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Yetter Coleman Secures Favorable Ruling For Anglo-Dutch Petroleum Int’l, Inc. in Texas Supreme Court

The Texas Supreme Court issued its opinion in Anglo-Dutch Petroleum Int’l, Inc. v. Greenberg Peden, P.C., finding that attorney-client fee agreements must be construed “as a reasonable person in the circumstances of the client” would construe them. The case involved a dispute between an individual lawyer and a client over a fee agreement the lawyer drafted on law firm letterhead and executed with a law firm signature block. The lawyer claimed the agreement was a personal one between the client and him, and as a result entitled him to roughly $1 million in additional fees. He argued that the use of a firm letterhead and signature block had been a drafting mistake, and that personal pronouns in the body of the agreement as well as prior dealings with the client made the agreement ambiguous about the identity of the contracting parties.

The trial court agreed with the lawyer and charged the jury with interpreting the agreement. The Texas Supreme Court, in an opinion authored by Justice Hecht, held that the agreement was between the client and the law firm, as a matter of law. The Court noted that the existence of an attorney-client relationship means that a lawyer has a duty to be clear when drafting fee agreements. The Court reasoned that “[t]he clear indicia of the firm letterhead and signature on the firm’s behalf [were] not contradicted by the personal pronouns in the text” of the agreement. The Court also clarified that while circumstances surrounding a fee agreement’s execution–like the parties’ prior dealings–may play a role in an agreement’s construction, “there are limits” so that such extrinsic evidence may not be used to create ambiguity in a fee agreement a reasonable client would consider, on its face, as binding the client and law firm. Justice Lehrman, joined by Justices Medina and Green, dissented.  Justice Wainwright wrote separately in favor of a remand for a new trial with proper jury instructions. Greg Coleman, supported by Rich Farrer, argued the case for Anglo-Dutch in September 2010. Details from the full opinion can be found here.