Control Works, Inc. and Third Party Elsa Cantu and Myla Cantu Garcia v. Jack Phillip Seeman

CourtCourt of Appeals of Texas
DecidedJune 28, 2018
Docket01-17-00212-CV
StatusPublished

This text of Control Works, Inc. and Third Party Elsa Cantu and Myla Cantu Garcia v. Jack Phillip Seeman (Control Works, Inc. and Third Party Elsa Cantu and Myla Cantu Garcia v. Jack Phillip Seeman) 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
Control Works, Inc. and Third Party Elsa Cantu and Myla Cantu Garcia v. Jack Phillip Seeman, (Tex. Ct. App. 2018).

Opinion

Opinion issued June 28, 2018

In The

Court of Appeals For The

First District of Texas ———————————— NO. 01-17-00212-CV ——————————— CONTROL WORKS, INC., ELSA CANTU-RIOS, AND MYLA CANTU, Appellants V. JACK PHILLIP SEEMAN, Appellee

On Appeal from the 269th District Court Harris County, Texas Trial Court Case No. 2010-10404

MEMORANDUM OPINION

After a jury trial, the trial court entered judgment in favor of Jack Phillip

Seeman on his claims that Tony Cantu, individually and through his alter-ego,

Control Works, Inc., fraudulently transferred assets to his wife, Elsa Cantu-Rios, and

mother, Myla Cantu, to prevent Seeman from collecting a $300,000 judgment awarded to him in a previous suit between the parties. In five issues on appeal, the

appellants, Control Works, Elsa Cantu-Rios, and Myla Cantu, challenge (1) the

jury’s findings on alter-ego and fraudulent transfer, (2) the exemplary damages

assessed against Control Works and Elsa, and (3) the jury’s finding that the property

subject to the fraudulent transfer claim was not Elsa’s homestead.

BACKGROUND

The following is this Court’s recitation of facts in a previous suit between

Tony Cantu and Jack Seeman:

On March 9, 2007, Tony Cantu filed suit in County Court against his neighbor, Jack Seeman, alleging intentional infliction of emotional distress, libel and slander, sexual harassment, stalking, assault, conspiracy, and malicious prosecution. The crux of Cantu’s allegations against Seeman was that Seeman was obsessed with Cantu’s wife, Elsa, that he stalked her, harassed her by giving her gifts, and spied on her. Cantu further alleged that as a result of this obsession, Seeman hated Cantu and made false reports to the police about him, threatened him, and damaged his property.

Cantu v. Seeman, No. 01-09-00545-CV, 2012 WL 1564536, at *1 (Tex. App.—

Houston [1st Dist.] May 3, 2012, pet. denied). On February 11, 2009, the jury

returned a verdict in favor of Seeman, and the trial court entered a $300,000

judgment in Seeman’s favor.

On February 12, 2009, one day after the jury verdict referenced above, Elsa,

purportedly acting on behalf of Control Works, transferred real property titled in

Control Works’s name and located at 1314 Longdraw Drive, Katy, Texas [“the Katy

2 Property”], to herself, individually. A few days later, Elsa filed a “corrected deed”

that was backdated two years; she also filed a designation of homestead that was

backdated two years. Elsa testified that the deeds were not an attempt to defraud

Tony’s creditors, but were to reduce her tax burden by designating the Katy Property

as her homestead.

In 2009, Seeman sought to execute on the judgment by obtaining orders for

Tony to turnover all stock ownership in Control Works. This Court affirmed the

turnover order. Id. at *4.

On February 17, 2010, Control Works brought the present lawsuit, seeking to

enjoin Seeman from obtaining the shares of stock that he was awarded in the

turnover order. Seeman counterclaimed against Control Works and filed a third-

party petition against Elsa and Myla, contending that Tony, acting through his alter

ego, Control Works, had fraudulently transferred property to them to avoid paying

Seeman his $300,000 judgment. Control Works did not pursue its injunctive relief,

and the case went to trial on Seeman’s claims.

At trial, Elsa claimed that she and Tony were not the owners of Control

Works, but that, since the time of its incorporation in 1997, its shares were owned

by Tony’s parents, who gave him $20,000 to start the consulting firm, and that he

and Elsa were merely employees of Control Works. No such stock certificates were

3 admitted at trial. In contrast, Seeman presented evidence that, during years of

previous litigation, Tony had claimed to own Control Works.

After a four-day jury trial, the jury returned a verdict finding that: (1) Tony

fraudulently transferred his ownership interest in Control Works to his mother,

Myla, (2) the value of the fraudulently transferred interest in Control Works was

$236,020, and (3) Control Works was responsible for the conduct of Tony. The jury

also found that (4) Control Works fraudulently transferred the Katy Property to Elsa,

and (5) the value of the fraudulently transferred Katy Property was $235,020. The

jury further determined that (6) the Katy Property was not the homestead of Elsa.

Finally, the jury found that (7) harm to Seeman was caused by Control Works’ and

Elsa’s malice and (8) assessed $225,000 in exemplary damages against both Control

Works and Elsa.

Based on the jury’s verdict, the trial court entered a final judgment that:

(1) ordered that the transfer of the Katy Property from Control Works to Elsa was null and void;

(2) ordered that the corrected warranty deeds purporting to transfer the Katy Property from Control Works to Elsa were null and void;

(3) ordered that the transfer of the ownership interest in Control Works from Cantu to his mother, Myla, was null and void;

(4) ordered that the ownership interest in Control Works, Inc. was vested in Seeman and his attorneys;

(5) ordered Elsa to deliver to Seeman’s attorneys all of Control Works’ books and records; 4 (6) ordered that all transfers of assets made by Control Works after January 12, 2017 [the date of the trial court’s verdict] were null and void;

(7) ordered that the District Clerk issue a writ of possession to Control Works and its transferees, Seeman and his attorneys;

(8) ordered that Control Works is jointly and severally liable to Seeman for the $300,000 judgment in the previous lawsuit;

(9) ordered that Control Works was permanently enjoined from transferring any of its assets to anyone other than Seeman; and

(10) awarded Seeman $225,000 in exemplary damages from both Elsa and Control Works, plus pre- and post-judgment interest and costs.

Control Works, Elsa, and Myla timely filed notices of appeal. Seeman did not

file a notice of appeal.

ISSUES

Appellants bring five issues on appeal, many with sub-points, which we will

attempt to discuss respectively.

1. “The Judgment Cannot Stand Because Appellants Were Not Debtors to Appellee Seeman.”

In their first issue, appellants argue that “[t]he Texas turnover statute cannot

be used as a vehicle to hold Control Works liable for the debts of Tony Cantu.”

Appellants also argue that Elsa and Myla “were never judgment debtors to Appellee”

and that “a turnover order is inappropriate where a judgment creditor attempts to

5 relieve a third party corporation of property without first successfully piercing the

corporate veil in a separate trial.”

The verdict in this case, however, was not based on the Texas turnover statute.

Instead, Seeman obtained jury findings that Control Works was the alter- ego for

Tony, and that Control Works, as Tony’s alter-ego, fraudulently transferred

corporate property to his wife and mother.

Because the turnover statute had nothing to do with the judgment entered in

this case, we overrule appellants’ first issue on appeal.

Appellants’ first issue also appears to challenge the factual sufficiency of the

evidence to support the jury’s alter-ego findings. To the extent that it does so, that

issue is waived because it was not raised in appellants’ motion for new trial. See

TEX. R. CIV. P. 324 (b)(2) (“A point in a motion for new trial is a prerequisite to the

following complaints on appeal: . . .

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Control Works, Inc. and Third Party Elsa Cantu and Myla Cantu Garcia v. Jack Phillip Seeman, Counsel Stack Legal Research, https://law.counselstack.com/opinion/control-works-inc-and-third-party-elsa-cantu-and-myla-cantu-garcia-v-texapp-2018.