Alexander Dubose Jefferson & Townsend LLP v. Chevron Phillips Chem. Co., L.P.
540 S.W.3d 577
| Tex. | 2018Background
- Post-judgment turnover proceeding: CPChem sought to collect on a final judgment against Kingwood by targeting a $1,000,000 sanctions payment Exxon had paid to Kingwood’s trial counsel.
- ADJT (Kingwood’s appellate counsel) claimed 50% of the Exxon payment under a fee-sharing arrangement and intervened in the turnover proceeding asserting ownership of the disputed half.
- Trial court’s Turnover Order (Nov. 8, 2013) directed half the funds to CPChem, and the disputed half into the court’s registry “without prejudice” to CPChem or ADJT seeking release later. No appeal was filed from that order.
- Months later the trial court issued a Release Order (June 9, 2014) denying ADJT’s motion to release registry funds, enforcing the Turnover Order, declaring the Release Order final and appealable, and ADJT appealed.
- The court of appeals dismissed ADJT’s appeal for lack of jurisdiction, holding the Turnover Order was final and should have been appealed; the Texas Supreme Court granted review.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether the Turnover Order was a final, appealable judgment | Turnover Order was interlocutory because it merely deposited disputed funds into the registry and preserved parties’ rights | Turnover Order was final and appealable as a turnover order functioning like a mandatory injunction | Turnover Order was not final as to disputed funds; the Release Order was the first adjudication of ADJT’s ownership claim and was timely appealed |
| Whether the trial court adjudicated ADJT’s substantive ownership rights in the Turnover Order | ADJT: court did not decide ownership; order was “without prejudice” and left rights open | CPChem: intervention allowed court to decide ownership and Turnover Order listed disputed funds as Kingwood’s assets | Trial court had not decided ADJT’s claims when it signed the Turnover Order; the wording and oral statements showed intent to decide later |
| Whether intervention by a third party authorizes adjudication of its substantive rights in a turnover proceeding | ADJT: intervention does not convert the turnover proceeding into a merits adjudication of third‑party rights | CPChem: ADJT voluntarily injected its claims and therefore cannot complain that its rights were adjudicated there | Intervention alone does not permit resolving non‑judgment‑debtor substantive rights in a turnover order absent a merits determination |
| Whether portions of a turnover order can be severably appealable | ADJT: the portion directing undisputed funds was injunctive/appealable; disputed registry deposit was interlocutory | CPChem: because turnover follows a final judgment it always resolves property rights and is appealable | Parts functioning as mandatory injunctions may be appealable (undisputed delivery was appealable); deposit of disputed funds into registry pending ownership determination is interlocutory |
Key Cases Cited
- Schultz v. Fifth Judicial Dist. Court of Appeals at Dallas, 810 S.W.2d 738 (Tex. 1991) (turnover order may be appealable when it functions as a mandatory injunction)
- Beaumont Bank, N.A. v. Buller, 806 S.W.2d 223 (Tex. 1991) (turnover statute is a procedural device limited to determining whether assets are in debtor’s possession or control)
- Lehmann v. Har-Con Corp., 39 S.W.3d 191 (Tex. 2001) (finality analysis limited to situations where only one final judgment can be rendered)
- Prodeco Exploration, Inc. v. Ware, 684 S.W.2d 199 (Tex. App.-Houston [1st Dist.] 1984) (depositing disputed funds into registry is not injunctive and not appealable; injunctive components that compel affirmative action may be appealable)
- Madeksho v. Abraham, Watkins, Nichols & Friend, 112 S.W.3d 679 (Tex. App.-Houston [14th Dist.] 2003) (when contested funds are deposited into registry in post‑judgment enforcement, further orders are required to resolve ownership)