Opinion ID: 895367
Heading Depth: 1
Heading Rank: 1

Heading: Reasonableness of alternative interpretations

Text: The Court holds that, even applying the Restatement's approach, a reasonable client would only interpret the agreement to be with Greenberg Peden. I disagree with that mechanical approach: application of the factors outlined in the Restatement leads me to conclude that the agreement is subject to multiple reasonable interpretations under the circumstances and thus ambiguous. The express terms of the Anglo-Dutch agreement cast doubt that it could only be understood to form a contract with Greenberg Peden from a reasonable client's perspective. The Anglo-Dutch agreement invites more than one reasonable interpretation of the parties' intentions in spite of the fact that it was printed on Greenberg Peden letterhead and signed under a Greenberg Peden signature block. First, the body of the agreement did not reference Greenberg Peden while it referred to McConn & Williams by name five separate times. It defined the client as you and/or the companies which you control (Anglo-Dutch) but exclusively used personal pronouns throughout to refer to Swonke. The one-page document repeatedly used language such as I agree to assist Anglo-Dutch and [McConn & Williams] for proportionately the same percentage (20%) of any benefit to McConn & Williams; the proportions under which my fees shall be calculated will be the ratio of the hours I have spent. . . relative to the hours [of McConn & Williams attorneys]; if . . . I spent 90 hours of my time towards the lawsuit, . . . I would be entitled to receive; I shall be entitled to the benefit of any amendment; I will not be responsible for any expenses other than those I may personally incur; and the like. Second, the fee structure contemplated by Anglo-Dutch and Swonke, which based Swonke's compensation solely on the hours he individually billed, creates an ambiguity, especially when compared to other firm fee agreements. The applicable provision states that: 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. The four corners of the Anglo-Dutch agreement indicate that Anglo-Dutch and Swonke negotiated a contingency fee based solely on the hours Swonke (and no other Greenberg Peden attorneys or support staff) worked on the lawsuit, divided by the total hours billed by the attorneys at McConn & Williams. [2] It is helpful to contrast this fee structure with the structure of the law firm agreement in Sacks, which likewise contained personal pronouns: My . . . rate for this particular matter will be $200.00 per hour. The other lawyers in my firm range from $150.00 to $200.00 per hour, and paralegals range from $50.00 to $100.00 per hour. You are responsible for all costs and expenses in the case as incurred. These expenses include, but are not limited to, copies; binding; fax transmissions; travel; lodging; parking; etc. Sacks, 266 S.W.3d at 448-49. While the Anglo-Dutch agreement stated Swonke would not be responsible for expenses, it did not anticipate compensation beyond one attorney's billable hours. Compare Anglo-Dutch, 267 S.W.3d at 460-61 with Sacks, 266 S.W.3d at 448-49; In re Inslaw, Inc., 97 B.R. 685, 688 (Bankr. D.D.C. 1989) (discussing an hourly law firm agreement stating that [m]y partner . . . will be billed at $170 and all other attorney or paralegal time will be billed at this law firm's normal rate for that person); In re Enron Corp. Sec., Deriv. & ERISA Litig., 586 F.Supp.2d 732, 767 and n. 32 (S.D.Tex. 2008) (recognizing that law firm contingent fees take resources into account by holding that in light of the complexity and difficulty of the litigation, the fee percentage would have to be sufficient to create adequate incentives for the firm to dedicate the substantial resources, possibly over a long period of time). The agreement's compensation ratio and the use of personal pronouns throughout, in conjunction with its use of Greenberg Peden letterhead and the Greenberg Peden signature block, make it open to more than one reasonable interpretation. Accordingly, it must be read in light of surrounding circumstances. See Columbia Gas, 940 S.W.2d at 589; Sun Oil, 626 S.W.2d at 731.