Edgefield Holdings, LLC v. Kenneth J. Gilbert, Helen K. Gilbert, Chandler Estates, Ltd., 02-17-00359-CV
| Decision Date | 20 September 2018 |
| Docket Number | No. 02-17-00359-CV,02-17-00359-CV |
| Parties | EDGEFIELD HOLDINGS, LLC AS ASSIGNEE OF REGIONS BANK, Appellant v. KENNETH J. GILBERT, HELEN K. GILBERT, CHANDLER ESTATES, LTD., AND PARKER COUNTY REAL ESTATE INVESTMENTS, INC., Appellees |
| Court | Texas Court of Appeals |
On Appeal from the 43rd District Court Parker County, Texas
Before Meier, Gabriel, and Pittman, JJ.
Opinion by Justice Pittman
Twenty-one years ago, the United States Supreme Court made it abundantly clear that "ERISA's1 pension plan anti-alienation provision is mandatory and contains only two explicit exceptions, . . . which are not subject to judicial expansion." Boggs v. Boggs, 520 U.S. 833, 851, 117 S. Ct. 1754, 1765 (1997) (citing 29 U.S.C. § 1056(d)(2), (d)(3)(A)) (emphasis added). Here, the trial court granted summary judgment on that issue in favor of Appellees Kenneth J. Gilbert; Helen K. Gilbert (Kay); Chandler Estates, Ltd.; and Parker County Real Estate Investments, Inc. (collectively, the Gilbert parties).
Despite the Supreme Court's holding, in this appeal, Appellant Edgefield Holdings, LLC, as assignee of Regions Bank, argues that the trial court erred by concluding that the pension plan at issue is not subject to execution. As part of its appeal, Edgefield challenges the trial court's subject-matter jurisdiction, the court's evidentiary rulings, and the court's granting of summary judgment. Because we hold that the trial court had jurisdiction to render summary judgment, that Edgefield did not show harm from the trial court's evidentiary rulings, and that Edgefield has not shown that the trial court erred by granting summary judgment, we affirm.
In June 2016, Edgefield filed this suit against the Gilbert parties in the 43rd district court of Parker County, Texas to recover funds Kenneth had transferred to and from accounts at EECU Credit Union (EECU). Edgefield claimed entitlement to those assets as a judgment creditor. In its petition, Edgefield alleged that in 2010, Regions Bank obtained a judgment against Kenneth for $1,972,645.58, plus attorney's fees and post-judgment interest, and that in March 2016, Regions Bank assigned that judgment to Edgefield.
Edgefield further alleged that in January 2016, for no value in return, Kenneth transferred $250,000, his earned commissions from his employer, to an account held in the name of Chandler Estates. The petition also stated that on April 28, 2016, Edgefield served EECU with a notice of subpoena requesting documents relating to Kenneth's account, and it served Kenneth's attorney with a copy of that notice on May 2, 2016. In addition, Edgefield alleged that after service of that subpoena on Kenneth through his attorney, Kenneth then made the following transfers:
In the lawsuit, Edgefield sought, among other relief, declarations that the transfers were void, avoidance of the transfers, and attachment and execution of the transferred assets. Finally, Edgefield asserted that Parker County Real Estate Investments was the general partner of Chandler Estates and was therefore also liable.
The Gilbert parties answered, and by amended answer, Kenneth filed a counterclaim for wrongful garnishment. Kenneth based the counterclaim on an application for writ of garnishment that Edgefield had earlier filed in a different trial court in Parker County, Texas, the 415th district court of Parker County, against UBS AG and UBS Financial Services, Inc. as garnishees (collectively, UBS) and against Kenneth as judgment debtor. In his wrongful garnishment counterclaim, Kenneth claimed that Edgefield had garnished funds held by UBS despite knowing the funds were exempt from execution under Texas Property Code Section 42.0021. See Tex. Prop. Code Ann. § 42.0021 (West 2014).
The Gilbert parties then filed a second amended answer and counterclaim, adding a claim for declaratory judgment on behalf of all the Gilbert parties. They alleged that Edgefield had attempted to garnish an Individual Retirement Account (IRA) and a defined benefit pension plan (which, in later pleadings, they identified as an account held in the name of the Gilbert Real Estate Brokers Defined Benefit Pension Plan (the Pension Plan)), both held at UBS and both of which they alleged were exempt from execution.
On August 3, 2017, Kenneth filed a traditional motion for partial summary judgment2 seeking a declaration that (1) the IRA and (2) the Pension Plan were protected by ERISA. Kenneth attached to his motion the answer UBS had filed in Edgefield's garnishment suit in the 415th district court. UBS stated in the answer that it held an IRA in Kenneth's name with a balance of $181,840.76 and a resource management account in the name of Kenneth and Kay W. Gilbert in the amount of $667.98. In the answer, UBS warned Edgefield that the IRA account may be exempt from garnishment.
A few days after Kenneth filed his August 3, 2017 motion for summary judgment, Edgefield attempted to remove this case to the United States District Court for the Northern District of Texas, Fort Worth Division, based on the Gilbert parties' counterclaim for a declaration that ERISA exempted the Pension Plan from execution. On August 24, 2017, the federal district court granted the parties' agreed motion to remand the case back to the 43rd district court.
On August 29, 2017—five days after the federal court remanded the case back to the 43rd district court—Edgefield filed a plea to the jurisdiction and a motion todismiss under Rule 91a3 arguing that federal courts had exclusive jurisdiction over Kenneth's requested declaratory relief. See Tex. R. Civ. P. 91a. Thus, it argued, because the allegations in the Gilbert parties' petition, taken as true, did not entitle them to the relief they sought in state court, their counterclaim had no arguable basis in law.
On the same date, the Gilbert parties filed a third amended answer and counterclaim. In that pleading, they "sue[d Edgefield] for the wrongful garnishment of UBS as the holder of the assets of both an [IRA] Account and the Pension Plan." They alleged that UBS held funds for the benefit of Kenneth and Kay in the Pension Plan account and that the assets in the account were exempt from execution under Texas Property Code section 42.0021 and ERISA. They further sought a declaration that the Pension Plan is exempt from execution under ERISA and the Texas Property Code, "notwithstanding [Edgefield's] assertion that transfers into the Pension Plan account are recoverable as fraudulent transfers."4
On August 31, 2017, Kenneth filed another motion for partial summary judgment seeking a declaration that the IRA and Pension Plan were exempt from execution under ERISA. That same day, the Gilbert parties filed a joint motion for traditional and no-evidence summary judgment. In the traditional motion, they asserted that Edgefield had filed its garnishment action to illegally garnish the IRA and the Pension Plan. In the no-evidence motion, the Gilbert parties asserted that they were entitled to summary judgment on Edgefield's claims because Edgefield had no evidence of several elements of its claims.
On September 18, 2017, Edgefield nonsuited its claims against the Gilbert parties.
Both the Gilbert parties and Edgefield filed briefing with the trial court arguing the merits of Edgefield's Motion to Dismiss, and Edgefield filed a response to the Gilbert parties' Motions for Summary Judgment and a supplemental Motion to Dismiss. With its summary judgment response, Edgefield attached a copy of an agreed judgment between Edgefield and UBS in the garnishment proceeding in the 415th district court, in which Edgefield took nothing on its claims against UBS andUBS recovered from Edgefield $667.98 in attorney's fees from Kenneth's non-IRA account held by UBS and garnished by Edgefield.
The Gilbert parties filed objections to all the evidence attached to Edgefield's response to their summary judgment motions. The trial court sustained the objections and struck the evidence.
The trial court granted each of the Motions for Summary Judgment on each of the grounds set out in the motions and found that the funds in the IRA and the Pension Plan were exempt under ERISA's anti-alienation provision from seizure by any creditor. The Gilbert parties then nonsuited their claim for wrongful garnishment and for attorney's fees, the only remaining claims pending in the case. The trial court signed a final judgment incorporating its previous orders granting the Motions for Summary Judgment and declaring that the IRA and the Pension Plan were exempt from execution under ERISA. Edgefield now appeals.
In Edgefield's first issue, it argues that the trial court erred in denying its Motion to Dismiss because (1) there was no justiciable issue before the trial court and (2) only a federal court has subject-matter jurisdiction to render judgment in favor of the Gilbert parties.
A motion under Texas Rule of Civil Procedure 91a may seek dismissal of a cause of action on the grounds that it has no basis in law or in fact. Tex. R. Civ. P. 91a. "A cause of action has no basis in law if the allegations, taken as true, together with inferences reasonably drawn from them, do not entitle the claimant to the relief sought." Id. Like a plea to the jurisdiction challenging a plaintiff's pleadings, a Rule 91a mot...
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