Earnest Money in Texas

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Question:

When I tried to sell my house the first time (FSBO), I received an earnest money check. Sent the check to the Title Co. He backed out, but not for the escape clauses (financing, inspection). I tried to collect the earnest money, and was told he had to release it to me. Since neither of us would release it to the other, I was told it belonged to the State of Texas.

Any thoughts on this? The house was off the market for 2 months because of this, and I'd like to get that check, but not if I'll have to pay a lawyer $5k to get it back. Any ideas on how to avoid this in the future? I'm guessing, don't put the check in an escrow account, but I don't know if that seems improper...

Thanks for the help,
Dean