ACCEPTED 06-14-00102-CV SIXTH COURT OF APPEALS TEXARKANA, TEXAS 5/6/2015 5:44:37 PM DEBBIE AUTREY CLERK
_________________________________________________________________
CAUSE NO. 06-14-00102-CV FILED IN 6th COURT OF APPEALS _________________________________________________________________ TEXARKANA, TEXAS 5/6/2015 5:44:37 PM IN THE SIXTH COURT OF APPEALS DEBBIE AUTREY TEXARKANA, TEXAS Clerk _________________________________________________________________
JOHNNY E. WEBB, III Appellant,
v.
ALEX RODRIGUEZ, CESAR GARCIA, DIVERSEGY, LLC, LUCIEN J. TUJAGUE, JR., DOMINION GAS HOLDINGS, LP, NICHOLAS GALLAGHER, IDT ENERGY, INC., AND SHUK HOLDINGS, LLC Appellees. ________________________________________________________________
Appeal from Cause No. DC-14-09393 th 95 Judicial District Court of Dallas County, Texas Hon. Judge Ken Molberg, Presiding _________________________________________________________________
REPLY BRIEF OF APPELLANT _________________________________________________________________
Melvin Houston Darrell J. O’Neal Melvin Houston & Associates Law Office of Darrell J. O’Neal Yorktown Building 2129 Winchester Road 1776 Yorktown, Suite 350 Memphis, TN 38116 Houston, TX 77056 (901) 345-8009 office (713) 212-0600 (901) 345-8014 fax mhouston@gotellmel.com domemphislaw@aol.com
1 TABLE OF CONTENTS
TABLE OF CONTENTS ........................................................................................2 TABLE OF AUTHORITIES ..................................................................................2 INTRODUCTION....................................................................................................3 I. MISSTATEMENT OF KEY FACTS BY APPELLEES ...............................4 II. ARGUMENT ..................................................................................................7 APPELLATE REVIEW OF A VENUE DETERMINATION IS EXTENDED TO WHETHER THE VENUE ISSUE WAS IN FACT PROPERLY DECIDED BASED UPON THE ENTIRE RECORD IN THE TRIAL COURT. ..............................................................................7 III. CONCLUSION .............................................................................................11 CERTIFICATE OF COMPLIANCE ..................................................................12 CERTIFICATE OF SERVICE ............................................................................12
TABLE OF AUTHORITIES
Cases Ruiz v. Conoco, Inc., 868, SW 2d 752, 757 (1993) ...............................................2, 7
Rules Tex. R. Civ. P. 87…………………………………………………………………8
2 INTRODUCTION
This appeal is about whether the trial court erred in granting Defendants’ motion
to transfer venue, or alternative motion to dismiss, based on an unenforceable forum
or venue selection clause. Appellant argued that the agreement relied upon by the
Appellees was not enforceable against him because his signature on the agreement
was merely a replica placed there deceptively without his knowledge or permission.
Appellees’ refused or were unable to produce the original agreement and Mr. Webb
presented evidence that the copy presented to the court did not contain his original
signature.
In support of this appeal, Appellant relies upon Ruiz v. Conoco which held that
the entire record must be reviewed as a whole, including rebuttal evidence, when
reviewing a venue determination by the trial court. 868 S.W.2d 752, 757-758 (Tex.
1993). The Appellees’ brief ignores this holding of Ruiz altogether, despite its
reliance upon Ruiz in the lower court.
Appellees’ argument in its response brief all but contradicts their main argument
before the trial court below. Appellees simply cannot have it both ways. Below,
Appellees argued that Webb could not present rebuttal proof in response to their
purported prima facie case. Here, in their response brief, Appellees argue Webb
waived any right to present rebuttal proof. p. 9, ¶ 3; p. 29-30. During the hearing on
the motion to transfer, Appellees argued:
3 MR. JOHANSEN:…And those three affidavits attesting to the fact that Mr. Webb signed the UPA in their presence is sufficient to meet that prima facie standard. And as the Court, I assume, is also very well-aware, the Texas Supreme Court has said prima facie proof is not subject to rebuttal, disproof, impeachment or cross-examination. So once we have established that prima facie proof, which those affidavits provide, that's sufficient, and this case must be either transferred in some fashion up to New Jersey or dismissed after giving Mr. Webb an opportunity to refile in New Jersey…
R.R. Vol.3, 11:12-23. Having argued before the trial court Appellant could not rebut,
disprove, impeach, or cross-examine their proof as presented, Appellees now have
the nerve to argue he (Webb) missed his chance. There is no case law that requires
such a Machiavellian or chess-like approach. In fact, the law is crystal clear. These
types of tactics are shunned in a court of law and represent improper
gamesmanship that this Court should not countenance.
I. MISSTATEMENT OF KEY FACTS BY APPELLEES
While Appellee took great liberties with its factual statement making several
misstatements, Appellant will address only those relevant and key factual
misstatements critical to the issues presented in this appeal. In Appellee’s first
factual misstatement it is asserted that Webb sold his membership interest in
Diversegy to Shuk pursuant to a Unit Purchase Agreement (“UPA”). Appellees’
Response Brief, p. 4, ¶ 1. This is a misstatement because Appellant did not sign the
UPA, and did not knowingly or voluntarily sell his membership interest in Diversegy
pursuant to the UPA. As stated in the sworn Amended Petition, Mr. Webb did not
4 even see the UPA until it was given to him by counsel for Defendant IDT after the
closing of the sale. C.R. 156, ¶40.
In Appellee’s second misstatement, it is asserted that $2 million was paid for
the Diversergy membership interests, but the last payment has yet to be made.
Appellees Response Brief, p. 4, ¶ 1. According to the UPA the final payment of
$416,000 is to be made on the 18th month anniversary of the closing, which would
be on or about June 4, 2015. CR 30, § 4.1(d). It is important to note here that Webb
sought the TRO so that information would not be secreted or destroyed, but also to
abate the final consummation of the sale with the intent of preserving his interests.
C.R. 142, 153.
Lastly, in a third misstatement of the facts, Appellees’ rely heavily on the
assertion that Webb identified himself as a seller and that “all of his alleged causes
of action relate to his position as a seller under the UPA”. Appellees Response Brief,
p. 4, ¶ 2 (Emphasis added). This particular misstatement is important to correct
because Appellees’ attempt to disguise the fact that Webb identified himself as a
seller because of the sale of his company, not because he is in fact a seller as legally
termed under the UPA. In fact, the issue of whether Webb is bound to the UPA as
a seller, or otherwise, is but one issue to be litigated because of Appellees’
unauthorized use of Webb’s signature, i.e. forgery. Webb referencing himself as a
seller does not diminish the merit of his suit against Appellees for breach of
5 contract1, fraud, breach of fiduciary duties and conversion. As stated in the
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ACCEPTED 06-14-00102-CV SIXTH COURT OF APPEALS TEXARKANA, TEXAS 5/6/2015 5:44:37 PM DEBBIE AUTREY CLERK
_________________________________________________________________
CAUSE NO. 06-14-00102-CV FILED IN 6th COURT OF APPEALS _________________________________________________________________ TEXARKANA, TEXAS 5/6/2015 5:44:37 PM IN THE SIXTH COURT OF APPEALS DEBBIE AUTREY TEXARKANA, TEXAS Clerk _________________________________________________________________
JOHNNY E. WEBB, III Appellant,
v.
ALEX RODRIGUEZ, CESAR GARCIA, DIVERSEGY, LLC, LUCIEN J. TUJAGUE, JR., DOMINION GAS HOLDINGS, LP, NICHOLAS GALLAGHER, IDT ENERGY, INC., AND SHUK HOLDINGS, LLC Appellees. ________________________________________________________________
Appeal from Cause No. DC-14-09393 th 95 Judicial District Court of Dallas County, Texas Hon. Judge Ken Molberg, Presiding _________________________________________________________________
REPLY BRIEF OF APPELLANT _________________________________________________________________
Melvin Houston Darrell J. O’Neal Melvin Houston & Associates Law Office of Darrell J. O’Neal Yorktown Building 2129 Winchester Road 1776 Yorktown, Suite 350 Memphis, TN 38116 Houston, TX 77056 (901) 345-8009 office (713) 212-0600 (901) 345-8014 fax mhouston@gotellmel.com domemphislaw@aol.com
1 TABLE OF CONTENTS
TABLE OF CONTENTS ........................................................................................2 TABLE OF AUTHORITIES ..................................................................................2 INTRODUCTION....................................................................................................3 I. MISSTATEMENT OF KEY FACTS BY APPELLEES ...............................4 II. ARGUMENT ..................................................................................................7 APPELLATE REVIEW OF A VENUE DETERMINATION IS EXTENDED TO WHETHER THE VENUE ISSUE WAS IN FACT PROPERLY DECIDED BASED UPON THE ENTIRE RECORD IN THE TRIAL COURT. ..............................................................................7 III. CONCLUSION .............................................................................................11 CERTIFICATE OF COMPLIANCE ..................................................................12 CERTIFICATE OF SERVICE ............................................................................12
TABLE OF AUTHORITIES
Cases Ruiz v. Conoco, Inc., 868, SW 2d 752, 757 (1993) ...............................................2, 7
Rules Tex. R. Civ. P. 87…………………………………………………………………8
2 INTRODUCTION
This appeal is about whether the trial court erred in granting Defendants’ motion
to transfer venue, or alternative motion to dismiss, based on an unenforceable forum
or venue selection clause. Appellant argued that the agreement relied upon by the
Appellees was not enforceable against him because his signature on the agreement
was merely a replica placed there deceptively without his knowledge or permission.
Appellees’ refused or were unable to produce the original agreement and Mr. Webb
presented evidence that the copy presented to the court did not contain his original
signature.
In support of this appeal, Appellant relies upon Ruiz v. Conoco which held that
the entire record must be reviewed as a whole, including rebuttal evidence, when
reviewing a venue determination by the trial court. 868 S.W.2d 752, 757-758 (Tex.
1993). The Appellees’ brief ignores this holding of Ruiz altogether, despite its
reliance upon Ruiz in the lower court.
Appellees’ argument in its response brief all but contradicts their main argument
before the trial court below. Appellees simply cannot have it both ways. Below,
Appellees argued that Webb could not present rebuttal proof in response to their
purported prima facie case. Here, in their response brief, Appellees argue Webb
waived any right to present rebuttal proof. p. 9, ¶ 3; p. 29-30. During the hearing on
the motion to transfer, Appellees argued:
3 MR. JOHANSEN:…And those three affidavits attesting to the fact that Mr. Webb signed the UPA in their presence is sufficient to meet that prima facie standard. And as the Court, I assume, is also very well-aware, the Texas Supreme Court has said prima facie proof is not subject to rebuttal, disproof, impeachment or cross-examination. So once we have established that prima facie proof, which those affidavits provide, that's sufficient, and this case must be either transferred in some fashion up to New Jersey or dismissed after giving Mr. Webb an opportunity to refile in New Jersey…
R.R. Vol.3, 11:12-23. Having argued before the trial court Appellant could not rebut,
disprove, impeach, or cross-examine their proof as presented, Appellees now have
the nerve to argue he (Webb) missed his chance. There is no case law that requires
such a Machiavellian or chess-like approach. In fact, the law is crystal clear. These
types of tactics are shunned in a court of law and represent improper
gamesmanship that this Court should not countenance.
I. MISSTATEMENT OF KEY FACTS BY APPELLEES
While Appellee took great liberties with its factual statement making several
misstatements, Appellant will address only those relevant and key factual
misstatements critical to the issues presented in this appeal. In Appellee’s first
factual misstatement it is asserted that Webb sold his membership interest in
Diversegy to Shuk pursuant to a Unit Purchase Agreement (“UPA”). Appellees’
Response Brief, p. 4, ¶ 1. This is a misstatement because Appellant did not sign the
UPA, and did not knowingly or voluntarily sell his membership interest in Diversegy
pursuant to the UPA. As stated in the sworn Amended Petition, Mr. Webb did not
4 even see the UPA until it was given to him by counsel for Defendant IDT after the
closing of the sale. C.R. 156, ¶40.
In Appellee’s second misstatement, it is asserted that $2 million was paid for
the Diversergy membership interests, but the last payment has yet to be made.
Appellees Response Brief, p. 4, ¶ 1. According to the UPA the final payment of
$416,000 is to be made on the 18th month anniversary of the closing, which would
be on or about June 4, 2015. CR 30, § 4.1(d). It is important to note here that Webb
sought the TRO so that information would not be secreted or destroyed, but also to
abate the final consummation of the sale with the intent of preserving his interests.
C.R. 142, 153.
Lastly, in a third misstatement of the facts, Appellees’ rely heavily on the
assertion that Webb identified himself as a seller and that “all of his alleged causes
of action relate to his position as a seller under the UPA”. Appellees Response Brief,
p. 4, ¶ 2 (Emphasis added). This particular misstatement is important to correct
because Appellees’ attempt to disguise the fact that Webb identified himself as a
seller because of the sale of his company, not because he is in fact a seller as legally
termed under the UPA. In fact, the issue of whether Webb is bound to the UPA as
a seller, or otherwise, is but one issue to be litigated because of Appellees’
unauthorized use of Webb’s signature, i.e. forgery. Webb referencing himself as a
seller does not diminish the merit of his suit against Appellees for breach of
5 contract1, fraud, breach of fiduciary duties and conversion. As stated in the
Amended Petition, “[T]his lawsuit is about three sellers who colluded and conspired
to sell an insolvent company to cover their own debts while converting monies that
were owed to other sellers, brokers, and vendors to include the Plaintiff.” C.R. 158,
¶ 12.
Most notably, Webb identified himself as a debtor with the right to payment,
irrespective of the UPA. In fact, Webb references the debt owed to him as a debt
owed prior to the sale of the company, more than fifteen times in his verified
Amended Petition.2 C.R. 156, ¶¶ 30, 32, 33, 35, 36, 41-45, 47-49, 54-60, 63, 65,
663. Webb also identified himself as an owner of Diversegy with the right to access
1 Webb’s breach of contract claim includes a breach of the Diversegy Operating Agreement. Para. 63 states, “The Defendant Sellers breached the Diversegy Operating Agreement (Exhibit 2) when they colluded and conspired to sell the company solely to cover their own debt, with knowledge that the purchase price would not cover all debts owed by the company. (§§4.5 and Art. VI).” (See other paragraphs in Count 2, Breach of Contract, that reference other violations of the Operating Agreement.) C.R.164.
2 The debt owed to Webb arises as a separate claim unrelated to the UPA because it was owed before the sale of the company. Whether the UPA deprived Mr. Webb of his right to payment for that debt because of the forged and unauthorized use of his signature is another issue that should be litigated in Dallas County. 3 Regarding Webb as a debtor, some of the allegations by Webb in his verified Amended Petition state in part: “Defendant Sellers have refused to pay Plaintiff any of the debt owed to him…” ¶30; “Defendant Sellers concealed over $250,000.00 in debts owed to Plaintiff, and thousands of dollars owed to former brokers, consultants and vendors…” ¶32; “The debt to Plaintiff was owed before the acquisition and purchase of Diversegy.” ¶33; “Defendant Sellers have refused demands for payment of these debts despite repeated demands for payment.” ¶35; “Defendant Sellers have refused to provide an accounting of the total debt concealed.” ¶36; “Defendant Sellers misrepresented material facts concerning the debts and liabilities of Diversegy, namely the total amount of debts owed by Diversegy and debts owed to the Plaintiff.” ¶41; “Defendant Sellers colluded to hide the debts of Diversegy in order to give the appearance of increased value.” ¶42;
6 the accounts and books of the company in connection with the company’s Operating
Agreement. C.R. 161, ¶ 38. Likewise and equally important for purposes of this
appeal, Webb identified himself as a resident of Dallas County with the right to have
his case heard in a Texas court. C.R. 156. In fact, all of the parties identified either
reside in or do business in Texas or particularly Dallas County. C.R. 156-158, 263-
270.
II. ARGUMENT
APPELLATE REVIEW OF A VENUE DETERMINATION IS EXTENDED TO WHETHER THE VENUE ISSUE WAS IN FACT PROPERLY DECIDED BASED UPON THE ENTIRE RECORD IN THE TRIAL COURT.
Appellees’ purported prima facie proof is misleading and wrong, requiring a
reversal in this case. “…in reviewing the trial court's decision, an appellate court
must reverse (there cannot be harmless error) if other evidence in the record, even
evidence adduced after venue was determined, destroys the prima facie proof on
which the trial court relied.” Ruiz v. Conoco, Inc., 868, SW 2d 752, 757 (1993).
According to Appellees, they established their prima facie case by the evidence of
“Based on information and belief, the concealment of debts by Defendant Sellers was done fraudulently and deceptively, converting the owed debts to assets to increase the valuation of the company.” ¶45; “There is also reason to believe that the Defendant Sellers also face potential insolvency. Defendant Sellers borrowed monies before the sale of the company in excess of $1.6 million. They borrowed against the company and also took out personal loans. These loans did not cover any payments for the debt owed to Plaintiff.” ¶47; “While Plaintiff can identify approximately $250,000 owed to him, the actual amount owed to him may exceed over $400,000.” ¶48. C.R. 156.
7 affidavits filed in support of their reply brief and Webb could not rebut it. During
the hearing on the motion to transfer, the following exchange took place:
MR. JOHANSEN: …And those three affidavits attesting to the fact that Mr. Webb signed the UPA in their presence is sufficient to meet that prima facie standard. And as the Court, I assume, is also very well-aware, the Texas Supreme Court has said prima facie proof is not subject to rebuttal, disproof, impeachment or cross-examination. So once we have established that prima facie proof, which those affidavits provide, that's sufficient, and this case must be either transferred in some fashion up to New Jersey or dismissed after giving Mr. Webb an opportunity to refile in New Jersey…
…
THE COURT: What -- I'm captured under the major transaction statute. You really think that --you're saying that you can make a prima facie showing and that the other side can't do anything about it and –
MR. JOHANSEN: The Ruiz versus Conoco case from 1993 from the Texas Supreme Court -- and I have a copy of it with me...
R.R. Vol.3, 11:12-23; 12:12-18 (emphasis added). Appellant agrees with Appellees
to the extent that Ruiz now controls. The record must be reviewed as a whole,
including rebuttal evidence, requiring reversal where the affidavits presented by
Appellees’ were presented the day of the hearing, and shown to be wrong and
misleading.
In deciding a motion to transfer venue, the trial court is required by Rule 87, TEX.R.CIV.P., to take as true those facts of which prima facie proof is made by the party with the burden of such proof; yet in reviewing the trial court's decision, an appellate court must reverse (there cannot be harmless error) if other evidence in the record, even evidence adduced after venue was determined,
8 destroys the prima facie proof on which the trial court relied. Prima facie proof is not subject to rebuttal, cross-examination, impeachment or even disproof. The evidence as a whole may well show that prima facie proof was misleading or wrong. But while the wisdom of the statute may be challenged, there is no misunderstanding its plain language: an appellate court is obliged to conduct an independent review of the entire record to determine whether venue was proper in the ultimate county of suit. See Price, supra, at 878-79.
868 S.W.2d 752, 757-758 (Tex. 1993)(emphasis added). Very simply, a
review of the record in its entirety shows that Appellees’ purported prima facie proof
is misleading and wrong and therefore Appellees’ motion to dismiss relying solely
on the forum-selection clause should have failed in light of the proof putting at issue
the validity and enforceability of the purchase agreement. What was that proof that
destroyed Appellees’ prima facie proof and showed it to be wrong and misleading?
First, proof presented by Appellees’ showed that at least two signatures on the
UPA agreement were not originals:
THE COURT: But the other one I noticed that I didn't feel anything on the back was right above Mr. Webb, Cesar Garcia.
MR. O'NEAL: He wasn't there at his signature signing.
R.R. Vol.3, 26:11-15. (Emphasis added). The court acknowledged that in addition
to Mr. Webb’s signature, he did not feel the signature indentation for Cesar Garcia.
Garcia did not attend the mysterious alleged signing party, but interestingly the
Appellees’ did not present an affidavit by Cesar Garcia. C.R. 363 ¶ 3. The judicial
notice by the court indisputably establishes that the purported prima facie proof of
9 Appellees attempting to show that Webb was bound by the UPA was wrong and
misleading. Therefore, according to Ruiz, this court should reverse.
Moreover, the sworn petition of Webb sets forth additional proof that
Appellees’ prima facie proof was wrong and misleading. Summarily, Webb averred
that Appellees’ concealed details regarding the sale of the company and the UPA.
As well, Webb averred that Appellees’ deceitfully sold his interests without
authorization. He alleged fraud, conversion and numerous facts that defeated the
enforceability of the UPA as to him.4
Without question, other evidence in the record, even evidence adduced after
venue was determined, destroys the prima facie proof on which the trial court relied.
The evidence adduced after venue was determined included:
1) an expert affidavit by a document examiner that established the signature
page of the UPA presented to the trial court contained a signature that
appeared to deviate from Plaintiff’s signature on other documents, C.R.
436-438, ¶ 7;
2) an affidavit by seller Fernando Campos that averred there was never a
signing party and he never witnessed Appellant sign the UPA directly
controverting the affidavits presented by Appellees, C.R. 435; and
4 Appellant refers the court back to footnote 2 which provides some of the specific averments challenging Appellees’ prima facie proof that the UPA is enforceable against Appellant.
10 3) the affidavit of the Appellant affirming again his sworn petition and that
he never attended a signing party, did not sign the UPA and never
authorized the use of his signature. C.R. 431-433.
All of this evidence destroys the prima facie proof upon which the trial court
relied. Consequently, venue is proper in Dallas County and this matter should be
remanded to the trial court for further proceedings.
III. CONCLUSION
For these reasons, and those argued in Appellant’s opening brief, this Court
should vacate the grant of the motion to transfer venue, reverse the dismissal and
remand for further proceedings.
Respectfully submitted,
/s/ Darrell J. O’Neal Darrell J. O’Neal Law Office of Darrell J. O’Neal TN State Bar No 20927 2129 Winchester Road Memphis, TN 38116 (901) 345-8009 office (901) 345-8014 fax domemphislaw@aol.com
/s/ Melvin Houston Melvin Houston Melvin Houston & Associates TX State Bar No. 00796559. 1776 Yorktown, Suite 350 Houston, TX 77056 Tel: (713) 212-0600
11 Fax: (713) 212-0290 mhouston@gotellmel.com COUNSEL FOR APPELLANT
CERTIFICATE OF COMPLIANCE
Pursuant to Texas Rule of Appellate Procedure 9.4(i)(3), I hereby certify that
this brief contains 2378 words (excluding the caption, table of contents, table of
authorities, signature, proof of service, and certificates). This is a computer-
generated document created in Microsoft Word, using 14-point typeface for all text,
except for footnotes which are in 12-point typeface. In making this certificate of
compliance, I am relying on the word count provided by the software used to prepare
the document.
/s/ Melvin Houston /s/ Darrell J. O’Neal
CERTIFICATE OF SERVICE
I hereby certify that I served a true and correct copy of the above and foregoing
Appellant’s Reply Brief via this court’s electronic filing system pursuant to T.R.AP.
Rule 9 upon the following on May 6, 2015:
Andrew K. York Jim Moseley Gray Reed & McGraw
12 1601 Elm Street, Suite 4600 Dallas, TX 75201 (201) 654-4135 (214) 953-1332 fax dyork@grayreed.com jmoseley@grayreed.com Counsel for Lucien Tujague, Jr. and Dominion Gas Holdings LP
Bryan Stevens Barrett Lesher Hallet & Perrin PC 1445 Ross Avenue, Ste 2400 Dallas, TX 75202 BStevens@hallettperrin.com blesher@halletperrin.com Counsel for Diversegy, LLC, Shuk Holdings LLC and IDT Energy Inc
Mark J. Johansen Rafeal C. Rodriguez Gruber Hurst Johansen Hail Shank LLP 1445 Ross Avenue, Ste 2500 Dallas, TX 75202 mjohansen@ghjhlaw.com rrodriquez@ghjhlaw.com Counsel for Alex Rodriguez