El Pescador Church, Inc. v. Ferrero

Decision Date25 November 2019
Docket NumberNo. 08-18-00029-CV,08-18-00029-CV
Citation594 S.W.3d 645
Parties EL PESCADOR CHURCH, INC., Appellant, v. Hector P. FERRERO, Rosa Ferrero, Antonio Nunez, and Diego Sanchez, Appellees.
CourtTexas Court of Appeals

Before Rodriguez, J., Palafox J., and McClure, Senior Judge, McClure, Senior Judge (Sitting by Assignment)

OPINION

ANN CRAWFORD McCLURE, Senior Judge At its core, this is a dispute between factions in a non-denominational church. But specifically, we are asked to review several dispositive motions granted in favor of the pastor, his wife, and two other individuals, all of whom who were alleged to have breached one or more duties to the non-profit corporation that established the church. Based on the record before us, we dismiss in part for want of jurisdiction, reverse and remand in part, and affirm in part.

FACTUAL BACKGROUND

The relevant facts are all derived from the pleadings and summary judgment record. On March 10, 1995, six persons, who also formed the original board of directors, incorporated El Pescador Church, Inc. (the Church) under the Texas Non-Profit Corporation Act. The initial six board of directors were identified as: Griselda Scalise, Serafin Scalise, Sergio Saenz, Teresa Leyva, Luz Gaham, and Armando Oaxaca. Serafin Scalise served as the pastor at that time. The corporation was to have no members. The board would serve until the adoption of bylaws which would set the number of directors at not less than five persons.

The bylaws, however, are not a part of our record. In fact, the next corporate document in our record appears to be a designation of the registered agent for service filed with the Texas Secretary of State's office some thirteen years later, on December 28, 2007. That filing reflects that the directors, who also served as officers, include: Hector Ferrero (president and director); Rosa Ferrero (secretary and director); and Armando Oaxaca (vice president-treasurer and director) Hector Ferrero apparently began serving as the pastor in 2007 and his wife, Rosa Ferrero, served as an assistant to the pastor.

The next corporate record appears to be the "Minutes of Meeting" dated another seven years later--January 18, 2014. The meeting came about because on January 3, 2014, three individuals who claimed to represent the board of directors, sent a letter through counsel asking Hector Ferrero to help locate a filing cabinet containing corporate records. The three individuals are identified as Carmen Yanez, Arturo Serrano, and Armando Oaxaca. Of the three, only Armando Oaxaca was an original board member.

In response, Hector Ferrero wrote to the three, informing them that they did not constitute the board of directors, that the church congregation in good standing was in process of electing new members to the board, and the request to review corporate records was declined. Hector Ferrero also called a special board meeting before the church congregation on January 18, 2014. The minutes of that special board meeting reflect that there were only three officers and directors at that time: Hector Ferrero who served president and chief executive officer, Rosa Ferrero who served as corporate secretary, and absent, was Armando Oaxaca, the treasurer. The minutes also reflect that Antonio Nunez attended as a guest of the board of directors. He is identified as serving in three roles: (1) accountant, (2) church administration specialist, and (3) notary public.

The minutes further reflect that Hector Ferrero called the special meeting to "expose" a group of people who were the "self proclaim[ed]" board of directors. Further, the church "hired" Nunez to perform an audit given the lack of corporate documents. According to Nunez, the only available public information recognized the following officers and directors: Hector Ferrero (president and director); Rosa Ferrero (secretary and director); and Armando Oaxaca (treasurer, vice president, and director) Nunez then advised the congregation on their duties and responsibilities for electing the board of directors. He counseled that board members were to be elected by a two-thirds vote of the membership in good standing.

The congregation voted unanimously to elect a committee to represent them and serve a responsive letter on Carmen Yanez, Armando Oaxaca, and Arturo Serrano. The responsive letter was drafted under Hector Ferrero's signature. These same three persons were unanimously declared no longer members in good standing of the church, and "are not recognized as Board of Directors and have no authority to represent" the church. Hector Ferrero was to take over the duties of treasurer, and Armando Oaxaca was to "render the existing [Church] bank account" and financial statements to Hector Ferrero. Armando Oaxaca was excluded as the treasurer specifically because he was not attending services or tithing. Finally, the minutes reflect that Hector Ferrero would complete a census of all members who are in good standing based on tithes and church attendance, and following that, those members in good standing would vote on a new permanent board of directors.

The letter approved by the congregation, dated January 28, 2014 and under Hector Ferrero's signature, denied that Carmen Yanez, Arturo Serrano, and Armando Oaxaca represented the board. The letter attached the minutes from the special meeting and restated that the members in good standing with the congregation were soon to elect new board members. Armando Oaxaca was requested to appear before the congregation at the next Sunday's services and "surrender the finances" of the Church.

PROCEDURAL BACKGROUND

Over a year later, attorney Alfonso Soto filed suit on behalf of the Church against Hector Ferrero, Rosa Ferrero, Nunez, and Diego Sanchez.1 The suit alleges that Hector Ferrero executed a Form 802 filing with the Secretary of State that listed himself as the agent for service. This form also lists only three officers and directors: Hector Ferrero, Rosa Ferrero, and Armando Oaxaca. But the suit alleges Hector Ferrero did not have the authority to execute and file this form. Further, Hector Ferrero, again without authorization, "retained the services" of Nunez to assist the Church with auditing, legal advice, and church management and operations.

The suit claims that based on Nunez's advice, Hector Ferrero and Rosa Ferrero took possession of the Church's corporate records, bank accounts, and that they further expelled as church members the existing board of directors and improperly named a new board. The suit claims that the Church, through its true board of directors, demanded that Hector Ferrero cease and desist from these actions, and when he failed to do so, the Church through its board filed this lawsuit. The suit alleges five causes of action: (1) conversion, (2) breach of fiduciary duty, (3) fraud, (4) the unauthorized practice of public accounting, and (5) the unauthorized practice of law. We add some explanation for each claim.

The conversion claim is alleged against Hector Ferrero, Rosa Ferrero, and Sanchez, and is based on the advice of Nunez. It claims that Hector Ferrero with the assistance of Rosa Ferrero and Sanchez (and based on the advice of Nunez) "wrongfully exercised dominion and control" over church property by "changing the bank where funds are deposited, changing the locks to the temple, taking control of the tithe, and subjecting any and all parities [sic] that disagree with these actions to intimidation, ridicule, and humiliation directed from the pulpit to the faithful."

The breach of fiduciary duty claim is alleged only against Hector Ferrero. It claims that as the president and as a member of the board of directors, he owed but breached several duties to the Church, including the duty of care, loyalty, utmost good faith, honesty and candor, full disclosure, and the duty to refrain from self-dealing. He allegedly did so by acting in derogation of the unspecified provisions of law, regulations, and the Church's articles of incorporation.

The fraud allegation is asserted against Hector Ferrero through his own acts or omissions, and the other defendants through their "aid and support[.]" The claim is based on the representation to the congregation that Hector Ferrero was entitled to solely conduct the management and operations of the Church, and as a result, he dispossessed the board of directors of management over the Church.

The last two claims are asserted only against Nunez. One count alleges that he has engaged in the practice of accountancy, despite not being a licensed certified public accountant. As such, he misrepresented his professional abilities to the Church. The count asserts liability under TEX.BUS. & COM.CODE ANN § 17.46(b)(2), (3), and (5).2 The last count asserts a similar claim against Nunez, but it is based on providing legal advice while not being a licensed lawyer in the State of Texas.

The suit seeks an accounting of funds received and spent, as well as monetary damages. It does not specifically seek any declaratory relief as to who is or is not a director of the corporation, nor does it seek the return of any property held by any defendant.

All the defendants answered and raised the issue of standing of the three putative board members to authorize the suit and retain an attorney on behalf of the Church. But that issue was never formally presented to the trial court, nor would the record be sufficient for us to decide that matter.3

Instead, the DTPA claims against Nunez were dismissed pursuant to a plea to the jurisdiction. The remaining conversion and fraud claims against Nunez were dismissed by summary judgment. Defendants Hector Ferrero, Rosa Ferrero, and Sanchez prevailed on their...

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