Michel B. Moreno v. Alan Halperin, as Trustee of the GFES Liquidation Trust ( 2021 )

DISMISS and Opinion Filed December 14, 2021
S In The
Court of Appeals
Fifth District of Texas at Dallas
No. 05-20-00858-CV
MICHEL B. MORENO, Appellant
V.
ALAN HALPERIN, AS TRUSTEE OF THE GFES LIQUIDATION TRUST,
Appellee
On Appeal from the 193rd Judicial District Court
Dallas County, Texas
Trial Court Cause No. DC-20-01025
MEMORANDUM OPINION
Before Justices Myers and Garcia 1
Opinion by Justice Garcia
Michael Moreno and MOR MGH Holdings, LLC (“Moreno”) appeal the
denial of a motion to vacate a foreign judgement domesticated in Texas.
Concluding the appeal is untimely, we dismiss for want of jurisdiction.
I. BACKGROUND
Moreno served as Chairman of the Board of Directors and CEO of
Greenfield Energy Services, Inc. (“Greenfield”) until its Chapter 11 liquidation in
1
Chief Justice Burns, sitting for Justice Molberg, recused himself from this matter.
Delaware bankruptcy proceedings. During the bankruptcy, Alan Halperin, trustee
of the GFES Liquidation Trust (“Trustee”) commenced adversary proceedings
against Moreno, MOR MGH and another related entity on various claims.
As relevant here, after a trial on the merits, the bankruptcy court found that
Moreno tortiously interfered with MOR MGH’s obligations because he wrongfully
diverted monies intended for Greenfield and used the funds to purchase a personal
home in Dallas, Texas (the “Highland Park Property”). The court recommended
that damages be awarded on the trustee’s tortious interference claim and that a
constructive trust in the amount of $10 million be imposed on the Highland Park
Property. The United State District Court agreed and entered final judgment
against Moreno for $16,607,081. in damages and pre-judgment interest on that
amount and a $10 million constructive trust on the Highland Park Property. See In
re Greenfield Energy Services, Inc., 610 B.R. 760, 775 (D. Del. 2019). The Third
Circuit Court of Appeals affirmed the district court’s judgment. See In re Green
Field Energy Services, Inc., 834 F. Appx 695, 698 (3rd Cir. 2020) (unpublished)
(collectively, the “Foreign Judgment”).
On January 22, 2020, the Foreign Judgment was domesticated in the Texas
state district court (the “Texas Judgment”) in accordance with the Uniform
Enforcement of Foreign Judgments Act (“UEFJA”). See TEX. CIV. PRAC. & REM.
CODE ANN. §§ 35.001–.008. Moreno filed a motion to vacate the Texas Judgment
–2–
on February 14, 2020, arguing that the Texas homestead exemption precludes
enforcement of the constructive trust.
On February 21, 2020, Moreno’s wife (“Wife”) filed a petition in
intervention asserting a claim to quiet title on the Highland Park Property. The
Trustee subsequently asserted a fraudulent transfer claim against Wife and
Moreno’s sister and a claim for judicial foreclosure to enforce the Texas Judgment
against the Highland Park Property.
On September 10, 2020, the trial court denied Moreno’s motion to vacate.
Moreno filed his notice of appeal from that order on September 28, 2020.
II. ANALYSIS
Moreno argues that we have jurisdiction over this appeal, or alternatively,
that the appeal is interlocutory because there is no final judgment. Moreno further
argues that the trial court’s order denying the motion to vacate is void because the
constructive trust imposed by the Foreign Judgment violates Texas law protecting
homestead exemptions. The Trustee argues that we have no jurisdiction over the
appeal because Moreno’s notice of appeal was untimely. We agree with the
Trustee.
The United States Constitution requires that each state give full faith and
credit to the public acts, records, and judicial proceedings of every other state. U.S.
Const. art. IV, § 1. Thus, a judgment creditor may enforce a foreign judgment in
Texas under Texas’s version of the UEFJA by filing an authenticated copy of the
–3–
judgment in a Texas court. See TEX. CIV. PRAC. & REM. CODE ANN. § 35.003(a).
When a judgment creditor proceeds under the UEFJA, the creditor’s filing of the
judgment is “both a plaintiff's original petition and a final judgment: the filing
initiates the enforcement proceeding, but it also instantly creates a Texas judgment
that is enforceable.” Moncrief v. Harvey, 805 S.W.2d 20, 22 (Tex. App.—Dallas
1991, no writ).
Any motion to contest the recognition of a foreign judgment filed within 30
days after the foreign judgment is filed operates as a motion for new trial. Id. at 23.
When, as here, a timely post-judgment motion extending the appellate timetable is
filed, a notice of appeal is due 90 days after the date the judgment is signed. See
TEX. R. APP. P. 26.1(a).
The trustee filed the Foreign Judgment on January 22, 2020. Moreno filed a
timely motion to vacate on February 14, 2020, which acted as a motion for new
trial. Thus, the notice of appeal was due on April 21, 2020. See TEX. R. APP. P.
26.1(a). Moreno’s notice of appeal, however, was not filed until September 28,
2020. This notice was untimely. See id. Without a timely filed notice of appeal,
this Court lacks jurisdiction. See id. 25.1(b); In re United Servs. Auto Ass’n, 307
S.W.3d 299, 307 (Tex. 2010) (orig. proceeding); Brashear v. Victoria Gardens of
McKinney, L.L.C., 302 S.W.3d 542, 545 (Tex. App.—Dallas 2009, no pet.) (timely
notice of appeal is jurisdictional prerequisite).
–4–
Moreno argues that he is appealing the trial court’s September 10, 2020
written order denying his motion to vacate. But this order is void because the
court’s plenary power expired on May 6, 2020. See TEX. R. CIV. P. 329b(e); In re
Dickason, 987 S.W.2d 570, 571 (Tex. 1998) (judicial action taken after trial court’s
plenary power expires is nullity and renders action void).
Specifically, when a motion for new trial is not determined by written order
signed within seventy-five days after the judgment, the motion is overruled by
operation of law. TEX. R. CIV. P. 329b (c); In re Panchakarla, 602 S.W.3d 536,
539 (Tex. 2020). The trial court’s plenary power expires thirty days after a timely
filed motion for new trial is denied or overruled by operation of law, extending to a
maximum of 105 days after the entry of judgment. See TEX. R. CIV. P. 329b(c), (e);
L.M. Healthcare, Inc. v. Childs, 929 S.W.2d 442, 444 (Tex. 1996). Accordingly,
the trial court’s plenary power over the January 22, 2020 Texas Judgment expired
on May 6, 2020 and the September 10, 2020 written order, entered approximately
four months after such expiration, is void. See Dickson, 987 S.W.2d at 571; see
also State ex rel Latty v. Owens, 907 S.W.2d 484, 486 (Tex. 1995) (per curiam).
Our jurisdiction extends only so far as the trial court’s jurisdiction. See J.P.
Morgan Chase Bank, N.A. v. Del Mar Properties, L.P., 443 S.W.3d 455, 459 (Tex.
App.—El Paso 2014, no pet.). When, as here, an order or judgment is rendered by
a court after its plenary power has expired, an appellate court’s jurisdiction is
–5–
limited to setting aside the order or judgment and dismissing the appeal for want of
jurisdiction. See Latty, 907 S.W.2d at 486.
Moreno further argues that the appeal is timely because the third-party
petition the Trustee filed against Moreno’s sister on August 27 prevented the
judgement from being final. According to Moreno, the judgment did not become
final until May 7, 2021, when Moreno’s sister obtained an order sustaining her
special appearance. 2 Relying on this date, Moreno insists that his appeal was
timely. Moreno also argues that the notice of appeal was premature because Wife’s
intervention and the ancillary third-party claims rendered the Texas Judgment
interlocutory. We are not persuaded by these arguments.
The Foreign Judgment became a final Texas Judgment on January 22, 2020,
the day it was filed. See Int’l Armament Corp. v. Stocker & Lancaster LLP, 565
S.W.3d 823, 826 (Tex. App.—Houston [14th Dist.] 2018, no pet.) (an
authenticated foreign judgment constitutes a final judgment on the day it is
properly filed in Texas). “By its very nature, the UEFJA does not contemplate or
authorize the entry of a judgment replacing the foreign judgment.” Jahan Tigh v.
De Lage Landen Financial Svs., 545 S.W.3d 714, 721 (Tex. App.—Fort Worth
2018, no pet.); see also Moncrief, 805 S.W.2d at 23 (explaining that post judgment
2
The Trustee’s appeal of that order, however, was not an appeal from a final judgment. Rather, it was
interlocutory. See MBM Family Trust v. GE Oil & Gas, LLC, No. 05-20-01103-CV, 2021 WL 4236874,
at *5 (Tex. App.—Dallas Sept. 17, 2021 no pet. h.) (mem. op.).
–6–
motions seek to contest enforceability of foreign judgment, not adjudication of
rights, because rights were adjudicated when the judgment was originally
imposed). In fact, it is well settled that a Texas trial court has no jurisdiction to set
aside another state’s judgment and return the parties to the positions they occupied
before the foreign judgment was rendered. See Mindis Metals, Inc. v. Oilfield
Motor & Control, Inc., 132 S.W.3d 477, 483 (Tex. App.—Houston [14th Dist.]
2004, pet. denied). An intervention and a third-party claim in an enforcement
proceeding do not in any way alter this fact.
Once final, as with judgments originally rendered in Texas, subsequent
proceedings relating to the judgment concern enforcement. A foreign judgment
filed under the UEFJA is treated “in the same manner as a judgment of the court in
which the foreign judgment is filed” and has “the same effect and is subject to the
same procedures, defenses, and proceedings for reopening, vacating, staying,
enforcing, or satisfying a judgment as a judgment of the court in which it is filed.”
TEX. CIV. PRAC. & REM. CODE ANN. § 35.003(b), (c); see also Russo v. Dear, 105
S.W.3d 43, 46 (Tex. App.—Dallas 2003, pet. denied).
“Under the UEFJA, the party seeking to enforce a foreign judgment has the
initial burden to present a judgment that appears on its face to be a final, valid, and
subsisting judgment.” Counsel Fin. Servs., L.L.C. v. David McQuade Leibowitz,
P.C., 311 S.W.3d 45, 51 (Tex. App.—San Antonio 2010, pet. denied). “When a
judgment creditor files an authenticated copy of a foreign judgment, he satisfies his
–7–
burden of presenting a prima facie case for enforcement under the UEFJA. A
debtor may then challenge the enforceability of that judgment (rather than the
judgement itself) by filing a post-judgment motion, typically a motion to vacate.
See Moncrief, 805 S.W.2d at 23; see also Lawrence Sys., Inc. By & Through
Douglas-Guardian Warehouse Corp. v. Superior Feeders, Inc., 880 S.W.2d 203,
208 (Tex. App.—Amarillo 1994, writ denied) (primary purpose for filing a foreign
judgment in Texas is enforcement).
In a post-judgment challenge to enforcement, the burden of establishing why
the judgment should not be given full faith and credit is on the judgment debtor.
Clamon v. DeLong, 477 S.W.3d 823, 825–26 (Tex. App.—Fort Worth 2015, no
pet.). To meet its burden, the judgment debtor must “prove by clear and convincing
evidence that the foreign judgment should not be given full faith and credit.”
Counsel Fin. Servs., L.L.C., 311 S.W.3d at 51.
Moreno provides no authority, nor are we aware of any, that a post-judgment
proceeding to determine whether a foreign judgment should be afforded full faith
and credit somehow transforms the finality of that judgment. To the contrary, the
judgment is either enforceable or it isn’t. See Cumberland Surg. Hosp. of San
Antonio, LLC v. CCA Financial, LLC, No. 04-19-00354-CV, 2019 WL 6499224, at
*5 (Tex. App.—San Antonio Dec. 4, 2019, no pet.) (mem. op.) (describing five
exceptions to full faith and credit requirements). As the record clearly
demonstrates, Wife’s intervention and the Trustee’s ancillary filings all pertain to
–8–
enforcement of the Texas Judgment. Wife seeks to adjudicate her interest in the
Highland Park Property that will be used to satisfy the judgment. Indeed, as
Moreno acknowledges, Wife did not seek relief altering the Trustee’s judgment
against Moreno; “she sought only to assert her own homestead rights in the
[Highland Park Property].” Likewise, the Trustee’s claims against Moreno’s sister
and Wife seek to set aside a transfer of an interest in the property to be foreclosed.
None of these determinations will or could affect the substance of the Foreign
Judgment against Moreno. Nor do they render the final Texas Judgment
interlocutory. Rather, these claims will adjudicate the extent to which that
judgment may be enforced in Texas.
Because the notice of appeal of the trial court’s denial of the motion to
vacate the final judgment was untimely, we dismiss this appeal for want of
jurisdiction. See Tex. R. App. P. 42.3(a).
/Dennise Garcia/
DENNISE GARCIA
JUSTICE
200858F.P05
–9–
S
Court of Appeals
Fifth District of Texas at Dallas
JUDGMENT
MICHEL B. MORENO, Appellant On Appeal from the 193rd Judicial
District Court, Dallas County, Texas
No. 05-20-00858-CV V. Trial Court Cause No. DC-20-01025.
Opinion delivered by Justice Garcia.
ALAN HALPERIN, AS TRUSTEE Justices Myers participating.
OF THE GFES LIQUIDATION
TRUST, Appellee
In accordance with this Court’s opinion of this date, the appeal is
DISMISSED for want of jurisdiction.
It is ORDERED that appellee ALAN HALPERIN, AS TRUSTEE OF THE
GFES LIQUIDATION TRUST recover his costs of this appeal from appellant
MICHEL B. MORENO.
Judgment entered December 14, 2021.
–10–