Lawyer sues McDonald over Chesapeake legal fees
Attorney Dan McDonald, who recently settled a $51 million lawsuit against Chesapeake Energy over underpaid royalty payments, is being sued for allegedly cheating another lawyer out of his share of millions of dollars in legal fees.
Jim Ward, who operates Wardlaw Services, contends he is owed one-third of the McDonald Law Firm’s a portion of the $19.9 million in fees. Under an agreement between McDonald and the law firm of Circelli, Walter & Young, McDonald’s firm gets 83 percent of the legal fees.
Ward’s attorneys also are seeking a temporary injunction in Tarrant County civil court against McDonald’s law firm to keep the firm from collecting any of its legal fees.
In the lawsuit, Ward contends that while McDonald has received the recognition as the “lead counsel,” the settlement “would not have occurred but for the indispensable contribution,” of him and his team of consultants who “developed and possessed the blueprint for victory.”
“The marshaling of evidence by Ward and his experts was invaluable,” the lawsuit states. “Because of Ward, a database of critical evidence already existed when McDonald was soliciting clients for royalty lawsuits in the Barnett Shale.”
Ward, described as an oil and gas attorney, runs his business out of an east Fort Worth residence. He did not return phone calls seeking comment. His attorneys in Amarillo and Oklahoma City also did not return phone calls about the lawsuit.
McDonald did not return a several phone calls seeking comment. But the lawsuit filed by Ward quotes McDonald as saying the agreement the two men signed applies to about six plaintiffs.
Ward contends that while McDonald has received recognition as the ‘lead counsel,’ the settlement ‘would not have occurred but for the indispensable contribution,’ of him and his team of consultants who ‘developed and possessed the blueprint for victory.’
Lawsuit filed by Jim Ward
The Circelli law firm was originally included in the lawsuit, but a motion to dismiss them with prejudice was filed Monday afternoon. As a result, no part of the Circelli fees are now in dispute in the lawsuit, according to George Parker Young.
Money for the settlement was wired to the bank and Parker said he doesn’t expect any delay in issuing checks to the plaintiffs in the coming weeks. But he said they have agreed to withhold a portion of McDonald’s fees until next Tuesday.
He said the consenting plaintiff’s claims and lawsuits will be dismissed at a court hearing Wednesday. About 91 percent of the 13,000 clients agreed to settle with Chesapeake.
Under the terms of the settlement, Chesapeake and Total E&P USA, Chesapeake’s partner in the Barnett Shale, would deposit $41.3 million in cash — $28.5 million from Chesapeake and $12.8 million from Total. Chesapeake also deposited a $9.7 million promissory note payable in about three years.
The maximum payout under the settlement was for $52.5 million. But it was prorated down to match the 97.15 percent of natural gas produced on the leases of those that backed the deal.
McDonald’s law firm is supposed to get 39 percent of the gross settlement in attorneys fees.
Over the past two years, McDonald has made headlines with his aggressive campaign against the Oklahoma City energy giant over the payment of natural gas royalties to smaller landowners.
In more than 400 lawsuits McDonald and others argued that Chesapeake deducted higher-than-necessary production costs from royalty checks. They contended that the company used sham sales to affiliates to transport and market the natural gas to increase what it earned.
Chesapeake and Total, which owns 25 percent of Chesapeake’s Barnett Shale holdings, denied doing anything wrong and said everything that was done was within the terms of its leases.
Max B. Baker: 817-390-7714, @MaxbakerBB
This story was originally published July 18, 2016 at 5:29 PM with the headline "Lawyer sues McDonald over Chesapeake legal fees."