in the Matter of Approximately $80,600.00 ( 2015 )

ACCEPTED
01-14-00424-CV
FIRST COURT OF APPEALS
HOUSTON, TEXAS
1/29/2015 2:22:08 PM
CHRISTOPHER PRINE
CLERK
No. 01-14-00424-CV
FILED IN
In the 1st COURT OF APPEALS
Court of Appeals HOUSTON, TEXAS
For the 1/29/2015 2:22:08 PM
CHRISTOPHER A. PRINE
First District of Texas Clerk
At Houston

No. 1417446
In the 351st District Court
Of Harris County, Texas

IN THE MATTER OF APPROXIMATELY $80,600

STATE’S APPELLATE BRIEF

DEVON ANDERSON
District Attorney
Harris County, Texas
DAN MCCRORY
Assistant District Attorney
Harris County, Texas
mccrory_daniel@dao.hctx.net
1201 Franklin, Suite 600
Houston, Texas 77002
Tel.: 713/755-5826
FAX No.: 713/755-5809
Counsel for Appellee
ORAL ARGUMENT REQUESTED ONLY IF REQUESTED BY APPELLANT
STATEMENT REGARDING ORAL ARGUMENT
Pursuant to TEX. R. APP. P. 39.7, the State requests oral argument only if oral
argument is requested by appellant.
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TABLE OF CONTENTS
STATEMENT REGARDING ORAL ARGUMENT .......................................................... i
INDEX OF AUTHORITIES .............................................................................................. iii
STATEMENT OF THE CASE ........................................................................................... 1
SUMMARY OF THE ARGUMENTS ................................................................................ 2
REPLY TO POINT OF ERROR ONE ................................................................................ 2
REPLY TO POINT OF ERROR TWO ............................................................................... 7
CONCLUSION ................................................................................................................. 14
CERTIFICATE OF SERVICE .......................................................................................... 15
CERTIFICATE OF COMPLIANCE ................................................................................ 15
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INDEX OF AUTHORITIES
CASES
A. Benjamini, Inc. v. Dickson,
2 S.W.3d 611 (Tex. App.--Houston [14th Dist.] 1999, no pet.) ................................ 8, 11
Bank of Saipan v. CNG Financial Corp.,
380 F.3d 836 (5th Cir. 2004) .......................................................................................... 12
Four B’s Inc. v. State,
902 S.W.2d 683 (Tex. App.--Austin 1995, writ denied) ............................................. 4, 6
Kennedy v. State,
No. 01-12-01142-CV, 2014 WL 5771935 (Tex. App.--Houston
[1st Dist.] Nov. 6, 2014, no pet. h.) ................................................................................. 6
Nelms v. State,
761 S.W.2d 578 (Tex. App.--Fort Worth 1988, no writ) ............................................ 7, 8
Sinclair Houston Fed. Credit Union v. Hendricks,
268 S.W.2d 290 (Tex. Civ. App. – Galveston 1954, writ ref’d n.r.e.) .......................... 11
Wells Fargo Bank, N.A. v. Ballestas,
355 S.W.3d 187 (Tex. App.--Houston [1st Dist.] 2011, no pet.) .................................... 9
York v. State,
373 S.W.3d 32 (Tex. 2012) ............................................................................................. 4
STATUTES
TEX. CODE CRIM. PROC. ANN. art. 47.01 (West 2006) ....................................................... 4
TEX. CODE CRIM. PROC. ANN. art. 47.01a (West 2006) .................................................. 5, 7
TEX. CODE CRIM. PROC. ANN. art. 47.02 (West Supp. 2014) ......................................... 5, 7
RULES
TEX. R. APP. P. 39.7.............................................................................................................. i
iii
TO THE HONORABLE COURT OF APPEALS:
STATEMENT OF THE CASE
This is an appeal from the trial court’s ruling on the State’s petition for the
disposition of stolen property brought under Chapter 47 of the Texas Code of
Criminal Procedure. (CR Supp. 3).1 The State’s petition alleges that Dennis Pharris
committed the offense of theft by unlawfully and fraudulently acquiring $215,000
from Dr. Vic Patel. (CR Supp. 8). Abraham Fisch, a criminal defense attorney,
represented Pharris in this criminal matter. (CR Supp. 7-8).
A fraud examiner traced Patel’s stolen money and determined that Pharris
transferred $80,600 of the stolen funds into Fisch’s IOLTA account. (CR Supp. 8).
Immediately following a bond hearing on Pharris’s criminal case, at which
evidence was presented regarding Pharris’s theft of Patel’s money, Fisch “almost
completely purged” his IOLTA account. (CR Supp. 8-9). Fisch transferred the
funds from his IOLTA account, including Patel’s $80,600, to a newly-created
account that he opened under his “attorney name.” (CR Supp. 9). Pursuant to a
warrant, the State seized $80,600 from Fisch’s new account. (CR Supp. 9).
The trial court granted the State’s petition for disposition of the stolen
property. (CR Supp. 72). The trial court ruled the $80,600 was stolen property and
1
“CR” refers to the clerk’s record filed with this Court on June 9, 2014.
“CR Supp.” refers to the supplemental clerk’s record filed with this Court on October 17, 2014.
ordered it to be returned to Patel, “the rightful owner of the property.” (CR Supp.
72). On appeal, Fisch argues that he has a superior right to possession of the
$80,600.
SUMMARY OF THE ARGUMENTS
Point one: Article 47.02 provides a district court with jurisdiction over a Chapter
47 claim during and after the related criminal trial. Therefore, the trial court had
jurisdiction to rule on the State’s Chapter 47 petition after the judgment in Pharris’s
criminal case was entered.
Point two: The trial court did not err in denying Fisch’s 2014 petition for the
return of the seized $80,600 because the trial court denied him relief on this same
issue in response to a petition Fisch filed in 2009. As such, Fisch’s 2014 request
for the funds was barred by the doctrine of collateral estoppel.
Alternatively, Fisch’s right to the money was not superior to Patel’s right of
possession because Fisch had some knowledge that the money was stolen when he
transferred the money from the IOLTA account, which was not his money, to his
personal account.
REPLY TO POINT OF ERROR ONE
In his first point of error, Fisch contends the trial court’s order granting the
State’s petition for disposition of stolen property is void. (CR Supp. 72).
2
Specifically, Fisch maintains the order is void because the trial court lacked
jurisdiction when it issued the order.
Relevant facts
Pharris was charged by indictment for the Patel theft in the 351st District
Court on or about April 2, 2009. (CR Supp. 54-56). The trial court conducted a
bond hearing on April 7th and 9th of 2009. (CR Supp. 8). Dr. Patel testified at this
hearing, describing Pharris’s theft of $215,000 from him. (CR Supp. 8). At the
conclusion of the hearing, the trial court found “proof evident” that Pharris had
committed the Patel theft and denied Pharris a bond. (CR Supp. 8; RR II 41).2
After learning that Fisch had transferred $80,600 of the theft proceeds from
his IOLTA account to his personal account right after the bond hearing, the State
seized $80,600 from Fisch’s account on April 21, 2009, pursuant to a warrant. (CR
Supp. 8-9). The State filed its petition for disposition of stolen property in the 351st
District Court on May 26, 2009. (CR Supp. 3).
Pharris eventually pleaded guilty to the Patel theft and was sentenced to five
years in prison. (CR Supp. 54-55). The judgment was entered on December 4,
2013. (CR Supp. 54). The trial court granted the State’s petition for disposition of
stolen property on May 21, 2014, and ordered the $80,600 returned to Dr. Patel.
(CR Supp. 72).
2
“RR II” refers to the reporter’s record for the hearing conducted on March 4, 2010.
3
Applicable law
The issue in this case, the disposition of stolen property, is controlled by
Chapter 47 of the Texas Code of Criminal Procedure. Chapter 47 provides a
procedure by which a person claiming an interest in stolen property, which is in the
possession of a governmental authority, may seek to obtain possession of the
property. York v. State, 373 S.W.3d 32, 43 (Tex. 2012).
Section 47.01 provides that “an officer who comes into custody of property
alleged to have been stolen shall hold it subject to the order of the proper court
only if the ownership of the property is contested or disputed.” TEX. CODE CRIM.
PROC. ANN. art. 47.01(a) (West 2006). Once stolen property is seized, a trial court
may determine how such property may be disposed. Specifically, there are two
statutes in Chapter 47 addressing the issue of which court is “the proper court” to
rule on the restoration of stolen property, one for proceedings that occur before the
related criminal trial and another for proceedings during or after the criminal trial.
Four B’s Inc. v. State, 902 S.W.2d 683, 684 (Tex. App.--Austin 1995, writ denied)
(citing TEX. CODE CRIM. PROC. ANN. arts. 47.01a, 47.02 (West 2006 & Supp.
2014).
Section 47.01a is titled “Restoration when no trial is pending” and it
provides:
If a criminal action relating to allegedly stolen property is
not pending, a district judge, county court judge,
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statutory county court judge, or justice of the peace
having jurisdiction as a magistrate in the county in which
the property is held or a municipal judge having
jurisdiction as a magistrate in the municipality in which
the property is being held may hold a hearing to
determine the right to possession of the property, upon
the petition of an interested person, a county, a city, or the
state. Jurisdiction under this section is based solely on
jurisdiction as a criminal magistrate under this code and
not jurisdiction as a civil court.
TEX. CODE CRIM. PROC. ANN. art. 47.01a(a) (West 2006).
Section 47.02 is titled “Restored on trial” and it provides:
(a) On the trial of any criminal action for theft or any
other offense involving the illegal acquisition of
property, the trial court trying the case shall order the
property to be restored to the person appearing by the
proof to be the owner of the property.
(b) On written consent of the prosecuting attorney, any
magistrate having jurisdiction in which a criminal
action for theft or any other offense involving the
illegal acquisition of property is pending may hold a
hearing to determine the right of possession to the
property. If it is proved to the satisfaction of the
magistrate that any person is a true owner of the
property alleged to have been stolen, and the property
is under the control of a peace officer, the magistrate
may, by written order, direct the property be restored
to that person
TEX. CODE CRIM. PROC. ANN. art. 47.02 (West Supp. 2014).
Argument and authorities
After defendant Pharris pleaded guilty to the Patel theft, the trial court
sentenced Pharris and entered the judgment on December 4, 2013. (CR Supp. 54).
5
On appeal, Fisch maintains the trial court lost jurisdiction over the “disposition of
stolen property” issue on January 3, 2014, when the trial court’s 30 days of general
plenary jurisdiction expired after the criminal judgment was entered. As such,
Fisch concludes that the trial court had no jurisdiction to rule on the State’s article
47.02 petition on May 21, 2014. (CR Supp. 72).
Fisch’s contention is meritless because a trial court’s authority to make a
Chapter 47 ruling is not dependent on the court’s jurisdiction arising from the
related criminal prosecution. Rather, the court’s authority to issue such rulings
derives from the Chapter 47 statutes themselves.
This Court recently observed that articles 47.01a and 47.02 are the two
provisions addressing the issue of jurisdiction for purposes of trial court rulings on
the disposition of stolen property. Kennedy v. State, No. 01-12-01142-CV, 2014
WL 5771935, at *5 (Tex. App.--Houston [1st Dist.] Nov. 6, 2014, no pet. h.). This
Court explained that a trial court has jurisdiction on Chapter 47 matters pursuant to
article 47.01a when no indictment or information has been filed initiating a
criminal action. Id. On the other hand, “[a]rticle 47.02(a)’s express language
allows the trial court to restore stolen property to its owner during or after a
criminal trial.” Id. (italics added); see also Four B’s Inc., 902 S.W.2d at 684
(article 47.01a authorizes restoration proceedings that occur before the related
criminal trial and article 47.02 authorizes such proceedings “during or after the
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criminal trial”) (italics added); Nelms v. State, 761 S.W.2d 578, 578-79 (Tex. App.--
Fort Worth 1988, no writ) (after defendant was acquitted in criminal theft trial, trial
court conducted hearing pursuant to article 47.02 to determine ownership of stolen
funds).
Therefore, Chapter 47 provides for jurisdiction in a district court both before
and after a criminal trial without a temporal restriction. TEX. CODE CRIM. PROC.
ANN. arts. 47.01a, 47.02 (West 2006 & Supp. 2014). Since the trial court had
jurisdiction to rule on the State’s petition for the disposition of stolen property
under article 47.02, the ruling was not void.3 Accordingly, Fisch’s first point of
error is meritless and should be overruled.
REPLY TO POINT OF ERROR TWO
In his second point of error, Fisch contends the trial court erred in denying
his “amended petition for release of seized property.” (CR 10; RR I 14).4 The
record indicates that Fisch filed this petition on February 17, 2014, under cause
number 1417446. (CR 10-12). In his petition, Fisch sought the return of the
$80,600 seized from his bank account. (CR 10-12). Fisch maintained that he had
no knowledge that the funds, which he received from Pharris as attorney fees, had
been stolen by Pharris. (CR 10). Fisch characterized himself as an “innocent
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provider of legal services.” (CR 11). Following a hearing on this matter, the trial
court denied Fisch’s petition on March 4, 2010. (RR II 4-51; Cr Supp. 53).5
On appeal, Fisch continues to argue that the seized funds should be returned
to him. He claims he has a superior right to possess the funds because he did not
know the money was stolen when he accepted payment from Pharris. Fisch argues
he is entitled to the money because he obtained it in good faith and in return for
valuable consideration (i.e., legal representation).
Standard of review
The disposition of stolen property is a civil matter. Nelms, 761 S.W.2d at
579. A trial court’s finding regarding the disposition of property is subject to a
sufficiency review. A. Benjamini, Inc. v. Dickson, 2 S.W.3d 611, 612 (Tex. App.--
Houston [14th Dist.] 1999, no pet.). When no findings of fact or conclusions of
law are made, as here, the trial court’s judgment implies all necessary findings of
fact to support the judgment. Id. at 613; Nelms, 761 S.W.2d at 579. When the
implied findings of fact are supported by the evidence, an appellate court must
uphold the judgment on any theory of law applicable to the case. Benjamini, 2
S.W.3d at 613. When making this determination, the reviewing court considers
3
Assuming, arguendo, that the trial court lacked jurisdiction under article 47.02 on the
basis of there being no criminal case pending, the court would nevertheless have jurisdiction to
dispose of stolen property pursuant to article 47.01a, which applies when no trial is pending.
4
“RR I” refers to the reporter’s record of the hearing conducted on May 21, 2014.
5
“RR II” refers to the reporter’s record of the hearing conducted on May 4, 2010.
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only the evidence most favorable to the implied factual findings and disregards all
opposing or contradictory evidence. Id.
Collateral estoppel
The trial court did not err in denying Fisch’s 2014 petition requesting the
return of the $80,600 seized from his bank account because the same trial court had
already denied another petition, filed in 2009 under cause numbers 991356,
1210228, 1210229, and 1031225, and denied in 2010, in which Fisch requested the
return of these same funds. (CR 10; CR Supp. 10, 53). Under such circumstances,
the doctrine of collateral estopped precluded Fisch from raising the same issue in
2014 that already had been resolved in 2010.
The doctrine of collateral estoppel, also known as issue preclusion, prevents
relitigation of particular issues already resolved in a prior action. Wells Fargo
Bank, N.A. v. Ballestas, 355 S.W.3d 187, 193 (Tex. App.--Houston [1st Dist.] 2011,
no pet.). A party seeking to assert the bar of collateral estoppel must establish that:
(1) the facts sought to be litigated in the second action were fully and fairly
litigated in the first action; (2) those facts were essential to the judgment in the first
action; and (3) the parties were cast as adversaries in the first action. Id.
Regarding the first factor, the facts Fisch sought to litigate in his 2014
petition were fully and fairly litigated pursuant to the 2009 petition (which was
ruled on following a hearing in 2010). Namely, in his 2014 petition, Fisch argued
9
for the return to him of the money seized from his account based on his claim that
he had no knowledge the funds were stolen when he received them. (CR 10-11). In
his 2009 petition and during the 2010 hearing, Fisch made the same request for the
return of the same funds for the same reason (i.e., his lack of knowledge that the
funds were stolen). (CR Supp. 10; RR II 5, 15, 20, 40-41, 47). The issue of Fisch’s
right to the funds was fully and fairly litigated at the first hearing. Fisch testified at
length about this issue in 2010 and both parties had the opportunity to examine him
without limitation. (RR II 4-51).
Regarding the second factor, the same facts Fisch sought to litigate in the
2014 petition were essential to the judgment in the ruling on the 2009 petition.
Namely, the same facts that Fisch sought to litigate in 2014 relating to his claimed
superior right to the funds based on his claim of an innocent ownership of the
funds were essential to the 2010 ruling. The 2010 ruling turned on the resolution
of the same issue Fisch presented in his 2014 petition.
Finally, regarding the third factor, the two petitions pitted the same
adversaries against one another. In both instances, Fisch was attempting to recover
from the Harris County District Attorney’s Office the money seized from the
former by the latter.
Considering these factors, Fisch was collaterally estopped in 2014 from
seeking the same relief that he was denied in 2010. As such, the trial court did not
10
err in denying Fisch’s 2014 petition. For this reason alone, Fisch’s second point of
error is meritless and should be overruled.
Patel had a superior right to the money
Fisch contends his right to the $80,600 was superior to that of Patel because
Fisch purportedly received the money from Pharris in exchange for valuable
consideration with no knowledge that Pharris stole the money from Patel. Having
received the money as an innocent third party, Fisch maintains his right to the cash
exceeds that of Patel, the person from whom the money was stolen. In support of
this contention, Fisch cites case law providing: “One who receives money which
has been illegally obtained by a third party in due course of business, in good faith,
and for valuable considerations, can keep it without liability to him from whom it
was stolen.” Sinclair Houston Fed. Credit Union v. Hendricks, 268 S.W.2d 290,
295 (Tex. Civ. App. – Galveston 1954, writ ref’d n.r.e.).
However, reviewing the record in the light most favorable to the trial court’s
implied findings reveals that Fisch did not gain possession of the money in good
faith. Benjamini, 2 S.W.3d at 613 (appellate court considers only the evidence
most favorable to the trial court’s implied fact findings). Fisch confirmed that
when Pharris gave him the $80,600 in question, he placed the money in his IOLTA
account. (RR II 28, 46). He further confirmed that when he placed the funds in his
11
IOLTA account, the money was not his since his money cannot be in the IOLTA
account. (RR II 26-29).
Fisch also confirmed he was present at a bond hearing when the trial court
found proof evident that Pharris stole the money from Patel. (RR II 40-41; CR
Supp. 8). Fisch admitted that, during this bond hearing, he learned that the money
in question could have been stolen by Pharris. (RR II 46). Fisch further admitted
that, several days after the bond hearing, he removed about $250,000 from his
IOLTA account and placed it in his personal account, leaving only $156 in his
IOLTA account. (RR II 34).
These circumstances demonstrate that Fisch’s ownership of the funds began
when he transferred the funds from an IOLTA account to his personal account, an
event that occurred after he had knowledge that Pharris may have obtained the
funds by theft. As such, when Fisch gained ownership of the money, he was not an
innocent third party recipient. Rather, there was a lack of good faith in his receipt
of the money. Given this circumstance, Fisch did not have a superior right to
possess the funds.6 Bank of Saipan v. CNG Financial Corp., 380 F.3d 836, 843 (5th
Cir. 2004) (to recover stolen money, theft victim need not show third party
acquired money by fraud or duress, only that third party lacked good faith in
6
There is also some evidence indicating that Pharris reimbursed Fisch with about $83,000 in
2010 after the trial judge denied Fisch’s original request for the return of the $80,600. (CR Supp.
12
acceptance of the stolen funds). As such, the trial court did not err in denying
Fisch’s petition for the return of the stolen funds. Point of error two is meritless
and should be overruled.
67-68). Since Fisch was made whole with regard to the seized money, he did not have a superior
right to the seized money.
13
CONCLUSION
It is respectfully submitted that all things are regular and the trial court’s
ruling should be affirmed.
DEVON ANDERSON
District Attorney
Harris County, Texas
/s/ Dan McCrory
DAN McCRORY
Assistant District Attorney
Harris County, Texas
1201 Franklin, Suite 600
Houston, Texas 77002
(713) 755-5826
TBC No. 13489950
mccrory_daniel@dao.hctx.net
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CERTIFICATE OF SERVICE
This is to certify that a copy of the foregoing instrument has been mailed to
the following address:
Regina Bacon Criswell
Attorney at Law
Carriage Place
7803 Bent Briar
San Antonio, Texas 78250
/s/ Dan McCrory
DAN McCRORY
Assistant District Attorney
Harris County, Texas
1201 Franklin, Suite 600
Houston, Texas 77002
(713) 755-5826
TBC No. 13489950
CERTIFICATE OF COMPLIANCE
The undersigned attorney certifies that this computer-generated document
has a word count of 2,834 words, based upon the representation provided by the
word processing program that was used to create the document.
/s/ Dan McCrory
DAN McCRORY
Assistant District Attorney
Harris County, Texas
1201 Franklin, Suite 600
Houston, Texas 77002
(713) 755-5826
TBC No. 13489950
Date: 1/29/2015
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