Gray Law, L.L.P. v. T & H Partners, Ltd. ( 2009 )

COURT OF APPEALS
SECOND DISTRICT OF TEXAS
FORT WORTH
NO. 2-08-387-CV
GRAY LAW, L.L.P. APPELLANT
V.
T & H PARTNERS, LTD. APPELLEE
------------
FROM THE 48TH DISTRICT COURT OF TARRANT COUNTY
------------
MEMORANDUM OPINION 1
------------
I. Introduction
In six issues, Appellant Gray Law, L.L.P. appeals the trial court’s order
granting summary judgment and a motion to dismiss in favor of Appellee T &
H Partners, Ltd. Because we conclude that the underlying issues are moot, we
dismiss this appeal for lack of jurisdiction.
II. Factual and Procedural History
1
… See Tex. R. App. P. 47.4.
In 2002, Katheryn Gray and Jay Gray filed for divorce. In March 2005,
Jay, a partner in Gray Law entered into a rule 11 agreement with Katheryn
authorizing the sale of Gray Law’s lot and building and asking the divorce court
to appoint James Handy as receiver to accomplish the sale. In June 2005,
Handy executed a contract for sale of the property and filed a receiver’s motion
for confirmation of contract.
During a hearing on the motion, Jay argued that Gray Law was not
subject to his and Katheryn’s rule 11 agreement, that the property was not part
of the community estate, and that Gray Law had not appeared before the
divorce court at the time Jay and Katheryn entered into the rule 11 agreement.
The divorce court noted, however, that Jay had agreed to the sale and that the
only other partner in Gray Law, John R. Howie, Jr., had also agreed to the sale.
At the conclusion of the hearing, the divorce court granted the motion for
confirmation of the contract and ordered that the net proceeds from the sale of
the property be deposited into the court registry.
In July 2005, Gray Law filed a petition for writ of mandamus in this court
requesting emergency relief, contending that the divorce court’s order
appointing a receiver over partnership property and approving the receiver’s sale
of the property was void because the partnership’s property was not subject to
the community estate and was sold without notice or hearing to the
2
partnership. In August 2005, this court issued a memorandum opinion denying
Gray Law’s requested relief. In re Gray Law, L.L.P., No. 02-05-00271-CV,
2005 WL 1838967, at *1 (Tex. App.—Fort Worth Aug. 3, 2005, no pet.)
(mem. op.). In September 2005, Handy conveyed the subject property to 121
Properties, L.P. and filed a motion to approve the final sale report.
During a hearing on the motion, Gray Law reiterated the same objections
to the receiver selling the property that it had made during the previous hearing.
At the conclusion of the hearing, the divorce court approved the order
submitted by Handy and ordered that the monies from the sale be placed in the
court registry for Gray Law. In November 2005, Gray Law filed a petition for
writ of mandamus in this court arguing that the proceeds of the sale should be
paid to Gray Law. In April 2006, this court issued a memorandum opinion in
which we concluded that the monies from the sale of the subject property
belonged to the partnership and therefore should be paid to Gray Law. In re
Gray Law, L.L.P., No. 02-05-00379-CV, 2006 WL 1030206, at *4 (Tex.
App.—Fort Worth Apr. 20, 2006, no pet.) (mem. op.). In May 2006, the
divorce court signed an order paying the monies to Gray Law.
In December 2006, the divorce court entered a final judgment in Jay and
Katheryn’s divorce proceedings that dismissed all of Gray Law’s claims against
Katheryn. In March 2007, Gray Law and Jay, individually, gave notice of
3
appeal from the December 2006 final judgment. Gray Law argued that the
divorce court lacked jurisdiction over it at the time the divorce court approved
the sale of Gray Law’s property and therefore the sale was void. In November
2007, this court expressed its concern that, because the proceeds from the sale
of the subject property had been disbursed to Gray Law, the appeal was moot
and would be so adjudicated absent a showing of grounds for continuation of
the appeal. Jay and Gray Law responded in writing that they had “no
objection” to the appeal being dismissed as moot. In response, this court
issued a memorandum opinion and judgment that dismissed the appeal as moot.
Gray v. Gray, No. 02-07-00099-CV, 2008 WL 110450, *1 (Tex. App.— Fort
Worth Jan. 10, 2008, no pet.) (mem. op.).
In February 2007, Gray Law filed a trespass to try title action against T
& H—the current owner of the subject property—asserting that, because the
trial court lacked subject matter jurisdiction over Gray Law in the prior
proceedings, the divorce court’s orders appointing a receiver and approving the
sale of Gray Law’s property were void. In response, T & H filed both a motion
to dismiss as moot and a no-evidence motion for summary judgment. In August
2008, the trial court granted both motions in favor of T & H. This appeal
followed.
III. Acceptance of the Benefits
4
On appeal, Gray Law challenges the divorce court’s orders appointing a
receiver over, and approving the sale of, Gray Law’s property. Specifically,
Gray Law argues that because the divorce court, in the prior proceedings,
lacked jurisdiction to enter the orders, the orders were void and therefore a
controversy exists, in the current proceedings, as to the property’s chain of
title. T & H, however, asserts that Gray Law’s acceptance of the sale proceeds
in the prior proceedings renders this appeal moot and thereby deprives this
court of jurisdiction.2 Thus, as a threshold matter, we must determine whether
we have jurisdiction over this appeal.
Under the acceptance of benefits doctrine, a party who has voluntarily
accepted the benefits of a judgment may not thereafter prosecute an appeal
from it. Carle v. Carle, 149 Tex. 469, 234 S.W.2d 1002, 1004 (1950). There
are two exceptions to this doctrine. First, a party who has voluntarily accepted
benefits of a judgment may prosecute an appeal if it would still be entitled to
those benefits upon reversal of a judgment and retrial of the case. Id. Second,
a party may prosecute an appeal if it must accept the benefits of the judgment
2
… In oral arguments before this court, Gray Law claimed that T & H had
failed to raise the acceptance of benefits doctrine in its motion for summary
judgment and therefore had waived this issue on appeal. However, the record
reflects that T & H raised the acceptance of benefits doctrine in its motion to
dismiss as moot.
5
because of financial duress. Haggard v. Haggard, 550 S.W.2d 374, 376 (Tex.
Civ. App.—Dallas 1977, no writ). In the latter situation, the party is said not
to have “voluntarily” accepted the benefits of the judgment. See id. If the
doctrine applies, the appeal is rendered moot and the proper disposition is
dismissal. Bloom v. Bloom, 935 S.W.2d 942, 945 (Tex. App.—San Antonio
1996, no writ); City of Mesquite v. Rawlins, 399 S.W.2d 162, 169 (Tex. Civ.
App.—Tyler 1966, writ ref’d n.r.e.).
Here, Gray Law concedes that it accepted the proceeds from the sale of
its property. Therefore, we must determine whether one of the exceptions
applies.
A. Entitlement to the Proceeds
The evidence does not support, and Gray Law does not argue, that it
would be entitled to the sale proceeds upon reversal of the judgment and retrial
of the case. See Carle, 234 S.W.2d at 1004. On the contrary, Gray Law,
during oral arguments, stated that it would be willing to return the proceeds
upon reversal of the judgment. Therefore, we hold the first exception—that is,
entitlement to the proceeds upon reversal of the judgment—does not apply.
6
B. Economic Duress
As to the second exception, economic duress, Gray Law argues that it
only accepted the proceeds because it “was left no alternative.” In support of
its argument, Gray Law directs our attention to the petition for writ of
mandamus that it filed in this court, in which Gray Law, in essence, asked this
court to stop the sale of its property and we denied relief. However, the
economic duress exception may be claimed only when the party against whom
it is claimed was responsible for the claimant’s financial distress. Deer Creek
Ltd. v. North Am. Mortgage Co., 792 S.W.2d 198, 203 (Tex. App.—Dallas
1990, no writ); Gaspard v. Logix Commc’ns Corp., No. 14-00-00688-CV, 2001
WL 1590080, at *2 (Tex. App.—Houston [14th Dist.] Dec. 13, 2001, no pet.)
(not designated for publication). Here, Gray Law does not claim, nor does it
produce evidence indicating, that T & H was responsible for its financial
distress.3 Therefore, because T & H is not the party responsible for Gray Law’s
3
… Gray Law had the opportunity to overcome the acceptance of benefits
doctrine when it appealed the divorce court’s final judgment and this court sent
a letter to Gray Law stating that the appeal would be dismissed as moot unless
a showing of grounds for continuation was provided. See Smith v. Smith, 143
S.W.3d 206, 212 (Tex. App.—Waco 2004, no pet.) (holding that, because of
the economic circumstances created by the court’s property division, wife’s
acceptance of the benefit was not voluntary and therefore husband’s argument
as to the acceptance of benefits doctrine did not apply). At that time, however,
Gray Law responded that it had no objection to the appeal being dismissed as
moot. See Gray, 2008 WL 110450, at *1.
7
financial distress, we hold the second exception to the acceptance of benefits
doctrine does not apply.
IV. Conclusion
For the reasons stated above, we conclude the acceptance of benefits
doctrine applies and therefore renders this appeal moot. See Bloom, 935
S.W.2d at 945; see also City of Mesquite, 399 S.W.2d at 164. Accordingly,
we dismiss this appeal for lack of jurisdiction.
BOB MCCOY
JUSTICE
PANEL: DAUPHINOT, GARDNER, and MCCOY, JJ.
DELIVERED: August 6, 2009
8