SPENCER -- A Charleston engineering firm says victorious attorneys in a multi-million dollar gas royalties case cheated it out of fees from the case.
Gaddy Engineering says it did work for Charleston attorney Tom Lane of the law firm of Bowles Rice McDavid Graff and Love on the Tawney vs. Columbia Natural Resources case in Roane County. The $404 million verdict was one of the largest in state history.
Gaddy, in its complaint, says its employees did work leading up to the lawsuit and help talk its clients into joining the legal action. Gaddy says it was promised one third of the fees Lane would receive from the verdict.
The attorneys on the case were awarded more than $125 million in attorney fees. The exact amount Bowles Rice and Lane received are not publicly known, according to the complaint.
The Gaddy complaint alleges the attorneys "secretly agreed with other Tawney attorneys to divide the total attorney fees in a manner that yielded defendants far less than one third of the amounts received by the Gaddy/Bowles Rice clients" and that the amount was hidden from Gaddy.
Gaddy accused Lane and his firm of professional negligence, breach of contract, fraud, conversion and misrepresentation, among other things.
Gaddy says the defendants failed to full inform the company "that they could not (under the Rules of Professional Conduct) and would not pay plaintiff according to the agreement." Gaddy says nine months after the verdict was announced, Bowles Rice delivered a check "for a relatively insignificant sum" which was refused.
In addition to the "one third of one third" agreement, Gaddy says it retained an oil and gas business expert to help support the need for the Tawney litigation.
Wheeling attorney Paul Harris and Elkins attorney Joseph Wallace are representing Gaddy in this case, which has been assigned to Circuit Judge David Nibert.
The lawyers in the Tawney case represented about 10,400 leasers in a class action lawsuit against NiSource Inc. and Chesapeake Energy. Lawyers from four law firms -- The Masters Law Firm, Bowles Rice McDavid Graff and Love, Carey Scott and Douglas and The Segal Law Firm -- represented the plaintiffs.
The case began after a retired school teacher and Roane County farmer named Garrison Tawney approached lawyers with questions about amounts he was receiving from a gas company. Other landowners joined until the case became a class action lawsuit.
The 2007 verdict initially awarded $94 million of past royalty, $40 million in interest, $134 million in compensatory damages and $270 million in punitive damages to landholders. But the gas companies reached a settlement agreeing to pay $380 million. In exchange, they agreed to drop appeals pending before the U.S. Supreme Court.
Roane Circuit Court case number: 10-C-27