Winton Mortgage Company, LLC and Winton and Associates, Inc. v. Melissa Livingston

CourtCourt of Appeals of Texas
DecidedAugust 23, 2024
Docket08-23-00184-CV
StatusPublished

This text of Winton Mortgage Company, LLC and Winton and Associates, Inc. v. Melissa Livingston (Winton Mortgage Company, LLC and Winton and Associates, Inc. v. Melissa Livingston) 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
Winton Mortgage Company, LLC and Winton and Associates, Inc. v. Melissa Livingston, (Tex. Ct. App. 2024).

Opinion

COURT OF APPEALS EIGHTH DISTRICT OF TEXAS EL PASO, TEXAS

WINTON MORTGAGE COMPANY, L.L.C. § No. 08-23-00184-CV AND WINTON and ASSOCIATES, INC., § Appeal from Appellants, § County Court at Law No. 7 v. § of El Paso County, Texas MELISSA LIVINGSTON, § (TC# 2005-7022) Appellee.

MEMORANDUM OPINION

After over 17 years of litigation and longtime defense counsel’s death, the trial court

granted Appellee Melissa Livingston’s motion for post-answer default judgment in this case

arising from the termination of an employment contract in 2005. Appellants Winton Mortgage

Company, L.L.C. and Winton and Associates, Inc. (collectively, the Winton entities) filed a

“Motion for New Trial Pursuant to Rule 306a(4),” but the trial court improperly denied it. In this

opinion, we first revisit Ms. Livingston’s motion to strike the Winton entities’ notices of appeal

and our corresponding October 20, 2023 order on the motion in light of the record now before us.

Determining that this appeal was properly brought as a regular appeal, we turn to the default

judgment, which is not a final appealable judgment. Accordingly, we dismiss the appeal for want

of jurisdiction. I. BACKGROUND

Ms. Livingston is a mortgage broker. In November 2004, she entered into a contract (the

Agreement) with Winton Mortgage to originate mortgage business on its behalf. Under the

Agreement, Winton Mortgage, which assists buyers of homes built by Winton & Associates with

securing mortgage financing, agreed to pay Ms.Livingston a salary of $10,000 per month and

periodic income distributions. As to the latter, Winton Mortgage would distribute 40% of its

accumulated income to Ms. Livingston and the remaining 60% to Winton & Associates. Further,

Winton Mortgage’s overhead would be covered by Winton & Associates, but Winton & Associates

would be reimbursed by Winton Mortgage for its total expenses.

With regard to termination, the Agreement provided, “[i]f for any reason this relationship

does not appear to be working out properly and to the complete satisfaction of [Ms. Livingston] as

well as [Winton Mortgage], each of them may at any time give the other a written notice that they

wish to cancel the relationship and it will be cancelled 30 days thereafter.” And the Agreement

included a handwritten and initialed postscript, which reads: “P.S. It is agreed that mortgage

business in the ‘pipeline’ will be allowed to be completed & earnings paid as is appropriate.” The

Agreement was signed by Ms. Livingston and Jack Winton (the owner of both Winton Mortgage

and Winton & Associates) on behalf of Winton Mortgage.

In October 2005, Mr. Winton advised Ms. Livingston that he was no longer planning to

operate a Texas mortgage company, and Winton Mortgage terminated the Agreement. 1 Ms.

Livingston sued Winton Mortgage, Winton & Associates, and Mr. Winton (collectively, the

Defendants). Among other things, Ms. Livingston alleged that Mr. Winton and an unnamed

1 Mr. Winton alleged that he asked Ms. Livingston whether she wanted 30 days’ notice of the termination as the Agreement provided, which she purportedly declined.

2 employee “were conspiring to take the mortgage business from her” and “engaged in a series of

material breaches including nonpayment and consistently attempting to changes the terms of the

Memorandum of Agreement.” She asserted a fraud claim against the Defendants for “a series of

fraudulent misrepresentations” she contends were made to induce her “to take over the

management and operation of Winton Mortgage.” She also asserted a breach of contract claim

against the Winton entities. Ms. Livingston later amended her pleadings to drop the fraud claim

and raise spoliation concerns.

The Defendants retained attorney Steven James, a solo practitioner, and counterclaimed

for breach of contract, conversion, and fraud (the latter of which they later dropped). In September

2008, the Defendants filed a no-evidence motion for summary judgment. In May 2010, the trial

court granted the motion as to Mr. Winton individually, but denied it as to the Winton entities. The

Winton entities sought summary judgment again in part because Winton & Associates was not a

party to the Agreement, but the trial court denied the motion.

Litigation continued slowly over many years as the parties waged various discovery

disputes and Ms. Livingston brought on new counsel. The parties sought multiple continuances of

trial dates, but otherwise appeared to be working towards trial by filing various pretrial motions

and documents. However, the case largely stalled after April 2018 with no action from either side.

The Defendants’ counsel, Attorney James, died in November 2021. In November 2022,

Ms. Livingston filed a motion for post-answer default judgment against the Defendants. In the

motion, Ms. Livingston alleged that she sought default judgment because no other attorney had

entered an appearance on the Defendants’ behalf, including after her attorney “made several

attempts” to speak directly “to representatives” of the Defendants but did not receive a response.

3 She requested a total judgment of $937,221.20. 2 The certificate of service attested that the motion

had been served on Attorney James electronically on November 29—even though the motion

acknowledged that Attorney James had died over a year prior.

The trial court scheduled a final/default hearing for March 9, 2023. On January 27, 2023,

Ms. Livingston’s counsel sent a copy of the trial court’s order setting the hearing to the following

addressees via certified mail, each at the same mailing address:

• Jack Winton;

• three copies to Jack Winton, Winton & Associates Inc, and Winton Mortgage Company L.L.C., Attn: Andy J. Winton 3; and

• Winton Mortgage Company L.L.C.

The certified mail return receipts reflected receipt on February 2, 2023.

On March 7, 2023, two days before the final hearing, Ms. Livingston filed a supplement to

her default-judgment motion, in which she asked the court to dismiss the Defendants’

counterclaims. On March 8, 2023, the day before the final hearing, she filed a second supplement,

in which she included a business record affidavit and over 50 pages of records to support her

damages calculations. The record reflects electronic service to Attorney James’s email for the first

supplement but not the second.

The next day, March 9, the trial court held the default judgment hearing, which the

Defendants did not attend. Ms. Livingston, the only witness at the hearing, testified. The court

granted default judgment in her favor, awarding her $294,255.26 in actual damages and

$392,983.45 in prejudgment interest in an order signed on March 10, 2023. The order also

2 This figure was based on Ms. Livingston’s calculation of a 6% fee applied to closed files purportedly in the Winton Mortgage pipeline when the Agreement terminated, plus 40% commission, unpaid commission at her departure, and 5% compounded interest for 17 years. At the default judgment hearing, Ms. Livingston and her counsel acknowledged that the calculation was incorrect and adjusted her request to $687,238.71. 3 Jack Winton and Andy J. Winton are apparently the same person.

4 dismissed the Defendants’ counterclaims “pursuant to 165 Tex. R. Civ. P.” The district clerk sent

official notice of the judgment to Attorney James’s address, but it was returned unclaimed. See

Tex. R. Civ. P. 306a.

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Winton Mortgage Company, LLC and Winton and Associates, Inc. v. Melissa Livingston, Counsel Stack Legal Research, https://law.counselstack.com/opinion/winton-mortgage-company-llc-and-winton-and-associates-inc-v-melissa-texapp-2024.