Court Opinion

ID: 4064546
Source: CourtListenerOpinion
Date Created: 2016-09-29 21:31:12.755245+00
Date Added: 2024-06-11T14:05:38.352614
License: Public Domain

ACCEPTED
                                                                            06-15-00037-CV
                                                                 SIXTH COURT OF APPEALS
                                                                       TEXARKANA, TEXAS
                                                                     12/17/2015 10:09:13 AM
                                                                           DEBBIE AUTREY
                                                                                     CLERK

                   No. 06-15-00037-CV

           IN THE COURT OF APPEALS             FILED IN
        FOR THE SIXTH DISTRICT OF TEXAS 6th COURT OF APPEALS
                                          TEXARKANA, TEXAS
              TEXARKANA,TEXAS          12/17/2015 10:09:13 AM
                                                       DEBBIE AUTREY
                                                          Clerk
                   MICHAEL D. LEE,

                        Appellant,

                            vs.

THE ROGERS AGENCY,C. MICHAEL ROGERS,AND
    NEW YORK LIFE INSURANCE COMPANY,

                        Appellees.

         On Appeal from Cause No. 2014-0615-B
In the 124th Judicial District Court of Gregg County, Texas

           APPELLEE BRIEF OF
THE ROGERS AGENCY AND C. MICHAEL ROGERS

                                  D. Craig Brinker
                                  Texas State Bar No. 03033200
                                  Lana P. Beverly
                                  Texas State Bar No. 24075377

                                  WILSON,ELSER, MOSKOWITZ,
                                     EDELMAN &DICKER LLP
                                  901 Main Street, Suite 4800
                                  Dallas, Texas 75202
                                  (214)698-8000(Telephone)
                                  (214)698-1101 (Facsimile)

                                  COUNSEL FOR APPELLEES
                                  THE ROGERS AGENCY AND
                                  C. MICHAEL ROGERS
                 IDENTITY OF PARTIES AND COUNSEL

APPELLANT/PLAINTIFF:          COUNSEL:

Michael D. Lee                TRIAL COUNSEL

                              James A. Holmes
                              State Bar No. 00784290
                              THE LAW OFFICE OF JAMES HOLMES,P.C.
                             212 South Marshall
                             Henderson, Texas 75624
                             (903)657-2800(Telephone)
                             (903)657-2855 (Facsimile)
                             jh~~amesHolmesLaw.com

                              APPELLATE COUNSEL

                              John R. Mercy
                              State Bar No. 13947200
                              MERCY CARTER TIDWELL,L.L.P.
                              1724 Galleria Oaks Drive
                              Texarkana, Texas 75503
                             (903)794-9419(Telephone)
                             (903)794-1268 (Facsimile)
                             jme~cy@texa~kanalawye~s.com

APPELLEES/DEFENDANTS:         COUNSEL:

The Rogers Agency and         TRIAL COUNSEL
C. Michael Rogers
                              D. Craig Brinker
                              State Bar No. 03033200
                              LaToyia Watkins Pierce
                              State Bar No. 24049109
                              WILSON,ELSER,MOSKOWITZ,
                                 EDELMAN 8i DICKER,LLP
                              Bank of America Plaza
                              901 Main Street, Suite 4800
                              Dallas, Texas 75202
                                  (214)698-8000(Telephone)
                                  (214)698-1101 (Facsimile)
                                  c~azg.b~inke~@wilsonelse~.com
                                  latoyia.pie~ce@wzlsonelse~.com

                                  APPELLATE COUNSEL

                                  D. Craig Brinker
                                  State Bar No. 03033200
                                  Lana P. Beverly
                                  State Bar No. 24075377
                                  WILSON,ELSER, MOSKOWITZ,
                                     EDELMAN &DICKER,LLP
                                  Bank of America Plaza
                                  901 Main Street, Suite 4800
                                  Dallas, Texas 75202
                                  (214)698-8000
                                  (214)698-1101 (Facsimile)
                                  c~azg.bNinke~@wilsonelse~.com
                                  lava.beve~ly@wilsonelse~.com

New York Life Insurance Company   TRIAL AND APPELLATE COUNSEL:

                                  Andrew Jubinsky
                                  State Bar No. 11043000
                                  Andrew C. Whitaker
                                  State Bar No. 21273600
                                  Ryan McComber
                                  State Bar No. 24041428
                                  Figari &Davenport, LLP
                                  Bank of America Plaza
                                  901 Main Street, Suite 3400
                                  Dallas, Texas 75202
                                  (214)939-2000(Telephone)
                                  (214)939-2090(Facsimile)
                                  andyjubinsky~~gday.com
                                  and~ew.whitaker~~g-day.com
                                  cyan.mccombe~~~gday.com

                                    3
                         TABLE OF CONTENTS

IDENTITY OF PARTIES AND COUNSEL ..............................2

TABLE OF CONTENTS ............................................ 4

INDEX OF AUTHORITIES .......................................... 6

STATEMENT OF THE CASE.........................................9

ISSUE PRESENTED ...............................................10

STATEMENT OF FACTS........................................... 10

     A.   Lee Purchases Three Policies from NY Life ...................10

     B.   Lee Creates and Assigns to a Trust
          All of His Interest in the Policies ............................11

     C.   The Willson Action ...................................... 13

     D.   The Willson Action Settles, and Notice is Sent to the Trustee ..... 14

     E.   The Willson Judgment ....................................15

     F.   Lee Files Suit Against Defendants ............ ..............18

SUMMARY OF THE ARGUMENT ...................................20

STANDARD OF REVIEW .......................................... 21

ARGUMENTS AND AUTHORITIES ................................. 22

     A.   Lee Lacks Standing to Pursue His Extra-Contractual Claims ..... 22

     B.   Lee's Claims Are Barred by the Doctrine ofRes Judicata .........26

          1.    The Willson Judgment Constitutes a Prior Final Judgment
                on the Merits From a Court of Competent Jurisdiction ......27

                                     0
          2.   Although Lee Was Not a Party to the Willson Judgment,
               He Was In Privity with the Trustee, Who Was a Party
               to the Willson Judgment ............................. 28

          3.   Lee's Claims Were Raised and Disposed of in the
               Willson Action .....................................31

     C.   Lee's Claims Regarding Notice Lack Merit ................... 34

          1.   Lee Was Not A Class Member Required to Be Noticed .....35

          2.   Notices Were Adequate to Inform Class Members
               of Their Rights .....................................39

PRAYER ........................................................40

CERTIFICATE OF SERVICE ........................................41

CERTIFICATE OF COMPLIANCE ................................... 41

                                   E
                        INDEX OF AUTHORITIES

Cases

Amstadt v. U.S. Bass Copp., 919 S.W.2d 644(Tex. 1996)........ 27, 28, 29, 30

Appleby v. And~easen, 758 N.W.2d 615(Neb. 2008)................... 33, 34

Board ofAdjustment v. Patel, 887 S.W.2d 90
     (Tex, App. Texarkana 1994,reh'g overruled)....................... 22

Browning v. Placke, 698 S.W.2d 362(Tex. 1985)......................... 38

Buechel v. Bazn, 766 N.E.2d 914(N.Y. 2001)............................ 29

Citizens Ins. Co, ofAme~ica v. Daccach,217 S.W.3d 430(Tex. 2007).........27

Eisen v. Carlisle &Jacquelin,417 U.S. 156(1974)....................... 37

Elite Spo~tswea~ Products, Inc. v. New York Life Ins. Co.,
       2006 WL 3052703(E.D. Pa. Oct. 24, 2006), aff'd,
       270 F. App'x 153 (3d Cir. 2008)................................. 37

Estate ofLede~ v. C.I.R., 893 F.2d 237(l Oth Cir. 1989)....................25

Freeman v. Cherokee Water Co.,
     11 S.W.3d 480(Tex. App. Texarkana 2000, pet. denied).............28

Getty Ozl Co, v. Insurance Co. ofN. Am., 845 S.W.2d 794(Tex. 1992)........29

G~acia v. RC Cola-7-Up Bottling Co., 667 S.W.2d 517(Tex. 1984).......... 26

G~amatan Home Investors Copp. v. Lopez, 386 N.E.2d 1328(N.Y. 1979)......27

Grimm v. Rizk,
    640 S.W.2d 711 (Tex. App. Houston [14th Dist.] 1982,
     writ refd n.r.e.).............................................. 30

Hallco Texas, Inc. v. McMullen County, 221 S.W.3d 50(Tex. 2006)..........26

                                      D
Hill Country Sprzng Water v. Krug,
      773 S.W.2d 637(Tex. App. San Antonio 1989, writ denied)..........35

In re P.D.D., 256 S.W.3d 834(Tex. App. Texarkana 2008).............26, 27

In ~e P~udentzal Securities, Inc. Ltd. Pa~tne~ships Litigation,
       164 F.R.D. 362(S.D.N.Y.), affd, 107 F.3d 3(2d Cir. 1996),
       cent, denied, 521 U.S. 1119(1997)............................ 36, 37

James Mills O~cha~ds Copp, v. Frank, 244 N.Y.S. 473 (N.Y. Sup. Ct. 1930)... 38

John H. Caney & Assocs. v. Texas.Prop. & Cas. Ins. Guar. Assn,
      354 S.W.3d 843 (Tex, App. Austin 2011, pet. denied)...............24

Lesika~ v. Moon,
      2014 WL 4374117(Tex. App. Houston[1st Dist.] 2014, pet. denied)...30

Michels v. Phoenix Home Life Mut. Ins. Co.,
      1997 WL 1161145 (N.Y. Sup. Ct. Jan. 7, 1997)..................... 36

Monahan v. N.Y.C. Dept ofCo~~ections,
     214 F.3d 275(2d Cir.), cent. denied, 531 U.S. 1035 (2000)...... 27, 28, 29

Natividad v. Alexsis, Inc., 875 S.W.2d 695 (Tex. 1994).................... 21

New York Life Ins. Co. v, Giffin, 794 So. 2d 1072(Ala. 2001).............. 34

Nixon v. M~. Prop. Mgmt Co., 690 S.W.2d 546(Tex. 1985)................21,22

PNS Stores, Inc. v. Rzve~a, 379 S.W.3d 267(Tex. 2012)....................38

Randall v. Goodall &Davison, P.C.,
     2013 WL 3481518 (Tex. App. Austin July 2, 2013, pet. denied).......24

Smith v. Huston,
      251 S.W.3d 808 (Tex. App. Fort Worth 2008, pet, denied)........27, 28

Stagy-Teleg~^am, Inc. v. Doe,915 S.W.2d 471 (Tex. 1995)...................22

State Farm FiNe & Cas. Co. v. Gandy,925 S.W.2d 696(Tex. 1996).......... 24

                                      7
Taylor v. StuNgell, 553 U.S. 880(2008)..............................29, 30

Tex. Farm Bureau Unde~^w~ite~s v. Graham,
      450 S.W.3d 919(Tex. App.—Texarkana 2014, pet. denied)............. 22

Weigne~ v. City ofNew York,
     852 F.2d 646(2d Cir. 1988), cent. dented, 488 U.S. 1005(1989)........36

Williams v. Ma~vzn Windows and Doors,
      790 N.Y.S.2d 66(N.Y. App. Div. 2005).................... ... 37, 38

Other Authorities

26 C.F.R. § 2Q.2042-1(c)(2)..........................................21

26 U.S.C.§2042 ..................................................25

N.Y. C.P.L.R. 901(a)(4)............................................. 25

TEx.R. Civ.P. 166a(c)................................................ 31

U.S. CoNST. art. IV, § 1 ............................................. 38

                                     0
                              STATEMENT OF THE CASE

Nature ofthe Case

      In March 2014, Appellant Michael D. Lee ("Appellant" or "Lee") filed suit
against The Rogers Agency and C. Michael Rogers (collectively "Rogers") and
New York Life Insurance Company ("NY L~fe") (collectively "Appellees" or
"Defendants") arising out of alleged misrepresentations Rogers made regarding life
insurance policies issued to Lee by NY Life from 1985 to 1987(~R 5-10),I

Course ofP~oceedzngs

       NY Life filed a Notice of Removal to Federal Court on April 23, 2014,
alleging Rogers was improperly joined.(CR 26-34).2 The Federal Court remanded
the case to the Trial Court (CR 36-45).3 After the case was remanded, NY Life
filed a Motion for Summary Judgment and supplements thereto, to which Rogers
adopted, joined, and incorporated by reference all arguments and authorities
contained therein, arguing Lee's claims against Defendants were barred by the
doctrine of resjudicata.(CR 50-700, 703-16, 726-32). Lee filed a Response to the
Motion for Summary Judgment, to which NY Life filed a Reply.(CR 737-95, 815-
28). Lee later filed aSur-Reply to NY Life's Response.(CR 832-38).

T~i~zl Court Disposition

       A hearing on Defendants' Motion for Summary Judgment was held on
February 4, 2015.(RR 1-37). After the hearing, the 124th Judicial District Court of
Gregg County, Texas entered an order granting Defendants' Motion for Summary
Judgment on June 26, 2015.(CR 1074). Lee then appealed the Trial Court's ruling
to the Texas Sixth Court of Appeals(CR 1075-76).

1 The Clerk's Record, filed on August 12, 2015, will be cited as "CR." The Supplemental Clerk's
Record, filed on September 2, 2015, will be cited as "SCR." The Reporter's Record from the
February 4, 2015, motion for summary judgment hearing will be cited as "RR."
2 "Federal Court" shall refer to the United States District Court for the Eastern District of Texas,
Tyler Division, the Honorable Michael Schneider presiding, which issued the Order Granting
Lee's Motion for Remand on October 14, 2014.(CR 36-45).
3 "Trial Court" shall refer to the 124th Judicial District Court of Gregg County, Texas, the
Honorable Alfonso Charles presiding.
                                                 G~
                              ISSUE PRESENTED

      The Trial Court properly granted Defendants' Motion for Summary

Judgment on the grounds that the doctrine of yes judicata applied to bar all of

Lee's claims against Defendants.

                           STATEMENT OF FACTS

A.    Lee Purchases Three Policies from NY Life

      Between 1985 and 1987, Lee, a certified public accountant, purchased three

whole life insurance policies from NY Life, each with an original face value

amount of $1,000,000 (the "Policies"), with the assistance of Rogers, an insurance

agent with NY Life.(CR 6, 14, 718, 458-525). The Policies NY Life issued to Lee

are as follows:

       Effective Date          Polic,               Original Face Amount

       March 12, 1985          37 958 331               $1,000,000.00
       April 12, 1986          42 161 943               $1,000,000.00
       Apri124, 1987           38 981 496               $1,000,000.00

(CR 458-525, 749). Lee elected to apply the dividends generated by the Policies

towards the purchase of paid up additional insurance, which was itself eligible for

dividends.(CR 762).

      Lee asserts that, in 1989, he asked Rogers how much he needed to pay NY

Life in order to have the Policies made fully paid up without any additional

premiums due. (CR 719, 750). According to Lee, Rogers promised that if Lee

                                        10
could fully pay the premiums on the Policies for $238,188.15, Lee would not owe

any additional premiums, and the Policies would remain in effect for his lifetime.

(CR 7, 15, 719). Lee subsequently provided Rogers with two checks totaling

$238,188.15 to remit to NY Life.(CR 7, 15, 719, 750, 757-58).

B.    Lee Creates and Assigns to a Trust All of His Interest in the Policies

      In June 1991, approximately four years after Lee purchased the last of his

three Policies, he, as the Settlor, and Richard A. Dial (the "Trustee"), as the

Trustee, entered into a Trust Agreement for the Michael Dee Lee Irrevocable

Insurance Trust (the "Trust"), in which Lee assigned to the Trustee "all his right,

title, and interest in and to" the Policies, and Lee further relinquished any rights

related to the Policies he could not convey to the Trustee. (CR 778-90).

Specifically, the Trust Agreement provided:

             3.     Rights in Policy of Insurance. The Trustee is hereby
      vested with all ~zght, title, and interest in and to such polzcies of
      insurance, and the Trustee is authorized and empowered to exercise
      and enjoy, for the purposes of the Trust herein created, and as absolute
      owner of such policies of insurance, all the options, benefits, rights,
      and privileges under such policies, including the right to borrow upon
      such policies, and to pledge them for a loan or loans or to cancel them.
      The insurance companies which have issued such policzes aye hereby
      autho~zzed and directed to ~ecognzze the Trustee as absolute owners
      of such policies of insurance, and as fully entitled to all options,
      ~zghts, privileges, and interests under such policzes; and any receipts,
      releases, and other instruments executed by the Trustee in connection
      with such policies shall be binding and conclusive upon the insurance
      companies and upon all persons interested in this Trust. The Settl~~
      hereby relinquishes all ~zghts and powers in such policies of
      insurance which aye not assignable, and will, at the request of the

                                        11
      Trustee, execute all other znst~uments seasonably Nequi~ed to
      effectuate this ~elznquishment.(CR 750, 778).

      Additionally, the Trust Agreement expressly divested Lee of any and all

rights he would otherwise have had in the Policies, stating:

      "Notwithstanding the above, Settlo~ shall have no powers exercisable
      over any insurance policies whzch become owned by this Trust,
      including but not limited to the power to change beneficiaries, the
      power to cancel policies, or the power to utilize the polices as
      collateral, so that he cannot do any act which may be deemed an
      incident ofownership ofthe polzcies."(CR 787).

      The Trust Agreement further provided that the Trust was irrevocable and

Lee was irrevocably waiving various rights he otherwise would have had:

             17. I~~evocabzlzty. This Trust shall be irrevocable, and the
      Settlor hereby expressly waives all rights and powers, whether alone
      or in conjunction with others, and regardless of when or from what
      source the Settlor may heretofore or hereafter have acquired such
      rights or powers, to alter, amend, revoke, or terminate the Trust, or
      any of the terms of this agreement, in whole or in part. To more fully
      express his intention, the Settlor hereby declares that, by this
      instrument, the Settlor relinquishes absolutely and forever all his
      possession or enjoyment of, or right to, the income from the Trust
      property, and all his rights and powers, whether alone or in
      conjunction with others, to designate the persons who shall possess or
      enjoy the Trust property, or the income therefrom.(CR 788-89).

      Over the following years, some of the required premiums for the Policies

were paid through their Automatic Premium Loan provisions, which resulted in the

establishment of loans against the Policies' cash values to pay the premiums due

and any interest that had accrued on those loans.(CR 763). In 2000 and 2001, the

Trustee signed forms instructing NY Life to apply the dividends and paid-up
                                         12
additions to pay the annual premiums, which served to reduce the cash value and

death benefit of the Policies and raised the possibility that, in the event those

values ran out, additional out-of-pocket premium payments would be required to

keep the Policies in force.(CR 762).

C.    The Willson Action

      Several years after Rogers' alleged misrepresentations forming the basis of

Lee's claims against Defendants, the following case was pending against NY Life

in New York: Willson v. New York Life Ins. Co., et al., Index No. 94/127804 (Sup.

Ct. N.Y. Co.)(the "Willson Action"), which consolidated four separate nationwide

class actions filed in 1994 and 1995 by NY Life policy owners.(CR 55, 79, 86-

136). The consolidated complaint in the Willson Action alleged a broad range of

improper life insurance sales practices like those asserted by Lee in the case at

hand, including misrepresentations:(1) regarding the future cash value of a policy,

and (2) that only one or a limited number of premiums would be required to

maintain the policies in force.(CR 55, 86-138).

      Specifically, one of the allegations asserted in the consolidated complaint

arose out of the premium offset arrangement, which allowed policy owners to use

accumulated dividend values from a whole life policy to pay all or part of the

required premiums. (CR 93-113). The class plaintiffs alleged NY Life had

fraudulently induced and deceived the class members into purchasing and

                                        13
maintaining life insurance policies based on false and misleading sales

presentations, including alleged misrepresentations regarding the premium offset

arrangement. As a result, the class plaintiffs asserted causes of action for breach of

contract, fraud, negligent misrepresentation, violations of the New York deceptive

trade practices law, and unjust enrichment.(CR 124-34).

      Ultimately, on July 28, 1995, the parties in the Willson Action executed a

Stipulation of Settlement (the "Settlement Agreement").(CR 55, 80, 137-217). On

July 31, 1995, the court in the Willson Action signed the Findings and Order

Confirming Certification of the Class for Settlement Purposes, Directing Issuance

of Class Notice and Scheduling a Settlement Hearing (the "July 1995 Order").(CR

218-33). The July 1995 Order, which certified a nationwide class for settlement

purposes only, found the Settlement Agreement was sufficient to warrant notice to

members of the class, directed the forms and methods of such notice, and set forth

procedures for the class members to use in excluding themselves from the class or

objecting to the terms of the proposed settlement.(CR 80, 218-33.)

D.    The Willson Action Settles, and Notice is Sent to the Trustee

      Pursuant to the July 1995 Order, the parties mailed the court-approved

notice, a cover letter from NY Life, aquestion-and-answer brochure, and an

individually customized statement of eligibility (the "Class Notice") to three

million class members at their last known addresses by first class mail.(CR 56, 80-

                                         14
81, 405-27, 826-28). The Class Notice regarding the Policies was mailed to the

Trustee, as the owner of record of the Policies, at his last known address and was

not returned as undelivered.(CR 56, 405-27, 826-28).

      Pursuant to the July 1995 Order, the parties also caused to be published, in

newspapers across the country, notice of the settlement of the Willson Action.(CR

81, 427). The Trustee did not request exclusion from the class before the October

31, 1995, deadline, and was not included on the court-approved list of individuals

who properly asked to be excluded from the class.(CR 529-30, 546-700).

E.    The Willson Judgment

      On February 1, 1996, the New York court in the Willson Action issued its

final judgment (the "Willson Judgment"), entering the Findings of Fact,

Conclusions of Law, and Final Order and Judgment.(CR 56, 234-310). Among

other things, the Willson Judgment: (1) held it had subject matter jurisdiction and

personal jurisdiction over all class members, (2) found the class representatives

adequately represented the class, (3) certified a settlement class (the "Settlement

Class"),(4) held the Class Notice "constituted due, adequate and reasonable notice

to all Class Members, and otherwise satisfy the requirements of due process," (5)

approved the settlement as "fair, reasonable and adequate and in the best interests

of the Class," and (6) and dismissed the Willson Action with prejudice and on the

merits.(CR 256-67, 299, 306-07, 310). The Willson Judgment further provided the

                                        15
Settlement Agreement and its terms as well as the Willson Judgment "shall forever

be binding on, and shall have yesjudzcata and preclusive effect in all pending and

future lawsuits maintained by, the plaintiffs and all other settlement Class

Members, as well as their heirs, executors and administrators, successors and

assigns."(CR 307-308.).

      The Settlement Agreement authorized by the Willson Judgment defined the

"Class Members" as "all persons or entities who have, or had at the time of the

Policy's termination, an ownership interest in one or more Policies issued by New

York Life at any time during the Class Period" and the "Class Period" as "the

period from January 1, 1982 through December 31, 1994, inclusive."(CR 319-20).

Additionally,"Released Transactions" was defined, in part, as:

     the marketing, solicitation, . ..sale, purchase, operation, retention,
     administration, or replacement by means of surrender, partial
     surrender, loans respecting, withdrawal and/or termination of...any
     insurance policy or annuity sold in connection with, or relating in any
     way directly or indirectly to the sale or solicitation of, the Policies.
     (CR 328).

      Under the Settlement Agreement incorporated in the Willson Judgment,

Class Members were releasing NY Life and other released parties, including

Rogers, from all claims stemming in any way from the Released Transactions and

were precluded from pursuing a claim based on the Released Transactions.(CR

366-70). Specifically the Willson Judgment stated:

                                        16
      Plaintiffs and all Class Members hereby expressly agree that they
      shall not now or hereafter institute, maintain or assert against the
      Releasees, either directly or indirectly, on their own behalf, on behalf
      of the Class or any other person, and release and discharge the
      Releasees from, any and all causes of action [and] claims ...that have
      been, could have been, may be or could be alleged or asserted now or
      in the future ...against the Releasees ... on the basis of, connected
      with, arising out of, or related to        .the Released Transactions,
      including without limitation ... (ii) any or all of the acts, omissions,
      facts, matters, transactions, occurrences, or any opal o~ w~ztten
      statements o~ ~ep~^esentations allegedly made in connection with or
      directly or indirectly relating to: (c) the number of out-of-pocket
      payments that would need to be paid for a life insurance policy; [and]
      (d) the ability to keep or not keep the policies in force based on a
      fixed number and/or amount of premium payments. .. . .(CR 366-
      367)(emphasis added).

      The scope of the release contained in the Willson Judgment specifically

included NY Life agents, such as Rogers, in its definition of "Releasees." (CR

328). In particular, paragraph 62 of the Willson Judgment states:

      The parties have explained that their objective was to finally resolve
      this action and that New York Life could not agree to a settlement that
      did not release its agents because such a settlement would provide no
      finality, in that if dissatisfied policy owners sued New York Life
      agents, the agents would likely turn -to New York Life for indemnity
      or contribution. The Court finds that (i) the need for finality
      necessitates release of New York Life's agents; (ii) the cooperation of
      agents will enhance the success of the ADR Process and it is therefore
      in no one's interest to automatically penalize agents ....(CR 287).

      The Willson Judgment also contained a permanent injunction against further

prosecution of these claims in any forum against any released party, including but

not limited to Rogers, based on the Released Transactions(CR 308, 366-70).

                                        17
      In accordance with the terms of the Settlement Agreement, apost-settlement

notice setting forth the Class Members' rights was also mailed to the Trustee, as

the owner of record of the Policies, at his last known address and was not returned

as undelivered or undeliverable.(CR 356-59, 857).

F.    Lee Files Suit Against Defendants

      Two of Lee's Policies lapsed for non-payment of premium in April of 2012,

with the remaining cash value used to purchase extended term insurance that

subsequently expired. Lee's third Policy was surrendered in 2013.(CR 761, 771).

Lee alleges he was notified in May of 2012 that his Policies had lapsed due to

unpaid premiums.(CR 7, 15, 719).

      In March of 2014, Lee filed suit against Defendants, asserting claims of

negligence and violations of both the Texas Deceptive Trade Practices Act

("DTPA") and       Texas    Insurance   Code    arising   from    Rogers'   alleged

misrepresentations regarding the Policies. (CR 5-10). He alleged in his Original

Petition that Rogers falsely represented that, in the event Lee paid an additional

$238,188.15 in premiums, he would not owe any additional premiums for the

Policies, which would remain in effect for his lifetime.(CR 7).

      NY Life removed the case to the Federal Court based on improper joinder,

arguing Lee's claims against Rogers were barred by yes judicata because of the

Willson Judgment. (CR 26-34). Lee subsequently filed a Motion to Remand,

                                        18
asserting his claims, which were purportedly based on the amount of the premiums

needed to keep the Policies in force for the rest of his life, did not fit within the

claims that were released in the Willson Judgment (CR 42). The Federal Court

rejected this argument in an order dated October 14, 2014(CR 36-45), stating:

      Rogers' alleged misrepresentations of which Lee complains falls
      squarely within the type of misrepresentations listed in the Willson
      release. Any claims arising from such misrepresentation against
      [Rogers]—as the agents of[NY Life] were released in the Willson
      settlement. Thus,[NY Life] has met its heavy burden to show that
      "there is no reasonable basis for the district court to predict that the
      Lee might be able to recover against an in-state defendant."(CR 42)
      (internal citations omitted).

      However, the Federal Court ultimately remanded the case to the Trial Court

under the common defense rule, which requires a remand "when a nonresident

defendant's showing that there is no reasonable basis for predicting that state law

would allow recovery against an in-state defendant equally disposes of all

defendants."(CR 43). The Federal Court found yes judicata not only barred all of

Lee's claims against Rogers, but it also barred all of Lee's claims against NY Life,

concluding that there was "no improper joinder but only an ill-founded case as to

all defendants."(CR 45).

      After the case was remanded to the Trial Court, NY Life filed a Motion for

Summary Judgment on the threshold issue, arguing yes judicata applied to all of

Lee's claims against Defendants, to which Rogers joined, adopted, and

incorporated by reference all of the arguments stated therein. (CR 50-700, 703-
                                         19
705). Following the filing of the initial summary judgment motion, Lee filed an

amended petition to assert an additional cause of action for breach of contract

against NY Life and request a declaratory judgment relating to the Policies.(CR

717-724). NY Life supplemented its Motion for Summary Judgment to address

these additional claims.(CR 706-13, 726-32). Rogers also filed a motion adopting

and joining in the arguments made and authorities cited in NY Life's supplemental

motion and further asserted the Willson Judgment not only applied to NY Life, but

also to Rogers, as NY Life's agents.(CR 714-16).

      On January 12, 2015, Lee filed his response to Defendants' motions for

summary judgment.(CR 737-95). In part, he alleged, for the first time, he was not

bound by the Willson Judgment because he transferred ownership of the Policies to

the Trustee in 1991. (CR 738-41). The Trial Court heard Defendants' summary

judgment motion on February 4, 2015.(RR 1-37). After the hearing, on June 26,

2015, the Trial Court signed an Order Granting Defendants' Motion for Summary

Judgment, dismissing all of Lee's claims against Defendants with prejudice.(CR

1074). Lee filed a Notice of Appeal on July 20, 2015.(CR 1075-76).

                     SUMMARY OF THE ARGUMENT

      The Trial Court correctly granted summary judgment in favor of Defendants.

As an initial matter, any extra-contractual claims Lee has or may have had against

Defendants were either assigned or waived, and thus, he lacks standing to now
pursue these claims against Defendants.

      Furthermore, the Willson Judgment bars all of Lee's claims against

Defendants because all of the elements of yes judzcata are met. First, the Willson

Judgment is a final judgment on the merits from a court of competent jurisdiction.

Second, although Lee was not a Class Member, he was in privity with the Trustee,

who was a Class Member in the Willson Action, satisfying the second element.

Last, Lee's claims were raised, and disposed of, in the Willson Action. As such,

the Trial Court properly found Lee's claims were barred by yesjudicata.

      Finally, Lee's arguments regarding improper notice are without merit. Since

Lee was not a Class Member, notice of the Willson Action and Willson Judgment

were not required to be sent to him. Additionally, the parties to the Willson Action

provided sufficient notice to ~~he Class Members, including the Trustee, of their

rights. Because Lee lacks any valid legal basis for his claims against Defendants,

the Trial Court properly granted Defendants' summary judgment.

                           STANDARD OF REVIEW

      A summary judgment movant must show that no genuine issue of material fact

exists and the movant is entitled to judgment as a matter of law. See 1~x. R. CN.P.

166a(c); Nixon v. Mr. Prop. Mgmt Co., 690 S.W.2d 546, 549 (Tex. 1985). The

Court's review of the summary judgment is de novo. See Natividad v. Alexsis, Inc.,

875 S.W.2d 695, 699(Tex. 1994).

                                          21
      When reviewing an appeal from the granting of a summary judgment, the

Court must: (1) determine whether the movant carried its burden to show that no

genuine issue of material fact existed,(2) accept the evidence favorable to the non-

movant as true, and (3) indulge every reasonable inference in the non-movant's

favor. Nixon, 690 S.W.Zd at 548-49; Tex, Farm Bureau Under^write~s v. Graham,

450 S.W.3d 919, 921-22(Tex. App. Texarkana 2014, pet, denied).

      The reviewing court may consider only the evidence on file before the trial

court at the time of the hearing. Board of Adjustment v. Patel, 887 S.W.2d 90, 92

(Tex. App. Texarkana 1994, reh'g overruled). When, as in this case, a trial court's

order granting summary judgment does not specify the grounds on which the trial

court granted it, the reviewing court must affirm summary judgment if any of the

summary judgment grounds are meritorious. See StagyTelegram, Inc. v. Doe, 915
S.W.2d 471, 473(Tex. 1995)(emphasis added).

                     ARGUMENTS AND AUTHORITIES

      The Trial Court appropriately found all of Lee's claims against Defendants

were barred by the preclusive effect of the Willson Judgment, and this Court, too,

should give effect to the Willson Judgment and find all of Lee's claims against

Defendants to be prohibited by the doctrine of yesjudicata.

A.    Lee Lacks Standing to Pursue His Extra-Contractual Claims

      As an initial matter, Lee argues his claims against Defendants for violations

                                        22
of the DTPA and Texas Insurance Code are separate and independent from claims

for contractual benefits, and he did not transfer these claims to the Trust when he

assigned all of his right, title, and interest to the Policies. See Appellant's Brief, p.

11-12. Lee maintains the fact the Trust became the owner of the Policies did not

foreclose his right to assert his claim as a "person" or "consumer" under the DTPA

or Texas Insurance Code. See id., p. 12. However, contrary to his contention, the

fact extra-contractual claims can be asserted with or without a breach of contract

claim has no bearing on Lee's ability to pursue any extra-contractual claims in this

case. Whatever claims Lee may have had regarding the Policies were either

assigned or waived, and thus, he has no standing to assert them against Defendants.

      As stated above, under the terms of the Trust Agreement, the Trustee was

the "absolute owner" of the Policies, entitled to all options, benefits, rights,

privileges, and interests under the Policies. (CR 750). By executing the Trust

Agreement, Lee (1) assigned all his "right, title, and interest in and to" the Policies

to the Trustee, (2) "relinquishe[d] all rights and powers in such policies of

insurance which are not assignable," (3) was divested of any and all rights he

would otherwise had have in the Policies pursuant to the provisions of the Trust

Agreement, and (4) was prohibited from doing any act which may be deemed an

incident of ownership of the Policies.(CR 750, 778, 787). Thus, any and all rights

                                          23
and claims Lee may have had under the Policies had in some manner been

relinquished by virtue of his transfer of ownership to the Trustee.

      Lee admits he transferred his ownership of the Policies to the Trust, but he

nevertheless argues that although he could have transferred his extra-contractual

claims to the Trust, he did not. See Appellant's Brief, p. 10, 12. As a general rule,

causes of action are freely assignable. State Farm Fz~e & Cas. Co. v. Gandy, 925
S.W.2d 696, 707(Tex. 1996). Here, Lee has not proffered any reason or evidence,

other than his own blanket statement, why his claims were not assigned and could

not have been assigned in connection with the transfer of all of his rights, title, and

interest in the Policies to the Trustee under the Trust Agreement. See John H.

Caney & A,ssocs, v. Texas Prop. & Cas. Ins. Guar. Ass'n, 354 S.W.3d 843, 849-

50 (Tex. App. Austin 2011, pet, denied) (noting the general rule that property

rights may be assigned unless assignment is prohibited by statute or is contrary to

public policy). Thus, Lee has not shown he retained any standing to pursue these

claims against Defendants after his ownership interests were transferred.

      Furthermore, through the Trust Agreement, Lee established an irrevocable

life insurance trust, which "provides a potential means of avoiding estate taxes by

transferring ownership of a life insurance policy to the trust so the policy proceeds

are not included in the decedent's estate." See Randall v. Goodall &Davison, P.C.,

2013 WL 3481518, at * 1 (Tex. App. Austin July 2, 2013, pet. denied). In order to

                                          24
avoid the inclusion of the Policies' proceeds in his gross estate, Lee had to ensure

he did not possess "at his death any of the incidents of ownership, exercisable

either alone or in conjunction with any other person," of the Policies. 26 U.S.C. §

2042; see also Estate of Lede~ v. C.I.R., 893 F.2d 237, 242-43 (10th Cir. 1989)

(concluding an insured who "never held any ownership, economic, or other

contractual rights in the policy" did not have any "incidents of ownership" under

section 2042). By regulation, "incidents of ownership" is "not limited in ~ its

meaning to ownership of the policy in the technical legal sense" and generally

refers "to the right of the insured or his estate to the economic benefits of the

policy." 26 C.F.R. § 20.2042-1(c)(2).

      As such, at the time he formed the Trust, Lee had an incentive to ensure he

surrendered each and every right he had in the Policies and did not retain any

interests whatsoever in or with respect to them. As part of his efforts to effectuate

this goal, Lee signed the Trust Agreement, assigning his rights in the Policies to

the Trustee, relinquishing all rights and powers to the Policies, and banning him

from any actions which may be deemed an incident of ownership in the Policies.

(CR 778, 787). He also authorized the Trustee "to do all such acts, take all such

proceedings, and to exercise all rights and privileges, although not hereinbefore

specifically mentioned, with relation to any such property."(CR 786).

                                         25
      In his lawsuit, Lee complains of misrepresentations allegedly made by

Rogers in 1989, after the Policies were issued, regarding whether they would,

following his payment of an additional $238,188.15, remain in effect for the

remainder of his life.(CR 719). The only way Lee could complain of those alleged

misrepresentations is because he was the owner of the Policies, and his assertion of

his claims in this action constitutes an impermissible "incident of ownership" of

the Policies. In sum, Lee's creation of the Trust deprived him of standing to assert

his claims, extra-contractual or not, against Defendants, as he assigned all of his

rights and interests in the Policies to the Trustee.

B.    Lee's Claims Are Barred by the Doctrine of Res Judicata

      The Trial Court rightly held Lee's claims were barred by yes judzcata. Res

judicata, or claim preclusion, prevents re-litigation of a claim or cause of action

that has been finally adjudicated on the merits, as well as matters that, with the use

of diligence, could or should have been litigated in a prior suit. See Hallco Texas,

Inc, v. McMullen County, 221 S.W.3d 50, 58(Tex. 2006); G~acza v. RC Cola-7-Up

Bottling Co., 667 S.W.2d 517, 519 (Tex. 1984); In the Interest of P.D.D., 256
S.W.3d 834, 842(Tex. App. Texarkana 2008).

      The bar of a claim by yes judicata requires proof of the following elements:

(1) a prior final judgment on the merits by a court of competent jurisdiction, (2)

identity of parties or those in privity with them, and (3) a second action based on

                                           fir..
the same claims that were raised or could have been raised in the first action.

P.D.D., 256 S.W.2d at 842 (citing Amstadt v. Unzted States Bass Copp., 919
S.W.2d 644, 652 (Tex.1996)); Monahan v. N.Y.C. Dept of Corr., 214 F.3d 275,

285 (2nd Cir. 2000); G~amatan Home Investors Copp, v. Lopez, 386 N.E.2d 1328,

1331 (N.Y. 1979) (a New York case noting yes judicata "holds that, as to the

parties in a litigation and those in privity with them, a judgment on the merits by a

court of competent jurisdiction is conclusive of the issues of fact and questions of

law necessarily decided therein in any subsequent action."). In this case, all

elements of yesjudzcata are properly satisfied.

      1.     The Willson Judgment Constitutes a P~io~ Final Judgment on the
             Merits From a Court ofCompetent ~Iu~isdiction

      The first element of yes judicata is met because the Willson Judgment is a

prior final judgment on the merits from a court of competent jurisdiction. The court

in the Willson Action expressly found it possessed subject-matter jurisdiction and

personal jurisdiction over all of the Class Members(CR 265-67), and it entered the

Willson Judgment(CR 235-310), which disposed of all of their claims.

      Moreover, a class action that proceeds to an agreed final judgment like the

Willson Judgment is final for yes judicata purposes. See Cztzzens Ins. Co. of

Ame~zca v. Daccach, 217 S.W.3d 430, 450 (Tex. 2007)("Basic principles of res

judicata apply to class actions just as they do to any other form of litigation.");

Smith v. Huston, 251 S.W.3d 808, 825 (Tex. App. Fort Worth 2008, pet. denied)

                                         27
("Res judicata applies to an agreed judgment."); see also Freeman v. Cherokee

Water Co., 11 S.W.3d 480, 483 (Tex. App. Texarkana 2000, pet. denied)("An

agreed judgment of dismissal in settlement of a controversy is a judgment on the

merits. It too is conclusive, not only on the matters actually raised and litigated, but

it is also conclusive on every other matter that could have been litigated and

decided as an incident to or essentially connected with the subject matter of the

prior litigation."). The Willson Judgment thus meets the first element for yes

judicata, and Lee does not contend to the contrary in his Appellant Brief.

      2.     Although Lee Was Not a Pasty to the Wzllson Judgment, He Was In
             Privity with the Trustee, Who Was a Pasty to the Willson .Iudgment

      Next, the only element of yesjudicata that Lee attacks is the second element:

the parties are identical or in privity. Lee argues he was neither a Class Member

nor in privity with a Class Member as the reason for why yes judicata should not

apply to bar his claims. See Appellant's Brief, p. 12-15. However, although Lee

was not a party to the Willson Judgment, he was indisputably in privity with the

Trustee, who was a party to the Willson Judgment.

      Although the general rule is that a person is not bound by a judgment in a

lawsuit to which he was not a party, the doctrine of yes judicata creates an

exception to this rule by forbidding a subsequent suit arising out of the same

subject matter of an earlier suit by those in privity with the parties to the original

suit. Amstadt, 919 S.W.2d at 652-53; see also Monahan, 214 F.3d at 285
(observing that "literal privity is not a requirement for yesjudicator to apply," and a

party is bound by a prior judgment if his interests were adequately represented by

another vested with the authority of representation). The purposes of the exception

are to ensure a defendant is not twice vexed for the same acts and to achieve

judicial economy by precluding those who have had a fair trial from relitigating

claims. Amstadt, 919 S.W.2d at 653.

      The Texas Supreme Court has recognized at least three ways in which a

person is in privity: (1) he can control an action even if he is not parties to it, (2)

his interests can be represented by a party to the action, or (3) he can be a

successor in interest, deriving their claims through a party to the prior action. Id.

(citing Getty Ozl Co. v. Insurance Co. ofN. Am., 845 S.W.2d 794, 800 (Tex.1992);

Benson, 468 S.W.2d at 363); see also Buechel v. Bazn, 766 N.E.2d 914, 920 (N.Y.

2001) ("[P]rivity is "`an amorphous concept not easy of application' * ~ ~ and

`includes those who are successors to a property interest, those who control an

action although not formal parties to it, those whose interests are represented by a

party to the action, and [those who are] coparties to a prior action."'). Additionally,

the United States Supreme Court has found privity:(1) based on "substantive legal

relationships," such as "preceding and succeeding owners of property, bailee and

bailor, and assignee and assignor," and (2) where the non-party was "adequately

represented by someone with the same interests who [wa]s a party" to the suit,

                                          29
such as in "properly conducted class actions" and "suits brought by trustees,

guardians, and other fiduciaries." Taylor v. Stu~gell, 553 U.S. 880, 894-95 (2008).

       Here, Lee is in privity with the Trustee for several reasons. First, Lee and the

Trustee have several substantive legal relationships, as they are the Settlor and

Trustee under the Trust Agreement, the assignor and assignee ofthe rights set forth

in the Trust Agreement, and the preceding and succeeding owners of the Policies.

See Amstadt, 919 S.W.2d at 653 ("Privity exists if the parties share an identity of

interests in the basic legal right that is the subject of litigation.").

       In the Trust Agreement, Lee, as the Settlor: (1) assigned to the Trustee, as

the Trustee, "all [of Lee's] right, title, ar~d interest" in the Policies,(2) vested the

Trustee with "all right, title, and interest in and to" the Policies, and (3) authorized

and directed NY Life to "recognize the Trustee as absolute owner of the [Policies],

and as fi~ily entitled to all options, rights, privileges, and interests under such

[P]olicies."(CR 778). These legal relationships establish privity as a matter of law.

See G~zmm v, Rizk, 640 S.W.2d 711, 715 (Tex. App. Houston [14th Dist.] 1982,

writ refd n.r.e.) (holding plaintiffs' claims were barred by yes judzcata by reason

of the final judgment in a prior action brought by plaintiffs' trustee); see also

Leszka~ v. Moon,2014 WL 4374117, at ~6-8 (Tex. App. Houston [1st Dist.] Sept.

4, 2014, pet. denied)(holding an individual's claims were barred in a subsequent

action by his involvement as a trustee in a prior action).

                                            30
      Second, the named plaintiffs and the Trustee represented Lee's interests in

the Willson Action. By definition, the named plaintiffs in the Willson Action

represented the interests of the Class Members, such as the Trustee, and those in

privity with them, such as Lee. See N.Y. C.P.L.R. 901(a)(4) (noting the

prerequisites to a class action include that "the representative parties will fairly and

adequately protect the interests of the class"). In the Willson Judgment, the court

found the named plaintiffs had a sufficient stake in the outcome of the Willson

Action and did not have interests antagonistic to those of the class.(CR 256-57).

Moreover, the Trustee had succeeded to Lee's interests in the Policies and was,

through his status as a Class Member,representing Lee's interests as well.

      Third, the Trust Agreement expressly provided the documents executed by

the Trustee "sha11 be binding and conclusive upon ~7~TY Life] and upon all persons

interested in this Trust."(CR 778). The above-referenced provisions of the Trust

Agreement, which was signed by both Lee and the Trustee, make it clear Lee was

assigning to the Trustee all of his rights under the Policies, including his right to

assert the claims at issue in this action. In conclusion, Lee was in privity with the

Trustee for yesjudicata purposes.

      3.     Lee's Claims Were Raised and Disposed ofin the Willson Action

      The third and final element for yes judicata is satisfied in this case because

Lee's lawsuit is based on the same claims that were raised, and disposed of, in the

                                          31
Willson Action. In the Willson Complaint, the class plaintiffs alleged NY Life

fraudulently induced and deceived the class members into purchasing and

maintaining life insurance policies based on false and misleading sales

presentations, including alleged misrepresentations regarding the premium offset

arrangement, which allowed policy owners to use accumulated dividend values

from a whole life policy to pay all or part of the required premiums.(CR 93-113).

Based on these allegations, the class plaintiffs asserted causes of action for breach

of contract, fraud, negligent misrepresentation, violations of the New York

deceptive trade practices law, and unjust enrichment.(CR 124-34).

      As stated above, in the Willson Judgment, the court defined, through its

approval ofthe Settlement Agreement, the "Released Transactions," in part, as:

     the marketing, solicitation, . ..sale, purchase, operation, retention,
     administration, or replacement by means of surrender, partial
     surrender, loans respecting, withdrawal and/or termination of...any
     insurance policy or annuity sold in connection with, or relating in any
     way directly or indirectly to the sale or solicitation of, the Policies.
     (CR 328).

It provided the Class Members were releasing NY Life and the other released

parties, including agents such as Rogers, from all claims stemming in any way

from the Released Transactions and enjoined the Class Members from prosecuting

claims in any forum against NY Life and the other released parties, including

Rogers, based on the Released Transactions.(CR 328, 366-70). Specifically, the

Willson Judgment released the claims of all Class Members arising out of, or

                                         32
relating to, "(c) the number of out-of-pocket payments that would need to be paid

for a life insurance policy or the Policies;(d)the ability to keep or not to keep the

Policies In-Force based on a fixed number and/or amount of premium payments

(less than the number and/or amount of payments required by the terms of the

Policies), and/or the amount that would be realized or paid under the Policies based

on a fixed number and/or amount of cash payments (less than the number and/or

amount of payments required by the terms of the Policies), whether in the form of

(i) cash value ... ; [and](j) the rate of return on premiums paid in terms of cash

value or cash surrender value."(CR 367-69).

      Lee's claims in this action fit squarely within the claims alleged, and

released, in the Willson Action. Lee contends Rogers misrepresented in 1989 that

Lee could fully pay the premiums on the Policies for $238,188.15, and after he

made such payments, the Policies would remain in effect for his lifetime. (CR

719). Based on these factual allegations, Lee asserted claims in the Amended

Petition against Rogers for negligence and violations of both the DTPA and Texas

Insurance Code, which are akin to the claims in the Willson Complaint.

      In fact, the Federal Court held the alleged misrepresentations complained of

by Lee fell "squarely within the type of misrepresentations listed in the Willson

release"(CR 42), and other courts across the country have reached the same result

in addressing comparable claims. See, e.g., Appleby v. And~easen, 758 N.W.2d
33
615, 620-21 (Neb. 2008)(holding the Willson Judgment barred claims for breach

of contract, negligence, breach of fiduciary duty, misrepresentation, and negligent

supervision even though the premium payments at issue were made after the Class

Period); New York Lzfe Ins. Co. v. Giffin, 794 So. 2d 1072, 1077 (Ala. 2001)

(holding the Willson Judgment barred claims for fraud and breach of contract).

      For example, in Giffin, the plaintiff alleged that NY Life's agent told him if

he made a $42,104.78 premium payment on his whole life policy, it "would be the

only money due and payable on this life insurance policy and that this sum would

be adequate to fund the policy for the balance of the plaintiffs life." Giffin, 794
So. 2d at 1075. The trial court denied NY Life's motion for summary judgment,

but the Supreme Court of Alabama reversed, holding the plaintiff was bound by

the terms of the Willson Judgment with respect to these allegations. Id. at 1076-77.

The same result is appropriate here, and the Court should affirm summary

judgment in Defendants' favor, as all elements of yesjudzcata are met.

C.    Lee's Claims Regarding Notice Lack Merit

      Finally, Lee makes two arguments attacking the notice provided of the

Willson Action and Willson Judgment, arguing summary judgment should be

reversed because (1) he did not receive notice of the Willson Action or Willson

Judgment, and (2) the notice was deficient. See Appellant's Brief, p. 15-17.

However,these arguments must fail for numerous reasons.

                                     '   34
       1.     Lee Was Not A Class Member Required to Be Notzced

       First, Lee did not receive notice because, as shown above, he transferred the

Policies, and all of his rights thereunder, to the Trustee and requested NY Life to

recognize the Trustee as the new owner of the Policies and the recipient of all

related communications.(CR 778-90, 792). Consistent with this ownership change

and instruction, the parties to the Willson Action sent the Class Notice and a post-

settlement notice regarding the Class Members' rights to the Trustee, as the owner

of record of the Policies, at the address Lee and the Trustee provided to NY Life

for the Trustee.(CR 791-92, 827). There is no reason to think the Trustee did not

receive actual notice, as these notices were not returned as undelivered or

undeliverable.(CR 827). Lee is bound by the Willson Judgment because he is in

privity with the Trustee, and he does not and cannot cite any cases requiring notice

be given to both class members and those in privity with class members.

       Furthermore, summary judgment would be appropriate even if neither the

Trustee nor Lee actually received these notices. Importantly, neither New York

class action notice rules4 nor due process require actual receipt of the individual

notice by each and every possible class member; rather, the parties need only

4 As Texas courts have recognized, the sufficiency of notice is determined under the rules of the
sister state issuing the judgment—here, New Yorlc, See, e.g., Hill Country Spying WateN v. K~^ug,
773 S.W.2d 637, 639 (Tex. App.—San Antonio 1989, writ denied)(observing the validity of an
out-of-state judgment "is controlled by the law of such state), The cases on which Lee relies
from the United States Court of Appeals for the Fifth Circuit are neither controlling nor
instructive. See Appellant's Brief, p. 15-16.
                                               35
provide the best notice practicable. See Michels v. Phoenix Home Life Mut. Ins.

Co., 1997 WL 1161145, at *16 (N.Y. Sup. Ct. Jan. 7, 1997); see also Weigher v.

Czty of New York, 852 F.2d 646, 649 (2d Cir. 1988) (holding "all risk of non-

receipt" need not be eliminated), cent. denied, 488 U.S. 1005 (1989); In ~e

Prudential Secu~itzes, Inc. Ltd. PaNtne~ships Litigation, 164 F:R.D. 362, 368

(S.D.N.Y.)(holding due process does not require that every class member receive

actual notice if reasonable means are chosen that are likely to inform the persons

affected), affd, 107 F.3d 3(2d Cir. 1996), cent. denied, 521 U.S. 1119(1997).

       As the court in the Willson Action found, the parties gave the Class

Members, such as the Trustee, notice that satisfied New York law and due process.

The parties to the Willson Action sent notice, in the form directed by the court, to

nearly three million class members at their last known address by first-class mail.

(CR 80-81). The parties also caused notice, in the form directed by the court, to be

published in The Wall Street Journal, USA Today, the national edition of The New

York Times, the daily newspapers with the largest circulation in each of the 50

states and the District of Columbia, including The Dallas Morning News, and the

20 newspapers with the highest daily circulation in the country, unless such

newspapers had already been targeted for publication as the highest circulation

newspapers in their respective areas.(CR 81, 427). In total, the notice appeared in

newspapers with an average aggregate daily circulation of approximately 22

                                         36
million. (CR 81). Moreover, between NY Life's announcement of the proposed

settlement ~f the Willson Action to the public in mid-August 1995 and the

settlement hearing on November 15, 1995, nearly 200 articles and opinion pieces

regarding the settlement appeared in newspapers and magazines across the county,

and news ofthe settlement was the subject of TV and radio broadcasts.(CR 81).

      Indeed, courts have repeatedly recognized that supplementing individual

notice with publication notice represents an appropriate balance between protecting

class members and making class actions workable. See, e.g., Eisen v. Carlisle &

Jacquelzn, 417 U.S. 156, 175 (1974)(finding mailing to easily ascertainable class

members constituted the "best notice practicable"); In ~e Prudential Securities, Inc.

Ltd. Pa~tne~ships Litigation, 164 F.R.D. at 368 (providing for notice through

mailing ~o reasonably ascertainable class members and publication). Accordingly,

the methods of notice in the Willson Action constituted due, adequate, and

reasonable notice to all Class Members and satisfied the requirements of New

York law and due process. See Elite Spo~tswea~ Products, Inc. v. New York Lzfe

Ins. Co., 2006 WL 3052703, at *6(E.D. Pa. Oct. 24, 2006)("The notice given for

the Willson settlement exceeded the requirements of due process."), affd, 270 F.

App'x 153 (3d Cir. 2008). This is true regardless of whether the Trustee actually

received notice. See Williams v. Marvin Windows and Doors, 790 N.Y.S.Zd 66, 67-

68 (N.Y. App. Div. 2005)(rejecting plaintiffs' claim they never received notice of

                                         37
class action settlement where they failed to show defendants did not act with

reasonable diligence in complying with court-ordered notice method).

      Furthermore, Lee's complaints regarding notice constitute an impermissible

collateral attack on the Willson Judgment. Courts distinguish between void

judgments, which may be set aside by a collateral attack, and voidable judgments,

which must be challenged by a valid direct attack. See PNS Stores, Inc, v. Rzve~a,

379 S.W.3d 267, 271 (Tex. 2012)("It is well settled that a litigant may attack a

void judgment directly or collaterally, but a voidable judgment may only be

attacked directly."); James Mills O~cha~ds Copp, v. Funk, 244 N.Y.S. 473, 475

(N.Y. Sup. Ct. 1930) ("Such judgment is not void upon its face, but merely

voidable and is not subject to such collateral attack.").

      A judgment is void if it is shown the court rendering judgment "had no

jurisdiction of the parties or property, no jurisdiction of the subject matter, no

jurisdiction to enter the particular judgment, or no capacity to act as a court."

Browning v. Placke, 698 S.W.2d 362, 363 (Tex. 1985). Lee has not claimed the

Willson Judgment is void, and his complaints regarding notice may only be raised

through a direct attack in the Willson Action. In the meantime, however, the Trial

Court properly gave, in accordance with the "full faith and credit" clause of the

United States Constitution, the same force and effect to the Willson Judgment as it

would give to one of its own judgments. See U.S. CoNST. art. IV, § 1.

                                          38
      2.     Notzces Were Adequate to Inform Class Members of Them Rights

      Finally, the notices the parties in the Willson Action sent to the Class

Members, such as the Trustee, were adequate to inform them of their rights and the

claims, such as the extra-contractual claims similar to those asserted herein by Lee,

that were being released. For example, the Class Notice: (1) described the claims

asserted in the Willson Complaint, including the challenges to the premium offset

proposal, which was NY Life's method of using dividends to pay premiums on

whole life policies, (2) set forth the benefits available to the Class Members and

their right to opt out ofthe settlement,(3)stated "all claims that have been or could

have been asserted in this lawsuit with respect to any Policy for which a Class

Member has not been excluded will be dismissed on the merits and with

prejudice," and (4) detailed the release as follows:

     Plaintiffs and all Class Members hereby expressly agree that they
     shall not now or hereafter institute, maintain or assert against the
     Releasees, either directly or indirectly, on their own behalf, on behalf
     of the Class or any other person, and hereby release and discharge the
     Releasees from, any and all causes of action, claims, damages,
     equitable, legal and administrative relief, interest, demands or rights,
     whether based on federal, state or local statute or ordinance,
     regulation, contract, common law, or any other source, that have been,
     could have been, may be or could be alleged or asserted now or in the
     future by Plaintiffs or any Class Member against the Releasees in the
     Actions or in any other court action or before any administrative body
     (including any state Department of Insurance or other regulatory
     commission), tribunal or arbitration panel on the basis of, connected
     with, arising out of, or related to, in whole or in part, the Released
     Transactions and servicing relating to the Released Transactions ....
     (CR 406, 408-13, 415).
                                         39
      As such, the notices adequately informed the Trustee of the claims that were

being released, and Lee's arguments to the contrary are without merit.

                                    PRAYER

      WHEREFORE,PREMISES CONSIDERED, Appellees The Rogers Agency

and C. Michael Rogers respectfully request that the Court affirm the Trial Court's

grant of summary judgment in their favor, and grant them their costs incurred from

having to defend this appeal.

                                      Respectfully Submitted,

                                      WILSON,ELSER,MOSKOWITZ,
                                        EDELMAN &DICKER LLP

                                     By: /s/D. C~ai~ Brinker
                                          D. Craig Brinker
                                          State Bar No. 03033200
                                          craig.brinker@wilsonelser.com
                                          Lana P. Beverly
                                          State Bar No. 24075377
                                          lana.beverly@wilsonelser,com

                                     901 Main Street, Suite 4800
                                     Dallas, Texas 75202
                                     (214)698-8000
                                     (214)698-1101 (Facsimile)

                                     ATTORNEYS FOR APPELLEES
                                     THE ROGERS AGENCY AND
                                     C. MICHAEL ROGERS

                                       ,~
                         CERTIFICATE OF SERVICE

      This certifies that this document was served in accordance with the Texas
Rules of Appellate Procedure on December 17, 2015, by the manner indicated
upon the following persons:

John R. Mercy
MERCY CARTER TIDWELL,L.L.P.
1724 Galleria Oaks Drive
Texarkana, Texas 75503

James A. Holmes
THE LAW OFFICE OF JAMES HOLMES,P.C.
212 South Marshall
Henderson, Texas 75624

Andrew Jubinsky
Andrew Whitaker
Ryan McComber
FIGARI &DAVENPORT,LLP
Bank of America Plaza
901 Main Street, Suite 3400
Dallas, Texas 75202

                                        /s/D. C~ai~ B~inke~
                                           D. Craig Brinker

                     CERTIFICATE OF COMPLIANCE

      I certify that this document is in compliance with Rule 9.4 of the Texas

Rules of Appellate Procedure, is in 14-point font, footnotes in 12-point font, and

consists of 10,980 words, as verified by computer word processing program.

                                            /s/D. C~ai~- Brinker
                                            D, Craig Brinker

                                       41