in Re Todd A. Prins

Opinion

ACCEPTED 04-16-00550-CV FOURTH COURT OF APPEALS SAN ANTONIO, TEXAS 8/31/2016 10:28:19 AM KEITH HOTTLE CLERK

No. 04-16-00550-CV FILED IN IN THE 4th COURT OF APPEALS SAN ANTONIO, TEXAS FOURTH COURT OF APPEALS 8/31/2016 10:28:19 AM KEITH E. HOTTLE at SAN ANTONIO, TEXAS Clerk ______________________

IN RE: TODD A. PRINS ______________________

Original Proceeding from the Probate Court No. 1, Bexar County, Texas, the Honorable Kelly M. Cross Presiding

Cause No. 2015-PC-2377; Estate of Jose Oleszcovski Wasserteil, Deceased.

REAL PARTY IN INTEREST, THE ESTATE OF JOSE OLESZCOVSKI WASSERTEIL, DECEASED RESPONSE TO DEFENDANT TODD A. PRINS’ PETITION FOR WRIT OF MANDAMUS

ORAL ARGUMENT REQUESTED

Submitted by:

FLUME LAW FIRM, LLP 1020 N.E. Loop 410, Suite 200 San Antonio, Texas 78209 (210) 828-5641 (210) 821-6069 Facsimile

MICHAEL FLUME State Bar No. 07188480 mflume@flumelaw.net GUILLERMO S. DEKAT State Bar No. 24069599 gdekat@flumelaw.net

ATTORNEYS FOR REAL PARTY IN INTEREST, THE ESTATE OF JOSE OLESZCOVSKI WASSERTEIL, DECEASED TABLE OF CONTENTS

TABLE OF CONTENTS .................................................................................... … i

INDEX OF AUTHORITIES............................................................................... … ii

STATEMENT OF THE CASE ........................................................................... … 1

ISSUES PRESENTED........................................................................................ … 3

1. Did the Trial Court abuse its discretion in issuing an Order Granting Motion to Place Funds Into the Registry of the Court?

2. Is an Emergency Stay necessary to maintain the status quo of the parties?

STATEMENT OF FACTS……………………………………………………… 3

ARGUMENT…………………………………………………………………… 6

1. The Trial Court did not abuse its discretion issuing an Order Granting Motion to Place Funds Into the Registry of the Court because evidence was presented that the funds were in danger of being lost or depleted…………………………………………….. 6

2. Prins’ Motion For Emergency Stay is not necessary to maintain the status quo pending the outcome of litigation……………...... 7

CONCLUSION ................................................................................................. 9

PRAYER ........................................................................................................... 9

CERTIFICATE OF SERVICE ......................................................................... 12

i INDEX OF AUTHORITIES

CASES

Liang Zhao v. XO Energy, LLC, NO. 01-15-00937-CV 2016, Tex. App. LEXIS 4757 at *25 (Tex. App.—Houston [1st Dist.] May 5, 2016, pet. dism’d).. 6

In re Reed, 901 S.W.2d 604, 609 (Tex. App.—San Antonio 1995, orig. proceeding)…………………………………………………………………………7

STATUTES

TEX. CIV. PRAC. & REM. CODE ANN. Section 61.0016………………………6

ii INTRODUCTION For clarity, Relator is referred to as Prins and includes Prins Law Firm,

which is an assumed name/DBA of Todd A. Prins; Respondent, the Honorable

Kelly M. Cross is sometimes referred to as the Trial Court or Judge Cross; and the

Real Party in Interest is referred to as the Estate.

STATEMENT OF THE CASE Nature of the case. The Estate sued Prins on May 25, 2016 in the 288th District

Court of Bexar County in Cause No. 2016-CI-08932, claiming breach of contract,

breach of fiduciary duty, conversion, punitive damages and attorney’s fees arising

out of a Release of Escrow Funds Agreement that Prins entered into with the Estate

and a $360,902.26 check issued to the Estate by Prins which was subsequently

returned NSF (Nonsufficient Funds) (the “Lawsuit”) (APP 3). Prins filed an

Original Answer (APP 7).

Course of proceedings. The Lawsuit was transferred and consolidated into

Cause No. 2015-PC-2377 in Probate Court No.1, Bexar County, Texas by an order

signed on July 1, 2016 by Judge Cross. The Estate filed a Motion to Place Funds

Into the Registry of the Court on July 18, 2016 (the “Estate’s Motion”) (APP 4). A

hearing was scheduled on the Estate’s Motion for August 17, 2016. On August 16,

2016, Prins communicated through his attorney to the Estate that he would agree to

place funds into the Court’s registry, subject to certain “tax language” in the

1 Agreed Order that was to be presented to the Court in connection with the Estate’s

Motion. A hearing to enter the Agreed Order was subsequently scheduled on

August 25, 2016. On August 25, 2016, Prins, through his attorney, sent the Estate

his reply to the Estate’s Motion, and his supplemental response was subsequently

filed a few hours before the hearing to enter a supposed Agreed Order.

Trial court disposition. Instead of a hearing to enter an Agreed Order on

August 25, 2016, a hearing regarding the Estate’s Motion was held before Judge

Cross. Judge Cross granted the Estate’s Motion (APP 1). This case has not been to

trial and is before this Court as an original proceeding under Texas Government

Code §22.221(b).

2 ISSUES PRESENTED FOR REVIEW

Issue 1: Did the Trial Court abuse its discretion in issuing an Order Granting Motion to Place Funds Into the Registry of the Court? Issue 2: Is an Emergency Stay necessary to maintain the status quo of the parties?

STATEMENT OF FACTS Jose Oleszcovski Wasserteil (the “Decedent”) died on June 7, 2013 in San

Luis Potosi, Mexico. The Decedent was a Mexican citizen at the time of his death.

Prior to his death, Prins was the attorney for Decedent and represented him

personally for approximately ten (10) years. Prins also represented numerous

entities in which both Prins and the Decedent were business partners in located in

the United States.

Decedent’s Will was admitted to probate and otherwise established

Decedent's domiciliary on October 24, 2013 in the Country of Mexico. An

application for Ancillary Letters of Testamentary was subsequently filed in the

Probate Case (the "Ancillary Probate"), and Ancillary Letters of Testamentary

were issued in an Order dated July 25, 2015 which appointed Marco Antonio

Reyner Portes Gil ("Reyner") as Independent Executor of the Estate (APP 3, APP

4).

At the time of his death, Decedent owned a limited partnership interest in

Sun Belt Investment Partners, I, LP ("Sun Belt"). Subsequent to the death of

3 Decedent, Sun Belt made a distribution to its limited partners. The amount

distributed by Sunbelt attributable to Decedent's interest was $366,244.26 (the

"Distribution") (APP 3, APP 4).

Since the Ancillary Probate had not been established at the time of the

Distribution, the amount to be paid to Decedent was deposited into a Cadence

Bank account held by a company that Decedent owned a membership interest in

called Stone Oak Park Delaware, LLC ("Stone Oak"). From Stone Oak, a majority

of the money from the Distribution was wired into the Prins Law Firm IOLTA

Trust Account ("Prins Law Firm Trust Account"). During this time it was not

made known that Prins claimed an interest in the money. The amount transferred

into the Prins Law Firm Trust Account was $360,902.26 (the "Escrow Amount")

(APP 3, APP 4).

On February 23, 2016, Counsel for the Estate, Michael Flume (“Flume”),

on behalf of the Estate, demanded the Escrow Amount from Prins. On the very

same day, Prins thanked Flume for reaching out and offered to put together a

release of escrow agent agreement (APP 3, APP 4).

On March 3, 2016, Prins sent a proposed Release, Indemnity and

Settlement Agreement to Flume and subsequent revisions and changes were

exchanged between the parties through May 13, 2016. At no time was there

4 language in any of the draft escrow release agreements that the Escrow Amount

could potentially be due and owing to Prins, nor did Prins ever allege during this

time that he was entitled to any of the Escrow Amount. A Release of Escrow

Funds Agreement, drafted by Prins, was subsequently executed between the Estate

and Prins.

On Sunday, May 15, 2016, after numerous attempts were made to obtain

the Escrow amount from Prins, Prins met with Flume and delivered a check made

payable to the Flume Law Firm, LLP Trust Account drawn on a Prins Law Firm

Compass Bank checking account in the amount of $360,902.26 (the "Prins Check")

(APP 3, APP 4). On Monday, May 16, 2016, the Prins Check was deposited in the

Flume Law Firm, LLP Trust Account (APP 3, APP 4). The Prins check was

returned NSF on May 18, 2016 (the “NSF Check”) (APP 3, APP 4). Flume was

notified by Chase bank on May 19, 2016 of the NSF Check (APP 3).

On May 19, 2016, Prins was contacted about the NSF Check and Prins

claimed that an error occurred and he would wire the money to the Flume Law

Firm, LLP Trust Account (APP 3, APP 4). Although wire instructions were sent to

Prins, the Escrow Amount has not been received by Reyner, the Estate or the

Flume Law Firm. No rescission of the Release of Escrow Funds Agreement was

5 received by the Estate, and the first time the Estate was made aware of Prins’

desire to keep the money for himself was in his Original Answer.

Argument & Authorities

Issue 1: The Trial Court did not abuse its discretion in issuing an Order Granting Motion to Place Funds Into the Registry of the Court because evidence was presented that the funds were in danger of being lost or depleted.

The Trial Court’s Order is not a Writ of Attachment in accordance with Tex.

Civ. Prac. Rem. Code Section 61.001. A Trial Court may, in exercise of its

inherent authority ‘order a party to pay disputed funds into the court's registry if

there is evidence the funds are in danger of being ‘lost or depleted.’ Liang Zhao v.

XO Energy, LLC, Tex. App. LEXIS 4757 at *25 (citing In re: Reveille Resources

(Texas), Inc., 347 S.W.3d 301, 304 (Tex. App.—San Antonio 2011, orig.

proceeding) (citing Castilleja v. Camero, 414 S.W.2d 431, 433 (Tex. 1967)).

There was sufficient evidence presented at the hearing for the Trial Court to

grant the Estate’s Motion. The Estate’s Motion contained a copy of the Release of

Escrow Funds Agreement, which was also, independently, placed into evidence at

the hearing. (APP 2, page 11). The Estate’s Motion also contained a redacted copy

of the NSF Check that was drafted by Prins and delivered to Flume. An un-

redacted copy of the NSF Check was placed into evidence at the hearing (APP 2,

page 11). Additionally, E-mail communications, between Prins and Flume, that

6 occurred after the receipt of NSF Check by the Estate’s Attorney in which Prins

stated he would wire the money was also placed into evidence at the hearing (APP

2, page 11). Flume, as a witness and an officer of the court also testified to the

Court regarding his dealings with Prins. (APP 2, pages 3-6). The Trial Court also

examined Prins under oath.

Prins asserts that the Estate’s Motion contained no evidence, and no

evidence was presented at the hearing of the Estate’s Motion that the funds were in

danger of being lost or depleted. The Estate disagrees. A check representing

escrowed funds, being held by Prins, a licensed attorney, which was returned for

nonsufficient funds, e-mails evidencing an unexecuted wire transfer from Prins

after Prins had agreed to disperse the funds is sufficient evidence that the funds in

question are in danger of being lost or depleted or perhaps have already been lost

or depleted. Furthermore, given the serious nature of this matter involving an

officer of the court, a polite comment by the Trial Court at the end of a hearing

does not make the evidence it considered disappear.

Issue 2: An Emergency Stay is not necessary to maintain the status quo of the parties?

Prins believes that emergency stay is necessary to maintain the status quo of

the parties and to preserve the Court’s jurisdiction to consider the merits of the

original proceeding. In re Reed, 901 S.W.2d 604, 609 (Tex. App.—San Antonio

1995, orig. proceeding). Nothing could be further from the truth or reality. Prins

7 accepted the money in trust for the Estate (APP 2, page 8). Prins executed a

Release of Escrow Funds Agreement to the Estate (APP 2, page 11). Prins has not

honored the Release of Escrow Funds Agreement with the Estate. The Estate,

upon learning of Prins’ issues, through his Original Answer, desired that the

Escrow Amount be placed in the Court’s Registry while Prins’ issues were

investigated. Prins’ issues with the Estate are still unclear. What is clear is that

Prins has issues with the companies that he represented and that he and the

Decedent were partners in. The issues Prins is bringing forth are with the

companies and not with the Estate.

Prins claims in his Motion for Emergency Relief that the Estate owes a

substantial amount of taxes to the United States Government. It is unknown how

Prins knows this, as the Estate, itself, does not know what taxes are owed at this

time. Darin Digby’s opinion in the affidavit attached to Prins’ Motion for

Emergency Relief appears to rely on the existence of a current IRS tax lien on the

Estate. Mr. Digby based his affidavit on his understanding of the facts, which are

in error. There is no current IRS tax lien on the assets of the Estate, nor has there

ever been an IRS tax lien on the assets of the Estate. Prins’ unsupported

speculation into the tax situation of an Estate that he does not legally represent

should not be taken seriously. The Court’s Registry is the ultimate safe place for

the funds in order to maintain the status quo of the parties.

8 CONCLUSION

Based on the forgoing, there was sufficient evidence before the Trial Court

that the funds in question are in danger of being lost or depleted. Furthermore, an

Emergency Stay is clearly not necessary to maintain the status quo of the parties as

the Court’s Registry would sufficiently protect the funds. Based on the foregoing,

the Trial Court did not abuse its discretion by granting the Estate’s Motion to Place

Funds Into The Registry of the Court and the Emergency Stay is not necessary to

maintain the status quo of the parties.

PRAYER

For the reasons stated above, Real Party in Interest, the Estate of Jose

Oleszcovski Wasserteil, Deceased respectfully prays that this Court DENY the

Relator’s Petition for Writ of Mandamus, DENY Relator’s Motion For Emergency

Relief, and grant any such other relief, general or special, legal or equitable, to

which Real Party in Interest, the Estate of Jose Oleszcovski Wasserteil, Deceased

may be justly entitled.

9 Respectfully submitted,

FLUME LAW FIRM, LLP 1020 N. E. Loop 410, Suite 200 San Antonio, Texas 78209 (210) 828-5641 (210) 821-6069 Facsimile

/S/ Michael Flume ____________________________ MICHAEL FLUME State Bar No. 07188480 mflume@flumelaw.net GUILLERMO S. DEKAT State Bar No. 24069599 gdekat@flumelaw.net

ATTORNEYS FOR REAL PARTY IN INTEREST, THE ESTATE OF JOSE OLESZCOVSKI WASSERTEIL, DECEASED

10 CERTIFICATION

I, Michael Flume, have reviewed this Reply and hereby certify that every factual statement in this Reply is supported by competent evidence included in the appendix or record.

/S/ Michael Flume __________________________________ MICHAEL FLUME

CERTIFICATE OF COMPLIANCE

I certify that this document was produced on a computer using Microsoft Word and contains 1,621 words, as determined by the computer software's word count function, excluding the sections of the document listed in Texas Rule of Appellate Procedure 9.4(i)(1).

/S/ Michael Flume __________________________________ MICHAEL FLUME

11 CERTIFICATE OF SERVICE

I do hereby certify that a true and correct copy of the foregoing document has been sent to the following on this 31st day of August, 2016 in accordance with the Texas Rules of Appellate Procedure:

E-Service Travis M. Parks PRINS LAW FIRM 4940 Broadway, Suite 108 San Antonio, TX 78209 Telephone: (210) 820-0833 Facsimile: (210) 820-0929 tmparks@prinslaw.com Counsel for Relator

Fax: (210) 335-3998 The Honorable Kelly M. Cross Probate Court #1 100 Dolorosa, 1st Floor, Room 123 San Antonio, Texas 78205 (210)335-3998 fax Respondent/Trial Court Judge

E-Service Glenn J. Deadman GLENN J. DEADMAN, P.C 509 South Main Avenue San Antonio, TX 78204 (210) 472-3900 (210) 472-3901 Facsimile gjdeadman@aol.com Trial Counsel for Relator

/S/ Michael Flume __________________________________ MICHAEL FLUME