Attorney Ad Litem's Motion To Retain Counsel - Andrews … - Motion to... · The Bank of New York...

NO. C-l-PB-14-001245

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-16-000096. 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, 2016.

3. 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

Filed: 5/26/2016 7:51:12 AMDana DeBeauvoir

Travis County Clerk C-1-PB-14-001245

Blair Hicks

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 6003433 (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 impliedcovenants to develop, market, and protect against drainage).


El Paso Production Oil & Gas v. Texas State Bank, 2007 WL152209 (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.—CorpusChristi 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 619639 (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.3d597 (Tex. App.—^Austin 2000, pet. denied) (rights to challenge RailroadCommission decision).

Garza v. Maddux, 988 S.W.2d 280 (Tex. App.—Corpus Christi 1999, pet. denied)(title).

Bank One. Texas v. U.S.. 157 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.


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 114.064 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

114.064 and 115.001 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.


Respectfully submitted,

THE KARISCH LAW FIRM, PLLC

By: /s/ Glenn M. KarischGlenn M. Karisch

State Bar No. 11098950

301 Congress Avenue, Suite 1910Austin, TX 78701

(512) 328-6346 (telephone)(512) 597-4062 (fax)[email protected]

Attorney Ad Litem


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.


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


onnTT Exhibit "A"SCOTTDOUGLASSMcCONNICO

January 5, 2016

Via Email: [email protected] M. Karisch

The Karisch Law Firm, PLLC

301 Congress Avenue, Suite 1910Austin, Texas 78701

Re; In Re TEL Offshore Trust, Cause No. C-1-PB-14-001245 in the Probate Court No.1 of Travis County, Texas.

Dear Glenn:

Thank you for asking Scott Douglass & McConnico ("SDM," "we" or "us") to representyou in your capacity as attorney ad litem for the interests of the unit holders of TEL OffshoreTrust ("Trust") who were served by publication and did not answer or appear in the aboveproceeding, i will refer to you acting in this capacity as "you" or "client." This letter will setforth 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 potentialclaims that you may have in connection with the Matter, including a counterclaim against thetrustees of the Trust for breach of fiduciary duty and possibly other claims (ii) preparingpleadings, written discovery, requesting and reviewing documents, producing documents,taking depositions and arguing motions before the court and, if necessary, full trial of thematter; (iii) negotiating settlement of any claims; and (iv) such other services incident to thedefense of this matter as are determined to be necessary.

You understand and agree that our representation is limited to the above Matter, andthat SDM is not undertaking to represent or advise you on matters other than the aboveMatter. If you request, and SDM agrees, to represent you in additional matters, SDM'srepresentation in any additional matters will be governed by the terms in this letter, unless youand SDM agree otherwise in writing.

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Scott Douglass S McConnico LLP i Attorneys at Law

303 Colorado Street, Suite 2400, Austin, TX 78701 ' p : 512.495.6300 I f: 512.495.6399 ! www.scottdeug.com

Exhibit "A"

You understand and agree that SDM represents you only and does not represent yourbusinesses or their parents, subsidiaries, affiliates, partners, guarantors or any of their officers,directors, employees, investors or stockholders. If SDM agrees to represent any of yourbusinesses or their parents, subsidiaries, affiliates, partners, guarantors or any of their officers,directors, employees, investors or stockholders, SDM and that additional client will confirm therepresentation in writing.

COOPERATION

To enable us to effectively perform the services contemplated, it is essential that youdisclose fully and accurately all facts and keeps us apprised of all developments relating to theMatter. You have agreed to cooperate fully with us and to make its representatives available toattend 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 inconnection with this Matter prior to the Probate Court's approval of this agreement (assumingthat the Court approves the agreement). Since you are serving as attorney ad litem, youpersonally are not responsible for paying our fees and expenses. We understand that we willhave to seek approval of our fees from the Probate Court. We also understand that theProbate Court limits the hourly rates it typically approves and also does not approve fees forcertain types of work. We are familiar with the Probate Court's Standards for Court Approval ofAttorney Fee Applications.

I propose that we staff this case with two partners. I will be the partner in charge. Mypartner, Cindy Saiter, will assist as needed.

This case primarily involves the fiduciary duties of the trustees of the Trust, which holdsoil and gas properties. Both Cindy and I have considerable experience litigating fiduciary dutycases, both in probate proceedings and otherwise. In addition, I and others in my firm havesignificate experience in oil and gas litigation. I've been practicing since 1988. Cindy has beenpracticing since 1996. We both have practiced in probate proceedings for over 11 years. Inlight of our experience, but also mindful of the Probate Court's limitation on hourly rates, Ipropose that both Cindy and I charge $350 per hour. We will use associates as needed andwe will charge them at $195 per hour. Our paralegals will be charged at $95 per hour. Wealso 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 ofthis nature, and you agree to seek approval of fees calculated at these rates. If the Court doesnot 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 approvalof our attomey fees applications. If the Court fells to approve our fees in amounts that webelieve are acceptable, we reserve the right to withdraw from the representation. We also

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Exhibit "A"

reserve the right to withdraw from the representation if there are delays in the payment of ourfees that we deem to be unacceptable.

After we investigate the facts and issues, we may determine that this matter requires aspecial expertise that justifies higher billing rates. In that event we reserve the right to ask theProbate Court to approve rates higher than those set forth in this letter. If we make such arequest 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 tosupport our withdrawal.

I would like to add a note about fees. In lawsuits fees frequently grow large quickly andcan exceed expectations. It has been my experience that when this happens it happens fortwo primary reasons. First, such cases evolve as the facts are developed. The case we actuallytry could differ greatly from the case as it appears at the outset. It is difficult to predict how thecase will evolve through this process and what additional work might become necessary as aresult. Second, the amount of time necessary to prosecute the case can be substantiallyinfluenced by the level and type of resistance we encounter from opposing counsel. Somelawyers—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 youmay need fee estimates and budgets. If requested we will provide estimates, but youunderstand that any estimates are just that—estimates—and do not guarantee or limit theactual amount of fees.

I urge you to call me immediately if you have any questions about the size orappropriateness of the fees.

SDM will send its bills to you at the above email address.

TERMINATION OF AGREEMENT

This agreement may be terminated with or without cause by SDM or by you by writtennotice. In the event of such termination, you agree to seek payment to SDM for all servicesrendered, including fees, charges, and expenses incurred and to assist in any withdrawaland/or substitution of counsel as needed in the Matter. In addition to terminating thisagreement, if SDM's fees and expenses are not timely paid, SDM specifically reserves the rightto withdraw from further representation of you, and you agree to take all necessary steps tofacilitate our withdrawal.

EFFORT AND OUTCOME

SDM will use reasonable efforts in representing you in this Matter. You understand andagrees that SDM has not made and can make no promises or guarantees to you concerningthe outcome of the Matter or any particular aspect of the Matter. Any expressions by usconcerning the outcome of this Matter or other matters are expressions of our professional

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Exhibit "A"

judgment but are not guarantees. Such opinions are necessarily limited by our knowledge ofthe 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 theconclusion 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 thereofto the extent we believe advisable for our records. We will retain any remaining documents inour files for a certain period of time and ultimately destroy them in accordance with our recordretention program schedule then in effect. Under our present policy, these records may bedestroyed 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 disqualifySDM from any representation adverse to you in matters that are not substantially related to theparticular Matter.

GOVERNING LAW AND VENUE

The agreement shall be governed by the laws of the State of Texas and shall not bemodified except by written agreement signed by all parties. Exclusive venue of any disputeconcerning 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 forattorney professionalism and states that lawyers should advise their clients of its contents whenundertaking 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 oftenuses facsimile transmissions and electronic mail transmissions as forms of communication. It ispossible that such transmissions may be intercepted by third parties. If you do not agree tothe 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, youunderstand and agree that in preparing this agreement we have acted on our behalf and not asyour attorney. You are encouraged to have independent counsel review this agreement if youhave any question about its fairness or interpretation.

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Exhibit "A"

if you agree to our representation under the terms of this letter, please sign in thespace below and return one of the originals to me. The other original is for your files. Weunderstand that this agreement is subject to the approval of the Probate Court No. 1 of TravisCounty, Texas, and is only effective if approved by the court.

We look forward to working with you.

Sincerely,

0—3.Daniel C. Bitting

DCB:mlpAttachment

AGREED:

Glenn M. Karisch, Attorney Ad Litem

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Exhibit "A"

The Texas Lawyer's Creed

I am a lawyer; 1 am entrusted by the People of Texas to preserve and improve our legalsystem. I am licensed by the Supreme Court of Texas. I must therefore abide by the TexasDisciplinary Rules of Professional Conduct, but I know that professionalism requires more thanmerely avoiding the violation of laws and rules. I am committed to this creed for no otherreason than it is right.

Our Legal System

A lawyer owes to the administration of justice personal dignity, integrity, andindependence. 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 competentrepresentation 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 regardingthe 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 employall appropriate legal means to protect and advance the client's legitimate rights, claims, andobjectives. A lawyer shall not deterred by any real or imagined fear of judicial disfavor orpublic unpopularity, nor be influenced by mere self-interest.

1. I will advise my client of the contents of this creed when undertakingrepresentation.

2. I will endeavor to achieve my client's lawful objectives in legal transactions andin litigation as quickly and economically as possible.

3. I will be loyal and committed to my client's lawful objectives, but I will not permitthat loyalty and commitment to interfere with my duty to provide objective and independentadvice.

4. I will advise my client that civility and courtesy are expected and are not a signof weakness.

5. I will advise my client of proper and expected behavior.

Exhibit "A"

6. I will treat adverse parties and witnesses with fairness and due consideration. Aclient 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 primarilyto 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 primarilyfor delay.

9. I will advise my client that we will not pursue any course of action which iswithout merit.

10. I will advise my client that I reserve the right to determine whether to grantaccommodations to opposing counsel in all matters that do not adversely affect my client'slawful objectives. A client has no right to instruct me to refuse reasonable requests made byother counsel.

11. I will advise my client regarding the availability of mediation, arbitration, andother 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 pursuitof litigation, courtesy, candor, cooperation, and scrupulous observance of all agreements andmutual understandings. Ill feelings between clients shall not influence a lawyer's conduct,attitude, or demeanor toward opposing counsel. A lawyer shall not engage in unprofessionalconduct 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 mattersof substance.

3. 1 will identify for other counsel or parties all changes I have made in documentssubmitted for review.

4. I will attempt to prepare documents which correctly reflect the agreement of theparties. I will not include provisions which have not been agreed upon or omit provisions whichare necessary to reflect the agreement of the parties.

5. I will notify opposing counsel, and, if appropriate, the Court or other persons, assoon as practicable, when hearings, depositions, meetings, conferences or closings arecanceled.

Exhibit "A"

6. I will agree to reasonable requests for extensions of time and for waiver ofprocedural formalities, provided legitimate objectives of my client will not be adverselyaffected.

7. I will not serve motions or pleadings in any manner that unfairly limits anotherparty's opportunity to respond.

8. I will attempt to resolve by agreement my objections to matters contained inpleadings and discovery requests and responses.

9. I can disagree without being disagreeable. I recognize that effectiverepresentation does not require antagonistic or obnoxious behavior. I will neither encouragenor knowingly permit my client or anyone under my control to do anything which would beunethical or improper if done by me.

10. I will not, without good cause, attribute bad motives or unethical conduct toopposing counsel nor bring the profession into disrepute by unfounded accusations ofimpropriety. 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 abstainfrom 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'sintention to proceed.

12. I will promptly submit orders to the Court. I will deliver copies to opposingcounsel before or contemporaneously with submission to the Court. I will promptly approvethe 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 staffcorrespondence or copies of correspondence.

14. I will not arbitrarily schedule a deposition, court appearance, or hearing until agood faith effort has been made to schedule it by agreement.

15. I will readily stipulate to undisputed facts in order to avoid needless costs orinconvenience 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 discoveryrequests which are not objectionable. I will not make objections nor give instructions to ayvitness for the purpose of delaying or obstructing the discovery process. I will encouragewitnesses to respond to all deposition questions which are reasonably understandable. I willneither encourage nor permit my witness to quibble about words where their meaning isreasonably clear.

Exhibit "A"

18. 1 will not seek Court intervention to obtain discovery which is clearly improperand not discoverable.

19. I will not seek sanctions or disqualification unless it is necessary for protection ofmy client's lawful objectives or is fully justified by the circumstances.

Lawyer and Judge

Lawyers and judges owe each other respect, diligence, candor, punctuality, andprotection against unjust and improper criticism and attack. Lawyers and judges are equallyresponsible 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 thejudicial system and the administration of justice. 1 will refrain from conduct that degrades thissymbol.

2. I will conduct myself in Court in a professional manner and demonstrate myrespect for the Court and the law.

3. I will treat counsel, opposing parties, the Court, and members of the Court staffwith courtesy and civility.

4. I will be punctual.

5. I will not engage in any conduct which offends the dignity and decorum ofproceedings.

6. 1 will not knowingly misrepresent, mischaracterize, misquote or miscite facts orauthorities 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 andconsideration.

9. I will be considerate of the time constraints and pressures imposed upon theCourt, Court staff and counsel in efforts to administer justice and resolve disputes.

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