Montemayor v. Ortiz, 13-04-224-CV.

• Decision Date: 20 July 2006
• Docket Number: No. 13-04-358-CV.,No. 13-04-224-CV.,13-04-224-CV.,13-04-358-CV.
• Citation: 208 S.W.3d 627
• Parties: G. Xavier MONTEMAYOR and Franklin T. Graham, Jr., Appellants, v. Becky ORTIZ, d/b/a Schors, Appellee. G. Xavier Montemayor and Franklin T. Graham, Jr., Appellants, v. Jose Antonio Ortiz Fernandez, Jose Antonio Ortiz Celada, and Wife, Becky Ortiz, Appellees.
• Court: Texas Court of Appeals

208 S.W.3d 627 G. Xavier MONTEMAYOR and Franklin T. Graham, Jr., Appellants,
v.
Becky ORTIZ, d/b/a Schors, Appellee.
G. Xavier Montemayor and Franklin T. Graham, Jr., Appellants,
v.
Jose Antonio Ortiz Fernandez, Jose Antonio Ortiz Celada, and Wife, Becky Ortiz, Appellees. No. 13-04-224-CV. No. 13-04-358-CV. Court of Appeals of Texas, Corpus Christi-Edinburg. July 20, 2006. Supplemental Opinion Denying Rehearing November 16, 2006.

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Gilberto Hinojosa, Magallanes, Hinojosa & Mancias, Brownsville, William Kimball, Harlingen, for appellants.

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Shelby Jordan, J. Norman Thomas, Jordan, Hyden, Womble & Culbreth, P.C., Corpus Christi, for appellees.

Before Justice HINOJOSA, YAÑEZ, and CASTILLO.

OPINION

Opinion by Justice CASTILLO.

These two appeals were consolidated for the purposes of briefing and argument, and will now be addressed in a single opinion. Cause number 13-04-358-CV began as a declaratory judgment action filed on May 15, 2002, by appellants, G. Xavier Montemayor and Franklin T. Graham, Jr. (collectively "Montemayor"), against appellees Jose Antonio Ortiz Fernandez ("Fernandez"), his son Jose Antonio Ortiz Celada ("Celada") and Celada's wife, Becky Ortiz ("Ortiz"). Montemayor desired to collect on a monetary judgment against Fernandez and Celada that issued in 1990, and sought a declaratory judgment that properties of Schor's, a d/b/a of Ortiz, were community property of Celada and Ortiz and therefore subject to levy and execution for payment of the judgment debt.

In conjunction with the petition for declaratory judgment, and without notice to Ortiz, Montemayor sought and obtained a temporary restraining order and an ex parte receivership. Ortiz filed counterclaims on January 10, 2003, alleging that the ex parte receivership was obtained wrongfully, based on misrepresentations to the court, and had damaged her and her business. Causes of action included abuse of process, malicious prosecution, defamation, and intentional infliction of emotional distress.

Two partial summary judgments were entered in favor of Ortiz in 2003 in the declaratory judgment action reflecting: (1) the 1990 judgment was for collection of a debt, not a tort; and (2) Schor's was the "special community property" of Ortiz, at all times subject to her sole management and control, and not subject to levy or execution by Montemayor. Subsequent to entry of the two summary judgment orders, the counterclaims of Ortiz were severed (now cause number 13-04-224-CV on appeal). The severed action dealing with the damage claims proceeded to trial in August 2003; final judgment consistent with the jury verdict in favor of Ortiz issued in February 2004. At that point, Ortiz returned to court in the declaratory judgment action and obtained an award for attorneys' fees. Final judgment in that case issued in favor of Ortiz on April 19, 2004.

Appeal is brought from the orders granting the summary judgments, and from the findings and judgment in the severed action, concluding that Montemayor engaged in tortious conduct and awarding damages. We affirm the trial court's rulings reflected in appeal number 13-04-358-CV. We reverse the trial court's judgment in appeal number 13-04-224-CV, based upon no evidence to support the findings, and render.

I. Background

In the mid 1980's, Fernandez and Celada had done business with the Brownsville Money Exchange. In 1986, they sought the immediate exchange of $140,000 in pesos for American dollars to satisfy some other debts. They received a check from the exchange; they then contacted it to advise that the check would not clear soon enough. They requested that $140,000 be forwarded by wire and they would return the check. The money was wired; the check was also deposited. After some dispute, but without litigation, Fernandez and Celada agreed to execute four promissory notes for the additional $140,000 in favor of the Brownsville Money Exchange. They

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failed to pay on those notes; litigation ensued, and in June 1990, a judgment was entered against Fernandez and Celada for $203,013, with interest at the rate of eighteen percent per year until paid. That judgment was later assigned two-thirds to Montemayor (son of the owner of the exchange) and one-third to Graham (the attorney who handled the matter on behalf of the exchange and retained a contingency fee interest).

When still a newly-wed, Ortiz began Schor's in 1977 in partnership with her sister-in-law. The initial capital investment was $15,000; Ortiz contributed $7,500 given to her as a gift from her father. The sister-in-law was not interested in operating the business, which grew largely due to the efforts of Ortiz. Schor's expanded into two stores, operating as a jewelry store and interior decorating business. Ortiz bought out her sister-in-law in the early 1990s with monies earned from the business. During this time, Celada allegedly had nothing to do with the Schor's business; he focused on farming operations with his father in Mexico. Ortiz was aware that in the late 1980s, Celada and Fernandez started an unsuccessful steel business. She testified she was aware of financial difficulties, but not immediately aware of the promissory notes executed on behalf of the Brownsville Money Exchange. In 1990, Fernandez filed for Chapter 7 protection in bankruptcy. The principal amount of the 1990 judgment debt against him for $140,000 was not discharged, based on a finding by the bankruptcy court that the debt had been incurred through fraud.

Ortiz continued to reinvest profits from Schor's into the business, which grew to have an inventory value in excess of one million dollars by 2002. She contended at all times that Schor's was subject to her sole management and control, as either her separate or special community property, and that she and Celada separately managed their own business affairs. By 2002, Celada was not contributing to maintenance of the family, was absent much of the time, living in Mexico, and the couple initiated divorce proceedings.

In May 2002, Montemayor and Graham approached counsel about possibly collecting on the 1990 judgment against the Schor's property. Various unsuccessful attempts had been made to collect in the intervening years; frequently Celada could not be located for service.¹ Graham also testified that they did not earlier pursue the Schor's assets because the business was not initially big enough to fight about. By 2002, the 1990 judgment had grown, through accruing interest, to have a value in excess of $1,450,000.²

Montemayor filed a petition on May 15, 2002, requesting a temporary restraining order to "preserve the status quo," to prevent Fernandez, Celada or Ortiz from concealing or hiding assets of Schor's. They also sought and secured an ex parte appointment of a receiver, based upon affidavits which alleged imminent threat that the

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assets would otherwise disappear, and that Schor's was the community property of Celada and Ortiz and therefore subject to execution to satisfy the debt. The order appointing the receiver reflects that, in the petition, Montemayor contended that if emergency relief were not granted, the "assets and cash of said store [Schor's] will be concealed, transferred, removed, assigned, sold or hidden and that the Plaintiffs will be forever and irreparably injured. . . ." The order appointed Rufus Ransome, Jr., ("Ransome") as "receiver of the inventory (including the jewelry, antiques, and merchandise), equipment, cash on hand, accounts receivable, and cash accounts or other depository accounts" of Schor's.

Ransome appeared at the store's facility on May 15, 2002, with order in hand. Store employees contacted Ortiz, who was shocked, but granted admittance and told employees to cooperate. Some other family member contacted Celada, who then appeared at the store, got into an altercation with Ransome, and told him to leave. Ransome left. Ortiz contacted an attorney, Dennis Sanchez, who immediately contacted counsel for Montemayor. An agreed order was negotiated and formally entered on May 28, 2002. It reflects that, based on representations that Fernandez and Celada would not be permitted access to Schor's and that no assets of Schor's will be transferred to them, Ortiz would be permitted to continue operating her business, buying and selling merchandise and conducting normal operations.³ Under the agreement, the receiver would complete his inventory of all assets, and would have authority to review all purchases and sales, which he could stop at his own discretion.

At a hearing held June 7, 2002, the temporary restraining order was dissolved and replaced by a temporary injunction. The parties agreed the receivership would remain in place: "It is our agreement that Mr. Ransome will be able to continue to view the books and records, and look at the inventory, and examine the inventory on a weekly basis. . . . But if he believes something irregular is occurring such as looting of assets, or something like that, then he would have the right to come back and advise the Court and counsel." Ortiz was permitted to continue normal operations of her business. A formal order to this effect was entered June 24, 2002; however, this order was not "agreed" as some additional language was included.

In October 2002, Ortiz moved to dissolve the receivership; it was formally vacated on January 8, 2003. Ortiz also moved for two partial summary judgments. Partial summary judgment that the 1990 judgment was an action for debt, and not based in tort, was entered on February 21, 2003. Partial summary judgment that Schor's was at all times Ortiz's "special community property," subject to her sole...