Parham Family Ltd. v. Morgan

Decision Date03 June 2014
Docket NumberNos. 14–12–00753–CV, 14–12–00795–CV.,s. 14–12–00753–CV, 14–12–00795–CV.
Citation434 S.W.3d 774
PartiesPARHAM FAMILY LIMITED PARTNERSHIP and Van E. Parham, Jr., Appellants v. Diane MORGAN f/k/a Diane Parham, Appellee. Parham Enterprises, Inc. and Rhetta Parham, Appellants v. Diane Morgan f/k/a Diane Parham, Appellee.
CourtTexas Court of Appeals

OPINION TEXT STARTS HERE

James Nathan Overstreet, Houston, David Richard Toups, Dallas, for Appellants.

Robert J. Thomas, Houston, Clinard J. Hanby, The Woodlands, for Appellee.

Panel consists of Justices McCALLY, BUSBY, and WISE.

OPINION

SHARON McCALLY, Justice.

This consolidated appeal arises from a dispute over Lot 9, Block 1 of Farmette Meadows Section One, Harris County, Texas (the “subject property”). By the underlying suit, Diane Morgan f/k/a Diane Parham (Diane) sought to avoid a transfer of the subject property as a fraudulent transfer as well as a declaration that the September 22, 2007 deed purporting to accomplish the transfer is void. The trial court granted partial summary judgment on the attempted transfer, declared the deed void, signed a final judgment awarding Diane attorney's fees, and enjoined appellants Parham Family Limited Partnership (Partnership) and Van E. Parham, Jr. (Van Jr.) from pursuing their collateral suit regarding the subject property.

On appeal, Parham Enterprises, Inc. (PEI) and Rhetta Parham (Rhetta), the president of PEI, urge the trial court erred by (a) granting the motion for partial summary judgment, (b) enforcing an “expired” temporary injunction, and (c) awarding Diane attorney's fees despite a failure to segregate. Partnership and Van Jr. challenge the trial court's subject matter jurisdiction over Diane's suit and Diane's standing to seek injunctive relief against them. Partnership and Van Jr. also assert the trial court erred in entering the injunction against them. As explained below, we affirm the trial court's judgment as modified.

I. Background

Diane was married to Shawn Parham in June 2004. On June 22, 2004, Shawn conveyed the subject property to PEI. PEI is a corporation that was owned and controlled by Van Parham, Sr. and Rhetta. Diane worked for PEI until she and Shawn were separated in August 2005; they were divorced in May 2006.

On September 22, 2007, Rhetta, as president of PEI, signed a deed attempting to convey the subject property to Partnership. However, it is undisputed that the warranty deed identified the wrong lot within the Farmette Meadows Section and named a non-existent entity, Parham Family Limited Partnership No. 2, as grantee. The warranty deed, including these errors, was recorded in the real property records of Harris County. In July 2008, Diane obtained a judgment against PEI for around $82,500 in County Court at Law No. 3 related to PEI's unauthorized use of her personal credit cards. The transfer of the subject property occurred during the pendency of the credit card dispute. Diane attempted to execute her judgment against PEI once it became final, but was unsuccessful. She abstracted this judgment in the Harris County deed records on September 22, 2008.

On January 28, 2009, Diane, as a judgment creditor, filed a petition to set aside deed, for declaratory judgment, for fraudulent transfer and for a temporary restraining order (TRO) and temporary injunction. She named PEI and Rhetta as defendants. Diane asserted that the September 22, 2007 deed conveying Lot 1 was a fraudulent conveyance of the subject property to a non-existent entity made to “delay, hinder, or defraud” Diane in her efforts to collect that judgment. Diane sought to set aside “the purported transfer and an order of sale ... for disposition and satisfaction of [her] judgment,” a declaratory judgment, a TRO and temporary injunction against further conveyances of the subject property, actual damages that “exceed $84,000 but are within the jurisdictional limits of this court,” and attorney's fees. The trial court issued a TRO on February 2 and set the hearing on the temporary injunction for February 13.

On February 13, Diane obtained a temporary injunction against PEI and Rhetta, prohibiting them from “deeding, transferring or conveying” Lot 1. The trial court set the matter for trial on July 15.

On February 27, Van Jr. and Partnership filed a petition in intervention (mistakenly styled an “interpleader”), asserting an interest in the subject property. Diane filed an amended petition naming Van Parham Sr., Van Jr., Partnership, and V.E. Parham Jr. Management Corp. as additional defendants. She also added claims for conspiracy and exemplary damages against all the defendants.

During the remainder of 2009, the defendants filed and continued various dispositive motions. The parties agreed to continue numerous trial settings and the parties unsuccessfully mediated. In 2010, the trial court denied all of the defendants' dispositive motions, Van Sr. passed away, and Diane amended her petition to remove Van Sr. and V.E. Parham Jr. Management Corp. as parties and delete her claim for exemplary damages. And, the parties agreed to more continuances, moving the trial into 2011. On September 19, 2011, Diane filed a motion for partial summary judgment against PEI only. In this motion, she sought judgment on her claims for declaratory judgment and for fraudulent transfer. This motion was set for submission on October 7. Diane attached to her motion (1) a copy of the recorded deed on the subject property, bearing the two errors in lot and grantee, (2) a certificate from the Texas Secretary of State certifying that there is no record of any business entity, foreign or domestic, by the name of Parham Family Limited Partnership No. 2,1 and (3) evidence in support of her fraudulent transfer claim, including an appraisal of the subject property at the time of the purported transfer. Rhetta and PEI responded to Diane's motion for partial summary judgment. Intervenors 2 Partnership and Van Jr. also filed a response to Diane's motion.

Later in September, Diane filed a third amended petition restating her previous claims; and adding a claim for piercing the corporate veil against Rhetta, seeking to hold her individually liable for disregarding the corporate form of PEI. A week later, Diane filed a “notice of disobedience of the temporary injunction,” asking the court to hold PEI and Rhetta, individually and as president of PEI, in contempt. In this notice, she asserted:

The Defendants [PEI] and [Rhetta] were served with the Plaintiff's Motion for Partial Summary Judgment on Thursday, September 15, 2011. In a calculated bad faith attempt to defeat the partial summary judgment motion, the Defendants [PEI] and [Rhetta] violated the Court's Temporary Injunction Order on Friday, September 23, 2011 by filing an amended and alleged corrected Warranty Deed to the subject property Lot 9 with the county clerk.

The trial court heard this motion on October 12. After the hearing, the trial court signed an order holding PEI and Rhetta in contempt. In this order, the trial court declared the deed executed by PEI and Rhetta on September 22, 2011 (filed on September 23) void and fined Rhetta “$500.00 as punishment for contempt” of the temporary injunction. The trial court further ordered PEI and Rhetta to obey the contempt order and the February 13, 2009 temporary injunction. In the order, the trial court stated the temporary injunction “remains in effect for any and all purposes.” The trial court also signed a trial setting that day, setting the case for trial on January 23, 2012.

Two days before the hearing on Diane's motion for contempt, Diane filed a motion to strike the intervention of Partnership and Van Jr. At a hearing on October 19, 2011, Diane orally dropped her conspiracy claims against all the parties. The trial court signed a partial non-suit with prejudice of these claims that same date. The trial court also signed an order granting Diane's motion to strike the intervention of Partnership and Van Jr. According to the trial court's findings, Partnership and Van Jr. filed a motion for new trial/motion for reconsideration in response to the trial court's order striking their intervention.3

Diane filed an amended petition on November 7 naming only PEI and Rhetta as defendants. In this petition, Diane sought to set aside the September 22, 2007 deed, a declaratory judgment that this deed was void, and alternative relief for fraudulent transfer, piercing the corporate veil, and fraud. She further alleged that the February 13, 2009 temporary injunction remained in effect.

On January 17, 2012, Partnership and Van Jr. filed an action to quiet title to the subject property in Harris County Probate Court No. 1, which was overseeing the probate of the estate of Van Sr. This quiet-title action was based on the September 22, 2007 deed. On January 19, PEI and Rhetta filed a motion in the underlying cause here to transfer venue to the probate court. The motion also complained that, due to the amount in controversy, the court did not have jurisdiction, and that the court had improperly excluded necessary parties by striking Partnership/Van Jr.'s petition in intervention. Although Diane responded to the motion, it appears that the motion was neither set for hearing nor ruled upon.

On January 23, 2012, the trial court signed an order granting Diane's September 19 motion for partial summary judgment against PEI. Specifically, the trial court's order: “GRANTS Plaintiff's motion for partial summary judgment against the Defendant Parham Enterprises, Inc. regarding the issue that the warranty deed executed on September 22, 2007 is void.”

The next day, the trial court signed an order denying Partnership and Van Jr.'s motion for new trial/motion for reconsideration. Also on January 24, Diane and PEI proceeded to a jury trial on the issue of attorney's fees only. 4 After a brief jury trial, the jury returned a verdict finding Diane's reasonable and necessary attorney's fees for preparation and trial to be...

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