Anglo-Dutch Tells Texas Court To Nix Interest on Atty Fees

Mar 3, 2016 | News

Anglo-Dutch Petroleum International told a Texas appellate court Thursday that a trial court wrongly awarded a “windfall” in interest on attorneys’ fees to a lawyer who represented the company in its suit alleging two rivals is closed confidential information, after Anglo-Dutch successfully appealed a verdict on the fee amount.

The amount of interest awarded to attorney Gerard Swonke related to his work representing Anglo-Dutch Petroleum International Inc. while working on the suit at two Houston law firms — Greenberg Peden PC and McConn & Williams LLP — should be eliminated completely or greatly reduced, Christopher S. Johns, who represents Anglo-Dutch, told the Fourteenth Court of Appeals panel during oral arguments.

A trial court in 2006 had awarded Swonke $1 million in attorneys’ fees, and the Fourteenth Court of Appeals upheld the award in 2008, but that award was overturned by the state Supreme Court in 2011 in a 54 decision, when it found the fee agreement only covered Swonke’s work while he was at Greenberg, and remanded the case back to the trial court.

In May 2014, the trial court ordered Anglo-Dutch to pay Greenberg $306,000 under the fee agreement, plus interest, bringing the total to $348,127.40, with interest continuing to accrue at an 8.25 percent rate until payment is made.

Johns told the court that because Swonke was not a prevailing party, and based on the Supreme Court’s judgment in its favor, the amount awarded must be adjusted.

“In this case, the Supreme Court looked at Swonke’s claims and it yelled timber,” he said. “It took everything down.”

Joe Roden, who represents Greenberg Peden and Swonke, argued that the trial court erred by essentially rewriting the fee agreement, which it did not have authority to do, and that his client still has not received a dime of the fees he’s owed.

“What this case is about is a predatory client who got rich off the efforts of his lawyers … and then said I’m not going to pay you at all,” Roden told the panel.

The case centered on a 2000 letter that Swonke, then an attorney of counsel at Greenberg Peden, wrote to Anglo-Dutch President Scott Van Dyke outlining an agreement for individual legal services in a suit Anglo-Dutch had filed against Halliburton Energy Services and Ramco Oil & Gas Ltd. The suit claimed the companies disclosed confidential information concerning the development of oil and gas prospects in Kazakhstan.

Swonke’s agreement was written on Greenberg Peden stationery, despite the law firm declining to represent Anglo-Dutch because of unpaid legal bills, according to the Supreme Court’s decision. Anglo-Dutch had argued that since the agreement was on Greenberg Peden letterhead, it had entered an agreement with Greenberg Peden, not Swonke.

When Greenberg Peden refused to represent Anglo-Dutch in the Halliburton suit, Swonke referred the company to McConn & Williams, which took the case. Greenberg Peden dissolved in 2001, and Swonke moved to McConn & Williams and continued to work on the Halliburton suit.

Anglo-Dutch settled the Halliburton suit for $51 million in 2004. Swonke then told Anglo-Dutch he expected to be paid under their 2000 fee agreement. Anglo-Dutch refused and sued Swonke in Texas court in 2006. Swonke, who claimed he mistakenly put the agreement on Greenberg Peden stationery, countersued for breach of contract.

The trial court concluded the agreement was ambiguous and let the matter go to a jury, which ruled in Swonke’s favor and awarded him $1 million. The state’s Fourteenth Court of Appeals upheld the verdict in 2008, and Anglo-Dutch appealed the decision to the Texas Supreme Court.

Anglo-Dutch is represented by Christopher S. Johns and Joseph R. Marrs of Johns Marrs Ellis & Hodge LLP, Ryan Bates of Bates PLLC and David Louie of McFall Breitbeil & Eidman PC.

Greenberg Peden is represented by Joe M. Roden and Rusty Hardin of Rusty Hardin and Associates, Jett Williams III of Henke Law Firm, William F. Hagans of Hagans Burdine Montgomery Rustay PC, and Robert Joseph Kruckemeyer.

The case is Anglo-Dutch Petroleum International Inc. v. Greenberg Peden PC and Gerald J.Swonke, case number 141400706cv, in the Fourteenth Court of Appeals of the State of Texas.

By Michelle Casady

Additional reporting by Keith Goldberg. Editing by Aaron Pelc.

Article originally published by Law360, Houston (March 3, 2016, 10:38 PM ET)

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