Alan Halperin, as Trustee of the GFES Liquidation Trust v. Michel B. Moreno and MOR MGH Holdings, LLC, Dalis M. Waguespack, and Tiffany C. Moreno

• Court: Court of Appeals of Texas
• Decided: March 9, 2022
• Docket: 05-21-00390-CV
• Status: Published

Opinion

Reverse and Remand and Opinion Filed March 9, 2022

In The Court of Appeals Fifth District of Texas at Dallas No. 05-21-00390-CV

ALAN HALPERIN, AS TRUSTEE OF THE GFES LIQUIDATION TRUST, Appellant V. MICHEL B. MORENO AND MOR MGH HOLDINGS, LLC, DALIS M. WAGUESPACK, AND TIFFANY C. MORENO, Appellees

On Appeal from the 193rd Judicial District Court Dallas County, Texas Trial Court Cause No. DC-20-01025

MEMORANDUM OPINION Before Justice Myers and Justice Garcia1 Opinion by Justice Myers Appellant Alan Halperin, as trustee of the GFES Liquidation Trust, appeals

the trial court’s order granting the special appearance filed by appellee Dalis M.

Waguespack. Appellant brings one issue arguing the trial court erred in granting the

special appearance. We reverse and remand for further proceedings.

BACKGROUND AND PROCEDURAL HISTORY

Michel Moreno (Moreno) served as Chairman of the Board of Directors and

1 Chief Justice Burns, sitting for Justice Molberg, recused himself from this matter. CEO of Greenfield Energy Services, Inc., until its Chapter 11 liquidation in

Delaware bankruptcy proceedings. During the bankruptcy, appellant Alan Halperin,

trustee of the GFES Liquidation Trust (the trustee) commenced adversary

proceedings against Moreno, MOR MGH (an entity he controlled), and another

related entity, based on various claims.

Following a trial on the merits, the bankruptcy court found that Moreno

tortiously interfered with MOR MGH’s obligations because he wrongfully diverted

monies intended for Greenfield and used the funds to purchase a personal home in

Dallas, Texas (the Dallas property). The court recommended that damages be

awarded on the trustee’s tortious interference claim and that a constructive trust in

the amount of $10 million be imposed on the Dallas property. The United States

District Court agreed and entered final judgment against Moreno for $16,607,081 in

damages and pre-judgment interest on that amount and a $10 million constructive

trust on the Dallas property. See In re Greenfield Energy Services, Inc., 610 B.R.

760, 764–65 (D. Del. 2019). The Third Circuit Court of Appeals affirmed the district

court’s judgment. See In re Green Field Energy Services, Inc., 834 F. Appx 695,

698 (3rd Cir. 2020) (unpublished) (collectively, the “foreign judgment”).

On January 22, 2020, the foreign judgment was domesticated in a Texas state

district court (the Texas judgment) pursuant to the Uniform Enforcement of Foreign

Judgments Act. See TEX. CIV. PRAC. & REM. CODE §§ 35.001–.008. Moreno filed

a motion to vacate the Texas judgment on February 14, 2020, arguing the Texas

–2– homestead exemption precluded enforcement of the constructive trust.

On February 21, 2020, Moreno’s wife filed a petition in intervention asserting

a claim to quiet title on the Dallas property. Trustee Halperin subsequently filed a

third-party petition against Moreno’s sister—appellee Dalis M. Waguespack—

asserting a fraudulent transfer claim. He also asserted a fraudulent transfer

counterclaim against Moreno’s wife. The trustee’s original counterclaim and third-

party petition also asserted a claim against all defendants for judicial foreclosure to

enforce the Texas judgment against the Dallas property.

On September 10, 2020, the trial court signed an order denying Moreno’s

motion to vacate. Moreno filed a notice of appeal from that order on September 28,

2020, and on December 14, 2021, we concluded the appeal was untimely and

dismissed it for want of jurisdiction. See Moreno v. Halperin as Trustee of GFES

Liquidation Trust, No. 05-20-00858-CV, 2021 WL 5902931, at *4 (Tex. App.—

Dallas Dec. 14, 2021, no pet.) (mem. op.). In our opinion, we explained that the

notice of appeal was due April 21, 2020 because the timely motion to vacate acted

as a motion for new trial, and that the trial court’s September 2020 order was void

because the court’s plenary power over the January 22, 2020 Texas judgment

expired on May 6, 2020. Id. at *2.

This appeal is from the trial court’s order of May 7, 2021, granting appellee

Waguespack’s November 2, 2020 special appearance. Waguespack argued she was

not subject to the jurisdiction of Texas state courts because she is a Louisiana

–3– resident with no contacts with the forum state.

DISCUSSION

In one issue, appellant argues the trial court erred in granting appellee

Waguespack’s special appearance because there are clearly sufficient contacts

between the forum state, appellee, and the specific causes of action asserted against

her. More specifically, appellant argues specific personal jurisdiction exists in this

case because (1) the claims asserted against Waguespack all relate to her role as

lienholder and obligee regarding an insider loan to a Texas resident designed to

defraud creditors on real property located in Dallas County, Texas; (2) Waguespack

purposefully directed her activities related to this “sham” loan transaction at the State

of Texas; and (3) Waguespack took advantage of Texas law to benefit her brother

and obtain a security interest in a multi-million dollar residence in Dallas.

As a matter of law, we review a trial court’s personal jurisdiction

determination de novo. M & F Worldwide Corp. v. Pepsi-Cola Metro. Bottling Co.,

Inc., 512 S.W.3d 878, 885 (Tex. 2017). When, as in this case, the trial court does

not issue findings of fact and conclusions of law with its special appearance ruling,

all facts necessary to support the judgment and supported by the evidence are

implied. BMC Software Belg., N.V. v. Marchand, 83 S.W.3d 789, 795 (Tex. 2002).

Appellant does not argue general jurisdiction is available over appellee, so our

inquiry is limited to specific jurisdiction, which concerns whether the nonresident

defendant’s alleged minimum contacts give rise to specific jurisdiction—triggered

–4– when the plaintiff’s cause of action arises from or relates to those contacts. M & F

Worldwide, 512 S.W.3d at 886. The exercise of specific personal jurisdiction over

a nonresident defendant comports with due process if a nonresident defendant has

“minimum contacts” with Texas and the exercise of jurisdiction does not offend

traditional notions of fair play and substantial justice. Id. at 885. A defendant’s

minimum contacts with a forum—in this case, Texas—are established when the

defendant purposefully avails itself of the privilege of conducting activities within

the forum state, thus invoking the benefits and protections of its laws. Id. at 886.

Three principles govern this purposeful-availment analysis:

(1) only the defendant’s contacts with the forum are relevant, not the unilateral activity of another party or third person; (2) the defendant’s acts must be purposeful and not random, isolated, or fortuitous; and (3) the defendant must seek some benefit, advantage, or profit by availing itself of the jurisdiction such that it impliedly consents to suit there.

Id. (quotations omitted).

For a nonresident defendant’s contacts with Texas to support an exercise of

specific jurisdiction, “there must be a substantial connection between those contacts

and the operative facts of the litigation.” Moncrief Oil Int’l Inc. v. OAO Gazprom,

414 S.W.3d 142, 156 (Tex. 2013) (quotation omitted). A nonresident’s “directing a

tort at Texas from afar is insufficient to confer specific jurisdiction.” Id. at 157. The

proper focus is on the extent of the defendant’s activities in the forum, not the

residence of the plaintiff. Id.

The absence of physical contacts with Texas does not defeat personal

–5– jurisdiction so long as the defendant’s efforts are purposefully directed towards

residents of Texas. See Retamco Operating, Inc. v. Rep. Drilling Co., 278 S.W.3d

333, 339 (Tex. 2009) (citing Burger King Corp. v. Rudzewicz, 471 U.S. 462, 476

(1985)). A defendant who reaches out beyond one state and creates continuing

relationships and obligations with a citizen of another state is subject to the

jurisdiction of the latter state in suits based on those activities. Id.

The exercise of personal jurisdiction must also comply with traditional

notions of fair play and substantial justice. Moncrief, 414 S.W.3d at 154. If a

nonresident has minimum contacts with the forum, rarely will the exercise of

jurisdiction not comport with traditional notions of fair play and substantial justice.

Id. at 154–55. We consider the following factors if appropriate: (1) the burden on

the defendant; (2) the interest of the forum state in adjudicating the dispute; (3) the

plaintiff’s interest in obtaining convenient and effective relief; (4) the interstate

judicial system’s interest in obtaining the most efficient resolution of controversies;

and (5) the shared interest of the several states in furthering fundamental social

policies. Retamco, 278 S.W.3d at 341.

In this case, the record shows that on March 7, 2018, Michel Moreno signed

two documents purporting to encumber the Dallas property. One was a promissory

note dated March 7, 2018, that allegedly created a home equity line of credit

(HELOC). Waguespack, “an individual and Borrower’s sister,” is the lender in the

HELOC note. The note references the collateral for the credit as the Dallas property

–6– located at 4425 Highland Drive, Dallas, Texas, and the note provides that payments

were to be made on the indebtedness at 4514 Cole Avenue, Suite 600, Dallas, Texas

75205. The note was secured by a deed of trust (the deed of trust) from Moreno,

again dated March 7, 2018.

The deed of trust states that Waguespack is the trustee for the deed of trust

and that her mailing address as trustee is 4514 Cole Avenue, Suite 600, Dallas, Texas

75205. The deed of trust also identifies Waguespack, “an individual and Borrower’s

sister,” as the lender; that she is the lender of $6.24 million to Moreno; and that her

mailing address as lender is, again, 4514 Cole Avenue, Suite 600, Dallas, Texas

75205. The deed of trust requires that it may only be foreclosed on by court order

and specifically requires that both the lender and the trustee abide by the provisions

of the Texas Property Code. The deed of trust was filed in the Dallas County public

records on June 26, 2018.

The record further reveals that on March 6, 2018, the day before the HELOC

transaction closed, Waguespack became the manager of a newly formed entity,

QR2DJ5UG1, LLC (the “Q” entity), for the purpose of receiving funds from MOR

KM Holdings, LLC. More specifically, on March 6, 2018, Waguespack authorized

the Q entity to grant 100 percent of its membership interests to MOR KM Holdings,

LLC, in exchange for $4.6 million from MOR KM. MOR KM is a Texas business

with its principal office and place of business located at 4514 Cole Avenue, Suite

600, Dallas, Texas, 75205, and it is undisputed that the HELOC was assigned to

–7– MOR KM. The Q entity is a Delaware limited liability company but according to

its Limited Liability Company Agreement, which Waguespack executed on March

6, 2018, its principal office is located at the same Texas address listed in the HELOC

and the deed of trust, and where MOR KM maintains its principal office and place

of business: 4514 Cole Avenue, Suite 600, Dallas, Texas 75205.

Appellant’s third-party petition against Waguespack alleges she is the sister

of a Texas resident, Michel Moreno, and an “insider” working to assist him in

avoiding, delaying, or hindering creditors’ collections efforts. Appellant alleges that

Waguespack entered into the deed of trust on the Dallas property located at 4425

Highland Drive, Dallas, Texas. Appellant also alleges the deed of trust was made in

exchange for a purported loan of $6.24 million from Waguespack, individually;

furthermore, the fraudulent conveyance to Moreno’s sister was made for the purpose

of avoiding creditors.

Waguespack argues she did not purposefully direct any activity towards

Texas. She claims the petition relies on a single alleged action, i.e., that Waguespack

agreed to a HELOC—which she entered into from Louisiana, and then subsequently

transferred to MOR KM—that happened to involve a Texas property. Waguespack

also argues that Moreno unilaterally contacted her in Louisiana to ask her to serve

as lender on the HELOC; she did not intentionally target Texas by merely receiving

a call from her brother who lived here; and she sought no benefit or advantage from

the HELOC or entering into the deed of trust. Waguespack further argues that “the

–8– presence of property in a state, without more, does not automatically signify that the

defendant has purposefully availed itself of the benefits and protections of state law.”

Johnson v. Kindred, 285 S.W.3d 895, 903 (Tex. App.—Dallas 2009, no pet.). And,

additionally, Waguespack argues that Halperin’s substantive allegations against

Moreno regarding Texas homestead laws do not warrant forcing Waguespack out of

her resident state to litigate this dispute in Texas.

Yet this case involves more than the “the presence of property in a state.” Id.

The deed of trust and the HELOC were between a Texas borrower (Moreno) and a

lender and trustee (Waguespack) with—according to the documentation—a Texas-

based mailing address. The HELOC set Texas as the place where the loan contract

would be performed. The HELOC was secured by a house located in Texas, and the

deed of trust is governed by Texas law. It is undisputed that the HELOC was

assigned to MOR KM, which maintains its principal office and place of business in

Texas. The HELOC note and the loan documentation evince a clear, specific intent

by Waguespack to purposefully direct conduct towards Texas for the benefit of her

brother, a Texas resident. Appellant’s fraudulent transfer and declaratory judgment

claims seek to avoid the lien related to the Texas real estate transaction under the

Texas Uniform Fraudulent Transfer Act as a sham insider loan and foreclose on the

Texas property. Accordingly, the record shows the defendant purposefully availed

herself of the privilege of conducting activities here and that there is a nexus between

the defendant, the litigation, and the forum state. Waguespack’s assertion that the

–9– transaction was done at the direction of Moreno cannot evade both her contacts with

the forum state and the specific connection of these contacts to the cause of action

being asserted against her in this case.

In a recent case from this Court, MBM Family Trust No. 1 v. GE Oil & Gas,

LLC, No. 05-20-01103-CV, 2021 WL 4236874 (Tex. App.—Dallas Sept. 17, 2021,

no pet.) (mem. op.), GE Oil & Gas, LLC, a judgment creditor of Michel Moreno,

was pursuing fraudulent transfer claims related to the same home equity line of credit

being pursued in this case. Id. at *1. There, Waguespack argued she participated in

the home equity line of credit transaction only in her individual capacity as Moreno’s

sister and did not participate in the transaction in her capacity as trustee. Id. at *4.

The trial court, however, denied Waguespack’s special appearance, and we

concluded the evidence raised at least a fact issue regarding specific jurisdiction. Id.

at *5. Addressing whether the exercise of jurisdiction violated traditional notions of

fair play and substantial justice, we concluded:

[T]he record indicates the Trust and Waguespack are involved in providing funds to Moreno, a Texas resident, in Texas. The burden on the Trust and Waguespack in adjudicating the underlying dispute in Texas is therefore minimal. Further, it appears that Texas has a considerable interest in adjudicating the underlying dispute in its entirety, and such an adjudication will aid GE in obtaining convenient and effective relief in Texas and result in an efficient resolution of the claims between the parties.

Id. at *4. We reach a similar conclusion in this case.

The evidence before the trial court raised, at the very least, a fact issue

regarding specific jurisdiction; therefore, we conclude the trial court erred in –10– granting the plea to the jurisdiction in this case. See id.; see M & F Worldwide, 512

S.W.3d at 886. We also reject the argument that the exercise of jurisdiction violates

traditional notions of fair play and substantial justice. Texas has a substantial interest

in resolving this dispute.

We sustain appellant’s issue, reverse the trial court’s order granting appellee

Waguespack’s special appearance, and remand for further proceedings.

/Lana Myers// 210390f.p05 LANA MYERS JUSTICE

–11– Court of Appeals Fifth District of Texas at Dallas JUDGMENT

ALAN HALPERIN, AS TRUSTEE On Appeal from the 193rd Judicial OF THE GFES LIQUIDATION District Court, Dallas County, Texas TRUST, Appellant Trial Court Cause No. DC-20-01025. Opinion delivered by Justice Myers. No. 05-21-00390-CV V. Justice Garcia participating.

MICHEL B. MORENO AND MOR MGH HOLDINGS, LLC, DALIS M. WAGUESPACK, AND TIFFANY C. MORENO, Appellees

In accordance with this Court’s opinion of this date, we REVERSE the trial

court’s order granting the special appearance filed by appellee DALIS M.

WAGUESPACK, and this cause is REMANDED to the trial court for further

proceedings. It is ORDERED that appellant ALAN HALPERIN, AS TRUSTEE

OF THE GFES LIQUIDATION TRUST, recover his costs of this appeal from

appellee DALIS M. WAGUESPACK

Judgment entered this 9th day of March, 2022.

–12–