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No Negligence in Pipeline Deal, Patton Boggs Says

DALLAS (CN) - Patton Boggs said it is not liable in a $1.3 million legal malpractice suit from a company that bought a pipeline interest in Denton County, Texas.

Gaedeke Holdings VI Ltd., Gaedeke Gulftex Gathering LLC and Gaedeke Bartonville Pipeline Ltd. sued the Washington, D.C.-based law firm and Dallas attorney Vince Murchison last year in Dallas County Court.

Gaedeke claims that a negligently drafted agreement will prevent it from receiving the $2 million bargained-for purchase-price adjustment that the lawyers allegedly negotiated with seller Gulftex Gathering LP regarding an oil and gas pipline in Bartonville, Texas.

But in a Nov. 28 motion for summary judgment, Patton Boggs and Murchison denied that the September 2007 agreement they drafted was professionally negligent.

The seller never agreed to the language described by Gaedeke, which would increased its refund by more $1.3 million, according to the motion authored by Campbell & Chadwick attorney Bruce Campbell.

Claims over the contract have also been time barred since September 2010, the lawyers said.

In an earlier motion, Patton Boggs and Murchison said that liability lies with third parties, namely Gaedeke executives Mark Reed and Glen Lickstein. The contract "accurately reflects the contract terms communicated by Gaedeke's officers," according to the Nov. 12 motion filed with Judge Jim Jordan.

Reed and Lickstein allegedly had a chance to review and revise the language they allegedly communicated to the lawyers, and still gave their approval, the motion says.

But Gaedeke opposed that motion a week later and blamed the lawyers for the erroneous math in the agreement's "even-up" calculations.

"This drafting error in the agreement ... artificially and incorrectly capped the starting point for the "even-up" calculation at $3,187,500, when it should have been $4,500,000," according to the response authored by Johnston Tobey attorney Robert Tobey. "The language was not only approved by the defendants, but was prepared by the defendants."

Gaedeke said Murchison admitted, after the seller disputed its calculation of over $2 million in refunds, that the unambiguous "mechanical" construction of the language meant to cap its refund to the difference between approximately $3.18 million and the final purchase price.

The alleged drafting error resulted in the seller only being on the hook for approximately $776,000, according to the response.

"The 'even-up' provision was merely a mechanism for the return of Gaedeke's money, which should have been escrowed," Tobey wrote. "If this had been done, Gaedeke would not have had to look at the assets of Gulftex to recover its own money in the event that the pipeline was not worth at least $4,500,000 on the end date."

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