TX: Underlying Fee Agreement Dispute
Facts: The client hired the attorney on behalf of himself and company owner as his appellate counselor. The parties signed a written engagement letter prepared by the attorney that included a description of the services to be provided as well as the rate for this particular matter. The agreement stated that the normal rate charged by the attorney is $300 per hour but in this matter will be $200 per hour. The attorney’s signature appears at the end of the letter and below the signature is the statement, “ Your signature below indicates acceptance of the terms of this fee agreement.” The parties later agreed to change the amount of the retainer from $10,000 to $5,000. The engagement letter shows that the client signed the agreement, making that change by crossing out the original retainer amount and writing in the new amount above the original typewritten numbers in handwriting, adding his initials beside the change. After filing the brief on behalf of the client the attorney sent the client an invoice and stated that in order to provide excellent service the cost is often times more expensive then anticipated. The attorney then sent a second invoice for the services he provided in preparing and filing the reply brief. The client only paid an additional $5,000 and contested the remaining fees owed. The client stated that the attorney was only to review the brief already drafted by his trial counsel and that it was made clear that $5,000 was all he could afford to spend.
Issue: Whether a written attorney fee agreement can be modified by presenting proof of an oral fee capping agreement?
Ruling: No. Evidence of an oral agreement capping attorney’s fees is not valid because parol evidence cannot modify a written agreement unless there is ambiguity in the agreement. The contract was explicit as to the services to be provided and the manner that would be used in determining the price.
Lesson: Attorney should be clear and forthright explaining the possibility of fees exceeding what was originally expected in order to avoid fee disputes.