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Attorney Fee Share Dispute in Chesapeake Energy Settlement

August 12, 2016 | Posted in : Fee Agreement, Fee Allocation / Fee Apportionment, Fee Dispute, Fee Entitlement / Recoverability

A recent Dallas Morning News story, “Attorney Who Says He Helped Yield $52.5 Million Chesapeake Royalty Settlement Sues Co-Counsel for Legal Fees,” reports that a Fort Worth attorney who helped represent residents of Johnson, Tarrant and Dallas counties in a lawsuit against Chesapeake Energy and Total E&P USA is suing his co-counsel for a third of the legal fees from the nearly $53 million settlement. 

In a lawsuit filed Friday in Tarrant County, Jim Ward accuses Dan McDonald and Fort Worth-based McDonald Law Firm of breaching a 2014 agreement on how settlement proceeds would be handled and ignoring his contribution to the winning case. 

Ward, the owner of Wardlaw Services, also named the Circelli, Walter & Young law firm in the suit. But on Monday he filed a motion asking a judge to dismiss that firm from the case.

Oklahoma City-based Chesapeake and Total, an American subsidiary of a French firm, agreed in May to settle claims that they underpaid royalties to 13,000 plaintiffs in the Barnett Shale.  

Chesapeake was scheduled to pay $29.4 million upon court approval of the settlement and another $10 million in three years.  Total agreed to pay $13.1 million in cash when the deal was finalized. 

In his lawsuit, Ward claims that while McDonald received "the recognition and spotlight" as lead counsel in the case, the Wardlaw team spent two years assembling the research that served as a "blueprint for victory."

When McDonald realized the value of the research, he drafted an agreement that said he would serve as trial counsel and Ward would provide behind-the-scenes expertise, the lawsuit says. 

Ward said that when he grew concerned the agreement wouldn't be honored, he confronted McDonald, who told him the agreement applied to only six of the 13,000 plaintiffs and refused to pay. 

Ward is suing for $1 million in damages in addition to his claimed portion of the legal fees.