A recent Texas Lawyer story by Angela Morris, “Austin Appellate Boutique to Settle Fee Dispute with Chevron Phillips Chemical Co.,” reports that there’s a settlement coming in a long-running dispute over whether $494,000 from a sanctions award should pay attorney fees to Austin-based appellate boutique Alexander Dubose & Jefferson, or pay an underlying judgment instead.
On June 28, at the request of the law firm and defendant Chevron Phillips Chemical Co., the Texas Supreme Court overturned an earlier intermediate appellate court’s opinion in the fee dispute and sent the matter back to the trial court with orders to render a judgment according to the settlement agreement. Court documents don’t list details about the settlement.
“The terms of the settlement are confidential. This is a long, ongoing feud. It’s just a matter of both sides getting together and saying, ‘It’s time to end this,’” said Alexander Dubose founding partner Doug Alexander, who represents his firm in the case. The firm this year changed its name from Alexander Dubose Jefferson & Townsend to Alexander Dubose & Jefferson, he said. The background of the dispute is explained in the March 14 overturned opinion by the Ninth Court of Appeals, Alexander Dubose Jefferson & Townsend v. Chevron Phillips Chemical Co. The underlying lawsuit involved a failed real estate transaction in which Alexander Dubose represented plaintiff Kingwood Crossroads Inc.
Kingwood won attorney fee sanctions against one defendant, Exxon Land Development Inc., for discovery abuses. Alexander Dubose and another of Kingwood’s law firms, Mayer Brown, had an alternate fee agreement with Kingwood that said those sanctions would be split between Kingwood, Mayer Brown and Alexander Dubose.
A 2011 appellate court ruling made the sanctions award final. In 2013, Exxon Land paid $989,000 in sanctions, and Mayer Brown deposited the money in its Interest on Lawyers Trust Account. Meanwhile, one defendant in the underlying case, Chevron Phillips Chemical, had won $1.2 million in attorney fees for prevailing on a separate breach of contract claim. Chevron Phillips Chemical sought a turnover of Kingwood’s sanctions funds to pay part of the judgment.
Next, Alexander Dubose intervened and asked for a declaratory judgment to protect its interest in the funds, arguing that the firm had a contingent fee agreement that gave it ownership over some of the money, and that the firm’s contractual claim had priority over Chevron Phillips Chemical’s claim. The trial court ordered Kingwood to pay half the funds to Chevron Phillips Chemical, and to deposit the other half, $494,000, into the court’s registry. In the end, the court denied Alexander Dubose’s bid to get the money and ordered it released to Chevron Phillips Chemical.
The appellate court found the trial court abused its discretion by failing to use the right procedure to decide whether Alexander Dubose had a claim to the funds. The trial court should have conducted separate, initial proceedings to resolve the firm’s claims. The opinion sent the case back to the trial court to try again. Now, thanks to the Texas Supreme Court’s June 28 ruling, the trial court has new orders to enforce the parties’ settlement instead.