Mike Jones v. Wells Fargo Bank ( 2007 )

NUMBER 13-04-609-CV

COURT OF APPEALS

THIRTEENTH DISTRICT OF TEXAS

CORPUS CHRISTI - EDINBURG

MIKE JONES, Appellant,

v.

WELLS FARGO BANK, N.A., Appellee.

On appeal from the 117th District Court of Nueces County, Texas.

MEMORANDUM OPINION

Before Justices Yañez, Benavides, and Vela Memorandum Opinion by Justice Yañez

Appellant, Mike Jones, sued appellee, Wells Fargo Bank, N.A. ("Wells Fargo"), for conversion, breach of fiduciary duty, negligence, and breach of contract. In his suit, appellant sought to recover funds that were transferred to a court-appointed receiver from accounts held under his name. The trial court granted a traditional motion for summary judgment in favor of Wells Fargo. On appeal, appellant contends the trial court erred in granting summary judgment. We affirm in part and reverse and remand in part.

Background

In November of 1999, the State of Texas filed a consumer protection suit against appellant's brother, Ali Yazdchi ("Ali"). ⁽¹⁾ At this time, the 61st District Court of Harris County entered an ex parte temporary restraining order against Ali after finding that he may have violated the Deceptive Trade Practices Act. ⁽²⁾

On December 21, 1999, the court entered a temporary injunction and appointment of temporary receiver against Ali. Through this entry, the court ordered that David West be appointed "Temporary Receiver of defendant Ali Yazdchi and any assets standing in the name of Ali Yazdchi or any alias of Ali Yazdchi[.]" The receiver was then authorized to "take possession and charge" of Ali's assets. This included, but was not limited to, "any deposits made by or for Ali Yazdchi (or any alias name used by Ali Yazdchi) with any bank, saving and loan association, [or] financial institution." ⁽³⁾ The aliases covered by the order included the alias, "Mike Jones."

On January 3, 2000, the trial court entered another ex parte temporary restraining order, stating, in part:

Since the signing of the Temporary Injunction Order, which specifically covers the Defendant's relatives and his agents, the State has been made aware of two other banks, both in Corpus Christi, where Mr. Mike Jones, brother to the Defendant, has deposited sums of money and withdrawn some of those funds for transfer to Iran or other financial institutions outside the jurisdiction of this court. ⁽⁴⁾

The order restrained appellant "from opening and/or closing any bank accounts, depositing, transferring and/or withdrawing any funds in any existing new account at any financial institutions, where ever located[.]"

On January 10, 2000, the trial court entered a supplemental temporary injunction. The court found that appellant had violated the court's temporary injunction and was in contempt of court. As a result, the court ordered that all sums of money on deposit in account #5079551 and #274610872 be transferred to West, the temporary receiver. The order further stated that these accounts could be closed after all the money had been transferred.

  Standard of Review

A party moving for summary judgment has the burden of proving that there is no genuine issue of material fact and that the movant is entitled to judgment as a matter of law. ⁽⁵⁾ When deciding whether there is a disputed, material fact issue precluding summary judgment, evidence favorable to the non-movant will be taken as true. ⁽⁶⁾ Every reasonable inference must be indulged in favor of the non-movant and any doubts must be resolved in its favor. ⁽⁷⁾ When a defendant moves for summary judgment, it must either (1) disprove at least one element of the plaintiff's cause of action or (2) plead and conclusively establish each essential element of its affirmative defense, thereby defeating the plaintiff's cause of action. ⁽⁸⁾

Here, the summary judgment order did not specify the grounds upon which the trial court relied, and thus the appellant, as the non-movant, is required to show that each summary judgment ground alleged was insufficient to support summary judgment. ⁽⁹⁾ Accordingly, we will affirm the trial court's summary judgment order if any ground presented in the supporting motion was meritorious. ⁽¹⁰⁾

Discussion

Appellant asserts that Wells Fargo should not have transferred funds from four of his accounts for the following reasons: (1) there is a question as to whether the trial court properly served appellant with process; (2) the court-appointed receiver was only empowered to receive property from appellant's brother; (3) appellant was not named as a defendant in the State's suit; (4) the order transferred assets standing in an alias name only when Ali was actually using the alias name as an alias, thus Wells Fargo unlawfully transferred assets standing in appellant's name without regard to whether Ali actually owned or was in possession of those assets; and (5) by analogizing to garnishment law, appellant contends that Wells Fargo was obligated by law to turn over funds in accounts held in his name.

The arguments before us have been addressed by the First and Fourteenth Courts of Appeals in cases that arose from the State's suit against Ali, which has been discussed herein. ⁽¹¹⁾ In those cases, the courts determined that the defendants, various financial institutions, were statutorily immune from liability as a matter of law for transferring funds from plaintiffs' accounts to the court-appointed receiver pursuant to the orders entered in the Ali action. ⁽¹²⁾ In coming to its ruling in Bank One, the First Court stated:

The Banks received a copy of the order, indicating that the court had found that Ali was using accounts at their institutions, under alias names, to deposit funds from illegal activities. The court commanded the Banks to turn over funds held in these accounts. Section 31.010 permitted the Banks to rely on the court's orders without conducting an independent investigation and without fearing that they would be subject to liability for complying with the plain language of the orders. ⁽¹³⁾

The First Court also noted that Texas Finance Code section 59.008(c) "places the burden on a customer of a financial institution to prevent a financial institution from complying with or responding to notices of freeze, receivership, restraining orders, and injunctions asserting or establishing claims against customer accounts." ⁽¹⁴⁾ Finally, the court found that precedent in the garnishment context supported the Banks' contention that they were not required to conduct an investigation into the true ownership of the funds because requiring them to do so would improperly shift judicial responsibility to the Banks. ⁽¹⁵⁾

In the present case, the temporary injunction empowered the receiver to take possession of bank accounts held in the name of "Mike Jones." We find that Wells Fargo complied with this order when it transferred appellant's four accounts to the receiver. ⁽¹⁶⁾ Issues pertaining to whether (1) appellant was properly served, (2) appellant was named in the State's suit, and (3) the receiver had authority to take possession of appellant's assets, are matters that Wells Fargo did not have a duty to independently investigate. Furthermore, because we believe that appellant did not meet the burden imposed upon him by finance code section 59.008(c), ⁽¹⁷⁾ we reject appellant's claim that Wells Fargo unlawfully transferred assets standing in his name without regard to whether Ali actually owned or was in possession of those assets. Finally, we reject appellant's garnishment argument for the same reasons stated by the First Court in Bank One. ⁽¹⁸⁾

Though we find that Wells Fargo lawfully transferred appellant's four accounts to the receiver, we do have a concern regarding the present state of two of those accounts. Wells Fargo's summary judgment evidence includes copies of two letters, both of which are written by the receiver, David West, and addressed to Darrell Reece of Wells Fargo's Texas Legal Department. In a letter dated June 6, 2000, West writes that he is "releasing the following account in the name of Mike Jones: Acct. #961 8116459 in the amount of $4,417.31 opened 3-22-99." ⁽¹⁹⁾ In the other letter, dated June 7, 2000, West writes: "I am releasing the account in the name of Mike Jones: Acct. #961 5053366 in the amount of $478.25 opened 3-17-99 to the account holder."

In his original petition, dated May 22, 2003, appellant contends that he has not received any of the assets contained in the two aforementioned accounts. We find no evidence in the record refuting this contention. Because it appears that appellant is entitled to the assets contained in these two released accounts, we find that the trial court erred, with respect to these accounts, in granting Wells Fargo's summary judgment motion.

Conclusion

We find that Wells Fargo lawfully complied with a court order in transferring all four of appellant's accounts to the receiver and overrule all arguments to the contrary. We affirm the summary judgment motion as to account #4610872 and #5079551. We remand to the trial court to determine only the disposition of the assets in account #8114659 and #5053366.

LINDA REYNA YAÑEZ,

Justice

Memorandum opinion delivered and filed

this the 26th day of April, 2007.

1. State of Texas v. Ali Yazdchi, also known as Al Giovanni, Habibollah Yazdchi, Habibolah Yazdchi, Hosein Y. Mohamad, Mohamed H. Yazdchi, Abbas Yazdchi, A. Abbasyazdchi, Ahmad Yazdchi, Habibolloah Yazdchi, Ali Yazdi, Habibolah Yazdi, Amir Ahmad, Yazdchi Habibollah, Yazdchi Ali, Yazdchi Mohamad, Yazdchi Habibolah, Yazdchi Ahmad, A. Yazdchi Habibolah, A. Yazdchi, A. Yazdchi Abbas, A. Aliyazdchi, Sidney Sam Hessein, Mike Jones, Al Auto, Al Auto Sales, All's Cars, Ali's Cars, and Alis Cars, No. 1999-57020, pending in the 61st Judicial District Court of Harris County, Texas.

2. See Tex. Bus. & Com. Code Ann. §§ 17.41-.63 (Vernon 2002 & Supp. 2006).

3. Emphasis added.

4. Emphasis added. The names of the two aforementioned banks in Corpus Christi, at the time this order was entered, were First National Bank of South Texas and Norwest Bank, N.A. These banks are now known as Wells Fargo.

5. Tex. R. Civ. P. 166a(c); Nixon v. Mr. Prop. Mgmt. Co., 690 S.W.2d 546, 548 (Tex. 1985); Farah v. Mafrige & Kormanik, 927 S.W.2d 663, 670 (Tex. App.-Houston [1st Dist.] 1996, no writ).

6. Nixon, 690 S.W.2d at 548-49.

7. Id. at 549.

8. Cathey v. Booth, 900 S.W.2d 339, 341 (Tex. 1995); Farah, 927 S.W.2d at 670.

9. Star-Telegram, Inc. v. Doe, 915 S.W.2d 471, 473 (Tex. 1995).

10. Harwell v. State Farm Mut. Auto. Ins. Co., 896 S.W.2d 170, 173 (Tex. 1995); Carr v. Brasher, 776 S.W.2d 567, 569 (Tex. 1989).

11. Yazdchi v. Bank One, Tex., N.A., 177 S.W.3d 399 (Tex. App.-Houston [1st Dist.] 2005, pet. denied); Yazdchi v. TradeStar Invs. Inc., No. 14-05-00125-CV, 2006 Tex. App. LEXIS 8372 (Tex. App.-Houston [14th Dist.] Sept. 26, 2006, no pet. h.). These two cases involved nearly the same factual scenario and arguments on appeal that we encounter herein. The appellants in these cases were also Ali's brothers: Ahmad Yazdchi and Abbas Yazdchi. We note that the aforementioned ex parte temporary restraining order (entered on January 3, 2000) states that Mike Jones is also known as "Abbas Yazdchi."

12. Bank One, 177 S.W.3d at 408; TradeStar, 2006 Tex. App. LEXIS 8372, at *9-10.

13. Bank One, 177 S.W.3d at 406. Section 31.010 of the civil practice and remedies code states that a financial institution that complies with an order to turn over assets to a receiver is not liable for such compliance to: (1) the judgment debtor; (2) a party claiming through the judgment debtor; (3) a co-depositor with the judgment debtor; or (4) a co-borrower with a judgment debtor. Tex. Civ. Prac. & Rem. Code Ann. § 31.010 (Vernon Supp. 2006).

14. Bank One, 177 S.W.3d at 407.

15. Id. at 408.

16. The trial court's supplemental temporary injunction, which specifically orders for the assets in two of the four complained of accounts to be transferred to the receiver, further supports this finding.

17. Tex. Fin. Code Ann. § 59.008(c) (Vernon Supp. 2006) ("The customer bears the burden of preventing or limiting a financial institution's compliance with or response to a claim subject to this section by seeking an appropriate remedy, including a restraining order, injunction, protective order, or other remedy, to prevent or suspend the financial institution's response to a claim against the customer.").

18. Id. at 407-08.

19. In this letter, West also discusses two other accounts that appellant seeks recovery for: account #027 4610872 and account #961 5079551. West requests that these accounts be emptied and closed.