Attorney Ad Litem's Motion To Retain Counsel

Transcription

1 NO. C-l-PB Filed: 5/26/2016 7:51:12 AM Dana DeBeauvoir Travis County Clerk C-1-PB Blair Hicks In Re; In the Probate Court No. 1 of TEL Offshore Trust Travis County, Texas Attorney Ad Litem's Motion To Retain Counsel Glenn M. Karisch ("Ad Litem"), who has been appointed attorney ad litem by this Court to represent the interests of the unit holders of TEL Offshore Trust (the "Trust") who were served by publication and did not answer or appear in this proceeding (collectively referred to as the "Defendants"), files this motion for the court to authorize Ad Litem to retain Scott, Douglass & McConnico ("SDM") as counsel to represent Ad Litem and to assist him in this proceeding. 1. The Bank of New York Mellon Trust Company, N. A., as Corporate Trustee, and Gary C. Evans, Jeffrey S. Swanson, and Thomas H. Owen, Jr., as Individual Trustees (collectively, the "Trustees"), filed this proceeding to modify and terminate the Trust. The Court appointed Ad Litem to represent the Defendants. 2. The Court severed the matters related to the modification of the Trust and sale of Trust assets sought in the Trustees' petition into Cause No. C-l-PB All other matters remain pending in this proceeding, including Ad Litem's counterclaim for accounting and RNR Production Land and Cattle's ("RNR's") counterclaim for accounting. Discovery is ongoing and it is likely that other claims related to the Trust will be filed. This matter is set for trial on November 7, The trust and fiduciary issues raised in the Counterclaim are within Ad Litem's expertise. However, this matter involves oil and gas issues and issues involving claims beyond Ad Litem's expertise. Ad Litem anticipates that the aspects of this matter, including

2 discovery, procedural and trial matters, will overwhelm Ad Litem and his firm. The potential amount in controversy in this proceeding exceeds $1,000,000. The Trustees are represented by Andrews Kurth LLP and may be retaining other coxmsel. The Trustees' counsel will have greater manpower than Ad Litem, making retention of counsel necessary and appropriate to protect the interests of the Defendants. 4. SDM has been assisting Ad Litem in this matter. Attached as Exhibit A is a proposed legal services agreement with SDM which is subject to the approval of the Court. The agreement provides that SDM's fees and expenses will be submitted to the Court for approval prior to being paid. Ad Litem believes that the terms of the agreement are fair and reasonable and asks the Court to approve retention of SD&M and to approve this agreement. 5. SDM has considerable experience in a variety of oil and gas matters. Its lawyers have handled numerous lawsuits and arbitrations involving oil and gas issues, such as disputes over royalty calculation, illegal drainage, well and reservoir damage, subsurface trespass, (including alleged trespass by fi-acking), property ownership, and rights under area of mutual interest agreements and joint operating agreements. Its lawyers have tried cases to juries, judges and arbitrators and have also handled a variety of oil and gas matters on appeal. A list of recent oil and gas appeals SDM handled includes: Warren v. Chesapeake Exploration, LLC., 759 F.3d 413 (5th Cir. 2014) (royalties). Dvorin v. Chesapeake Exploration, LLC, 2013 WL (N.D. Tex. 2013) (royalties/class action). Coastal Oil & Gas Corp. v. Garza Energy Trust, 268 S.W.3d 1 (Tex. 2008) (subsurface trespass, breach of duty of good faith pooling, and breach of implied covenants to develop, market, and protect against drainage). Attorney Ad Litem's Motion To Retain Counsel Page 2

3 El Paso Production Oil & Gas v. Texas State Bank, 2007 WL (Tex. App. San Antonio 2007, pet. denied) (Pugh clause). Railroad Comm'n of Texas v. WBD Oil & Gas Co., 104 S.W.3d 69 (Tex. 2003) (review of field rules). Coastal Oil and Gas Corporation v. Roberts, 28 S.W.3d 759 (Tex. App. Corpus Christi 2000) pet. granted, motion to dismiss granted in part, judgment set aside (Tex. Mar. 21, 2002) (royalties/lease termination). de los Santos v. Coastal Oil & Gas Corporation, 1999 WL (Tex. App. Dallas 1999, pet. denied) (not for publication) (companion case to Yzaguirre v. KCS Resources, Inc., 53 S.W.3d 368 (Tex. 2001)) (royalties). H.G. Sledge, Inc. v. The Prospective Investment and Trading Co., Ltd., 36 S.W.3d 597 (Tex. App. ^Austin 2000, pet. denied) (rights to challenge Railroad Commission decision). Garza v. Maddux, 988 S.W.2d 280 (Tex. App. Corpus Christi 1999, pet. denied) (title). Bank One. Texas v. U.S F.3d 397 (5th Cir. 1998) (title). Concord Oil Co. v. Pennzoil Exploration and Prod. Co., 966 S.W.2d 451 (Tex. 1998) (size of mineral interest conveyed). Lenape Resources Corp. v. Tennessee Gas Pipeline Co., 925 S.W.2d 565 (Tex. 1996) (application of UCC to gas contract). Transamerican Natural Gas Corp. v. Finkelstein, 933 S.W.2d 591 (Tex. App. San Antonio 1996, writ denied) (royalties/take-or-pay issues). 6. SDM also has one of the largest oil and gas regulatory practices in Texas. For over thirty years, the firm has represented clients before the Railroad Commission of Texas in all areas of the Commission's jurisdiction, including oil and gas matters, gas utility matters, and surface mining and reclamation matters. 7. In addition, SDM has extensive experience in litigating fiduciary duty claims, both suing and defending trustees, executors, officers, directors, attomeys and other fiduciaries. Its lawyers have tried such cases before judges, juries and arbitrators. Attorney Ad Litem's Motion To Retain Counsel Page 3

4 8. Ad Litem believes that retaining SDM is reasonable and necessary to represent the Defendants and to protect their interests. 9. Attached is SD&M's proposed legal services agreement. The agreement provides that SD&M's fees and expenses will be submitted to the Court for approval prior to being paid. Ad Litem believes that the terms of the agreement are fair and that the agreement should be approved. 10. Section of the Texas Trust Code permits the Court to make an award of costs and reasonable and necessary attorney's fees as may seem equitable and just. It is equitable and just to cause SDM's fees and expenses to be taxed as costs and to be paid from the Trust during the pendency of this proceeding, subject to reallocation as may seem equitable and just at the conclusion of this proceeding. 11. The Court has authority to grant the relief requested in this motion under Sections and of the Texas Trust Code. Prayer On behalf of the Defendants, Ad Litem prays: that the Court will authorize Ad Litem to enter into the legal services agreement with SD&M in the form which is attached to this motion; that, upon approval of SD&M's fees and expenses by the Court, the fees and expenses will be taxed as costs and the Court will order the Trustees to pay the fees and expenses from the Trust during the pendency of this proceeding; that those fees and expenses shall be subject to reallocation as may seem equitable and just at the conclusion of this proceeding; and that the Court will grant such other and further relief to which Defendants or Ad Litem justly may be entitled. Attorney Ad Litem's Motion To Retain Counsel Page 4

5 Respectfully submitted, THE KARISCH LAW FIRM, PLLC By: /s/ Glenn M. Karisch Glenn M. Karisch State Bar No Congress Avenue, Suite 1910 Austin, TX (512) (telephone) (512) (fax) Attorney Ad Litem Attorney Ad Litem's Motion To Retain Counsel Page 5

6 Notice of Hearing A hearing on this motion is set for 3 p.m. Thursday, June 9, 2016, in Travis County Probate Court No. 1. Attorney Ad Litem's Motion To Retain Counsel Page 6

7 CERTIFICATE OF SERVICE I hereby certify that, on or about May 26,2016, a true and correct copy of the foregoing has been served or will be served in accordance with the Court's orders regarding service dated September 28, 2015, and January 21,2016. /s/glenn M. Karisch Glenn M. Karisch Attorney Ad Litem's Motion To Retain Counsel Page 7

8 onntt SCOTT DOUGLASS McCONNICO Exhibit "A" January 5, 2016 Via Glenn M. Karisch The Karisch Law Firm, PLLC 301 Congress Avenue, Suite 1910 Austin, Texas Re; In Re TEL Offshore Trust, Cause No. C-1-PB in the Probate Court No. 1 of Travis County, Texas. Dear Glenn: Thank you for asking Scott Douglass & McConnico ("SDM," "we" or "us") to represent you in your capacity as attorney ad litem for the interests of the unit holders of TEL Offshore Trust ("Trust") who were served by publication and did not answer or appear in the above proceeding, i will refer to you acting in this capacity as "you" or "client." This letter will set forth the terms of our representation. SCOPE OF REPRESENTATION \A/e will represent you in the above-described Probate Court proceeding ("Matter"). This engagement will involve: (i) the investigation of facts and evaluation of potential claims that you may have in connection with the Matter, including a counterclaim against the trustees of the Trust for breach of fiduciary duty and possibly other claims (ii) preparing pleadings, written discovery, requesting and reviewing documents, producing documents, taking depositions and arguing motions before the court and, if necessary, full trial of the matter; (iii) negotiating settlement of any claims; and (iv) such other services incident to the defense of this matter as are determined to be necessary. You understand and agree that our representation is limited to the above Matter, and that SDM is not undertaking to represent or advise you on matters other than the above Matter. If you request, and SDM agrees, to represent you in additional matters, SDM's representation in any additional matters will be governed by the terms in this letter, unless you and SDM agree otherwise in writing Scott Douglass S McConnico LLP i Attorneys at Law 303 Colorado Street, Suite 2400, Austin, TX ' p : I f: !

9 Exhibit "A" You understand and agree that SDM represents you only and does not represent your businesses or their parents, subsidiaries, affiliates, partners, guarantors or any of their officers, directors, employees, investors or stockholders. If SDM agrees to represent any of your businesses or their parents, subsidiaries, affiliates, partners, guarantors or any of their officers, directors, employees, investors or stockholders, SDM and that additional client will confirm the representation in writing. COOPERATION To enable us to effectively perform the services contemplated, it is essential that you disclose fully and accurately all facts and keeps us apprised of all developments relating to the Matter. You have agreed to cooperate fully with us and to make its representatives available to attend meetings, conferences, hearings and other proceedings. FEES AND EXPENSES Our fees will be based on hourly rates applied to the time spent working on the case. You understand and agree that the work for which we charge fees will include work done in connection with this Matter prior to the Probate Court's approval of this agreement (assuming that the Court approves the agreement). Since you are serving as attorney ad litem, you personally are not responsible for paying our fees and expenses. We understand that we will have to seek approval of our fees from the Probate Court. We also understand that the Probate Court limits the hourly rates it typically approves and also does not approve fees for certain types of work. We are familiar with the Probate Court's Standards for Court Approval of Attorney Fee Applications. I propose that we staff this case with two partners. I will be the partner in charge. My partner, Cindy Saiter, will assist as needed. This case primarily involves the fiduciary duties of the trustees of the Trust, which holds oil and gas properties. Both Cindy and I have considerable experience litigating fiduciary duty cases, both in probate proceedings and otherwise. In addition, I and others in my firm have significate experience in oil and gas litigation. I've been practicing since Cindy has been practicing since We both have practiced in probate proceedings for over 11 years. In light of our experience, but also mindful of the Probate Court's limitation on hourly rates, I propose that both Cindy and I charge $350 per hour. We will use associates as needed and we will charge them at $195 per hour. Our paralegals will be charged at $95 per hour. We also use assistants to paralegals to keep the fees as economical as possible. Their rates will be $50 per hour. By signing below you acknowledge that these are reasonable rates for work of this nature, and you agree to seek approval of fees calculated at these rates. If the Court does not approve the rates quoted in this letter, we reserve the right to decline the representation. We understand that payment of our fees is dependent on the Probate Court approval of our attomey fees applications. If the Court fells to approve our fees in amounts that we believe are acceptable, we reserve the right to withdraw from the representation. We also

10 Exhibit "A" reserve the right to withdraw from the representation if there are delays in the payment of our fees that we deem to be unacceptable. After we investigate the facts and issues, we may determine that this matter requires a special expertise that justifies higher billing rates. In that event we reserve the right to ask the Probate Court to approve rates higher than those set forth in this letter. If we make such a request and the Court declines it, we reserve the right to withdraw from the representation. If we seek to withdraw from the representation as discussed above, you agree to support our withdrawal. I would like to add a note about fees. In lawsuits fees frequently grow large quickly and can exceed expectations. It has been my experience that when this happens it happens for two primary reasons. First, such cases evolve as the facts are developed. The case we actually try could differ greatly from the case as it appears at the outset. It is difficult to predict how the case will evolve through this process and what additional work might become necessary as a result. Second, the amount of time necessary to prosecute the case can be substantially influenced by the level and type of resistance we encounter from opposing counsel. Some lawyers either on their own or on instructions from their client insist on doing everything the "hard way." For these reasons, it is always difficult to estimate fees. We understand that you may need fee estimates and budgets. If requested we will provide estimates, but you understand that any estimates are just that estimates and do not guarantee or limit the actual amount of fees. I urge you to call me immediately if you have any questions about the size or appropriateness of the fees. SDM will send its bills to you at the above address. TERMINATION OF AGREEMENT This agreement may be terminated with or without cause by SDM or by you by written notice. In the event of such termination, you agree to seek payment to SDM for all services rendered, including fees, charges, and expenses incurred and to assist in any withdrawal and/or substitution of counsel as needed in the Matter. In addition to terminating this agreement, if SDM's fees and expenses are not timely paid, SDM specifically reserves the right to withdraw from further representation of you, and you agree to take all necessary steps to facilitate our withdrawal. EFFORT AND OUTCOME SDM will use reasonable efforts in representing you in this Matter. You understand and agrees that SDM has not made and can make no promises or guarantees to you concerning the outcome of the Matter or any particular aspect of the Matter. Any expressions by us concerning the outcome of this Matter or other matters are expressions of our professional

11 Exhibit "A" judgment but are not guarantees. Such opinions are necessarily limited by our knowledge of the facts and are based on the state of the law at the time they are expressed. CUENT DOCUMENTS AND FIRM DOCUMENTS We will maintain documents you furnish us in our client files for this Matter. At the conclusion of this Matter (or earlier if appropriate), it is your obligation to advise us as to which, if any, of the documents in our files you wish us to return to you. We may keep copies thereof to the extent we believe advisable for our records. We will retain any remaining documents in our files for a certain period of time and ultimately destroy them in accordance with our record retention program schedule then in effect. Under our present policy, these records may be destroyed as soon as two years after the conclusion of the Matter. OTHER REPRESENTATION You agree that SDM's representation in this Matter or other matters will not disqualify SDM from any representation adverse to you in matters that are not substantially related to the particular Matter. GOVERNING LAW AND VENUE The agreement shall be governed by the laws of the State of Texas and shall not be modified except by written agreement signed by all parties. Exclusive venue of any dispute concerning this agreement shall be in the state district courts of Travis County, Texas. TEXAS LAWYER'S CREED The Texas Supreme Court has adopted a Lawyer's Creed, which sets forth standards for attorney professionalism and states that lawyers should advise their clients of its contents when undertaking representation. A copy of the Texas Lawyer's Creed is attached. FACSIMILE AND ELECTRONIC TRANSMISSION By signing this Agreement, you represent that you have been notified that SDM often uses facsimile transmissions and electronic mail transmissions as forms of communication. It is possible that such transmissions may be intercepted by third parties. If you do not agree to the use of such transmissions, please notify SDM in writing. ADVICE TO SEEK INDEPENDENT COUNSEL CONCERNING THIS AGREEMENT I am happy to answer any questions you have about this agreement. However, you understand and agree that in preparing this agreement we have acted on our behalf and not as your attorney. You are encouraged to have independent counsel review this agreement if you have any question about its fairness or interpretation

12 Exhibit "A" if you agree to our representation under the terms of this letter, please sign in the space below and return one of the originals to me. The other original is for your files. We understand that this agreement is subject to the approval of the Probate Court No. 1 of Travis County, Texas, and is only effective if approved by the court. DCB:mlp Attachment We look forward to working with you. Sincerely, 0 3. Daniel C. Bitting AGREED: Glenn M. Karisch, Attorney Ad Litem

13 Exhibit "A" The Texas Lawyer's Creed I am a lawyer; 1 am entrusted by the People of Texas to preserve and improve our legal system. I am licensed by the Supreme Court of Texas. I must therefore abide by the Texas Disciplinary Rules of Professional Conduct, but I know that professionalism requires more than merely avoiding the violation of laws and rules. I am committed to this creed for no other reason than it is right. Our Legal System A lawyer owes to the administration of justice personal dignity, integrity, and independence. A lawyer should always adhere to the highest principles of professionalism. 1. I am passionately proud of my profession. Therefore, "My word is my bond." 2. I am responsible to assure that all persons have access to competent representation regardless of wealth or position in life. 3. I commit myself to an adequate and effective pro bono program. 4. I am obligated to educate my clients, the public, and other lawyers regarding the spirit and letter of this Creed. 5. I will always be conscious of my duty to the judicial system. Lawyer to Client A lawyer owes to a client allegiance, learning, skill, and industry. A lawyer shall employ all appropriate legal means to protect and advance the client's legitimate rights, claims, and objectives. A lawyer shall not deterred by any real or imagined fear of judicial disfavor or public unpopularity, nor be influenced by mere self-interest. 1. I will advise my client of the contents of this creed when undertaking representation. 2. I will endeavor to achieve my client's lawful objectives in legal transactions and in litigation as quickly and economically as possible. 3. I will be loyal and committed to my client's lawful objectives, but I will not permit that loyalty and commitment to interfere with my duty to provide objective and independent advice. 4. I will advise my client that civility and courtesy are expected and are not a sign of weakness. 5. I will advise my client of proper and expected behavior.

14 Exhibit "A" 6. I will treat adverse parties and witnesses with fairness and due consideration. A client has no right to demand that I abuse anyone or indulge in any offensive conduct. 7. I will advise my client that we will not pursue conduct which is intended primarily to harass or drain the financial resources of the opposing party. 8. I will advise my client that we will not pursue tactics which are intended primarily for delay. 9. I will advise my client that we will not pursue any course of action which is without merit. 10. I will advise my client that I reserve the right to determine whether to grant accommodations to opposing counsel in all matters that do not adversely affect my client's lawful objectives. A client has no right to instruct me to refuse reasonable requests made by other counsel. 11. I will advise my client regarding the availability of mediation, arbitration, and other alternative methods of resolving and setting disputes. Lawyer to Lawyer A la\«yer owes to opposing counsel, in the conduct of legal transactions and the pursuit of litigation, courtesy, candor, cooperation, and scrupulous observance of all agreements and mutual understandings. Ill feelings between clients shall not influence a lawyer's conduct, attitude, or demeanor toward opposing counsel. A lawyer shall not engage in unprofessional conduct in retaliation against other unprofessional conduct. 1. I will be courteous, civil, and prompt in oral and written communications. 2. I will not quarrel over matters of form or style, but I will concentrate on matters of substance will identify for other counsel or parties all changes I have made in documents submitted for review. 4. I will attempt to prepare documents which correctly reflect the agreement of the parties. I will not include provisions which have not been agreed upon or omit provisions which are necessary to reflect the agreement of the parties. 5. I will notify opposing counsel, and, if appropriate, the Court or other persons, as soon as practicable, when hearings, depositions, meetings, conferences or closings are canceled.

15 Exhibit "A" 6. I will agree to reasonable requests for extensions of time and for waiver of procedural formalities, provided legitimate objectives of my client will not be adversely affected. 7. I will not serve motions or pleadings in any manner that unfairly limits another party's opportunity to respond. 8. I will attempt to resolve by agreement my objections to matters contained in pleadings and discovery requests and responses. 9. I can disagree without being disagreeable. I recognize that effective representation does not require antagonistic or obnoxious behavior. I will neither encourage nor knowingly permit my client or anyone under my control to do anything which would be unethical or improper if done by me. 10. I will not, without good cause, attribute bad motives or unethical conduct to opposing counsel nor bring the profession into disrepute by unfounded accusations of impropriety. I will avoid disparaging personal remarks or acrimony towards opposing counsel, parties and witnesses. 1 will not be influenced by any ill feeling between clients. I will abstain from any allusion to personal peculiarities or idiosyncrasies of opposing counsel. 11. I will not take advantage, by causing any default or dismissal to be rendered, when I know the identity of an opposing counsel, without first inquiring about that counsel's intention to proceed. 12. I will promptly submit orders to the Court. I will deliver copies to opposing counsel before or contemporaneously with submission to the Court. I will promptly approve the form of orders which accurately reflect the substance of the rulings of the Court. 13. I will not attempt to gain an unfair advantage by sending the Court or its staff correspondence or copies of correspondence. 14. I will not arbitrarily schedule a deposition, court appearance, or hearing until a good faith effort has been made to schedule it by agreement. 15. I will readily stipulate to undisputed facts in order to avoid needless costs or inconvenience for any party. 16. I will refrain from excessive and abusive discovery. 17. I will comply with all reasonable discovery requests. I will not resist discovery requests which are not objectionable. I will not make objections nor give instructions to a yvitness for the purpose of delaying or obstructing the discovery process. I will encourage witnesses to respond to all deposition questions which are reasonably understandable. I will neither encourage nor permit my witness to quibble about words where their meaning is reasonably clear.

16 Exhibit "A" will not seek Court intervention to obtain discovery which is clearly improper and not discoverable. 19. I will not seek sanctions or disqualification unless it is necessary for protection of my client's lawful objectives or is fully justified by the circumstances. Lawyer and Judge Lawyers and judges owe each other respect, diligence, candor, punctuality, and protection against unjust and improper criticism and attack. Lawyers and judges are equally responsible to protect the dignity and independence of the Court and the profession. 1. I will always recognize that the position of judge is the symbol of both the judicial system and the administration of justice. 1 will refrain from conduct that degrades this symbol. 2. I will conduct myself in Court in a professional manner and demonstrate my respect for the Court and the law. 3. I will treat counsel, opposing parties, the Court, and members of the Court staff with courtesy and civility. 4. I will be punctual. 5. I will not engage in any conduct which offends the dignity and decorum of proceedings will not knowingly misrepresent, mischaracterize, misquote or miscite facts or authorities to gain an advantage. 7. I will respect the rulings of the Court. 8. I will give the issues in controversy deliberate, impartial and studied analysis and consideration. 9. I will be considerate of the time constraints and pressures imposed upon the Court, Court staff and counsel in efforts to administer justice and resolve disputes.