A panel of the Dallas Court of Appeals has concluded that a Collin County judge abused her discretion when she ordered HBC and the firm's client to turnover IOLTA funds, accounts receivable, and billing statements pursuant to a post-judgment turnover order. The court of appeals conditionally granted the firm's Petition for Writ of Mandamus and ordered Collin County Judge Andrea Thompson to vacate her order granting turnover relief within 15 days.
Harper Bates & Champion partner Austin Champion and associate Ben Jones represented HBC and the firm's client after receiving a turnover order commanding them to:
- deposit into the trial court’s registry unearned funds in HBC’s IOLTA account “owned by and/or for the benefit of” the firm's client;
- deposit “accounts receivable, present or future, earned or unearned fees” due from the firm's client; and
- produce billing statements, invoices, and other documents reflecting fee agreements, payments, and accounting related to HBC’s representation of its client.
HBC filed a Petition for Writ of Mandamus within 3 days of receiving the trial court's turnover order. In its Petition, HBC argued the trial court's order—which was granted in an ex parte proceeding to which HBC was not a party—deprived the firm of property rights without due process. The firm also argued the order prevented its client from obtaining legal representation because it prohibited its client from directly or indirectly paying attorneys' fees and ordered HBC to turnover any payments to the judgment creditor.
In its opinion, the panel concluded attorney billing statements and other information about attorneys' fees and expenses is privileged, irrelevant, and not discoverable unless a party places its attorneys' fees at issue in the litigation.
The panel also concluded that the Texas turnover statute could not be used to force HBC to turnover its property, including funds held in trust for its client. Justice Brown noted the trial court entered an ex parte order that "effectively deprives HBC of a property interest," the trial court "lacked authority to make such a determination… [and] abused its discretion in doing so."
The trial court judge previously held the firm's client in contempt of court and ordered him to be confined in the Collin County Detention Center for 14 days for failing to produce documents that he testified were not in his possession, custody, or control. The same day, HBC attorneys Austin Champion and Ben Jones filed a Petition for Writ of Habeas Corpus with the Dallas Court of Appeals and requested emergency relief from the trial court's order of confinement. The Dallas Court of Appeals granted the emergency motion and ordered the firm's client released from confinement pending a final determination of the Petition.
About Harper Bates & Champion
Harper Bates & Champion LLP is a law firm in Dallas, Texas, devoted to complex business litigation, intellectual property litigation and intellectual property prosecution. The firm works closely with Fortune 100 companies, privately held businesses and individuals to resolve business and intellectual property disputes and obtain intellectual property rights. The Firm's attorneys have been recognized as Texas Super Lawyers, Texas Rising Stars and among the Best Lawyers in Dallas. The firm's attorneys have appeared before trial and appellate courts throughout the country, the International Trade Commission, the Trademark Trial and Appeal Board, the Patent Trial and Appeal Board, and the United States Patent and Trademark Office. To contact Harper Bates & Champion, call 214-238-8400, or visit www.harperbates.com.