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Texas Supreme Court examines $48,000 an hour legal fee in H.L. Hunt case

The Texas Lawbook, October 16, 2017

By: Janet Elliott

The heir of Texas oil tycoon H.L. Hunt involved a bitter decade-long dispute with his son over control of a $1 billion trust wants the Texas Supreme Court to declare illegal his lawyers request to be paid $48,000 an hour for his legal services.

Attorney Gregory Shamoun says Albert Hill Jr. made an oral agreement to pay him a 50 percent contingency fee if he was able to settle the intense and complicated family fight – a feat he accomplished after only a few weeks working on the case.

When Hill Jr. refused to pay claiming the legal fee was ludicrously too high, Shamoun sued and won a $7.25 million award – or an estimated $48,000 an hour – from a jury.

The fee dispute is only the latest in a long and heated legal battle between Hill Jr. and his son, Albert Hill III. The two men have filed more than 20 lawsuits against each other and their lawyers in what the Texas appellate courts described as a "spider web of litigation." More than 100 different lawyers have worked on the case.

The idea of a settlement was deemed impossible when Hill Jr. asked the flamboyant Shamoun, who once called a donkey named Buddy to testify in a court case, to make a fresh attempt to settle all of the cases against Hill's son, who is known in Dallas as "Al Three."

To everyone's surprise, Shamoun successfully negotiated a global settlement for $40.5 million that left Hill Jr. in exclusive control of the family trust.

Shamoun says he was never compensated for his work and took Hill to court for breach of contract, citing an oral fee agreement with Hill that allegedly promised a 50-percent share of any settlement that fell between $55 million and $73 million.

The legal fee dispute reached the Texas Supreme Court last week with Shamoun's $7.25 million jury award hanging in the balance.

Critics of the award, including the State of Texas, say it represents a "shocking" contingency-fee rate of $48,000 per hour for 150 hours of work and is illegal under a state law that requires contingency fee contracts be signed and in writing.

As all things involving the Hills' litigation, the case took on an added twist when Hill Jr.'s lawyer, Gibson, Dunn & Crutcher partner James Ho, was one of two people nominated three weeks ago by President Trump to a judgeship on the U.S. Court of Appeals for the Fifth Circuit.

The other nominee is Texas Supreme Court Justice Don Willett, who is one of the judges deciding the Hill litigation.

Ho honed in on the contingency-fee nature of the award, saying the dollar amount isn't as much an issue as the illegal nature of an oral fee agreement that is contingent on the outcome of a case. Such an arrangement is illegal, Ho said, under the Texas "statute of frauds," a provision in the Government Code pertaining to attorney conduct.

"What the Legislature has chosen in this very historically sensitive area of contingency fee is that you have to get that signed into writing, specifically to make sure that the client has in fact" agreed to terms, Ho said.

Texas Solicitor General Scott Keller, who supports Hill Jr.'s contention that the oral fee agreement was unenforceable, said Shamoun deserved to be paid his regular hourly rate of $600 an hour for a total recovery of $90,000.

Former Texas Supreme Court. Chief Justice Wallace Jefferson, who represents Shamoun in the litigation, invited the justices to put themselves in the shoes of the jury who heard evidence about specific phone calls involving Shamoun, Hill, and Hill's longtime personal lawyer Frances Wright in reaching the oral agreement about Shamoun's compensation.

Hill was insistent that all of the cases be settled before an upcoming trial involving racketeering claims and perjury allegations, Jefferson said, and told Shamoun he wanted him "vested" in the outcome.

When Shamoun pushed to put the fee agreement in writing, Hill denied even agreeing to the terms and then fired Shamoun, Jefferson said.

"You read this testimony and it becomes clear," Jefferson said. "The jury was asked what is reasonable under these circumstances."

Jefferson said the jury's award was based on the reasonable value of Shamoun's services and was less than the amount he would have been due under the oral agreement.