Brosseau v. Ranzau

81 S.W.3d 381, 2002 Tex. App. LEXIS 4069, 2001 WL 1877063
CourtCourt of Appeals of Texas
DecidedJune 6, 2002
Docket09-99-145 CV
StatusPublished
Cited by52 cases

This text of 81 S.W.3d 381 (Brosseau v. Ranzau) is published on Counsel Stack Legal Research, covering Court of Appeals of Texas primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Brosseau v. Ranzau, 81 S.W.3d 381, 2002 Tex. App. LEXIS 4069, 2001 WL 1877063 (Tex. Ct. App. 2002).

Opinion

OPINION

DAVID B. GAULTNEY, Justice.

On motion for rehearing, our prior opinion was withdrawn. The following opinion is substituted in its place.

Appellee Dennis R. Ranzau (“Ranzau”) and appellant William D. Brosseau (“Bros-seau”) expressed interest in a house (“Casa T”) in Acapulco that was being offered for sale by John Ballis (“Ballis”). *385 Brosseau and Ranzau met with Ballis and negotiated the sale of the house. During the course of the negotiations, it became apparent that the house was the sole asset of a Canadian corporation, 80451 Holdings, Ltd. (“80451”).

Brosseau and Ranzau each agreed to pay Ballis $60,000 down and co-sign a promissory note for $800,000. Ranzau testified Brosseau did not have time to draw up the partnership papers, so with Ran-zau’s permission the funding of the transaction went through one of Brosseau’s companies, Argos Properties, Inc. (“Argos”), with the sole outstanding share of stock, certifícate no. 8, placed in Argos. Ballis and Argos, through its president Brosseau, signed a Stock Purchase and Sale Agreement that recited, among other things, that Ballis owned all the stock in 80451 and that all the shares were represented by a single certificate, no. 8. After a tangled web of financial restructuring, the parties ultimately negotiated a deal that resulted in the $800,000 promissory note becoming pledged to First State Bank of Liberty (“First State”).

Ranzau soon became concerned that Brosseau was not accounting for the expenses and income of Casa T, which rented for $1,500 a day. In spite of numerous requests from Ranzau, Brosseau allegedly failed to provide receipts for the substantial expenses he claimed were being expended on the house. On one occasion, Ranzau’s wife was embarrassed and angered when she and some of her friends were locked out of the house by an agent of Brosseau. Ranzau filed this lawsuit claiming breach of the partnership agreement, breach of a partner’s fiduciary duty, and fraud; he also requested an accounting, declaratory relief, injunctive relief, and the appointment of a receiver. Ran-zau relied on an oral partnership agreement and various letters and documents.

In April 1989, the trial court appointed a receiver to take charge of the partnership property during the dispute. While the lawsuit was pending, the FDIC took over as receiver for First State and the case was removed to federal court. The case was eventually remanded back to state court following payment of $600,000 to the FDIC. As part of a settlement agreement, Brosseau, Argos, and 80451 conveyed stock certificate no. 8 and Casa T to the FDIC by “Quitclaim Deed and Agreement Respecting Collateral.” Ultimately, the FDIC conveyed the property in similar fashion to the state court receiver. In April 1991, Teresa Brosseau claimed she owned the Brosseau/Argos interest in the property, and on that basis she filed an intervention in the state court lawsuit.

The case was heard in a bench trial in May 1991. In November 1991, the trial court entered an interlocutory judgment for Ranzau and ordered Brosseau to pay $107,196.76 in actual damages and $200,000 in exemplary damages, plus attorney’s fees. The interlocutory judgment also found that a partnership existed between Ranzau and Brosseau/Argos, and that on the date Ranzau filed the suit, Ranzau and Brosseau/Argos owned the stock and assets of 80451 as tenants in partnership. On August 7, 1992, after finding that Brosseau had diverted rental income and intentionally violated court orders, the trial court ordered the receiver to sell the property.

Between the onset of litigation in 1989 and the 1998 final judgment, other events occurred that appeared to place ownership of the property in one person. On October 8,1991, some seven months after the interlocutory judgment, Brosseau filed for Chapter 11 bankruptcy. The bankruptcy was later converted to a Chapter 7 bankruptcy. For the purpose of liquidating the assets of the estate, the bankruptcy court *386 appointed a trustee. On February 1, 1994, the trustee sold ownership of the bankruptcy estate’s interest, if any, in 80451 and Casa T to Ranzau. During the pen-dency of the bankruptcy estate and the instant suit, divorce litigation between Teresa Brosseau and William Brosseau proceeded in a district court in Dallas County. On Teresa Brosseau’s motion, the bankruptcy court lifted the stay in November 1992 to allow the district court in Dallas to enter orders regarding, among other things, the preservation of the marital estate, property of the bankruptcy estate, custody and use of property, and characterization and division of property. While the divorce suit was pending, Teresa and the trustees of one of the children’s trusts agreed to convey to Ranzau any interest they had in the stock of 80451 Holdings and Casa T. Meanwhile, pursuant to the trial court’s order in the district court in Liberty County, the receiver executed a Bill of Sale and a Quitclaim Deed on April 16, 1994, in which the stock and Casa T were conveyed to Ranzau. By the middle of 1994, it appeared that Ranzau had acquired the existing rights to 80451 and Casa T. However, in September 1994, the Dallas County district court entered a divorce decree in the Brosseau divorce proceeding that declared the trust’s conveyance to Ranzau was not effective and that the stock in 80451 and Casa T were the property of the Brosseaus’ children.

In addition to the complexities described above, there were recusal issues in the Liberty County case. In September 1991, Brosseau filed a motion to recuse the state trial judge. The first recusal motion in September 1991 was not verified as required by Rule 18a(a) of the Texas Rules of Civil Procedure, and the trial court refused to refer it to the presiding judge. Brosseau filed a second, properly verified motion to recuse on September 9, 1992. No action was taken on the motion. Ultimately, Brosseau appealed, and in 1995 this court issued an opinion concluding the trial judge violated Rule 18a by failing to address the recusal motion. See Brosseau v. Ranzau, 911 S.W.2d 890, 893 (Tex.App.Beaumont 1995, no writ). On December 5, 1997, Brosseau’s second motion for recusal was finally heard and denied. Brosseau appealed to this court for a second time; he claimed he did not receive sufficient notice of the December 5, 1997, recusal hearing. See Brosseau v. Ranzau, 28 S.W.Sd 235, 238 (Tex.App.-Beaumont 2000, no pet.). Finding that notice had been inadequate and that all actions taken by the judge after the violation of Rule 18a were void, this court abated the appeal for a second recusal hearing. Id. at 238-40. Another hearing on the motion to recuse was held in February 2001, and the motion was again denied. As we explain below, the motion to recuse, which resulted in considerable delay and two appellate opinions, had no merit.

Meanwhile, in August 1996 a court in Mexico held that the stock in 80451 was owned by the Brosseau [Children’s] Trust and Desarrollo Turístico Alexa, S.A. de C.V. (Alexa Tourism Development) (hereafter “DTA”), a Mexican corporation. The Mexican judgment was affirmed by the Superior Court of Justice of the Tabares Judicial District on December 12, 1996.

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Cite This Page — Counsel Stack

Bluebook (online)
81 S.W.3d 381, 2002 Tex. App. LEXIS 4069, 2001 WL 1877063, Counsel Stack Legal Research, https://law.counselstack.com/opinion/brosseau-v-ranzau-texapp-2002.