Gaylen M. Brotherson, Judy K. Brotherson, Ryan Durant, Sam Murante, Michael Wilcox, and Gene Wilczewski v. Springbrook Apartments, Ltd., a Louisiana Limited Partnership

• Court: Court of Appeals of Texas
• Decided: September 30, 2010
• Docket: 02-10-00003-CV
• Status: Published

Opinion

COURT OF APPEALS SECOND DISTRICT OF TEXAS FORT WORTH

NO. 2-10-003-CV

GAYLEN M. BROTHERSON, APPELLANTS JUDY K. BROTHERSON, RYAN DURANT, SAM MURANTE, MICHAEL WILCOX, AND GENE WILCZEWSKI

V.

SPRINGBROOK APPELLEE APARTMENTS, LTD., A LOUISIANA LIMITED PARTNERSHIP

------------

FROM THE 348TH DISTRICT COURT OF TARRANT COUNTY

MEMORANDUM OPINION1 ------------

1 See Tex. R. App. P. 47.4. I. INTRODUCTION

This is an interlocutory appeal by Appellants Gaylen M. Brotherson, Judy

K. Brotherson, Ryan Durant, Sam Murante, Michael Wilcox, and Gene

Wilczewski from the trial court=s order denying their special appearances. In

connection with its special appearance ruling, the trial court signed findings of

fact and conclusions of law. The trial court ruled, based on the facts it found, that

Appellants= special appearances were denied based on the doctrine of judicial

estoppel. For the reasons set forth below, we will affirm the trial court=s ruling.

II. PROCEDURAL BACKGROUND AND FINDINGS OF FACT

Appellee Springbrook Apartments, Ltd., a Louisiana limited partnership,

originally sued Appellants and others in Maricopa County Superior Court in

Arizona (the Arizona Action). All Appellants filed motions to dismiss in the

Arizona Action, alleging that pursuant to a contractual venue selection provision,

Appellee should have brought suit against them in Tarrant County, Texas. The

Arizona court dismissed the Arizona Action, and Appellee filed suit against

Appellants in Tarrant County, Texas. Appellants then filed special appearances

in the Tarrant County suit contending that they were not subject to personal

jurisdiction in Texas.

2 At the special appearance hearing, the Tarrant County trial court had

before it the reporter’s record from a hearing on Appellants’ motion to dismiss the

Arizona Action. In findings of fact, the trial court found that Appellee=s claims

against Appellants were based on a Surplus Cash Note that was signed by

Defendants Tapestry Group, Inc. and by Tapestry Springbrook, LLC; that

Appellants are the principal and sole officers, members, and agents of Tapestry

and Tapestry Springbrook and unilaterally control both entities; that Appellee

alleged claims against Appellants for alter ego, breach of the Surplus Cash Note,

fraud, and negligent misrepresentation; that Appellee originally filed this lawsuit

in Maricopa County Superior Court in Arizona; that Appellants (Gaylen M.

Brotherson, and Judy K. Brotherson) filed a motion to dismiss the Arizona Action

based on a venue selection clause in the Surplus Cash Note or, alternatively, on

forum non conveniens; that the remaining Appellants––Ryan Durant, Sam

Murante, Michael Wilcox, and Gene Wilczewski––filed their own motion to

dismiss the Arizona Action asserting the same grounds for dismissal; that the

venue selection clause upon which all Appellants based their motion to dismiss

designates Tarrant County, Texas, as the proper venue; that at the hearing in

Arizona on all Appellants= motions to dismiss the Arizona Action, they were

represented by the same counsel; and that at the hearing on Appellants= motions

3 to dismiss, Appellants= counsel expressly maintained and argued that Appellee’s

claims against Appellants should have been brought in Tarrant County, Texas.

Specifically, the trial court made the following findings of fact:

11. In the Arizona Action, the Individual Defendants expressly maintained that the lawsuit––which expressly included the claims asserted against them in this case, including the claim for alter ego—should have been brought in Tarrant County, and they asked the Arizona court to dismiss the claims against them as a result. At the hearing [on the motions to dismiss, Appellants= counsel] argued, ―Indeed if there was no dispute as to the payment on the promissory note, there would be no claim for alter ego. There would be no claim for conversion. There would be no claim for fraud. There would be no claim for negligent misrepresentation. That means all of these claims are related to the underlying contract, which in turn means that the venue selection clause applies with equal force to the tort claims that have been alleged in this case.‖

12. At the hearing, [Appellants= counsel] argued that, pursuant to the terms of the Surplus Cash Note, all of the claims alleged by [Appellee] Ashould have been brought in Tarrant County, Texas.@

13. [Appellants= counsel] argued that Tarrant County, not Maricopa County, was the proper venue for the lawsuit, making no distinction between the claims against Tapestry and Tapestry Springbrook, on the one hand, and those against the individual Defendants [that is, Appellants], on the other hand.

14. [Appellants= counsel] specifically represented to the Arizona court that Aif the lawsuit goes forward as it=s supposed to in Tarrant County, Texas, the Defendants are likely to hire counsel in Tarrant County, Texas . . . . [Appellants= counsel] also argued that the Defendants ―benefit from having a Texas court decide this matter‖ and that all of Plaintiff’s claims ―should have been brought in Tarrant County, Texas,‖ and he asked the Arizona court to ―let the parties proceed as they originally agreed in Tarrant County, Texas.‖

15. At no time did [Appellants’ counsel] suggest to the Arizona 4 court that some of the parties –– namely the Individual Defendants – – had not actually agreed to the claims against them proceeding in Tarrant County, or that once Plaintiff brought its claims in the ―proper‖ forum, those Defendants would object to that forum as well. Similarly, in their briefing in the Arizona Action, the Defendants made no distinctions as between the corporate entities and the Individual Defendants or as among the various claims asserted. 16. At the hearing on Defendants’ Motions to Dismiss in the Arizona Action, Plaintiff’s counsel . . . argued vigorously that the Motions to Dismiss should be denied and that the case should remain in Arizona. In doing so he expressly questioned the Defendants’ motives for arguing for venue in Texas and asking the Arizona court to dismiss the case –– ―Why do they even want to go to Texas? They don’t want to be in Texas. They’re doing this to stall to further perpetrate the fraud that they started when they didn’t want to pay us a year ago when they should’ve.‖ 17. The Arizona court sided with the Defendants, deciding at the hearing to grant the Defendants’ Motions to Dismiss based on the venue selection provision. . . . 18. The Arizona court dismissed the case based on its understanding that all the parties had an unambiguous agreement to litigate the case in Tarrant County, Texas, and that all the parties were going to do so. 19. Following the dismissal of the Arizona Action, Plaintiff did exactly what all the Defendants had asked –– it sought to ―let the parties proceed as they originally agreed in Tarrant County, Texas.‖ 20. In the Special Appearance, the Individual Defendants assert that the case cannot proceed in Tarrant County because all claims against them should be dismissed for want of personal jurisdiction. 21. The Individual Defendants previously argued successfully that the Arizona Action should be dismissed because the case could properly proceed only in Tarrant County. 22. Thereafter, the Individual Defendants claimed that the case against them brought in Tarrant County should be dismissed because of a lack of personal jurisdiction. 5 23. The position adopted by the Individual Defendants in their Special Appearance is not consistent with the position they successfully took in the Arizona Action. 24. The Individual Defendants seek to require Plaintiff to bring another lawsuit against them in another jurisdiction when they previously asserted without qualification that the case should proceed in Tarrant County. 25. The Individual Defendants would gain an unfair advantage over the Plaintiff if they were not judicially estopped from arguing that this Court has no personal jurisdiction over them. 26. The Individual Defendants’ Special Appearance is overruled to prevent them from abusing the judicial process and insulting the integrity of the judiciary. [Emphasis added.]

III. APPELLANTS ARE JUDICIALLY ESTOPPED FROM CLAIMING THAT THE TRIAL COURT DOES NOT HAVE PERSONAL JURISDICTION OVER THEM

In a single issue on appeal, Appellants argue that the trial court erred by

denying their special appearances. Appellants challenge the sufficiency of the

evidence to support the trial court’s findings of fact and argue that they ―did not

make a deliberate, clear[,] and unequivocal statement in a prior proceeding

consenting to Texas[’s] personal jurisdiction in their individual capacities.‖

Appellants claim that when their counsel argued their motions to dismiss the

Arizona Action, his use of the word ―parties‖ referred to the parties to the Surplus

Cash Note, not to the parties sued by Appellee in the Arizona Action.

A. Standards of Review2

2 As set forth in its findings of fact and conclusions of law, the trial court denied Appellants’ special appearances because it determined that Appellants 6 Findings of fact entered in a case tried to the court have the same force

and dignity as a jury’s answers to jury questions. Anderson v. City of Seven

Points, 806 S.W.2d 791, 794 (Tex. 1991). The trial court’s findings of fact are

reviewable for legal and factual sufficiency of the evidence to support them by

the same standards that are applied in reviewing evidence supporting a jury’s

answer. Ortiz v. Jones, 917 S.W.2d 770, 772 (Tex. 1996); Catalina v. Blasdel,

881 S.W.2d 295, 297 (Tex. 1994).

We may sustain a legal sufficiency challenge only when (1) the record

discloses a complete absence of evidence of a vital fact; (2) the court is barred

by rules of law or of evidence from giving weight to the only evidence offered to

prove a vital fact; (3) the evidence offered to prove a vital fact is no more than a

mere scintilla; or (4) the evidence establishes conclusively the opposite of a vital

fact. Uniroyal Goodrich Tire Co. v. Martinez, 977 S.W.2d 328, 334 (Tex. 1998),

cert. denied, 526 U.S. 1040 (1999); Robert W. Calvert, "No Evidence" and

"Insufficient Evidence" Points of Error, 38 Tex. L. Rev. 361, 362–63 (1960). In

determining whether there is legally sufficient evidence to support the finding

were judicially estopped from asserting that they are not subject to the Tarrant County trial court’s jurisdiction. Consequently, because this independent basis for the trial court’s ruling is not based on the merits of Appellants’ special appearances, we need not and do not set forth the merits-based special appearance standards of review. The only issue before us is whether the trial court’s findings of fact concerning judicial estoppel are supported by legally and factually sufficient evidence. 7 under review, we must consider evidence favorable to the finding if a reasonable

factfinder could and disregard evidence contrary to the finding unless a

reasonable factfinder could not. Cent. Ready Mix Concrete Co. v. Islas, 228

S.W.3d 649, 651 (Tex. 2007); City of Keller v. Wilson, 168 S.W.3d 802, 807, 827

(Tex. 2005).

When reviewing an assertion that the evidence is factually insufficient to

support a finding, we set aside the finding only if, after considering and weighing

all of the evidence in the record pertinent to that finding, we determine that the

evidence supporting the finding is so weak, or so contrary to the overwhelming

weight of all the evidence, that the answer should be set aside and a new trial

ordered. Pool v. Ford Motor Co., 715 S.W.2d 629, 635 (Tex. 1986) (op. on

reh’g); Garza v. Alviar, 395 S.W.2d 821, 823 (Tex. 1965); In re King’s Estate, 150

Tex. 662, 664–65, 244 S.W.2d 660, 661 (1951).

B. Law on Judicial Estoppel

Judicial estoppel precludes a party who successfully maintains a position

in one proceeding from afterwards adopting a clearly inconsistent position in

another proceeding to obtain an unfair advantage. Ferguson v. Bldg. Materials

Corp. of Am., 295 S.W.3d 642, 643 (Tex. 2009) (citing Pleasant Glade Assembly

of God v. Schubert, 264 S.W.3d 1, 6 (Tex. 2008)). The doctrine is not intended

to punish inadvertent omissions or inconsistencies but rather to prevent parties

8 from playing fast and loose with the judicial system for their own benefit. Id.

(citing Schubert, 264 S.W.3d at 7). The elements of judicial estoppel are (1) a

sworn, prior inconsistent statement made in a prior judicial proceeding; (2) the

successful maintenance of the contrary position in the prior action; (3) the

absence of inadvertence, mistake, fraud, or duress in the making of the prior

statement; and (4) the statement was deliberate, clear, and unequivocal.

DeWoody v. Rippley, 951 S.W.2d 935, 944 (Tex. App.––Fort Worth 1997, writ

dism’d by agr.).

C. Analysis

As previously mentioned, at the hearing in Tarrant County on Appellants’

special appearances, Appellee offered, and the trial court admitted into evidence,

the reporter’s record from the hearing in Arizona on Appellants’ motions to

dismiss the Arizona Action. That record reveals that the same attorney

represented all of the defendants––both the individuals (who are Appellants

here) and corporate entities––in the Arizona Action. When counsel argued the

defendants’ motions to dismiss the Arizona Action, he bound them to the legal

position that he expressed, which was that the parties agreed that jurisdiction

over all claims––including the tort and the alter ego claims––was proper in

Tarrant County, Texas, based on the venue selection provision in the Surplus

Cash Note. See Goldman v. White Rose Distrib. Co., 936 S.W.2d 393, 398 (Tex.

9 App.––Fort Worth 1996), vacated pursuant to settlement, 949 S.W.2d 707 (Tex.

1997) (stating that counsel’s statements can bind the client to that legal position).

The Arizona court accepted counsel’s articulation of the defendants’ position and

held that the language of the Surplus Cash Note unambiguously provided that

―[a]ll legal actions involving the validity or enforcement of this note shall have

jurisdiction and venue in Tarrant County, Texas.‖ The Arizona court thus

dismissed the Arizona Action. When Appellee (the plaintiff in the Arizona Action)

then filed suit in Tarrant County, Appellants filed special appearances, arguing

that the Tarrant County district court did not have personal jurisdiction over them;

Appellants thus took a position clearly inconsistent with their position in the

Arizona Action.

Appellants now attempt to argue that the position articulated by their

counsel in the Arizona Action––that the parties agreed that jurisdiction over all

claims was proper in Tarrant County, Texas––was somehow inadvertent

because counsel’s use of the word ―parties‖ referred to the parties to the Surplus

Cash Note, not to the parties to the lawsuit. The record from the hearing in

Arizona on Appellants’ motions to dismiss, however, reflects no inadvertence or

equivocation in Appellants’ counsel’s argument that ―all of these claims,‖ which

necessarily includes claims asserted against Appellants in their individual

capacities, are subject to the Surplus Cash Note’s venue selection provision.

10 The record does not reveal any mistake, fraud, or duress by or on Appellants’

counsel in the making of the pertinent statements to judge in the Arizona Action.

To the contrary, Appellants’ counsel’s statements to the judge in the Arizona

Action––that the parties had agreed to litigate the suit in Tarrant County, Texas,

and which were made to secure dismissal of the Arizona Action––were

deliberate, clear, and unequivocal. The trial court’s findings of fact supporting its

conclusions of law that Appellants are judicially estopped as a matter of law from

asserting that the Tarrant County district court lacked personal jurisdiction over

them are supported by much more than a scintilla of evidence and the evidence

the evidence supporting the findings is not so weak or so contrary to the

overwhelming evidence that they should be set aside. See Horsely-Layman v.

Adventist Health Sys./Sunbelt, Inc., 221 S.W.3d 802, 808 (Tex. App.––Fort

Worth 2007, pet. denied) (holding that appellant’s nondisclosure of her

malpractice claim prior to discharge from bankruptcy precluded her subsequent

assertion of claim because she had taken position in bankruptcy court that all

claims had been disclosed); Charles Brown, L.L.P. v. Lanier Worldwide, Inc., 124

S.W.3d 883, 900 (Tex. App.––Houston [14th Dist.] 2004, no pet.) (holding that

elements of judicial estoppel doctrine were satisfied when law firm unequivocally

represented itself in its sworn petition in county court as the party involved in the

dispute with Lanier but later attempted to contradict that statement in the district

11 court action); Goldman, 936 S.W.2d at 398 (holding that company was judicially

estopped from asserting that former company president was not entitled to

distribution of monies because company’s attorney took opposite position in prior

lawsuit); see also Dominey v. The Unknown Heirs & Legal Representatives Of

Lokomski, 172 S.W.3d 67, 73 (Tex. App.––Fort Worth 2005, no pet.) (holding

that trial court’s finding that decedent did not abandon property was supported by

legally and factually sufficient evidence); McLaughlin v. Northstart Drilling Techs.,

Inc., 138 S.W.3d 24, 29 (Tex. App.––San Antonio 2004, no pet.) (holding that

findings of fact were supported by legally and factually sufficient evidence).

IV. CONCLUSION

Having overruled Appellants’ sole issue, we affirm the trial court’s order

denying Appellants’ special appearances.

SUE WALKER JUSTICE

PANEL: DAUPHINOT, WALKER, and GABRIEL, JJ.

DELIVERED: September 30, 2010