Appeals court says lower court abused its discretion regarding disputed funds in real estate transaction

By Marian Johns | Mar 26, 2019

BEAUMONT — The Court of Appeals for the Ninth District of Texas at Beaumont has ruled a trial court abused its discretion regarding disputed funds in Alexander Dubose Jefferson & Townsend LLP v. Chevron Phillips Chemical Company LP .

The case, which the Texas Supreme Court remanded to the Court of Appeals, involves the Alexander Dubose Jefferson & Townsend (Alexander Dubose) firm, who represented Kingwood Crossroads, Inc., (Kingwood) in litigation involving a real estate dispute, according to the March 27 court filing, the case involved defendants First American Title Insurance Company, Chevron Phillips Chemical Company (CP Chem), Exxon Land Development, Inc., ( Exxon Land) and Kingwood Place West Community Association, Inc. The litigation resulted in a jury verdict in favor of Kingwood that involved a monetary reward with the court awarding sanctions to Kingwood assessed against Exxon Land which amounted to attorney's fees, according to the court filing. Kingwood then agreed to an Alternate Fee Agreement (AFA) with its then counsel Mayer Brown and then two years later Alexander Dubose joined Kingwood's representation with a Supplement to Alternate Fee Agreement (SAFA).  

The Fourteenth Court of Appeals upheld the sanctions and attorneys' fees to Kingwood but also "reversed the remainder of the trial court's judgment," according to the court filing.   "The issue of attorneys’ fees incurred by Kingwood in defense of CP Chem’s breach of contract counterclaim was severed and remanded to the trial court to be determined after segregation," the court filing states. 

Alexander Dubose, the appellant, presented three issues for appeal including a sanctions judgement against Exxon, the firm's "contractural security interest" relating to Chevron's creditor lien and if the appellant has a superior "attorney's lien" over Chevron's judgment-creditor lien. 

The Ninth District Appeals Court concluded that "The trial court abused its discretion when it entered the Release Order requiring payment of the remaining disputed funds in the court’s registry to CP Chem without first adjudicating the claims of ownership by the non-judgment debtor in a separate, initial proceeding."

The court ordered the reversal of the trial court's order and remanded the case back to the trial court for further proceedings. 

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