Opinion
No. 01-01-01010-CV.
Opinion issued October 9, 2003.
Appeal from the 234th District Court, Harris County, Texas, Trial Court Cause No. 2000-50984.
For Appellant: Alexander R. D. Wallenwein, 1412 Westheimer, Suite 1, Houston, TX 77006.
Sidney Farr, 806 Main, Suite 1930, Houston, TX 77002.
For Appellee: Anthony G. Stergio, McDaniel Allen, 1001 McKinney, 21st Floor, Houston, TX 77002.
Larry E. Meyer, McCormick, Hancock Newton, 1900 West Loop South, Suite 700, Houston, TX 77027-3206.
Timothy M. McDaniel, 1001 McKinney, 21st Floor, Houston, TX 77002.
Panel consists of Justices HEDGES, NUCHIA, and KEYES.
MEMORANDUM OPINION
This appeal involves the ownership of the Glenbrook Valley Apartments and property allegedly left in the Apartments. We affirm.
Facts
Appellant Nga Nguyen was the original owner of the Glenbrook Apartments. In August 1998, Nga conveyed the Apartments to appellant CNL Investments and Financial Services, Inc. The original officers of CNL were Nga (vice president and treasurer), his wife Lien Nguyen (secretary), and Lien's brother, Chuong Pham (president). Before CNL acquired the Apartments, the officers changed to Sang Nguyen (president), Nga (vice president), Lien (secretary), and Thao Nguyen (treasurer).
On June 23, 1999, Nga signed a deed in his capacity as CNL's vice president that conveyed the Apartments to Lien. On February 25, 2000, Lien conveyed the Apartments to Chuong. On May 16, 2000 and allegedly without any knowledge that the Apartments had been sold, Sang signed a deed in his capacity as CNL's president that conveyed the Apartments to American First National Bank. On June 30, 2000, the Bank conveyed the Apartments to Meritex Investments, Inc.
Meritex filed a declaratory judgment action to quiet title to the Apartments and to enjoin Nga from entering the Apartments to collect rents. CNL and Lien intervened in the lawsuit and brought the Bank in as a third-party defendant. Nga filed a counterclaim against Meritex for allegedly converting his personal property located at the Apartments.
After a jury trial, the trial court rendered judgment that (1) nullified the June 23, 1999 conveyance from Nga to Lien, (2) nullified the February 25, 2000 conveyance from Lien to Chuong, (3) validated the May 16, 2000 conveyance from Sang to the Bank, (4) validated the June 30, 2000, conveyance from the Bank to Meritex, (5) awarded Meritex $380 in actual damages from Nga, (6) awarded Meritex $119,500 in attorney's fees from Nga, Lien, Chuong, and CNL, (7) awarded the Bank $30,000 in attorney's fees from Nga, Lien, Chuong, and CNL, (8) enjoined Nga from entering the Apartments, and (9) awarded a take-nothing judgment to Nga, Chuong, Lien, and CNL on their conversion and trespass-to-try-title claims.
Appeal Concerning Conversion of Personal Property
Nga appeals the take-nothing judgment on his claim that Meritex converted his personal property at the Glenbrook Valley Apartments. His sole issue is that the evidence is factually insufficient. When reviewing a jury verdict to determine the factual sufficiency of the evidence, we must consider and weigh all the evidence, and should set aside the judgment only if it is so contrary to the overwhelming weight of the evidence as to be clearly wrong and unjust. Cain v. Bain, 709 S.W.2d 175, 176 (Tex. 1986); see also Pool v. Ford Motor Co., 715 S.W.2d 629, 635 (Tex. 1986). The elements on conversion submitted to the jury included whether (1) Nga actually owned the property, (2) Nga demanded that the property to be returned, and (3) Meritex failed to return the property. See generally Waisath v. Lack's Stores, Inc., 474 S.W.2d 444, 446 (Tex. 1971) (defining conversion as "the wrongful exercise of dominion and control over another's property in denial of or inconsistent with his rights.").
Nga offered evidence that Meritex knew of his claim of ownership concerning personal property allegedly left at the Apartments after the Meritex purchase and that Nga continued to enter the property after the Meritex purchase. There is also evidence that Meritex observed some property left in certain areas of the Apartments. However, Meritex argued that Nga was not in legal possession of the disputed property at the time of the Meritex purchase. The evidence also indicates that some of the disputed property was actually the personal property of Lien or Lin Vo, not Nga, and that Nga was not the tenant of the apartment in which the disputed property was allegedly left.
Nga presented evidence that a demand was faxed to Meritex concerning items left in the Apartments. There is also evidence that Nga's original demand was inconsistent with some items of the disputed personal property that he later claimed.
Nga's claim that Meritex refused to return the disputed property is premised on the property's still being located at the Apartments at the time of trial. However, there was evidence that, when counsel for Nga and Meritex arranged for Nga to retrieve personal property, Nga did not demand the allegedly converted property, nor did Meritex refuse to return the property.
Based on the record, we cannot say that the evidence supporting the take-nothing judgment on the conversion ground is so contrary to the overwhelming weight of the evidence as to be clearly wrong and unjust. We overrule Nga's sole issue.
Appeal Concerning Ownership of Glenbrook Valley Apartments
Lien, CNL, and Chuong appeal the portion of the trial court's judgment (1) voiding the July 23, 1999 conveyance of Glenbrook from CNL to Lien (signed by Nga as vice presedent of CNL), (2) voiding the February 25, 2000 conveyance of Glenbrook from Lien to Chuong, (3) validating the May 16, 2000 conveyance of Glenbrook from CNL to the Bank (signed by Sang as president of CNL), (4) validating the June 30, 2000 conveyance of Glenbrook from the Bank to Meritex, (5) declaring that Meritex is the fee simple owner of Glenbrook, and (6) awarding the Bank and Meritex attorney's fees from Lien and Chuong. Lien, CNL, and Chuong challenge that portion of the judgment in four issues.
In issue one, Lien, CNL, and Chuong broadly ask, "Was the trial court wrong in preventing the appellants by pleadings, jury questions, and evidence from attacking the validity of the deed from CNL to the bank?" As best as we can discern, Lien's, CNL's, and Chuong's specific allegations of trial-court error are that the trial court erred in (1) not allowing the jury to hear evidence concerning the authority of CNL's president to execute a deed for the corporation, (2) denying a motion by CNL to file a trial amendment verifying a denial of the execution of the May 16, 2000 conveyance of Glenbrook from CNL to the Bank, and (3) refusing requested jury instructions regarding the authority of CNL's president to execute deeds. Lien, CNL, and Chuong claim that the Bank was negligent in not investigating Sang's authority as president of CNL to sign the deed, but they do not link this negligence claim to any alleged trial-court error.
The standard of review for a trial court's refusal of a trial amendment is abuse of discretion. State Bar v. Kilpatrick, 874 S.W.2d 656, 658 (Tex. 1994). The Bank objected to the trial amendment based on surprise, explaining the difference between (1) the pleaded allegations that Sang was not CNL's president at the time of the May 16, 2000 conveyance of Glenbrook from CNL to the Bank and (2) the allegation that CNL's president, regardless of the particular individual, had no authority to execute a deed. See id. at 658; see also Tex.R.Civ.P. 66 (trial amendments). At trial, Lien, CNL, and Chuong did not challenge the Bank's assertion and explanation that it was surprised.
Based on the record, we hold that the trial court did not abuse its discretion in refusing the trial amendment. We also hold that the trial court did not err in not allowing the jury to hear evidence concerning the authority of CNL's president to execute a deed for the corporation, because the evidence was not relevant to the issues raised in Lien's, CNL's, and Chuong's pleadings. Finally, we do not reach the propriety of the trial court refusing requested jury instructions one and two regarding the authority of CNL's president to execute deeds, because the record does not contain copies of these instructions marked "refused" and signed by the trial court. See Tex.R.Civ.P. 276 (party requesting instruction may appeal trial court's refusal of instruction without preparing formal bill of exceptions if trial court endorses "refused" on tendered instruction and signs it).
We overrule issue one.
In issue two, Lien, CNL, and Chuong challenge the trial court's award of attorney's fees to the Bank and Meritex. We hold that Lien, CNL, and Chuong have waived their complaint against Meritex, because they failed to object and obtain an adverse ruling in the trial court. See Tex.R.App.P. 33.1(a). Although Lien, CNL, and Chuong challenged the factual sufficiency of the award of attorney's fees to Meritex in their motion for new trial, they did not object to the award based on the total absence of a statutory or common-law basis for awarding attorney's fees. Chuong also complains on appeal that he should not be liable for attorney's fees to either the Bank or Meritex, because there was no jury finding against him. We hold that Chuong has waived this complaint because he failed to object and obtain an adverse ruling in the trial court. See Tex.R.App.P. 33.1(a).
Lien, CNL, and Chuong properly objected in their motion for new trial to the absence of a statutory or common-law basis for awarding attorney's fees to the Bank.
We now consider whether the trial court erred in awarding attorney's fees to the Bank from Lien, CNL, and Chuong on the narrow basis they preserved in their motion for new trial: "There is no legal basis for the judgment's award of any attorney's fees to [the Bank]." The Bank relied on the Uniform Declaratory Judgment Act as the basis for its claim of attorney's fees. See Tex. Civ. Prac. Rem. Code Ann. § 37.009 (Vernon 1997). Without citations to the record or to relevant case law, Lien, CNL, and Chuong summarily state, "the bank prayer for declaratory relief was alternative to its primary claim, and that alternative relief was never granted to the bank. The bank's pleadings and the record don't invoke the Declaratory Judgment Act for the bank as a vehicle for attorney's fees." We hold that this argument is insufficient and that Lien, CNL, and Chuong have waived their complaint about attorney's fees awarded to the Bank. See Tex.R.App.P. 38.1(h) (appellant's brief must contain clear and concise argument for contentions made, with appropriate citations to authorities and to record); Harris County Mun. Util. Dist. No. 48 v. Mitchell, 915 S.W.2d 859, 866 (Tex.App.-Houston [1st Dist.] 1995, writ denied).
We overrule issue two.
In issues three and four, Lien, CNL, and Chuong claim that the judgment incorrectly declared that the transfers of Glenbrook Valley Apartments from CNL to Lien (issue three) and from Lien to Chuong (issue four) were fraudulent. Because the only objections that Lien, CNL, and Chuong made in the trial court were in their motion for new trial and were based on factual sufficiency, their complaint on appeal is limited to factual-sufficiency review.
When reviewing a jury verdict to determine the factual sufficiency of the evidence, we must consider and weigh all the evidence, and should set aside the judgment only if it is so contrary to the overwhelming weight of the evidence as to be clearly wrong and unjust. Cain, 709 S.W.2d at 176. The jury charge set forth the statutory requirements of Business and Commerce Code section 24.005 regarding fraudulent transfers to present and future creditors, but in their brief, Lien, CNL, and Chuong do not apply the test for determining factual insufficiency to the statutory elements. Tex. Bus. Com. Code Ann. § 24.005 (Vernon 2002). Their brief contains one page of argument concerning issue three and one and one-half pages concerning issue four. The Bank and Meritex have seven pages of argument on issue three and seven pages on issue four, in which they marshal the evidence to demonstrate that the judgment is factually sufficient to meet the statutory requirements of Business and Commerce Code section 24.005. We summarize that evidence below.
Considerable evidence supports the finding that the first purported conveyance, from CNL to Lien on July 23, 1999, was a fraudulent transfer as defined by Business and Commerce Code section 24.005: (1) the conveyance was made to an insider, i.e., Lien, who was an original incorporator of CNL, CNL's secretary, and the wife of CNL's vice president, Nga (section 24.005(b)(1)); (2) CNL retained possession of the property after the conveyance, and the Apartments continued to be operated by Nga (section 24.005(b)(2)); (3) the conveyance was concealed, e.g., the conveyance was not disclosed to Sang, CNL's president, who subsequently conveyed the property to the Bank on CNL's behalf without knowledge of the prior conveyance (section 24.005(b)(3)); (4) the conveyance was made to avoid CNL's economic troubles with the Palm Bluff Apartments mortgage (section 24.005(b)(4)); (5) the conveyance constituted substantially all of CNL's assets (section 24.005(b)(5)); (6) no consideration was paid for the conveyance (section 24.005(b)(8)); (7) CNL was insolvent before the conveyance (section 24.005(b)(9)); and (8) CNL incurred substantial debts before the purported conveyance (section 24.005(b)(10)).
Lien, CNL, and Chuong contest only two of the factors enumerated in Business and Commerce Code section 24.005(b). First, they argue that lack of consideration is only one factor to be considered with regard to the issue of fraudulent transfer. Second, Lien, CNL, and Chuong point out that CNL still owned the Palm Bluff Apartments at the time of the July 23, 1999 conveyance, so CNL was not insolvent at that time. The City of Pasadena foreclosed on the Palm Bluff Apartments on March 7, 2000.
Considerable evidence supports the finding that the second purported conveyance, from Lien to Chuong on February 25, 2000, was a fraudulent transfer as defined by Business and Commerce Code section 24.005: (1) the conveyance was made to an insider, i.e., Chuong, who was CNL's original president and Lien's brother (section 24.005(b)(1)); (2) the Apartments continued to be operated by Nga, Chuong needed Nga's permission to sell the Apartments for five years after the conveyance, and Lien and Nga maintained an absolute right to buy the Apartments back from Chuong for five years after the conveyance (section 24.005(b)(2)); (3) the conveyance was made to avoid economic trouble for Lien and Nga, as they had personally guaranteed CNL's mortgage on the Palm Bluff Apartments (section 24.005(b)(4)); (4) no consideration was paid for the conveyance (section 24.005(b)(8)); and (5) Lien and Nga were insolvent before the conveyance (section 24.005(b)(9)).
Lien, CNL, and Chuong argue that there was consideration for the 2000 conveyance in the form of cancellation of debt that Lien owed her brother Chuong. There is evidence of Lien's indebtedness to Chuong, but Chuong also testified that the conveyance was a family deal and that he "didn't pay anything."
After examining all the evidence, we cannot say that the evidence supporting the judgment on the fraudulent-conveyance ground is so contrary to the overwhelming weight of the evidence as to be clearly wrong and unjust. We overrule issues three and four.
Chuong requests that if we overrule issues three and four, we also reduce his liability under the judgment by $87,000 pursuant to Business and Commerce Code section 24.009. Tex. Bus. Com. Code Ann. § 24.009 (Vernon 2002). Chuong does not direct us in his brief to where he requested this relief in the trial court, and he cannot raise this argument for the first time on appeal. See Davis v. Campbell, 572 S.W.2d 660, 662 (Tex. 1978).
Conclusion
We affirm the judgment of the trial court.