Court Opinion

ID: 4054902
Source: CourtListenerOpinion
Date Created: 2016-09-29 06:12:08.880524+00
Date Added: 2024-06-11T14:31:31.107181
License: Public Domain

ACCEPTED
                                                                                    06-14-00102-CV
                                                                         SIXTH COURT OF APPEALS
                                                                               TEXARKANA, TEXAS
                                                                                5/6/2015 5:44:37 PM
                                                                                   DEBBIE AUTREY
                                                                                             CLERK

_________________________________________________________________

                    CAUSE NO. 06-14-00102-CV            FILED IN
                                                  6th COURT OF APPEALS
_________________________________________________________________
                                                    TEXARKANA, TEXAS
                                                          5/6/2015 5:44:37 PM
                IN THE SIXTH COURT OF APPEALS       DEBBIE AUTREY
                       TEXARKANA, TEXAS                 Clerk
_________________________________________________________________

                         JOHNNY E. WEBB, III
                             Appellant,

                                 v.

       ALEX RODRIGUEZ, CESAR GARCIA, DIVERSEGY, LLC,
      LUCIEN J. TUJAGUE, JR., DOMINION GAS HOLDINGS, LP,
           NICHOLAS GALLAGHER, IDT ENERGY, INC.,
                   AND SHUK HOLDINGS, LLC
                            Appellees.
________________________________________________________________

                 Appeal from Cause No. DC-14-09393
               th
            95 Judicial District Court of Dallas County, Texas
                  Hon. Judge Ken Molberg, Presiding
_________________________________________________________________

                  REPLY BRIEF OF APPELLANT
_________________________________________________________________

Melvin Houston                        Darrell J. O’Neal
Melvin Houston & Associates           Law Office of Darrell J. O’Neal
Yorktown Building                     2129 Winchester Road
1776 Yorktown, Suite 350              Memphis, TN 38116
Houston, TX 77056                     (901) 345-8009 office
(713) 212-0600                        (901) 345-8014 fax
mhouston@gotellmel.com                domemphislaw@aol.com

                                  1
                                      TABLE OF CONTENTS

TABLE OF CONTENTS ........................................................................................2
TABLE OF AUTHORITIES ..................................................................................2
INTRODUCTION....................................................................................................3
I. MISSTATEMENT OF KEY FACTS BY APPELLEES ...............................4
II.    ARGUMENT ..................................................................................................7
   APPELLATE REVIEW OF A VENUE DETERMINATION IS EXTENDED TO WHETHER
   THE VENUE ISSUE WAS IN FACT PROPERLY DECIDED BASED UPON THE ENTIRE
   RECORD IN THE TRIAL COURT. ..............................................................................7
III. CONCLUSION .............................................................................................11
CERTIFICATE OF COMPLIANCE ..................................................................12
CERTIFICATE OF SERVICE ............................................................................12

                                   TABLE OF AUTHORITIES

Cases
Ruiz v. Conoco, Inc., 868, SW 2d 752, 757 (1993) ...............................................2, 7

Rules
Tex. R. Civ. P. 87…………………………………………………………………8

                                                        2
                                INTRODUCTION

   This appeal is about whether the trial court erred in granting Defendants’ motion

to transfer venue, or alternative motion to dismiss, based on an unenforceable forum

or venue selection clause. Appellant argued that the agreement relied upon by the

Appellees was not enforceable against him because his signature on the agreement

was merely a replica placed there deceptively without his knowledge or permission.

Appellees’ refused or were unable to produce the original agreement and Mr. Webb

presented evidence that the copy presented to the court did not contain his original

signature.

   In support of this appeal, Appellant relies upon Ruiz v. Conoco which held that

the entire record must be reviewed as a whole, including rebuttal evidence, when

reviewing a venue determination by the trial court. 868 S.W.2d 752, 757-758 (Tex.

1993). The Appellees’ brief ignores this holding of Ruiz altogether, despite its

reliance upon Ruiz in the lower court.

   Appellees’ argument in its response brief all but contradicts their main argument

before the trial court below. Appellees simply cannot have it both ways. Below,

Appellees argued that Webb could not present rebuttal proof in response to their

purported prima facie case. Here, in their response brief, Appellees argue Webb

waived any right to present rebuttal proof. p. 9, ¶ 3; p. 29-30. During the hearing on

the motion to transfer, Appellees argued:

                                            3
         MR. JOHANSEN:…And those three affidavits attesting to the fact
         that Mr. Webb signed the UPA in their presence is sufficient to meet
         that prima facie standard. And as the Court, I assume, is also very
         well-aware, the Texas Supreme Court has said prima facie proof is
         not subject to rebuttal, disproof, impeachment or cross-examination.
             So once we have established that prima facie proof, which those
         affidavits provide, that's sufficient, and this case must be either
         transferred in some fashion up to New Jersey or dismissed after
         giving Mr. Webb an opportunity to refile in New Jersey…

R.R. Vol.3, 11:12-23. Having argued before the trial court Appellant could not rebut,

disprove, impeach, or cross-examine their proof as presented, Appellees now have

the nerve to argue he (Webb) missed his chance. There is no case law that requires

such a Machiavellian or chess-like approach. In fact, the law is crystal clear. These

types of tactics are shunned in a court of law and represent improper

gamesmanship that this Court should not countenance.

           I.   MISSTATEMENT OF KEY FACTS BY APPELLEES

      While Appellee took great liberties with its factual statement making several

misstatements, Appellant will address only those relevant and key factual

misstatements critical to the issues presented in this appeal. In Appellee’s first

factual misstatement it is asserted that Webb sold his membership interest in

Diversegy to Shuk pursuant to a Unit Purchase Agreement (“UPA”). Appellees’

Response Brief, p. 4, ¶ 1. This is a misstatement because Appellant did not sign the

UPA, and did not knowingly or voluntarily sell his membership interest in Diversegy

pursuant to the UPA. As stated in the sworn Amended Petition, Mr. Webb did not

                                         4
even see the UPA until it was given to him by counsel for Defendant IDT after the

closing of the sale. C.R. 156, ¶40.

      In Appellee’s second misstatement, it is asserted that $2 million was paid for

the Diversergy membership interests, but the last payment has yet to be made.

Appellees Response Brief, p. 4, ¶ 1. According to the UPA the final payment of

$416,000 is to be made on the 18th month anniversary of the closing, which would

be on or about June 4, 2015. CR 30, § 4.1(d). It is important to note here that Webb

sought the TRO so that information would not be secreted or destroyed, but also to

abate the final consummation of the sale with the intent of preserving his interests.

C.R. 142, 153.

      Lastly, in a third misstatement of the facts, Appellees’ rely heavily on the

assertion that Webb identified himself as a seller and that “all of his alleged causes

of action relate to his position as a seller under the UPA”. Appellees Response Brief,

p. 4, ¶ 2 (Emphasis added). This particular misstatement is important to correct

because Appellees’ attempt to disguise the fact that Webb identified himself as a

seller because of the sale of his company, not because he is in fact a seller as legally

termed under the UPA. In fact, the issue of whether Webb is bound to the UPA as

a seller, or otherwise, is but one issue to be litigated because of Appellees’

unauthorized use of Webb’s signature, i.e. forgery. Webb referencing himself as a

seller does not diminish the merit of his suit against Appellees for breach of

                                           5
contract1, fraud, breach of fiduciary duties and conversion.                 As stated in the

Amended Petition, “[T]his lawsuit is about three sellers who colluded and conspired

to sell an insolvent company to cover their own debts while converting monies that

were owed to other sellers, brokers, and vendors to include the Plaintiff.” C.R. 158,

¶ 12.

        Most notably, Webb identified himself as a debtor with the right to payment,

irrespective of the UPA. In fact, Webb references the debt owed to him as a debt

owed prior to the sale of the company, more than fifteen times in his verified

Amended Petition.2 C.R. 156, ¶¶ 30, 32, 33, 35, 36, 41-45, 47-49, 54-60, 63, 65,

663. Webb also identified himself as an owner of Diversegy with the right to access

1
 Webb’s breach of contract claim includes a breach of the Diversegy Operating Agreement. Para.
63 states, “The Defendant Sellers breached the Diversegy Operating Agreement (Exhibit 2) when
they colluded and conspired to sell the company solely to cover their own debt, with knowledge
that the purchase price would not cover all debts owed by the company. (§§4.5 and Art. VI).” (See
other paragraphs in Count 2, Breach of Contract, that reference other violations of the Operating
Agreement.) C.R.164.

2
  The debt owed to Webb arises as a separate claim unrelated to the UPA because it was owed
before the sale of the company. Whether the UPA deprived Mr. Webb of his right to payment for
that debt because of the forged and unauthorized use of his signature is another issue that should
be litigated in Dallas County.
3
  Regarding Webb as a debtor, some of the allegations by Webb in his verified Amended Petition
state in part: “Defendant Sellers have refused to pay Plaintiff any of the debt owed to him…” ¶30;
“Defendant Sellers concealed over $250,000.00 in debts owed to Plaintiff, and thousands of dollars
owed to former brokers, consultants and vendors…” ¶32; “The debt to Plaintiff was owed before
the acquisition and purchase of Diversegy.” ¶33; “Defendant Sellers have refused demands for
payment of these debts despite repeated demands for payment.” ¶35; “Defendant Sellers have
refused to provide an accounting of the total debt concealed.” ¶36; “Defendant Sellers
misrepresented material facts concerning the debts and liabilities of Diversegy, namely the total
amount of debts owed by Diversegy and debts owed to the Plaintiff.” ¶41; “Defendant Sellers
colluded to hide the debts of Diversegy in order to give the appearance of increased value.” ¶42;

                                                6
the accounts and books of the company in connection with the company’s Operating

Agreement. C.R. 161, ¶ 38. Likewise and equally important for purposes of this

appeal, Webb identified himself as a resident of Dallas County with the right to have

his case heard in a Texas court. C.R. 156. In fact, all of the parties identified either

reside in or do business in Texas or particularly Dallas County. C.R. 156-158, 263-

270.

                                     II.    ARGUMENT

APPELLATE REVIEW OF A VENUE DETERMINATION IS EXTENDED TO WHETHER THE
VENUE ISSUE WAS IN FACT PROPERLY DECIDED BASED UPON THE ENTIRE RECORD
IN THE TRIAL COURT.

   Appellees’ purported prima facie proof is misleading and wrong, requiring a

reversal in this case. “…in reviewing the trial court's decision, an appellate court

must reverse (there cannot be harmless error) if other evidence in the record, even

evidence adduced after venue was determined, destroys the prima facie proof on

which the trial court relied.” Ruiz v. Conoco, Inc., 868, SW 2d 752, 757 (1993).

According to Appellees, they established their prima facie case by the evidence of

“Based on information and belief, the concealment of debts by Defendant Sellers was done
fraudulently and deceptively, converting the owed debts to assets to increase the valuation of the
company.” ¶45; “There is also reason to believe that the Defendant Sellers also face potential
insolvency. Defendant Sellers borrowed monies before the sale of the company in excess of $1.6
million. They borrowed against the company and also took out personal loans. These loans did not
cover any payments for the debt owed to Plaintiff.” ¶47; “While Plaintiff can identify
approximately $250,000 owed to him, the actual amount owed to him may exceed over $400,000.”
¶48. C.R. 156.

                                                7
affidavits filed in support of their reply brief and Webb could not rebut it. During

the hearing on the motion to transfer, the following exchange took place:

         MR. JOHANSEN: …And those three affidavits attesting to the fact
         that Mr. Webb signed the UPA in their presence is sufficient to meet
         that prima facie standard. And as the Court, I assume, is also very
         well-aware, the Texas Supreme Court has said prima facie proof is
         not subject to rebuttal, disproof, impeachment or cross-examination.
             So once we have established that prima facie proof, which those
         affidavits provide, that's sufficient, and this case must be either
         transferred in some fashion up to New Jersey or dismissed after
         giving Mr. Webb an opportunity to refile in New Jersey…

                                            …

         THE COURT: What -- I'm captured under the major transaction
         statute. You really think that --you're saying that you can make a
         prima facie showing and that the other side can't do anything about
         it and –

         MR. JOHANSEN: The Ruiz versus Conoco case from 1993 from the
         Texas Supreme Court -- and I have a copy of it with me...

R.R. Vol.3, 11:12-23; 12:12-18 (emphasis added). Appellant agrees with Appellees

to the extent that Ruiz now controls. The record must be reviewed as a whole,

including rebuttal evidence, requiring reversal where the affidavits presented by

Appellees’ were presented the day of the hearing, and shown to be wrong and

misleading.

         In deciding a motion to transfer venue, the trial court is required
         by Rule 87, TEX.R.CIV.P., to take as true those facts of which
         prima facie proof is made by the party with the burden of such
         proof; yet in reviewing the trial court's decision, an appellate court
         must reverse (there cannot be harmless error) if other evidence in
         the record, even evidence adduced after venue was determined,

                                           8
         destroys the prima facie proof on which the trial court relied.
         Prima facie proof is not subject to rebuttal, cross-examination,
         impeachment or even disproof. The evidence as a whole may
         well show that prima facie proof was misleading or wrong. But
         while the wisdom of the statute may be challenged, there is no
         misunderstanding its plain language: an appellate court is obliged
         to conduct an independent review of the entire record to determine
         whether venue was proper in the ultimate county of suit. See Price,
         supra, at 878-79.

      868 S.W.2d 752, 757-758 (Tex. 1993)(emphasis added). Very simply, a

review of the record in its entirety shows that Appellees’ purported prima facie proof

is misleading and wrong and therefore Appellees’ motion to dismiss relying solely

on the forum-selection clause should have failed in light of the proof putting at issue

the validity and enforceability of the purchase agreement. What was that proof that

destroyed Appellees’ prima facie proof and showed it to be wrong and misleading?

      First, proof presented by Appellees’ showed that at least two signatures on the

UPA agreement were not originals:

         THE COURT: But the other one I noticed that I didn't feel
         anything on the back was right above Mr. Webb, Cesar Garcia.

         MR. O'NEAL: He wasn't there at his signature signing.

R.R. Vol.3, 26:11-15. (Emphasis added). The court acknowledged that in addition

to Mr. Webb’s signature, he did not feel the signature indentation for Cesar Garcia.

Garcia did not attend the mysterious alleged signing party, but interestingly the

Appellees’ did not present an affidavit by Cesar Garcia. C.R. 363 ¶ 3. The judicial

notice by the court indisputably establishes that the purported prima facie proof of

                                          9
Appellees attempting to show that Webb was bound by the UPA was wrong and

misleading. Therefore, according to Ruiz, this court should reverse.

         Moreover, the sworn petition of Webb sets forth additional proof that

Appellees’ prima facie proof was wrong and misleading. Summarily, Webb averred

that Appellees’ concealed details regarding the sale of the company and the UPA.

As well, Webb averred that Appellees’ deceitfully sold his interests without

authorization. He alleged fraud, conversion and numerous facts that defeated the

enforceability of the UPA as to him.4

    Without question, other evidence in the record, even evidence adduced after

venue was determined, destroys the prima facie proof on which the trial court relied.

The evidence adduced after venue was determined included:

        1) an expert affidavit by a document examiner that established the signature

             page of the UPA presented to the trial court contained a signature that

             appeared to deviate from Plaintiff’s signature on other documents, C.R.

             436-438, ¶ 7;

        2) an affidavit by seller Fernando Campos that averred there was never a

             signing party and he never witnessed Appellant sign the UPA directly

             controverting the affidavits presented by Appellees, C.R. 435; and

4
 Appellant refers the court back to footnote 2 which provides some of the specific averments challenging
Appellees’ prima facie proof that the UPA is enforceable against Appellant.

                                                       10
      3) the affidavit of the Appellant affirming again his sworn petition and that

         he never attended a signing party, did not sign the UPA and never

         authorized the use of his signature. C.R. 431-433.

     All of this evidence destroys the prima facie proof upon which the trial court

relied. Consequently, venue is proper in Dallas County and this matter should be

remanded to the trial court for further proceedings.

                              III.   CONCLUSION

   For these reasons, and those argued in Appellant’s opening brief, this Court

should vacate the grant of the motion to transfer venue, reverse the dismissal and

remand for further proceedings.

                                              Respectfully submitted,

                                              /s/ Darrell J. O’Neal
                                              Darrell J. O’Neal
                                              Law Office of Darrell J. O’Neal
                                              TN State Bar No 20927
                                              2129 Winchester Road
                                              Memphis, TN 38116
                                              (901) 345-8009 office
                                              (901) 345-8014 fax
                                              domemphislaw@aol.com

                                              /s/ Melvin Houston
                                              Melvin Houston
                                              Melvin Houston & Associates
                                              TX State Bar No. 00796559.
                                              1776 Yorktown, Suite 350
                                              Houston, TX 77056
                                              Tel: (713) 212-0600

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                                              Fax: (713) 212-0290
                                              mhouston@gotellmel.com
                                              COUNSEL FOR APPELLANT

                      CERTIFICATE OF COMPLIANCE

      Pursuant to Texas Rule of Appellate Procedure 9.4(i)(3), I hereby certify that

this brief contains 2378 words (excluding the caption, table of contents, table of

authorities, signature, proof of service, and certificates). This is a computer-

generated document created in Microsoft Word, using 14-point typeface for all text,

except for footnotes which are in 12-point typeface. In making this certificate of

compliance, I am relying on the word count provided by the software used to prepare

the document.

                                              Respectfully submitted,

                                              /s/ Melvin Houston
                                              /s/ Darrell J. O’Neal

                         CERTIFICATE OF SERVICE

      I hereby certify that I served a true and correct copy of the above and foregoing

Appellant’s Reply Brief via this court’s electronic filing system pursuant to T.R.AP.

Rule 9 upon the following on May 6, 2015:

Andrew K. York
Jim Moseley
Gray Reed & McGraw

                                         12
1601 Elm Street, Suite 4600
Dallas, TX 75201
(201) 654-4135
(214) 953-1332 fax
dyork@grayreed.com
jmoseley@grayreed.com
Counsel for Lucien Tujague, Jr. and
Dominion Gas Holdings LP

Bryan Stevens
Barrett Lesher
Hallet & Perrin PC
1445 Ross Avenue, Ste 2400
Dallas, TX 75202
BStevens@hallettperrin.com
blesher@halletperrin.com
Counsel for Diversegy, LLC, Shuk Holdings LLC and
IDT Energy Inc

Mark J. Johansen
Rafeal C. Rodriguez
Gruber Hurst Johansen Hail Shank LLP
1445 Ross Avenue, Ste 2500
Dallas, TX 75202
mjohansen@ghjhlaw.com
rrodriquez@ghjhlaw.com
Counsel for Alex Rodriguez

                                            /s/ Melvin Houston
                                            /s/ Darrell J. O’Neal

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