Barbara Regina Schlein v. Anthony Griffin

Opinion

ACCEPTED 01-14-00799-cv FIRST COURT OF APPEALS HOUSTON, TEXAS 5/4/2015 2:29:53 PM CHRISTOPHER PRINE CLERK

CAUSE NO. 01-14-00799-cv

FILED IN 1st COURT OF APPEALS IN THE COURT OF APPEALS HOUSTON, TEXAS 5/4/2015 2:29:53 PM FOR THE FIRST DISTRICT OF TEXAS CHRISTOPHER A. PRINE Clerk

HOUSTON, TEXAS

BARBARA REGINA SCHLEIN,

Appellant/Cross-Appellee,

vs.

ANTHONY P. GRIFFIN,

Appellee/Cross-Appellant.

REPLY BRIEF OF APPELLANT BARBARA REGINA SCHLEIN

Stephen H. Cagle State Bar No. 24045596 Heather Panick State Bar No. 24062935 CHRISTIAN, SMITH & JEWELL LLP 2302 Fannin, Suite 500 Houston, Texas 77002 t: (713) 659-7617 f: (713) 659-7641 ATTORNEYS FOR APPELLANT

ORAL ARGUMENT REQUESTED TABLE OF CONTENTS

TABLE OF CONTENTS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ii

INDEX OF AUTHORITIES. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . iii

SUMMARY OF THE ARGUMENT. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4

ARGUMENT.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5

I. Appellee Lacked Standing to Bring Suit in his Own Name.. . . . . . . . 5

II. The Trial Court did not Err in Denying Cross-Appellant’s JNOV on the Deceptive Trade Practices Questions Submitted to the Jury. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8

III. Error as to Rebuttal Witnesses was Preserved . . . . . . . . . . . . . . . . . 11

CONCLUSION AND RELIEF REQUESTED.. . . . . . . . . . . . . . . . . . . . . . . . . . . 12

CERTIFICATE OF SERVICE. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14

CERTIFICATE OF COMPLIANCE.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14

-ii- INDEX OF AUTHORITIES

Cases

Arkoma Basin Exploration Co., Inc. v. FMF Associates 1990-A, Ltd., 249 S.W. 3d 380, 387 (Tex. 2008). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14

Bailey v. Vanscot Concrete Corp., 894 S.W. 2d 757, 759-761 (Tex. 1995). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10

Chilkewitz v. Hyson, 22 S.W.3d 825, 829, 830 (Tex. 1999).. . . . . . . . . . . . . . . 9, 10

Durbin v. Dal-Briar Corp., 871 S.W. 2d 263, 268-269, 273 (Tex. App.–El Paso 1994, writ denied).. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11

Emmett Properties, Inc. v. Halliburton Energy Services, Inc., 167 S.W.3d 365, 371 (Tex. App.–Houston [14th Dist.] 2005, pet. denied). . . . . . . 8

Golden Eagle Archery, Inc. v. Jackson, 24 S.W. 3d 362 (Tex. 2000). . . . . . . . . . 11

Interstate Northborough P’ship, 66 S.W. 3d 213, 220 (Tex. 2001).. . . . . . . . . . . 12 Sixth RMA Partners v. Sibley, 111 S.W. 3d 46, 56 (Tex. 2003).. . . . . . . . . . . . . . . 9

Statutes

Tex. Bus. Orgs. Code § 21.551. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8

Other Authorities

Tex. R. Civ. P. 28. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9

Tex. R. Evid. 406.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11

Standards of Review in Texas, 38 St. Mary’s L.J. 47, 75 (2006). . . . . . . . . . . . . . 12

Tex. R. Evid. 103(a)(1). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13 SUMMARY OF ARGUMENT

Appellee Anthony Griffin admits that “A Griffin Lawyers” was never registered

as an assumed name; he also admits that “Anthony P. Griffin Inc.” is defunct. These

are the only “parties” to the agreement with Barbara Schlein. Griffin drafted the

contract at issue, and chose to contract through those “parties;” he must live with those

terms now.

Furthermore, Griffin’s reliance on Rule 28 to save his claim is misplaced

because the Rules do not apply to entities with no legal existence. His status as

“owner” of both entities does not give him the right to enforce his corporation’s claim.

Finally, the trial court abused its discretion by preventing Schlein from

effectively rebutting Griffin’s claim that it was his “routine practice” to keep his

clients informed, and by admitting dozens of unsigned letters based on this

presumption. Further, Schlein preserved her complaint to the admission of

undisclosed rebuttal witnesses on this point by timely objecting to the trial court’s

decision to permit such undisclosed witnesses.

-4- ARGUMENT

I. Appellee Lacked Standing to Bring Suit in his Own Name

Griffin is not a party to the agreement that is the basis of this lawsuit. Stripped

to its essentials, Griffin argues he can enforce his corporation’s contract because he

is its sole shareholder. This is not the law in Texas, and Griffin, a lawyer, should

know better.

The contract at issue is between Barbara Schlein and “A Griffin Lawyers /

Anthony P. Griffin, Inc.” [PX-1] Griffin originally brought suit in his individual

capacity. When challenged in the trial court, Griffin responded by adding “A Griffin

Lawyers” as a party. [CR-628] Yet Griffin brazenly admits in his Response that “A

Griffin Lawyers” was never duly registered as a d/b/a of any entity. (Response Brief,

at 10). The trial court erred by giving legal significance to this nonexistent entity.

Griffin’s conduct in this case amply illustrates the evil which the laws on

assumed names were designed to suppress. In 2012, in the Southern District of Texas,

Griffin stated under penalty of perjury that “A Griffin Lawyers” was the assumed

name of Anthony P. Griffin Inc. [CR-422, ln 1-18; CR 522] This is consistent with the

contract at issue, which pairs “A Griffin Lawyers / Anthony P. Griffin Inc.” as the

contracting party. [PX-1] In 2014, when this was called into question, Griffin claimed

“A Griffin Lawyers” as his own; he specifically denied that it had ever been used by

-5- his corporation. [CR-640]

Because the only evidence supporting Griffin’s standing is the inconsistent

testimony of an interested witness, the trial court erred in finding that Griffin had

standing to maintain suit.

Griffin’s fallback position is one which has no support in the law. As his

response brief states:

In the case at bar, the assumed name was not a valid assumed name (not filed with the county clerk), this however did not restrict Anthony P. Griffin, the owner of both the defunct corporation and the non-registered assumed name to bring the claim to enforce the contract in question for services performed by Anthony P. Griffin.

Contrary to Griffin’s claim, the owner of a defunct corporation may not enforce claims

on behalf of the corporation. See Emmett Properties, Inc. v. Halliburton Energy

Services, Inc., 167 S.W.3d 365, 371 (Tex. App.—Houston [14th Dist.] 2005, pet.

denied).

In Emmett, the shareholders of a defunct corporation sought to assert a claim of

property damage on behalf of the corporation. The Fourteenth Court denied their

request to intervene: “A corporate stockholder cannot recover damages personally for

a wrong done solely to the corporation, even though he may be injured by that wrong.”

The Emmett Court noted that, by statute and necessity, a stockholder’s right to assert

a claim is necessarily limited to a derivative action. See Tex. Bus. Orgs. Code §

-6- 21.551. “Even though stockholders may sustain indirect losses, they have no

independent right to bring an action for injuries suffered by the corporation.” Id.

(emphasis in original). Thus Griffin may not assert claims on behalf of his

corporation.

Griffin cites two cases to support his capacity argument. Neither one is

applicable to the facts as presented here. In Sixth RMA Partners v. Sibley, 111 S.W.3d

46 (Tex. 2003), the defendant never raised the issue of a lack of assumed name

certificate until the case was in the Supreme Court; that court held that defendant had

waived the issue. Id. at 56. Here Defendant properly raised the issue under Rule 93,

moved for summary judgment on the issue, and vigorously contested whether Griffin

had produced any evidence that he had used “A Griffin Lawyers” as an assumed name.

[CR 481-567; CR 699-726] Sixth RMA Partners does not apply.

Next, Appellee’s reliance on Chilkewitz v. Hyson, 22 S.W.3d 825 (Tex. 1999)

is misplaced. Chilkewitz involved Tex. R. Civ. P. 28's application to a malpractice

claim. The claim was erroneously filed against a physician individually when it was

the doctor’s professional association that performed the services. Id. The Supreme

Court applied Tex. R. Civ. P. 28 to Chilkewitz’s claim, holding that because the

association had, in effect, done business in Dr. Hyson’s name, suing the doctor was

effective to sue the corporation. Id. at 829.

-7- However, Chilkewitz does not apply because, as the Supreme Court noted, Rule

28 does not apply to defunct corporations, which cannot do business “under an

assumed name or any other name.” Id. at 830 (citing Bailey v. Vanscot Concrete

Corp., 894 S.W.2d 757, 759-761 (Tex. 1995). Griffin has consistently admitted that

Anthony P. Griffin Inc. is “defunct.” In fact, he admitted that the corporation had not

been in good standing since 1998; and public records show it has forfeited its legal

existence. [CR-802] Rule 28 has no application under the facts of this case.

Anthony P. Griffin chose to contract with Barbara Schlein through a defunct

corporation, using a non-registered DBA. It is unclear why he chose to do this. What

is clear is that, under Texas law, neither the “defunct” corporation nor the unregistered

assumed name may use the courts of the State to enforce claims. The trial court’s

decision, permitting the suit to go forward, was a clear abuse of discretion.

II. The Trial Court Created a Misleading Impression by Excluding Appellant’s Habit and Rebuttal Evidence

The trial court excluded all mention of 29 grievances filed against Anthony

Griffin; allowed only cross-examination over three grievances which were final; and

then permitted rebuttal testimony by Griffin’s witnesses. The trial court’s decision

allowed Griffin to foster a false impression in the minds of the jury and vitiated Ms.

Schlein’s defense. In doing so, the trial court erred; this error probably resulted in

rendition of an improper verdict.

-8- The 32 excluded grievances were admissible for several reasons: because

Griffin “opened the door” to their admission [RR 6 165:7-18]; to rebut Griffin’s

testimony about the “habit or routine practice” of his office [RR 6, 165:7-18]; and as

similar happenings evidence [Brief of Appellant 17-22]. They were also germane to

Schlein’s claims for exemplary damages. [Id. at 22-23]

Appellee’s argument that the grievances about his law practice were properly

excluded because they were character evidence is without merit. The argument

assumes that complaints about how Griffin ran his office are directed at him

personally. Furthermore, Tex. R. Evid. 406 specifically authorizes evidence of both

“habit of a person” and the “routine practice of an organization.” Since, by definition,

grievances filed with the State Bar of Texas would have to relate to the practice of law,

there is no basis for contending that these complaints were offered to prove Griffin’s

bad character.

Further, when a trial court’s evidentiary rulings permit one party to create a

false impression in the minds of the jury, reversible error is shown. Durbin v.

Dal–Briar Corp., 871 S.W.2d 263, 268–69, 273 (Tex.App.-El Paso 1994, writ denied),

overruled in part on other grounds by Golden Eagle Archery, Inc. v. Jackson, 24

S.W.3d 362 (Tex.2000)

Here the trial court’s ruling permitted Griffin to pose as a paragon of virtue

-9- while painting Schlein as some kind of lone crank. But Schlein was not alone; there

were at least two dozen other clients who felt the same way about Griffin. The trial

court’s ruling deprived Schlein of her most effective weapon to counter Griffin’s

claims.

Finally, when reviewing evidentiary complaints, the reviewing court must

consider the entire record. See e.g. Interstate Northborough P’ship, 66 S.W.3d 213,

220 (Tex. 2001). Put another way, the complained-of errors cannot be viewed in

isolation. As one leading commentator noted:

One error under scrutiny will be considered against the whole record, including the other errors in the case. If the other errors compound the harm caused by the error under scrutiny, then reversible error exists from a review of the record as a whole. If the other errors compound the harm caused by the error under scrutiny, then reversible error exists from a review of the record as a whole.

W. Wendell Hall, Standards of Review in Texas, 38 St. Mary’s L.J. 47, 75

(2006)(emphasis supplied).

Here, when viewed in context, it is apparent that the trial court’s ruling probably

resulted in an improper verdict. Consider first that, based on Appellee’s testimony of

“habit or routine practice,” the jury was allowed to take dozens of unsigned letters

retrieved from Appellee’s hard drive into the jury room. These letters were admitted

wholesale, on the strength of Appellee’s “routine practice” testimony, and offered to

prove that he kept Schlein informed. [RR 8 13:24-16:4] The jury was not allowed to

-10- consider evidence that dozens of Anthony Griffin’s other clients believed that he did

not keep them informed. Even more egregiously, jurors were not allowed to take

Griffin’s public reprimands – public records – into the jury room with them.

Finally, Griffin was permitted to call “rebuttal” witnesses who reinforced

Griffin’s “routine practice” and testified as to his good character. [Brief of Appellant,

at 26-27] In fact, Griffin’s counsel argued to the jury that their testimony showed Ms.

Schlein to be a “fraud.” [RR 12 155:16-20] Griffin thus relied on the absence of all

these complaints to his advantage.

Viewed in this context, the conclusion is clear: the trial court’s rulings put the

scales of justice out of kilter and probably resulted in rendition of an improper verdict.

III. Error as to Rebuttal Witnesses was Preserved

Griffin’s claim that Ms. Schlein waived error by failing to object to the

testimony of rebuttal witnesses is without merit because the Rules of Evidence hold

otherwise. Tex. R. Evid. 103(a)(1) states that “[w]hen the court hears objections out

of the presence of the jury and rules that such evidence be admitted, such objections

shall be deemed to apply to such evidence when it is admitted before the jury without

the necessity of repeating those objections.” Ms. Schlein did just that: she raised a

specific objection to nondisclosed witnesses with the trial court, outside of the

presence of the jury, after the charge conference. [RR 9 58:17-24] Counsel engaged

-11- in brief argument about whether the need for such rebuttal witnesses should have been

reasonably anticipated, as required under the Rules. [RR 9 58:25-59:5] At that point,

the trial court had not ruled on the admissibility of the grievances; she promised a

ruling on both issues when trial reconvened. [Id. 59:6-21]

The reporter’s record resumes in the middle of Griffin’s argument about whether

the need for rebuttal witnesses could have been reasonably anticipated. [RR 10 5:1-7]

The trial court makes it clear that she has already ruled on limiting the admissibility

of the grievances. [RR 10 5:8-9] See also RR 11 163:9-168:19](formal bill of

exception memorializing trial court’s ruling on grievances) The trial court eventually

ruled that a limited number of rebuttal witnesses would be admitted, impliedly

overruling Ms. Schlein’s objection. [RR 10 6:13-17]

“[T]he cardinal rule for preserving error is that an objection must be clear

enough to give the trial court an opportunity to correct it.” Arkoma Basin Exploration

Co., Inc. v. FMF Associates 1990-A, Ltd., 249 S.W.3d 380, 387 (Tex. 2008). This

record shows the trial court was made aware of Ms. Schlein’s complaint and ruled

accordingly. Error is preserved.

CONCLUSION AND RELIEF REQUESTED

Appellee’s response admits to relying on an incorrect theory of law to bring suit

in his individual capacity. Appellee also fails to show that the exclusion of the dozens

-12- of grievances against him was harmless. Further, error was preserved with respect to

the admission of undisclosed testimony from rebuttal witnesses. Appellant Barbara

Regina Schlein therefore prays that, for the reasons set forth in her briefs filed in this

appeal, the judgment in favor of Anthony Griffin, individually, be reversed and

judgment rendered in her favor; alternatively, that judgment be reversed as set forth

above, and in her original Brief; and for all further relief to which she may be justly

entitled.

Respectfully submitted,

CHRISTIAN , SMITH & JEWELL, LLP

By: //s// Stephen H. Cagle, Jr. Stephen H. Cagle, Jr. State Bar No. 24045596 scagle@csj-law.com Heather Panick State Bar No. 24062935 hpanick@csj-law.com 2302 Fannin, Suite 500 Houston, Texas 77002 Telephone: (713) 659-7617 Facsimile: (713) 659-7641

ATTORNEYS FOR APPELLANT/ CROSS-APPELLEE

-13- CERTIFICATE OF SERVICE

I do hereby certify that a true and correct copy of the above and foregoing instrument has been forwarded to all counsel of record via the Rules on this the 4th day of May, 2015

Ms. Norma Venso 830 Apollo Houston, Texas 77058 Facsimile: (281) 286-9990 Telephone: (409) 789-8661

By: //s// Stephen H. Cagle, Jr. STEPHEN H. CAGLE, JR.

CERTIFICATE OF COMPLIANCE

Pursuant to Tex. R. App. P. 9.4(i)(2)(B), I hereby certify that Appellant Barbara Schlein’s Brief in Reply contains less than 15,000 words (counting all parts of the document). Specifically, this brief was prepared using WordPerfect and according to its word-count function, this document contains 2,646 words in total. Further, the typeface used in this brief is no smaller than 14-point, except for footnotes, which are no smaller than 12-point.

-14-