## Facts

- Explosions at a Phillips 66 chemical plant killed 23 workers and injured hundreds, leading to numerous wrongful-death and personal-injury suits.
- A law firm represented approximately 126 plaintiffs and obtained a settlement near $190 million, from which the attorneys received contingent fees exceeding $60 million.
- Forty-nine former clients sued the attorneys seeking fee forfeiture and alleging misconduct, including use of a lay intermediary to solicit clients, inadequate investigation of individual claims, failures to communicate offers and demands, entering an aggregate settlement without authorization, limiting representation of others from the incident, and coercing clients to accept the settlement.
- The clients asserted claims including breach of fiduciary duty, fraud, statutory consumer-protection violations, negligence, and breach of contract.
- The attorneys denied wrongdoing and contested any entitlement to forfeiture.

## Issues

1. Whether an attorney who breaches fiduciary duties may be required to forfeit all or part of a fee even if the client proves no actual damages caused by the breach.
2. Whether fee forfeiture for fiduciary breach is automatic and total or a discretionary, fact-dependent remedy that may be partial.
3. Whether the amount of any fee forfeiture is determined by the court or by a jury.
4. Whether summary judgment for the attorneys could stand on the record presented.

## Decision

- The Texas Supreme Court held that a client may obtain forfeiture of an attorney’s fee for breach of fiduciary duty without proving actual damages attributable to the breach.
- The court held forfeiture is an equitable, discretionary remedy and is not automatic; the forfeiture may be total or partial depending on the circumstances and seriousness of the breach.
- The court held the amount of any forfeiture is for the court to decide as an equitable matter, though juries may resolve disputed fact questions concerning whether a fiduciary breach occurred when properly submitted.
- The court reversed the intermediate court’s affirmance of summary judgment to the extent it rested on conclusory affidavits and remanded for further proceedings consistent with its holdings.

## Legal Principles

- Attorney–client relationships impose fiduciary duties of the highest honesty, candor, and loyalty; equitable remedies may address disloyalty independent of compensatory loss.
- Fee forfeiture for fiduciary breach serves protective and deterrent purposes and therefore does not require proof of actual damages.
- Forfeiture is proportional and fact-dependent; relevant considerations include the nature of the wrong, the extent and timing of the misconduct, the effect on the value of the lawyer’s work, and the public interest in maintaining fiduciary integrity.
- The existence of a fiduciary breach may present fact issues for a jury, but the equitable determination of whether and how much fee is forfeited is for the judge.

## Conclusion

The court recognized fee forfeiture as a flexible equitable remedy for attorney fiduciary breaches that may be imposed without proof of actual damages, with the trial judge determining the amount after resolving any necessary fact disputes about the breach.


Burrow v. Arce, 997 S.W.2d 229 (Tex. 1999)