Valero gas station in the San Francisco Bay area. Credit: Sundry Photography/Shutterstock.com

Valero Energy Corp. claims in a federal lawsuit filed Monday that New Jersey lawyer Seth Davenport overbilled the company by at least $1.1 million in connection with a long-running tax appeal.

Davenport has demanded fees bearing no relation to what is called for in a 2013 fee agreement with Valero, claims the lawsuit filed in New Jersey. Davenport is a solo practitioner in Montville who has represented Valero since 1998 in its appeal of the assessment on its Paulsboro refinery in Gloucester County.

Davenport has made claims ranging from $4.2 million to $10.5 million in outstanding fees for the case, the suit claims, far exceeding what is provided under the 2013 agreement. Meanwhile, the company is asking the court to find it doesn't owe Davenport any more than the $3.9 million it has paid him to date in connection with the Paulsboro case. Valero also paid Davenport more than $5 million in connection with matters unrelated to the Paulsboro tax appeals, the company claims.

Valero's suit seeks a judgment for breach of contract against Davenport, awarding the company incidental and consequential damages, loss-of-use damages, compensatory damages, prejudgment interest and legal fees. Valero is also seeking the return of another $1.1 million in proceeds from the tax settlement that is being held in escrow.

Davenport is a former municipal court judge in Montville who was reprimanded by the state Supreme Court in 2013 for performing legal work for the town's mayor while on the bench. The Advisory Committee on Judicial Conduct said Davenport violated a court rule by representing the mayor in connection with a sale of real estate, a mortgage transaction and negotiations for a commercial lease.

Davenport first worked for Valero in 2008, when it bought the Paulsboro refinery from Mobil Oil, which remained a party in the appeals. Years passed with no resolution to Valero's tax appeals, but the steady stream of costs continued, the suit claims. In 2004, Davenport ended monthly billing in the case, pending a trial, but in 2010 and 2011 the company paid $273,000 of additional bills from Davenport in the tax appeal. And in 2010, Valero sold the Paulsboro refinery, but the litigation over the assessment went on. Davenport was also engaged to work on other tax appeals for Valero, collecting over $5 million in fees from matters not related to the Paulsboro case.

In 2013, Davenport agreed to end hourly billing in the Paulsboro case in exchange for a contingency fee of 35% of refunds from tax appeals.

In 2019, Valero and Mobil, now Exxon Mobil, reached a deal to settle its tax appeals with Paulsboro for a gross sum of $15 million. After the settlement was reached, Davenport made fee demands that Valero considers excessive.

Valero, per the 2013 agreement, paid Davenport $2.5 million, or 35% of its $7.3 million share of the settlement it received after deducting $3.4 million in expenses. But Davenport continues to seek another $1.1 million, the suit claims.

Davenport declined to comment.  Valero's attorney, Christopher Carroll of Kennedys CMK, did not respond to a request for comment.