sharing agreement. For matters accepted by the firm, it billed Swonke’s time through the firm computer system and deducted a percentage from Swonke’s fees; the size of the deduction depended on the fee agreement with a particular client. This deduction reimbursed Greenberg Peden for Swonke’s use of office space, paralegals, secretaries, and parking. Clients in matters accepted by the firm paid their fees for Swonke’s time directly to Greenberg Peden, which made appropriate deductions and then paid the balance to Swonke.

Swonke met Van Dyke in 1987 at a lunch with Van Dyke’s father while Van Dyke was working for his father’s company. Van Dyke’s father asked Swonke to perform legal work for the company. Swonke already had joined Greenberg Pe-den as of counsel at that point. While Van Dyke was still working for his father, Van Dyke and his father later asked about Swonke’s salary at Greenberg Peden because they wanted to hire Swonke as in-house counsel for the father’s company. Swonke responded that as “of counsel” he did not receive a salary from the firm, but was paid only when clients paid; Swonke explained that he generated his own work and sometimes made more money than at other times. Van Dyke, his father and Swonke decided to maintain their existing relationship, under which Swonke performed legal work for the father’s company as “of counsel” at Greenberg Peden. Swonke testified that he also explained his “of counsel” status to Van Dyke and Van Dyke’s mother on several occasions. Van Dyke testified that he did not recall being told Swonke was “of counsel” to Green-berg Peden.

Van Dyke left his father’s company in 1988 and together with his mother formed Anglo-Dutch Petroleum International, an oil and gas exploration company. Approximately four years later, Van Dyke asked Swonke to perform legal work for Anglo-Dutch in connection with development of oil and gas properties in an area known as the Tenge Field in Kazakhstan. Swonke began performing a substantial amount of legal work for Van Dyke and Anglo-Dutch in 1993. This work focused on preparing documents addressing the participation of multiple national and international investors in Anglo-Dutch’s Tenge Field project. Swonke worked with Greenberg Peden shareholder Skip Naylor to draft the elaborate documents Van Dyke requested to bring investors together and create an entity called Anglo-Dutch (Tenge) L.L.C.

In 1997, Anglo-Dutch invited Halliburton Energy Services, Inc. and Rameo Oil & Gas, Ltd. to invest in the Tenge Field project. Anglo-Dutch hoped to use funds from these new investors to buy out its existing investors. To evaluate Anglo-Dutch’s proposal, Halliburton and Rameo entered into confidentiality agreements with Anglo-Dutch and received confidential data to review. Swonke negotiated and drafted the confidentiality agreements for Anglo-Dutch.

Anglo-Dutch ceased paying Greenberg Peden’s bills at about this time and began accumulating a large account payable to the firm. Anglo-Dutch’s unpaid legal bills prompted Greenberg Peden to stop working for Anglo-Dutch in 1999. By early 2000, Anglo-Dutch owed Greenberg Peden more than $200,000. Swonke and Green-berg Peden shareholder David Peden met with Van Dyke in 1999 or early 2000 to discuss Anglo-Dutch’s unpaid legal bills. *460 Peden told Van Dyke that no Greenberg Peden attorney would perform legal work for Anglo-Dutch until it paid its accumulated legal bills to the firm.

A dispute arose between Anglo-Dutch, Halliburton and Rameo in early 2000 regarding breach of the Tenge Field confidentiality agreements and disclosure of Anglo-Dutch’s confidential data. Van Dyke asked Swonke in February 2000 to evaluate the potential for a lawsuit against Halliburton and Rameo for breach of the confidentiality agreements. Swonke advised Van Dyke that Anglo-Dutch had viable claims against both companies. Anglo-Dutch wanted to pursue the lawsuit but lacked financial resources to pay an attorney on an hourly basis.

Pursuant to Greenberg Peden’s right of first refusal, Swonke asked the firm in February or March 2000 if it wanted to represent Anglo-Dutch in a suit against Halliburton and Rameo arising from breaches of the Tenge Field confidentiality agreements.

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Bluebook (online)
267 S.W.3d 454, 2008 Tex. App. LEXIS 7178, 2008 WL 4355069, Counsel Stack Legal Research, https://law.counselstack.com/opinion/anglo-dutch-petroleum-international-inc-v-greenberg-peden-pc-texapp-2008.