Matz v. Bennion

• Decision Date: 29 August 1997
• Docket Number: No. 01-95-01222-CV,01-95-01222-CV
• Parties: Marla B. MATZ, D.D.S., Trustee, Appellant, v. Roy I. BENNION and Neil C. Morgan, Appellees. (1st Dist.)
• Court: Texas Court of Appeals

Page 445

961 S.W.2d 445

Marla B. MATZ, D.D.S., Trustee, Appellant, v. Roy I. BENNION and Neil C. Morgan, Appellees.

No. 01-95-01222-CV.

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

Aug. 29, 1997.

Kristi L. Boylan, Houston, for Appellant.

Marvin Isgur, William R. Burke, Jr., Brad Beers, Houston, for Appellees.

Before HEDGES, ANDELL and HUTSON-DUNN, ^* JJ.

OPINION

HEDGES, Justice.

Appellant, Marla B. Matz, D.D.S. (Matz), Trustee of the Marla B. Matz, D.D.S. Money Purchase Pension Plan (the plan), appeals orders entered by the trial court on July 10, 1995, July 28, 1995, and September 22, 1995 (sometimes referred to as "post-judgment orders"). The underlying judgment, which is the subject of the post-judgment orders, adopted an arbitration award relating to certain parcels of real estate: Vickery Woods, Beltway, Meadowbrook/Pinebrook II, Park Harbor, and Cypress Park (sometimes referred to as "the properties"). The properties and the interested parties have been the subject of five previous proceedings before this Court. ¹

Factual and Procedural Background

During the pendency of this litigation, two limited partnerships, Chelan Associates and Vickery Woods Associates, held most of the ownership interests in the properties. Before 1993, Stewart A. Feldman was the sole limited partner in both partnerships and held a 27 percent interest in Chelan Associates and a 37 percent interest in Vickery Woods Associates. Roy I. Bennion was the general partner in Vickery Woods Associates, in which he held a 62.5 percent interest. Chelan, Inc. was the general partner of Chelan Associates, with a 73 percent interest. Bennion was the president and 100 percent owner of Chelan, Inc. Feldman and Bennion each directly owned small percentages of the properties. The management and ownership of the properties were governed by an investment agreement which contained an arbitration clause.

In 1992, Bennion and Feldman fell into a dispute about their joint business interests. The disagreement resulted in the filing of a lawsuit styled, Intermarque Products, Inc. v. Feldman, No. 92-07396 (125th Dist. Ct., Harris County, Tex.). Visiting Judge Solomon Casseb, sitting for Judge Don Wittig, presided over the suit. In 1992, Judge Casseb severed Feldman's counterclaims against Bennion relating to the properties into cause of action number 92-07396-A and ordered arbitration of these claims. ² Judge Ruby Sondock was named arbitrator.

After conducting arbitration proceedings, Judge Sondock asked the parties to submit proposed drafts of an arbitration award. On March 24, 1993, she sent the parties her proposed draft of the arbitration award, which was largely based on Feldman's proposal.

On the same day, unknown to Judge Sondock and to Bennion, Feldman entered into a marital property agreement with Matz, his wife, in which he conveyed to her his interests in the partnerships. In the agreement, the parties specifically acknowledged that the partnership interests were currently the subject of litigation. Feldman agreed to make his best efforts to substitute Matz as a limited partner or substitute limited partner. To the extent substitution could not be accomplished, he would hold the partnership interests as nominee or trustee for her, as appropriate. Soon thereafter, Matz placed these assets in the Marla B. Matz, D.D.S., Inc. Money Purchase Plan, of which she is trustee. The plan is a pension plan covered by the Employment Retirement Income Security Act of 1974 (ERISA). ³

On August 13, 1993, a month before arbitration proceedings were scheduled to resume, counsel for Feldman wrote Judge Sondock to inform her that in light of the marital property agreement, he no longer owned any interest in the partnerships. Bennion did not add Matz or the plan to the arbitration proceedings, and neither Matz nor the plan sought to participate in the arbitration proceedings.

On November 2, 1993, Judge Sondock signed the arbitration award, which included the following:

FINDINGS

9. That one of the powers expressly given the Arbitrator by the parties in the August 1989 agreement was the power to divide the interests of the parties.

10. That it is in the best interests of the parties that a final and permanent division of their jointly held interests and responsibilities be effected immediately.

12. That Feldman did in March 1993 attempt to "convey" his interest in properties subject to the arbitration proceeding to his wife by instrument filed but not disclosed until September.

13. The arbitrator finds that such "conveyance" does not diminish the power of the arbitrator with regard to such properties. To the extent that Feldman asserts an inability to comply with this award because of his "conveyance" to his wife, Bennion is relieved from transferring any property to Feldman. Further, to the extent that the "conveyance" to Feldman's wife prevents a division of jointly owned properties by this award, the property shall be separated by partition in accordance with procedures prescribed in the Texas Rules of Civil Procedure with all expenses of partition to be paid from Feldman's share of the proceeds. To the extent that any such property cannot be partitioned in kind, the same shall be sold at public auction to be held no later than February 15, 1994, and the net proceeds, if any, after payment of taxes and expenses (except those of partition which shall be charged to the partition attributed to Feldman's ownership interest) shall be divided in accordance with the respective ownership interests of the parties.

II.

AWARD

14. Feldman shall himself and if necessary, shall cause his wife to transfer and convey, as is, to Bennion all of the right, title, and interest of Feldman as it existed prior to the "conveyance" to his wife in and to properties known as Beltway, Meadowbrook/Pinebrook II, Park Harbor, and Cypress Park subject to all outstanding liens, taxes, penalties or other existing encumbrances, if any, related to the Beltway, Meadowbrook/Pinebrook II, Park Harbor, and Cypress Park property.

15. In the event that Feldman's interests in Beltway, Meadowbrook/Pinebrook II, Park Harbor, and Cypress Park are conveyed to Bennion, Bennion shall transfer and convey, as is, to Feldman all the right, title and interest of Bennion in and to the Vickery Woods property....

16. If by November 15, 1993 Feldman pays to Bennion, $65,000 as partial reimbursement for earnest money paid by Bennion on the earnest money contract on the S.W. Freeway property, Bennion shall release to Feldman all of Bennion's interest, if any, in the property on the S.W. Freeway property....

22. That all documents effecting these findings and this award shall be executed by all necessary parties on or before November 26, 1993.

23. That each party shall elect or designate the name(s) and/or entities to whom the above transfers shall be made on or before November 10, 1993.

24. That all payments, deliveries, designations, and elections required by these findings and this award shall be made or done on or before November 26, 1993.

25. That Bennion has no further obligations to Feldman, and Feldman has no further obligations to Bennion, regarding the future expenses and costs related to assets related to, or arising from, the Wolff litigation [the properties]....

Sondock refused Bennion's request to delete paragraph 13. On February 22, 1994, Judge Casseb adopted the arbitration award as the judgment of the court. ⁴ No appeal was taken from this judgment. No property was transferred or partitioned pursuant to paragraph 13. No public sale was held before February 15, 1994.

On March 3, 1994, Bennion initiated enforcement proceedings to compel the property exchange ordered under paragraphs 14 and 15 of the arbitration award. This action spawned several of the previously mentioned original proceedings before this Court. In the first proceeding, Feldman sought mandamus relief against Judge Casseb to command him to vacate an April 11, 1994 order that declared the marital property agreement void. Feldman I, slip op. at 1. In that opinion we held the trial court's order was void, saying:

A trial court does not have jurisdiction to render a personal judgment against a person [Matz] unless a controversy exists between individuals and the controversy is legally presented for determination.... A judgment rendered against a person who was not served with citation in accordance with the mandatory rules relating to service of citation (and who did not waive service of citation or appear voluntarily) is void. Id. at 62 [Strawder v. Thomas, 846 S.W.2d 51, 62 (Tex.App.--Corpus Christi 1992)].

Feldman I, slip op. at 4-5 [citations omitted].

In his first habeas corpus proceeding, Feldman protested his incarceration for refusal to comply with Judge Casseb's orders to execute transfer documents. These documents included two special warranty deeds by which the limited partnerships, as grantors, conveyed their interests in the properties to Bennion, and Feldman conveyed to Bennion and Chelan, Inc. his interest in Vickery Woods, Beltway, Meadowbrook/Pinebrook II, Park Harbor, and Cypress Park. In our opinion, issued August 16, 1994, we agreed with Feldman that he should be discharged from the contempt order. We held that:

As we have already noted, [Feldman] could not execute documents that would distribute to him that which is the property of Dr. Matz. Because [Feldman] could not receive any distribution of real property from the limited partnerships, he could not convey any real property to Bennion.

Id. at 10. We concluded that Judge Casseb's order was void because it was impossible for Feldman to comply with its terms.

On July 12, 1994, Neil Morgan, a party to the original Intermarque suit, but not to the arbitration, filed a "Motion for Order in Aid of Sale." He asked that the trial court order that Feldman execute a quitclaim deed to Bennion on the Park Harbor property so that a proposed sale...