Morrison v. Brosseau

377 B.R. 815, 2007 U.S. Dist. LEXIS 76112, 2007 WL 2901133
CourtDistrict Court, E.D. Texas
DecidedSeptember 28, 2007
Docket4:05-cv-446
StatusPublished
Cited by2 cases

This text of 377 B.R. 815 (Morrison v. Brosseau) is published on Counsel Stack Legal Research, covering District Court, E.D. Texas primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Morrison v. Brosseau, 377 B.R. 815, 2007 U.S. Dist. LEXIS 76112, 2007 WL 2901133 (E.D. Tex. 2007).

Opinion

MEMORANDUM OPINION AND ORDER

MICHAEL H. SCHNEIDER, District Judge.

Before the Court is an appeal from the United States Bankruptcy Court for the Eastern District of Texas, Sherman Division. Appellants challenge that court’s September 30, 2005, Memorandum of Decision Regarding Motions for Summary Judgment and accompanying Judgment. This Court has jurisdiction over the matter pursuant to 28 U.S.C. § 158(a). Having carefully reviewed the submissions of the parties and in light of the record on appeal, the circumstances of this case, and the applicable law, the Court AFFIRMS the decision of the bankruptcy court.

I. STATEMENT OF THE APPEAL

At the heart of this dispute is whether the bankruptcy court, in approving the sale also approved a settlement agreement between non-debtors regarding that same piece of property, thereby assuming jurisdiction over any future disputes involving the ownership of that property.

II. FACTUAL BACKGROUND

A. Casa T and the Liberty County Proceeding

This dispute arises over the ownership of a piece of real property known as Casa T, and a sale order entered by the bankruptcy court concerning that property. Casa T is a villa located in the Las Brisas section of Acapulco, Mexico. A Mexican trust owned legal title to Casa T, and the trustee of the Mexican trust was Banco Nacional de Mexico, S.A. (“Banamex”). The sole beneficiary of the Mexican Trust was a Canadian company called 80451 Holdings, Ltd. (“80451”). All of the issued common stock in 80451 was represented by one share certificate for one share.

The ownership the share certificate and Casa T has been the subject of litigation between Dennis R. Ranzau (“Ranzau”) and William D. Brosseau (“Brosseau”) for years. The litigation began in 1989 with a proceeding in the 253rd Judicial District Court of Liberty County, Texas (the “Liberty County Proceeding”). On April 21, 1989, the court in the Liberty County Pro *818 ceeding appointed a receiver to take possession and control of Casa T and the equity interests in 80451. On October 8, 1991, Brosseau filed for bankruptcy. On June 4, 1992, the bankruptcy court denied Brosseau’s request that Casa T be turned over to the bankruptcy court, citing the ongoing state court litigation. The bankruptcy court, Judge Houston Abel presiding, concluded, “The court has declined to order turnover because the property may not be property of the estate.” Judge Abel denied Brosseau’s motion to reconsider this decision on August 24,1992.

B. The Sale of Casa T

On November 1, 1993, the bankruptcy trustee (“Trustee”) appointed to administer Brosseau’s bankruptcy estate filed a motion to sell, for $70,000, “property or potential property of the estate,” namely Casa T and the stock of 80451, to Ranzau (“Motion for Sale”). Brosseau, his then wife, Teresa Brosseau (whom Brosseau has now divorced), and the Brosseau Children’s Trust (the “Children’s Trust”) initially objected to the Motion for Sale. These objections were withdrawn after Teresa Brosseau, the Children’s Trust, the receiver from the Liberty County Proceeding and Ranzau entered into a settlement agreement on January 12, 1994 (the “Settlement Agreement”). That same day, the bankruptcy court held a hearing on the Motion for Sale.

At the conclusion of the hearing, Judge Abel signed the Order Approving Trustee’s Motion to Sell Property or Potential Property of the Estate Under 11 U.S.C. § 363 (the “Sale Order”). 1 On February 1, 1994, the Trustee conveyed Casa T to Ran-zau by quitclaim deed, which relinquished any right the estate might have to the stock of 80451 and Casa T. That same day, the Trustee also executed a bill of sale. Under the bill of sale, the Trustee agreed to sell, assign, transfer, set over and deliver to' Ranzau without any representations or warranties of any kind, “all of the rights, titles, interests and claims, if any, which may be owned, possessed or asserted by the Bankruptcy Estate in and to the following”: (1) the stock of 80451(2) any claim, action or suit against Ranzau, including but not limited to claims arising in connection with Casa T, (3) any claim, action or suit against the receiver in the Liberty County Proceeding, (4) any claim, action or suit by, through or against Teresa Brosseau, which forms the basis of any interest she may have in and/or could assert to or against Casa T or Ranzau and (5) any partnership interest in any partnerships that have or had an interest in Casa T. 2 Teresa Brosseau and the Children’s Trust also conveyed Casa T to Ran-zau and executed a similar bill of sale on February 1,1994.

C. The Post-Sale Events

Appellants allege that after the execution of the conveyances and bills of sale, “Brosseau engaged in a series of transactions designed to eviscerate the effect of the 1/12/94 Sale Order.” First, Appellants allege that on May 17, 1994, Brosseau, *819 acting as a director of 80451 and as a trustee of the Brosseau Children’s Trust, signed a director’s resolution authorizing the issuance of 9,999 additional common shares of 80451 to Desarrollo Turístico Alexa, S.A. De C.V. (“Desarrollo”), a corporation organized under the laws of Mexico. According to Brosseau, the stock of Desarrollo was owned by the Brosseau Children’s Trust. The issuance of these additional shares watered down the one original share in 80451.

Next, Appellants allege Brosseau attempted to nullify the Sale Order through an order from the Dallas state court in which Brosseau’s divorce with Teresa Brosseau was pending. Appellants state Brosseau “orchestrated” the inclusion of a provision in his September 1994 divorce decree, which states that the title to the stock in 80451 was not affected by the Settlement Agreement. The provision also states that Brosseau, as trustee to the Children’s Trust, had controlled and owned all interest in the 80451 stock, and that all interest in Casa T is owned by Brosseau’s children, Jordan and Alexa Brosseau.

A little over one year later, on October 31, 1995, Brosseau allegedly instigated a lawsuit in Mexico, which was brought on behalf of 80451 against Ranzau, Banamex and the receiver in the Liberty County Proceeding. According to Appellants, Brosseau used the provision in the divorce decree to “fraudulently induce the Mexican Court into finding that the Brosseau Chil-drens Trust, through its ownership of De-sarrollo was the owner of 80451 and that Ranzau did not own any stock interest in 80451.”

Finally, Appellants allege that on December 14, 1995, Brosseau, on behalf of 80451, signed a bogus promissory note in favor of Desarrollo for $100,000 to document a loan from Desarrollo to 80451. Murry K. Morrison (“Morrison”), director, president and secretary of 80451, states that such a loan never existed. On July 9, 1999, Desarrollo filed a lawsuit against 80451 in Mexico to recover on the loan. Appellants claim this lawsuit was a sham.

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Bluebook (online)
377 B.R. 815, 2007 U.S. Dist. LEXIS 76112, 2007 WL 2901133, Counsel Stack Legal Research, https://law.counselstack.com/opinion/morrison-v-brosseau-txed-2007.