Anglo-Dutch Petroleum International, Inc., and Anglo-Dutch (Tenge), LLC v. Greenberg Peden, P.C., and Gerald J. Swonke ( 2015 )

ACCEPTED
14-14-00706-cv
FOURTEENTH COURT OF APPEALS
HOUSTON, TEXAS
4/6/2015 11:22:02 PM
CHRISTOPHER PRINE
CLERK
NO. 14-14-00706-CV
__________________
FILED IN
14th COURT OF APPEALS
IN THE HOUSTON, TEXAS
4/6/2015 11:22:02 PM
FOURTEENTH COURT OF APPEALSCHRISTOPHER A. PRINE
Clerk
__________________
ANGLO-DUTCH PETROLEUM INTERNATIONAL, INC.
and ANGLO-DUTCH (TENGE) L.L.C.,
Appellants/Cross-Appellees,
v.
GREENBERG PEDEN, P.C. and GERARD J. SWONKE,
Appellees/Cross-Appellants.
__________________________________________________________________
BRIEF OF CROSS-APPELLANTS
GREENBERG PEDEN, P.C. and GERARD J. SWONKE
__________________________________________________________________
RUSTY HARDIN & ASSOCIATES, LLP
Joe Roden
State Bar No. 00794549
Rusty Hardin
State Bar No. 08972800
1401 McKinney Street, Suite 2250
Houston, Texas 77010
Telephone: 713-652-9000
Facsimile: 713-652-9800
ATTORNEYS FOR
CROSS-APPELLANTS
ORAL ARGUMENT REQUESTED
IDENTITY OF PARTIES AND COUNSEL
Appellants/Cross-Appellees:
Anglo-Dutch Petroleum International, Inc. and
Anglo-Dutch (Tenge) L.L.C.
Appellate Counsel for Appellants/Cross-Appellees
Christopher S. Johns
State Bar No. 24044849
805 West 10th Street, Suite 400
Austin, Texas 78701
Telephone: (512) 215-4078
Facsimile: (512) 628-7169
cjohns@jmehlaw.com
Joseph R. Marrs
State Bar No. 24037029
Leah Lanier
State Bar No. 24080068
Johns, Marrs, Ellis & Hodge, LLP
500 Dallas Street, Suite 1350
Houston, Texas 77002
Telephone: (713) 609-9503
Facsimile: (713) 583-5825
jmarrs@jmehlaw.com
llanier@jmehlaw.com
Ryan P. Bates
State Bar No. 24055152
Bates PLLC
3300 Harris Park Avenue
Austin, Texas 78705
Telephone: (512) 694-5268
rbates@batespllc.com
ii
Trial and Appellate Counsel for Appellants/Cross-Appellees:
Kenneth R. Breitbeil
State Bar No. 02947690
David L. Louie
State Bar No. 24074621
McFall, Breitbeil & Eidman, P.C.
1331 Lamar Street
1250 Four Houston Center
Houston, Texas 77010-3027
Telephone: (713) 590-9300
Facsimile: (713) 590-9399
kbreitbeil@mcfall-law.com
dlouie@mcfall-law.com
Appellees/Cross-Appellants:
Gerard J. Swonke and Greenberg Peden, P.C.
Trial and Appellate Counsel for Appellees/Cross-Appellants:
Joe Roden
State Bar No. 00794549
Rusty Hardin
State Bar No. 08972800
Ryan Higgins
State Bar No. 24007362
Rusty Hardin & Associates, LLP
1401 McKinney Street, Suite 2250
Houston, Texas 77010
Telephone: (713) 652-9000
Facsimile: (713) 652-9800
jroden@rustyhardin.com
rhardin@rustyhardin.com
rhiggins@rustyhardin.com
iii
TABLE OF CONTENTS
IDENTITY OF THE PARTIES AND COUNSEL ................................... ii
TABLE OF CONTENTS ........................................................................ iv
INDEX OF AUTHORITIES ..................................................................... x
STATEMENT OF THE CASE ............................................................. xiv
STATEMENT REGARDING ORAL ARGUMENT ............................ xviii
ISSUES PRESENTED .......................................................................... xix
I. Did the trial court misconstrue the numerator and
rounding provisions of the Fee Agreement and
erroneously order Anglo-Dutch to pay Swonke
$306,000 instead of $1,530,000?1
II. Did the trial court err by rendering judgment against—
and refusing to render judgment for—Swonke on his
attorneys’ fees claims?2
III. Did the trial court err by rendering judgment against—
and refusing to render judgment for—Swonke on his
breach of contract claim?3
IV. Did the trial court err by rendering a judgment on
prejudgment interest, post-judgment interest, and
costs that conflicts with its 2007 Judgment, which
remains in force and effect on those issues?4
1 This issue attacks judgment decrees 2, 4, 5, 6, and 9 in the 2014 Judgment.
2 This issue attacks judgment decrees 8, 11, and 12 in the 2014 Judgment.
3 This issue attacks judgment decree 7 in the 2014 Judgment.
4 This issue attacks judgment decrees 13, 15, and 16 in the 2014 Judgment.
iv
STATEMENT OF FACTS ........................................................................ 1
I. The Underlying Dispute .................................................................. 1
II. The Trial Court—Part I ................................................................... 9
III. The Fourteenth Court of Appeals ................................................. 12
IV. The Texas Supreme Court ........................................................... 15
V. The Trial Court—Part II .............................................................. 17
SUMMARY OF THE ARGUMENT ...................................................... 19
ARGUMENT .......................................................................................... 21
I. The Trial Court Erred By Misconstruing The
Numerator And Rounding Provisions Of The Fee
Agreement, And By Ordering Anglo-Dutch To Pay
Swonke $306,000 Instead Of $1,530,000 Under The
Fee Agreement. ............................................................................ 21
A. Anglo-Dutch Waived The Declarations Regarding
The Numerator And Rounding Provisions
Because The Trial Court’s 2007 Judgment Denied
That Relief And That Denial Was Not Appealed. .............. 23
B. The Trial Court Misconstrued The Fee
Agreement By Rewriting Its Plain Language In
Violation Of The Supreme Court’s Opinion. ........................ 26
1. The Supreme Court’s Opinion Requires
Enforcement Of The Unambiguous Fee
Agreement As Written. ............................................... 27
a. The Plain Language Of The Fee
Agreement Makes Swonke’s Hours The
Numerator In The Fee Formula. ......................... 28
v
b. The Plain Language Of The Fee
Agreement Requires Rounding Up To
The Next Whole Percentage After The
Hours Ratio Is Multiplied By 20%. ..................... 29
2. The Supreme Court’s Opinion Prohibits
Rewriting The Fee Agreement Or Adding To
Its Language. .............................................................. 30
a. The Trial Court Rewrote The Hours
Ratio In The Fee Formula At Anglo-
Dutch’s Request. .................................................. 31
b. The Trial Court Rewrote The Rounding
Provision. .............................................................. 33
3. The Supreme Court’s Opinion Requires The
Fee Agreement To Be Construed As A
Reasonable Person In Anglo-Dutch’s
Circumstances Would Have Construed It,
Not As Anglo-Dutch Construes It. ............................. 35
a. A Reasonable Person In Anglo-Dutch’s
Circumstances Would Have Recognized
That The Numerator Is Swonke’s
Hours, Not Greenberg Peden’s Hours. ................ 35
i. The Text Of The Fee Agreement
Plainly States That The Numerator
Of The Hours Ratio Is Swonke’s
Hours. ............................................................ 35
ii. The Circumstances Surrounding
The Execution Of The Fee
Agreement Do Not Alter Its Plain
Language. ...................................................... 36
vi
iii. The Post-Fee Agreement
Circumstances Do Not Alter The
Plain Language Of The Fee
Agreement. .................................................... 37
b. A Reasonable Person In Anglo-Dutch’s
Circumstances Would Have
Recognized That The Rounding To The
Next Whole Percentage Occurs After,
Not Before, Multiplying The Hours
Ratio By 20%. ..................................................... 41
i. The Text Of The Fee Agreement
Plainly Shows That The Rounding
Occurs After, Not Before,
Multiplying The Hours Ratio By
20%. ................................................................ 41
ii. Neither The Circumstances
Surrounding The Execution Of The
Fee Agreement Nor Post-Fee
Agreement Circumstances Alter Its
Plain Language That Requires
Rounding After Multiplying The
Hours Ratio By 20%. ..................................... 42
C. Conclusion ............................................................................. 42
II. The Trial Court Erred By Rendering Judgment
Against—And Refusing To Render Judgment For—
Swonke On His Attorneys’ Fees Claims. ...................................... 44
A. The Trial Court Erred By Granting Summary
Judgment Against Swonke On His Attorneys’
Fees Claims. ......................................................................... 46
vii
1. Anglo-Dutch’s Waiver Of All Complaints
About The 2007 Judgment’s Award Of
Attorneys’ Fees To Swonke Prohibited The
Trial Court From Altering The Award On
Remand. ....................................................................... 47
2. Alternatively, Even If Not Waived, Anglo-
Dutch’s Grounds For Summary Judgment
On Swonke’s Attorneys’ Fees Claims Lack
Merit. ............................................................................ 50
a. Notwithstanding The Supreme Court’s
Opinion, Swonke Had Standing And
Capacity To Sue For Breach Of The Fee
Agreement. ........................................................... 50
b. Anglo-Dutch’s Grounds For Summary
Judgment On Swonke’s Claim For
Attorneys’ Fees Under The Declaratory
Judgment Act Lack Merit. ................................... 53
i. Swonke May Recover Attorneys’
Fees Under The Declaratory
Judgment Act Because He
Defended Against Anglo-Dutch’s
Declaratory Judgment Action. ..................... 53
ii. Swonke’s Breach Of Contract Claim
Did Not Fail. .................................................. 54
iii. Anglo-Dutch Waived Its Complaint
That Swonke’s Attorneys’ Fee
Award Was Not Equitable And Just
And, In Any Event, The Award Was
Equitable And Just. ...................................... 55
viii
B. The Trial Court Erred By Refusing To Render
Judgment Of $427,892.50 For Swonke On His
Attorneys’ Fees Claims. ....................................................... 58
III. The Trial Court Erred By Rendering Judgment
Against—And Refusing To Render Judgment For—
Swonke On His Breach Of Contract Claim. ................................. 62
A. The Trial Court Erred By Granting Summary
Judgment To Anglo-Dutch On Swonke’s Breach
Of Contract Claim. ............................................................... 62
B. Alternatively, The Trial Court Erred By Refusing
To Render Judgment For Swonke On His Breach
Of Contract Claim. ............................................................... 63
IV. The Trial Court Erred By Rendering A Judgment On
Prejudgment Interest, Post-Judgment Interest, And
Costs That Conflicts With Its 2007 Judgment, Which
Remains In Force And Effect On Those Issues. ........................... 69
A. Anglo-Dutch Waived Any Complaints About The
Trial Court’s 2007 Judgment On Prejudgment
Interest, Post-Judgment Interest, And Costs. .................... 69
B. The 2007 Judgment’s Awards Of Prejudgment
Interest, Post-judgment Interest, And Costs
Remain In Force And Effect. ............................................... 71
C. The Trial Court Erred By Altering Its Prior
Awards Of Prejudgment Interest, Post-judgment
Interest, And Costs, And Refusing To Render
Judgment Consistent With Its 2007 Judgment. ................. 72
PRAYER .................................................................................................. 73
CERTIFICATE OF COMPLIANCE ..................................................... 74
ix
CERTIFICATE OF SERVICE ................................................................ 75
x
INDEX OF AUTHORITIES
Cases:
Allright, Inc. v. Pearson,
735 S.W.2d 240 (Tex. 1987) ........................................................... 70
American Mfrs. Mut. Ins. Co. v. Schaefer,
124 S.W.3d 154 (Tex. 2003) ............................................... 30, 31, 33
Anglo-Dutch Petroleum Int’l, Inc. v. Haskell,
193 S.W.3d 87 (Tex. App.—Houston [1st Dist.]
2007, pet. denied) .......................................................................... 10
Anglo-Dutch Petroleum Int’l v. Greenberg Peden, P.C.,
267 S.W.3d 454 (Tex. App.—Houston [14th Dist.]
2008, rev’d, 352 S.W.3d 445 (Tex. 2011) .............................. passim
Anglo-Dutch Petroleum Int’l v. Greenberg Peden, P.C.,
352 S.W.3d 445 (Tex. 2011) ................................................... passim
Anglo-Dutch Petroleum Int’l, Inc. v. Littlemill Ltd.,
No. 14-06-00921-CV, 2007 WL 2826900 (Tex.
App.—Houston [14th Dist.] Oct. 2, 2007, pet. denied) .................. 10
Anglo-Dutch Petroleum Int’l, Inc. v. Smith,
243 S.W.3d 776 (Tex. App.—Houston [14th Dist.]
2007, pet. denied) .......................................................................... 10
Bramlett v. Phillips,
359 S.W.3d 304 (Tex. App.—Amarillo 2012, aff’d,
Phillips v. Bramlett, 407 S.W.3d. 229 (Tex. 2013) ...... 59, 60, 61, 71
Brown v. Mesa Distributors, Inc.,
414 S.W.3d 279 (Tex. App.—Houston [1st Dist.]
2013, no pet.) ............................................................................ 51, 53
xi
City of Temple v. Taylor,
268 S.W.3d 852 (Tex. App.—Austin 2008, pet. denied) ................ 48
Guitar Holding Co., L.P. v. Hudspeth County Underground
Water Conservation Dist. No. 1,
263 S.W.3d 910 (Tex. 2008) ............................. 59, 60, 61, 67, 68, 71
Hoover Slovaceck, L.L.P. v. Walton,
206 S.W.3d 557 (Tex. 2006) ........................................................... 58
Hudspeth County Underground Water Conservation
Dist. No. 1 v. Guitar Holding Co., L.P.,
355 S.W.3d 428 (Tex. App.—El Paso 2011,
pet. denied) ..................................................... 25, 47, 49, 52, 63, 72
Jacobs v. Satterwhite,
65 S.W.3d 653 (Tex. 2001)........................................................ 24, 51
JGR, Inc. v. Thomasville Furniture Indus., Inc.,
550 F.3d 529 (6th Cir. 2008) .................................. 49, 67, 68, 72, 73
Medical Ctr. Pharmacy v. Holder,
634 F.3d 830 (5th Cir. 2011) ............................................... 25, 48, 72
Montemayer v. Ortiz,
208 S.W.3d 627 (Tex. App.—Corpus Christi 2006,
pet. denied) .............................................................................. 54, 58
Ontiveros v. Flores,
218 S.W.3d 70 (Tex. 2007)........................................................ 24, 51
Pagosa Oil and Gas, L.L.C. v. Marrs and Smith Partnership,
323 S.W.3d 203 (Tex. App.—El Paso 2010, pet. denied) ........ 51, 52
Phillips v. Bramlett,
407 S.W.3d 229 (Tex. 2013) ............................................... 60, 61, 71
xii
David J. Sacks, P.C. v. Haden,
266 S.W.3d 447 (Tex. 2008) ............................................... 29, 32, 40
San Jacinto River Authority v. Duke,
783 S.W.2d 209 (Tex. 1990) ............................................... 24, 51, 71
Sims v. Fitzpatrick,
No. 01-13-00176-CV, 2014 WL 1004410
(Tex. App.—Houston [1st. Dist.] March 13,
2014, pet. denied) .......................................................................... 64
Southwestern Bell Telephone Co. v. Marketing on Hold, Inc.,
308 S.W.3d 909 (Tex. 2010) ..................................................... 51, 64
State v. Anderson Courier Serv.,
222 S.W.3d 62 (Tex. App.—Austin 2005, pet. denied) ...... 26, 49, 73
State v. Biggar,
873 S.W.2d 11 (Tex. 1994) ........................................... 24, 51, 67, 68
Thomas v. Bilby-Knight,
No. 09-03-370CV, 2003 WL 22213590 (Tex. App.—
Beaumont 2003, no pet.) .......................................................... 70-71
United Resources, L.P. v. Sepco Tubulars, Inc.,
No. 04-12-00663-CV, 2014 WL 3339537 (Tex.
App.—San Antonio July 9, 2014, no pet.) .................. 25, 48, 49, 72
Wohlfahrt v. Holloway, 172 S.W.3d 630 (Tex. App.–
Houston [14th Dist.] 2005, pet. denied) ......................................... 70
Statutes:
Restatement (Third) of The Law Governing Lawyers
§ 18(2) (2000) ................................................................................. 35
xiii
Rules:
TEX. R. CIV. P. 301 ............................................................................. 68-69
xiv
STATEMENT OF THE CASE
Nature of the Declaratory judgment and breach of fiduciary
original case: duty action brought by Anglo-Dutch Petroleum
International, Inc. and Anglo-Dutch (Tenge)
L.L.C. (collectively “Anglo-Dutch”) against their
attorney, Gerard Swonke, and Greenberg Peden,
P.C., the law firm to which he was formerly “of
counsel.” Swonke counterclaimed for a
declaratory judgment, breach of contract, and
fraud. Swonke also sued Scott Van Dyke, the
president of Anglo-Dutch, for fraud.
Original trial court: 61st District Court, Harris County, Judge John
Donovan
Original jury verdict: The jury found that Swonke was, and Greenberg
Peden was not, a party to a contingent fee
agreement (“Fee Agreement”) with Anglo-Dutch,
and that Anglo-Dutch breached the Fee
Agreement.5 The jury awarded damages of
$1,000,000. The jury also found that Swonke
complied with his fiduciary duties to Anglo-
Dutch.6
Original trial court Judgment rendered for Swonke on the jury’s
disposition: verdict for actual damages, attorneys’ fees, pre-
and post-judgment interest, and costs of court.7
5 A copy of the Fee Agreement is attached as Appendix A.
6 A copy of the original jury verdict is attached to the original final judgment which
is attached as Appendix B.
7A copy of the trial court’s January 22, 2007 final judgment (“2007 Judgment”) is
attached as Appendix B.
xv
Court of Appeals: Fourteenth Court of Appeals, panel consisting of
Justice Boyce (author), Justice Fowler, and
Senior Justice Hudson
COA disposition: Affirmed.
COA opinion: Anglo-Dutch Petroleum Int’l, Inc. v. Greenberg
Peden, P.C., 267 S.W.3d 454 (Tex. App.—Houston
[14th Dist.] Aug. 26, 2008, pet. filed) (“Anglo-
Dutch”).8
Supreme Court Reversed and remanded to the trial court for
disposition: further proceedings in accordance with the
opinion.
Supreme Court Anglo-Dutch Petroleum Int’l, Inc. v. Greenberg
opinion: Peden, P.C., 352 S.W.3d 445 (Tex. 2011).9
Nature of the case Declaratory judgment and breach of contract
on remand: action regarding the fee owed under the Fee
Agreement.
Trial court on 61st District Court, Harris County, Judge Al
remand: Bennett
Course of The trial court construed the Fee Agreement as a
proceedings matter of law and applied those rulings to
on remand: stipulated facts.10 The trial court also granted an
interlocutory summary judgment against Swonke
8A copy of Anglo-Dutch Petroleum Int’l, Inc. v. Greenberg Peden, P.C., 267 S.W.3d
454 (Tex. App.—Houston [14th Dist.] Aug. 26, 2008), rev’d, 352 S.W.3d 445 (Tex.
2011) is attached as Appendix C.
9A copy of Anglo-Dutch Petroleum Int’l, Inc. v. Greenberg Peden, P.C., 352 S.W.3d
445 (Tex. 2011) is attached as Appendix D.
xvi
on his claims for breach of contract, declaratory
judgment, and attorneys’ fees.11 Finally, the trial
court held a jury trial on Anglo-Dutch’s claims for
trial, appellate, and post-remand attorneys’ fees
and costs.12
Jury verdict The jury found that Anglo-Dutch’s reasonable
on remand: and necessary attorneys’ fees and costs for trial,
appellate, and post-remand work was “$0” with
two exceptions. 1 CR 957-968. The jury found
that a reasonable fee for the necessary services of
Anglo-Dutch’s attorneys for the prior appeal to
the Supreme Court of Texas was $50,000. 1 CR
962. The jury also found that reasonable and
necessary costs for the appeals to this Court and
the Texas Supreme Court was $12,000. 1 CR
965.
Trial court The trial court rendered declaratory judgments
disposition construing the Fee Agreement in favor of Anglo-
on remand: Dutch and awarded Anglo-Dutch court costs. The
trial court also rendered a take-nothing judgment
against Swonke on his claims for breach of
contract, declaratory judgment, and attorneys’
fees. The trial court rendered judgment for
Swonke and against Anglo-Dutch for $306,000,
plus pre- and post-judgment interest. The trial
court disregarded the two jury findings in favor of
Anglo-Dutch and rendered a take-nothing
10A copy of the trial court’s order construing the Fee Agreement as a matter of law
and applying that construction to stipulated facts is attached as Appendix E.
11A copy of the trial court’s order granting interlocutory summary judgment against
Swonke on his claims for breach of contract, declaratory judgment, and attorneys’
fees is attached as Appendix F.
12A copy of the jury verdict in the second trial is attached to the trial court’s final
judgment which is attached as Appendix G.
xvii
judgment against Anglo-Dutch on its claims for
trial, appellate, and post-remand attorneys’
fees.13
13A copy of the trial court’s May 13, 2014 judgment (“2014 Judgment”) is attached
as Appendix G.
xviii
STATEMENT REGARDING ORAL ARGUMENT
The cross-appellants request oral argument. The lengthy
procedural history of this case and numerous defects in the judgment
may be better explored with the parties’ advocates available to address
the Court’s questions that are sure to arise in this complex case.
xix
ISSUES PRESENTED
I. Did the trial court misconstrue the numerator and rounding
provisions of the Fee Agreement and erroneously order Anglo-
Dutch to pay Swonke $306,000 instead of $1,530,000?14
II. Did the trial court err by rendering judgment against—and
refusing to render judgment for—Swonke on his attorneys’ fees
claims?15
III. Did the trial court err by rendering judgment against—and
refusing to render judgment for—Swonke on his breach of contract
claim?16
V. Did the trial court err by rendering a judgment on prejudgment
interest, post-judgment interest, and costs that conflicts with its
2007 Judgment, which remains in force and effect on those
issues?17
14 This issue attacks judgment decrees 2(1), 4, 5, 6, and 9 in the 2014 Judgment.
15 This issue attacks judgment decrees 8, 11, and 12 in the 2014 Judgment.
16 This issue attacks judgment decree 7 in the 2014 Judgment.
17 This issue attacks judgment decrees 13, 15, and 16 in the 2014 Judgment.
xx
STATEMENT OF FACTS
I. The Underlying Dispute
Gerard Swonke has been a lawyer for 41-years who was “of
counsel” to Greenberg Peden, P.C. or its predecessor from 1987 until
November 2001. 1 CR 248-250, 1 CR 258. Scott Van Dyke worked for
Van Dyke Energy Company (later Vanco Energy Company), his father’s
oil company, where he spent 50% of his time negotiating and preparing
contracts. Swonke first met Van Dyke in 1987 through Van Dyke’s
father. 1 CR 251-253. Soon thereafter, Swonke began to represent Van
Dyke’s father’s company. 1 CR 253.
In 1989, Van Dyke and his mother formed Anglo-Dutch Petroleum
International, Inc., an exploration company. 1 CR 168-171. Van Dyke
served as its president. 1 CR 185-186. Beginning in 1993, Van Dyke
became the chief architect and negotiator of an elaborate limited
liability agreement that brought together disparate investor interests
from several countries to pursue a license in Kazakhstan for the
development of the Tenge oil and gas field. 1 CR 230, 257. Swonke
drafted the formal documents and obtained the assistance of Skip
Naylor, a Greenberg Peden shareholder, to help document the
1
transaction. 1 CR 231, 257. Anglo-Dutch (Tenge) L.L.C. was the entity
formed to complete the transaction. See 1 CR 231.
In 1997, Swonke negotiated and drafted confidentiality
agreements that Halliburton and Ramco executed in order to view
Anglo-Dutch’s confidential data regarding the Tenge field to assess a
proposed buyout of Anglo-Dutch’s existing partners. 1 CR 172-175. In
February 2000, Anglo-Dutch requested that Swonke examine the
viability of a potential lawsuit against Halliburton and Ramco for
breaching the confidentiality agreements. 1 CR 187, 260-261. Swonke
concluded a lawsuit was viable and so advised Anglo-Dutch. 1 CR 188,
262.
Although Anglo-Dutch wished to pursue the lawsuit, it did not
have the financial resources to do so on an hourly basis. 1 CR 176.
Anglo-Dutch owed Greenberg Peden a large sum of money. 1 CR 221.
For that reason, Greenberg Peden previously had decided and told Van
Dyke that it would no longer represent Anglo-Dutch in any matters. 1
CR 208-209, 225-226, 258-259, 232-234. Nevertheless, as required
under Swonke’s “of counsel” agreement with Greenberg Peden, Swonke
first approached Greenberg Peden and asked if it would represent
2
Anglo-Dutch against Halliburton and Ramco. 1 CR 232-233, 217, 235 ¶
8. Greenberg Peden flatly refused. 1 CR 218-220, 222-226, 232-233,
235, 237-238, 241-242. Swonke and David Peden, a named shareholder
of Greenberg Peden, both informed Van Dyke that Greenberg Peden
would not represent it against Halliburton and Ramco, a fact even Van
Dyke concedes. 1 CR 188, 208-209, 225-226, 233, 237-238, 241-243.
Swonke then referred the case to McConn & Williams without
seeking a referral fee. 1 CR 263. McConn & Williams signed a fee
agreement with Anglo-Dutch on March 25, 2000 and filed Anglo-Dutch
(Tenge) L.L.C., et al. v. Ramco Oil & Gas, Ltd., et al.; in the 61st Judicial
District Court of Harris County, Texas, Cause No. 2000-22588
(“Halliburton Lawsuit”) on May 2, 2000. 1 CR 318-325, 177-178.
McConn & Williams later associated with John O’Quinn to try the case.
1 CR 236.
After Anglo-Dutch hired McConn & Williams, Van Dyke and
McConn & Williams’ lawyers frequently asked Swonke for advice and to
perform tasks on the Halliburton Lawsuit even though at that time
Swonke had no agreement with Anglo-Dutch or McConn & Williams by
which he would be paid for his efforts. 1 CR 264-266. After several
3
months of such requests, Swonke finally concluded that he had to be
compensated if he was going to continue to work on the Halliburton
Lawsuit. 1 CR 266.
Van Dyke called Swonke and specifically asked to retain him, not
Greenberg Peden, to work on the Halliburton Lawsuit on a contingent
fee because he could not afford to pay Swonke by the hour. 1 CR 267-
268. Van Dyke suggested a contingency fee based on a formula. 1 CR
268. Swonke and Anglo-Dutch agreed to Van Dyke’s terms, which
Swonke dictated into a Dictaphone. 1 CR 269-271. Swonke then asked
his secretary to transcribe his dictation and finalize the document. 1
CR 272.
The body of the Fee Agreement never mentions Greenberg Peden.
1 CR 312. Instead, the body of the Fee Agreement exclusively uses the
personal pronouns “I”, “me”, and “my” twelve times in a nine-sentence
contract to refer to Swonke, individually, and his rights and obligations
under the Fee Agreement. 1 CR 312-313.
Swonke’s secretary inadvertently put the Fee Agreement on
Greenberg Peden letterhead and inserted “GREENBERG PEDEN, P.C.”
into the signature block. 1 CR 272. Swonke then signed the Fee
4
Agreement on October 16, 2000, never noticing the references to
Greenberg Peden in the letterhead and in the signature block. 1 CR
273, 312. Van Dyke signed the Fee Agreement the next day for Anglo-
Dutch. 1 CR 313.
Swonke had no intention to, did not, and could not—because of
Greenberg Peden’s prohibition on doing work for Anglo-Dutch—act for
Greenberg Peden by signing the Fee Agreement. 1 CR 207. Instead,
Swonke signed the contract for himself individually. 1 CR 282. Swonke
has never signed a contingency fee contract on behalf of Greenberg
Peden. 1 CR 215. Indeed, when Greenberg Peden signs a contingency
fee contract with a client, a Greenberg Peden attorney executes the fee
agreement. 1 CR 211. Greenberg Peden had flatly refused to represent
Anglo-Dutch in the Halliburton Lawsuit and told Van Dyke so—thus,
Swonke had no authority to sign the Fee Agreement on behalf of
Greenberg Peden, a fact known by Van Dyke. 1 CR 188, 208-209, 218-
220, 222-226, 232-233, 235, 237-238, 241-243. Naylor, Greenberg
Peden’s managing shareholder, agreed that Swonke did not execute the
Fee Agreement on behalf of Greenberg Peden. 1 CR 239-240.
5
After signing the Fee Agreement, Swonke worked on the
Halliburton Lawsuit for 277 hours while physically present at
Greenberg Peden’s offices. 1 CR 216. On October 26, 2001, Swonke
became “of counsel” to McConn & Williams. 1 CR 347-350. Swonke
informed Anglo-Dutch that he was taking its files, including the
Halliburton Lawsuit, with him to his “of counsel” position at McConn &
Williams unless Anglo-Dutch objected. 1 CR 354. Anglo-Dutch did not
object. 1 CR 193-194. Because Swonke was to be compensated for his
work on the Halliburton Lawsuit under the Fee Agreement, Swonke’s
“of counsel” agreement with McConn & Williams provided that McConn
& Williams would not share any fees with Swonke that it derived from
the Halliburton Lawsuit. See 1 CR 349. With Anglo-Dutch’s
knowledge, Swonke then worked 1,022 hours on the Halliburton
Lawsuit while “of counsel” at McConn & Williams. 1 CR 206.
On May 7, 2002, six months after Van Dyke learned that Swonke
had physically left Greenberg Peden to become “of counsel” to McConn
& Williams, Van Dyke was deposed in the Halliburton Lawsuit. Van
Dyke expressly testified that Anglo-Dutch had a fee agreement with
Swonke. 1 CR 195, 247. Van Dyke did not remotely suggest during his
6
deposition that Anglo-Dutch had a fee agreement with Greenberg
Peden. 1 CR 195.
The jury in the Halliburton Lawsuit rendered a $70,500,000
verdict for Anglo-Dutch against Halliburton and Ramco. 1 CR 179.
Halliburton and Ramco then stipulated that Anglo-Dutch incurred
reasonable and necessary attorneys’ fees of $9,800,000. 1 CR 192. The
attorneys’ time for which Anglo-Dutch recovered attorneys’ fees
included the 1,022 hours that Swonke worked on the Halliburton
Lawsuit while “of counsel” to McConn & Williams. 1 CR 204, 216.
Anglo-Dutch eventually settled with Halliburton for $51,000,000
on April 1, 2004, and Halliburton funded the settlement on April 15,
2004. 1 CR 180, 378. During this period, Swonke repeatedly emailed
Van Dyke about the calculation of his fee, directed Van Dyke’s attention
to the fact that Swonke’s wiring instructions were not included with
those of other attorneys who received their fees directly from
Halliburton, and asked Van Dyke to promptly address “my contract.” 1
CR 364, 368, 373, 383. Van Dyke never suggested in response to these
communications that he believed Swonke was not a party to the Fee
Agreement. See 1 CR 205, 279. Instead, Van Dyke expressed concern
7
that Greenberg Peden may make a claim for a fee because the Fee
Agreement was on Greenberg Peden letterhead. To address Van Dyke’s
concern and at his request, on April 16, 2004, before this lawsuit was
filed, Swonke obtained an assignment from Greenberg Peden of any
rights it had under the Fee Agreement. See 1 CR 385.
On April 20, 2004, Van Dyke met with a lawyer and discussed
issues related to Swonke. 1 CR 183. On April 22, 2004, Swonke met
with Van Dyke and, for the first time, Van Dyke asserted that the Fee
Agreement is between Anglo-Dutch and Greenberg Peden, shocking
Swonke. 1 CR 274-275, 280. Swonke left the meeting, telling Van Dyke
“I can’t believe you’re going to do this to me and my family.” 1 CR 281.
Several hours later, Anglo-Dutch sued Swonke, asserting that Anglo-
Dutch’s Fee Agreement was with Greenberg Peden, not Swonke. 1 CR
286.
Like it did with Swonke’s Fee Agreement, Anglo-Dutch also
attempted to avoid numerous other contracts that required it to share
the settlement from the Halliburton Lawsuit. For example, Anglo-
Dutch executed 33 contracts that would have required it to pay
approximately $11,000,000 of the settlement to investors in the
8
Halliburton Lawsuit. 1 CR 196-199. However, Van Dyke did not pay
any of the investors the amount they contracted for, thereby saving $4-5
million. 1 CR 198, 200. Like Swonke, at least eight of the investors
successfully sued Anglo-Dutch for breach of contract. See, e.g., Anglo-
Dutch Petroleum Int’l, Inc. v. Smith, 243 S.W.3d 776 (Tex. App.—
Houston [14th Dist.] 2007, pet. denied); Anglo-Dutch Petroleum Int’l,
Inc. v. Littlemill Ltd., No. 14-06-00921-CV, 2007 WL 2826900 (Tex.
App.—Houston [14th Dist.] Oct. 2, 2007, pet. denied); Anglo-Dutch
Petroleum Int’l, Inc. v. Haskell, 193 S.W.3d 87 (Tex. App.—Houston [1st
Dist.] 2007, pet. denied).
II. The Trial Court—Part I
Anglo-Dutch sued Swonke and Greenberg Peden for a declaratory
judgment, negligence, gross negligence, fraud, and breach of fiduciary
duty. 1 CR 286-290. Anglo-Dutch sought the following seven
declarations regarding the Fee Agreement:
 the Fee Agreement is between Anglo-Dutch and Greenberg
Peden, and not between Anglo-Dutch and Swonke,
individually;
 Greenberg Peden’s April 16, 2004 assignment of its rights
and interest in the Fee Agreement to Swonke is illegal and
unenforceable against Anglo-Dutch;
9
 the numerator in the hours ratio in the fee formula in the
Fee Agreement is the hours Greenberg Peden worked on the
Halliburton Lawsuit and does not include the hours Swonke
worked on the Halliburton Lawsuit while of counsel to
McConn & Williams;
 the hours Swonke worked on the Halliburton Lawsuit while
of counsel to McConn & Williams are included in the
denominator in the fee formula in the Fee Agreement;
 the rounding up to the next whole percentage that is
required by the Fee Agreement occurs after the hours ratio
is determined and before, not after, the hours ratio is
multiplied by 20%.
 the contingency fee owed under the Fee Agreement shall
remain in direct correlation to McConn & Williams’
contingency fee percentage—whether the McConn &
Williams contingency fee percentage increases or decreases;
and
 neither Swonke nor Greenberg Peden can recover any
contingency fee under the Fee Agreement from any future
recovery against Ramco.
See 1 CR 286-287. In addition, Anglo-Dutch sought fee forfeiture,
actual damages, exemplary damages, and attorneys’ fees. 1 CR SUPP
114. Swonke counterclaimed for a declaratory judgment, for breach of
contract against Anglo-Dutch, and for fraud against both Anglo-Dutch
and Van Dyke. 1 CR 293-294. Swonke sought actual damages and
attorneys’ fees. 1 CR SUPP 100.
10
After two weeks of testimony, the jury found in response to
Question 1 that the Fee Agreement with Anglo-Dutch was entered into
on behalf of Swonke, individually, and not on behalf of Greenberg
Peden. See 1 CR 303. In response to Question 2, the jury found that
Anglo-Dutch breached the Fee Agreement. 1 CR 304. The jury found in
response to Question 3 that $1,000,000 would fairly and reasonably
compensate Swonke for his damages that resulted from Anglo-Dutch’s
breach of the Fee Agreement. 1 CR 305. In response to Question 5, the
jury found that Swonke complied with his fiduciary duty to Anglo-
Dutch. 1 CR 306. Finally, the jury found in response to Question 9 that
Van Dyke did not commit fraud against Swonke. 1 CR 307.
The trial court rendered judgment on the jury’s verdict on
January 22, 2007 (the “2007 Judgment”). 1 CR 298. That judgment
ordered Anglo-Dutch to take nothing from Swonke and Greenberg
Peden. 1 CR 298. The judgment also ordered Anglo-Dutch to pay
Swonke $1,000,000 and prejudgment interest on that amount of
$226,924.50. 1 CR 299. Finally, the judgment also ordered Anglo-
Dutch to pay Swonke the following attorneys’ fees for the prosecution of
his breach of contract and declaratory judgment claims, and his defense
11
of Anglo-Dutch’s declaratory judgment claims: $352,892.50 for trial;
$75,000 if Anglo-Dutch unsuccessfully appealed to the court of appeals;
and $50,000 if Anglo-Dutch unsuccessfully appealed to the Texas
Supreme Court. 1 CR 299.
III. The Fourteenth Court of Appeals
On appeal to this Court, Anglo-Dutch complained only that: (1)
the Fee Agreement was unambiguously between Anglo-Dutch and
Greenberg Peden, and should have been construed that way as a matter
of law; (2) any ambiguity in the Fee Agreement should have been
construed against Swonke; (3) the evidence was legally and factually
insufficient to support the jury’s finding in Question 1 that the Fee
Agreement with Anglo-Dutch was entered into on behalf of Swonke,
individually, and not on behalf of Greenberg Peden; (4) the evidence
was legally and factually insufficient to support the jury’s finding in
Question 5 that Swonke complied with his fiduciary duty; (5) the trial
court erroneously instructed the jury; and (6) the trial court erroneously
admitted evidence. See Anglo-Dutch Petroleum Int’l v. Greenberg
Peden, P.C., 267 S.W.3d 454, 464 (Tex. App.—Houston [14th Dist.]
2008); 1 CR SUPP 124-183.
12
Anglo-Dutch did not complain in this Court about the trial court’s
take-nothing judgment rejecting Anglo-Dutch’s request for the following
declarations, among others:
 the numerator in the hours ratio in the fee formula in the
Fee Agreement is the hours Greenberg Peden worked on the
Halliburton Lawsuit and does not include the hours Swonke
worked on the Halliburton Lawsuit while of counsel to
McConn & Williams; and
 the rounding up to the next whole percentage that is
required by the Fee Agreement occurs after the hours ratio
is determined and before, not after, the hours ratio is
multiplied by 20%.
1 CR SUPP 124-183.
Finally, Anglo-Dutch did not attack in this Court: (1) the jury’s
finding in Question 2 that Anglo-Dutch breached the Fee Agreement;
(2) the jury’s finding in Question 3 that $1,000,000 would fairly and
reasonably compensate Swonke for his damages resulting from Anglo-
Dutch’s breach of the Fee Agreement; (3) the trial court’s award of
$226,924.50 in prejudgment interest; (4) the trial court’s award of
attorneys’ fees to Swonke; (5) the trial court’s finding that an award of
attorneys’ fees to Anglo-Dutch would not be equitable or just; (6) the
trial court’s award of court costs to Swonke and Greenberg Peden; or (7)
the trial court’s award of post-judgment interest at 8.25%, compounded
13
annually, from the date of the judgment until paid. 1 CR SUPP 124-
183; Anglo-Dutch Petroleum Int’l v. Greenberg Peden, P.C., 267 S.W.3d
454, 464 n.5 (Tex. App.—Houston [14th Dist.] 2008), rev’d, 352 S.W.3d
445 (Tex. 2011) (“Anglo-Dutch does not challenge on appeal the jury’s
finding that it breached the fee agreement; the amount of contract
damages awarded for that breach; or the separate statutory fee award
for litigating Swonke’s contract claim under the disputed fee agreement,
which the parties opted to try to the Court. Anglo-Dutch also does not
challenge the rendition of a take-nothing judgment in favor of
Greenberg Peden.”).
This Court unanimously affirmed the trial court’s judgment. See
Anglo-Dutch Petroleum Int’l v. Greenberg Peden, P.C., 267 S.W.3d 454
(Tex. App.—Houston [14th Dist.] 2008), rev’d, 352 S.W.3d 445 (Tex.
2011). 1 CR SUPP 8-52. Specifically, this Court stated:
We hold that the October 16, 2000 fee agreement was
ambiguous with respect to whether Anglo–Dutch contracted
with Swonke individually or with Greenberg Peden. The
trial court properly refused to construe the ambiguous fee
agreement against Swonke and properly submitted this
issue to the jury. Legally and factually sufficient evidence
supports the jury's finding that Swonke individually is a
party to the fee agreement with Anglo–Dutch, and that
Greenberg Peden is not. Legally and factually sufficient
evidence supports the jury's finding that Swonke complied
14
with his fiduciary duty to Anglo–Dutch. Anglo–Dutch's
charge and evidentiary complaints provide no basis for
reversal. We affirm the trial court's judgment.
See 1 CR SUPP 52.
IV. The Texas Supreme Court
In the Texas Supreme Court, Anglo-Dutch complained only that:
(1) the Fee Agreement was unambiguously between Anglo-Dutch and
Greenberg Peden; (2) any ambiguity in the Fee Agreement should be
construed against Swonke; and (3) the trial court erroneously instructed
the jury. See 1 CR SUPP 226-269.
Anglo-Dutch did not complain in the Texas Supreme Court about
the trial court’s take-nothing judgment rejecting Anglo-Dutch’s request
for the following declarations, among others:
 the numerator in the hours ratio in the fee formula in the
Fee Agreement is the hours Greenberg Peden worked on the
Halliburton Lawsuit and does not include the hours Swonke
worked on the Halliburton Lawsuit while of counsel to
McConn & Williams; and
 the rounding up to the next whole percentage that is
required by the Fee Agreement occurs after the hours ratio
is determined and before, not after, the hours ratio is
multiplied by 20%.
1 CR SUPP 134-183.
15
Moreover, Anglo-Dutch did not challenge in the Texas Supreme
Court: (1) the jury’s finding in Question 2 that Anglo-Dutch breached
the Fee Agreement; (2) the jury’s finding in Question 3 that $1,000,000
would fairly and reasonably compensate Swonke for his damages
resulting from Anglo-Dutch’s breach of the Fee Agreement; (3) the trial
court’s award of $226,924.50 in prejudgment interest; (4) the trial
court’s award of attorneys’ fees to Swonke; (5) the trial court’s
conclusion that an award of attorneys’ fees to Anglo-Dutch would not be
equitable or just; (6) the trial court’s award of court costs to Swonke and
Greenberg Peden; or (7) the trial court’s award of post-judgment
interest at 8.25% on the award, compounded annually, from the date of
the judgment until paid. See 1 CR SUPP 197-213; 1 CR SUPP 226-296.
In a 5-4 decision, the Texas Supreme Court held that the Fee
Agreement was unambiguously between Anglo-Dutch and Greenberg
Peden. See Anglo-Dutch Petroleum Int’l v. Greenberg Peden, P.C., 352
S.W.3d 445, 453 (Tex. 2011). The Texas Supreme Court’s opinion
states: “The judgment of the court of appeals is reversed, and the case
is remanded to the trial court for further proceedings.” Id.
16
V. The Trial Court—Part II
Upon remand, the trial court declared as a matter of law, among
other declarations, that: (1) the rounding up to the next whole
percentage that is required by the Fee Agreement occurs before the
hours ratio is multiplied by 20%; (2) the numerator in the fee formula is
the hours Greenberg Peden spent on the Halliburton Lawsuit; and (3)
Anglo-Dutch owed Swonke $306,000 under the Fee Agreement. 1 CR
524-525.
The trial court also rendered an interlocutory summary judgment
ordering, among other things, that: (1) Swonke take nothing on his
breach of contract counterclaim; (2) Swonke take nothing on his request
for attorneys’ fees under chapter 38 of the Texas Civil Practice and
Remedies Code; (3) Swonke take nothing on his declaratory judgment
counterclaim; and (4) Swonke is precluded from recovering attorneys’
fees under section 37.009 of the Texas Civil Practice and Remedies
Code. 1 CR 668-669.
Finally, the Court held a three-day jury trial on the issues of
Anglo-Dutch’s trial, appellate, and post-remand attorneys’ fees and
costs. 1 CR 1302. The jury answered “$0” nine times in response to
17
eleven subquestions in the jury charge. 1 CR 1309-1314. However, the
jury also found that $50,000 was a reasonable fee for the necessary
services of Anglo-Dutch’s attorneys for representation for the prior
appeal to the Texas Supreme Court and that $12,000 was the
reasonable and necessary costs that Anglo-Dutch incurred in its appeal
to this Court and the Texas Supreme Court. 1 CR 1311, 1314. The trial
court granted Swonke’s motion to disregard the jury’s findings on those
two questions and also ruled that an award of attorneys’ fees or costs to
Anglo-Dutch would not be equitable or just. 1 CR 1302.
18
SUMMARY OF THE ARGUMENT
Eleven years ago, Anglo-Dutch settled a lawsuit for $51,000,000
and then refused to pay one of its lawyers, Swonke, the amount it had
agreed to pay him. Adding insult to injury, Anglo-Dutch then sued
Swonke. Thus began this litigation odyssey.
A jury, a trial court (now Fourteenth Court of Appeals) judge,
three court of appeals justices, and four Texas Supreme Court justices
found that the parties’ Fee Agreement was between Anglo-Dutch and
Swonke. However, five justices on the Texas Supreme Court held
that—notwithstanding Greenberg Peden’s express refusal to represent
Anglo-Dutch, and Van Dyke’s testimony that Anglo-Dutch had a fee
agreement with Swonke—the Fee Agreement was between Anglo-Dutch
and Greenberg Peden, not Swonke, as a matter of law.
On remand, Anglo-Dutch treated the Supreme Court’s declaration
regarding the parties to the Fee Agreement as a panacea despite its
insignificance. Although the Supreme Court did not address or decide
how much money was owed under the Fee Agreement because Anglo-
Dutch did not appeal the take-nothing judgment on the declarations
that would have presented that issue, at Anglo-Dutch’s invitation the
19
trial court literally rewrote the Fee Agreement in contravention of its
plain language and the Supreme Court’s opinion. The trial court’s
mistaken construction of the Fee Agreement resulted in a judgment for
Swonke of $306,000 instead of the $1,530,000 the parties agreed he
would be paid.
The remainder of the trial court’s errors on remand resulted
primarily from its failure to acknowledge and apply a fundamental rule
of appellate practice: issues decided in a judgment that are not
appealed are waived and not remanded for a second bite at the apple,
even if the judgment is reversed and the case is remanded. In other
words, a trial court errs by rendering a judgment on remand that alters
its own or a higher court’s prior judgment on an issue that was not
appealed because the waived judgment on the issue remains in force
and effect. This waiver doctrine serves judicial economy by forcing
parties to raise issues whose resolution might spare the courts and
parties successive rounds of remands and appeals.
The trial court ran afoul of the waiver doctrine by rendering
declarations on remand which had previously been sought, refused by
the 2007 Judgment, and not appealed. Similarly, the trial court
20
awarded Swonke attorneys’ fees, pre- and post-judgment interest, and
costs in its 2007 Judgment that were not appealed. Nevertheless, the
trial court erroneously eliminated or altered those awards on remand.
Despite the trial court’s errors, Swonke had decided to forego an
appeal to allow this litigation to end until forced to cross-appeal by
Anglo-Dutch’s perfection of its appeal. A proper construction of the Fee
Agreement and application of the waiver doctrine will allow a lawyer
who helped enrich his client to get paid the agreed amount for his
services and end this litigation once and for all.
ARGUMENT
I. The Trial Court Erred By Misconstruing The Numerator And
Rounding Provisions Of The Fee Agreement, And By Ordering
Anglo-Dutch To Pay Swonke $306,000 Instead Of $1,530,000
Under The Fee Agreement.
On remand, the trial court construed the Fee Agreement as a
matter of law and ruled, among other things, that: (1) the numerator in
the fee formula is the hours Greenberg Peden spent on the Halliburton
Lawsuit, and does not include the hours Swonke worked on the
Halliburton Lawsuit while of counsel to McConn & Williams; and (2)
the rounding up to the next whole percentage that is required by the
Fee Agreement occurs after the hours ratio is determined and before,
21
not after, the hours ratio is multiplied by 20%. See 1 CR 524-525; 1 CR
1303. The trial court then applied its rulings in light of the parties’
stipulations that: (a) Anglo-Dutch’s gross recovery in the Halliburton
Lawsuit was $51,000,000, (b) Swonke worked on the Halliburton
Lawsuit for 277 hours while of counsel to Greenberg Peden; and (c)
McConn & Williams’ attorneys, and Swonke while of counsel to McConn
& Williams, worked on the Halliburton Lawsuit for a total of 11,652
hours. See 1 CR 524-525; 1 CR 1303-1304.
Based on its construction of the Fee Agreement and the parties’
stipulations, the trial court rendered judgment: (A) declaring the
numerator in the fee formula to be Greenberg Peden’s hours and not
Swonke’s hours; (B) declaring that the rounding up required by the Fee
Agreement occurs before the hours ratio is multiplied by 20%; and (C)
ordering Anglo-Dutch to pay Swonke $306,000 under the Fee
Agreement. See 1 CR 525; 1 CR 1303-1304. As shown below, the trial
court erred by rendering judgment on Anglo-Dutch’s requested
numerator and rounding declarations because Anglo-Dutch waived any
entitlement to the declarations and, in any event, the declarations
misconstrue the Fee Agreement by rewriting its plain language in
22
violation of the Supreme Court’s opinion. These mistakes resulted in
the rendition of an incorrect judgment ordering Anglo-Dutch to pay
Swonke $306,000 instead of $1,530,000 under the Fee Agreement.
A. Anglo-Dutch Waived The Declarations Regarding The
Numerator And Rounding Provisions Because The Trial
Court’s 2007 Judgment Denied That Relief And That Denial
Was Not Appealed.
The trial court decreed in its final judgment: “As requested in
Plaintiffs’ First Amended Petition at 7 ¶ 23(c), the Court DECLARES
that . . . the numerator in the hours ratio in the fee formula in the Fee
Agreement is the hours Greenberg Peden worked on the Halliburton
Lawsuit and does not include the hours Swonke worked on the
Halliburton Lawsuit while of counsel to McConn & Williams . . . .” 1 CR
1303 ¶ 2. The trial court also decreed in its final judgment: “As
requested in Plaintiffs’ First Amended Petition at 7-8 ¶ 23(d), the Court
DECLARES that the rounding up to the next whole percentage that is
required by the Fee Agreement occurs after the hours ratio is
determined [and] before, not after, the hours ratio is multiplied by
20%.” See 1 CR 1303 ¶ 4.
However, Anglo-Dutch sought these same declarations in the first
trial, 1 CR SUPP 110-111 ¶¶ 23(c), 23(d), the trial court rendered a
23
take-nothing judgment on these requested declarations in its 2007
Judgment, 1 CR SUPP 120, and Anglo-Dutch did not complain about
the take-nothing judgment on these declaratory judgment claims in its
appeal to this Court or the Texas Supreme Court. 1 CR SUPP 124-183,
185-214, 216-269.
Consequently, Anglo-Dutch waived its claims seeking these
declarations. See Ontiveros v. Flores, 218 S.W.3d 70, 71 (Tex. 2007)
(holding that a party waived any error as to claims by not complaining
on appeal about the summary judgment on those claims); Jacobs v.
Satterwhite, 65 S.W.3d 653, 655-56 (Tex. 2001) (holding that a party
waived any error as to a claim by not complaining on appeal about the
summary judgment on the claim); State v. Biggar, 873 S.W.2d 11, 14-15
(Tex. 1994) (holding that a party waived all complaints about a damage
awarded affirmed by the court of appeals by not complaining in the
Texas Supreme Court about the damage award); San Jacinto River
Authority v. Duke, 783 S.W.2d 209, 209-210 (Tex. 1990) (stating that it
is a “well-established rule that grounds of error not asserted by points of
error or argument in the court of appeals are waived).
24
Anglo-Dutch’s waiver of all complaints about the take-nothing
judgment on its numerator and rounding declarations prohibited the
trial court from reversing on remand its prior take-nothing judgment on
those requested declarations.18 See Medical Ctr. Pharmacy, 634 F.3d at
834 (holding that the district court erred by reversing on remand its
prior ruling granting declaratory relief which had been waived on
appeal); United Resources, L.P. v. Sepco Tubulars, Inc., No. 04-12-
00663-CV, 2014 WL 3339537, at *3 (Tex. App.—San Antonio July 9,
2014, no pet.) (holding that the trial court erred on remand by
modifying its prior take-nothing judgment on cross-claims because no
party had attacked that part of the trial court’s judgment in an earlier
appeal); Hudspeth County Underground Water Conservation Dist. No.
1 v. Guitar Holding Co., L.P., 355 S.W.3d 428, 434-35 (Tex. App.—El
Paso 2011, no pet.) (holding that the trial court erred on remand by
making a finding on prevailing-party status for attorneys’ fees purposes
18 This rule is called the waiver doctrine. “[T]he waiver doctrine . . . holds that an
issue that could have been but was not raised on appeal is forfeited and may not be
revisited by the district court on remand.” Medical Ctr. Pharmacy v. Holder, 634
F.3d 830, 834 (5th Cir. 2011). “The waiver doctrine . . . serves judicial economy by
forcing parties to raise issues whose resolution might spare the court and parties
later rounds of remands and appeals.” Medical Ctr. Pharmacy, 634 F.3d at 834
(quotes omitted). “[I]t arises as a consequence of a party’s inaction, not as a
consequence of a decision on [the court of appeals] part.” Id.
25
that conflicted with the court of appeals’ prior decision on the issue
which had been waived on appeal to the Texas Supreme Court); State v.
Anderson Courier Serv., 222 S.W.3d 62, 66-67 (Tex. App.—Austin 2005,
pet. denied) (holding that the trial court erred by awarding attorneys’
fees under the declaratory judgment act on remand when any complaint
that the trial court’s original judgment failed to award attorneys’ fees
was waived on appeal).
Because Anglo-Dutch waived any complaint about the prior take-
nothing judgment on its requested numerator and rounding
declarations by not appealing that judgment, and Anglo-Dutch’s waiver
prohibited the trial court from reversing the take-nothing judgment on
remand, the trial court erred by rendering judgment declaring that the
numerator in the fee formula is Greenberg Peden’s hours and that the
rounding up required by the Fee Agreement occurs after the hours ratio
is multiplied by 20%.
B. The Trial Court Misconstrued The Fee Agreement By
Rewriting Its Plain Language In Violation Of The Supreme
Court’s Opinion.
Even if not waived, the trial court’s numerator and rounding
declarations, and its order that Anglo-Dutch pay $306,000 instead of
26
$1,530,000, are erroneous because the trial court misconstrued the Fee
Agreement by rewriting its plain language in violation of the Supreme
Court’s opinion. In Anglo-Dutch Petroleum Int’l, Inc. v. Greenberg
Peden, P.C., 352 S.W.3d 445, 452-53 (Tex. 2011), the Supreme Court did
not directly address how much Anglo-Dutch owes under the Fee
Agreement largely because Anglo-Dutch did not appeal the take-
nothing judgment on its numerator and rounding declarations.
However, the Supreme Court discussed interpretive principles which,
when applied, compel rejection of the trial court’s rulings that: the
numerator in the fee formula is Greenberg Peden’s hours; the rounding
up to the next whole percentage occurs before the hours ratio is
multiplied by 20%; and Anglo-Dutch owes Swonke $306,000 instead of
$1,530,000 under the Fee Agreement.
1. The Supreme Court’s Opinion Requires Enforcement
Of The Unambiguous Fee Agreement As Written.
The Texas Supreme Court concluded that the Fee Agreement was
unambiguous. See Anglo-Dutch Petroleum Int’l, 352 S.W.3d at 452
(“Given our conclusion that the agreement was not ambiguous . . . .”).
The Supreme Court also required the Fee Agreement to be enforced as
27
written. See id. (“An unambiguous contract will be enforced as written .
. . .”).
a. The Plain Language Of The Fee Agreement
Makes Swonke’s Hours The Numerator In The
Fee Formula.
As written, the unambiguous Fee Agreement twice states that the
numerator in the hours ratio in the fee formula is Swonke’s hours,
without any location-dependent limitation or restriction on those hours:
 “[T]he proportions under which my fees shall be calculated
will be the ratio of the hours I have spent or will spend on
this matter relative to the hours the attorneys at McConn &
Williams have spent or will spend after the date the lawsuit
was filed. . . .” (emphasis added);
 For example, if McConn & Williams' attorneys spend 1,000
hours on the lawsuit after the date the lawsuit was filed and
I spend 90 hours of my time towards the lawsuit, then by
rounding up to the nearest whole number, I would be
entitled to receive from you 2% (10% of 20%) of the gross
revenues and other benefits recovered, if any, from this
lawsuit.
1 CR 312.
The Supreme Court confirmed this plain language interpretation
of the Fee Agreement by expressly recognizing that the numerator in
the hours ratio is Swonke’s hours:
Since the fee was contingent on recovery and therefore not
based on any attorney’s hourly rate, it would presumably
28
make no difference to Anglo-Dutch who besides Swonke
worked on the case as long as the fee was computed on his
hours. . . . Nor does the fee calculation, based solely on the
hours Swonke spent individually, suggest that others at
Greenberg Peden were excluded from the work. Taking
Swonke’s time into account provided a way of limiting the
fee.
Anglo-Dutch Petroleum Int’l, 352 S.W.3d at 452 (emphasis added).
For these reasons, the numerator in the hours ratio is the 1,299
hours Swonke worked on the Halliburton Lawsuit. See id.; David J.
Sacks, P.C. v. Haden, 266 S.W.3d 447, 450-51 (Tex. 2008) (enforcing the
plain language of an unambiguous attorneys’ fee agreement and
refusing to impose a limitation on fees not expressed in the agreement).
b. The Plain Language Of The Fee Agreement
Requires Rounding Up To The Next Whole
Percentage After The Hours Ratio Is Multiplied
By 20%.
As written, the unambiguous Fee Agreement also states that the
fee is a proportion of 20%, rounded up to the next whole percentage:
I agree to assist Anglo–Dutch and that firm with this
lawsuit for proportionately the same percentage (20%) of any
benefit to McConn & Williams reflected in such agreement. .
. . Further, the proportions under which my fees shall be
calculated will be the ratio of the hours I have spent or will
spend on this matter relative to the hours the attorneys at
McConn & Williams have spent or will spend after the date
the lawsuit was filed, rounded to the next whole percentage.
For example, if McConn & Williams' attorneys spend 1,000
29
hours on the lawsuit after the date the lawsuit was filed and
I spend 90 hours of my time towards the lawsuit, then by
rounding up to the nearest whole number, I would be
entitled to receive from you 2% (10% of 20%) of the gross
revenues and other benefits recovered, if any, from this
lawsuit.
1 CR 312.
For clarity, the Fee Agreement contains an example that shows
when the rounding to the next whole percentage occurs. In the
example, the hours ratio (90/1000) is multiplied by 20% resulting in a
fee of 1.8%, which is then rounded up to 2%. Expressed algebraically,
the example is: 90/1000 x 20% = 1.8% = 2% when rounded up to the
next whole percentage. Thus, the plain language of the Fee Agreement
shows that the rounding up to the next whole percentage that is
required occurs after, not before, the hours ratio is multiplied by 20%.
2. The Supreme Court’s Opinion Prohibits Rewriting The
Fee Agreement Or Adding To Its Language.
The corollary to the Texas Supreme Court’s mandate that
unambiguous fee agreements be enforced as written is its prohibition on
courts rewriting or adding language to unambiguous contracts. See
Anglo-Dutch Petroleum Int’l, 352 S.W.3d at 452; American Mfrs. Mut.
30
Ins. Co. v. Schaefer, 124 S.W.3d 154, 162 (Tex. 2003) (Courts “may
neither rewrite the parties’ contract nor add to its language.”).
a. The Trial Court Rewrote The Hours Ratio In The
Fee Formula At Anglo-Dutch’s Request.
Incredibly, notwithstanding the Supreme Court’s prohibition on
rewriting or adding language to the unambiguous Fee Agreement,
Anglo-Dutch expressly invited the trial court to “re-write” the Fee
Agreement:
Since the Supreme Court of Texas ruled that the Fee
Agreement was with GP and not Swonke, it is clearer, for
analytical purposes, to re-write the Fee Agreement and
replace the pronouns with the term GP . . . .”
1 CR 415 (emphasis added). Specifically, Anglo-Dutch asked the trial
court to re-write the key phrase regarding the numerator in the hours
ratio from “the ratio of the hours I have spent or will spend on this
matter” to “the ratio of the hours GP has spent or will spend on this
matter”:
Further, the proportions under which GP’s fees shall be
calculated will be the ratio of the hours GP has spent or will
spend on this matter relative to the hours the attorneys at
McConn & Williams have spent or will spend after the date
the lawsuit was filed, rounded to the next whole percentage.
31
Id. at 416 (emphasis added); accord id. (“One need simply determine
the hours GP spent on the matter and divide them by the hours that
MW spent on the matter . . . .”) (emphasis added).
The trial court accepted Anglo-Dutch’s invitation and held that
“the numerator in the hours ratio in the fee formula in the Fee
Agreement is the hours Greenberg Peden worked on the Halliburton
Lawsuit,” 1 CR 1303 ¶¶ 2-4, or, in another instance, simply inserted
“Greenberg Peden Hours” into the hours ratio in the fee formula. 1 CR
524-525. But the Fee Agreement does not state, as the trial court held,
that the numerator in the hours ratio in the fee formula is “Greenberg
Peden’s hours” or only the hours Swonke worked “while at Greenberg
Peden.”
Without any support in the language of the Fee Agreement, the
trial court rewrote the fee formula by: (1) substituting “Greenberg
Peden” in two places for “I” in the Fee Agreement; and/or (2) adding
“while at Greenberg Peden” to restrict Swonke’s hours in the numerator
of the fee formula to those hours he worked while at Greenberg Peden.
In doing so, the trial court erred by enforcing an agreement the parties
did not make. See David J. Sacks, P.C., 266 S.W.3d at 450-51
32
(enforcing the plain language of an unambiguous attorneys’ fee
agreement and refusing to impose a limitation on fees not expressed in
the agreement); American Mfrs. Mut. Ins. Co., 124 S.W.3d at 162
(Courts “may neither rewrite the parties’ contract nor add to its
language.”).
b. The Trial Court Rewrote The Rounding
Provision.
Similarly, the trial court rewrote the rounding provision of the Fee
Agreement. The trial court declared that “the rounding up to the next
whole percentage that is required by the Fee Agreement occurs after
the hours ratio is determined [and] before, not after, the hours ratio is
multiplied by 20%.” 1 CR 1303 ¶ 4. The trial court expressed its view
of the rounding provision algebraically as follows:
Greenberg Peden Hours/McConn Williams Hours = X
(rounded up to the next whole percentage) (X1). X1 x 20% =
X2.
***
277 Hours/11,652 Hours = 2.37% (rounded to 3%). 3% x 20%
= .006%. .006 x $51,000,000.00 = $306,000.00
1 CR 525.
33
However, this rewritten rounding provision does not comport with
the Fee Agreement’s plain language. This is readily apparent because,
utilizing the figures in the Fee Agreement’s rounding example and
applying the trial court’s holding that any rounding to the next whole
percentage occurs before the hours ratio is multiplied by 20%, the fee
owed is 1.8%, not the 2% set forth in the example.19 Since the fee owed
after applying the trial court’s holding to the figures in the example
(1.8%) does not match the fee owed in the example (2%), the trial court’s
holding cannot be correct.
On the other hand, utilizing the figures in the example and
applying Swonke’s interpretation that rounding to the next whole
percentage occurs after the hours ratio is multiplied by 20%, the fee
owed is 2%, precisely that fee set forth in the example.20 Consequently,
Swonke’s interpretation is correct and is necessarily the agreement that
Swonke and Anglo-Dutch made in the Fee Agreement.
1990/1,000 = .09 = 9%. Because 9% is a whole percentage, no rounding up occurs.
9% x 20% = 1.8%.
20 90/1,000 = .09. .09 x 20% = 1.8% = 2% when rounded to the next whole
percentage.
34
3. The Supreme Court’s Opinion Requires The Fee
Agreement To Be Construed As A Reasonable Person
In Anglo-Dutch’s Circumstances Would Have
Construed It, Not As Anglo-Dutch Construes It.
The Texas Supreme Court stated that “a tribunal should construe
a contract between client and lawyer as a reasonable person in the
circumstances of the client would have construed it.” See Anglo-Dutch
Petroleum Int’l, 352 S.W.3d at 451 (quoting Restatement (Third) of The
Law Governing Lawyers § 18(2) (2000)). The Supreme Court applied
this standard first to the text of the Fee Agreement and then to the
surrounding circumstances. See id. at 449, 452-53.
a. A Reasonable Person In Anglo-Dutch’s
Circumstances Would Have Recognized That The
Numerator Is Swonke’s Hours, Not Greenberg
Peden’s Hours.
i. The Text Of The Fee Agreement Plainly
States That The Numerator Of The Hours
Ratio Is Swonke’s Hours.
As previously noted, the text of the Fee Agreement, which Anglo-
Dutch proposed,21 twice refers to the numerator in the hours ratio as
Swonke’s hours, without any location-dependent limitation or
21See Anglo-Dutch Petroleum Int’l, 352 S.W.3d at 452 (“Van Dyke was not an
unsophisticated client; indeed, it was he, not Swonke, who proposed the terms of the
Fee Agreement.”).
35
restriction on those hours. And, as previously noted, the Supreme
Court has already construed this language to mean that the fee
calculation was based solely on Swonke’s individual hours because it
provided a way of limiting Anglo-Dutch’s fee. See Anglo-Dutch
Petroleum Int’l, 352 S.W.3d at 452 (emphasis added). Thus, a
reasonable person in Anglo-Dutch’s circumstances would have
recognized from the text of the Fee Agreement that the numerator of
the hours ratio is Swonke’s hours.
ii. The Circumstances Surrounding The
Execution Of The Fee Agreement Do Not
Alter Its Plain Language.
In the words of the Texas Supreme Court, “the circumstances in
which the Fee Agreement was executed do not suggest that the parties
must have intended something different from what they plainly stated.”
Id. at 453. The Fee Agreement resulted from Anglo-Dutch’s desire to
have Swonke’s—not Greenberg Peden’s—assistance in the Halliburton
Lawsuit:
But Swonke’s continued counsel, based on his involvement in
the events leading up to the litigation, was still needed and
Van Dyke asked him to assist McConn & Williams, again for
a contingent fee.
36
Anglo-Dutch Petroleum Int’l, 352 S.W.3d at 447. And Greenberg Peden,
to whom Swonke had presented the potential representation in
compliance with his of counsel arrangement, had declined to represent
Anglo-Dutch in the Halliburton Lawsuit because Anglo-Dutch had not
paid its outstanding bills to Greenberg Peden. Id.
Under these circumstances, when Anglo-Dutch sought Swonke’s
help and Greenberg Peden had refused to represent Anglo-Dutch in the
Halliburton Lawsuit, it would be utterly illogical to construe the
personal pronouns defining the hours ratio as referring to anyone other
than Swonke. The circumstances surrounding the execution of the Fee
Agreement certainly “do not suggest that the parties must have
intended something different from what they plainly stated.” Id. at 453.
iii. The Post-Fee Agreement Circumstances Do
Not Alter The Plain Language Of The Fee
Agreement.
Again in the words of the Supreme Court, “[e]vents following the
Fee Agreement do not cast the situation in a different light.” Id. at 453.
When Swonke relocated from Greenberg Peden to McConn & Williams,
Swonke informed Anglo-Dutch that Greenberg Peden was going to
dissolve and that, absent objection (which was never made), he would
37
continue to represent Anglo-Dutch in matters, including the
Halliburton Lawsuit, in his new position as of counsel to McConn &
Williams:
But a year later, Greenberg Peden dissolved, and Swonke
moved to McConn & Williams, again in an “of counsel”
relationship. In a letter to Van Dyke, Swonke wrote that he
would not take the Anglo-Dutch files with him if Van Dyke
objected. Van Dyke did not.
Anglo-Dutch Petroleum Int’l, 352 S.W.3d at 448-49; 1 CR 193-194, 354.
At this point in time, Anglo-Dutch could have limited the fees
owed under the Fee Agreement to the hours Swonke spent on the
Halliburton Lawsuit while of counsel to Greenberg Peden, as it now
attempts to do, by requiring that the file stay at Greenberg Peden and
not allowing Swonke to take it with him to his of counsel position at
McConn & Williams. But Anglo-Dutch chose to continue working with
Swonke because it needed his help. Because Anglo-Dutch’s decision to
permit Swonke to take the Halliburton Lawsuit file with him to his of
counsel position at McConn & Williams without objection created the
situation about which it now complains, Anglo-Dutch’s complaint about
compensating Swonke for the time he worked on the Halliburton
Lawsuit while there must fall on deaf ears.
38
With Anglo-Dutch’s knowledge, Swonke worked 1,022 hours on
the Halliburton Lawsuit while of counsel at McConn & Williams. See 1
CR 206. Included in those hours was time Swonke spent attending Van
Dyke’s three-day deposition, which occurred six months after Swonke
relocated from Greenberg Peden to McConn & Williams. 1 CR 206. In
his deposition, Van Dyke testified in the present tense that he had a fee
agreement with Swonke, and noted through his testimony that his fee
agreement with Swonke was separate and distinct from his other
attorneys’ fee agreements:
Q: The attorney’s fees, the written contract that you
made reference to a moment ago?
Van Dyke: Yes.
***
Q: Who is it with?
Van Dyke: It is with – there’s actually – there are two
contracts in existence, one is with a contract with
Mr. O’Quinn, Mr. McConn and Mr. Williams, and
the second contract is with Mr. Swonke.
1 CR 247.
Finally, Swonke received no fees from McConn & Williams or any
other source for any of the hours he spent on the Halliburton Lawsuit,
39
including the 1,022 hours that he spent on the Halliburton Lawsuit
after relocating from Greenberg Peden to McConn & Williams. 1 CR
206.
The post-Fee Agreement circumstances reflect that Swonke
worked on the Halliburton Lawsuit for more than one thousand hours
after relocating from Greenberg Peden to McConn & Williams with the
expectation to be paid under the Fee Agreement by Anglo-Dutch, which
knew both that Swonke was actively working on the Halliburton
Lawsuit and that the Fee Agreement, the numerator in which is based
on Swonke’s unrestricted and unlimited hours, was still in full force and
effect. These post-Fee Agreement circumstances only bolster Swonke
and the Supreme Court’s interpretation that the numerator in the
hours ratio is Swonke’s hours. See Anglo-Dutch Petroleum Int’l, 352
S.W.3d at 452; David J. Sacks, P.C., 266 S.W.3d at 450-51 (enforcing
the plain language of an unambiguous attorneys’ fee agreement and
refusing to impose a limitation on fees not expressed in the agreement).
Based on its text and the surrounding circumstances, a reasonable
person in Anglo-Dutch’s circumstances would have recognized that the
numerator in the hours ratio is Swonke’s hours.
40
b. A Reasonable Person In Anglo-Dutch’s
Circumstances Would Have Recognized That The
Rounding To The Next Whole Percentage Occurs
After, Not Before, Multiplying The Hours Ratio
By 20%.
i. The Text Of The Fee Agreement Plainly
Shows That The Rounding Occurs After, Not
Before, Multiplying The Hours Ratio By 20%.
As previously noted, the text of the Fee Agreement plainly states
that the fee is a proportion of 20%, rounded up to the next whole
percentage. And, as previously stated, Anglo-Dutch’s method of
rounding does not comport with the Fee Agreement’s plain language
because Anglo-Dutch’s method produces an answer different than that
in the Fee Agreement’s example. Anglo-Dutch’s rounding method
produces an answer of 1.8% for the example while the Fee Agreement
plainly shows that proper rounding results in an answer of 2% for the
example. Thus, a reasonable person in Anglo-Dutch’s circumstances
would have recognized from the text of the Fee Agreement that the
rounding up to the next whole percentage occurs after, not before,
multiplying the hours ratio by 20%.
41
ii. Neither The Circumstances Surrounding The
Execution Of The Fee Agreement Nor Post-
Fee Agreement Circumstances Alter Its Plain
Language That Requires Rounding After
Multiplying The Hours Ratio By 20%.
Swonke and Van Dyke discussed the rounding feature before the
Fee Agreement was signed and it was clear that Van Dyke understood
the rounding feature as Swonke did. 9 RR 247-48. Van Dyke never
suggested during this discussion that the rounding would occur before
the hours ratio was multiplied by 20%. 9 RR 249. Anglo-Dutch first
asserted that the rounding should occur before the hours ratio was
multiplied by 20% once the lawsuit was filed. Id. Consequently, “the
circumstances in which the Fee Agreement was executed do not suggest
that the parties must have intended something different from what
they plainly stated” regarding when rounding occurs. See Anglo-Dutch
Petroleum Int’l, 352 S.W.3d at 453.
C. Conclusion
As explained above, the trial court erred by rendering judgment
on Anglo-Dutch’s requested numerator and rounding declarations
because Anglo-Dutch waived any entitlement to the declarations and, in
any event, the declarations misconstrue the Fee Agreement by
42
rewriting its plain language in violation of the Supreme Court’s opinion.
These mistakes resulted in the rendition of an incorrect judgment for
Swonke of $306,000 based on the parties’ stipulated facts.
Applying the trial court’s erroneous rounding declaration, but
changing its numerator declaration to include in the numerator all of
the hours Swonke worked on the Halliburton Lawsuit without
limitation or restriction, results in a fee owed under the Fee Agreement
of $1,224,000, calculated as follows:
(1,299/11,652) = .11148301 = 11.148301% = 12% rounded up to the next
whole percentage
12% x 20% = 2.4%
2.4% x $51,000,000 = $1,224,000
Applying the trial court’s numerator declaration, but changing its
rounding declaration by rounding up to the next whole percentage after
the hours ratio is multiplied by 20%, results in a fee owed of $510,000,
calculated as follows:
(277/11,652) x 20% = .475455% = 1% when rounded up to the next
whole percentage
1% x $51,000,000 = $510,000
43
Changing both the trial court’s erroneous numerator and rounding
declarations by including all of Swonke’s hours in the numerator and
rounding to the next whole percentage after the hours ratio is
multiplied by 20%, results in a fee owed of $1,530,000, calculated as
follows:
1,299/11,652 = .11148301
.11148301 x 20% = 2.22966% = 3% when rounded up to the next whole
percentage
3% x $51,000,000 = $1,530,000
Based on the parties’ stipulated facts, the amount owed under the
Fee Agreement when properly construed is $1,530,000. The trial court
erred by refusing to render judgment for Swonke in that amount.
II. The Trial Court Erred By Rendering Judgment Against—And
Refusing To Render Judgment For—Swonke On His Attorneys’
Fees Claims.
The trial court’s 2007 Judgment ordered Anglo-Dutch to pay to
Swonke attorneys’ fees of $352,892.50 for representation in the trial
court and $75,000 for representation in the court of appeals. See 1 CR
supp 121. The trial court found those attorneys’ fees to be reasonable,
necessary, equitable, and just for the prosecution of Swonke’s breach of
44
contract and declaratory judgment claims, and Swonke’s defense of
Anglo-Dutch’s declaratory judgment claims. Id.
As Anglo-Dutch has previously conceded, Anglo-Dutch did not
appeal Swonke’s attorneys’ fees award: “Anglo-Dutch did not raise a
separate and distinct appeal point concerning the award of attorneys’
fees to Swonke.” See 1 CR SUPP 394; Anglo-Dutch Petroleum Int’l, Inc.
v. Greenberg Peden, P.C., 267 S.W.3d 454, 464 n.5 (Tex. App.—Houston
[14th Dist.] 2008) (“Anglo–Dutch does not challenge on appeal . . . the
separate statutory fee award for litigating Swonke's contract claim
under the disputed fee agreement, which the parties opted to try to the
court.”), rev’d, 352 S.W.3d 445 (Tex. 2011); 2 CR SUPP 766-815; 3 CR
SUPP 817-846, 848-901.
On remand, Swonke and Anglo-Dutch cross-moved for summary
judgment on Swonke’s attorneys’ fees claims. 1 CR SUPP 77; 1 CR 271.
The trial court ruled for Anglo-Dutch and interlocutorily ordered that
Swonke take nothing on his attorney fees’ claims. See 1 CR 668-669.
Based on that order, the trial court ultimately rendered a take-nothing
judgment against Swonke on his attorneys’ fees claims. See 1 CR 1304.
45
A. The Trial Court Erred By Granting Summary Judgment
Against Swonke On His Attorneys’ Fees Claims.
Anglo-Dutch sought summary judgment on Swonke’s claim for
attorneys’ fees under Texas Civil Practice and Remedies Code chapter
38 on the sole ground that Swonke did not prevail on his breach of
contract claim. See 1 CR SUPP 281-282. Anglo-Dutch argued that
Swonke did not prevail on his breach of contract claim because the
Texas Supreme Court ruled that the Fee Agreement was between
Anglo-Dutch and Greenberg Peden, not Swonke. See 1 CR SUPP 282.
Anglo-Dutch sought summary judgment on Swonke’s claim for
attorneys’ fees under Texas Civil Practice and Remedies Code section
37.009 on three grounds: (1) Swonke’s declaratory judgment claim
raised only issues already raised by Anglo-Dutch’s original claim; (2)
Swonke did not prevail on his breach of contract claim; and (3) it would
not be equitable or just to award attorneys’ fees to Swonke. See 1 CR
SUPP 282-284.
As shown below, none of Anglo-Dutch’s arguments support the
trial court’s summary judgment against Swonke on his attorneys’ fees
claims because: (1) Anglo-Dutch waived all complaints about Swonke’s
attorneys’ fees award; (2) notwithstanding the Supreme Court’s opinion,
46
Swonke had standing and capacity to sue for breach of the Fee
Agreement; (3) Swonke may recover Declaratory Judgment Act
attorneys’ fees defending against against declaratory judgment claims;
and (4) Swonke’s award of attorneys’ fees was equitable and just and
Anglo-Dutch waived any complaint that it was not.
1. Anglo-Dutch’s Waiver Of All Complaints About The
2007 Judgment’s Award Of Attorneys’ Fees To Swonke
Prohibited The Trial Court From Altering The Award
On Remand.
As previously noted, Anglo-Dutch did not complain on appeal
about the 2007 Judgment’s award of attorneys’ fees to Swonke. See 1
CR SUPP 394 (“Anglo-Dutch did not raise a separate and distinct
appeal point concerning the award of attorneys’ fees to Swonke.”);
Anglo-Dutch Petroleum Int’l, Inc. v. Greenberg Peden, P.C., 267 S.W.3d
454, 464 n.5 (Tex. App.—Houston [14th Dist.] 2008); 2 CR SUPP 756-
815; 3 CR SUPP 817-846; 3 CR SUPP 848-901.
Anglo-Dutch’s failure to complain on appeal about the 2007
Judgment’s award of attorneys’ fees to Swonke waived all complaints
about that award. See Hudspeth County Underground Water
Conservation Dist. No. 1 v. Guitar Holding Co., L.P., 355 S.W.3d 428
(Tex. App.—El Paso 2011, pet. denied) (holding that a party waived its
47
complaint about the court of appeals’ decisions regarding entitlement to
attorneys’ fees and prevailing-party status by not appealing those
issues to the Texas Supreme Court); City of Temple v. Taylor, 268
S.W.3d 852, 858 (Tex. App.—Austin 2008, pet. denied) (holding that,
even though a party prevailed on appeal in a declaratory judgment
action, that party waived all complaints regarding a trial court’s award
of attorney’s fees to the prevailing party in the trial court because the
attorneys’ fee award was not challenged on appeal). The complaints
waived by Anglo-Dutch include all of the grounds that Anglo-Dutch
asserted in its motion for summary judgment on Swonke’s attorneys’
fees claims.
Anglo-Dutch’s waiver of all complaints about the 2007 Judgment’s
award of attorneys’ fees to Swonke prohibited the trial court from
altering the attorneys’ fees award on remand because a trial court errs
by rendering a judgment on remand that alters its own or a higher
court’s prior judgment on an issue that was not appealed. See Medical
Ctr. Pharmacy, 634 F.3d at 834 (holding that the district court erred by
reversing on remand its prior ruling granting declaratory relief which
had been waived on appeal); United Resources, L.P., 2014 WL 3339537,
48
at *3 (holding that the trial court erred on remand by modifying its
prior take-nothing judgment on cross-claims because no party had
attacked that part of the trial court’s judgment in an earlier appeal);
Hudspeth County Underground Water Conservation Dist. No. 1, 355
S.W.3d at 434-35 (holding that the trial court erred on remand by
making a finding on prevailing-party status for attorneys’ fees purposes
that conflicted with the court of appeals’ prior decision on the issue
which had been waived on appeal to the Texas Supreme Court); JGR,
Inc. v. Thomasville Furniture Indus., Inc., 550 F.3d 529, 533 (6th Cir.
2008) (holding that a district court erred on remand by rendering
judgment on a jury’s $3.3 million lost profits finding because the district
court’s previously-rendered judgment on a $0 lost profits finding had
been waived on appeal); Anderson Courier Serv., 222 S.W.3d at 66-67
(holding that the trial court erred by awarding attorneys’ fees under the
declaratory judgment act on remand when any complaint that the trial
court’s original judgment failed to award attorneys’ fees was waived on
appeal).
Because Anglo-Dutch waived any complaint about Swonke’s
attorneys’ fees award in the 2007 Judgment by not appealing that
49
award, and Anglo-Dutch’s waiver prohibited the trial court from
altering the award on remand, the trial court erred by granting a take-
nothing summary judgment to Anglo-Dutch on Swonke’s attorneys’ fees
claims.
2. Alternatively, Even If Not Waived, Anglo-Dutch’s
Grounds For Summary Judgment On Swonke’s
Attorneys’ Fees Claims Lack Merit.
Alternatively, even if not waived, Anglo-Dutch’s grounds for
summary judgment on Swonke’s attorney’s fees claims lack merit
because, as shown below, Anglo-Dutch did not conclusively negate any
element of Swonke’s attorneys’ fees claims and genuine issues of
material fact remain on those claims.
a. Notwithstanding The Supreme Court’s Opinion,
Swonke Had Standing And Capacity To Sue For
Breach Of The Fee Agreement.
Anglo-Dutch argued that Swonke was not entitled to attorneys’
fees under chapter 38 on the sole ground that Swonke had not prevailed
on his breach of contract claim since the Texas Supreme Court ruled
that the Fee Agreement was between Anglo-Dutch and Greenberg
Peden, not Swonke. See 1 CR SUPP 282. Two flaws infect this
argument.
50
First, the Texas Supreme Court’s holding that Swonke was not a
party to the Fee Agreement was not dispositive of Swonke’s breach of
contract claim because Swonke need not have been a party to the Fee
Agreement to sue for its breach; assignees and third-party beneficiaries
also have standing and capacity to sue for breach of contract. See
Southwestern Bell Telephone Co. v. Marketing on Hold, Inc., 308
S.W.3d 909, 916 (Tex. 2010) (“Because [assignee] holds contractually
valid assignments, [assignee] steps into the shoes of the claimholders
and is considered under the law to have suffered the same injury as the
assignors and have the same ability to pursue the claims.”); Brown v.
Mesa Distributors, Inc., 414 S.W.3d 279, 281-82 (Tex. App.—Houston
[1st Dist.] 2013, no pet.) (“In order to establish standing to maintain a
breach of contract action, a plaintiff must show either third-party-
beneficiary status or privity. Privity is established by proof that the
defendant was a party to an enforceable contract with either the
plaintiff or a party who assigned its cause of action to the plaintiff.”);
Pagosa Oil and Gas, L.L.C. v. Marrs and Smith Partnership, 323
S.W.3d 203, 210 (Tex. App.—El Paso 2010, pet. denied) (parties,
51
assignees, and third-party beneficiaries have standing to sue for breach
of contract).
Anglo-Dutch did not argue—much less conclusively prove—that
Swonke lacked standing or capacity to sue for breach of the Fee
Agreement, or that Swonke was not an assignee or third-party
beneficiary of the Fee Agreement. Consequently, Anglo-Dutch was not
entitled to summary judgment on Swonke’s breach of contract claim.
Second, the summary judgment evidence affirmatively showed
that Swonke had capacity and standing to sue for breach of the Fee
Agreement as an assignee and a third-party beneficiary of the Fee
Agreement. On April 16, 2004, before this lawsuit was ever filed,
Greenberg Peden assigned all of its interest in and under the Fee
Agreement to Swonke. See 2 CR SUPP 723. Indeed, on remand, the
trial court recognized the validity of that assignment in its May 15,
2012 Order: “[U]nder the Fee Agreement the Court determines that the
attorneys’ fees due to Greenberg Peden (and now Swonke by way of
assignment) are $306,000.” 2 CR SUPP 734. That assignment also
identifies Swonke as the “third party beneficiary” of the Fee Agreement.
See id. At a minimum, the assignment and designation of Swonke as a
52
third-party beneficiary raised genuine issues of material fact that
precluded summary judgment for Anglo-Dutch on Swonke’s breach of
contract claim. See Brown, 414 S.W.3d at 285-86 (holding that legally
sufficient evidence supported the standing of an assignee to sue for
breach of contract when the contract that was assigned and the
assignment were introduced into evidence).
b. Anglo-Dutch’s Grounds For Summary Judgment
On Swonke’s Claim For Attorneys’ Fees Under
The Declaratory Judgment Act Lack Merit.
Anglo-Dutch argued that Swonke was not entitled to attorneys’
fees under section 37.009 of the Declaratory Judgment Act for three
reasons: (1) Swonke’s declaratory judgment claim only raised issues
already raised by Anglo-Dutch’s original claim; (2) Swonke’s breach of
contract claim failed; and (3) it would not be equitable or just to award
attorneys’ fees to Swonke. 1 CR SUPP 282-284.
i. Swonke May Recover Attorneys’ Fees Under
The Declaratory Judgment Act Because He
Defended Against Anglo-Dutch’s Declaratory
Judgment Action.
Anglo-Dutch argued that Swonke was not entitled to attorneys’
fees under the Declaratory Judgment Act because his declaratory
judgment claim only raised issues already raised by Anglo-Dutch’s
53
original claim. See 1 CR SUPP 282. Anglo-Dutch relied on
Montemayor v. Ortiz, 208 S.W.3d 627, 666 (Tex. App.—Corpus Christi
2006, pet. denied), but Montemayor itself defeats Anglo-Dutch’s
argument. In Montemayor, the court of appeals held that the trial court
did not abuse its discretion by awarding attorneys’ fees to a defendant
under the Declaratory Judgment Act because the plaintiff’s original
claim was for a declaratory judgment. See Montemayor, 208 S.W.3d at
666-67. Indeed, Montemayor expressly states that the rule upon which
Anglo-Dutch relied “does not apply where a defendant is defending
against a plaintiff's declaratory judgment action.” Id.
Here, Anglo-Dutch originally brought declaratory judgment claims
and Swonke defended against them. See 1 CR SUPP 300; 1 CR SUPP
392 (“Anglo-Dutch filed suit against Greenberg Peden, P.C. . . . and
Swonke, seeking relief pursuant to the Uniform Declaratory Act . . . .”).
Consequently, Swonke was entitled to recover attorneys’ fees under the
Declaratory Judgment Act. See Montemayor, 208 S.W.3d at 666-67.
ii. Swonke’s Breach Of Contract Claim Did Not
Fail.
Anglo-Dutch also argued that Swonke could not recover attorneys’
fees under the Declaratory Judgment Act because Swonke’s breach of
54
contract claim purportedly failed due to the Texas Supreme Court’s
holding that Swonke was not a party to the Fee Agreement. See 1 CR
SUPP 283. However, for the reasons set forth in section II.A.2.a. above,
which are incorporated herein by reference, Anglo-Dutch’s argument
that Swonke did not prevail on his breach of contract claim lacks merit.
iii. Anglo-Dutch Waived Its Complaint That
Swonke’s Attorneys’ Fee Award Was Not
Equitable And Just And, In Any Event, The
Award Was Equitable And Just.
Anglo-Dutch finally argued that Swonke could not recover
attorneys’ fees under the Declaratory Judgment Act because it would
not be equitable and just to award attorneys’ fees to Swonke. See 1 CR
SUPP 283-284. In its 2007 Judgment, the trial court expressly found
that Swonke’s award of attorneys’ fees was equitable and just. See 1
CR 299. But Anglo-Dutch did not attack that conclusion of law on
appeal. See 1 CR SUPP 394 (“Anglo-Dutch did not raise a separate and
distinct appeal point concerning the award of attorneys’ fees to
Swonke.”); Anglo-Dutch Petroleum Int’l, Inc. v. Greenberg Peden, P.C.,
267 S.W.3d 454, 464 n.5 (Tex. App.—Houston [14th Dist.] 2008)
(“Anglo–Dutch does not challenge on appeal . . . the separate statutory
fee award for litigating Swonke's contract claim under the disputed fee
55
agreement, which the parties opted to try to the court.”), rev’d, 352
S.W.3d 445 (Tex. 2011); 1 CR SUPP 124-183, 185-214, 216-269. Thus,
Anglo-Dutch’s attack on the equitable and just nature of Swonke’s
attorneys’ fees award has been waived and could not have been properly
revisited on remand by the trial court.
In any event, it was equitable and just to award attorneys’ fees to
Swonke under the Declaratory Judgment Act given the circumstances
of this case. Swonke has thus far defeated three of Anglo-Dutch’s seven
declaratory judgment claims and, when this Court reverses the trial
court’s numerator and rounding declarations, Anglo-Dutch will have
succeeded on only two of seven requested declarations. And neither of
those declarations are significant to the ultimate issue in this case—
what does Anglo-Dutch owe Swonke under the Fee Agreement? The
declaration that Greenberg Peden is a party to the Fee Agreement is of
no moment because, as explained above, it is not dispositive of Swonke’s
breach of contract claim. The declaration that Swonke’s hours at
McConn & Williams are included in the denominator in the fee formula
is insignificant and was agreed to by Swonke because it does not change
the fee owed to Swonke under the Fee Agreement. 1 CR 460.
56
Moreover, the facts contained in the Statement of Facts in this
brief, which are incorporated herein by reference, also demonstrate that
it was equitable and just to award Swonke attorneys’ fees for his
defense of Anglo-Dutch’s declaratory judgment claims. Specifically, Van
Dyke’s company, Anglo-Dutch, settled the Halliburton Lawsuit for
$51,000,000 and then stiffed Swonke on his fee. Anglo-Dutch then sued
Swonke for a judicial declaration that it owed him nothing for the 1,022
hours he had worked on the lawsuit while at McConn & Williams even
though:
 Greenberg Peden had expressly refused to represent Anglo-
Dutch in the Halliburton Lawsuit and told Van Dyke so;
 Van Dyke, not Swonke, proposed the disputed terms in the
Fee Agreement;
 Greenberg Peden is not mentioned in the body of the Fee
Agreement;
 The Fee Agreement uses personal pronouns twelve times in
nine sentences to refer to Swonke;
 Van Dyke himself testified in the Halliburton Lawsuit that
Anglo-Dutch had a fee agreement with Swonke;
 Swonke worked 1,022 hours on the Halliburton Lawsuit
without compensation while “of counsel” at McConn &
Williams because he knew he would be compensated under
the Fee Agreement with Anglo-Dutch;
57
 Although Anglo-Dutch seeks to avoid paying Swonke
attorneys’ fees for the 1,022 hours he worked on the
Halliburton Lawsuit while of counsel to McConn & Williams,
Anglo-Dutch’s verdict that resulted in the $51,000,000
settlement actually included attorneys’ fees for those same
hours;
 After settling the Halliburton Lawsuit for $51,000,000,
Anglo-Dutch began a concerted effort to avoid its contractual
obligations to numerous others who helped it prevail; and
 Swonke has not been compensated by anyone for any of his
1,299 hours of work on the Halliburton Lawsuit that helped
Anglo-Dutch recover $51,000,000.
These facts demonstrate that an award of attorneys’ fees to Swonke is
equitable and just. See Hoover Slovacek, L.L.P. v. Walton, 206 S.W.3d
557, 563 (Tex. 2006) (“[A]ttorneys are entitled to protection from clients
who would abuse the contingent fee arrangement and avoid duties owed
under contract.”).
B. The Trial Court Erred By Refusing To Render Judgment Of
$427,892.50 For Swonke On His Attorneys’ Fees Claims.
As previously noted, Swonke moved for a partial summary
judgment on his attorneys’ fees claims. 1 CR SUPP 77-270. The trial
court denied that motion by ordering that Swonke take-nothing on his
attorneys’ fees claims. 1 CR 668. Swonke also moved the Court to
render judgment on his attorneys’ fees claims. 3 CR SUPP 1014. The
58
trial court’s final judgment denied that requested relief by rendering
judgment that Swonke take nothing on his attorneys’ fees claims. 3 CR
SUPP 1304. As shown below, the trial court erred by refusing to render
judgment for Swonke on his attorneys’ fees claims.
A lower court’s judgment remains in force and effect as to any
issue it decides that is not appealed. See Guitar Holding Co., L.P. v.
Hudspeth County Underground Water Conservation Dist. No. 1, 263
S.W.3d 910, 918 (Tex. 2008); Bramlett v. Phillips, 359 S.W.3d 304, 311
(Tex. App.—Amarillo 2012), aff’d, Phillips v. Bramlett, 407 S.W.3d 229
(Tex. 2013).
In Guitar Holding, the Supreme Court reversed the court of
appeals’ judgment and declared certain water transfer permits and
rules relating thereto invalid. See id. On motion for rehearing, the
losing party argued that it had prevailed on several other issues in the
court of appeals which were unchallenged—and therefore waived—in
the Supreme Court. See id. The Supreme Court agreed that those
issues were waived and held that “the court of appeals’ judgment
remains in effect as to these abandoned issues.” Id. In Bramlett, the
court of appeals succinctly stated the rule:
59
[A]s to issues not addressed by the Supreme Court, the
opinions and judgments of this Court [of Appeals] remain in
force and effect. Similarly, as to those issues not addressed
by either the Supreme Court or this Court [of Appeals], the
[original] judgment of the trial court remains in force and
effect.
Bramlett, 359 S.W.3d at 311.
Indeed, a lower court’s judgment remains controlling on issues it
decided that were waived on appeal even when that judgment is
“reversed” by a higher court. See Phillips v. Bramlett, 407 S.W.3d 229,
233, 237 (Tex. 2013); Guitar Holding Co., L.P., 263 S.W.3d at 918. In
Phillips, the Supreme Court held that the portion of a court of appeals’
judgment that reversed punitive damages was not reversed—but
instead was “approved”—in the Supreme Court, even though the
Supreme Court’s opinion, judgment, and mandate stated that the court
of appeals’ judgment was reversed, because that issue went
unchallenged in the Supreme Court and unaddressed in its opinion.
See id. at 233, 237. Similarly, in Guitar Holding, the Supreme Court
held that its reversal of the court of appeals’ judgment did not actually
reverse issues decided by the court of appeals that were not appealed to
the Texas Supreme Court. Guitar Holding Co., L.P., 263 S.W.3d at 918.
60
As previously noted, Anglo-Dutch did not appeal to any court the
trial court’s award of attorneys’ fees to Swonke in the 2007 Judgment.
Consequently, the 2007 Judgment’s award of attorneys’ fees remains in
force and effect. See Guitar Holding Co., 263 S.W.3d at 918; Bramlett,
359 S.W.3d at 311.
In Phillips, the Texas Supreme Court concluded that, “[b]y
remanding the case to the trial court for entry of a judgment consistent
with our opinion, we permitted the trial court to enter a final judgment
that reflected this [Supreme] Court’s holdings and the court of appeals’
holding . . . .” Phillips, 407 S.W.3d at 237 (emphasis added). Like
Phillips, by remanding this case to the trial court for entry of a
judgment in accordance with its opinion, the Supreme Court in this case
permitted the trial court to render a final judgment that reflected the
Supreme Court’s holding—that Greenberg Peden was unambiguously a
party to the Fee Agreement—and the prior decisions of the trial court
and this Court that were waived on appeal, including the trial court’s
award of $427,892.50 to Swonke on his attorneys’ fee claims. See id.
The trial court’s refusal to render such a judgment for Swonke on his
attorneys’ fees claims was error.
61
III. The Trial Court Erred By Rendering Judgment Against—And
Refusing To Render Judgment For—Swonke On His Breach Of
Contract Claim.
A. The Trial Court Erred By Granting Summary Judgment To
Anglo-Dutch On Swonke’s Breach Of Contract Claim.
On remand, Anglo-Dutch sought summary judgment on Swonke’s
breach of contract claim on the sole ground that the Texas Supreme
Court had ruled that Swonke did not have a contract with Anglo-Dutch.
See 1 CR SUPP 280-281. The trial court granted Anglo-Dutch’s motion
and ordered that Swonke take nothing on his breach of contract claim.
1 CR 668.
However, for the reasons stated in detail in section II.A.2.a. above,
which are incorporated herein by reference, Anglo-Dutch was not
entitled to summary judgment on Swonke’s breach of contract claim
because: Anglo-Dutch did not conclusively negate Swonke’s standing or
capacity to sue for breach of the Fee Agreement as an assignee or third-
party beneficiary; and the April 16, 2004 assignment from Greenberg
Peden to Swonke of Greenberg Peden’s interest in the Fee Agreement
raised a genuine issue of material fact about whether Swonke had
standing and capacity to sue for breach of the Fee Agreement as an
assignee or third-party beneficiary. For those reasons, the trial court
62
erred by granting summary judgment to Anglo-Dutch on Swonke’s
breach of contract claim.
B. Alternatively, The Trial Court Erred By Refusing To Render
Judgment For Swonke On His Breach Of Contract Claim.
As explained above, the trial court erred by misconstruing the Fee
Agreement and refusing to render judgment that Anglo-Dutch owes
Swonke $1,530,000 under the Fee Agreement. In the alternative to that
recovery, the trial court erred by refusing to render judgment for
Swonke on his breach of contract claim.
Swonke moved the trial court to render judgment for him on his
breach of contract claim. 3 CR SUPP 1014. The trial court denied
Swonke’s request and rendered a take-nothing judgment against
Swonke on his breach of contract claim. 1 CR 1304. As shown below,
the trial court erred by refusing to render judgment for Swonke on his
breach of contract claim because conclusive evidence and undisturbed
jury findings from the original trial entitle Swonke to the rendition of a
judgment for $1,000,000 on his breach of contract claim.
Swonke sued Anglo-Dutch for breach of the Fee Agreement. 1 CR
SUPP 294-307. The elements of a breach of contract claim are: “(1) the
existence of a valid contract; (2) performance or tendered performance
63
by the plaintiff; (3) breach of contract by the defendant; and (4)
damages sustained as a result of the breach.” Sims v. Fitzpatrick, No.
01-13-00176-CV, 2014 WL 1004410, at *4 (Tex. App.—Houston [1st.
Dist.] March 13, 2014, pet. denied).
The first element of Swonke’s breach of contract claim—the
existence of a contract—is undisputed and was conclusively proved in
the original trial. The Fee Agreement is the contract. 1 CR 312-313;
Anglo Dutch Petroleum Int’l, Inc. v. Greenberg Peden, P.C., 352 S.W.3d
445, 453 (Tex. 2011) (“We hold that the agreement was between Anglo-
Dutch and Greenberg Peden.”).
Moreover, the evidence conclusively proved that Swonke had
standing and capacity to sue for breach of the Fee Agreement as an
assignee and a third-party beneficiary of the Fee Agreement. See
Southwestern Bell Telephone Co. v. Marketing on Hold, Inc., 308
S.W.3d 909, 916 (Tex. 2010) (“Because [assignee] holds contractually
valid assignments, [assignee] steps into the shoes of the claimholders
and is considered under the law to have suffered the same injury as the
assignors and have the same ability to pursue the claims.”). On April
16, 2004, before this lawsuit was ever filed, Greenberg Peden assigned
64
all of its interest in and under the Fee Agreement to Swonke. See 1 CR
385 (“Greenberg Peden, P.C. hereby . . . ASSIGNS all of its interest in
and under the [Fee Agreement] to Swonke.”); [additional cite]. Indeed,
the trial court recognized the validity of that assignment as a matter of
law in its May 15, 2012 Order: “[U]nder the Fee Agreement the Court
determines that the attorneys’ fees due to Greenberg Peden (and now
Swonke by way of assignment) are $306,000.” (emphasis added). That
assignment also identifies Swonke as the “third party beneficiary” of
the Fee Agreement. See id. For these reasons, the April 16, 2004
assignment conclusively proves that Swonke had standing and capacity
to sue for breach of the Fee Agreement.
The second element of Swonke’s breach of contract claim—
performance by the plaintiff—is also undisputed and conclusively
proved. Swonke promised in the Fee Agreement “to assist Anglo-Dutch
and that firm [McConn & Williams, LLP] in this lawsuit [the
Halliburton Lawsuit] . . . .” The evidence at trial conclusively proved
that Swonke assisted Anglo-Dutch and McConn & Williams in the
Halliburton Lawsuit, by working on the lawsuit for 277 hours while of
counsel to Greenberg Peden and 1,022 hours while of counsel at
65
McConn & Williams. 1 CR 164, 184, 206, 216. Indeed, the trial court
recognized in its May 15, 2012 order that Anglo-Dutch had conceded
that Swonke assisted Anglo-Dutch on the Halliburton Lawsuit for 277
hours while at Greenberg Peden (“In addition, the parties have agreed
that Swonke spent 277 hours on the representation while at Greenberg
Peden . . . .”).22 For these reasons, Swonke’s performance of the Fee
Agreement has been conclusively proved.
The third element of Swonke’s breach of contract claim—Anglo-
Dutch’s breach of the Fee Agreement—was proved in the original trial.
The jury found in response to Question 2 that Anglo-Dutch failed to
comply with the Fee Agreement. 1 CR 304. The trial court
incorporated the finding of breach into the 2007 Judgment. 1 CR 298.
And Anglo-Dutch did not attack that finding on appeal: “Anglo-Dutch
does not challenge on appeal the jury’s finding that it breached the fee
agreement . . . .” See Anglo-Dutch Petroleum Int’l v. Greenberg Peden,
P.C., 267 S.W.3d 454, 464 n.5 (Tex. App.—Houston [14th Dist.] 2008),
rev’d, 352 S.W.3d 445 (Tex. 2011). Consequently, Anglo-Dutch waived
any attack on the jury’s breach finding and it remains undisturbed and
22It is significant that Anglo-Dutch neither sought nor obtained a finding that
Swonke did not comply with the Fee Agreement. See 1 CR 312-313.
66
in effect. See Guitar Holding Co., L.P., 263 S.W.3d at 918 (holding that
a lower court’s judgment remains in force and effect as to any issue it
decides that is not appealed); Biggar, 873 S.W.2d at 14-15 (holding that
a party waived all complaints about a damage award affirmed by the
court of appeals by not complaining about it in the Texas Supreme
Court); see also JGR, Inc. v. Thomasville Furniture Indus., Inc., 550
F.3d 529, 533 (6th Cir. 2008) (holding that a district court erred on
remand by rendering judgment on a jury’s $3.3 million lost profits
finding because the district court’s previously-rendered judgment on a
$0 lost profits finding had been waived on appeal).
The fourth element of Swonke’s breach of contract claim—
damages resulting from the breach—was also proved in the original
trial. The jury found in response to Question 3 that $1,000,000 would
fairly and reasonably compensate Swonke for his damages resulting
from Anglo-Dutch’s breach. 1 CR 305. The trial court incorporated the
$1,000,000 damage finding into the 2007 Judgment. 1 CR 298. And
Anglo-Dutch did not challenge that finding on appeal: “Anglo-Dutch
does not challenge on appeal the amount of contract damages awarded
for that breach . . . .” See Anglo-Dutch Petroleum Int’l v. Greenberg
67
Peden, P.C., 267 S.W.3d 454, 464 n.5 (Tex. App.—Houston [14th Dist.]
2008), rev’d, 352 S.W.3d 445 (Tex. 2011). Consequently, Anglo-Dutch
waived any attack on the jury’s damage finding and it remains
undisturbed and in effect. See Guitar Holding Co., L.P., 263 S.W.3d at
918 (holding that a lower court’s judgment remains in force and effect
as to any issue it decides that is not appealed); Biggar, 873 S.W.2d at
14-15 (holding that a party waived all complaints about a damage
award affirmed by the court of appeals by not complaining about it in
the Texas Supreme Court); see also JGR, Inc., 550 F.3d at 533 (holding
that a district court erred on remand by rendering judgment on a jury’s
$3.3 million lost profits finding because the district court’s previously-
rendered judgment on a $0 lost profits finding had been waived on
appeal).
Having established all four elements of his breach of contract
claim either through undisturbed jury findings or conclusive evidence,
Swonke is entitled to the rendition of a judgment on that claim in the
amount of $1,000,000. See TEX. R. CIV. P. 301 (“The judgment of the
court shall conform to the pleadings, the nature of the case proved and
68
the verdict, if any, and shall be so framed as to give the party all the
relief to which he may be entitled either in law or equity.”).
IV. The Trial Court Erred By Rendering A Judgment On Prejudgment
Interest, Post-Judgment Interest, And Costs That Conflicts With
Its 2007 Judgment, Which Remains In Force And Effect On Those
Issues.
A. Anglo-Dutch Waived Any Complaints About The Trial
Court’s 2007 Judgment On Prejudgment Interest, Post-
Judgment Interest, And Costs.
The trial court has ordered Anglo-Dutch to pay Swonke
$42,127.40 in prejudgment interest. See 1 CR 1304 at ¶ 13. However,
the trial court’s 2007 Judgment awarded Swonke $226,924.50 in
prejudgment interest. 1 CR 299. Anglo-Dutch did not complain about
the trial court’s award of $226,924.50 in prejudgment interest in its
appeal to this Court or the Texas Supreme Court. 1 CR SUPP 124-183,
185-214, 216-269.
The trial court has also ordered Anglo-Dutch to pay Swonke post-
judgment interest on $348,127.40. See 1 CR 1305 at ¶ 16. However,
the trial court’s 2007 Judgment ordered Anglo-Dutch to pay Swonke
post-judgment interest on “this judgment and the amounts awarded
herein,” i.e., $1,654,817. 1 CR 300. Anglo-Dutch did not complain in its
appeal to this Court or the Texas Supreme Court about the trial court’s
69
order to pay Swonke post-judgment interest on the 2007 Judgment and
the $1,654,817 awarded therein. 1 CR SUPP 124-183, 185-214, 216-
269.
Finally, the trial court also ordered Swonke and Greenberg Peden
to pay all court costs. See 1 CR 1304 at ¶ 15. However, the trial court’s
2007 Judgment ordered Anglo-Dutch to pay all court costs. 1 CR 299.
Anglo-Dutch did not complain about the trial court’s order to pay all
court costs in its appeal to this Court or the Texas Supreme Court. 1
CR SUPP 124-183, 185-214, 216-269.
Anglo-Dutch’s failure to complain on appeal about the 2007
Judgment’s orders to pay $226,924.50 in prejudgment interest, post-
judgment interest on $1,654,817, and costs waived any complaints
about those awards. See Allright, Inc. v. Pearson, 735 S.W.2d 240, 240-
41 (Tex. 1987) (holding that a complaint about prejudgment interest is
waived if not made in the court of appeals); Wohlfahrt v. Holloway, 172
S.W.3d 630, 639-40 (Tex. App.–Houston [14th Dist.] 2005, pet. denied)
(holding that a complaint about an award of post-judgment interest
must be properly preserved or it is waived); Thomas v. Bilby-Knight,
No. 09-03-370CV, 2003 WL 22213590, at *1 (Tex. App.—Beaumont
70
2003, no pet.) (“An issue relating to judgment for costs must be brought
in a regular appeal.”); see also San Jacinto River Authority, 783 S.W.2d
at 209-210 (stating that it is a “well-established rule that grounds of
error not asserted by points of error or argument in the court of appeals
are waived).
B. The 2007 Judgment’s Awards Of Prejudgment Interest,
Post-judgment Interest, And Costs Remain In Force And
Effect.
As previously noted, a lower court’s judgment remains in force and
effect as to any issue it decides that is not appealed. See Guitar
Holding Co., L.P., 263 S.W.3d at 918; Bramlett, 359 S.W.3d at 311. And
a lower court’s judgment remains controlling on issues it decided that
were waived on appeal even when that judgment is “reversed” by a
higher court. See Phillips, 407 S.W.3d at 233, 237 (Tex. 2013); Guitar
Holding Co., L.P., 263 S.W.3d at 918. Because Anglo-Dutch did not
appeal to any court the 2007 Judgment’s awards of prejudgment
interest, post-judgment interest, or costs, those awards remain in force
and effect. See Guitar Holding Co., 263 S.W.3d at 918; Bramlett, 359
S.W.3d at 311.
71
C. The Trial Court Erred By Altering Its Prior Awards Of
Prejudgment Interest, Post-judgment Interest, And Costs,
And Refusing To Render Judgment Consistent With Its 2007
Judgment.
Anglo-Dutch’s waiver of all complaints about the 2007 Judgment’s
awards of prejudgment interest, post-judgment interest, and costs
prohibited the trial court from altering those awards on remand
because a trial court errs by rendering a judgment on remand that
alters its own or a higher court’s prior judgment on an issue that was
not appealed. See Medical Ctr. Pharmacy, 634 F.3d at 834 (holding
that the district court erred by reversing on remand its prior ruling
granting declaratory relief which had been waived on appeal); United
Resources, L.P., 2014 WL 3339537, at *3 (holding that the trial court
erred on remand by modifying its prior take-nothing judgment on cross-
claims because no party had attacked that part of the trial court’s
judgment in an earlier appeal); Hudspeth County Underground Water
Conservation Dist. No. 1, 355 S.W.3d at 434-35 (holding that the trial
court erred on remand by making a finding on prevailing-party status
for attorneys’ fees purposes that conflicted with the court of appeals’
prior decision on the issue which had been waived on appeal to the
Texas Supreme Court); JGR, Inc., 550 F.3d at 533 (holding that a
72
district court erred on remand by rendering judgment on a jury’s $3.3
million lost profits finding because the district court’s previously-
rendered judgment on a $0 lost profits finding had been waived on
appeal); Anderson Courier Serv., 222 S.W.3d at 66-67 (holding that the
trial court erred by awarding attorneys’ fees under the declaratory
judgment act on remand when any complaint that the trial court’s
original judgment failed to award attorneys’ fees was waived on appeal).
Therefore, the trial court erred by rendering a judgment inconsistent
with the 2007 Judgment’s awards of $226,924.50 in prejudgment
interest, post-judgment interest on $1,654,817, and costs, and refusing
to render a judgment consistent with the 2007 Judgment on those
issues.
PRAYER
For these reasons, Swonke requests that this Court reverse the
trial court’s 2014 Judgment decrees 2(1), 4, 5, 6, 7, 8, 9, 11, 12, 13, 15,
and 16. Swonke also requests that this Court render judgment that
Anglo-Dutch pay Swonke $1,530,000 under the Fee Agreement,
$427,892.50 in attorneys’ fees, $226,924.50 in prejudgment interest,
73
post-judgment interest on $1,654,817, and court costs. Swonke also
requests all other relief to which he is entitled.
Respectfully submitted,
RUSTY HARDIN & ASSOCIATES, LLP
__/s/ Joe Roden_____________
Rusty Hardin
State Bar No. 08972800
Joe Roden
State Bar No. 00794549
Ryan Higgins
State Bar No. 24007362
1401 McKinney Street, Suite 2250
Houston, Texas 77010
Telephone: 713-652-9000
Facsimile: 713-652-9800
ATTORNEYS FOR APPELLEES
CERTIFICATE OF COMPLIANCE
This document complies with the typeface requirements of Texas
Rule of Appellate Procedure 9.4(e) because it contains conventional
typeface no smaller than 14-point for text and 12-point for footnotes.
The document also complies with the word-count limitations of Texas
Rule of Appellate Procedure 9.4(i), as it contains 14,426 words,
excluding any parts exempted by Texas Rule of Appellate Procedure
Rule 9.4(i)(1).
___/s/ Joe Roden ________
Joe Roden
74
CERTIFICATE OF SERVICE
This is to certify that a true and correct copy of Appellees’ Merits
Brief has been served via electronic service on Mr. Kenneth Breitbeil,
Mr. David Louie, McFall, Sherwood & Eidman, P.C., 1331 Lamar
Street, 1250 Four Houston Center, Houston, Texas 77010-3027 and
Christopher S. Johns, Johns, Marrs, Ellis & Hodge, LLP, 805 W. 10th
Street, Suite 400, Austin, Texas 78701 on April 6, 2015.
___/s/ Joe Roden __________
Joe Roden
75
NO. 14-14-00706-CV
IN THE
FOURTEENTH COURT OF APPEALS
ANGLO-DUTCH PETROLEUM INTERNATIONAL, INC.
and ANGLO-DUTCH (TENGE) L.L.C.,
Appellants/Cross-Appellees,
v.
GREENBERG PEDEN, P.C. and GERARD J. SWONKE,
Appellees/Cross-Appellants.
CROSS-APPELLANTS' APPENDIX
A. Fee Agreement dated October 16, 2000
B. Final Judgment dated January 22, 2007
C. Anglo-Dutch Petroleum Inti v. Greenberg Peden, P. C,
267 S.W.3d 454 (Tex. App.-Houston [14th Dist.J 2008)
D. Anglo-Dutch Petroleum Inti v. Greenberg Peden, P. C,
352 S.W.3d 445 (Tex. 2011)
E. Trial Court's May 15, 2012 order construing the Fee
Agreement as a matter of law and applying that construction
to stipulated facts
F. Trial Court's May 23, 2013 order granting interlocutory
summary judgment against Swonke on his claims for breach
of contract, declaratory judgment, and attorneys' fees
G. Trial Court's May 13, 2014 Final Judgment
2
APPENDIX A
.<.
~GREENBERG PEDEN P.C. TELEPHONE: (713) 627-Z72JJ
FACSI:MILE: (713) 627-7f157
ATTORNEYS AN"D COUN"SELORS AT LAW WEBSITE:www.gpsolaw .com
TENTH FLOOR. 12 GREENWAY PLAZA
HOUSTON. TEXAS 77046
October 16, 2000
Mr. Scott v_ Van Dyke
Anglo-Dutch Petroleum International, Inc.
Eight Greenway Plaza, Suite 900
Houston, Texas 77046
Re: Cause No. 2000-22588; Anglo-Dutch (Tenge) eta[ vs. Ramco, et aL; In th~ 15l't
Judicial District ofHarris County, Texas.
Dear Scott:
This letter memorializes our agreement with respect to me assisting you and/or the companies which
you control (Anglo-Dutch) and the law firm of McConn & Williams, LLP regarding the above-
referenced matlfed all important information to Anglo-Dutc``
concerning the transactions. · ·: ··
Answe-r ''YES" or:;'NO": ·
Answer.
...
. .
-ll-
000833
If your answer to Question 5 is "NO," and you did not answer Question 3 with .a
dollar amount, then answer Question 6. Otherwise, do not answer Question 6.
QUESTION 6
What was the amount of Swanke's fees, lf any, under the Fee Agreement?
Answer in dollars and cents, if any.
X..,_..,.
Answer: $_ _..... ______
-9-
000834
•,
\ \. ~
If your answen.... Gluestion 5 is "NO," then answer Ou ...;:;tion 7. Otherwise, do· not'
answer Question 7.
You are instructed that, in order for you to answer the following question "Yes,''
your answer must be unanimous. ~
QUESTION 7
Do you find by clear and convincing evidence that the harm to Anglo-Dutch
resulted from malice or fraud?
"Clear and convincing evidence" means the measure or degree of proof that
produces a 'firm belief or conviction· of the truth of the allegations sought to be
established.
"Malice" means a specific intent by Swanke to cause substantial injury or ~arm to
Anglo-Dutch~
Fraud occurs when-
· a. a party'makes a material misrepresentation,
b. the misrepresentation is made with knowledge of its falsity or made
'recklessly without any knowledge of the truth and as
.a positive assertion,
c. the misrepresentation is made wlth the intention that it should be acted onr
by the ·o~her party, and ·.
d. the other party relies on the misrepresentation and thereby suffers' injury.
Fraud also OCCUrS When~ · . .
a. a partY fails" to '·disClose arriateiiallact'witliin the' knowledge of that party,
b. the party knows that the other party is ignorant of the fact and does not
. hav.e an_·eqqal o.pportunity to discpver the truth, · . . . . . .... . .. . . .
c. the party intends to induce the other party to take some action b\Vfailing to J;;t:?
disclose the fact, and · . I ·· ~
d. the other party suffers· injury as a result of acting without knowledge of the
undisclosed fact. · · ·
"Misrepresentation" means:
a. a false l=>tatement of fact,
b. a promise of future performance m?de with an intent, at the time the
·promise was made, not to perform as promised, ·
c. a statement of opinion· based on a false statement of fact,
d. a statement of opinion that the maker knows to be false, or
e. an expression of opinion that is false, made by one claiming or implying to
have special knowledge of the subject matter~ the opinion.
"Special knowledge" mean's knowledge or information superior to that possessed
by the other party and to which the other party did not have equal access.
Answer "YES" or "NO":
Answer: "K
000835 - 10-
\J
If your answer to Question 7 is "YES," then answer Question 8. Otherwise, do
not answer Question 8.
You are instructed that, in order for you to find exemplary damages, your answer
to the question regarding the amount of such damages must be unanimous.
. -
QUESTION 8
What sum of money, if paid now in cash, should be assessed against Swanke
and awarded to Ang!o-Dutch as exemplary damages, if any, for the conduct found in
response to Question 7? ·
"Exemplary damages" means an amount that you may in your discretion· award
as a penalty or by way of punishment
Factors to consider in awa:rded exemplary damages; if any, are-
a. The nature of the wrong.-
b. The character of the conduct involved.
c. The degree of culpability of Swanke.
d. The situation af.ld sensibilities of the parties concerned.
- e: The extent to which such conduct offen4s' a puclic sense of justice and·; J8.
propriety. _ . -
f. The net wonh qf Sw.o'nke ..
' '.
Answer in.dollars and cents, if any.
Answer: $ · )<' _' -
- 11 -
Q008~b _;
)
If you answered "Yes" to Question No.1 as to Swanke, individually, then answer
the following question. Otherwise, do not answer the following question.
. QUESTlON NO.9
Did Van Dyke commit fraud agafnst'Swonke?
Fraud occurs when a promise; of future performance· is made with an intent, at
the time the promise was made, not to perform as promised.
Answer "Yes" or "No": JN 6
·--````---------
000837 - 1:!-
If your answer 'to Question No. 9 Is "Yes," then answer the following question.
Otherwise, do not answer the following question.
QUESTION NO. 10
. What sum of money, if any, if paid now in cash,.would fairly and reasonably
compensate Swanke for his damages, if any, that resulted from such fraud?
Consider the following elements of damages, if any, and none other.
. .
The amount Anglo-Dutch agreed to pay Swanke.
Do not add any amount fudnterest on damages, if any.
:Answer separately in dollars and cents for damages, if any:
. - .··
Answer. $._·_·_·'-X__,_··_·.___ · · · · ·
000838
If you have answered "Yes" to Question No_ 9, then answer the following
question. Otherwise, do not answer the following question.
You are instructed that. in order for you to answer the following question "Yes,"
your answer must be unanimous.
QUESTION N0:1.1
Do you find by clear and convincing evidence that the harm to Swanke resulted
from fraud or malice? ·
Answer "Yes" or uNo." _)('
"Clear and convincing evidence" means the measure or degree of proof
to
that produces a firm belief or conviction of the :truth of the allegations sought
be estal;llished_
..
"Fraud" me:aris fraud other than constructive· fraud:
UM~Iice" means a specific intent by Van Dyke to .cause s~bstantra1Jnjury ~r
harm to Swanke. ·
- 14-
.000839
)
If you have answered "Yes" to Question No. i 1, thEm answer the following
question. Otherwise, do not answer the following ques_tioo.
You are instructed that, ln order for you to find exemplary damages, your answer
to the question regarding the amount of such damages must be unanimous.
QUESTION NO. 12
What sum of money, if any, if paid now in c·ash, should be assessed against Van
Dyke and awarded to Swanke as exemplary damages, if any, fo-r the conduct found in
response to Question 11? ·
"Exemplary damages'' means ~m amount that you may in your discretion award
as a penalty or by way of punishment.
Factors to consider in awarding exemplary damages, ifany, are-
a. The nature of the wrcirig.
b. The character 9fthe conduct involved.
c.· The degree ofcul_papilio/ of Van Dyke.
d. The .situation and sensibilities ofthe parties concerned.
e. The extenno wriicti such c~n.duct offends a public sense at justice anct
·propriety. · ·
[ The networtli ofVan Dyke ..
Answer in dollars and cents, if any.
v
$____``--------
(
-15-
000840
After you retire to the jury room, you wiil seleCt your own presiding juror. Th~ first thing
the presiding juror will do is to have this complete charge read aloud and then you will.
deliberate upon your answers to the questions asked.
It is the duty of the presiding juror-
1. to preside duting your deliberations,
2. to see that your .deliberations .are conducted in an orderly manner and in
accordance with the instructions in this charge,
3. · to write out and hand to the bailiff any communications concerning the case
that you desire to have delivered to the judge,
4. to vote on the questions, -
·5. to write your ~ns~ers to the questions in the spaces provided, and
6. to certify to- your ·verdict in the space provided for the presiding juror's
signature or to ._obtain 'the signatures of all the jurors who agree with the
verdict if your verdict is less than unanimous .
. .· . . .
You should. riot discuss ·the case with anyone, not even wlth other memberS of tfie
jury; unless all of .you:ar:e: pr.e.sent and .assembl~d in th~ jury room.' Should ~nyone
attempt to talk to· you about' the ·case before the verdict is returned, whether at the
. cowrlhouse, at your home, or: elsewhere,
: . .please
. inform
'
the judge ofthis fact.
When you have:··a'n·s~e'r~d aU the questions you are required to answer under the
instructions of the judge and you·r presiding juror has placed your answers in the spaces
provided and signed the verdict· as presiding juror or obtained the signatures, you will
inform the bailiff at the door of the jury room that you have reached a verdict, and then
you will retum into court with your verdict.
- 16-
00084\
CERTlFlCATE
We, the jury, have answered the above and foregoing questions as herein
indicated, and herewith return same into court as our verdict
I certify that the jury was unanimous in answering the following questions:
Answer "~llu or list questions: _..:;:,2~-----------'----
Printed Name of Prestding Juror ·
{lfihe answers to sqme question·s were not ·unanimous, the jurors wlio agreed to those
answers must certifY l?S follo'A(s:). . . . . . .. . · . :
. . .. . . . . . . . . . ' . . . ' . . . ...· . .
~
We agree to the answers to the following questions:
list questiomt ·-\-. ··~ ·: 5
j. J
· 9- ·
:s
12.
• 17-
000842
..
Jurors' Printed Names:
1. .:Jiuf,--1-t. {,~le,v+l-'~ IJ 3.. :J ~ q
2. 1\aJL>"rtt....D ~- Sotf,i)S,orJ IJ "1. 1 SJ 9
3• A~ L'\.·:':>he!\
f> t-+ U\Y r)..._ . jI j i 5'1 c;I
4. NlrCf-\t±i=L ~J llEt "'EM'-&r\1 It '3; ~-/1
5. DftUi D piA. blz:OLL 1 i 51``
6.{?)!J\J.~b6J>R ~-
'\ '\1.0..6\\.\Q:~i
' \, r.:;
i 1 21, .:l, \
D
(j -J
7. L-?.slf..-- l_f-.e<'l-fr.., f1 31 9
s. j)AI!;A:- 1]/tPP::/ (, 31 5 1 q·
9. :Da}e uJoJ.ters 1 3 l '51 CJ
1 o. {ru llt) . /1Jlr. (fiAJe --'2. • I I 3 1 5J Uj
11.'ilT ·L-ruAI G.J?iJ-/f(..; li ~ ~ I
. . . . ' - . .
1·2. _ _ _.,.......,~....-..-'----"-"--
.....· . . . .
000843
APPENDIX C
Petroleum intern., Inc. v. Greenberg Peden, P.C., 267 S.W.3d 454
267 S.W.3d 454 West Headnotes (23)
Court of Appeals of Texas,
Houston (14th Dist.).
[1] Appeal and Error
ANGLO-DUTCH PETROLEUM INTERNATIONAL, Cases Triable in Appellate Court
INC. and Anglo-Dutch (Tenge) L.L.C., Appellants Determining whether a contract is ambiguous is
v. a question of law subject to de novo review on
GREENBERG PEDEN, P.C. and appeal.
Gerard J. Swanke, Appellees.
Cases that cite this headnote
No. 14-07-00343-CV. Aug. 26, 2008.
[2] Contracts
Synopsis
Construction as a whole
Background: Former client brought action seeking
declaration that it did not owe attorney contingency fees. Contracts
Attorney counterclaimed. The 6lst District Court, Harris Extrinsic circumstances
County, John J. Donovan, J., entered judgment on a jury To determine whether a contract is ambiguous, a
verdict for attorney, and former client appealed. court looks at the agreement as a whole in light
of the circumstances present when the parties
entered the agreement.
Holdings: The Court of Appeals, William J. Boyce, J., held Cases that cite this headnote
that:
[1] contingency fee agreement was ambiguous regarding [3] Appeal and Error
whether the fees were owed to attorney individually or to firm Conduct of trial or hearing in general
in which attorney was "of counsel;" An appellate court reviews a trial court's decision
to submit or refuse a particular instruction under
[2] ambiguity in agreement would not be construed against an abuse of discretion standard.
attorney as the drafter;
Cases that cite this headnote
[3] evidence was sufficient to establish that attorney did not
breach his fiduciary duty when he drafted fee agreement; [4] Trial
Authority to instruct jwy in general
[4] evidence was sufficient to establish that client owed the Trial
contingency fees to attorney rather than to firm; Definition or explanation of terms
A trial court enjoys wide discretion in framing
[5] instructions adequately informed the jury regarding the
a jwy charge and is given broad latitude
consideration of the client's perspective offee agreement; and
to determine the propriety of explanatory
instructions and definitions.
[6] trial court did not abuse its discretion by admitting
evidence that investors had funded the underlying action, that 1 Cases that cite this headnote
former client did not pay investors their contracted amounts,
and that former client did not pay legal fees owed to other law
firms in unrelated actions. [5] Appeal and Error
Rulings on admissibility of evidence in
general
Affirmed.
Anglo-Dutch Petroleum lntem., Inc. v. Greenberg Peden, P.C., 267 S.W.3d 454 (2008)
An appellate court reviews a trial court's decision printed on law firm's stationery and attorney
to admit or exclude evidence for abuse of signed agreement under law firm's signature
discretion. block, agreement's text did not reference law
firm, agreement made multiple references to the
l Cases that cite this headnote attorney individually, attorney was of counsel to
law firm, and law firm had refused to do any
[6] Trial further work for former client because of unpaid
Admission of evidence in general legal fees.
Trial Cases that cite this headnote
Exclusion of improper evidence
A trial court abuses its discretion in admitting or
[10] Contracts
excluding evidence if it acts without reference
Intention of Parties
to any guiding rules and principles, or if the act
complained of is arbitrary and unreasonable. A court's primary concern when interpreting a
contract is to ascertain and give effect to the
Cases that cite this headnote intent of the parties as that intent is expressed in
the contract.
[7] Appeal and Error
Cases that cite this headnote
Rulings as to evidence and instructions
An appellate court must uphold a trial court's
[111 Contracts
evidentiary ruling if there is any legitimate basis
Language of contract
in the record to support it.
A contract's language is the primary evidence of
1 Cases that cite this headnote the intent of the parties to the contract.
Cases that cite this headnote
[8] Appeal and Error
Evidence in General
[12] Contracts
Appeal and Error
Construction as a whole
Prejudicial Effect
When construing a contract, a court examines
A successful challenge to evidentiary rulings
and considers the entire writing in an effort to
usually requires the complaining party to show
harmonize and give effect to all the provisions
that the judgment turns on the particular evidence
of the contract so that none will be rendered
excluded or admitted.
meaningless.
Cases that cite this headnote
Cases that cite this headnote
[9] Declaratory Judgment
[13] Contracts
Questions for jury
Construction as a whole
Contingency fee agreement former client had
Contracts
entered into regarding attorney's assistance
Extrinsic circumstances
in legal action was ambiguous with respect
to whether attorney contracted for himself To determine whether a contract is ambiguous, a
individually or for law firm, and thus issue court looks at the agreement as a whole in light
of the parties' intent was for the jury to of the circumstances present when the parties
determine, in trial of former client's lawsuit entered into the agreement.
seeking declaration that it did not owe attorney
Cases that cite this headnote
the contingency fees; though agreement was
[14] Contracts Cases that cite this headnote
Existence of ambiguity
A contract is unambiguous if it can be given a [18] Attorney and Client
definite or certain meaning. Pleading and evidence
Cases that cite this headnote Evidence was sufficient to establish that attorney
did not breach his fiduciary duty to client by
drafting contingency fee agreement which was
[15] Contracts ambiguous in regard to whether fees were owed
Existence of ambiguity to attorney individually or to law firm, in trial of
Contracts former client's lawsuit seeking declaration that
Ambiguity in general it did not owe attorney the contingency fees;
If a contract is subject to two or more reasonable attorney testified that he had explained on many
interpretations, then the contract is ambiguous occasions his "of counsel" status at law firm,
and the jury is entitled to resolve the fact issue client acknowledged that law firm had refused
concerning the parties' intent. to assist client in the undedying action due to
unpaid legal bills and that attorney had referred
Cases that cite this headnote client to a second law firm, and attorney testified
that, after client had retained second law firm,
client still requested attorney's personal services
[16] Contracts
Existence of ambiguity in the underlying action and that when agreement
was negotiated he explained to client and client
An ambiguity in a contract can be patent or
understood that agreement was with attorney
latent; a "patent ambiguity" is evident on the
individually and not the law firm.
contract's face, while a "latent ambiguity" arises
from a collateral matter when a contract that Cases that cite this headnote
appears to be unambiguous on its face is applied
to its subject.
[19] Attorney and Client
Cases that cite this headnote Employment
Evidence was sufficient to establish that
[17] Attorney and Client under the terms of ambiguous contingency fee
Construction and Operation of Contract agreement former client owed contingency fees
to attorney individually rather than to law
Ambiguity in contingency fee agreement
firm, in trial of former client's lawsuit seeking
regarding whether attorney contracted for
declaration that it did not owe attorney the
himself individually or for law firm would not be
contingency fees; though agreement was printed
construed against attorney as the drafter, in trial
on law firm's stationery, agreement's text did
of former client's lawsuit seeking declaration
not reference law firm, agreement made multiple
that it did not owe attorney the contingency
references to the attorney individually, attorney
fees, where the client was sophisticated and
testified that client understood that he was "of
experienced, agreement was not presented
counsel" at law firm, client acknowledged that
to client on a take-it-or-leave-it basis, and
law firm had refused to do any further work
agreement was instead negotiated between
for client because of unpaid legal fees, attorney
attorney and client after attorney's law firm told
testified that contingency fee agreement was
client it would not undertake the representation
negotiated after client requested his continued
due to unpaid legal bills. Restatement (Third)
assistance on underlying action after such action
The Law Governing La\\oyers § 18.
had been referred to a second law firm, and
attorney testified that client understood fees were
owed to him rather than law firm. Cases that cite this headnote
Cases that cite this headnote
[23] Attorney and Client
Evidence
[20] Appeal and Error Declaratory Judgment
Conduct oftrial or hearing in general Admissibility
Because a trial court enjoys wide discretion Witnesses
in determining which instructions should be Competency of contradictmy evidence
included in the jury charge, review is limited
Trial court did not abuse its discretion, in trial
to determining whether the court acted without
offormer client's lawsuit seeking declaration that
reference to any guiding rules or principles.
under terms of contingency fee agreement it did
Cases that cite this headnote not owe attorney individually the contingency
fees but instead owed the fees to firm in which
attorney was "of counsel," by admitting evidence
[21] Attorney and Client that client entered into agreements with investors
Instructions to fund underlying action, testimony by one of
Instructions adequately informed the jury the investors that he had to sue attorney's former
regarding the consideration of the client's client when he was asked to accept less than what
perspective of fee agreement and the fiduciary he had contracted for after underlying action was
duties attorney owed client, in trial of former settled, and evidence that former client had not
client's lawsuit seeking declaration that under paid fees it owed to other law firms in unrelated
the terms of contingency fee agreement it did actions; evidence of the investment agreements
not owe attorney individually the contingency went to attorney's individual work with respect to
fees but instead owed the fees to law firm in the investors, and evidence that former client did
which attorney was "of counsel," by providing not pay investors their contracted amounts and
that the jury was to consider all of the facts did not pay bills owed to other law firms went to
and circumstances surrounding the making of the credibility of client's owner when he testified
the agreement, the interpretation placed on the that client did not owe attorney the fees.
agreement by the parties and the conduct of the
parties, and by separately instructing the jury 1 Cases that cite this headnote
on attorney's fiduciary duties and submitting
question on whether attorney breached his
fiduciary duties in regard to the fee agreement.
Attorneys and Law Firms
1 Cases that cite this headnote
*457 Gregory S. Coleman, Donald B. McFall, Richard B.
Farrer, Austin, *458 Kenneth R. Breitbeil, Ke1meth Wayne
[22] Trial
Bullock II, Houston, TX, for appellants
Matters oflaw
Trial Rusty Hardin, Joe M. Roden, Ryan Kees Higgins, Houston,
Duty to give requested instruction; TX, for appellees.
erroneous requests
Panel consists of Justices FOWLER and BOYCE and Senior
Not every correct statement of the law belongs
in a jury charge; a requested instruction can set Justice HUDSON. *
forth a correct statement of the law and still be
unnecessary in the charge.
OPINION
Petroleum !ntem., Inc. v. Greenberg Peden, P.C., 267 S.W.3d 454 (2008)
Swonke. See Tex. Civ. Prac. & Rem.Code Ann. § 38 001
WILLIAM J. BOYCE, Justice. (Vernon 2008).
Anglo-Dutch Petroleum International, Inc. and Anglo-Dutch
Anglo-Dutch assails the trial court's final judgment in favor
(Tenge) L.L.C. (collectively, "Anglo-Dutch") appeal the trial
ofSwonke on multiple grounds. Resolution of Anglo-Dutch's
court's judgment in favor of Greenberg Peden, P.C. and
appellate challenges requires a detailed discussion of the
Gerard J. Swonke in connection with this fee dispute between
evidence adduced at trial and the circumstances surrounding
a client and an attorney.
execution ofthe October 16, 2000 fee agreement.
We affirm the trial court's judgment.
Facts
Overview
Swonke joined Greenberg Peden as "of counsel" in 1987. 1
This appeal arises from a contingency fee agreement dated This status gave Swonke discretion to choose his clients and
October 16, 2000. It is undisputed that the client, Anglo- *459 gave Greenberg Peden a right of first refusal regarding
Dutch, entered the fee agreement. It is undisputed that clients and matters Swonke brought to the firm. Swonke
Anglo-Dutch's president, Scott V. Van Dyke, signed the fee remained as "of counsel" to Greenberg Peden until the firm
agreement on behalf of Anglo-Dutch. It is undisputed that the dissolved in 2001.
attorney, Swonke, also signed the fee agreement. It is hotly
disputed whether Swonke signed the fee agreement on behalf The "of counsel" relationship between Swonke and
of himself individually or on behalf of the Greenberg Peden Greenberg Peden operated under a fee sharing agreement. For
law firm, where he was "of counsel" at the time. matters accepted by the firm, it billed Swanke's time through
the firm computer system and deducted a percentage from
Swonke contends he signed on behalf of himself individually Swonke's fees; the size ofthe deduction depended on the fee
and can recover fees individually. Anglo-Dutch contends agreement with a particular client. This deduction reimbursed
Swonke signed on behalf of the law firm and cannot recover Greenberg Peden for Swanke's use of office space, paralegals,
fees individually. Greenberg Peden disclaims rights to or secretaries, and parking. Clients in matters accepted by the
interest in the disputed fees. The law firm assigned any firm paid their fees for Swanke's time directly to Greenberg
interest under the October 16, 2000 fee agreement to Swonke; Peden, which made appropriate deductions and then paid the
released Anglo-Dutch from liability to Greenberg Peden for balance to Swonke.
the disputed fees; and acknowledged that Greenberg Peden is
not entitled to receive money from Anglo-Dutch under the Swonke met Van Dyke in 1987 at a lunch with Van Dyke's
agreement. father while Van Dyke was working for his father's company.
Van Dyke's father asked Swonke to perform legal work for
The trial court concluded that the October 16, 2000 fee the company. Swonke already had joined Greenberg Peden as
agreement is ambiguous with respect to the capacity in which of counsel at that point. While Van Dyke was still working
Swonke signed, and submitted that issue to the jury. The for his father, Van Dyke and his father later asked about
jury sided with Swonke on that issue, finding that he signed Swanke's salary at Greenberg Peden because they wanted to
the fee agreement with Anglo-Dutch on behalf of himself hire Swonke as in-house counsel for the father's company.
individually and not on behalf of Greenberg Peden. The jury Swonke responded that as "of counsel" he did not receive
further answered that Anglo-Dutch failed to comply with a salary from the firm, but was paid only when clients
the fee agreement; that Swonke complied with his fiduciary paid; Swonke explained that he generated his own work and
duty to his client Anglo-Dutch; and that Van Dyke did not sometimes made more money than at other times. Van Dyke,
commit fraud against Swonke. The jury awarded $1 million his father and Swonke decided to maintain their existing
as contract damages to Swonke for Anglo-Dutch's failure to relationship, under which Swonke performed legal work for
comply with the fee agreement. The trial court signed a final the father's company as "of counsel" at Greenberg Peden.
judgment in conformity with the jmy's findings awarding Swonke testified that he also explained his "of counsel" status
contract damages and additional statutory attorney's fees to to Van Dyke and Van Dyke's mother on several occasions.
Anglo-Dutch Petroleum lntem., Inc. v. Greenberg Peden, P.C., 267 S.W.3d 454 (2008)
.. . ...
Van Dyke testified that he did not recall being told Swonke lawsuit but lacked financial resources to pay an attorney on
was "of counsel" to Greenberg Peden. an hourly basis.
Van Dyke left his father's company in 1988 and together with Pursuant to Greenberg Peden's right of first refusal, Swonke
his mother formed Anglo-Dutch Petroleum International, asked the firm in February or March 2000 if it wanted
an oil and gas exploration company. Approximately four to represent Anglo-Dutch in a suit against Halliburton
years later, Van Dyke asked Swonke to perform legal work and Ramco arising from breaches of the Tenge Field
for Anglo-Dutch in connection with development of oil confidentiality agreements. Greenberg Peden refused to
and gas properties in an area known as the Tenge Field in represent Anglo-Dutch on an hourly or a contingency basis
Kazakhstan. Swonke began performing a substantial amount because of Anglo-Dutch's unpaid bills and a history of
of legal work for Van Dyke and Anglo-Dutch in 1993. difficulty in collecting fees from Anglo-Dutch. Thereafter,
This work focused on preparing documents addressing the Swonke told Van Dyke that Greenberg Peden would not
participation of multiple national and international investors represent Anglo-Dutch in a lawsuit against Halliburton and
in Anglo-Dutch's Tenge Field project. Swonke worked Ramco due to Anglo-Dutch's outstanding legal bills. The
with Greenberg Peden shareholder Skip Naylor to draft the bills remained unpaid. 2 Van Dyke did not ask Swonke to
elaborate documents Van Dyke requested to bring investors represent Anglo-Dutch against Halliburton and Ram co at that
together and create an entity called Anglo-Dutch (Tenge) time.
L.L.C.
Because Greenberg Peden refused to represent Anglo-Dutch
In 1997, Anglo-Dutch invited Halliburton Energy Services, in a suit against Halliburton and Ramco, Swonke referred
Inc. and Ramco Oil & Gas, Ltd. to invest in the Tenge Van Dyke to several other law firms. Anglo-Dutch signed
Field project. Anglo-Dutch hoped to use funds from these a contingency fee agreement with McConn & Williams in
new investors to buy out its existing investors. To evaluate March 2000. That firm filed a lawsuit against Halliburton and
Anglo-Dutch's proposal, Halliburton and Ram co entered into Ramco in May 2000. See generally Ramco Oil & Gas Ltd.
confidentiality agreements with Anglo-Dutch and received v. Anglo-Dutch (Tenge) L.L.C., 207 S.W.3d 801 (Tex.App.-
confidential data to review. Swonke negotiated and drafted Houston [14th Dist.] 2006, pet. denied).
the confidentiality agreements for Anglo-Dutch.
Van Dyke and attorneys from McConn & Williams frequently
Anglo-Dutch ceased paying Greenberg Peden's bills at about asked Swonke for advice and help with tasks in furtherance of
this time and began accumulating a large account payable the lawsuit against Halliburton and Ramco in the months that
to the firm. Anglo-Dutch's unpaid legal bills prompted followed this filing. After providing unpaid legal assistance
Greenberg Peden to stop working for Anglo-Dutch in 1999. for months, Swanke decided that he wanted compensation
By early 2000, Anglo-Dutch owed Greenberg Peden more for time spent helping Anglo--Dutch with its lawsuit against
than $200,000. Swonke and Greenberg Peden shareholder Halliburton and Ramco. Swonke informed McConn &
David Peden met with Van Dyke in 1999 or early 2000 to Williams ofhis desire to be paid. McConn & Williams said its
discuss Anglo-Dutch's unpaid legal bills. *460 Peden told fee interest was not large enough for that firm to compensate
Van Dyke that no Greenberg Peden attorney would perform him out of its interest. VanDyke then called Swanke directly;
legal work for Anglo-Dutch until it paid its accumulated legal asked him to help with the lawsuit; and offered to pay him
bills to the firm. for doing so. Van Dyke and Swonke negotiated the terms
of Swonke's compensation for his participation in Anglo--
A dispute arose between Anglo-Dutch, Halliburton and Dutch's suit against Halliburton and Ramco.
Ramco in early 2000 regarding breach of the Tenge Field
confidentiality agreements and disclosure of Anglo-Dutch's Van Dyke proposed to pay Swanke based on a contingency
confidential data. Van Dyke asked Swonke in February 2000 fee agreement because Anglo--Dutch could not afford an
to evaluate the potential for a lawsuit against Halliburton and hourly fee. When Swanke suggested a flat percentage fee,
Ramco for breach of the confidentiality agreements. Swonke Van Dyke responded by insisting on a formula that would ( 1)
advised Van Dyke that Anglo-Dutch had viable claims incorporate a ratio ofhours Swonke spent to hours McConn &
against both companies. Anglo-Dutch wanted to pursue the Williams attorneys spent, and then (2) multiply the 20 percent
contingency fee contained in the McConn & Williams fee
Petroleum Intern., inc. v. Greenberg Peden, P.C., 267 S.W.3d 454
agreement by that ratio. Van Dyke thought this would be the Ramco. McConn & Williams understood that Swanke had
only fair way to measure Swanke's hours. Swanke initially a separate fee agreement with Anglo-Dutch in connection
rejected Van Dyke's formula because he thought it was too with the case. Swanke worked another 1,022 hours on Anglo-
complicated; *461 later, he acquiesced to using it with a Dutch's lawsuit as "of counsel" to McConn & Williams.
rounding feature.
Several months after Swanke left Greenberg Peden and
Swanke's secretary typed the contingency fee agreement joined McConn & Williams, Van Dyke was deposed in
negotiated by Van Dyke and Swanke on Greenberg Peden the Halliburton and Ramco lawsuit. At the deposition, Van
letterhead; dated it October 16, 2000; and inserted the Dyke testified that Anglo-Dutch had two contingency fee
words "Greenberg Peden, P.C." in the signature block. The agreements. He testified that one such agreement was with
letter's opening paragraph states that it "memorializes our John O'Quinn, Jett Williams, and Luke McConn, and the
agreement with respect to me assisting you ... and the law other was with Swanke. Van Dyke did not identifY any
firm of McConn & Williams, LLP" regarding the suit against contingency fee agreement with Greenberg Peden.
Halliburton and Ramco. In the next paragraph, the letter
states that "I agree to assist Anglo-Dutch and [McConn & Anglo-Dutch's lawsuit against Halliburton and Ramco was
Williams] ... in this lawsuit.. .. " tried for nine weeks beginning in August 2003. Anglo-
Dutch sought more than $600 million in damages. See
Swanke signed the fee agreement's signature block on Ramco Oil & Gas Ltd., 207 S.W.3d at 806-07. The
October 16, 2000 and sent it to Van Dyke for signature the jury found that Halliburton and Ramco breached their
same day. Van Dyke signed the fee agreement on October 17, respective confidentiality agreements with Anglo-Dutch.
2000 and returned it to Swanke. The jury awarded Anglo-Dutch $64 million in lost profits for
Halliburton's breach of its confidentiality agreement and $6.4
Van Dyke also sent a separate transmittal letter to Swanke million in lost profits for Ramco's breach of its confidentiality
on October 17, 2000 with a copy of the McConn & Williams agreement. The parties *462 stipulated to $9.8 million in
contingency fee agreement. In the transmittal letter's second reasonable and necessary attorney's fees, which included the
paragraph, Van Dyke states that the McConn & Williams fee 1,022 hours Swanke spent working on the lawsuit while at
agreement "provides the basis for the Agreement between McConn & Williams.
Greenberg Peden P.C. and Anglo-Dutch." The transmittal
letter was stamped "received" by Greenberg Peden. At the Anglo-Dutch settled with Halliburton on April 1, 2004 for
time of receipt, Swanke did not respond to the transmittal $51 million. 3 After Swanke learned of the settlement, he sent
letter; did not challenge its reference to a fee agreement an e-mail to Van Dyke on April 7, 2004 reminding him that
"between Greenberg Peden P.C. and Anglo-Dutch;" and the October 16, 2000 fee agreement required a comparison
did not assert that the fee agreement was between Anglo- of Swanke's hours to those billed by McConn & Williams.
Dutch and Swanke individually. Swanke did not examine or Swanke sent another e-mail to Van Dyke the same day setting
respond to Van Dyke's letter at the time of receipt because forth the total number of hours he worked on the lawsuit.
the letter transmitted the McConn & Williams fee agreement Swanke's email asserted his entitlement to three percent of
that Swanke already had in his file. Swanke testified that he the settlement amount according to Swanke's calculations.
normally would not read a letter that refers to a document he Van Dyke responded to Swanke's email on April 13, 2004.
already had in his files. Van Dyke said he had lost his voice and agreed that he
and Swanke needed to discuss Swanke's situation. Swanke
The Greenberg Peden firm dissolved on October 1, 2001. By replied, asking Van Dyke to call him when he felt well
that time, Swanke had worked 277 hours on Anglo-Dutch's enough to speak and inquiring whether Van Dyke received a
suit against Halliburton and Ram co. Swanke joined McConn memorandum Swanke sent him providing examples of work
& Williams as "of counsel" in October 2001 and informed Swanke performed in furtherance of the lawsuit. The record
Anglo-Dutch that he was taking its files with him to McConn does not reflect a written response by Van Dyke to this
& Williams unless Anglo-Dutch objected. There was no inquiry.
objection. Under his contract with McConn & Williams,
Swanke did not share in any McConn & Williams fees for The final Halliburton settlement documents were signed on
working on the Anglo-Dutch lawsuit against Halliburton and April 15, 2004. At Van Dyke's request, Swanke's name was
Anglo-Dutch Petroleum lntem., Inc. v. Greenberg Peden, P.C., 267 S.W.3d 454 (2008)
removed from the wiring instructions given to Halliburton. "Office conferences with Scott Van Dyke regarding claims of
Swanke e-mailed Van Dyke that afternoon to note that Gerard Swanke; Draft, review and revise Plaintiffs Original
Swanke's wiring instructions were not included with those of Petition." At 2:52 p.m. that day, Anglo-Dutch filed a suit
other attorneys who had worked on the lawsuit. Swanke asked against Swanke and Greenberg Peden seeking a declaratory
Van Dyke how he wanted to handle payment of Swanke's judgment in connection with the October 16, 2000 fee
fees. In the meantime, attorneys at McConn & Williams asked agreement.
Swanke to not force the fee issue with Van Dyke until after
the settlement was funded and completed, fearing it could Anglo-Dutch asked for a declaration that the fee agreement is
jeopardize the settlement. between Anglo-Dutch and Greenberg Peden. Anglo-Dutch
also asserted that Swanke breached the fiduciary duties he
On April 16, 2004, Swanke e-mailed Van Dyke to owed as an attorney to client Anglo-Dutch, and requested
congratulate him on receiving a $30 million portion of the fee forfeiture. Swanke later filed a counterclaim seeking a
Halliburton settlement. Swanke asked Van Dyke to address declaration that the fee agreement is between Anglo-Dutch
payment of Swanke's fees. Swanke said he would fax to Van and Swanke individually. Swanke also asserted claims for
Dyke a release signed by Greenberg Peden, which Van Dyke breach of contract against Anglo-Dutch, and for fraud against
had requested. In that document, the law firm assigned any Anglo-Dutch and Van Dyke individually.
interest under the October 16, 2000 fee agreement to Swanke
and released Anglo-Dutch from liability to Greenberg Peden The jury returned a verdict after a two-week trial. In answer to
for fees under that agreement. Question 1, the jury found that the fee agreement with Anglo-
Dutch was entered into on behalf of Swanke individually and
On April 19, 2004, attorneys Luke McConn and Edward not on behalf of Greenberg Peden. In answer to Question 2,
Crain wrote letters to Van Dyke at Swanke's request in the jury found that Anglo-Dutch failed to comply with the
support of Swanke. Both stated that Swanke's assistance had fee agreement. The jury awarded $1,000,000 to Swanke in
been invaluable in prosecuting the suit against Halliburton, Question 3 for his damages resulting from Anglo-Dutch's
and that Swanke's submitted hours were fair and reasonable. failure to comply with the fee agreement. The jury answered
Swanke also faxed a letter to Van Dyke on that date further "yes" to Question 5 asking if Swanke complied with his
explaining his hours and offering an audit of his hours. Van fiduciary duty to Anglo-Dutch. The jury answered "no" to
Dyke and Swanke set up a meeting for April 22, 2004 to Question 9 asking if Van Dyke committed fraud against
discuss Swanke's fee request. Swanke. 4
*463 On April 20, 2004, Van Dyke met with attorney The trial court signed a final judgment in conformity with the
Sandy Dow to get a "fresh look" at Swanke's fee request. jury's verdict on January 22, 2007, ordering that Anglo-Dutch
Swanke subsequently met with Van Dyke and his mother and Van Dyke take nothing from Swanke and Greenberg
as scheduled at 8 a.m. on April 22, 2004. At the April 22 Peden; that Swanke and Greenberg Peden take nothing
meeting, Van Dyke challenged the munber of hours Swanke on their fraud and exemplary damages *464 claims from
claimed to have worked on the lawsuit and the language of the Anglo-Dutch and Van Dyke; and that Anglo-Dutch pay
Greenberg Peden release. Van Dyke asserted at this meeting Swanke $1 ,000,000 and prejudgment interest on that amount
that Anglo-Dutch entered the October 16, 2000 fee agreement totaling $226,924.50. As agreed by the parties, the trial
with Greenberg Peden-not with Swanke individually. The court held an evidentiary hearing on the issue of attorney's
meeting concluded without resolution of the fee dispute. fees. The trial court ordered that Anglo-Dutch pay Swanke
$352,892.50 in attorney's fees for the prosecution of his
After meeting with Van Dyke, Swanke returned to his office breach of contract claim and for defense of the declaratory
and sent an email at 9:08 a.m. to Van Dyke and other judgment claims. Following denial of its post-trial motions,
recipients. The email stated that Swanke no longer would Anglo-Dutch timely filed a notice of appeal from the trial
represent Van Dyke or his companies. court's final judgment.
After meeting with Swanke, Van Dyke met with attorney On appeal, the main dispute centers on whether Anglo-
Sandy Dow for about two hours. Dow's billing records for Dutch contracted with Greenberg Peden or with Swanke
April22, 2004 describe the activity at this meeting as follows: individually when Anglo-Dutch and Swanke signed the
Anglo-Dutch Petroleum Intern., Inc. v. Greenberg Peden, P.C., 267 S.W.3d 454 (2008)
October 16, 2000 fee agreement. Anglo-Dutch approaches "Instifficient Evidence Points ofError," 38 Tex. L.Rev. 361,
this issue from several angles, contending that ( 1) the fee 362-63 ( 1960)).
agreement unambiguously is between Anglo-Dutch and
Greenberg Peden, and should be construed that way as a *465 We must consider evidence in the light most favorable
matter oflaw; (2) any ambiguity in the fee agreement should to the verdict, and indulge every reasonable inference that
be construed against the drafter, attorney Swonke; (3) the would support it. City of Keller, 168 S.W.3d at 822. If
evidence is legally and factually insufficient to support the the evidence allows only one inference, neither jurors nor
jury's finding that the fee agreement is between Anglo-Dutch the reviewing court may disregard that evidence. Id. "The
and Swanke individually; and (4) the evidence is legally traditional scope of review does not disregard contrary
and factually insufficient to support the jury's finding that evidence in every no evidence review if there is no favorable
Swonke complied with his fiduciary duty. Anglo-Dutch also evidence (situation (a) above), or if contrary evidence renders
supporting evidence incompetent (situation (b) above) or
challenges the correctness of the trial court's jury charge and
certain evidentiary rulings during trial. 5 conclusively establishes the opposite (situation (d) above)."
!d. at 810-11. If the evidence at trial would enable reasonable
and fair-minded people to differ in their conclusions, then
jurors must be allowed to do so. !d. at 822. Accordingly,
Standards of Review the ultimate test for legal sufficiency always must focus
on whether the evidence would enable reasonable and fair-
A. Contract Interpretation
minded jurors to reach the verdict under review. Id. at 827.
[1] [2] Determining whether a contract is ambiguous is a
Legal sufficiency review in the proper light must credit
question oflaw subject to de novo review on appeal. Bowden
favorable evidence if reasonable jurors could do so, and
v. Phillips Petroleum Co., 247 S.W.3d 690, 705 (Tex.2008).
must disregard contrary evidence unless reasonable jurors
To determine whether a contract is ambiguous, we look at the
could not do so. Id. The reviewing court cannot substitute its
agreement as a whole in light of the circumstances present
judgment for that of the trier offact if the evidence falls within
when the parties entered the agreement. David J. Sacks, P. C.
this zone of reasonable disagreement. Id. at 822.
v. Haden, No. 07-0472,2008 WL 2702184, at *3 (Tex. July
11, 2008).
In reviewing factual sufficiency, we must consider and weigh
all the evidence. Golden Eagle Archery, Inc. v. Jackson, 116
B. Legal and Factual Sufficiency of the Evidence S.W.3d 757,761 (Tex.2003). We can set aside a verdict only
We apply the standard and scope of review for legal if the evidence is so weak or if the finding is so against the
sufficiency of the evidence discussed in City of Keller v. great weight and preponderance of the evidence that it is
Wilson, 168 S.W.3d 802 (Tex.2005). After City of Keller, it clearly wrong and manifestly unjust. I d.
is difficult to make general pronouncements about the scope
of review for a legal sufficiency challenge. The better course For both legal and factual sufficiency review, the jury is the
is to focus on the specific type of legal sufficiency challenge sole judge of the credibility of the witnesses and the weight
that is being made; this, in tum, frames the scope of review to be given to their testimony. City of Keller, 168 S.W.3d at
for appeal. 819; Golden Eagle Archery, Inc., 116 S.W.3d at 761.
City of Keller endorsed Chief Justice Calvert's description
C. Charge Instructions
of legal sufficiency challenges. "No-evidence" challenges
[3] [4] We review a trial court's decision to submit or refuse
may be sustained only when the record discloses one of the
a particular instruction under an abuse of discretion standard.
following situations: (a) a complete absence of evidence of
Dew v. Crown Derrick Erectors, Inc., 208 S.W.3d 448, 456
a vital fact; (b) the court is barred by rules of law or of
(Tex.2006). A party is entitled to a jury question, instruction,
evidence from giving weight to the only evidence offered
or definition on an issue raised by the pleadings and evidence.
to prove a vital fact; (c) the evidence offered to prove
Tex.R. Civ. P. 278; Dew, 208 S.W.3d at 456. The trial
a vital fact is no more than a mere scintilla; or (d) the
court enjoys wide discretion in framing a jury charge and is
evidence establishes conclusively the opposite of the vital
given broad latitude to determine the propriety of explanatory
fact. Id. at 810 (citing Robert W. Calvert, "No Evidence" and
instructions and definitions. HE. Butt Grocery Co. v. Bilotta,
985 S.W.2d 22,23 (Tex.1998). A trial court's error inrefusing
Anglo-Dutch Petroleum Intern., Inc. v. Greenberg Peden, P.C., 257 S.W.3d 454 (2008)
an instruction is reversible if that refusal probably caused the E & P, Inc. v. Eland Energy, Inc., 207 S.W.3d 342, 345
rendition of an improper judgment. Tex.R.App. P. 44.1; Dew, (Tex.2006).
208 S.W.3d at 456.
[13] [14] To determine whether a contract is ambiguous,
we look at the agreement as a whole in light of the
D. Admission of Evidence circumstances present when the parties entered into the
[5] [6] [7] [8] We review a trial court's decisioragreement. David J. Sacks, P.C., 2008 WL 2702184, at
to admit or exclude evidence for abuse of discretion. In *3 (contract for legal services was not ambiguous and
re J.P.B., 180 S.W.3d 570, 575 (Tex.2005). A trial court unenforceable as written because it only could be reasonably
abuses its discretion in admitting or excluding evidence if it interpreted as setting forth agreement that client agreed to pay
acts without reference to any guiding rules and principles, law firm hourly fee and contained no cap on fees); Enter.
or if the act complained of is arbitrary and unreasonable. Leasing Co. v. Barrios, 156 S.W.3d 547, 549 (Tex.2004). A
Carpenter v. Cimarron Hydrocarbons Corp., 98 S.W.3d 682, contract is unambiguous if it can be given a definite or certain
687 (Tex.2002). We must uphold a trial court's evidentiary meaning. SAS Inst., Inc. v. Breitenfeld, 167 S.W.3d 840, 841
ruling if there is any legitimate basis in the record to support (Tex.2005).
it. Owens-Corning Fiberglas Corp. v. Malone, 972 S.W.2d
35, 43 (Tex.l998). We will not reverse a trial court for an [15] [16] If the contract is subject to two or more
erroneous evidentiary ruling unless the error was reasonably reasonable interpretations, then the contract is ambiguous and
calculated to cause and probably did cause the rendition the jury is entitled to resolve the fact issue concerning the
of an improper judgment. See Tex.R.App. P. 44.1; see parties' intent. J.M Davidson, Inc. v. Webster, 128 S.W.3d
also *466 Gee v. Liberty Mut. Fire Ins. Co., 765 S.W.2d 223,229 (Tex.2003); Columbia Gas Trans. Corp. v. New Ulm
394, 396 (Tex.l989). A successful challenge to evidentiary Gas, Ltd., 940 S.W.2d 587, 589 (Tex.1996). An ambiguity
rulings usually requires the complaining party to show that can be patent or latent. E.g., Ji'riendswood Dev. Co. v.
the judgment turns on the particular evidence excluded or McDade & Co., 926 S.W.2d 280, 282 n. 1 (Tex.1996). A
admitted. City of Brownsville v. Alvarado, 897 S.W.2d 750, patent ambiguity is evident on the contract's face. ld. at 282.
753-54 (Tex.1995). A latent ambiguity arises from a collateral matter when a
contract that appears to be unambiguous on its face is applied
to its subject.Id. at 282-283.
Analysis
We begin with the October 16, 2000 fee agreement, which
A. The Fee Agreement is Ambiguous reads in its entirety as follows:
[9] Anglo-Dutch first argues that the trial court erred by
allowing the jury to interpret the fee agreement because Dear Scott:
it unambiguously is between Anglo-Dutch and Greenberg
This letter memorializes our agreement with respect to
Peden-not between Anglo-Dutch and Swonke individually.
me assisting you and/or the companies which you control
We reject Anglo-Dutch's contention because we agree with
(Anglo-Dutch) and the law firm of McConn & Williams,
the trial court's determination that the fee agreement is
LLP regarding the above-reference matter.
ambiguous with respect to whether Swonke contracted for
himself individually or for Greenberg Peden. In that regard, you have executed a Fee Agreement with the
law firm ofMcConn& Williams onMarch25, 2000, which
[10] [11] [12] Our primary concern when interpreting a is incorporated herein by reference. I agree to assist Anglo-
contract is to ascertain and give effect to the intent of the Dutch and that firm in this lawsuit for proportionately
parties as that intent is expressed in the contract. Perry Homes the same percentage (20%) of any benefit to McConn &
v. Cull, 258 S.W.3d 580, 606 (Tex.2008). The contract's Williams reflected in such agreement. However, I will not
language is the primary evidence of that intent. !d. We be responsible for any expenses other than those I may
examine and consider the entire writing in an effort to personally incur. Further, the proportions under which my
harmonize and give effect to all the provisions of the contract fees *467 shall be calculated will be the ratio ofthe hours
so that none will be rendered meaningless. Seagull Energy I have spent or will spend on this matter relative to the
hours the attorneys at McConn & Williams have spent or
will spend after the date the lawsuit was filed, rounded Greenberg Peden while specifYing which Greenberg Peden
to the next whole percentage. For example, if McConn & attorney would perform the work; and (3) Van Dyke's October
Williams' attorneys spend 1,000 hours on the lawsuit after 17, 2000 transmittal letter demonstrates his belief that the fee
the date the lawsuit was filed and I spend 90 hours of my agreement was between Anglo-Dutch and Greenberg Peden.
time towards the lawsuit, then by rounding up to nearest
whole number, I would be entitled to receive from you Swonke emphasizes other circumstances surrounding
2% (10% of20%) of the gross revenues and other benefits execution of the fee agreement. The fee agreement was signed
recovered, if any, from this lawsuit. In addition, should against a backdrop that included ( 1) previous explanations
the Fee Agreement be amended, you agree that I shall be dating back at least a decade regarding the nature of Swonke' s
entitled to the benefit of such amendment. "of counsel" status at Greenberg Peden; (2) Greenberg
Peden's refusal to perform work for Anglo-Dutch since
If this comports with your understanding of our agreement, 1999 due to unpaid legal bills; and (3) Greenberg Peden's
please indicate by signing below and returning this letter specific refusal to represent Anglo-Dutch on an hourly
tome. or a contingency fee basis in its suit against Halliburton
and Ramco, again due to unpaid legal bills. Van Dyke
If you have any questions, please contact me.
acknowledged that after 1999, no Greenberg Peden attorney
Very truly yours, had performed legal work for Anglo-Dutch. Van Dyke
admitted that Swonke informed him of the firm's refusal to
GREENBERG PEDEN P.C. represent Anglo-Dutch in the lawsuit against Halliburton and
Ramco due to Anglo-Dutch's unpaid legal bills.
/s/
GERARD J. SWONKE *468 We reject Anglo-Dutch's contention that the October
16, 2000 letter agreement unambiguously establishes a
Anglo-Dutch contends the fee agreement is an unambiguous contract between Anglo-Dutch and Greenberg Peden in light
contract between Greenberg Peden and Anglo-Dutch, of the letter's content and the circumstances surrounding its
stressing that it is printed on Greenberg Peden letterhead. execution. The use of Greenberg Peden letterhead and the
Swonke's address, telephone and fax number are not included. inclusion of "Greenberg Peden P.C." in the signature block
Swonke signed under the "Greenberg Peden P.C." signature reasonably suggest a contract with the law firm rather than
block. an individual attorney. But the absence of any reference
to Greenberg Peden in the letter's body-combined with
For his part, Swonke stresses that the agreement's text does Swonke's exclusive use of personal pronouns in the letter
not reference Greenberg Peden. The fee agreement refers after the law firm repeatedly and emphatically told Van Dyke
five times to McConn & Williams by name but never says it would not represent Anglo-Dutch-reasonably suggest
Greenberg Peden will perform legal services for Anglo- a contract with Swonke individually. These circumstances
Dutch. Swonke also highlights multiple references to himself render the fee agreement ambiguous and give rise to a fact
individually. The letter refers to "our agreement with respect issue. The trial court properly submitted that fact issue to the
to me assisting you and/or the companies which you control jury for resolution.
(Anglo-Dutch)." It continues with "I agree to assist," "I will,"
"I may," "my fees," "I have spent," "I spend 90 hours of This conclusion should not be misconstrued as a holding that
my time ... I would be entitled to receive from you," "I shall any appearance of personal pronouns in an engagement letter
be entitled," and concludes with "If this comports with your or fee agreement creates ambiguity about whether the client
understanding of our agreement." hired a law firm or an individual lawyer. It usually will be
clear when a client hired a law firm with an expectation that
The circumstances surrounding formation of the fee particular lawyers at the firm would work on a particular
agreement also bear on this issue. See Enter. Leasing Co .. matter. However, an ambiguity exists in this case due to
156 S.W.3d at 549. Anglo-Dutch points to the following conflicting indications on the fee agreement's face combined
circumstances: (1) Anglo-Dutch had a longstanding with the law firm's prior express refusals to represent Anglo-
relationship with Greenberg Peden; (2) the personal pronouns Dutch, which refusals were communicated directly to Van
used throughout the fee agreement are consistent with hiring
Anglo-Dutch Petroleum ~ntem., Inc. v. Greenberg Peden, P.C., 267 S.W.3d 454 (2otl!l)
Dyke. Regardless of whether the ambiguity is characterized Anglo-Dutch nevertheless invites this court to construe the
as "patent" or "latent," an ambiguity exists. ambiguous October 16, 2000 fee agreement against Swanke.
Anglo-Dutch cannot change this conclusion by pointing to
the October 17, 2000 transmittal letter Van Dyke sent to 1. Should the ambiguous fee agreement be construed
Swanke. As noted earlier, the transmittal letter states as against Swonke?
follows: "This fee agreement with McConn & Williams, LLP
a. Contra proferentem
provides the basis for the Agreement between Greenberg
Anglo-Dutch invokes the doctrine of contra proferentem
Peden P. C. and Anglo-Dutch." Even assuming for argument's
to advocate strict construction of the fee agreement against
sake that a separate letter signed after execution of the fee
Swanke. Under this doctrine, an ambiguous contract will
agreement can be considered as part of the circumstances
be interpreted against its drafter. See, e.g., Evergreen Nat'!
existing when the fee agreement was executed, the transmittal
Indem. Co. v. Tan It All, Inc., 111 S.W.3d 669,677 (Tex.App.-
letter merely underscores the existence of an ambiguity in the
Austin 2003, no pet.) (if insured's interpretation of ambiguous
fee agreement.
policy provision is reasonable, it will be adopted even if
insurer's interpretation is objectively more sensible, as long
After examining the fee agreement as a whole and the
as insured's construction is not unreasonable). Courts employ
circumstances present when the parties signed it, we hold
this doctrine as a device of last resort when construing
that the fee agreement is ambiguous and that the trial court
ambiguous contracts; it essentially operates as a tie-breaking
properly submitted a question asking the jury to determine the
device to prevent arbitrary decisions. I d.
identity of the contracting parties.
Anglo-Dutch acknowledges that Texas case law has not
We overrule Anglo-Dutch's first issue.
applied this doctrine in blanket fashion to all ambiguities
in attorney-client fee agreements. Anglo-Dutch nonetheless
B. Determining Which Parties Entered the Ambiguous argues that recent Texas Supreme Court decisions suggest a
Fee Agreement preference for strictly construing ambiguities in fee contracts
Anglo-Dutch next argues that the trial court should have against the attorney and in favor ofthe client. We analyze the
construed the fee agreement against Swanke because ( 1) cases cited by Anglo-Dutch in light of its assertion.
any ambiguities in attorney-drafted fee agreements should be
construed strictly against the attorney-drafter; and (2) there In Hoover Slovacek LLP v. Walton, 206 S.W.3d 557,
is legally and factually insufficient evidence to support the 559 (Tex.2006), Walton hired attorney Parrott of Hoover
jury's finding that Swanke is a party to the fee agreement and Slovacek to recover royalties from oil and gas companies
Greenberg Peden is not. operating on his ranch. Under the fee agreement, Hoover
Slovacek was entitled to a 30 percent contingent fee for
The fact finder usually is tasked with weighing evidence all claims on which collection was achieved. Id. The fee
of the parties' intent and choosing among competing agreement also included a provision stating that, in the event
interpretations of an ambiguous contract. See Columbia the firm was discharged before completing the representation,
Gas Transmission Corp., 940 S.W.2d at 589. However, Walton immediately had to pay a fee equal to the present
ambiguities sometimes are construed in favor of one value ofthe firm's interest in Walton's claim. Id.
contracting party over another to address disparities in
negotiating power or to promote public policy goals. See, e.g., Parrott negotiated settlements with Texaco and El Paso
Fiess v. State Farm Lloyds, 202 S.W.3d 744, 746 (Tex.2006) Natural Gas, and Walton paid the firm its contingent
(if an exclusion in an insurance contract has more than one fee. Parrott then turned to Walton's claims against Bass
reasonable *469 interpretation, it will be construed in favor Enterprises Production Company, and Walton authorized
ofthe insured). Parrott to settle for $8.5 million. !d. Parrott's initial settlement
demand was for $58.5 million. A month later, Bass offered $6
Anglo-Dutch acknowledges that Texas has not adopted a million not only to settle Walton's claims, but also to acquire
blanket rule construing all ambiguities in contingency fee surface estates of eight sections of Walton's ranch. I d. Walton
agreements against the attorney and in favor of the client. refused to sell, authorized Parrott to settle Walton's claims for
unpaid royalties for $6 million, and expressed his discontent
Petroleum Intern., inc. v. Greenberg Peden, P.C., 257 S.W.3d 454 (2008)
with Parrott for not consulting Walton before making the a definite legal meaning and it is not reasonably susceptible
$58.5 million settlement demand. I d. at 559-60. When Parrott to more than one meaning. Jd. at 861. By filing a cash
responded by urging Walton to sell part of his ranch, Walton deposit to perfect an appeal, the court found that an appeal
discharged Parrott and hired Andrews & Kurth LLP. Id. had been "taken" and the appellate court's jurisdiction had
at 560. That firm settled Walton's claims against Bass for been invoked under a plain reading of the appellate rules. !d.
$900,000. Jd. In the meantime, Hoover Slovacek demanded The court concluded that the unambiguous contract would be
that Walton pay $1.7 million under the fee agreement. Hoover enforced as written. !d. at 862. Accordingly, because the case
Slovacek contended that Bass's $6 million offer and Walton's was appealed to a higher court when Westinghouse perfected
subsequent authorization to settle for that amount established its appeal, the firm did not breach the contract by charging the
the present value of Walton's claims at the time of discharge. additional appeal fee. !d.
I d.
Justice Gonzales dissented in Lope::; and argued that the
The court examined whether the termination fee provision phrase "appealed to a higher court" is ambiguous and should
was contrary to public policy. I d. at 561-66. It concluded that have been construed against the attorneys. !d. at 865. Justice
the firm's provision penalized Walton for changing counsel; Gonzales acknowledged that, when the objective meaning of
granted the firm an *470 impermissible proprietary interest a contract term is ambiguous, the parties' subjective meaning
in Walton's claims; shifted the risks of representation almost of the term becomes a fact question. !d. Nonetheless, he
entirely to Walton's detriment; and subverted several policies advocated that the special relationship between an attorney
underlying the use of contingent fees. I d. at 566. Thus, the and client as well as the attorney's superior understanding of
court determined that it was unenforceable because it was contract terms generally require an ambiguous contract to be
unconscionable as a matter of law, severed the termination construed against the attorney-drafter. Id at 866.
provision, and held the remainder of the fee agreement was
enforceable. Id. Finally, in Levine v. Bayne, Snell & Krause, Ltd., 40
S.W.3d 92, 93 (Tex.2001), the Levines agreed to pay their
In Lope::: v. Munoz, Hockerna & Reed, L.L.P., 22 S.W.3d attorneys "one-third of any amount received by settlement
857, 859 (Tex.2000), the Lopezes hired Munoz, Hockema or recovery from their lawsuit" for foundation damage.
& Reed to represent them in a wrongful death suit against The Levines' $243,644 award was offset to extinguish their
Westinghouse Electric Corporation. Their contingency fee mortgage obligation, giving them clear title and resulting in
agreement assigned 40 percent of any recovery to the firm, a net recovery of $81,792.62. Jd. A dispute arose regarding
and 45 percent if the case "is appealed to a higher court." computation of fees before or after the offset. I d. The court
I d. After a $25 million jury verdict in favor of the Lopezes, sided with the Levines and held that "any amount received"
the parties began settlement negotiations. Jd. The parties meant net recovery. I d. at 95. The court reasoned that, because
tentatively agreed to a settlement, but Westinghouse filed a the attorney is better able to predict and provide for fee
cash deposit in lieu of a cost bond with the trial court to arrangements, the burden should *471 fall on the attorney
perfect an appeal in case the settlement fell through. I d. When to express in the agreement with the client whether the
the firm met with the Lopezes to discuss the settlement and contingent fee will be calculated on non-cash benefits as
the firm's fees, the firm explained that its fee would be 45 well as money damages. !d. In Levine, there was no contract
percent of the recovery. No one objected at the time. Id. at ambiguity and the court did not discuss or apply the doctrine
859-60. The Lopezes signed a settlement statement reflecting of contra proferentern.
the firm's 45 percent fee and the funds were distributed. Id.
at 860. These cases do not establish that Texas law requires
an ambiguity concerning the identity of parties to a fee
Three years later, the Lopezes sent the firm a letter asking agreement to be resolved against the attorney.
the firm to refund the additional five percent fee. Jd When
the firm refused, the Lopezes sued the firm alleging a breach Hoover Slovacek does not apply here because it addresses
of contract claim. I d. They argued that the phrase "appealed whether a fee agreement's termination provision is
to a higher court" was ambiguous and should be construed unconscionable and unenforceable. Hoover Slovacek, 206
against its drafter, the firm. !d. However, the court held that S.W.3d at 559. It did not decide whether contra proferentern
the contract language is unambiguous because it can be given
should be applied to construe an ambiguous fee agreement is to be construed in light of the circumstances in which
against the attorney-drafter. it was made, the parties' past practice and contracts,
and whether it was truly negotiated. When the reasons
In Lopez, Justice Gonzales argued in dissent that the fee supporting the principle are inapplicable-for example,
agreement was ambiguous and should be construed against because the client had help of its own inside counsel
the attorney-drafter because of the special relationship or another lawyer in drafting the contract-the principle
between attorney and client. Lopez, 22 S.W.3d at 866. No should be correspondingly relaxed.
subsequent Texas Supreme Court case has acted on the Lopez RESTATEMENT (THIRD) OF THE LAW GOVERNING
dissent's urging to adopt a broad contra proferentem rule for LAWYERS § 18 cmt. h (1998). Comment h identifies
attorney-client fee contracts. multiple factors that may influence interpretation of an
ambiguous attorney-client *472 agreement, and it guides
Levine placed a burden on attorneys to express clearly the our disposition here.
contemplated computation in fee agreements. 40 S.W.3d at [17] Comment h does not mandate that ambiguities in
95. That decision did not address an ambiguity concerning attorney-client contracts always must be construed against
the identity of parties to a fee agreement, and it did not adopt the attorney. Rather, comment h contemplates reliance on
a contra proferentem rule for all ambiguities in all attorney- the customary resources used for contract interpretation,
client fee agreements. including consideration of the contract language and
surrounding circumstances; the client's sophistication and
Given the absence of definitive teaching from the Texas experience; the parties' past practice; and whether the
Supreme Court, we look for guidance on this issue from contract terms were truly negotiated or instead were imposed
comment h to section 18 of the RESTATEMENT (THIRD) unilaterally. This approach encompasses multiple factors and
OF THE LAW GOVERNING LAWYERS ........ Both sides encourages sensitivity to the particular circumstances of a
invoke comment h in favor of their respective positions. particular case. Comment h ultimately grounds the analysis
Comment h provides in pertinent part: on this question: What would "a reasonable person in the
client's circumstances" understand or expect?
Construction of client-lawyer contracts. Under this
Section, contracts between clients and lawyers are to be The "client's circumstances" in this case do not involve
construed from the standpoint of a reasonable person in the an unsophisticated individual whose lawyer presented an
client's circumstances. The lawyer thus bears the burden of already-drafted agreement on a take-it-or-leave-it basis.
ensuring that the contract states any terms diverging from To the contrary, this case involves a sophisticated and
a reasonable client's expectations. The principle applies to experienced client who vigorously negotiated the fee
fee terms ... as well as other terms. agreement with an individual attorney after being told the
law firm would not take the case. The evidence in this case
establishes that ( 1) Van Dyke is an experienced businessman
*** who had been instrumental in drafting complex contracts
and setting up complex business ventures with national and
Many tribunals have expressed the principle as a rule that international investors; (2) the fee agreement was created
ambiguities in client-lawyer contracts should be resolved through a collaborative process between Van Dyke and
against lawyers. That formulation can be taken to mean Swonke; (3) the fee agreement's terms were vigorously
that the principle comes into play only when other means negotiated; (4) all provisions Van Dyke insisted upon were
of interpreting the contract have been unsuccessful. Under included in the contract; (5) Van Dyke had experience in
this Section, the principle that the contract is construed retaining attorneys; (6) Greenberg Peden previously told
as a reasonable client would understand it governs the Van Dyke it no longer would represent Anglo-Dutch due
construction of the contract in the first instance. However, to unpaid legal bills; and (7) Swonke told Van Dyke that
this Section does not preclude reliance on the usual Greenberg Peden specifically refused to represent Anglo-
resources of contractual interpretation such as the language Dutch in the lawsuit against Halliburton and Ramco.
of the contract, the circumstances in which it was made,
and the client's sophistication and experience in retaining These circumstances make the present case an inappropriate
and compensating lawyers or lack thereof. The contract vehicle for applying the doctrine of contra proferentem-
either broadly with respect to all ambiguities that may
arise in connection with attorney-client agreements, or C. Swonke acted in the utmost good faith and exercised the
specifically with respect to the particular ambiguity at issue most scrupulous honesty toward Anglo-Dutch;
here regarding the identity of Anglo-Dutch's contracting
D. Swonke placed the interests of Anglo-Dutch before his
counterpart. Construing the October 16, 2000 fee agreement
own, did not use the advantage of his position to gain
from the standpoint of a reasonable client in the circumstances
any benefit for himself at the expense of Anglo-Dutch,
of Anglo-Dutch's Van Dyke, there is ample basis for
and did not place himself in any position where his self-
concluding that such a client would understand Anglo-Dutch
interest might conflict with his obligations as a fiduciary;
had contracted with an individual lawyer rather than the
and
law firm. At a minimum, a triable issue of fact is presented
regarding the parties' intent. E. Swonke fully and fairly disclosed all important
information to Anglo-Dutch concerning the
transactions.
b. Breach of fiduciary duty
Anglo-Dutch tries to bolster its argument for applying contra Answer "YES" or "NO":
proferentem by linking that doctrine to Swonke's asserted
breach ofhis fiduciary duty. Answer: YES
It is worth noting that the jury did not answer "no" to a
Anglo-Dutch argues that the ambiguous fee agreement
should be construed against Swonke because he breached his question asking whether Swonke breached his fiduciary duty.
fiduciary duty. Anglo-Dutch contends that Swonke breached In other words, the jury's answer is not merely a failure to
his fiduciary duty by mistakenly drafting an ambiguous fee find actionable conduct in answer to a question that put the
agreement and then failing to disclose to Van Dyke his own burden of proof on Anglo-Dutch. Cf Bliz::ard v. Nationwide
Mut. Fire Ins. Co., 756 S.W.2d 801, 806 (Tex.App.-Dallas
interpretation of that agreement as an individual contract,
1988, no writ) ("the jury's negative answer does not establish
which diverged from Van Dyke's stated belief that Anglo-
the contrary of the question asked;" it establishes only that
Dutch contracted with Greenberg Peden rather than Swonke
the party with the burden ofprooffailed to meet that burden).
individually.
Rather, the jury here answered "yes" to a question that put
[18] Anglo-Dutch's argument is hampered by the jury's the burden of proof on Swonke. It is an affirmative finding in
finding that Swonke complied with his fiduciary duty. Anglo- Swonke's favor establishing that he complied with all facets
Dutch's linkage of contra proferentem and Swonke's asserted of his fiduciary duty to Anglo-Dutch-including his duty to
breach of fiduciary duty malces it appropriate at this juncture "fully and fairly disclose[ ] ... all important information to
Anglo-Dutch concerning the transactions."
to address Anglo-Dutch's contention that legally *473 and
factually insufficient evidence supports the jury's finding in
We conclude that the evidence is legally and factually
favor of Swonke on this issue.
sufficient to support the jury's "yes" answer to Question 5.
Jury Question 5 asked:
Anglo-Dutch asserts that it conclusively established
Did Swonke comply with his fiduciary duty to Anglo- Swonke's breach of fiduciary duty because the evidence is
Dutch? undisputed that Swonke failed to ( 1) clarify the nature of the
fee agreement when the parties signed it, or explain his view
As Anglo-Dutch's attorney, Swonke owed Anglo-Dutch a of the terms governing his entitlement to a fee; (2) respond
fiduciary duty. To prove that he complied with his fiduciary to Van Dyke's October 17, 2000 transmittal letter, which
duty, Swonke must show: set forth Van Dyke's divergent view of the fee agreement's
meaning; (3) inform Anglo-Dutch about his interpretation of
A The transactions in question were fair and equitable to
the fee agreement after he left Greenberg Peden and about
Anglo-Dutch;
the repercussions his move would have; (4) inform Anglo-
B. Swonke made reasonable use of the confidence that Dutch of a conflict of interest Swonke created when he
Anglo-Dutch placed in him; began working at McConn & Williams while considering
himself to be exempt from the fee agreement Anglo-Dutch
Anglo-Dutch Petroleum !ntem., Inc. v. Greenberg Peden, P.C., 267 S.W.3d 454 (2008)
had with McConn & Williams; (5) consult with Anglo- Dutch; !mew that no one at Greenberg Peden would do
Dutch regarding the assignment of rights he negotiated with any more work for Anglo-Dutch; and knew that no one at
Greenberg Peden at the time he negotiated the release; and ( 6) Greenberg Peden had done any work for Anglo-Dutch since
act with the strictest fairness and honesty with respect to his 1999. Swanke testified that Van Dyke absolutely and without
fee because he sought to recover a fee five times the amount a doubt understood that Swanke would be paid individually
Anglo-Dutch reasonably expected to pay. when he moved to McConn & Williams; Anglo-Dutch had
been with Swanke for 15 years and Greenberg Peden had
As stated above, when conducting a legal sufficiency review, severed ties with Anglo-Dutch earlier. Further, when Swanke
we must consider the evidence in the light most favorable to joined McConn & Williams as "of counsel," he sent Van
the verdict and indulge every reasonable inference that would Dyke a letter informing Van Dyke of his move and his
support it. We will credit favorable evidence if reasonable intent to take the clients' files to McConn & Williams absent
jurors could do so and disregard contrary evidence unless objections. Van Dyke did not object to Swanke taking Anglo-
reasonable jurors could *474 not do so. City of Keller, Dutch's files with him to McConn & Williams.
168 S.W.3d at 822, 827. If the evidence at trial would
enable reasonable and fair-minded people to differ in their Swanke also testified that he complied with his fiduciary
conclusions, then jurors must be allowed to decide the issue. duty to Anglo-Dutch. Swanke stated that he (1) was perfectly
!d. at 822. Under the governing standard and scope of review, honest with Van Dyke about any fee arrangements; (2) did not
we consider the following evidence in assessing Anglo- engage in any self-dealing; (3) did not do anything concerning
Dutch's contention that the evidence was undisputed and the fee agreement that was to his advantage but to Anglo-
conclusively established Swanke's breach of fiduciary duty. Dutch's disadvantage; (4) never received any benefit for the
work he performed on behalf of Anglo-Dutch in the lawsuit;
Swanke testified that he explained his "of counsel" status to (5) acted with absolute candor and honesty, and without any
Van Dyke on several occasions, although Van Dyke claimed concealment or deception toward Anglo-Dutch; (6) provided
to have no recollection of these explanations. Swanke Anglo-Dutch his undivided loyalty; (7) never failed to inform
testified-and Van Dyke acknowledged-that Greenberg Van Dyke of matters material to the representation; and (8)
Peden refused to represent Anglo-Dutch in the lawsuit never believed there was a conflict of interest in this case.
against Halliburton and Ramco because of unpaid legal
fees. Swanke testified-and Van Dyke acknowledged-that This evidence entitled the jury to conclude that the transaction
Swanke continued to provide services in furtherance of was fair and equitable to Anglo-Dutch, and that Swanke fully
the lawsuit after Swanke referred Anglo-Dutch to McConn and fairly disclosed all important information regarding the
& Williams without receiving compensation from Anglo- terms of the fee agreement. The jury was entitled *475 to
Dutch. Swanke testified-and Van Dyke acknowledged- conclude that Van Dyke knew the fee agreement was between
that Van Dyke approached Swanke asking for Swanke's help. Anglo-Dutch and Swanke individually, and that no further
disclosure was necessary. Further, the testimony entitled the
Van Dyke proposed a contingency fee agreement. Swanke jury to find that Swanke acted with fairness, loyalty, and
testified that he wanted a flat fee, but Van Dyke insisted honesty toward his client Anglo-Dutch, and that he did not
on computing the fee based on the hourly formula stated in create any conflict of interest when he moved to McConn &
the fee agreement. After negotiations, Swanke acquiesced to Williams; his move had no effect on the parties' relationship
Van Dyke's formula but added a rounding-up feature. Swanke because the fee agreement was between Anglo-Dutch and
testified that he and Van Dyke discussed the rounding feature, Swanke individually, and would follow him wherever he
and that Van Dyke understood it. Van Dyke testified that chose to practice as of counsel.
he recommended the fee agreement be based on the hourly
formula and that Swanke proposed the rounding-up feature. Additionally, Swanke testified that he did not respond to Van
Dyke's October 17, 2000 transmittal letter because he did not
According to Swanke, the parties achieved a meeting of see it. Swanke testified that he normally would not read a
the minds when they entered the fee agreement after Van letter that refers to a document he already had in his files.
Dyke specifically called Swanke and requested his personal Swanke stated that he would have responded to the letter if
services. Swanke testified that Van Dyke knew the fee he had seen it and had thought Van Dyke was contending
agreement was Swanke's personal contract with Anglo- the fee agreement was with Greenberg Peden. Swanke
Anglo-Dutch Petroleum Intern., Inc. v. Greenberg Peden, P.C., 267 S.W.3d 454
testified that Van Dyke's assertion of a fee agreement between In addition to the evidence discussed above, Anglo-Dutch
Greenberg Peden and Anglo-Dutch was suspicious because relied on testimony from a fiduciary duty expert, Robert
both knew that the fee agreement was between Anglo-Dutch Schuwerk. He testified that Swonke had a duty to clarify
and Swonke individually. According to Swonke, it is not who the contracting parties *476 were because the fee
possible that Van Dyke was simply expressing his belief in agreement was on Greenberg Peden letterhead and contained
the transmittal letter because Van Dyke had continued calling the firm's signature block. Schuwerk opined that Swonke
Swonke for help with the Halliburton lawsuit. When Swonke owed a fiduciary duty to clear up any misunderstanding
became tired of helping Van Dyke without compensation, regarding who the contracting parties were-if he received
Van Dyke asked Swonke for help and proposed the fee the October 17, 2000 transmittal letter from Van Dyke.
agreement without anyone at Greenberg Peden knowing Schuwerk could not point to any case or treatise establishing
about it. that an attorney breaches his fiduciary duty by not acting on a
document he never saw or read. Schuwerk declined to opine
This evidence entitled the jury to conclude that Swonke never on whether Swonke breached his fiduciary duty if he had not
saw the October 17, 2000 letter and, therefore, did not have seen or read the October 17, 2000 transmittal letter.
to take further steps to disclose information to Anglo-Dutch
regarding its contracting counterpart. Schuwerk also testified that Swonke owed a duty to write a
new contract when he left Greenberg Peden for McConn &
Swonke also testified that when he told Van Dyke he wanted Williams, and to explain how the move might affect Anglo-
to be included on the settlement distribution list, Van Dyke Dutch's obligation to pay legal fees. He opined that Swonke
asked Swonke to obtain a release from Greenberg Peden. should have redone the fee agreement even if Swonke and
According to Swonke, Van Dyke insisted that Swonke get a Van Dyke both knew the fee agreement was an individual
release to prevent the law firm from making a claim against contract. Swonke testified that it would have been "ludicrous"
Anglo-Dutch because the fee agreement was printed on to redo the fee agreement because it was Swanke's individual
Greenberg Peden letterhead. Swonke drafted a release and agreement.
assignment to address Van Dyke's request. Swonke explained
that he was acting as Anglo-Dutch's attorney and was trying Having reviewed all the evidence before us and considered
to draft exactly what Van Dyke requested. Swonke testified that the jury is the sole judge of the credibility of the
that there was nothing in the release document to cause witnesses, we conclude that the jury's "yes" answer to
concern to an attorney representing Anglo-Dutch. Question 5 was supported by factually sufficient evidence.
Accordingly, we conclude that the evidence was legally and
This evidence entitled the jury to conclude that Swonke factually sufficient to support the jury's finding that Swonke
obtained the Assignment and Release Agreement at Van complied with his fiduciary duty.
Dyke's insistence; that Swonke made reasonable use of the
confidence Anglo-Dutch placed in him; that he acted in the In light of the jury's amply supported answer to Question
utmost good faith; and that he did not use the advantage of 5, we reject Anglo-Dutch's argument that Swanke's asserted
his position to gain any benefit for himself at the expense of breach of fiduciary duty justifies applying contra proferentem
Anglo-Dutch. and construing the ambiguous October 16, 2000 fee
agreement against Swonke. The finding that Swonke
Having reviewed the evidence and considered that the jury complied with his fiduciary duty reinforces our decision
is the sole judge of the credibility of the witnesses, we to forego reliance on contra proferentem and to refrain
conclude that the evidence is legally sufficient because it from automatically construing the ambiguous fee agreement
would enable reasonable and fair-minded people to find that against Swonke. The trial court properly left this issue to the
Swonke complied with his fiduciary duty to Anglo-Dutch. jury's resolution.
Alternatively, Anglo-Dutch argues that the evidence in this
case is factually insufficient to support the jury's finding that 2. Evidence supports the finding that Swonke contracted
Swonke complied with his fiduciary duty. individually
[19] We now turn to Anglo-Dutch's argument that legally
and factually insufficient evidence supports the jury's finding
Petroleum lntem., Inc. v. Greenberg Peden, P.C., 267 S.W.3d 454 (2008)
" "'······.·.··.···.·.·.·.·.·.·.·.·.·.··· ''' '
that the fee agreement is between Angh-Dutch and Swonke reasonable and fair-minded jurors from relying upon it to
individually. answer "yes" as to Swonke in response to Question 1.
Question 1 asked and instructed the jury as follows: Anglo-Dutch next contends that the only competent evidence
in the record conclusively shows that the fee agreement
Do you find that the Fee Agreement with Anglo-Dutch always was intended to be between Anglo-Dutch and
(Plaintiffs' Exhibit 1) was entered into on behalf of Greenberg Peden. This argument corresponds to situation (d)
Greenberg Peden, or on behalf of Swonke, individually? set out above because it asserts that the evidence conclusively
establishes the opposite of a vital fact.
You must decide the agreement's meaning by determining
the intent of the parties at the time of the agreement.
Under this challenge, Anglo-Dutch asserts that the
Consider all the facts and circumstances surrounding the
Assignment and Release Agreement obtained from
making of the agreement, the interpretation placed on the
Greenberg Peden on April 16, 2004 reveals the parties' true
agreement by the parties, and the conduct of the parties.
intent. That assignment and release says Swonke signed the
As to your two choices below, you must answer "YES" as fee agreement on behalf of the law firm; that the firm assigned
to only one, and "NO" as to the other any interest under the fee agreement to Swonke; and that the
firm released Anglo-Dutch from liability to Greenberg Peden
Answer: NO on behalf of Greenberg Peden for fees under the fee agreement. Anglo-Dutch argues that
Swonke would not have needed an assignment of rights if
YES on behalf of Swonke, individually
he believed he had an individual fee agreement with Anglo-
Dutch and the rights already belonged to him. Anglo-Dutch
Anglo-Dutch argues that the evidence does not support the
contends that Greenberg Peden shareholder Skip Naylor
jury's answer to Question 1. As noted above, we will sustain
acknowledged that the fee agreement was executed on behalf
no evidence challenges when the record discloses: (a) a
of the firm.
complete absence of evidence of a vital fact; (b) the court
is barred by rules of law or of evidence from giving weight
Anglo-Dutch also stresses that other contingency fee
to the only evidence offered to prove a vital fact; (c) the
agreements Swonke signed in his individual capacity were
evidence offered to prove a vital fact is no more *477 than
printed on Swonke's own letterhead. It further argues that
a mere scintilla; or (d) the evidence establishes conclusively
Swonke's outward appearance and behavior indicated he was
the opposite of the vital fact. City of Keller, 168 S.W.3d
employed by Greenberg Peden while working on Anglo-
at 810. Ultimately, our review will focus on whether the
Dutch matters; this included his billing practices, recording
evidence would enable reasonable and fair-minded jurors to
time on the firm's system, using the firm's paralegals, and
find that the fee agreement was entered on behalf of Swonke
using the firm to bill Anglo-Dutch for expenses relating
individually. !d. at 827.
to the Halliburton lawsuit. Anglo-Dutch contends that its
execution of a promissory note in favor of Greenberg Peden-
Anglo-Dutch first contends that "[t]he only evidence
and not Swonke individually-for the outstanding legal fees it
offered at trial by Swonke in support of the alleged
owed confirms that Swonke worked on Anglo-Dutch matters
ambiguity amounts to no evidence." This argument appears
through the firm and not individually. Additionally, Swonke's
to correspond to situation (b) identified above. Anglo-Dutch
letter informing Anglo-Dutch of his move to McConn &
asserts that the use of personal pronouns in the fee agreement
Williams stated that his legal services had been provided
is no evidence because the fee agreement is unambiguous
"through [his] association with Greenberg Peden P.C."
-an argument we already have rejected. Anglo-Dutch
also contends that Van Dyke's deposition testimony in
Van Dyke further suggested in his testimony that Anglo-
the Halliburton lawsuit, in which he stated that he had a
Dutch agreed to the rounding feature in the formula for
fee contract with Swonke, does not support or create an
calculating the fee only as a reward to Greenberg Peden for its
ambiguity and thus constitutes no evidence because it related
forbearance on prior unpaid legal bills. He also pointed to the
to a different topic-the number and rough identity of the
October 17, 2000 transmittal letter he sent *478 to Swonke,
fee contracts that Anglo-Dutch had at the time. We reject
which he portrays as confirmation the parties intended the fee
this contention because the jury was entitled to consider
agreement to be between Anglo-Dutch and Greenberg Peden.
this testimony and its context; that context does not prevent
Anglo-Dutch Petroleum lntem., Inc. v. Greenberg Peden, P.C., 267 S.W.3d 454 (2008)
Lastly, Anglo-Dutch contends that, after Swonke moved to system; under the fee sharing arrangement between Swonke
McConn & Williams, he maintained every appearance of and Greenberg Peden, the firm would deduct a certain
acting as a McConn & Williams attorney using the firm percentage ofthe fees the clients paid to reimburse Greenberg
office space, letterhead, e-mail account and billing system. Peden, among others, for using office space, paralegals,
According to Anglo-Dutch, this gave Anglo-Dutch no reason secretaries, and parking.
to believe Swonke was employed individually under the terms
ofthe October 16, 2000 fee agreement. Swonke told Van Dyke he generated his own work, did not
get a salary from the firm, and was paid only when the clients
This evidence does not rise to the level of allowing "only paid. Swonke told Van Dyke he was not part of the firm,
one logical inference" in favor of a finding that Anglo- despite appearances that Swonke had "all the trappings ofthe
Dutch contracted with Greenberg Peden. See City of Keller, firm." Further, Naylor testified that sending Anglo-Dutch a
168 S.W.3d at 822. Swanke's testimony provided contrary bill for Halliburton lawsuit expenses was simply a mistal(e on
evidence and established that more than one inference was Greenberg Peden's part.
permissible in this case. The choice between these competing
narratives belonged to the jury. We will not disturb that Additionally, Swonke testified that Van Dyke proposed a
choice. contingency fee agreement. Although Swonke suggested his
usual flat percentage fee, Van Dyke insisted on the formula
Swonke testified that the Assignment and Release Agreement stated in the fee agreement. Swonke initially rejected the
was drafted only because of Van Dyke's "hypersensitivity" formula because he thought it was too *4 79 complicated, but
and concern that Greenberg Peden would attempt to assert later acquiesced to it because Van Dyke thought this would be
a right to fees under the October 16, 2000 fee agreement. the only fair way to measure Swonke's hours. Swonke added a
When Swonke told Van Dyke that he wanted to be included rounding feature because he knew Van Dyke had a propensity
on the settlement distribution list, Van Dyke insisted that for "putting decimals out there to a long degree."
Swonke first obtain a release from Greenberg Peden because
the fee agreement was on firm letterhead and Van Dyke According to Swonke, Van Dyke absolutely and without a
was worried that the firm would make a claim against doubt knew that Swonke would be paid individually when
Anglo-Dutch. Swonke and Greenberg Peden shareholder he moved from Greenberg Peden to McConn & Williams.
Skip Naylor drafted a release and assignment to address Swonke also sent Van Dyke a letter informing him of
Van Dyke's request. Swonke testified that he prepared a Swanke's move to McConn & Williams as "of counsel" and
release and an assignment because an assignment had to occur Swonke's intention to take Anglo-Dutch's files with him
before there could be a release, and Swonk.c and Naylor were unless Anglo-Dutch objected.
trying to draft a document that would give Van Dyke the
comfort he sought. Swonke testified that the release implicitly Finally, Swonke testified that he did not see the October 17,
required an assignment of rights to place Swonke and Anglo- 2000 transmittal letter because it transmitted the McConn &
Dutch in the position Van Dyke, Swonke and Greenberg Williams contingency fee agreement, which Swonke already
Peden believed they should occupy. Naylor explained that the had in his file. Normally, Swonke would not read a letter that
language in the document was there to assure Van Dyke that, refers to a document he already had in his files. Swonke stated
when Anglo-Dutch paid Swonke, it would owe Greenberg that he would have responded to the letter if he had thought
Peden nothing. Van Dyke was contending the fee agreement was not with
Swonke individually.
Swonke's practice was to use his personal letterhead
whenever he entered into an individual contingency fee From this evidence, the jury was entitled to conclude that
agreement with a new client, and Anglo-Dutch was not Van Dyke knew the implications of Swanke's "of counsel"
a new client. Further, Swonke testified that Van Dyke status at Greenberg Peden and McConn & Williams because
knew he was "of counsel" to Greenberg Peden because he Swonke had explained the meaning of his status before they
explained the meaning of his "of counsel" status to him on signed the October 16, 2000 fee agreement. The jury also
several occasions, including once while Van Dyke worked was entitled to conclude that executing the promissory note
at his father's company in the late 1980s. Swanke's work as in favor of Greenberg Peden was consistent with the "of
"of counsel" was billed through Greenberg Peden's billing counsel" arrangement Swonke had with the firm.
it agreed to pay attorney's fees and Swonke agreed to work
The jury could conclude that the fee agreement's rounding on the Halliburton lawsuit.
feature was included to not as a reward for Greenberg
Peden's forbearance, but as a means of addressing Van Dyke's Further, on the record before us, Angler-Dutch cannot show a
propensity for "putting decimals out there to a long degree." complete absence of evidence establishing the vital fact that
The jury could further conclude that Swonke never saw Van Angler-Dutch and Swonke intended to contract for payment
Dyke's October 17, 2000 transmittal letter until after the of Swonke's individual services rather than the services
dispute arose. Finally, the jury was entitled to conclude that of Greenberg Peden. Evidence establishing this vital fact
Swonke obtained the Assignment and Release Agreement constitutes much more than a scintilla and includes the
only at Van Dyke's insistence to calm his fear that Greenberg following.
Peden would assert an interest in the fee agreement, and that
Swonke was willing to satisfY all of Van Dyke's demands to In 1999 or early 2000, Swonke and David Peden had a
get paid under the fee agreement. meeting with Van Dyke at which Peden expressly told Van
Dyke that Greenberg Peden no longer would perform legal
Therefore, the evidence does not conclusively establish work for Angler-Dutch due to unpaid legal bills. No one at
that the parties always intended the fee agreement to be Greenberg Peden had performed legal work for Angler-Dutch
between Angler-Dutch and Greenberg Peden; and Angler- since 1999.
Dutch cannot assert a successful legal sufficiency challenge
based on this argument. In February or March of 2000, Greenberg declined to
represent Angler-Dutch in the Halliburton lawsuit on an
Lastly, we conclude that Angler-Dutch cannot prevail on a hourly and contingency fee basis due to the unpaid bills.
no evidence challenge described in situations (a) and (c) Van Dyke admitted that Swonke informed him of Greenberg
under Chief Justice Calvert's formulation applied above in Peden's refusal. Swonke testified that, after Angler-Dutch
City of Keller. The vital fact at issue here is whether the signed a contract with McConn & Williams, he did not want
parties intended the fee agreement to be between Angler- to be involved with the Halliburton lawsuit but Van Dyke
Dutch and Greenberg Peden, or between Angler-Dutch and and McConn & Williams attorneys continued to call him for
Swonke individually. advice and help.
More than a scintilla of evidence supports the jury's answer When Swanke became weary of providing legal services
to Question 1. This evidence includes consistent use of without compensation, Van Dyke called him and asked
personal pronouns throughout the fee agreement against a for his personal services. Swonke testified that Van Dyke
backdrop of undisputed evidence that Van Dyke repeatedly knew no one at Greenberg Peden would help him, and that
was told Greenberg Peden would not represent Angler-Dutch Van Dyke intended to hire Swonke individually. Van Dyke
due to unpaid legal bills. These circumstances give the choice proposed the fee agreement and the parties negotiated the
of personal pronouns added significance, and the jury was terms. Swonke also testified that the use offirm letterhead and
entitled to consider these circumstances. signature block made no difference because he, Van Dyke and
Greenberg Peden all knew that Angler-Dutch was contracting
This evidence also includes Van Dyke's 2002 deposition with Swonke individually.
testimony in the Halliburton lawsuit. Van Dyke testified that
Anglo-Dutch had two contingency fee contracts: one with Swonke consistently maintained that he was working
John O'Quinn, Jett *480 Williams, and Luke McConn, and for Angler-Dutch individually and consistently demanded
the other with Swonke. Van Dyke did not mention Greenberg payment for his legal work on that basis. This was also evident
Peden in his deposition testimony. Van Dyke's deposition from Swonke's e-mails and other written correspondence with
testimony reasonably can be read to conflict with his trial Van Dyke and others after the Halliburton lawsuit was settled.
testimony; deciding the credibility of witnesses and the Swonke testified that, before the meeting on April 24, 2002,
weight to be given to conflicting testimony is left to the jury's Van Dyke never mentioned that he thought the fee agreement
discretion. See City of Keller, 168 S.W.3d at 819. There is was with Greenberg Peden.
more than a scintilla of evidence to support the jury's finding
that Angler-Dutch contracted with Swonke individually when
In addition to this testimony from Swonke, there is other a client, along with "a generally applicable instruction on the
evidence the jury could have relied upon in determining the 'presumption of unfairness' that automatically arises when an
parties' intent. attorney contracts with an existing client."
Naylor and Peden both testified that the fee agreement Anglo-Dutch asked the trial court to include "general"
was between Anglo-Dutch and Swonke individually. Naylor instructions applicable to Questions 1, 2, and 3. This cluster
stated that the Greenberg Peden letterhead does not determine of questions pertained to the identity of the contracting
the identity of parties to the fee agreement because the firm parties, failure to comply with the fee agreement, and contract
had refused to be involved in the Halliburton lawsuit and damages. Anglo-Dutch requested the following "general"
Van Dyke knew that; therefore, the fee agreement described instructions:
how Swonke individually would assist Anglo-Dutch in the
Halliburton lawsuit and not how the firm would assist You are instructed that a law firm and its lawyers, including
Anglo-Dutch. Naylor reiterated that, despite the use of firm any "OfCounse1" lawyers who provide services for clients
letterhead, Van Dyke knew the firm would not represent of that firm, owe a fiduciary duty to the client. A lawyer
Anglo-Dutch and Swonke would do so. who works as an "Of Counsel" to a law firm is treated under
the law as an employee ofthat firm.
The jury also heard testimony from Nancy Strong, a McConn
A lawyer owes a fiduciary duty to a client and must act
& Williams attorney, *481 who worked on the Halliburton
with integrity and fidelity and in the best interest of his
lawsuit. She testified that she became aware that Anglo-
client. Some of the fiduciary duties a lawyer owes his client
Dutch resisted paying Swonke because Van Dyke was not
include the:
taking Swanke's calls or calling him back after having talked
to him on a daily basis for years. She told Swonke that Van 1. duty to be strictly and perfectly honest about fee
Dyke would try to renegotiate his contract and pay less than arrangements and to refrain from self-dealing;
what he bargained for as he had done with all the other people
he dealt with, including McConn & Williams in a previous 2. duty to act with absolute candor, openness, honesty, and
matter and the Anglo-Dutch investors. without any concealment or deception;
Based on our review of the record, we conclude that the 3. duty to represent the client with undivided loyalty,
keeping the client's best interest in mind;
evidence in this case is legally sufficient because it would
enable reasonable and fair-minded jurors to find that Anglo-
4. duty to inform the client of matters material to
Dutch contracted with Swonke individually. See City of
representation;
Keller, 168 S.W.3d at 827. The evidence also is factually
sufficient to support the jury's answer to Question 1. After 5. duty to provide the client at the outset with a clear
considering and weighing all the evidence, we conclude that and accurate explanation of the basis or rate of the fee to
the evidence is not so weak and the finding that the parties be charged under the fee agreement and how it is to be
intended the fee agreement to be between Anglo-Dutch and calculated;
Swonke individually is not so against the great weight and
preponderance of the evidence as to be clearly wrong and 6. duty to timely inform the client of a conflict of interest.
manifestly unjust.
You are further instructed that, with regard to the fee
agreement in question, it is the attorney's and law firm's
We overrule Anglo-Dutch's second and fifth issues.
burden to provide that the attorney and law firm acted
with perfect fairness, adequacy, *482 and equity with
C. Jury Instructions regard to the client. Where self-dealing on the part of the
In its third issue, Anglo-Dutch seeks reversal and a new trial attorney and/or the law firm is alleged by the client, a
on grounds that the trial court erroneously refused Anglo- presumption of unfairness automatically arises and it is
Dutch's requests for additional instructions to accompany the attorney's and law firm's burden to prove (a) that the
Question 1. Anglo-Dutch contends that the trial court should questioned transaction was made in good faith, (b) for a fair
have submitted additional instructions applicable to Question consideration, and (c) after full and complete disclosure of
1 identifYing the relevant fiduciary duties an attorney owes to all material information to the client.
Anglo-Dutch Petroleum Intern., Inc. v. Greenberg Peden, P.C., 267 S.W.3d 454 (2008)
pertaining to treatment of an "of counsel" attorney as a firm
You are further instructed that attorneys, law firms, and employee. Even assuming for argument's sake that this is a
attorneys performing services as "Of Counsel" to a law correct statement of the law, not every correct statement of the
firm have a duty, at the beginning of representation of a law belongs in the jury charge. A requested instruction can set
client on a contingency fee matter, to inform that client forth a correct statement of the law and still be unnecessary
of the basis or rate of the contingency fee. Also, the in the charge. See Acord v. General Motors Corp., 669
attorney must inform the client about the implication of a S.W.2d 111, 116 (Tex.l984); Maddoxv. DenkaChem. Cmp.,
contingency fee agreement. 930 S.W.2d 668, 671 (Tex.App.-Houston [1st Dist.] 1996,
no writ). The trial court acted within its discretion when it
Anglo-Dutch also asked the trial court include the following refused to include this unnecessary additional statement.
instructions as part of Question 1:
The remaining requested instructions pertain to Swanke's
In answering this question, you are instructed that the
fiduciary duty. Anglo-Dutch's *483 request to include
agreement must be construed as a reasonable person in the
"general" fiduciary duty instructions applicable to Question
circumstances of the client would have construed it.
1 is another manifestation of Anglo-Dutch's larger effort to
You are further instructed that the obligation of clarifYing link the contract interpretation issue with its contention that
attorney-client contracts falls on the attorney because ofthe Swonke breached his fiduciary duties.
attorney's greater knowledge and experience with respect
to fee arrangements and because of the trust the client has We already have concluded that Swonke's asserted breach
placed in the attorney. of his fiduciary duty does not influence the manner in
which the fee agreement is interpreted in this case. The
The trial court refused Anglo-Dutch's requests. trial court submitted a separate fiduciary duty question and
accompanying instructions describing the facets of that duty
[20] Because a trial court enjoys wide discretion in in Question 5. The jury answered "yes" to Question 5, which
determining which instructions should be included in the jury (a) asked whether Swonke complied with his fiduciary duty to
charge, our review is limited to determining whether the court Anglo-Dutch, and (b) placed the burden on Swonke to justifY
acted without reference to any guiding rules or principles. his conduct and establish his compliance with his fiduciary
See Tex. A & lvf Univ. v. Chambers, 31 S.W.3d 780, 783 duty. Legally and factually sufficient evidence supports
(Tex.App.-Austin 2000, pet. denied). A trial court's asserted the jury's "yes" answer to Question 5. The instructions
error in refusing an instruction is reversible only if it probably accompanying Question 5 describe the fiduciary duty that
caused the rendition of an improper judgment. Tex.R.App. P. Anglo-Dutch sought to apply to Question 1 via its requested
44.1; Dew, 208 S.W.3d at 456. instructions. The trial court acted within its discretion in
submitting fiduciary duty instructions as part of Question
[21] We conclude that the trial court acted within 5, and in refusing to submit another set of fiduciary duty
its discretion when it refused Anglo-Dutch's requested instructions applicable to Question 1.
additional instructions. Further, any asserted error in refusing
the requested instructions was harmless. In any event, the asserted charge error in refusing to include
fiduciary duty instructions applicable to Question I was
[22] With respect to the construction placed upon the harmless because fiduciary duty instructions were submitted
fee agreement by a reasonable person in the client's as part of a separate question that the jury answered adversely
circumstances, Question 1 already included a broad to Anglo-Dutch. See Times Herald Printing Co. v. A.H.
instruction that told the jury to "[c]onsider all of the facts and Bela Cmp., 820 S.W.2d 206, 214 (Tex.App.-Houston [14th
circumstances surrounding the making of the agreement, the Dist.] 1991, no writ) (omission of requested instructions was
interpretation placed on the agreement by the parties, and the harmless in light of separate question that applied requested
conduct of the parties." The existing instruction encompassed legal standard and was answered adversely to party seeking
the client's perspective ofthe fee agreement, and the trial court the instructions).
was not obligated to provide further instructions tailored to
a particular litigant's liking. Similarly, the trial court acted We overrule Anglo-Dutch's third issue.
within its discretion by rejecting the requested instruction
them to take less than they agreed to in their lawsuit funding
D. Admission of Evidence agreements so that the Halliburton lawsuit could be settled.
In its fourth issue, Anglo-Dutch asserts that a new trial Van Dyke also testified without objection that he did not pay
is required because the trial court erroneously admitted any of the 33 investors the amounts contracted for in the
evidence regarding other litigation involving Anglo-Dutch. funding agreements. Further, the trial court admitted evidence
Specifically, Anglo-Dutch challenges the trial court's that investors in the Halliburton lawsuit had sued Anglo-
admission of evidence relating to ( 1) "investor lawsuits," Dutch because it did not pay them the amounts for which they
"lawsuit funding agreements," or "Anglo-Dutch's payment, had contracted. Without objection, the jury was later again
nonpayment, or attempts at resolving any claims related informed of these investor lawsuits.
thereto;" (2) investor Michael Lore's testimony; and (3) any
unpaid fees to McConn & Williams or any other law firm. With respect to Michael Lore's testimony, the trial court found
that it was admissible for the limited purpose of stating that
Because we review a trial court's admission of evidence for he was an investor; of impeaching Van Dyke's testimony in
abuse of discretion, In re J.P. B.. 180 S.W.3d at 575, we must which he claimed the investors were happy with the payment
uphold the evidentiary ruling if there is any legitimate basis they had received from Anglo-Dutch; and in rebuttal to
in the record to support it. Owens-Corning Fiberglas Corp .. McConn's assertion that Van Dyke was a fine man. Lore
972 S.W.2d at 43. We will not reverse a trial court for an testified that he was displeased when Van Dyke asked him
erroneous evidentiary ruling unless the error was reasonably to accept less than he contracted for; that he didn't sign
calculated to cause and probably did cause the rendition of the release Van Dyke requested; that he was never told the
an improper judgment. See Tex.R.App. P. 44.1; see also Gee, Halliburton settlement amount by Van Dyke; that he sued
765 S.W.2d at 396. Anglo-Dutch to recover the amount originally contracted
for; that and he did not think Van Dyke was a fine man.
[23] We conclude that the trial court acted within its Only during cross-examination by Anglo-Dutch's attorney
discretion in admitting the challenged evidence. A key issue did Lore answer more particular questions regarding his
at trial focused on the parties' intent in signing the fee investor lawsuit.
agreement in light of the surrounding facts and circumstances.
Those facts and circumstances included the challenged Nancy Strong testified without objection that a dispute arose
evidence, which related in significant part to the parties' between Van Dyke and McConn & Williams because he
sophistication and intent. We cannot say that the trial court failed to pay the entire legal bill after the firm had successfully
abused its discretion in admitting evidence relating to the represented Van Dyke in an unrelated lawsuit against OPIC,
lawsuit funding agreements and investor lawsuits, or investor one of Anglo-Dutch's Tenge Field project partners. Strong
Michael Lore's testimony. also testified that Van Dyke owed the law firm of Looper
Reed legal fees for its work in the lawsuit against OPIC. 6
*484 Additionally, any error in admitting the challenged
Swonke testified without objection that Van Dyke could not
evidence was harmless because it was introduced at different
hire the Looper Reed law firm to represent Anglo-Dutch in
stages of the trial without objection by Anglo-Dutch. See
the Halliburton lawsuit because "as it tum[ ed] out, he owed
Volkswagen of Am., Inc. v. Ramirez, 159 S.W.3d 897, 907
Looper Reed quite a bit of money, too."
(Tex.2004) (error in admission is deemed harmless if the
objecting party permits the same or similar evidence to be
Finally, Anglo-Dutch has not established on this record
introduced without objection).
that the verdict turned on the challenged evidence. See
City of Brownsville, 897 S.W.2d at 753-54. This trial was
The trial court admitted evidence that Anglo-Dutch had
in significant part a credibility battle based on the jury's
entered into lawsuit funding agreements with investors
assessment ofSwonke and Van Dyke. Both testified at length.
to offset Anglo-Dutch's expenses during prosecution of
Anglo-Dutch has not demonstrated that the admission of
the Halliburton lawsuit. The trial court reasoned that this
evidence regarding collateral agreements and disputes during
evidence tended to show Swonke's individual legal work with
a lengthy trial featuring voluminous evidence likely caused
respect to Anglo-Dutch's investors. Evidence regarding these
the rendition of an improper judgment.
same lawsuit funding agreements was later admitted by the
trial court without objection when Van Dyke testified that he
We overrule Anglo-Dutch's fourth issue.
instructed Swonke to draft releases for investors to encourage
to the jury. Legally and factually sufficient evidence supports
the jury's finding that Swonke individually is a party to the
fee agreement with Anglo-Dutch, and that Greenberg Peden
*485 Conclusion is not. Legally and factually sufficient evidence supports
the jury's finding that Swonke complied with his fiduciary
We hold that the October 16, 2000 fee agreement was
duty to Anglo-Dutch. Anglo-Dutch's charge and evidentiary
ambiguous with respect to whether Anglo-Dutch contracted
complaints provide no basis for reversal.
with Swonke individually or with Greenberg Peden. The
trial court properly refused to construe the ambiguous fee
We affirm the trial court's judgment.
agreement against Swonke and properly submitted this issue
Footnotes
* Senior Justice J. Harvey Hudson sitting by assignment.
Swanke in fact joined a predecessor firm, which changed its name and composition from time to time. Because these changes do not
affect the disposition of this appeal, we refer to "Greenberg Peden" throughout this opinion.
2 In June 2001, Anglo-Dutch signed a promissory note in favor of Greenberg Peden for $231,749.16. Anglo-Dutch paid the note with
interest in December 2003, about two years after Greenberg Peden had dissolved.
3 This settlement spawned a separate series oflawsuits and appeals involving investors who signed litigation funding agreements in
return for a portion of Anglo-Dutch's recovery from the lawsuit against Halliburton and Ramco. After the jury returned its verdict
against Halliburton and Ramco, Anglo-Dutch sought to reduce amounts it owed to investors who financed the lawsuit and a number
of those investors sued Anglo-Dutch. See Anglo-Dutch Petroleum Int'l, Inc. v. Smith, 243 S.W.3d 776 (Tex.App.-Houston [14th
Dist.] 2007, pet. filed); Anglo-Dutch Petroleum Int'l, Inc. v. Littlemill Limited, No. 14--06-00921-CV, 2007 WL 2826900 (Tex.App.-
Houston [14th Dist.] Oct. 2, 2007, pet. filed); Case Funding Network, L.P. v. Anglo-Dutch Petroleum Int'l, Inc., 264 S.W.3d 38
(Tex.App.-Houston [1st Dist.] 2007, pet. filed); Anglo-Dutch Petroleum Int'l, Inc. v. Haskell, 193 S.W.3d 87 (Tex.App.-Houston
[1st Dist.] 2006, pet. denied). Anglo-Dutch's judgment against Ramco was reversed on appeal. See Ramco Oil & Gas Ltd., 207
S.WJd at 827.
4 The jury did not answer Question 4, asking what sum of money would compensate Greenberg Peden for its damages that resulted
from Anglo-Dutch's failure to comply with the fee agreement, because it was conditioned on finding that the fee agreement was
entered into on behalf of Greenberg Peden and not Swonke individually. The jury did not answer Question 6, asking the jury to
determine the amount of Swonke's fees under the fee agreement, because Question 6 was conditioned on the jury answering Question
5 in the negative and not answering Question 3 with a dollar amount. Further, the jury did not answer Question 7, asking if clear and
convincing evidence showed that Anglo-Dutch's harm resulted from malice or fraud, because it was conditioned on the jury answering
Question 5 in the negative. Lastly, the jury did not answer Question 8, addressing exemplary damages against Swonke for the harm
Anglo-Dutch suffered from Swonke's conduct, because it was conditioned on the jury answering Question 7 in the affirmative.
5 Anglo-Dutch does not challenge on appeal the jury's finding that it breached the fee agreement; the amount of contract damages
awarded for that breach; or the separate statutory fee award for litigating Swonke's contract claim under the disputed fee agreement,
which the parties opted to try to the court. Anglo-Dutch also does not challenge the rendition of a take-nothing judgment in favor
of Greenberg Peden.
6 Anglo-Dutch objected to this testimony only on hearsay grounds.
Governrnent VVorks,
APPENDIXD
Petroleum international, Inc. v. Greenberg ... , 352 S.W.3d 445 (2011}
54 fex. sup. ct: J .1669 ··-··· ··. ·.·.·.·.· . . . · . .
Whether a contract is ambiguous is a question
of law that must be decided by examining the
352 S.W.3d 445
contract as a whole in light of the circumstances
Supreme Court of Texas.
present when the contract was entered.
ANGLO-DUTCH PETROLEUM INTERNATIONAL,
13 Cases that cite this headnote
INC., and Anglo-Dutch (Tenge) L.L.C., Petitioners,
v.
GREENBERG PEDEN, P.C., and [2) Attorney and Client
Gerard J. Swonke, Respondents. Dealings Between Attorney and Client
Because a lawyer's fiduciary duty to a client
No. oS-0833. Argued Sept. 14, covers contract negotiations between them, such
2010. I Decided Aug. 26, 2011. contracts are closely scrutinized.
Rehearing Denied Dec. 16, 2011.
3 Cases that cite this headnote
Synopsis
Background: Former client brought action seeking
[3) Attorney and Client
declaration that it did not owe attorney contingency fees.
Dealings Between Attorney and Client
Attorney counterclaimed. The 61st District Court, Harris
County, John J. Donovan, J., entered judgment on a jury Part of the lawyer's duty is to inform the client of
verdict for attorney, and former client appealed. The Court all material facts with regard to contract between
of Appeals, William J. Boyce, J., 267 S.W.3d 454, affirmed. attorney and client; so that this responsibility is
Former client petitioned for review which was granted. not a mere and meaningless formality, the lawyer
must be clear.
3 Cases that cite this headnote
[Holding:) The Supreme Court, Hecht, J., held that
agreement was between client and law firm for which attorney
[4] Attorney and Client
was of counsel, rather than with attorney individually.
Dealings Between Attorney and Client
Only reasonable clarity as to material facts with
Reversed and remanded. regard to contract between attorney and client is
required, not perfection; not every dispute over
Wainwright, J., concurred in part, dissented in part, and filed the contract's meaning must be resolved against
opm10n. the lawyer.
1 Cases that cite this headnote
Lehrmann, J., dissented and filed opinion in which Medina,
and Green, JJ., joined.
[5] Attorney and Client
Dealings Between Attorney and Client
West Headnotes (10) Object of imposing duty on attorney to inform
the client of all material facts with regard to
contract between attorney and client is that the
[1) Contracts client be informed; thus, whether the lawyer has
Construction as a whole been reasonably clear must be determined from
Contracts the client's perspective.
Extrinsic circumstances
4 Cases that cite this headnote
Contracts
Ambiguity in general
[6) Contracts
Anglo-Dutch Petroleum International, Inc. v. 352 S.W.3d 445 (2011)
54fex. sup. ct. J. 1669
Language of contract Construing client-attorney agreements from
Contracts the perspective of a reasonable client in
Extrinsic circumstances the circumstances imposes a responsibility of
clarity on the attorney that should preclude a
Evidence
determination that an agreement is ambiguous
Showing Intent of Parties as to Subject-
in most instances; attorneys appreciate the
Matter
importance of words and are more able than most
Understanding the context m which an
clients to detect and repair omissions in client-
agreement was made is essential in determining
attorney contracts.
the parties' intent as expressed in the agreement,
but it is the parties' expressed intent that the Cases that cite this headnote
court must determine; extrinsic evidence cannot
be used to show that the parties probably meant,
[10] Attorney and Client
or could have meant, something other than what
Construction and operation
their agreement stated.
Attorney and Client
8 Cases that cite this headnote Questions for jury
A client's best interests, which its attorney is
[7] Attorney and Client obliged to pursue, do not include having a jury
Construction and operation construe their attorney-client fee agreements.
Legal fee agreement for contingency fee
Cases that cite this headnote
representation was between client and law firm
for which attorney was of counsel, rather than
with attorney individually, although agreement
used personal pronouns to refer to attorney,
Attorneys and Law Firms
where personal pronouns did not suggest that
only the individual attorney, to the exclusion of *446 Gregory S. Coleman, Richard Bernard Farrer, Yetter
other firm attorneys, would be working on the Coleman LLP, Craig T. Enoch, Enoch Kever PLLC, Mike A.
matter, one use of the word "I" clearly referred to Hatchell, Charles R. 'Skip' Watson Jr., Locke Lord Bissell
firm, client had never been individual attorney's & Liddell, LLP, Austin, TX, Donald B. McFall, Kenneth R.
non-firm client, and agreement was written on Breitbeil, McFall, Breitbeil & Smith, P.C., Brian K. Tully,
firm letterhead, and signed on the finn's behalf. JesseR. Pierce & Associates, P.C., Houston, TX, for Anglo-
Dutch Petroleum International, Inc.
2 Cases that cite this headnote
Rusty Hardin, Joe M. Roden, Ryan Kees Higgins, Rusty
[8] Attorney and Client Hardin & Associates, P.C., Robert M. 'Randy' Roach Jr.,
Construction and operation Daniel William Davis, Roach & Newton, L.L.P., Houston,
TX, Amy J. Schumacher, Roach & Newton, L.L.P., Austin,
Extrinsic evidence of attorney's and client's
TX, for Greenberg Pede, P.C.
intent could not be used to show the parties'
motives or intentions apart from the fee Linda Eads, Dedman School of Law, Dallas, TX, prose.
agreement; it could only provide the context in
which the agreement was reached. Christopher S. Jolms, Dawson Sodd Ellis & Hodge LLP,
Austin, TX, for Amicus Curiae Abrams Scott & Bickley,
3 Cases that cite this headnote L.L.P.
[9] Attorney and Client
Construction and operation
Anglo-Dutch Petroleum lntemationa!, Inc. v. 1)
54 tex. sur;:ct. ..r 1559·····
the firm; if the firm refused, Swonke could undertake the
Opinion representation individually. Swonke used personal stationery
-"Law Offices of Gerard J. Swonke Attorney at Law"-and
Justice HECHT delivered the opmwn of the Court, in
signed individually when representing clients who were not
which ChiefJustice JEFFERSON, Justice JOHNSON, Justice
also clients of the firm. Even in those situations, the firm sent
WILLETT, and Justice GUZMAN joined.
the bills and retained ten percent of the fees. Swonke agreed
The parties dispute whether an attorney fee agreement is to Van Dyke's proposal and dictated the following agreement
ambiguous. The client contends that an agreement on law firm ("the Fee Agreement"), which his secretary prepared on firm
letterhead, signed by a lawyer on behalf of the firm, is with letterhead and he signed on its behalf:
the firm, not with the lawyer personally. The lawyer counters
GREENBERG PEDEN P C.
that his use of personal pronouns in the agreement, as well
as surrounding circumstances, create an ambiguity that must TELEPHONE: (713) 627-2720
be resolved by a jury. We agree with the client and therefore
reverse the judgment of the court of appeals. 1 FACSIMILE: (713) 627-7057
WEBSITE: www.gpsolaw.com
I ATTORNEYS AND COUNSELORS AT LAW
Scott V. Van Dyke, president of Anglo-Dutch Petroleum TENTH FLOOR, 12 GREENWAY PLAZA HOUSTON,
International, Inc., asked Gerard J. Swonke, a lawyer TEXAS 77046
"of counsel" with the firm of Greenberg Peden, P.C., to
represent Anglo-Dutch as plaintiff 2 in a *447 suit against
Halliburton Energy Services, Inc. and Ramco Oil & Gas, October 16, 2000
Ltd. for disclosing confidential information concerning the
development of oil and gas prospects in the Tenge Field Mr. Scott V. Van Dyke
in Kazakhstan. Greenberg Peden had represented Anglo-
Anglo-Dutch Petroleum International, Inc.
Dutch on various matters for years and had drafted the
confidentiality agreement that would be central to the suit. Eight Greenway Plaza, Suite 900
Swonke had been responsible for Anglo-Dutch's initial
engagement as a firm client and had done much of its work. Houston, Texas 77046
He and Van Dyke were friends.
Re: Cause No.2000-22588; Anglo-Dutch (Tenge) et al.
The Tenge Field case was expected to be protracted and v. Ramco, et al; In the 151st Judicial District of Harris
difficult, and Anglo-Dutch could not afford to pay Greenberg County, Texas.
Peden's hourly rates, as it had done in the past, so it proposed
Dear Scott:
a 20% contingent fee. The firm declined. Anglo-Dutch had
fallen behind in its obligations to the firm, and the firm had This letter memorializes our agreement with respect
decided not to accept further business from Anglo-Dutch to me assisting you and/or the companies which you
until it became current. Plus Greenberg Peden believed that control (Anglo-Dutch) and the law firm of McConn &
it lacked the resources needed to prosecute the case on a Williams, LLP regarding the above-referenced matter.
contingent-fee basis. Swonke referred Van Dyke to another
firm, McConn & Williams, which took the case. In that regard, you have executed a Fee Agreement
with the law firm of McConn & Williams on March
But Swonke's continued counsel, based on his involvement 25, 2000, which is incorporated herein by reference.
in the events leading up to the litigation, was still needed, I agree to assist Anglo-Dutch and that firm with this
and Van Dyke asked him to assist McConn & Williams, lawsuit for proportionately the same percentage (20%)
again for a contingent fee. Swonke's arrangement with of any benefit to McConn & Williams reflected in
Greenberg Peden required him to offer new business to such agreement. However, I will not be responsible for
any expenses other than those I may personally incur.
352 S.W.3d 445 (2011}
Further, the proportions under which my fees shall be
calculated will be the ratio *448 of the hours I have October 17, 2000
spent or will spend on this matter relative to the hours
Mr. Gerard J. Swonke
the attorneys at McConn & Williams have spent or will
spend after the date the lawsuit was filed, rounded to Greenberg Peden P.C.
the next whole percentage. For example, if McConn &
Williams' attorneys spend 1,000 hours on the lawsuit Tenth Floor
after the date the lawsuit was filed and I spend 90 hours
12 Greenway Plaza
of my time towards the lawsuit, then by rounding up
to the nearest whole number, I would be entitled to
Houston, TX 77046
receive from you 2% ( 10% of20%) ofthe gross revenues
and other benefits recovered, if any, from this lawsuit.
In addition, should the Fee Agreement be amended,
you agree that I shall be entitled to the benefit of such Re: McConn & Williams, LLP
amendment. Attorney's Employment Agreement
If this comports with your understanding of our Dear Jerry:
agreement, please indicate by signing below and
Pursuant to our Fee Agreement dated October 16, 2000,
returning this letter to me.
please find enclosed a copy of the executed Attorney's
If you have any questions, please contact me. Employment Agreement with McConn & Williams,
LLP related to Cause No.2000-2258; Anglo-Dutch
Very truly yours, (Tenge) et al. Vs. Ramco, et al.; in the !51st Judicial
District of Harris County Texas.
GREENBERG PEDEN P.C.
This fee agreement with McConn & Williams, LLP
Is/ G.J Swanke
provides the basis for the Agreement between Greenberg
GERARD J. SWONKE Peden P.C. and Anglo-Dutch.
AGREED TO: Very truly yours,
SCOTT V. VAN DYKE, PRESIDENT OF Is/ Scott Van Dvke
ANGLO-DUTCH PETROLEUM INTERNATIONAL, Scott V. Van Dyke
INC.
President
DATED: _ _ __
Of significance is Van Dyke's reference to the Fee
The next day, Van Dyke signed the agreement and returned it
Agreement as "the Agreement between Greenberg Peden
to Swonke. He also wrote Swonke the following letter:
P.C. and Anglo-Dutch." Swonke received the letter but did
ANGLO-DUTCH PETROLEUM INTERNATIONAL not read it and thus did not respond.
Swonke continued to work on the case, and as provided by
EIGHT GREENWAY PLAZA, SUITE 900 the Fee Agreement, Greenberg Peden invoiced Anglo-Dutch
for expenses. But a year later, Greenberg Peden dissolved,
HOUSTON, TEXAS 77046 and Swonke moved to McConn & Williams, again in an "of
counsel" relationship. In a letter to Van Dyke, Swonke wrote
UNITED STATES
that he would not take the Anglo-Dutch files with him if Van
TEL: (713) 993-9303 Dyke *449 objected. 3 Van Dyke did not. Swonke continued
to work on the Tenge Field case at McConn & Williams as
FAX: (713) 993-9011 did other lawyers, including two who were also "of counsel".
email@anglo-dutch.com
Anglo-Dutch Petroleum international, Inc. v.
54 Tex. sup: cr J.1669
As the litigation wore on, Anglo-Dutch and McConn & We begin by considering what standards to apply in
Williams decided to retain additional counsel, and they hired construing lawyer-client contracts. We then apply those
John M. O'Quinn & Associates. McConn & Williams reduced standards to the Fee Agreement, first to its text, and then to
its 20% fee to 16-2/3%, and Anglo-Dutch agreed to pay the circumstances surrounding its execution.
O'Quinn 20%, for a total contingent fee of 36--2/3%. Still
later, Anglo-Dutch agreed to pay the fee net of expenses.
The case was tried to a plaintiffs' verdict and then settled for
A
$51 million. Anglo-Dutch's legal fees and expenses totaled
slightly over $20 million. [1] [2] [3] " 'Whether a contract is ambiguous is a
question of law that must be *450 decided by examining
A few days before the settlement was funded, Swonke the contract as a whole in light of the circumstances present
told Van Dyke that he expected to be paid under the Fee
when the contract was entered.' " 6 One such circumstance
Agreement not only for the 277 hours he worked while at
is the existence of a lawyer-client relationship between
Greenberg Peden but also for 1,022 hours he worked at
McConn & Williams. All the other lawyers at McConn & the parties. 7 Because a lawyer's fiduciary duty to a client
Williams were to be paid under the firm's agreement with covers contract negotiations between them, such contracts are
Anglo-Dutch. Greenberg Peden assigned its interest in the closely scrutinized. 8 Part of the lawyer's duty is to inform the
Fee Agreement to Swonke. The assignment, which Swonke client of all material facts. 9 And so that this responsibility
prepared and signed, recited that "Swonke executed [the is not a mere and meaningless formality, the lawyer must be
Fee Agreement] on behalf of (and while affiliated with) clear.
Greenberg Peden as an Of Counsel". Van Dyke offered to
pay $293,338.85 for Swanke's work on the case while at Clarity in fee agreements is certainly important to clients.
Greenberg Peden but refused to pay for the time spent by In an amicus brief supporting Anglo-Dutch, Professor Linda
Swonke at McConn & Williams. Eads explains:
Anglo-Dutch sued for a declaration that the Fee Agreement [Clients] need to know they can
was with Greenberg Peden, not Swonke personally. It depend on the firm they thought they
also sued Swonke for breach of fiduciary duty. Swonke hired to represent their interests. When
counterclaimed for breach of contract, asserting that he there is uncertainty about a firm's or
personally was party to the agreement. Swonke also alleged attorney's responsibility for a matter,
that Van Dyke had defrauded him. Based on Swanke's there is a real risk that loyalty to
testimony that his use of firm letterhead and the firm that client will become watery. And
signature block, and his characterization of the agreement if disputes arise about fees or other
in the assignment, were mistakes, and extrinsic evidence of issues, clients need to know who has
the parties' relationship, the trial court concluded that the ultimate authority to negotiate the
agreement was ambiguous and submitted the parties' dispute issue, firm management or just the
to the jury. The jury found that the Fee Agreement was with attorney working on the matter. 10
Swonke, that Swonke had complied with his fiduciary duty
to Anglo-Dutch, and that his damages were $1 million. The
Clarity is also important to lawyers. Professor Eads continues:
jury failed to find that Van Dyke had defrauded Swonke. The
trial court rendered judgment on the verdict, and the court of Law firms need to know whether they are entitled to
4 fees in order to budget their expenses and organizational
appeals affirmed.
strategy; firms need to know how much, and what scope
of, malpractice insurance to purchase; they need to know
We granted Anglo-Dutch's petition for review. 5
who their clients are in order to analyze potential conflicts
of interest; and firms need to know what matters are theirs
in order to staff them appropriately and ensure their clients'
II interests are protected.
Petroleum lntematlonai, Inc. v. r·m"'"'''r."'rn 352 S.W.3d 445 1)
54feX..sup. cXJ.1669
***
[Individual] lawyers will want the certainty that their law *452 B
firm stands behind them, that the firm's malpractice carrier
[7] On its face, the Fee Agreement is plainly one with
will defend them if necessary, and that the fee agreements
Greenberg Peden, not Swanke personally. The clear indicia of
they draft will be interpreted to avoid readings that would
the firm letterhead and signature on the firm's behalf are not
involve violations of the rules of discipline. Further, in
contradicted by the personal pronouns in the text. Swanke's
cases in which the existence of an ambiguity appears to
uses of 'T', "me", and "my" indicate that he would himself
*451 favor the lawyer, allowing a lawyer initially to
be working on the matter, which Anglo-Dutch certainly
benefit from the ambiguity might not be a good thing,
intended, but none suggests that other attorneys and staff at
even for the lawyer. By suing a former client, the lawyer's
Greenberg Peden would be excluded from the case any more
reputation often suffers. And if the ambiguity was drafted
than they had been from other Anglo-Dutch matters. Since
by the lawyer, Texas courts will have to decide how to
the fee was contingent on recovery and therefore not based
handle malpractice claims based on poor draftsmanship of
on any attorney's hourly rate, it would presumably make no
the fee agreement. 11 difference to Anglo-Dutch who besides Swanke worked on
the case as long as the fee was computed on his hours. One
A number of law firms also appearing as amicus cunae use of"''' clearly included the firm: "I will not be responsible
endorse these views. 12 for any expenses". The firm, not Swanke, invoiced the clients
for expenses, on firm letterhead. Moreover, the second-
[4] [5] Only reasonable clarity is required, not perfection; person pronouns show that the word "you" refers sometimes
not every dispute over the contract's meaning must be only to Van Dyke individually ("you and/or the companies
resolved against the lawyer. But the object is that the client be which you control"), sometimes only to Anglo-Dutch ("I
informed, and thus whether the lawyer has been reasonably would be entitled to receive from you"), and sometimes
clear must be determined from the client's perspective. to Van Dyke and his companies ("you have executed" the
Accordingly, we agree with the Restatement (Third) of the McConn & Williams fee agreement-Van Dyke signing for
Law Governing Lawyers that "[a] tribunal should construe a his companies). In sum, the pronouns indicate only inexact
contract between client and lawyer as a reasonable person in drafting; none says that despite the firm letterhead and firm
the circumstances of the client would have construed it." 13 signature, the agreement could only have been with Swanke
personally.
[6] Other circumstances surrounding the execution of
a contract may inform its construction, but "[t]here are Nor does the fee calculation, based solely on the hours
Swanke spent individually, suggest that others at Greenberg
limits." 14 We have said:
Peden were excluded from the work. Taking Swonlce's time
into account provided a way of limiting the fee. If anything,
An unambiguous contract will be enforced as written, and the rounding-up feature of the calculation might suggest
parol evidence will not be received for the purpose of a means of providing additional compensation for others
creating an ambiguity or to give the contract a meaning who did work on the case. Anglo-Dutch was to reimburse
different from that which its language imports. Only where expenses, which were billed by Greenberg Peden, not by
a contract is ambiguous may a court consider the parties' Swanke individually.
interpretation and "admit extraneous evidence to determine
Even if the Fee Agreement had expressly provided that
the true meaning of the instrument." 15
only Swanke would render the legal services required, the
Understanding the context in which an agreement was made
representation could still have been a firm matter. Anglo-
is essential in determining the parties' intent as expressed in
Dutch was already a Greenberg Peden client and had been
the agreement, but it is the parties' expressed intent that the
for years. Although Swanke had first engaged Anglo-Dutch
court must determine. Extrinsic evidence cannot be used to
as a client and had been responsible for most of its work,
show that the parties probably meant, or could have meant,
Anglo-Dutch had never been Swanke's non-firm client. From
something other than what their agreement stated. 16 Anglo-Dutch's perspective, nothing in the Fee Agreement
- --- ------~---------
Anglo-Dutch Petroleum International, Inc. v. Greenberg ... , 352 S.W.3d 445 (21:11 1)
54i'ex. sl.Ji]: ct:J: 1669 ww·w· ·• •·····.···.···.··.. ·.·.·.·..·....•
reasonably suggested that its relationship with its lawyers was [9] [10] Construing client-lawyer agreements from the
changing. perspective of a reasonable client in the circumstances
imposes a responsibility of clarity on the lawyer that should
preclude a determination that an agreement is ambiguous
in most instances. Lawyers appreciate the importance of
c
words and "are more able than most clients to detect and
[8] The trial court having determined the Fee Agreement to repair omissions in client-lawyer contracts." 17 A client's best
be ambiguous, the parties offered extensive extrinsic evidence interests, which its lawyer is obliged to pursue, do not include
of their intent in the ten-day trial. Given our conclusion that having a jury construe their agreements.
the agreement was not ambiguous, this evidence is oflimited
relevance. It cannot be used to show the parties' motives or The judgment of the court of appeals is reversed, and the case
intentions apart from the Fee Agreement; it can only provide is remanded to the trial court for further proceedings.
the context in which the agreement was reached.
Van Dyke was not an unsophisticated client; indeed, it
Justice WAINWRIGHT filed an opinion concurring in part
was he, not Swonke, who proposed the terms of the Fee
and dissenting in part.
Agreement. But for years Anglo-Dutch had been a client
of Greenberg Peden, not Swonke personally. Van Dyke Justice LEHRMANN filed a dissenting opinion, in which
knew Greenberg Peden was concerned that Anglo-Dutch was Justice MEDINA and Justice GREEN joined.
delinquent in its payments to the firm, but the Tenge Field
representation was on a contingent-fee basis. He also knew Justice WAINWRIGHT, concurring in part and dissenting in
that the firm had refused to be lead counsel in the case, but part.
the firm certainly had sufficient resources for a consulting Scott Van Dyke, president of Anglo-Dutch Petroleum
role. Nothing about the parties' relationship preceding the International, Inc., and his attorney Gerald Swonke signed an
Fee Agreement required *453 Van Dyke to recognize that engagement letter, dated October 16,2000, in which attorney
though the agreement purported to be with Greenberg Peden, Swonke agreed to represent Van Dyke's company, Anglo-
it was really with Swonke. Dutch, in litigation with Halliburton Energy Services, Inc.
Swonke was "of counsel" at the law firm of Greenberg
Events following the Fee Agreement do not cast the situation Peden P.C. Anglo-Dutch contends that under the terms of
in a different light. The day he signed the Fee Agreement for the letter, Swonke also bound Greenberg Peden to represent
Anglo-Dutch, Van Dyke wrote Swonke that the agreement Anglo-Dutch in the Halliburton litigation. The letter contains
was with Greenberg Peden. When the firm dissolved a year Swonke's references to expenses he would "personally incur",
later and Swonke moved to McConn & Williams, he treated fees that "I would be entitled to receive", the agreement for
all of Anglo-Dutch's files as having belonged to Greenberg "me" to assist you in the so-called Halliburton litigation, but
Peden. Even after the Tenge Field case settled and the present it is drafted on Greenberg Peden letterhead. Swonke contends
controversy began to emerge, Swonke stated that he had this was an oversight. Swonke testified that for a couple of
signed the Fee Agreement on behalf of Greenberg Peden and years prior to the Halliburton litigation, he had individually
obtained an assignment of its interest. represented Anglo-Dutch under his "of counsel" arrangement
at Greenberg Peden. Notwithstanding this evidence, the
In sum, the circumstances in which the Fee Agreement was Court disagrees with the trial court and concludes that the
executed do not suggest that the parties must have intended engagement letter is unambiguous and as a matter of law
something different from what they plainly stated. We hold bound the Greenberg Peden firm to represent Anglo-Dutch.
that the agreement was between Anglo-Dutch and Greenberg I therefore agree with mSTICE LEHRMANN'S dissent
Peden. that the engagement letter is ambiguous and with her other
departures from the Court's opinion. I write to explain another
basis for my disagreement with the Court's position.
III
*454 The Court holds the two parties to an agreement
that neither of them entered in October 2000, as their trial
Anglo-Dutch Petroleum International, Inc. v.
54fex:sui.J:crT1669 '''"''' ' '"' ,',',',',
testimony indicates. Van Dyke testified that he knew at the quite a turnabout for Anglo-Dutch as its litigation position
time of the engagement letter that Greenberg Peden would contradicts the knowledge of its president, who signed the
not represent Anglo-Dutch in any new matters, such as the engagement letter. Knowing that Greenberg Peden refused
Halliburton litigation. Why? Van Dyke explained. Anglo- to represent Anglo-Dutch in the Halliburton litigation, Van
Dutch was over $200,000 behind in paying Greenberg Peden, Dyke now asserts that the engagement letter unambiguously
and Greenberg Peden was not interested in further exposure did just that.
on contingency fee cases. The exchange on this point during
Van Dyke's testimony at trial is unequivocal, as Swanke told The jury heard all about the dispute from all four sides
him in February 2000 that Greenberg Peden was not his law -Swonke, Van Dyke, Greenberg Peden and another law
firm. firm Anglo-Dutch engaged (McConn & Williams}-and
found that the two signers of the engagement letter intended
Attorney: Mr. Van Dyke, my question was a more limited that Swanke, not Greenberg Peden, would represent Anglo-
one, and you can say, "No, he didn't tell me that," if you Dutch.
want.
I agree with the Court that attorneys owe fiduciary duties to
I'm just asking: Did he [Swonke] not tell you from
their clients in this context that include: exercising the utmost
the beginning that Greenberg Peden wouldn't represent
good faith and most scrupulous honesty toward clients;
you in any lawsuit here, no matter whether it was
ensuring that engagement letters are clear to the clients;
contingency or hourly at all until you-because you
fully and fairly disclosing all important information to clients
hadn't paid off that debt.
concerning the transactions; and explaining material changes
Van Dyke: Yes. in the arrangement, such as moving from one law firm to
another. Ambiguity in the fee agreement should be construed
Furthermore, Van Dyke knew that no Greenberg lawyers against the lawyer-drafter of the agreement. The *455 Court
would work on his files from that time forward. Harlan
and amici set these duties out in some detail. 1 I do not
Naylor, Greenberg's managing partner, explained to the jury
conclude, however, that application of these duties to this case
that the firm's lawyers were instructed not to work for Anglo-
means that an ambiguous contract should be designated clear
Dutch-"neither the shareholders nor the associates were and then enforced to a result that neither signer intended at
going to do any more work for Mr. Van Dyke on that case."
the time he signed it. At base, our task here is to enforce the
This testimony from Van Dyke and Naylor is undisputed.
parties' agreement. The duties and presumptions of counsel
Swanke explained to the jury that Greenberg had essentially
in such cases should help determine what the contractual
terminated Van Dyke as a client.
obligations are, not override the agreement they entered.
Greenberg Peden had told him in
I therefore agree with the arguments in ruSTICE
my presence they wouldn't do any
LEHRMANN'S dissent. However, because I agree that the
more work for him. I had been doing
judgment should remand the case to the trial court, I concur
work for him individually in my
in the Court's judgment, while respectfully dissenting from its
own capacity for-I don't know-
reasoning. Unlike the Court, I would remand for a new trial
two years, with Greenberg Peden not
and instruct the jury to be guided by the lawyer's fiduciary
having involvement at all.
duties in interpreting the ambiguous engagement letter.
The uncontested testimony at trial establishes that Greenberg
Peden's name partner (David Peden) told Van Dyke before he Justice LEHRMANN, joined by Justice MEDINA, and
signed the engagement letter that the Greenberg Peden firm Justice GREEN, dissenting.
would not represent Anglo-Dutch in any new matter, whether I agree that a court should review an attorney-client
contingency or hourly, because it was delinquent in paying agreement from the perspective of a reasonable person in the
the firm over $200,000 in legal fees. Swanke was present at client's circumstances when deciding whether it is subject to
that meeting. Nevertheless, Anglo-Dutch contends that the two or more reasonable interpretations. I disagree, however,
engagement letter signed after the meeting bound Greenberg with the Court's assumption that an agreement on firm
Peden to represent it in the Halliburton litigation. This is letterhead unambiguously creates an agreement with the firm.
Ang!o-Dutch Petroleum !ntemationa!, inc. v.
54Tex:sup:ct.J.f669 - -.·. ·.·.·.·.·.·.·.·.- · · · · ·
The use of letterhead must be viewed in light of clear Dutch's unpaid bills and a history of difficulty in collecting
evidence that the client understood the firm had refused to fees from Anglo-Dutch.
represent him in the case due to large unpaid legal bills, the
lawyer's testimony that his secretary mistakenly used firm Unable to retain Greenberg Peden, Anglo-Dutch, based
stationery, and the fact that the agreement referred solely to on Swonke's recommendation, hired the law firm of
the individual lawyer and contemplated a fee structure where McConn & Williams under a twenty percent contingency
only that lawyer's time would be compensated. I therefore fee arrangement. As the Halliburton lawsuit progressed,
am compelled to respectfully express my dissent. I would Van Dyke asked Swonke to serve as an advisor to
affirm the court of appeals' judgment and hold that the trial McConn & Williams because of his familiarity with the
court correctly determined the agreement was ambiguous and underlying contracts. After initially consulting for free,
properly submitted the agreement's meaning to the jury. Swonke requested compensation as his involvement in the
case became more substantial. McConn & Williams declined
to pay Swonke because the firm's contingency fee interest
was not large enough, so Van Dyke called Swonke directly
I. BACKGROUND
and offered to pay him for the work. It is undisputed that
Scott Van Dyke, the president of Anglo-Dutch, and Swonke, Van Dyke and Swonke negotiated the tenns of Swonke's
the attorney, had a long-standing relationship that began when representation and that Swonkc finally agreed to accept
Van Dyke worked at another company. Swonke was "of compensation in the form of a fraction of the total recovery
counsel" at the law firm of Greenberg Peden when the subject calculated based on the hours he worked, divided by the total
agreement was executed in 2000. One of the firm's founders hours billed by the McConn & Williams attorneys.
testified at trial that Greenberg Peden understood Swonke
sometimes contracted with clients the firm did not want to Swonke dictated the body of the one-page agreement and his
represent, and it was understood these were Swonke's "side secretary printed it on Greenberg Peden letterhead, with a
deals". Greenberg Peden had the right of first refusal for all Greenberg Peden signature block. Swonke signed his name
of Swonke's potential clients. under the Greenberg Peden signature block and sent the
agreement to Van Dyke, who signed and returned it the next
In 1997, when Anglo-Dutch committed to develop an oil day. Swonke testified he did not notice the letterhead or the
field in Kazakhstan with two business partners, Halliburton signature block and did not think to correct them at any point
and Ramco, Van Dyke contacted Swonke to prepare the because he and Van Dyke both knew the agreement was
necessary documents. It is undisputed that the parties personal to him.
understood that Greenberg Peden, not Swonke individually,
took on the representation at that time. No formal fee The day he signed the agreement, Van Dyke also drafted
agreement was signed. The joint project ended in early and sent Swonke a separate transmittal letter attaching a
2000 when Halliburton and Ram co allegedly *456 breached copy of the McConn & Williams contingency fee agreement.
the parties' confidentiality agreement and disclosed Anglo- The letter said that the McConn & Williams document
Dutch's confidential data to third parties. Van Dyke consulted "provides the basis for the Agreement between Greenberg
with Swonke, who advised him that Anglo-Dutch had viable Peden P.C. and Anglo-Dutch." At trial, Swonke questioned
claims against Halliburton and Ramco. Van Dyke's motives for sending the letter separately from the
main agreement, and for sending it at all as Van Dyke had
Around the same time, Anglo-Dutch ceased paymg previously given him the McConn & Williams agreement.
Greenberg Peden's bills and began accumulating a large Swonke testified that he did not read the letter, and would not
account payable to the firm. Anglo-Dutch's unpaid legal bills normally read a transmittal letter referring to a document he
prompted Greenberg Peden to stop working for Anglo-Dutch already had in his files.
in 1999. By early 2000, Anglo-Dutch owed Greenberg Peden
more than $200,000. It is undisputed that Van Dyke asked Swonke worked on the Halliburton lawsuit for 277 hours
if Greenberg Peden would represent Anglo-Dutch in the while at Greenberg Peden. After Greenberg Peden dissolved
lawsuit against Ramco and Halliburton, but the firm refused in 2001, Swonke joined McConn & Williams as "of counsel".
to take on any more work for Anglo-Dutch because of Anglo- McConn & Williams and Swonke agreed that he would not
share in the finn's fees from the Halliburton lawsuit, but
Anglo-Dutch Petroleum lntemationa!, Inc. v,
54 Tex. sup: ct. J. 1669
did not relay that agreement to Anglo-Dutch. Swonke did I agree with the standards the Court applies in determining
inform Anglo-Dutch of his move to McConn & Williams, whether this attorney-client agreement is ambiguous.
and told Anglo-Dutch he planned to take his client files with Ambiguity is determined by examining the contract as
him unless Anglo-Dutch objected. Receiving no objection, a whole in light of the circumstances present when the
Swonke worked 1,022 hours on the matter at McConn & contract was entered. Columbia Gas Transmission Corp.
Williams. v. New Ulm Gas, Ltd., 940 SW.2d 587, 589 (Tex.l996).
When an agreement's language is ambiguous in light of
*457 Anglo-Dutch won a $70.5 million verdict against the circumstances present when the parties entered into
Halliburton and the parties stipulated to $9.8 million in it, its meaning becomes an issue for the fact-finder. Jlvf.
attorney's fees. The verdict was appealed and Halliburton Davidson, Inc. v. Webster, 128 S.W.3d 223, 229 (Tex.2003);
ultimately settled the case for $51 million in 2004. A few see Columbia Gas, 940 S.W.2d at 589.
days before Halliburton was going to wire the attorneys'
fees portion of the settlement to individuals and firms I also agree that there are limits. Sun Oil Co. v. Madeley,
involved in the case, Swonke's name was removed from the 626 S.W.2d 726, 731 (Tex.l981 ). Parol evidence will not be
wiring instructions at Van Dyke's request. Noting the change, received to create an ambiguity or to give a contract a meaning
Swonke e-mailed Van Dyke asking how he wanted to handle different from that imparted by its language. David J Sacks,
his compensation. Prior to discussing payment, Van Dyke P.C. v. Haden, 266 S.W.3d447, 450-51 (Tex.2008)(citations
requested that Greenberg Peden assign any interest under omitted). Courts may not consider the parties' interpretation
the Anglo-Dutch agreement to Swonke, purportedly to avoid or "admit extraneous evidence to determine the true meaning
any possible problems with multiple claims for attorney's of the instrument" if the express language of the agreement
fees. Swonke contacted Greenberg Peden, and the no-longer may be interpreted in only one way. I d. at 450 (quoting Nat'!
operating firm's representatives agreed to the assignment in Union Fire Ins. Co. v. CBI Indus., Inc., 907 S.W.2d 517,
exchange for a ten percent fee from all amounts collected 520 (Tex.1995)). Ambiguity likewise does not arise simply
by Swonke from Anglo-Dutch, an amount consistent with because the parties advance conflicting interpretations of the
their original agreement that he would pay the firm a flat ten contract; rather, for an ambiguity to exist, both interpretations
percent to cover overhead for matters handled by Swonke must be reasonable. See Lopez v. Munoz, Hockema & Reed,
individually. L.L.P., 22 S.W.3d 857, 866 (Tex.2000); Nat'! Union Fire Ins.,
907 S.W.2d at 520.
Soon after obtaining the assignment letter, Van Dyke
informed Swonke that he'd consulted lawyers and determined *458 Further, as the Court observes and Anglo-Dutch
that Anglo-Dutch's contract was with Greenberg Peden and amici 1 contend, clarity is obviously critical, and courts
and not with Swonke individually. Accordingly, Van Dyke should therefore view the agreement from the perspective of a
refused to include the hours billed after Swonke left reasonable client to determine if it is susceptible to more than
Greenberg Peden in the contingency ratio, a position that one reasonable interpretation. Such a rule will protect clients
would reduce Swonke's total compensation due by over a from unscrupulous attorneys, reduce disputes, and create a
million dollars. Swonke asserted that the agreement was predictable rule that is in the best interest ofthe legal system,
personal to him and that he should be paid for all of the individual clients, lawyers, and law firms.
work he performed for Anglo-Dutch. It is undisputed that
had the trial court determined that the agreement was with And it is beyond dispute that attorney-client agreements
Greenberg Peden, Anglo-Dutch would be able to calculate are subject to heightened scrutiny by the courts because
the compensation ratio based solely on the 277 hours Swonke of the fiduciary nature of the attorney-client relationship.
billed while at Greenberg Peden. Anglo-Dutch argued that See Hoover Slovacek LLP v. Walton, 206 S.W.3d 557, 560
the 1,022 hours Swonke billed at McConn & Williams were (Tex.2006). The attorney, unlike a commercial party to an
covered by that firm's contingency percentage. agreement, bears a duty to ensure the client understands the
terms of the representation because of the trust the client
places in the attorney. See Levine v. Bayne, Snell & Krause,
II. APPLICABLE STANDARDS Ltd., 40 S.W3d 92, 95 (Tex.2001). To fulfill this duty, the
lawyer must be clear.
Ang!o~Dutch Petroleum !ntemationa!, Inc. v. Greenberg ... , 352 S.W.3d 445 (2011)
s4fex.suiJ·.ct:J.1669.. · · ··· ···
Like the Court, I believe that the approach set out
in the Restatement of the Law Governing Lawyers is Undoubtedly, Swanke's use of the Greenberg Peden
workable. See RESTATEMENT (THIRD) OF THE LAW letterhead in this case contributed to the agreement's
GOVERNING LAWYERS § 18, cmt. h. Under this ambiguity. But in times of increasing fluidity in the legal
approach, such agreements should be viewed from the profession, the solution the Court implements-to construe
perspective of a reasonable client, taking into consideration agreements based on the letterhead regardless of the parties'
the parties' relative bargaining power and other circumstances understanding of their terms-could lead to unnecessarily
surrounding the agreement. See id. A reasonable client to harsh results: a lawyer who made a mistake in choosing
whom this standard is applied is "a reasonable person in the stationery-or even used the only stationery available-
client's circumstances." Id. I do not agree, however, that any would lose. See Milton C. Regan, Jr. & Palmer T. Heenan,
potential ambiguities should be resolved against the attorney. Supply Chains and Porous Boundaries: The Disaggregation
ofLegal Services, 78 FORDHAML.REV. 2137,2191 (2010)
(noting that the economic downturn marks a "transition for
law firms less because of its immediate financial impact and
III. ASSESSING AMBIGUITY IN
more because it has highlighted and accelerated the trend
ATTORNEY-CLIENT AGREEMENTS
toward the disaggregation of legal services that had begun
The evaluation of whether an agreement is subject before it"). While the entire Court would hold lawyers to a
to multiple reasonable interpretations should be made standard of reasonable clarity, perfection is not required. The
from the perspective of a reasonable person in the Court's analysis of the agreement should focus on the terms as
client's circumstances. This does not mean, as Anglo- negotiated and agreed to, not on interpretations that the parties
Dutch and the Court presume, that the individual (and, at times, their counsel) have subsequently adopted in
client's interpretation prevails. Instead, the reasonableness light of the changed circumstances. While giving due weight
of potential interpretations will be viewed from the to a lawyer's fiduciary obligations, we should do so from a
reasonable client's perspective, taking into consideration reasonable, not predatory, client's perspective.
the circumstances surrounding the agreement's formation,
such as the parties' past dealings, their relative bargaining
1. Reasonableness of alternative interpretations
power, and the client's experience negotiating such
agreements to determine whether the agreement was "truly The Court holds that, even applying the Restatement's
negotiated". See id. If the court determines, as a matter approach, a reasonable client would only interpret the
of law, that the agreement is subject to more than agreement to be with Greenberg Peden. I disagree with that
one reasonable interpretation from a reasonable client's mechanical approach: application of the factors outlined in
perspective, construction of the agreement becomes a fact the Restatement leads me to conclude that the agreement
issue for the judge or jury to resolve. is subject to multiple reasonable interpretations under the
circumstances and thus ambiguous. The express terms of
The Court claims not to construe the agreement against the the Anglo-Dutch agreement cast doubt that it could only be
attorney. See Levine, 40 S.W.3d at 94; Lopez, 22 S.W.3d understood to form a contract with Greenberg Peden from a
at 860-61. However, in concluding that the circumstances reasonable client's perspective.
surrounding the agreement do nothing to negate the letterhead
on which the agreement was printed, the Court does just that. The Anglo-Dutch agreement invites more than one
The Restatement emphasizes that in applying the reasonable reasonable interpretation of the parties' intentions in spite of
client standard, courts should not ignore "the usual resources the fact that it was printed on Greenberg Peden letterhead
of contractual interpretation such as the language of the and signed under a Greenberg Peden signature block. First,
contract, the circumstances in which it was *459 made, the body of the agreement did not reference Greenberg
and the client's sophistication and experience in retaining and Peden while it referred to McConn & Williams by name
compensating lawyers or lack thereof." RESTATEMENT five separate times. It defined the client as "you and/
(THIRD) OF THE LAW GOVERNING LA WYERS § 18, or the companies which you control (Anglo-Dutch)" but
cmt. h. An agreement should be "construed in light of the exclusively used personal pronouns throughout to refer to
circumstances in which it was made, the parties' past practice Swonke. The one-page document repeatedly used language
and contracts, and whether it was truly negotiated." Id. such as "I agree to assist Anglo-Dutch and [McConn &
Anglo-Dutch Petroleum lntematlonal, Inc. v.
s4 l'ex. sup. i::iJ.1669
Williams] for proportionately the same percentage (20%) of and all other attorney or paralegal time will be billed at this
any benefit to McConn & Williams;" "the proportions under law firm's normal rate for that person"); In re Enron Corp.
which my fees shall be calculated will be the ratio of the hours Sec., Deriv. & ERIS'A Litig., 586 F. Supp. 2d 732, 767 and n.
I have spent ... relative to the hours [of McConn & Williams 32 (S.D.Tex.2008) (recognizing that law firm contingent fees
attorneys];" "if ... I spent 90 hours of my time towards the take resources into account by holding that "in light of the
lawsuit, ... I would be entitled to receive;" "I shall be entitled complexity and difficulty of the litigation, the fee percentage
to the benefit of any amendment;" "I will not be responsible would have to be sufficient to create adequate incentives for
for any expenses other than those I may personally incur;" the firm to dedicate the substantial resources, possibly over
and the like. a long period of time"). The agreement's compensation ratio
and the use of personal pronouns throughout, in conjunction
Second, the fee structure contemplated by Anglo-Dutch and with its use of Greenberg Peden letterhead and the Greenberg
Swonke, which based Swonke's compensation solely on the Peden signature block, make it open to more than one
hours he individually billed, creates an ambiguity, *460 reasonable interpretation. Accordingly, it must be read in
especially when compared to other firm fee agreements. The light of surrounding circumstances. See Columbia Gas, 940
applicable provision states that: S.W.2d at 589; Sun Oil, 626 S.W.2d at 731.
the proportions under which my fees
shall be calculated will be the ratio of 2. Circumstances surrounding the agreement
the hours I have spent or will spend
on this matter relative to the hours the It is undisputed that Van Dyke knew Greenberg Peden had
attorneys at McConn & Williams have refused to represent Anglo-Dutch in the Halliburton lawsuit
spent or will spend after the date the due to the large amount of unpaid legal bills and the history
lawsuit was filed, rounded to the next of difficulty in collecting fees from Anglo-Dutch. Van Dyke
whole percentage. admitted that he knew that Anglo-Dutch's account payable
exceeded $200,000, and that Greenberg Peden therefore
The four corners of the Anglo-Dutch agreement indicate that wanted to play no part in the lawsuit against Halliburton.
Anglo-Dutch and Swonke negotiated a contingency fee based Given this admission, it is difficult to see how a reasonable
solely on the hours Swonke (and no other Greenberg Peden client in Anglo-Dutch's position could have believed that the
attorneys or support staff) worked on the lawsuit, divided agreement was with the firm, rather than with Swanke.
by the total hours billed by "the attorneys at McConn &
Williams." 2 It is helpful to contrast this fee structure with the Moreover, it is undisputed that the contract in this case
structure of the law firm agreement in Sacks, which likewise arose in the context of genuine negotiations between Swanke
contained personal pronouns: and the client, both of whom had previous experience
*461 negotiating such agreements. Van Dyke testified that
negotiating agreements was a significant portion of his job.
My ... rate for this particular matter will be $200.00 per He testified that Anglo-Dutch retained other counsel prior to
hour. The other lawyers in my firm range from $150.00 switching to Greenberg Peden and had another attorney draft
to $200.00 per hour, and paralegals range from $50.00 to a demand letter to Halliburton prior to retaining McConn &
$100.00 per hour. You are responsible for all costs and Williams. Further, Van Dyke testified that he and Swanke had
expenses in the case as incurred. These expenses include, many discussions about contract drafting over the years, and
but are not limited to, copies; binding; fax transmissions; Swanke had even given Van Dyke advice on best practices
travel; lodging; parking; etc. when drafting agreements.
Sacks, 266 S.W.3d at 448-49.
While the Anglo-Dutch agreement stated Swonke would Concerns that an attorney could exercise undue influence
not be responsible for expenses, it did not anticipate over an existing client are valid, but they are minimized
compensation beyond one attorney's billable hours. Compare here because this agreement was truly negotiated. The
Anglo-Dutch, 267 S.WJd at 460-61 with Sacks, 266 agreement was not suggested by Swanke to an uninformed
S.W.3d at 448-49; In re Inslaw, Inc., 97 B.R. 685, and agreeable client-to the contrary, Van Dyke proposed
688 (Bankr.D.D.C.l989) (discussing an hourly law firm it to ensure that he would continue to receive the benefit of
agreement stating that "[m ]y partner ... will be billed at $170 Swonke's experience when McConn & Williams refused to
Anglo-Dutch Petroleum lntemationai, inc. v. Greenberg ... , 352 S.W.3d 445 (2011}
54Tex. sup. ct: J..1669
surrounding the agreement's formation, made it open to
compensate Swonke for his services. Although the Anglo-
multiple interpretations. The use of the letterhead could lead
Dutch agreement is only one page, both Van Dyke and
a reasonable client to believe the agreement was with the
Swonke testified that they negotiated its terms. Significantly,
law firm. However, it was every bit as reasonable, given
there is undisputed evidence that Van Dyke, not Swonke,
Greenberg Peden's repeated refusal to do more business
suggested the unusual compensation ratio that Swonke
with Anglo-Dutch, for the client to understand that it was
initially resisted, requesting a flat percentage fee instead.
a personal agreement with Swonke. Van Dyke's undisputed
testimony that the firm declined all further representation
Viewing the agreement from a reasonable client's perspective,
of Anglo-Dutch highlights the ambiguity resulting from
I disagree that Anglo-Dutch's interpretation is the only
the circumstances surrounding the agreement's formation.
reasonable one. Certainly, the use of personal pronouns in
an engagement letter does not alone create an ambiguity His one-paragraph letter to Swonke, describing it as the
agreement between "Anglo-Dutch and Greenberg Peden,"
as to whether the client hired a law firm or an individual
showed only Anglo-Dutch's self-serving interpretation ofthe
lawyer. To be reasonable, an alternative interpretation
agreement, not whether it would unmistakably be understood
must be one a client could reasonably understand from
that way by a reasonable client given the scope of the
the agreement's language and the circumstances of the
negotiation between the parties. Yet the negotiations between agreement. Moreover, because the letter is external to
the parties demonstrate an understanding that the law firm of the contract's formation, it is not properly considered m
determining whether the agreement is ambiguous.
Greenberg Peden was uninterested in future work for Anglo-
Dutch, and Swonke negotiated the compensation for himself
individually. The Court is persuaded by the letterhead on Consideration of the language of the actual contract and the
which the agreement was printed after its terms were already circumstances surrounding *462 its formation lead me to
conclude that the fee agreement was ambiguous as a matter
negotiated and accepted by both parties, and by the language
of law. Accordingly, I would hold that the trial court properly
of a Greenberg Peden assignment of interest letter, signed
submitted the agreement's construction to the jury. Because
years after the agreement was reached. Neither one bears
on the parties' understanding at the time they reached their the Court effectively construes the agreement against the
lawyer, I am compelled to respectfully express my dissent.
agreement.
I would hold that the language of the agreement, as shown
Parallel Citations
by the compensation ratio, the use of personal pronouns,
the use of Greenberg Peden letterhead and the Greenberg 54 Tex. Sup. Ct. I. 1669
Peden signature block, together with the circumstances
Footnotes
1 267 S.W.3d 454 (Tex.App.-Houston [14th Dist]2008).
2 An affiliate, Anglo--Dutch (Tenge) L.L.C., was also a plaintiff and is a petitioner here, wholly aligned with Anglo--Dutch Petroleum
International, Inc.
3 Swanke wrote to Van Dyke on November 6, 2001: "For many years, I have had the pleasure of representing you and your interests
through my association with Greenberg Peden, P.C. However, recently Greenberg Peden, P.C. has decided to dissolve. As a result,
I will have the pleasure of continuing to represent your interests as 'Of Counsel' with the law firm of McConn & Williams, L.L.P ....
I am planning to take your files with me to my new firm. If you do not wish for me to take your files, please contact me as soon as
possible so that we can make arrangements for you to take possession of them."
4 267 S.W.3d 454.
5 53 Tex.Sup.Ct.J. 758 (May 28, 2010).
6 David J. Sacks. F. C. v. Haden, 266 S.W.3d 447, 451 (Tex.2008) (per curiam) (quoting Columbia Gas Transmission Corp. v. New
Ulm Gas. Ltd., 940 S.W.2d 587,589 (Tex.l996)).
7 See Hoover Slovacek LLP v. Walton, 206 S.W.3d 557, 560 (Tex.2006) ("When interpreting and enforcing attorney-client fee
agreements, it is 'not enough to simply say that a contract is a contract There are ethical considerations overlaying the contractual
relationship.' "(quoting Lopez v. Muiio::. Hockema & Reed, L.L.P., 22 S.W.3d 857, 868 (Tex.2000) (Gonzales, J., concurring and
dissenting))).
Anglo-Dutch Petroleum International, Inc. v.
54 'rex. sl.Jr). ct. 3.1669 ......·. . ·.·.· ··
8 Keck, Mahin & Cate v. Nat'! Union Fire Ins. Co. of Pittsburgh, Pa., 20 S.W.3d 692, 699 (Tex.2000) ("Contracts between attorneys
and their clients negotiated during the existence of the attorney-client relationship are closely scrutinized."); Archer v. Griffith, 390
S.W.2d 735, 739 (Tex.1964) ("Although an attorney is not incapacitated from contracting with his client for compensation during
the existence of the relation of attorney and client, and a fair and reasonable settlement of the compensation to be paid is valid
and enforceable, if executed freely, voluntarily, and with full understanding by the client, the courts, because of the confidential
relationship, scrutinize with jealousy all contracts between them for compensation which are made while the relation exists." (internal
quotation marks omitted)); see also RESTATEMENT (THIRD) OF THE LAW GOVERNING LAWYERS§ 18, cmt. e (2000)
("Client-lawyer fee contracts entered into after the matter in question is under way are subject to special scrutiny .... ").
9 Keck, 20 S.W.3d at 699 (citing Schlumberger Tech. Corp. v. Swanson, 959 S.W.2d 171, 175 (Tex.l997)).
10 Brief of Amicus Curiae Linda S. Eads, Associate Professor of Law, Dedman School of Law, Southern Methodist University, in
Support of Petitioner at 2 L
11 ld. at 20-2 L
12 Brief of Amici Curiae Abrams Scott & Bickley, L.L.P., Arnold & Itkin LLP, Caddell & Chapman, Cornell, Smith & Mierl, LLP,
Dawson, Sodd, Ellis & Hodge LLP, Law Office of James M_ McCormack, and Quilling, Selander, Cummiskey & Lownds, P.C., in
Support ofPetitioner at 11-12. These firms describe themselves as follows: "Some ... are larger firms with multiple offices and dozens
of attorneys practicing before the Texas bar; others are small firms with just a few attorneys. Some represent primarily defendants,
some represent primarily plaintiffs, and some represent plaintiffs and defendants on a regular basis. The amici curiae are thus in a
balanced position to address the interpretation of fee agreements between lawyers and their clients." I d. at I.
l3 RESTATEMENT(THIRD) OF THE LAW GOVERNING LAWYERS§ 18(2).
14 Sun Oil Co. (Delaware) v. Made ley, 626 S.W.2d 726, 731 (Tex. 1981) ("If, in the light of surrounding circumstances, the language
of the contract appears to be capable of only a single meaning, the court can then confine itself to the writing. Consideration of
the facts and circumstances surrounding the execution of a contract, however, is simply an aid in the construction of the contract's
language. There are limits.").
15 David J. Sacks, P.C. v. Haden, 266 S.W.3d 447, 450-451 (Tex.2008) (per curiam) (citation omitted) (quoting Nat'! Union Fire Ins.
Co. of Pittsburgh, Fa. v. CBllndus., Inc., 907 S.W.2d 517, 520 (Tex.l995) (per curiam), and citing Universal C.l. T. Credit Corp.
v. Daniel, !50 Tex. 513, 243 S.W.2d 154, !57 (1951)).
16 See Gannon v. Baker, 818 S.W.2d 754, 755-756 (Tex.1991) (per curiam) ("The parol evidence rule applies only to contractual or
jural writings evidencing the creation, modification, termination or securing of a particular right or obligation. Brannon v. GulfStates
Energy Cmp., 562 S.W.2d 219, 222 (Tex.1977). The rule does not apply to mere statements or recitals of past facts.").
17 RESTATEMENT (THIRD) OF THE LAW GOVERNING LAWYERS§ 18 cmt. h.
1 See Brief of Amicus Curiae Linda S. Eads, Associate Professor of Law, Dedman School of Law, Southern Methodist University, in
Support of Petitioner at 21. See Brief of Amici Curiae Abrams Scott & Bickley, L.L.P., Arnold & Itkin LLP, Caddell & Chapman,
Cornell, Smith & Mierl, LLP, Dawson, Sodd, Ellis & Hodge LLP, Law Office of James M. McCormack, and Quilling, Selander,
Cummiskey & Lownds, P.C., in Support of Petitioner. The law firm amici state that they "are not suggesting that lawyers and law
firms should always lose a fee dispute." ld. at 8.
1 Two amicus briefs were submitted in support of Anglo-Dutch: one by Linda Eads, Associate Professor of Law at the Dedman School
of Law and another by the law firms of Abrams Scott & Bickley, L.L.P.; Arnold & Itkin LLP; Caddell & Chapman; Cornell, Smith
& Mierl, LLP; Dawson, Sodd, Ellis & Hodge LLP; Law Office of James M. McCormack; and Quilling, Selander, Cummiskey &
Lownds, P.C.
2 Anglo-Dutch's agreement with McConn & Williams provided for a flat 20 percent contingency fee, later reduced to 16 and 2/3
percent.
of 5 Thon-.scn Reu!erc;. No d2in1 original Governrnent VVorks.
APPENDIXE
CAUSE NO. 2004-20712
ANGLO-DUTCH PETROLEUM § IN THE DISTRICT COURT OF
INTERNATIONAL, INC. et al. §
Plaintiffs, §
§
vs. § HARJUSCOUNTY,TEXAS~
_.=: ~ ;
§ ...........9!:; C) ~
GREENBERG PEDEN, P.C., et al. § Jlllllllillll io C'-.1
Defendant. § 61 ST JUDICIAL DISTRICT ~ `` ~
... .... >-
Jail! ..c 10 352
S.W.3d 445 (Tex. 2011).
In addition, the Court has reviewed the briefs and heard the oral arguments of the respective
parties on this issue.
As to the threshold question, "Who are the parties to the Fee Agreement?" the Texas
Supreme Court has unequivocally answered that question. The Supreme Court, after extensive
briefing and oral arguments, has stated the Fee Agreement was "between Anglo-Dutch and
Greenberg Peden." Anglo-Dutch Petroleum Int'l, Inc., 352 S.W.3d at 453. As such, only
Swanke's work while at Greenberg Peden is covered by the Fee Agreement.
From that starting point, the Court looks to the Fee Agreement to determine the
appropriate formula for calculating the attorneys' fees. The Fee Agreement spells outs the
following:
I [Greenberg Peden] agree to assist Anglo-Dutch and that firm [McConn & Williams] in
this lawsuit [Cause No. 2000-22588; Anglo-Dutch (Fenge) eta!. v. Ramco et al., In the
RECORDER'S MEMORANDUM
This instrument is of poor quality 524
at the time of imaging
I 51st Judicial District Court ofHarris County, Texas] for proportionately the same
percentage (20%) of any benefit to McConn & Williams reflected in such agreement.
However, I will not be responsible for any expenses other than those I may personally
incur. Further, the proportions under which my fees shall be calculated will be the ratio of
the hours I have spent or will spend on this matter relative to the hours the attorneys at
McConn & Williams have spent or will spend after the date the lawsuit was filed,
rounded to the next whole percentage.
Fee Agreement, page 1. [not in original]
The Court reads the above recitals to result in the following formula:
Greenberg Peden Hours/McCmm Williams Hours= X (rounded up to the next whole
percentage) (XI). Xl x 20% = X2.
The Fee Agreement goes on to say that the factor X2 will be applied to "gross revenues and other
benefits received" to determine the attorneys' fees.
We know "gross revenues" to be $51,000,000.00 which represents the amount of the
negotiated settlement. In addition, the parties have agreed that Swanke spent 277 hours on the
representation while at Greenberg Peden and that McConn Williams spent 11,652 on the
representation. Hence, the Court makes the following calculation under the guidance of the
Texas Supreme Court, the Fee Agreement, and the undisputed evidence:
277 Hours/11,652 Hours= 2.37% (rounded to 3%). 3% x 20% = .006% .
.006 X $51,000,000.00 = $306,000.00
Thus, under the Fee Agreement the Court determines that the attorneys' fees due to Greenberg
Peden (and now Swanke by way of assignment) are $306,000.00. This determination will be
applied to and will be used to resolve all outstanding issues remaining in the above captioned
case.
MAY 1 5 2012
Signed _ _ _ _ _ _ _ _ _ _ __
525
APPENDIXF
CAUSE NO. 2004-20712
ANGLO-DUTCH PETROLEUM § IN THE DISTRICT COURT OF
INTERNATIONAL, INC. and §
ANGLO-DUTCH (TENGE), LLC, §
§ ~ ~
.... .!It
PLAINTIFFS, § .m
filil c- ~ = I
=
C'o.J
§ cuU
v. § HARRIS COUNTY, TEXAS ``~
§ ........ .c. ~
GREENBERG PEDEN, P.C. and § ,....us 2
GERARD J. SWONKE, § ~
§
DEFENDANTS. § 6lst JUDICIAL DISTRICT ~ !"
ORDER
The Court has considered Anglo-Dutch Petroleum International, Inc. and Anglo-Dutch
(Tenge) LLC's Motion for Interlocutory Summary Judgment (the "Motion"). After considering
the Motion, the responses and replies thereto, if any, and the arguments of counsel, if any, the
Court is of the opinion that the Motion is meritorious and should be GRANTED in all respects. It
is therefore,
ORDERED that Defendant Gerard J. Swonke TAKE NOTHING on his Breach of
Contract Counterclaim. It is further,
ORDERED that Defendant Gerard J. Swonke TAKE NOTHING on his request for
attorneys' fees pursuant to Tex. Civ. Prac. & Rem Code§ 38.001 et seq. It is further,
ORDERED that Defendant Gerard J. Swonke TAKE NOTHING on his Declaratory
Judgment Counterclaim. It is further,
ORDERED that Defendant Gerard J. Swonke is precluded, as a matter of law, from
recovering attorneys' fees under Tex. Civ. Prac. & Rem Code§ 37.009. It is further,
ORDERED that Anglo-Dutch is entitled to attorneys' fees as are equitable and just
pursuant to Tex. Civ. Prac. & Rem Code§ 37.009. It is further,
668
ORDERED that Defendant, Greenberg Peden, P.C., recover $4,063.70 prejudgment
interest through September 28, 2012. It is further,
ORDERED that Defendant, Greenberg Peden, P.C. recover prejudgment interest at the
rate of$1.73 per day from September 28, 2012, through the date of the entry of the judgment.
Signed this _ _ _ day o,_AY_2_3_20_\3_--jjl1-r
-2-
669
APPENDIXG
CAUSE NO. 2004-20712
ANGLO-DUTCH PETROLEUM § IN THE DISTRICT COURT OF
INTERNATIONAL, INC. et al. §
Plain tiffs, §
§
vs. § HARRIS COUNTY, TEXAS
§
GREENBERG PEDEN, P.C., et al. §
Defendant. § 61 5 T JUDICIAL DISTRICT
FINAL JUDGMENT
The parties to this final judgment are Anglo-Dutch Petroleum International, Inc., Anglo-
Dutch (Tenge), LLC (collectively "Anglo-Dutch"), Greenberg Peden, P.C. ("Greenberg Peden"),
and Gerald J. Swonke ("Swonke").
Trial
On January 13, 2014, this case was called for trial. All parties appeared and announced
ready for trial. A jury was impaneled and sworn; it heard the evidence and arguments of counsel.
In response to the Charge of the Court, the jury made findings that the Court received, filed, and
entered of record on January 15, 2014. The questions submitted to the jury and the jury's
findings are attached as Exhibit A and incorporated by reference.
Post-Trial
Swanke and Greenberg Peden moved the Court to rule as a matter of law that Anglo-
Dutch waived its trial, appellate, and post-remand attorneys' fees and costs claims. The Court
denied that motion. Swanke and Greenberg Peden also moved the Court to disregard the jury's
findings to Questions 2(2) and 4(B). The Court initially denied that motion, but upon
reconsideration has agreed to that motion. Specifically, after considering the evidence introduced
at trial, the jury's verdict, and the entire record, the Court finds that an award of attorneys' fees
or costs to Anglo-Dutch would not be equitable or just.
RECORDER'S MEMORANDUM
Th1s mstrument IS of poor qualrty
at the t1me of 1magmg
1302
Anglo-Dutch moved for a judgment notwithstanding the verdict. The Court denied that
motion.
Judgment Decrees
Based upon the Court's pretrial rulings, the jury's verdict, and the post-verdict arguments
of counsel, the judgment should be and is now hereby RENDERED as set forth below:
1. As requested in Plaintiffs' First Amended Petition at page 7, ~ 23(a), the Court
DECLARES that the Fee Agreement is between Anglo-Dutch and Greenberg Peden, and not
between Anglo-Dutch and Swanke individually.
2. As requested in Plaintiffs' First Amended Petition at 7 ~ 23(c), the Court
DECLARES that: (1) the numerator in the hours ratio in the fee formula in the Fee Agreement is
the hours Greenberg Peden worked on the Halliburton Lawsuit and does not include the hours
Swanke worked on the Halliburton Lawsuit while of counsel to McConn & Williams; and (2) the
hours Swanke worked on the Halliburton Lawsuit while of counsel to McConn & Williams are
included in the denominator in the fee fommla in the Fee Agreement.
3. The Court DECLARES that the fee owed under the Fee Agreement is based on
Anglo-Dutch's gross recovery in the Halliburton Lawsuit.
4. As requested in Plaintiffs' First Amended Petition at 7-8 ~ 23(d), the Court
DECLARES that the rounding up to the next whole percentage that is required by the Fee
Agreement occurs after the hours ratio is determined before, not after, the hours ratio is
multiplied by 20%.
5. Based on the parties' stipulations that (a) Anglo-Dutch's gross recovery in the
Halliburton Lawsuit was $51,000,000, (b) Swanke worked on the Halliburton Lawsuit for 277
hours while of counsel to Greenberg Peden, and (c) McConn & Williams' attorneys, and Swanke
Page 2 of 4
1303
while of counsel to McConn & Williams, worked on the Halliburton Lawsuit for a total of
11,652 hours, the Court DECLARES that Greenberg Peden (and now Swanke by way of
assignment) is owed $306,000.00 under the Fee Agreement.
6. The Court ORDERS Anglo-Dutch, jointly and severally, to pay Swonke
$306,000.00.
7. The Court ORDERS that Swonke take nothing on his breach of contract
counterclaim.
8. The Court ORDERS that Swonke take nothing on his request for attorneys' fees
pursuant to Texas Civil Practice and Remedies Code§ 38.001 et seq.
9. The Court ORDERS that Swonke take nothing on his declaratory judgment
counterclaim.
10. The Court ORDERS that Swonke take nothing on his fraud and exemplary
damages claims.
11. The Court ORDERS that Swonke is precluded, as a matter oflaw, from
.- recovering attorneys' fees under Texas Civil Practice and Remedies Code § 37.009.
12. The Court ORDERS that Swanke take nothing on his request for attorneys' fees
pursuant to Texas Civil Practice and Remedies Code§ 37.009.
13. The Comt ORDERS that Anglo-Dutch, jointly and severally, pay Swonke
$42,127.40 in prejudgment interest.
14. The Court ORDERS that Anglo-Dutch take nothing from Swonke or Greenberg
Peden on Angle-Dutch's claims for trial, appellate, and post-remand attorneys' fees and costs.
15. The Court (as required by T.R.C.P. 131) ORDERS that Swonke and Greenberg
Peden, jointly and severally, pay all costs of court expended or incurred in this action by Anglo-
Dutch.
Page 3 of 4
1304
16. The Court ORDERS that Anglo-Dutch, jointly and severally, to pay post-
judgment interest on the amount of$348,127.40 at the rate of8.25% per annum, compounded
annually, from the date of the Original Final Judgment until paid.
17. The Court ORDERS execution to issue for this judgment.
Finality of Judgment
All relief not expressly granted in this Final Judgment is he y DENIED. This
judgment is final, disposes of all claims and parties, and is appeal
MAY 1 3 2014
SIGNED this __ day o f - - - - - - - - - - - e - - 1 1 -
Page 4 of4
1305
ORIGINAL
.,.
....
0
..."'....
......
ANGLO-DUTCH PETROLEUM
CAUSE NO. 2004-20712
§
@
'... IN THE DISTRICT COURT
INTERNATIONAL, INC. and §
ANGLO-DUTCH (fENGE), LLC §
§ HARRIS COUNTY, TEXAS
vs. §
§
GREENBERG PEDEN, P.C. and § ..
.,
GERARD J. SWONKE § •
CHARGEOFTHECOURT
MEMBERS OF THE JURY:
After the closing arguments, you will go to the jury room to decide the case,
answer the questions that are attached, and reach a verdict. You may discus~ the case
with other jurors only when you are all together in the jury room.
'Remember my previous instructions: Do not discuss the case with anyone
l
else, either in person or by any other means. Do not do any independent
investigation about the case or conduct any research. Do not look up any words in
dictionaries or. on the Internet. Do not post information about the case on the
Internet. Do not share any special knowledge or experiences with the other jurors.
Do not use your phone or any other electronic device during your deliberations for
any reason. I will give you a number where others may contact you in case of an
emergency.
Any notes you have taken are for your own personal use. You may take your
notes back into the jury room and consult them during deliberations, but do not show
or read your notes to your fellow jurors during your deliberations. Your notes are
not evidence. Each of you should rely on your independent recollection of the
evidence and not be influenced by the fact that another juror has or has not taken
notes.
You must leave your notes with the bailiff when you are not deliberating. The
bailiff will give your notes to me promptly after collecting them from you. I will
make sure your notes are kept in a safe, secure location and not disclosed to anyone.
After you complete your deliberations, the bailiff will collect your notes. When you
EXHIBIT A
1306
are reJeased from jury duty, the bailiff will promptly destroy your notes so that
nobody can read what you wrote.
Here are the instructions for answering the questions.
1. Do not let bias, prejudice, or sympathy play any part in your
decision.
2. Base your answers only on the evidence admitted in court and on
the law that is in these instructions and questions. Do not
consider or discuss any evidence that was not admitted in the
courtroom.
3. You are to make up your own minds about the facts. You are the
sole judges of the credibility of the witnesses and the weight to
give their testimony. But on matters of Jaw, you must follow all
of my instructions.
4. If my instructions use a word in a way that is different from its
ordinary meaning, use the meaning I give you, which will be a
proper legal definition.
5. All the questions and answers are important. No one should say
that any question or answer is not important.
6. Answer "yes" or "no" to all questions unless you are told
otherwise. A "yes" answer must be based on a preponderance of
the evidence unless you are told otherwise. Whenever a question
requires an answer other than "yes" or "no," your answer must
be based on a preponderance of the evidence unless you are told
otherwise.
The tenn "preponderance of the evidence" means the greater
weight of credible evidence presented in this case. If you do not
find that a preponderance of the evidence supports a "yes"
.... answer, then answer "no." A preponderance of the evidence is

z documents admitted in evidence. For a fact to be proved by a
preponderance of the evidence, you must find that the fact is
more likely true than not true.
Page 2 of 12
EXHIBIT A
1307
7. Do not decide who you think should win before you answer the
questions and then just answer the questions to match your
decision. Answer each question carefully without considering
who will win. Do not discuss or consider the effect your answers
will have.
8. Do not answer questions by drawing straws or by any method of
chance.
9. Some questions might ask you for a dollar amount. Do not agree
in advance to decide on a dollar amount by adding up each
juror's amount and then figuring the average.
10. Do not trade your answers. For example, do not say, "I will
answer this question your way if you answer another question
my way."
11. Unless otherwise instructed, the answers to the questions must be
based on the decision of at least ten of the twelve jurors. The
same ten jurors must agree on every answer. Do not agree to be
bound by a vote of anything less than ten jurors, even if it would
be a majority.
As I have said before, if you do not follow these instructions, you will be
guilty of juror misconduct, and I might have to order a new trial and start this
process over again. This would waste your time and the parties' money, and would
require the taxpayers of this county to pay for another trial. If a juror breaks any of
these rules, tell that person to stop and report it to me immediately.
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EXHIBIT A
1310
8. Whether the fee is fixed or contingent on results obtained or uncertainty
of collection before the legal services have been rendered.
Answer with an amount for each of the following:
l. For representation for the prior appeal to the court of appeals.
Answer: __:I 0_____
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2. For representation for the prior appeal to the Supreme Court of Texas.
Answer: ..i/ 50; ct?O
------~------
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Page 6 of 12
EXHIBIT A
1311
QUESTION NO.3:
What is a reasonable fee for the necessary services of Anglo-Dutch
Petroleum International, Inc. and Anglo-Dutch (Tenge), LLC's attorneys, stated in
dollars and cents?
You are instructed to include only reasonable fees for necessary services that
relate to Anglo-Dutch Petroleum International, Inc. and Anglo-Dutch (Tenge),
LLC's declaratory judgment claims.
You are further instructed that if any attorney's fees relate solely to a claim
for which such fees are unrecoverable, a claimant must segregate recoverable from
unrecoverable fees. Intertwined facts do not make unrecoverable fees recoverable;
it is only when discrete legal services advance both a recoverable and
unrecoverable claim that they are so intertwined that they need not be segregated.
A party, however, may recover attorney's fees incurred in overcoming defenses or
counterclaims to a claim for which attorney's fees are recoverable.
You are further instructed to exclude from your answer any attorney's fees
that relate solely to claims for breach of fiduciary duty, fraud, negligence, and
gross negligence.
Factors to consider in determining a reasonable fee include
1. The time and labor required, the novelty and difficulty of the questions
involved, and the skill required to perform the legal services properly.
2. The likelihood that the acceptance of the particular employment will
preclude other employment by the lawyer.
3. The fee customarily charged in the locality for similar legal services.
4. The amount involved and the results obtained.
5. The time limitations imposed by the client or by the circumstances.
6. The nature and length of the professional relationship with the client.
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7. The experience, reputation, and ability of the lawyers or lawyers
E performing the services.
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EXHIBIT A
1312
8. Whether the fee is fixed or contingent on results obtained or uncertainty
of collection before the legal services have been rendered.
Answer with an amount, if any, for each of the following:
I. For representation in the trial court fi·om December 16,2011 to the
present.
Answer: _j/0
------~---------
2. For representation for an appeal in the court of appeals.
Answer: ::/r 0
------``-------
3. For representation at the petition for review stage in the Supreme Court
of Texas.
Answer: :flo
-----------------
4. For representation at the merits briefing stage in the Supreme Court of
Texas. ·
Answer: j/ 0
-------=---------
5. For representation through oral argument and the completion of
proceedings in the Supreme Court of Texas.
Answer: Ito
Page 8 of 12
EXHIBIT A
1313
QUESTION NO. 4:
State the amount of reasonable and necessary costs incurred, if any, by
Anglo-Dutch Petroleum International, Inc. and Anglo-Dutch (Tenge), LLC.
You are instructed to include only reasonable costs for necessary services
that relate to Anglo-Dutch Petroleum International, Inc. and Anglo-Dutch (Tenge),
LLC's declaratory judgment claims.
You are further instructed that if any costs relate solely to a claim for which
such costs are unrecoverable, a claimant must segregate recoverable from
unrecoverable costs. Intertwined facts do not make unrecoverable costs
recoverable; it is only when discrete costs advance both a recoverable and
unrecoverable claim that they are so intertwined that they need not be segregated.
A party, however, may recover costs incurred in overcoming defenses or
counterclaims to a claim for which costs are recoverable.
You are further instructed to exclude from your answer any costs that relate
solely to claims for breach of fiduciary duty, fraud, negligence, and gross
negligence.
Answer with an amount for each of the following:
a. For representation in the original trial court and post-trial motions
ending in February 2007.
Answer: 1fo
----------------------------
b. For representation through the prior appeal to the Court of Appeals
and to the Supreme Court of Texas.
Answer: :If/ ;}.. , 0 0 0
--------~--~-------------
c. For representation from the issuance of the Supreme Court of Texas'
December 16, 20 I I, Mandate to the completion of proceedings in the
trial court.
Answer:
----------------------------
Page 9 of 12
EXHIBIT A
1314
!-
Presiding Juror:
l. When you go into the jury room to answer the questions, the first
thing you will need to do is choose a presiding juror.
2. The presiding juror has these duties:
a. have the complete charge read aloud if it will be helpful to
your deliberations;
b. preside over your deliberations, meaning manage the
discussions, and see that you follow these instructions;
c. give written questions or comments to the bailiff who will
give them to the judge;
d. write down the answers you agree on;
e. get the signatures for the verdict certificate; and
f. notifY the bailiff that you have reached a verdict.
Do you understand the duties of the presiding juror? If you do not, please tell
me now.
Instructions for Signing the Verdict Certificate:
1. Unless otherwise instructed, you may answer the questions on a
vote of ten jurors. The same ten jurors must agree on every answer in the
charge. This means you may not have one group of ten jurors agree on one
answer and a different group often jurors agree on another answer.
2. If ten jurors agree on every answer, those ten jurors sign the
verdict.
If eleven jurors agree on every answer, those eleven jurors sign the
verdict.
If all twelve of you agree on every answer, you are unanimous and only
the presidingjuror signs the verdict.
Page 10of12
EXHIBIT A
1315
3. All jurors should deliberate on every question. You may end up
with all twelve of you agreeing on some answers, while only ten or eleven of
you agree on other answers. But when you sign the verdict, only those ten
who agree on every answer will sign the verdict.
Do you understand these instructions? If you do not, please tell me now.
Page 11 of 12
EXHIBIT A
1316
Verdict Certificate
Check one:
_ _ Our verdict is unanimous. All twelve of us have agreed to each and every answer.
The presiding juror has signed the certificate for all twelve of us.
Signature of Presiding Juror Printed Name of Presiding Juror
_ _ Our verdict is not unanimous. Eleven of us have agreed to each and every answer
and have signed the certificate below.
Vour verdict is not unanimous. Ten of us have agreed to each ;nd every answer and
have signed the certificate below.
Signature Name Printed
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10.
11.
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Signature of Presiding Juror Printed Name of Presiding Juror
Page 12 of12
EXHIBIT A
1317