Dauz v. Valdez

• Decision Date: 30 August 2018
• Docket Number: NO. 01-15-00831-CV,01-15-00831-CV
• Citation: 571 S.W.3d 795
• Parties: Elizabeth DAUZ, Appellant v. Xochitl VALDEZ, Frontier Title Company-WH, LLC, Thai Klam, Team 360, LLC, and Himarani Sivarajan, Appellees
• Court: Texas Court of Appeals

571 S.W.3d 795

Elizabeth DAUZ, Appellant

v.Xochitl VALDEZ, Frontier Title Company-WH, LLC, Thai Klam, Team 360, LLC, and Himarani Sivarajan, Appellees

NO. 01-15-00831-CV

Court of Appeals of Texas, Houston (1st Dist.).

Opinion issued August 30, 2018

Timothy M. McDaniel, Houston, Debra Donaldson, for Appellees Sivarajan, Hemarani.

Joseph Colvin Jr., Charles Marcellus Vethan, Houston, Shawn McKee, Daryl W. Bailey, Casey Jon Lambright, Houston, for Appellees Xochitl Valdez, Frontier Title Company-WH, L.L.C., Thai Klam, Team 360, LLC, Himarani Sivarajan.

Eric Days, Ricardo Guerra, Spring, Brent Smith, for Appellant Dauz, Elizabeth.

Xochitl Valdez, pro se.

Panel consists of Justices Higley, Brown, and Caughey.

Harvey Brown, Justice

Elizabeth Dauz sued Xochitl Valdez, Frontier Title Company-WH, LLC, Thai Klam, Team 360, LLC, and Himarani Sivarajan on a variety of legal theories related to two real estate transactions. The trial court granted summary judgment to the defendants and entered final judgment in their favor. It then denied Dauz’s motion to amend the final judgment to join Allen Price, Dauz’s husband, as a party. Dauz appeals, arguing that the trial court’s summary judgments were improper and that the trial court erred in denying her post-judgment motion to join Price as a party. We affirm in part, reverse in part, and remand to the trial court for further proceedings.

Background

Elizabeth Dauz and Thai Klam are former business partners. They jointly owned Team 360, LLC, a REMAX real estate agency franchise, as well as PMP Group, a real estate management company. In 2012, Dauz used funds from OnNet Logis, LLC, a company owned by her husband, Allen Price, to purchase two properties in Houston: one on Harpers Glen Lane and one on Bacard Lane.

Purchase and later sale of Harpers Glen property

Dauz purchased the Harpers Glen property from a bank at a foreclosure sale and titled it in her own name, individually. Later in 2012, Dauz and Himarani Sivarajan negotiated and executed an earnest money contract in which Sivarajan agreed to buy the Harpers Glen property. Dauz personally signed the contract as the seller. Frontier acted as the title company for the closing of the sale. At that time, Valdez was an employee of Frontier.

At closing on the Harpers Glen sale to Sivarajan, Klam signed a deed and other documents on Dauz’s behalf, acting under a power of attorney. The power of attorney, however, bore execution and notarization dates two-to-three days after the execution dates on the closing documents and deed, and Dauz asserts that the power of attorney was fraudulent. Valdez, who notarized the power of attorney for Frontier, did not actually see Dauz execute the power of attorney. Instead, according to Valdez’s testimony, she asked another Frontier employee in her office to obtain a signature from Dauz and have it notarized. But when the employee returned with the document, it bore only a signature and was not notarized. Valdez acknowledges that she notarized it when Dauz was not present, without taking any steps to confirm the validity of the signature. There was a swearing match regarding whether Dauz had orally told Valdez that she approved the sale: Valdez testified that she called Dauz on the phone and confirmed Dauz’s desire to proceed with the sale, but Dauz testified that Valdez did not call her before closing.

Klam directed Valdez to deposit the proceeds of the Harpers Glen sale into an account over which both Klam and Dauz had signing privileges. Valdez did so.

Purchase and later sale of Bacard property

According to Dauz, she authorized Klam to buy the second property, on Bacard Lane, as her personal investment, with the understanding that the two would share any profit from a later sale of that property. The funds used to purchase the Bacard property were provided entirely by Dauz, but the property was titled in the name of PMP Group.

When the Bacard property sold in late 2012, Klam deposited funds from that sale into the same shared account where Valdez had deposited funds from the Harpers Glen sale. According to Dauz, Klam later transferred the bulk of the funds from both sales into his personal account.

Dauz’s arbitration

In late 2013, Dauz initiated an arbitration proceeding before the American Arbitration Association under the "Company Agreement" of Team 360, the real estate entity Dauz jointly owned with Klam. She sued Klam, and Team 360 intervened. In the arbitration, Dauz asserted a variety of theories and demands for relief, including demands for proceeds from the sales of the Harpers Glen and Bacard properties. Klam and Team 360 sought to strike Dauz’s claims relating to the two properties, arguing that those claims fell outside the scope of the arbitration clause. The arbitration clause, however, was broadly written, covering "any claim by a Member in the Member’s capacity as a Member against any other Member in that other Member’s capacity as a Member" and "any other matter that, in the Arbitrator’s view, is appropriate for decision" via arbitration. It excluded from arbitration only "[r]outine business matters" of Team 360, "[m]atters requiring urgent judicial relief," and suits to enforce an order entered in such an arbitration. The arbitrator, relying on these broad grants of discretion, refused to strike claims relating to the Harpers Glen and Bacard properties, finding "all issues raised by the Parties ... to be arbitrable" and stating that all of Dauz’s claims were "live and on the table."

The arbitration proceeded to a hearing in June 2014. The arbitrator ultimately entered an order expressly denying Dauz’s request for recovery of funds from the Harpers Glen and Bacard sales. Pursuant to an agreement of the parties, however, the arbitrator ordered a buyout of Dauz’s interests in Team 360 and PMP Group by Klam.

Dauz’s suit in district court

Meanwhile, in connection with the Harpers Glen sale, Dauz sued the title company (Frontier), its employee (Valdez), and the purchaser (Sivarajan) in state district court. Dauz later amended her petition to add Klam and Team 360 and to seek recovery of the proceeds of the Harpers Glen and Bacard sales. Dauz also filed a second lawsuit against Klam and Team 360, in which she sought to enforce the arbitration award. The two suits were consolidated, creating the action giving rise to this appeal.

Ultimately, Dauz sought recovery from Klam and Team 360 on theories of theft, breach of fiduciary duty, and an alleged conspiracy between Klam, Team 360, and Valdez. She also sought to recover from Valdez for the alleged conspiracy and for theft. She alleged that Valdez, as Frontier’s employee, transferred proceeds from the Harpers Glen sale into Klam’s personal bank account and that this transfer breached a fiduciary duty owed to Dauz and was negligent. In addition, she alleged that Valdez negligently notarized Klam’s power of attorney. Finally, she sought to quiet title as to the Harpers Glen property, asserting that the deed to Sivarajan was void, despite also seeking to recover the proceeds of that sale from other defendants.

Klam and Team 360 moved for summary judgment on the theory of res judicata, arguing that Dauz’s claims were resolved in the arbitration.¹ In particular, they contended that the arbitration resolved claims relating to proceeds of the Harpers Glen and Bacard sales. The trial court granted that motion in full.

Frontier and Valdez also filed motions for traditional summary judgment on grounds of collateral estoppel, judicial estoppel, and superseding cause by a criminal act. They argued that (1) Dauz’s claims had been resolved by the arbitration, (2) Dauz had taken the position in the arbitration that Klam had deceived Valdez regarding the destination of funds from the sales, which was inconsistent with her claims in the current suit, and (3) Klam’s actions in removing funds from a joint account to which Dauz had access and placing them in an account under his sole control constituted a superseding criminal act, without which Dauz could not show any damages from alleged torts by Frontier or Valdez. Valdez also sought a no-evidence summary judgment on Dauz’s theft, conspiracy, and negligence claims, and Frontier sought a no-evidence summary judgment on the breach-of-fiduciary-duty and negligence claims. Sivarajan joined both Frontier’s and Valdez’s motions, but Sivarajan did not file a summary-judgment motion of her own. The trial court granted both Frontier’s and Valdez’s summary-judgment motions and, in so doing, expressly granted summary judgment to Sivarajan on the suit to quiet title.

The trial court entered a final judgment, which incorporated its interlocutory summary judgment orders. It subsequently denied Dauz’s motion to amend the judgment to name Price, her husband, as a party. Dauz now appeals.

Summary Judgment Standard of Review

We review a trial court’s grant of summary judgment de novo. Mann Frankfort Stein & Lipp Advisors, Inc. v. Fielding , 289 S.W.3d 844, 848 (Tex. 2009). Traditional summary judgment is proper if, having viewed all the evidence in the light most favorable to the non-movant, there are no genuine issues of material fact and the movant is entitled to judgment as a matter of law. TEX. R. CIV. P . 166a(c) ; Amedisys, Inc. v. Kingwood Home Health Care, LLC , 437 S.W.3d 507, 511 (Tex. 2014). To prevail on a motion for traditional summary judgment, a defendant-movant must conclusively negate at least one element of each of the plaintiff’s causes of action or establish each element of an affirmative defense as a matter of law. Sci. Spectrum, Inc. v. Martinez , 941 S.W.2d 910, 911 (Tex. 1997). In reviewing a no-evidence summary judgment, we determine whether the non-movant produced more than a scintilla of probative evidence to raise a genuine issue of material fact for each challenged element. TEX. R. CIV. P . 166a(i) ; Smith v. O'Donnell , 288 S.W.3d 417, 424 (Tex. 2009). When, as here, both sides move for summary judgment, and the...