Texas Lawyer’s Commissions Claims Against Employer Can Proceed

A lawyer that sued his former law firm for breach of contract over settlement commissions will be able to proceed with some claims, after a Texas appeals court ruled Wednesday that they weren’t barred by the statute of limitations.

William Fagan accepted a role with Aaron & Quirk LLP in 2013, the Texas Appeals Court, Fourth District, said. He was under a contract that stated he would be paid 25% of the law firm’s fees on cases he worked on that resulted in settlement proceeds, arbitration awards, restitution receipts, or billed legal defense services.

Fagan alleged that he advanced “hundreds” of files allocated to him and also advanced numerous non-allocated files. Fagan was paid biweekly, which typically reflected his commissions, but payments typically lagged the settlement dates by several weeks, the court said.

Fagan argues that he worked to settle many cases during his employment with the firm, including four cases in which A&Q recovered more than $50,000. After he resigned a few months later, he noted he hadn’t been paid the 25% of settlement proceeds for all the cases he worked.

He sued the law firm in 2017 to recover the payments. A&Q moved for summary judgment arguing that Fagan’s contract claims were past their statute of limitations because of the time gap. The district court granted summary judgment for the defendants.

The appeals court found that Fagan’s causes of action didn’t accrue until he received payments and explanatory accounting summaries that showed A&Q wasn’t compensating Fagan according to their alleged agreement.

Fagan continued to receive such payments and summaries until A&Q’s last payment to him on Oct. 28, 2013, the court said. Any of Fagan’s claims that accrued before Sept. 15, 2013—more than four years before he sued—are barred, but not those accrued afterwards, the court said.

Justice Patricia O. Alvarez delivered the opinion, joined by Justices Liza A. Rodriguez and Lori I. Valenzuela.

Troy Glander of San Antonio represented Fagan. Bingham & Lea PC represented Aaron & Quirk LLP.

The case is Fagan v. Aaron & Quirk LLP, Tex. App., 4th Dist., No. 04-21-00302-CV, 7/27/22.