Posted Apr 13, 2011 11:17 am CDT
A Texas law firm has sued a former client, contending that it is entitled to a “performance incentive bonus” of at least $18 million for achieving a global settlement of a family trust dispute below a threshold amount.
However, Albert G. Hill Jr. says he never agreed to pay Shamoun & Norman a bonus and was “in shock” when he discovered that his former personal attorney, solo Frances Johnson Wright of Dallas, had okayed the incentive when she engaged the law firm with his authorization, reports Texas Lawyer.
Shamoun & Norman sued Hill and several companies in 160th District Court in Dallas for fraud, breach of contract and fraudulent inducement. All the defendants deny the allegations and Hill is currently seeking more discovery concerning communications between Wright, who is not a defendant in the case, and the firm.
An attorney ethics expert tells the legal publication that the dispute will likely turn on whether Shamoun & Norman can prove that it had a written contract with Hill concerning the bonus payment, as required by Rule 1.04 of the Texas Disciplinary Rules of Professional Conduct.
“Contingency fees have to be in writing. That’s just black letter Texas law,” says James McCormack, a solo practitioner in Austin. “Any fee that’s contingent on an event, or I guess, non-event, has to be in writing.”
However the firm’s Gregory Shamoun says it is black-letter contract law that an offer can be accepted by performance, which is what happened here. “I never asked him for a bonus,” he says of Hill. “The bonus was his idea, which I accepted.”