Barbara Regina Schlein v. Anthony Griffin ( 2015 )

ACCEPTED
01-14-00799-cv
FIRST COURT OF APPEALS
HOUSTON, TEXAS
5/4/2015 2:29:53 PM
CHRISTOPHER PRINE
CLERK
CAUSE NO. 01-14-00799-cv
FILED IN
1st COURT OF APPEALS
IN THE COURT OF APPEALS HOUSTON, TEXAS
5/4/2015 2:29:53 PM
FOR THE FIRST DISTRICT OF TEXAS CHRISTOPHER A. PRINE
Clerk
HOUSTON, TEXAS
BARBARA REGINA SCHLEIN,
Appellant/Cross-Appellee,
vs.
ANTHONY P. GRIFFIN,
Appellee/Cross-Appellant.
REPLY BRIEF OF APPELLANT
BARBARA REGINA SCHLEIN
Stephen H. Cagle
State Bar No. 24045596
Heather Panick
State Bar No. 24062935
CHRISTIAN, SMITH & JEWELL LLP
2302 Fannin, Suite 500
Houston, Texas 77002
t: (713) 659-7617
f: (713) 659-7641
ATTORNEYS FOR APPELLANT
ORAL ARGUMENT REQUESTED
TABLE OF CONTENTS
TABLE OF CONTENTS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ii
INDEX OF AUTHORITIES. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . iii
SUMMARY OF THE ARGUMENT. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
ARGUMENT.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
I. Appellee Lacked Standing to Bring Suit in his Own Name.. . . . . . . . 5
II. The Trial Court did not Err in Denying Cross-Appellant’s JNOV
on the Deceptive Trade Practices Questions Submitted to the
Jury. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
III. Error as to Rebuttal Witnesses was Preserved . . . . . . . . . . . . . . . . . 11
CONCLUSION AND RELIEF REQUESTED.. . . . . . . . . . . . . . . . . . . . . . . . . . . 12
CERTIFICATE OF SERVICE. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
CERTIFICATE OF COMPLIANCE.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
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INDEX OF AUTHORITIES
Cases
Arkoma Basin Exploration Co., Inc. v. FMF Associates 1990-A, Ltd.,
249 S.W.3d 380, 387 (Tex. 2008). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
Bailey v. Vanscot Concrete Corp., 894 S.W.2d 757, 759-761
(Tex. 1995). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
Chilkewitz v. Hyson, 22 S.W.3d 825, 829, 830 (Tex. 1999).. . . . . . . . . . . . . . . 9, 10
Durbin v. Dal-Briar Corp., 871 S.W.2d 263, 268-269, 273
(Tex. App.–El Paso 1994, writ denied).. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
Emmett Properties, Inc. v. Halliburton Energy Services, Inc.,
167 S.W.3d 365, 371 (Tex. App.–Houston [14th Dist.] 2005, pet. denied). . . . . . . 8
Golden Eagle Archery, Inc. v. Jackson, 24 S.W.3d 362 (Tex. 2000). . . . . . . . . . 11
Interstate Northborough P’ship, 66 S.W.3d 213, 220 (Tex. 2001).. . . . . . . . . . . 12
Sixth RMA Partners v. Sibley, 111 S.W.3d 46, 56 (Tex. 2003).. . . . . . . . . . . . . . . 9
Statutes
Tex. Bus. Orgs. Code § 21.551. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
Other Authorities
Tex. R. Civ. P. 28. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
Tex. R. Evid. 406.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
Standards of Review in Texas, 38 St. Mary’s L.J. 47, 75 (2006). . . . . . . . . . . . . . 12
Tex. R. Evid. 103(a)(1). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
SUMMARY OF ARGUMENT
Appellee Anthony Griffin admits that “A Griffin Lawyers” was never registered
as an assumed name; he also admits that “Anthony P. Griffin Inc.” is defunct. These
are the only “parties” to the agreement with Barbara Schlein. Griffin drafted the
contract at issue, and chose to contract through those “parties;” he must live with those
terms now.
Furthermore, Griffin’s reliance on Rule 28 to save his claim is misplaced
because the Rules do not apply to entities with no legal existence. His status as
“owner” of both entities does not give him the right to enforce his corporation’s claim.
Finally, the trial court abused its discretion by preventing Schlein from
effectively rebutting Griffin’s claim that it was his “routine practice” to keep his
clients informed, and by admitting dozens of unsigned letters based on this
presumption. Further, Schlein preserved her complaint to the admission of
undisclosed rebuttal witnesses on this point by timely objecting to the trial court’s
decision to permit such undisclosed witnesses.
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ARGUMENT
I. Appellee Lacked Standing to Bring Suit in his Own Name
Griffin is not a party to the agreement that is the basis of this lawsuit. Stripped
to its essentials, Griffin argues he can enforce his corporation’s contract because he
is its sole shareholder. This is not the law in Texas, and Griffin, a lawyer, should
know better.
The contract at issue is between Barbara Schlein and “A Griffin Lawyers /
Anthony P. Griffin, Inc.” [PX-1] Griffin originally brought suit in his individual
capacity. When challenged in the trial court, Griffin responded by adding “A Griffin
Lawyers” as a party. [CR-628] Yet Griffin brazenly admits in his Response that “A
Griffin Lawyers” was never duly registered as a d/b/a of any entity. (Response Brief,
at 10). The trial court erred by giving legal significance to this nonexistent entity.
Griffin’s conduct in this case amply illustrates the evil which the laws on
assumed names were designed to suppress. In 2012, in the Southern District of Texas,
Griffin stated under penalty of perjury that “A Griffin Lawyers” was the assumed
name of Anthony P. Griffin Inc. [CR-422, ln 1-18; CR 522] This is consistent with the
contract at issue, which pairs “A Griffin Lawyers / Anthony P. Griffin Inc.” as the
contracting party. [PX-1] In 2014, when this was called into question, Griffin claimed
“A Griffin Lawyers” as his own; he specifically denied that it had ever been used by
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his corporation. [CR-640]
Because the only evidence supporting Griffin’s standing is the inconsistent
testimony of an interested witness, the trial court erred in finding that Griffin had
standing to maintain suit.
Griffin’s fallback position is one which has no support in the law. As his
response brief states:
In the case at bar, the assumed name was not a valid assumed name (not
filed with the county clerk), this however did not restrict Anthony P.
Griffin, the owner of both the defunct corporation and the non-registered
assumed name to bring the claim to enforce the contract in question for
services performed by Anthony P. Griffin.
Contrary to Griffin’s claim, the owner of a defunct corporation may not enforce claims
on behalf of the corporation. See Emmett Properties, Inc. v. Halliburton Energy
Services, Inc., 167 S.W.3d 365, 371 (Tex. App.—Houston [14th Dist.] 2005, pet.
denied).
In Emmett, the shareholders of a defunct corporation sought to assert a claim of
property damage on behalf of the corporation. The Fourteenth Court denied their
request to intervene: “A corporate stockholder cannot recover damages personally for
a wrong done solely to the corporation, even though he may be injured by that wrong.”
The Emmett Court noted that, by statute and necessity, a stockholder’s right to assert
a claim is necessarily limited to a derivative action. See Tex. Bus. Orgs. Code §
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21.551. “Even though stockholders may sustain indirect losses, they have no
independent right to bring an action for injuries suffered by the corporation.” Id.
(emphasis in original). Thus Griffin may not assert claims on behalf of his
corporation.
Griffin cites two cases to support his capacity argument. Neither one is
applicable to the facts as presented here. In Sixth RMA Partners v. Sibley, 111 S.W.3d
46 (Tex. 2003), the defendant never raised the issue of a lack of assumed name
certificate until the case was in the Supreme Court; that court held that defendant had
waived the issue. Id. at 56. Here Defendant properly raised the issue under Rule 93,
moved for summary judgment on the issue, and vigorously contested whether Griffin
had produced any evidence that he had used “A Griffin Lawyers” as an assumed name.
[CR 481-567; CR 699-726] Sixth RMA Partners does not apply.
Next, Appellee’s reliance on Chilkewitz v. Hyson, 22 S.W.3d 825 (Tex. 1999)
is misplaced. Chilkewitz involved Tex. R. Civ. P. 28's application to a malpractice
claim. The claim was erroneously filed against a physician individually when it was
the doctor’s professional association that performed the services. Id. The Supreme
Court applied Tex. R. Civ. P. 28 to Chilkewitz’s claim, holding that because the
association had, in effect, done business in Dr. Hyson’s name, suing the doctor was
effective to sue the corporation. Id. at 829.
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However, Chilkewitz does not apply because, as the Supreme Court noted, Rule
28 does not apply to defunct corporations, which cannot do business “under an
assumed name or any other name.” Id. at 830 (citing Bailey v. Vanscot Concrete
Corp., 894 S.W.2d 757, 759-761 (Tex. 1995). Griffin has consistently admitted that
Anthony P. Griffin Inc. is “defunct.” In fact, he admitted that the corporation had not
been in good standing since 1998; and public records show it has forfeited its legal
existence. [CR-802] Rule 28 has no application under the facts of this case.
Anthony P. Griffin chose to contract with Barbara Schlein through a defunct
corporation, using a non-registered DBA. It is unclear why he chose to do this. What
is clear is that, under Texas law, neither the “defunct” corporation nor the unregistered
assumed name may use the courts of the State to enforce claims. The trial court’s
decision, permitting the suit to go forward, was a clear abuse of discretion.
II. The Trial Court Created a Misleading Impression by Excluding
Appellant’s Habit and Rebuttal Evidence
The trial court excluded all mention of 29 grievances filed against Anthony
Griffin; allowed only cross-examination over three grievances which were final; and
then permitted rebuttal testimony by Griffin’s witnesses. The trial court’s decision
allowed Griffin to foster a false impression in the minds of the jury and vitiated Ms.
Schlein’s defense. In doing so, the trial court erred; this error probably resulted in
rendition of an improper verdict.
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The 32 excluded grievances were admissible for several reasons: because
Griffin “opened the door” to their admission [RR 6 165:7-18]; to rebut Griffin’s
testimony about the “habit or routine practice” of his office [RR 6, 165:7-18]; and as
similar happenings evidence [Brief of Appellant 17-22]. They were also germane to
Schlein’s claims for exemplary damages. [Id. at 22-23]
Appellee’s argument that the grievances about his law practice were properly
excluded because they were character evidence is without merit. The argument
assumes that complaints about how Griffin ran his office are directed at him
personally. Furthermore, Tex. R. Evid. 406 specifically authorizes evidence of both
“habit of a person” and the “routine practice of an organization.” Since, by definition,
grievances filed with the State Bar of Texas would have to relate to the practice of law,
there is no basis for contending that these complaints were offered to prove Griffin’s
bad character.
Further, when a trial court’s evidentiary rulings permit one party to create a
false impression in the minds of the jury, reversible error is shown. Durbin v.
Dal–Briar Corp., 871 S.W.2d 263, 268–69, 273 (Tex.App.-El Paso 1994, writ denied),
overruled in part on other grounds by Golden Eagle Archery, Inc. v. Jackson, 24
S.W.3d 362 (Tex.2000)
Here the trial court’s ruling permitted Griffin to pose as a paragon of virtue
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while painting Schlein as some kind of lone crank. But Schlein was not alone; there
were at least two dozen other clients who felt the same way about Griffin. The trial
court’s ruling deprived Schlein of her most effective weapon to counter Griffin’s
claims.
Finally, when reviewing evidentiary complaints, the reviewing court must
consider the entire record. See e.g. Interstate Northborough P’ship, 66 S.W.3d 213,
220 (Tex. 2001). Put another way, the complained-of errors cannot be viewed in
isolation. As one leading commentator noted:
One error under scrutiny will be considered against the whole record,
including the other errors in the case. If the other errors compound the
harm caused by the error under scrutiny, then reversible error exists from
a review of the record as a whole. If the other errors compound the harm
caused by the error under scrutiny, then reversible error exists from a
review of the record as a whole.
W. Wendell Hall, Standards of Review in Texas, 38 St. Mary’s L.J. 47, 75
(2006)(emphasis supplied).
Here, when viewed in context, it is apparent that the trial court’s ruling probably
resulted in an improper verdict. Consider first that, based on Appellee’s testimony of
“habit or routine practice,” the jury was allowed to take dozens of unsigned letters
retrieved from Appellee’s hard drive into the jury room. These letters were admitted
wholesale, on the strength of Appellee’s “routine practice” testimony, and offered to
prove that he kept Schlein informed. [RR 8 13:24-16:4] The jury was not allowed to
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consider evidence that dozens of Anthony Griffin’s other clients believed that he did
not keep them informed. Even more egregiously, jurors were not allowed to take
Griffin’s public reprimands – public records – into the jury room with them.
Finally, Griffin was permitted to call “rebuttal” witnesses who reinforced
Griffin’s “routine practice” and testified as to his good character. [Brief of Appellant,
at 26-27] In fact, Griffin’s counsel argued to the jury that their testimony showed Ms.
Schlein to be a “fraud.” [RR 12 155:16-20] Griffin thus relied on the absence of all
these complaints to his advantage.
Viewed in this context, the conclusion is clear: the trial court’s rulings put the
scales of justice out of kilter and probably resulted in rendition of an improper verdict.
III. Error as to Rebuttal Witnesses was Preserved
Griffin’s claim that Ms. Schlein waived error by failing to object to the
testimony of rebuttal witnesses is without merit because the Rules of Evidence hold
otherwise. Tex. R. Evid. 103(a)(1) states that “[w]hen the court hears objections out
of the presence of the jury and rules that such evidence be admitted, such objections
shall be deemed to apply to such evidence when it is admitted before the jury without
the necessity of repeating those objections.” Ms. Schlein did just that: she raised a
specific objection to nondisclosed witnesses with the trial court, outside of the
presence of the jury, after the charge conference. [RR 9 58:17-24] Counsel engaged
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in brief argument about whether the need for such rebuttal witnesses should have been
reasonably anticipated, as required under the Rules. [RR 9 58:25-59:5] At that point,
the trial court had not ruled on the admissibility of the grievances; she promised a
ruling on both issues when trial reconvened. [Id. 59:6-21]
The reporter’s record resumes in the middle of Griffin’s argument about whether
the need for rebuttal witnesses could have been reasonably anticipated. [RR 10 5:1-7]
The trial court makes it clear that she has already ruled on limiting the admissibility
of the grievances. [RR 10 5:8-9] See also RR 11 163:9-168:19](formal bill of
exception memorializing trial court’s ruling on grievances) The trial court eventually
ruled that a limited number of rebuttal witnesses would be admitted, impliedly
overruling Ms. Schlein’s objection. [RR 10 6:13-17]
“[T]he cardinal rule for preserving error is that an objection must be clear
enough to give the trial court an opportunity to correct it.” Arkoma Basin Exploration
Co., Inc. v. FMF Associates 1990-A, Ltd., 249 S.W.3d 380, 387 (Tex. 2008). This
record shows the trial court was made aware of Ms. Schlein’s complaint and ruled
accordingly. Error is preserved.
CONCLUSION AND RELIEF REQUESTED
Appellee’s response admits to relying on an incorrect theory of law to bring suit
in his individual capacity. Appellee also fails to show that the exclusion of the dozens
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of grievances against him was harmless. Further, error was preserved with respect to
the admission of undisclosed testimony from rebuttal witnesses. Appellant Barbara
Regina Schlein therefore prays that, for the reasons set forth in her briefs filed in this
appeal, the judgment in favor of Anthony Griffin, individually, be reversed and
judgment rendered in her favor; alternatively, that judgment be reversed as set forth
above, and in her original Brief; and for all further relief to which she may be justly
entitled.
Respectfully submitted,
CHRISTIAN , SMITH & JEWELL, LLP
By: //s// Stephen H. Cagle, Jr.
Stephen H. Cagle, Jr.
State Bar No. 24045596
scagle@csj-law.com
Heather Panick
State Bar No. 24062935
hpanick@csj-law.com
2302 Fannin, Suite 500
Houston, Texas 77002
Telephone: (713) 659-7617
Facsimile: (713) 659-7641
ATTORNEYS FOR APPELLANT/
CROSS-APPELLEE
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CERTIFICATE OF SERVICE
I do hereby certify that a true and correct copy of the above and foregoing
instrument has been forwarded to all counsel of record via the Rules on this the 4th
day of May, 2015
Ms. Norma Venso
830 Apollo
Houston, Texas 77058
Facsimile: (281) 286-9990
Telephone: (409) 789-8661
By: //s// Stephen H. Cagle, Jr.
STEPHEN H. CAGLE, JR.
CERTIFICATE OF COMPLIANCE
Pursuant to Tex. R. App. P. 9.4(i)(2)(B), I hereby certify that Appellant Barbara
Schlein’s Brief in Reply contains less than 15,000 words (counting all parts of the
document). Specifically, this brief was prepared using WordPerfect and according to
its word-count function, this document contains 2,646 words in total. Further, the
typeface used in this brief is no smaller than 14-point, except for footnotes, which are
no smaller than 12-point.
By: //s// Stephen H. Cagle, Jr.
STEPHEN H. CAGLE, JR.
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