Fuentes v. Zaragoza
| Decision Date | 31 May 2018 |
| Docket Number | NO. 01-16-00251-CV,01-16-00251-CV |
| Parties | Miguel Zaragoza FUENTES, Dade Aviation, Inc., Abbingdon Marine, Inc., Ezar Management, L.L.C., Ezar Properties, L.P., Eagle Ridge Properties LLC, Elsa Esther Carrillo Anchondo, Ernesto Carrillo, Texas LP G Storage Company, and Myrna Alicia Zaragoza Lopez, Appellants v. Evangelina Lopez Guzman ZARAGOZA, Appellee |
| Court | Texas Court of Appeals |
Christopher M. Flood, Flood & Flood, 914 Preston, Suite 800, Houston, Texas 77002, Kyle W. Sanders, Gray Reed & McGraw, 1300 Post Oak, Suite 2000, Houston, Texas 77056, Christopher M. Odell, Hannah Sibiski, ARNOLD & PORTER LLP, 700 Louisiana Street, Suite 1600, Houston, Texas 77002, R. Reeves Anderson, (pro hac vice), ARNOLD & PORTER LLP, 370 Seventeenth Street, Suite 4400, Denver, CO 80202, Richard P. Hogan, Jr., Jennifer Bruch Hogan, James C. Marrow, HOGAN & HOGAN, 711 Louisiana, Suite 500, Houston, Texas 77002, Elaine A. Carlson, Professor of Law, South Texas College of Law, 1303 San Jacinto, Suite 755, Houston, Texas 77002, Kevin D. Jewell, Steven J. Knight, CHAMBERLAIN, HRDLICKA, WHITE, WILLIAMS & AUGHTRY, 1200 Smith Street, Suite 1400, Houston, Texas 77002, Lucy H. Forbes, THE FORBES FIRM, PLLC, 839 E 27th Street, Ricardo L. Ramos, RICARDO L. RAMOS, PLLC, 440 Louisiana, Suite 1500, Houston, Texas 77002, Randall B. Wilhite, FULLENWEIDER WILHITE, 4265 San Felipe St., Suite 1400, Houston, Texas 77027, Lauren Beck Harris, Susan K. Hellinger, PORTER HEDGES LLP, 1000 Main Street, 36th Floor, Houston, Texas 77002, for Appellants.
Mary-Olga Lovett, Robert L. Galloway, Aimee Housinger, Kyle B. Dugan, GREENBERG TRAURIG, L.L.P., 1000 Louisiana, Suite 1700, Houston, Texas 77002, Dale Wainwright, Greenberg Traurig, L.L.P., 300 West 6th Street, Suite 2050, Austin, Texas 78701, Jeanne C. McDowell, Rebekah H. Birdwell, The Law Office of Jeanne C. McDowell, 603 Avondale, Houston, Texas 77006, for Appellee.
Panel consists of Justices Jennings, Bland, and Brown.
In this appeal from a decree of divorce, we determine whether the trial court had jurisdiction to divorce a husband and wife who are Mexican citizens, and the procedural effect pending Mexican litigation has on this suit. We further determine whether (1) legally sufficient evidence supports the division of community assets following the husband’s failure to appear for trial; (2) the trial court erred in rendering judgments against parties who were nonsuited before trial on an alter-ego theory of liability; and (3) the trial court abused its discretion in declining to award sanctions against the wife’s counsel.
Miguel Zaragoza Fuentes appeals from a divorce decree obtained by Evangelina Guzman Zaragoza. Miguel contested personal jurisdiction. After the trial court denied Miguel’s special appearance, he did not appear for trial. In its default decree of divorce, the trial court awarded Evangelina: (1) half of the community estate, including "[a]ll shares and all interest" in 89 business entities, on the basis that these entities and others were Miguel’s alter egos; (2) $537 million in damages for fraud against the community estate; (3) injunctive relief; (4) spousal support; and (5) attorney’s fees. On appeal, Miguel challenges the trial court’s subject matter and personal jurisdiction and the relief awarded.
Before the trial court signed its final judgment, Dade Aviation, Inc.; Abbingdon Marine, Inc.; Ezar Management, LLC; Ezar Properties, L.P.; Eagle Ridge Properties, LLC; Elsa Esther Anchondo Carrillo; Ernesto Carrillo; and Texas LPG Storage Company intervened in the case. These third parties contend that the trial court erred in including their property interests as part of the community estate and in awarding these interests in the division of the estate, without notice to them. Myrna Alicia Zaragoza Lopez, daughter of Miguel and Evangelina, also appeals, contending that her property interests were improperly included in the community estate as well and further that the trial court erred in denying her request for sanctions against Evangelina’s counsel.1
We conclude that the trial court had jurisdiction to hear the petition for divorce between Miguel and Evangelina. We further conclude that the trial court’s disposition of the community assets, as well as the other amounts and relief awarded, are not supported by legally sufficient evidence. The trial court erred in awarding interests in the assets of third parties based on an alter-ego theory without notice to these parties. It acted within its discretion in declining to impose sanctions. Accordingly, we reverse the trial court’s decree of divorce and disposition of assets, and we remand the case for further proceedings. On remand, the trial court must consider whether to defer to pending litigation in the Mexican courts for reasons of comity. We affirm the denial of Myrna Alicia Zaragoza Lopez’s motion for sanctions.
Miguel and Evangelina are Mexican citizens. They were married in the United States on October 14, 1953, in a civil ceremony in the state of New Mexico. They held a ceremonial wedding in Mexico three days later. The couple lived together as husband and wife until 2009. During that time, Miguel headed business enterprises in Texas and around the world.
Although Miguel claims Ciudad Juarez in Chihuahua, Mexico as his place of residence, and has a home there, he also has maintained residences and close ties with Texas, particularly in the City of El Paso, located approximately four miles from Juarez. During the course of their marriage, Miguel regularly lived with Evangelina at their residence in El Paso. All eleven of the couple’s children were born in El Paso, Texas. The couple also lived at their residence in Juarez.
After the couple stopped living together, Miguel regularly lived at another residence in El Paso with Elsa Esther Carrillo Anchondo (Esther), one of the intervenors in this case. In 2004, Esther gave birth to a daughter in El Paso. Miguel acknowledges Esther’s daughter as his child.
Evangelina files for divorce in Harris County.
Shortly after Christmas in 2013, Evangelina moved from El Paso to Houston and began to live at a home owned by one of Miguel and Evangelina’s daughters. In May 2014, Evangelina petitioned for divorce against Miguel in Harris County, Texas.
Initially, Evangelina named several individuals and business entities as co-respondents, including Esther; Robert Dale Baucom; Ernesto Carrillo; Raoul Gisler; Abbingdon Marine, Inc.; Cadogan Properties, Inc.; Dade Aviation, Inc.; Ezar Management, L.L.C.; Ezar Properties, L.P.; Texas LPG Storage Company; and Texas Overseas Gas Corp. Evangelina alleged that these co-respondents were Miguel’s corporate alter egos or persons to whom Miguel improperly had diverted community funds.
Miguel avoided service by regularly crossing back and forth over the border between Juarez and El Paso. The trial court granted Evangelina’s request for substituted service, and ordered that Miguel could be served by leaving a copy of the citation and pleadings at his known residence in El Paso, and another at Miguel’s office of over twenty years in El Paso. Service was effected accordingly.
Miguel challenges personal jurisdiction.
Miguel filed a special appearance and supporting declaration, in which he averred that he is not a United States citizen of a Texas resident, and that he lacks sufficient minimum contacts with Texas to establish personal jurisdiction over him in this suit. Miguel also denied that he was the alter ego of any entities doing business in Texas. At the special appearance hearing, Evangelina offered testimony from Alejandra Zaragoza Sterling, the youngest of the eleven children born to Miguel and Evangelina, about Miguel’s Texas contacts.
Miguel did not offer testimony or evidence in support of his special appearance. The trial court took judicial notice of a case file offered by Evangelina with documents and photographs showing a home that Miguel was building in El Paso, described as a "mansion." The architect that Miguel employed to build the home accepted service on Miguel’s behalf in this suit.
The trial court denied Miguel’s special appearance. Miguel did not file an interlocutory appeal, and our court later denied Miguel’s petition for writ of mandamus challenging the denial of his special appearance. See In re Fuentes , No. 01-14-00624-CV, 2014 WL 4251152, at *1 () (mem. op.) (per curiam).
Miguel did not participate in further trial court proceedings. Evangelina ultimately moved for a default judgment against Miguel, which the trial court granted.
The third parties contest subject-matter jurisdiction.
In February 2015, Ernesto Carrillo and Texas LPG Storage Company filed a plea to the trial court’s jurisdiction, contending that it lacked subject-matter jurisdiction to entertain the suit for divorce. As part of their plea, the third parties alleged that Miguel and Evangelina had already divorced in a legal proceeding in Mexico in 1959.
Ernesto Carrillo and Texas LPG requested that the trial court take judicial notice of (1) a divorce decree from the Mexican Civil Registry stating that the couple divorced in May 1959, (2) a Mexican divorce certificate, (3) Miguel’s Mexican birth certificate (containing a notation regarding the divorce), and (4) Evangelina’s Mexican birth certificate (containing a notation regarding the divorce).
Evangelina denied that she and Miguel were divorced in Mexico. She disputed the authenticity of the records purporting to show a 1959 Mexican divorce. Evangelina introduced testimony that the records were irregular on their face and had been fraudulently created or altered. The validity of the purported Mexican divorce is the subject of litigation in Mexico.
The trial court denied the plea to the jurisdiction. It declined the request to take judicial notice of the Mexican court records and declined to...
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