Court Opinion

ID: 3103783
Source: CourtListenerOpinion
Date Created: 2015-10-16 05:30:57.597929+00
Date Added: 2024-06-11T11:51:43.022134
License: Public Domain

NUMBER 13-10-00693-CV

                           COURT OF APPEALS

                 THIRTEENTH DISTRICT OF TEXAS

                    CORPUS CHRISTI - EDINBURG

COUNSEL FINANCIAL SERVICES, L.L.C.,                                     Appellant,

                                         v.

DAVID McQUADE LEIBOWITZ
AND DAVID McQUADE LEIBOWITZ, P.C.,                                      Appellees.

                  On appeal from the 370th District Court
                        of Hidalgo County, Texas.

                       MEMORANDUM OPINION
 Before Chief Justice Valdez and Justices Rodriguez and Benavides
            Memorandum Opinion by Justice Benavides
      Appellant, Counsel Financial Services, L.L.C. (―Counsel Financial‖), appeals the

denial of its motion to transfer venue pursuant to section 15.003 of the Texas Civil
Practice and Remedies Code.            See TEX. CIV. PRAC. & REM. CODE § 15.003 (West Supp.

2010). We dismiss the appeal for want of jurisdiction.

                                           I. BACKGROUND

        Counsel Financial loaned the law firm of David McQuade Leibowitz, P.C. more

than five million dollars.     The loan was secured by David McQuade Leibowitz, P.C. and

David McQuade Leibowitz individually (collectively ―Leibowitz‖).                 The promissory note

evidencing the loan was secured by an agreement and guaranty executed by Leibowitz

in his individual capacity.       The note and security agreement were modified several

times by the agreement of the parties over the course of several years.                            These

documents provided Counsel Financial with a security interest in Leibowitz’s legal fees, 1

accounts, and intangibles in the event of a default under the loan.

        Leibowitz failed to make payments due under the loan, and Counsel Financial

brought suit against Leibowitz in cause number 12008–010002 in the Supreme Court of

the State of New York, in and for the County of Erie, styled Counsel Financial Services,

LLC v. David McQuade Leibowitz, P.C. et al.                Following several trial court hearings,

Counsel Financial obtained a summary judgment on the note and security agreement. 2

        1
         Neither party has briefed the issue regarding whether such an agreement violates rule 5.04 of the
Texas Disciplinary Rules of Professional Conduct, and accordingly, this opinion does not address that
issue. See TEX. DISCIPLINARY R. PROF’L CONDUCT 5.04(a), reprinted in TEX. GOV’T CODE ANN., tit. 2, subtit.
G, app. A (West Supp. 2010) (providing generally that ―[a] lawyer or law firm shall not share or promise to
share legal fees with a non-lawyer‖).

        2
         The specific proceedings underlying the rendition of judgment in that case are detailed by the San
Antonio Court of Appeals in Counsel Financial Services, L.L.C., v. Leibowitz, P.C., 31 S.W.3d 45 (Tex.
App.—San Antonio 2010, pet. denied).
                                                    2
Leibowitz unsuccessfully appealed the judgment in the New York court system.

       On December 2, 2008, Counsel Financial filed an authenticated copy of the New

York judgment in state district court in Bexar County, Texas.      On December 29, 2008,

Leibowitz filed a motion for relief from enforcement of this foreign judgment, arguing that

the trial court should apply the Craddock standard for motions for new trial with regard to

the domestication of foreign judgments.      See Craddock v. Sunshine Bus Lines, Inc.,

134 Tex. 388, 133 S.W.2d 124, 126 (1939) (holding that a default judgment should be

set aside and a new trial granted if (1) the failure to answer or appear at trial was not

intentional or the result of conscious indifference but was due to a mistake or accident;

(2) the defendant sets up a meritorious defense; and (3) the motion is filed at such time

that granting a new trial would not result in delay or otherwise injure the plaintiff). On

January 30, 2009, the trial court granted Leibowitz’s motion and refused to enforce the

New York judgment.

       Counsel Financial appealed that determination.          The San Antonio Court of

Appeals held that the Craddock motion for new trial standard relating to default

judgments does not apply to proceedings under the Uniform Enforcement of Foreign

Judgments Act.    Counsel Fin. Serv., L.L.C., v. Leibowitz, P.C., 31 S.W.3d 45, 47 (Tex.

App.—San Antonio 2010, pet. denied). The court reversed and rendered judgment that

the New York judgment is entitled to full faith and credit and is fully enforceable in Texas.

Id. at 57.   The Texas Supreme Court denied the petition for review of this cause on

August 20, 2010, and denied rehearing on October 15, 2010.

                                             3
       In separate trial court proceedings, which underlie this appeal, Leibowitz

represented Maria Alma Anzaldua in a personal injury lawsuit against Kmart Corporation

(―Kmart‖) in the 370th District Court of Hidalgo County.       Upon learning that the parties

had reached a settlement in the personal injury lawsuit, Counsel Financial filed a plea in

intervention in that suit on grounds that Leibowitz had refused to pay the New York debt

and judgment.     In this intervention, Counsel Financial sought ―an order from the Court

directing all Parties to pay directly to [Counsel Financial] all funds (up to the amount of

CFS’s lien) to which Leibowitz and the Law Firm may be entitled to as a result of this

case and the settlement.‖ Counsel Financial expressly stated that it ―[did] not seek to

disturb the proposed settlement agreement in the Lawsuit‖ and likewise ―[did] not seek to

disturb the rights of Plaintiff to receive the portion of the settlement that is rightfully hers,

or the release of Defendant from the Lawsuit.‖

       On October 9, 2009, in response to Counsel Financial’s intervention, Leibowitz

also intervened in the Hidalgo County suit and asserted claims for affirmative relief

against Counsel Financial, including claims for declaratory and temporary injunctive

relief and damage claims for tortious interference and business disparagement. By his

first amended pleading, Leibowitz sought an anti-suit injunction and an anti-execution

injunction attempting to restrain Counsel Financial from enforcing either the security

agreement or the domesticated judgment. According to Leibowitz’s pleadings, Counsel

Financial claimed that it was entitled to his portion of the settlement funds based either

on ―a foreign default judgment which is not now enforceable under Texas law, or a

                                               4
Security Agreement which [Counsel Financial] has itself breached.‖

        Counsel Financial filed two separate motions to transfer venue from Hidalgo

County to Bexar County, and Leibowitz filed two responses to these motions.                            After

holding a hearing on the motions to transfer, the trial court ultimately denied both

motions on December 1, 2010.             This appeal ensued.3

                                            II. JURISDICTION

        Counsel Financial contends that the trial court erred in denying its motion to

transfer venue to Bexar County because:               (1) Leibowitz did not independently establish

that Hidalgo County is a proper venue for his affirmative claims against Counsel

Financial; and (2) Leibowitz did not independently establish each of the factors required

by section 15.003(a) of the Texas Civil Practice and Remedies Code.                         See TEX. CIV.

        3
          By separate appeal arising from the same trial court proceedings, Counsel Financial challenged a
temporary injunction which prevented it from instituting legal proceedings to enforce a security agreement
and collecting on a judgment in its favor. By opinion issued this same date, the Court reversed the trial
court’s order granting the injunction and remanded the cause for further proceedings consistent with that
opinion. See Counsel Fin. Servs., L.L.C. v. Leibowitz, No. 13-10-00200-CV, 2011 Tex. App. LEXIS, *__
(Tex. App.—Corpus Christi June 30, 2011, no pet. h.) (mem. op.).

         By petition for writ of mandamus, also arising from the same underlying proceedings, Counsel
Financial sought to set aside an order of the trial court which allegedly denied Counsel Financial’s motion to
transfer venue. In re Counsel Fin. Servs., L.L.C., No. 13-10–00157-CV, 2010 Tex. App. LEXIS 3112, at *1
(Tex. App.—Corpus Christi Apr. 27, 2010, orig. proceeding). This Court concluded that the issue was
premature because the trial court has not yet ruled on relator’s motion to transfer venue and denied the
petition for writ of mandamus. See id. at **2–3. We note in this regard that section 15.0642 of the civil
practice and remedies code provides for mandamus relief to enforce a mandatory venue provision. TEX.
CIV. PRAC. & REM. CODE ANN. § 15.0642 (West 2002); In re Transcon. Realty Investors, 271 S.W.3d 270,
271 (Tex. 2008) (orig. proceeding); In re Tex. Dep’t of Transp., 218 S.W.3d 74, 76 (Tex. 2007) (orig.
proceeding). In cases regarding mandatory venue, the relator is not required to show the lack of an
adequate remedy by appeal. In re Mo. Pac. R.R., 998 S.W.2d 212, 215–16 (Tex. 1999) (orig. proceeding).
The only issue presented in such cases is the legal question regarding whether the trial court properly
interpreted the mandatory venue provision. In re Transcon. Realty Investors, 271 S.W.3d at 271; In re
Tex. Ass’n of Sch. Bds., Inc., 169 S.W.3d 653, 656 (Tex. 2005) (orig. proceeding).

                                                      5
PRAC. & REM. CODE § 15.003. In contrast, Leibowitz contends, inter alia, that Counsel

Financial waived its right to challenge venue; the relief requested by Counsel Financial

interferes with appellate jurisdiction because there is an appeal pending from another

ruling,4 and section 15.003 of the civil practice and remedies code is inapplicable, thus

no interlocutory appeal lies from the trial court’s determination regarding venue.

        As a threshold matter, we address Leibowitz’s contention, raised by motion to

dismiss, that we lack jurisdiction over the appeal. The general rule is that a venue

ruling is not a final judgment ripe for appeal. See TEX. CIV. PRAC. & REM. CODE ANN. §

15.064(a) (West 2002); see also TEX. R. CIV. P. 87(6) (―There shall be no interlocutory

appeals from such determination.‖).            Counsel Financial asserts that the denial of the

motion to transfer venue is appealable pursuant to section 15.003 of the civil practice

and remedies code.           Section 15.003, entitled ―Multiple Plaintiffs and Intervening

Plaintiffs,‖ provides in relevant part:

        (a) In a suit in which there is more than one plaintiff, whether the plaintiffs
        are included by joinder, by intervention, because the lawsuit was begun by
        more than one plaintiff, or otherwise, each plaintiff must, independently of
        every other plaintiff, establish proper venue. If a plaintiff cannot
        independently establish proper venue, that plaintiff’s part of the suit,
        including all of that plaintiff’s claims and causes of action, must be
        transferred to a county of proper venue or dismissed, as is appropriate,
        unless that plaintiff, independently of every other plaintiff, establishes that:

        4
           On March 22, 2010, the trial court entered an order granting Leibowitz’s request for a temporary
injunction. Counsel Financial appealed that order in Counsel Financial Services, L.L.C. v. David Mcquade
Leibowitz and the Law Offices of David McQuade Leibowitz, P.C., currently pending before this Court in
appellate cause number 13-10-00200-CV.

                                                    6
             (1) joinder of that plaintiff or intervention in the suit by that
             plaintiff is proper under the Texas Rules of Civil Procedure;

             (2) maintaining venue as to that plaintiff in the county of suit
             does not unfairly prejudice another party to the suit;

             (3) there is an essential need to have that plaintiff’s claim
             tried in the county in which the suit is pending; and

             (4) the county in which the suit is pending is a fair and
             convenient venue for that plaintiff and all persons against
             whom the suit is brought.

      (b) An interlocutory appeal may be taken of a trial court’s determination
      under Subsection (a) that:

             (1) a plaintiff did or did not independently establish proper
             venue; or

             (2) a plaintiff that did not independently establish proper
             venue did or did not establish the items prescribed by
             Subsections (a)(1)–(4).

TEX. CIV. PRAC. & REM. CODE § 15.003. On appeal, the appellate court determines

whether the trial court’s order is proper based on an independent determination from the

record and not under either an abuse of discretion or substantial evidence standard.

See id. § 15.003(c).

      Because we have no jurisdiction over this appeal unless Leibowitz qualifies as a

plaintiff, our analysis begins with this issue.   It has long been established that an

intervening party may be characterized as either a defendant or as a plaintiff.   Savage

v. Cowen, 33 S.W.2d 433, 434 (Tex. Comm’n App. 1930) (holding that intervenors may

occupy the position of either plaintiffs or defendants); Ivey v. Harrell, 1 Tex. Civ. App.
226, 230, 20 S.W. 775, 776 (Galveston 1892, no writ) (same).                Compare HEB

                                            7
Ministries, Inc. v. Tex. Higher Educ. Coordinating Bd., 235 S.W.3d 627 (Tex. 2007)

(intervening plaintiffs); O’Quinn v. Hall, 77 S.W.3d 452, 457 (Tex. App.—Corpus Christi

2002, orig. proceeding) (same), with Tex. Workers’ Comp. Comm’n v. Garcia, 893
S.W.2d 504 (Tex. 1995) (intervening defendants); Jenkins v. Entergy Corp., 187 S.W.3d
785 (Tex. App.—Corpus Christi 2006, pet. denied) (same); see also Anglo Irish Bank

Corp. v. Ashkenazy & Agus Ventures, LLC, No. 02-10-00299-CV, 2010 Tex. App. LEXIS

9765, at *3 (Tex. App.—Fort Worth Dec. 9, 2010, no pet.) (mem. op.) (―A party may

intervene in a lawsuit as either a defendant or a plaintiff.‖). Whether an intervenor is

characterized as a plaintiff or a defendant depends on the character of the rights

asserted and the relief requested through the intervention.     Sec. State Bank v. Merritt,

237 S.W. 990, 992 (Tex. Civ. App.—Amarillo 1922, no writ); see also Anglo Irish Bank

Corp., 2010 Tex. App. LEXIS 9765, at **3–4.

      The underlying lawsuit was instituted by Anzaldua against Kmart.             Counsel

Financial intervened in the lawsuit on grounds that it ―is a secured creditor and judgment

creditor‖ of Leibowitz and his firm, who serve as counsel for Anzaldua.    According to the

plea in intervention, Anzaldua and Kmart had agreed to settle the case ―which will result

in funds being paid to the Debtors for their attorney’s fees and costs.‖           Counsel

Financial asserted that it ―has a lien against such funds‖ on the grounds that Leibowitz

had ―wholly failed and refused to pay the debt and judgment due and owing‖ to Counsel

Financial.   Leibowitz specifically sought ―an order from the Court directing all Parties to

pay directly to [Counsel Financial] all funds (up to the amount of CFS’s lien) to which

                                             8
Leibowitz and the Law Firm may be entitled to as a result of this case and the

settlement.‖ As stated previously, Counsel Financial expressly stated that it did not

seek to obtain the funds allocated to Anzaldua as a result of the settlement, nor did it

intend to affect Kmart’s release from the lawsuit.

       In response, Leibowitz intervened in the Hidalgo County suit to stop Counsel

Financial from obtaining any of the funds in the registry of the court. He asserted claims

for affirmative relief, including claims for declaratory and temporary injunctive relief and

damage claims for tortious interference and business disparagement.            By his first

amended pleading, Leibowitz also sought an anti-suit injunction and an anti-execution

injunction attempting to restrain Counsel Financial from enforcing either the security

agreement or the domesticated judgment. According to Leibowitz’s pleadings, Counsel

Financial claimed that it was entitled to his portion of the settlement funds based either

on ―a foreign default judgment which is not now enforceable under Texas law, or a

Security Agreement which [Counsel Financial] has itself breached.‖

       Based on the foregoing, we conclude that Counsel Financial intervened in the

lawsuit as a plaintiff because it was seeking to recover that portion of the funds Kmart

was paying to Anzaldua which represented her attorney’s fees.           In short, Counsel

Financial sought to recover funds from Leibowitz out of Kmart’s settlement payment to

Anzaldua.   In contrast, Leibowitz filed defensive pleadings seeking to avoid Counsel

Financial’s recovery, and there is no indication in the record that Leibowitz would have

filed an intervention or any other responsive pleading against Counsel Financial’s claims

                                             9
if Counsel Financial had not first intervened in this action as an intervening plaintiff.   The

record before the trial court and this Court is sparse with regard to the precise contour of

the litigation first fought in New York and then contested in Bexar County, but Leibowitz’s

pleadings in the underlying action confirm that his interests are adverse to intervening

plaintiff Counsel Financial’s.    Based on our independent review of the record, we

conclude that Leibowitz’s intervention in the action below is best characterized as a

defensive intervention.

                                          III. CONCLUSION

         Generally, a party must wait until a final judgment occurs in order to appeal an

erroneous ruling regarding venue.        TEX. CIV. PRAC. & REM. CODE ANN. § 15.064(b);

Surgitek, Bristol-Myers Corp. v. Abel, 997 S.W.2d 598, 601 (Tex. 1999); Elec. Data Sys.

Corp. v. Pioneer Elecs. (USA) Inc., 68 S.W.3d 254, 257 (Tex. App.—Fort Worth 2002, no

pet.).   However, when a case involves multiple plaintiffs, wherein plaintiffs are included

by joinder or intervention, section 15.003 establishes a limited right of interlocutory

appeal to contest a trial court’s venue determination.     See TEX. CIV. PRAC. & REM. CODE

ANN. § 15.003(b)-(c); Surgitek, Bristol-Myers Corp., 997 S.W.2d at 601; Elec. Data Sys.

Corp., 68 S.W.3d at 257. This limited right of interlocutory appeal extends only to

plaintiffs who are unable to independently establish proper venue apart from the joinder

factors set out in section 15.003(a).    TEX. CIV. PRAC. & REM. CODE ANN. § 15.003(b)-(c);

Elec. Data Sys. Corp., 68 S.W.3d at 258.               Because the record supports the

characterization of Leibowitz as an intervening defendant, section 15.003 does not

                                              10
apply.5 Because no applicable statute allows for an interlocutory appeal to be heard,

the appeal must be dismissed for want of jurisdiction.              Accordingly, we grant Leibowitz’s

motion to dismiss and we dismiss the appeal for want of jurisdiction.

                                                                   ________________________
                                                                   GINA M. BENAVIDES,
                                                                   Justice

Delivered and filed the
1st day of July, 2011.

        5
           In April, Counsel Financial provided this Court with a letter stating that this ―is an appeal under
section 15.003 of the Texas Civil Practice and Remedies Code‖ and this statute ―provides that the court of
appeals shall render judgment not later than the 120th day after the date the appeal is perfected.‖ TEX.
CIV. PRAC. & REM. CODE ANN. § 15.003. We have concluded that section 15.003 is inapplicable to the
instant case; however, even if we were to hold otherwise, section 15.003(c) is directory, not jurisdictional.
Wyeth v. Hall, 118 S.W.3d 487, 490 (Tex. App.—Beaumont 2003, no pet.) (citing TEX. R. APP. P. 19.2
regarding the plenary jurisdiction of appellate courts in the context of section 15.003(c)).

                                                     11