Maria Reva West Prado v. Maria De Lourdes Ayala Leal ( 2020 )

In The
Court of Appeals
Ninth District of Texas at Beaumont
__________________
NO. 09-19-00154-CV
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MARIA REVA WEST PRADO, Appellant
V.
MARIA DE LOURDES AYALA LEAL, Appellee
__________________________________________________________________
On Appeal from the 284th District Court
Montgomery County, Texas
Trial Cause No. 16-12-13925-CV
__________________________________________________________________
MEMORANDUM OPINION
In two issues on appeal, appellant María Reva West Prado (“West Prado”)
complains that the trial court erred by denying her Rule 12 motion to show authority
and her motion to stay. For the reasons explained herein, the trial court’s judgment
is affirmed in part, vacated in part, and remanded.
Background
Banorte-Ixe Securities International, Ltd. (“Banorte”), a broker-dealer
registered with the U.S. Securities and Exchange Commission and a member of The
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Financial Industry Regulatory Authority, Inc., filed a petition in interpleader against
West Prado and María de Lourdes Ayala Leal (“Leal”), who are both individuals
residing in Mexico. The interpleader concerns a dispute over a Banorte account
jointly owned by Augustina Prado Díaz (“Augustina”) and West Prado, Augustina’s
niece, which is a multiple-party account with right of survivorship and transfer on
death (“TOD”) designations, and the TOD beneficiaries are Jose Luis Prado Díaz
(“Prado Díaz”), Luciel West Prado, and West Prado. In 1998, West Prado and
Augustina opened a joint brokerage account with Banorte’s predecessor (the “Joint
Account”) in Laredo, Texas, agreeing to submit to personal jurisdiction of the courts
of the State of Texas. As of September 2016, the Joint Account held approximately
$3,289,000.
In its petition, Banorte stated that in July 2015, it received, through the United
States Department of Justice, a letter rogatory seeking documents in connection with
an involuntary guardianship proceeding against Augustina in Nuevo León, Mexico,
which Leal and Prado Díaz, Augustina’s brother, initiated. In February 2016,
Banorte received a letter from Prado Díaz and Leal, who claimed to be the court-
appointed legal guardians of Augustina, demanding the transfer of $2,900,000 from
the Joint Account to a bank in Monterrey, Nuevo León, Mexico. According to
Banorte’s petition, it was unable to determine whether Prado Díaz and Leal had legal
authority to act on Augustina’s behalf and to withdraw or transfer funds from the
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Joint Account, because Prado Díaz and Leal had not sought or obtained an order
from a court of competent jurisdiction in Texas concerning the ownership of the
Joint Account or their authority to direct transactions in the Joint Account. In
February 2016, Banorte froze the funds in the Joint Account and informed Prado
Díaz and Leal that it would not transfer funds from the Joint Account without written
instructions signed by both account holders or their legal representatives or a court
order by a court in the United States.
In March 2016, Banorte received a letter from West Prado’s Texas counsel
explaining that West Prado was contesting Prado Diaz’s guardianship of Augustina
and demanding that Banorte not transfer any funds held in the Joint Account.
Banorte’s petition indicates that West Prado provided Mexican court documents
showing that she had commenced an amparo proceeding in Mexico to set aside the
appointment of Prado Díaz and Leal as Augustina’s legal guardians due to a lack of
summons. According to the documents Prado West provided, the First District Judge
for Civil and Labor Matters in the State of Nuevo León sustained West Prado’s
amparo complaint and Augustina’s guardianship was under review.
In September 2016, Banorte received a letter from Kevin Duddlesten of
McGuire Woods on behalf of Prado Díaz, asserting that Prado Díaz was Augustina’s
guardian and instructing Banorte that no transactions should be allowed on the Joint
Account without notice and consent by Prado Díaz. According to Banorte’s petition,
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in November 2016, Prado Díaz’s counsel from Monterrey, Mexico, sent an email
reiterating that Prado Díaz was Augustina’s guardian, but counsel also
acknowledged that final judgment was pending because West Prado had filed a
constitutional relief action challenging Prado Díaz’s appointment. The record shows
that the First Collegiate Court of Appeals in Civil Matters for the Fourth Circuit of
Mexico (“the Mexican Appeals Court”) found that West Prado’s constitutional relief
action had merit and ordered the First Family Court of the Fourth Judicial District
of Nuevo Leon (“the Mexican Court”) to vacate the judgment finding Augustina
incompetent and appointing Prado Diaz as the guardian of her person and estate.
The Mexican Court vacated its prior judgment and entered a judgment appointing
Leal as guardian of Augustina’s person and estate.
Due to the ongoing dispute between West Prado and Prado Díaz regarding the
right to control the Joint Account, Banorte filed an interpleader, alleging that it was
unable to determine who is entitled to the funds in the Joint Account and offering to
deposit the funds into the Court’s registry to avoid multiple liability and incidental
costs. Banorte requested to be released and discharged from all liability on the Joint
Account and to recover reasonable attorney’s fees and costs. Banorte deposited
$3,627,770.86 from its law firm’s IOLTA account into the Court’s registry. In June
2017, the trial court discharged Banorte and granted Banorte reasonable and
necessary attorney’s fees and costs.
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In June 2018, Leal filed an amended answer to Banorte’s petition in
interpleader, asserting that the Joint Account is held by Augustina and West Prado
as tenants in common and that each of their interests in the Joint Account is based
on their relative contributions to the Joint Account. According to Leal, Augustina
contributed approximately ninety percent of the funds into the Joint Account and
that any claims of control or entitlement to the funds in the Joint Account by West
Prado are barred, in whole or in part, by equitable doctrines. As Augustina’s
guardian, Leal requested that Augustina recover ninety percent of the monies in the
Joint Account, which is the value proportionate to the aggregate contributions
Augustina made to the Joint Account. Leal also filed a motion to substitute Prado
Díaz as Augustina’s temporary guardian, because upon review, the Mexican Court
determined that Prado Díaz should continue to serve as Augustina’s temporary
guardian.
In November 2018, West Prado filed a Rule 12 motion to show authority
under the Texas Rules of Civil Procedure, arguing that Duddlesten did not have
proper authority to represent Augustina’s interests. According to West Prado,
Duddlesten did not have authority to file an answer on behalf of Augustina or Leal,
who was acting in her capacity as supervisor to guardian Prado Díaz. West Prado
argued that under Texas law, the Mexican Court has the sole authority to determine
the rights of the guardian in a case involving Texas domestic assets, and the Mexican
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Court had not given Leal the authority to transfer Augustina’s funds from the Joint
Account. West Prado requested that the court deny Duddlesten permission to
represent Leal or require Duddlesten to conform his pleadings to the limited powers
the Mexican Court had granted Leal as temporary guardian. In the alternative, West
Prado argued that the case should be stayed pending a final ruling by the Mexican
Court.
Leal filed a response to West Prado’s motion to show authority and argued
that as Augustina’s appointed temporary guardian, she had full capacity to represent
Augustina, including the authority to retain counsel to protect Augustina’s interest
in the Joint Account. According to Leal, she is Augustina’s temporary guardian until
the Mexican Appeals Court resolves West Prado’s appeal of Prado Díaz’s
appointment as permanent guardian. Leal argued that the Mexican Court’s order
gave her the authority to take actions to protect Augustina’s interests in the Joint
Account, including retaining counsel. Leal further argued that West Prado’s Rule 12
motion was untimely because it was filed after the parties announced ready for trial,
and was merely an attempt to obtain a continuance in the case, which the trial court
had already denied. According to Leal, the local rules provide that all civil nonjury
cases should be tried or dismissed within twelve months from the appearance date,
and West Prado had ample time to bring the motion during the twenty-three months
the case was pending.
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In November 2018, West Prado filed a motion to dismiss Leal’s intervention
for lack of subject-matter jurisdiction because Leal lacks standing, and West Prado
filed an alternative motion to abate. West Prado argued, among other issues, that the
trial court must grant a stay because a foreign guardianship proceeding had been
previously filed that involves the same parties and issues. In December 2018, West
Prado filed an amended answer, arguing that Leal’s demands that the assets in the
Joint Account be liquidated and transferred to Mexico contradict the terms of the
Joint Account, and Leal’s claims are barred by the equitable doctrines of waiver,
estoppel, laches, offset, unclean hands, contractual defenses, fraudulent conduct,
and/or negligence in making demands. West Prado requested that the trial court find
that she is entitled to independent control of the assets in the Joint Account.
In March 2019, Leal filed a motion for summary judgment requesting that the
trial court enter an order granting Augustina the sum of all deposits she made to the
Joint Account, including a pro rata share of any interest or dividends in the current
balance. In her response, West Prado argued that Leal’s motion was not ripe, because
the trial court had yet to rule on her pending motions addressing jurisdiction and
Leal’s authority to act as Augustina’s guardian. West Prado requested that the trial
court continue the summary judgment hearing until the Mexican Court appoints a
permanent guardian with authority to act on Augustina’s behalf. Leal filed a reply in
support of her motion for summary judgment and argued that the trial court need not
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rule on West Prado’s pending motions to determine the issue of ownership of the
funds in the Joint Account. According to Leal, the trial court has quasi in rem
jurisdiction to determine ownership of the funds, and the guardianship issue does not
impact the trial court’s determination concerning ownership.
In May 2019, the trial court conducted a hearing, during which the trial judge
stated that the issue of ownership of the funds in the Court’s registry is a question of
law, and the facts regarding the deposits made into the Joint Account are undisputed.
According to the trial court, the ownership issue concerns a debate between
Augustina, who is a Mexican guardianship ward, and West Prado. West Prado’s
counsel argued that he filed the Rule 12 motion to show authority because Leal lacks
proper authority to be a guardian over the Joint Account or to request that the funds
in the Joint Account be divided. The trial judge indicated that she was not concerned
about the guardianship issue because her decision is limited to determining
ownership and partitioning the funds in the Joint Account, and it is in the Mexican
Court’s purview to determine who has the rights to Augustina’s portion of the funds
and for what use they may be made. The trial judge explained that she would be
awarding the funds directly to Augustina and not to any of the guardians, and that
the Mexican Court will oversee what happens to the funds.
During the hearing, the trial court heard testimony from Manuel Fletes
Stadeler, an attorney from Mexico, who explained the status of the pending Mexican
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proceedings. Stadeler testified that the pending amparo challenges, among other
issues, how Leal has spent money to hire lawyers in the United States. Stadeler
testified that depending on how the Mexican Appeals Court rules on the amparo,
Leal’s status could change, and everything could become void. According to
Stadeler, if the amparo is granted, everything will become void, and the funds from
the Joint Account would have to be returned to the United States and to Banorte. The
trial judge noted that the funds could not be returned to Banorte, because Banorte is
no longer a party to the case.
After considering the parties’ arguments and Stadeler’s testimony, the trial
court granted Leal’s motion for summary judgment and ordered that Augustina
owned 98.16% of the funds in the Court’s Registry and West Prado owned the
remaining 1.84% of the funds. In its final judgment, the trial court denied West
Prado’s motion to dismiss, plea to the jurisdiction, motion to abate, and also denied
her Rule 12 motion to show authority as being moot because the funds were being
paid directly to Augustina and not her guardians. The trial court ordered Augustina’s
funds to be sent by check payable to Augustina to her address in Mexico. West Prado
appealed.
Analysis
In issue one, West Prado complains that the trial court erred by denying her
Rule 12 motion to show authority and entering a summary judgment. According to
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Prado, the case should be stayed because the Mexican guardianship suit, which
involves the same parties, was filed first, and the effect of a judgment in the
interpleader suit would directly conflict with judgments and orders in the prior
guardianship suit. Prado argues that proceeding to judgment before the Mexican
Court rules would effectively supplant the prior proceeding; disturb principles of
comity, convenience, and orderly procedure; and cause unnecessary cost and waste
of judicial resources. According to Leal, the trial court acted within its discretion in
denying West Prado’s Rule 12 motion as moot because the trial court had
jurisdiction to determine ownership of the funds in the Joint Account pursuant to the
Texas Estates Code, and because West Prado’s argument that a Texas court had not
authorized anyone to represent Augustina’s interests is irrelevant to the trial court’s
determination of ownership, which is a question of law.
Rule 12 of the Texas Rules of Civil Procedure permits a party to challenge an
attorney’s authority to prosecute or defend a lawsuit. Tex. R. Civ. P. 12. A sworn
written motion stating that a party believes the suit is being prosecuted or defended
without authority, served upon the challenged attorney at least ten days prior to the
hearing on the motion, may be heard and determined at any time before the parties
announce ready for trial. Id. At the hearing on the motion, the challenged attorney
has the burden of proof to show sufficient authority to prosecute or defend the suit
on behalf of the other party. Id. If the challenged attorney fails to show authority to
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act, the trial court must “strike the pleadings if no person who is authorized to
prosecute or defend appears.” Id. The primary purpose of a Rule 12 motion is to
enforce a party’s right to know who authorized a suit. New Talk, Inc. v. Sw. Bell Tel.
Co., 520 S.W.3d 637, 644 (Tex. App.—Fort Worth 2017, no pet.).
A trial court’s ruling on a Rule 12 motion is not a decision on the merits or a
determination of ultimate questions of fact. Tanner v. Black, 464 S.W.3d 23, 26
(Tex. App.—Houston [1st Dist.] 2015, no pet.). Rather, “[i]t is simply a pretrial
determination of an attorney’s authority to represent a party.” Id. We review a trial
court’s ruling on a Rule 12 motion for an abuse of discretion. Id. A trial court abuses
its discretion when it acts without reference to any guiding rules or principles.
Worford v. Stamper, 801 S.W.2d 108, 109 (Tex. 1990).
The record shows that on November 16, 2018, West Prado’s counsel filed a
Rule 12 motion challenging Duddlesten’s authority to represent Augustina’s
interests in the Joint Account on behalf of Leal, and the motion included the unsworn
declaration of West Prado. West Prado’s counsel argued that because the Mexican
Court supervising Augustina’s guardianship had only granted Leal limited powers
as Augustina’s temporary guardian to preserve the status quo of Augustina’s assets,
Leal lacked the authority to alter the status of the funds in the Joint Account or to
transfer, spend, compromise, or otherwise access those funds except for Augustina’s
health needs and living expenses.
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Leal filed a response to the Rule 12 motion, arguing that the motion was
untimely and that as Augustina’s temporary guardian she had full capacity to
represent Augustina without restrictions, including the right to retain counsel to
protect Augustina’s property. According to Leal, the Mexican Court appointed her
as Augustina’s temporary guardian to ensure the protection and preservation of
Augustina’s assets, and the Mexican Court determined that the substituted decision-
making authority model would apply, which enables Leal to step into the shoes of
Augustina and make decisions that represent Augustina’s best interests. Leal stated
that after Leal appealed the Mexican Court’s decision appointing Prado Díaz as
Augustina’s permanent guardian, the Mexican Court reappointed her to serve as the
decisionmaker for Augustina, and Leal attached orders from the Mexican Court
verifying that she was Augustina’s temporary guardian. Leal also attached a 2018
Order that the Mexican Court sent to Banorte stating that Leal was responsible for
making decisions to protect Augustina’s interests. West Prado filed a reply to Leal’s
response and argued that her Rule 12 motion was timely and that the purpose of the
motion was to challenge the purported guardian’s lack of authority.
During the hearing, the trial judge noted that the matter concerned a debate
between Augustina and West Prado regarding ownership of the Joint Account and
had nothing to do with the court-appointed guardians. West Prado’s counsel argued
that Leal did not have authority to partition the funds in the Joint Account and that
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there was not proper counsel to speak on Augustina’s behalf, but the trial judge
indicated that her decision was limited to determining the ownership of the funds in
the court’s registry and partitioning those funds to West Prado and Augustina. The
trial court stated that Leal was a court-appointed attorney and the Mexican Court’s
order suggests that Leal has the decision-making authority for Augustina. The trial
court noted that Leal did not bring the lawsuit but was sued as a defendant and as a
representative party of Augustina when Banorte brought the initial interpleader
action, and the sole issue was to determine ownership of the funds in the trial court’s
registry.
Leal’s counsel moved to strike the Rule 12 motion, arguing that it failed to
comply with Rule 12’s requirement that it be a sworn written motion. According to
Leal’s counsel, the ownership of the funds in the court’s registry is an issue of Texas
law. The trial court noted that the account statements from Banorte reflect the
deposits that Augustina and West Prado made to the Joint Account and that 98.16%
of the account funds belong to Augustina and 1.84% belongs to West Prado. See
Tex. Estates Code Ann. § 113.102 (stating that “[d]uring the lifetime of all parties
to a joint account, the account belongs to the parties in proportion to the net
contributions by each party to the sums on deposit unless there is clear and
convincing evidence of a different intent”). The trial judge further noted that the
dispute concerning the guardianship does not change the ownership of the Joint
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Account, and that since Banorte initiated the lawsuit and deposited the funds in the
court’s registry, she had to order the funds out of the court’s registry.
The interpleader action brought by Banorte is quasi in rem, and because the
funds were in Texas and Banorte tendered them into the court’s registry, the trial
court had jurisdiction over the funds to disperse them upon determining ownership.
See Bryant v. United Shortline Inc. Assur. Services, N.A., 972 S.W.2d 26, 29 (Tex.
1998); see also Tex. Estates Code Ann. § 113.102. Any decision by the Mexican
Appeals Court regarding West Prado’s challenge of Prado Díaz’s appointment as
Augustina’s guardian would have no impact on the trial court’s judgment
determining ownership of the funds in the Joint Account. Additionally, the trial court
considered the documents filed with Leal’s response to the Rule 12 motion showing
that the Mexican Court appointed Leal as Augustina’s temporary guardian to ensure
the protection and preservation of Augustina’s assets and that Leal had substituted
decision-making authority.
The trial court also heard Stadeler testify that Leal was appointed by the
Mexican Court as the curator, which authorized that Leal could spend money on
accountants and lawyers, and Stadeler testified that the pending amparo challenged
that decision. According to Stadeler, if the pending amparo is granted, and the
Mexican Court decided that Leal cannot spend money on the Texas attorney, then
Leal would have “to take out the money and they will not have any authority [in
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Texas].” Stadeler testified that the main issue with the trial court sending the money
in the court’s registry to Mexico is that if the amparo is granted on review,
everything would be void and the money would have to be sent back to Banorte.1
After considering Stadeler’s testimony, the trial judge stated that if the
amparo was granted, it would be impossible for the trial court to send the money
back to Banorte, and the trial judge indicated that once she determines the ownership
of the funds, the Mexican Court overseeing the guardianship is in the best position
to determine what to do with Augustina’s portion of the funds. Based on this record,
we conclude that the trial court did not abuse its discretion by denying West Prado’s
Rule 12 motion to show authority as being moot because the authority of the
guardians is not at issue with regard to the trial court’s decision concerning
ownership of the funds. See Tanner, 464 S.W.3d at 26. Additionally, after
considering the documents Leal filed with her response to the Rule 12 motion, the
trial court could have reasonably found that Leal had satisfied her burden to show
that as Augustina’s temporary guardian she had sufficient authority to hire counsel
1
We note that in her brief, Leal contends that West Prado’s Rule 12 motion is
moot because West Prado’s amparo was not granted, and Leal included documents
in the appendix indicating a final judgment was entered and that Prado Díaz’s
appointment as Augustina’s guardian was confirmed. However, we cannot consider
the documents in Leal’s appendix because they are not part of the appellate record.
See Till v. Thomas, 10 S.W.3d 730, 733-34 (Tex. App.—Houston [1st Dist.] 1999,
no pet.); see also Tex. R. App. P. 34.1.
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to protect and preserve Augustina’s interests in the Joint Account. See Tex. R. Civ.
P. 12. We overrule issue one.
In issue two, West Prado argues that the trial court erred by denying her
motion to stay the case pending authorization by the Mexican Court, which has prior
jurisdiction over a dispute between the same parties. According to West Prado, the
trial court’s judgment determining ownership of the funds in the Joint Account
would directly conflict with judgments and orders in the guardianship proceeding.
Leal argues that West Prado has incorrectly framed this case as a guardianship case
rather than as an interpleader with the sole issue of determining ownership. Leal
further argues that West Prado’s motion to stay is moot. According to Leal, West
Prado’s counsel admitted that the identity of the guardian does not change the issue
of ownership.
West Prado filed a motion to dismiss for lack of jurisdiction and an alternative
motion to abate the case. Having already discussed in issue one that the trial court
had jurisdiction over the funds and to disperse them upon determining ownership,
we will only address West Prado’s alternative motion to abate. See Bryant, 972
S.W.2d at 29; see also Tex. Estates Code Ann. § 113.102. West Prado argued that
the trial court should have granted a stay because the previously filed guardianship
in Mexico involved the same parties and the effect of a judgment in this suit would
directly conflict with judgments and orders in the prior suit. According to West
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Prado, proceeding to a judgment in the interpleader action would effectively
supplant the prior proceeding and disturb principles of comity, convenience, and
orderly procedure. West Prado further argued that the trial court should have abated
the case because it was not ripe.
We review a trial court’s decision on a motion to abate for an abuse of
discretion. See Dolenz v. Cont’l Nat’l Bank of Fort Worth, 620 S.W.2d 572, 575
(Tex. 1981). Abating a lawsuit due to the pendency of a prior suit is based on the
principles of comity, convenience, and the necessity for an orderly procedure in the
trial of contested issues. Perry v. Del Rio, 66 S.W.3d 239, 252 (Tex. 2001). Texas
courts have discretion over whether to abate a case based on comity and defer to the
sovereignty of a foreign nation. Fuentes v. Zaragoza, 555 S.W.3d 141, 160 (Tex.
App.—Houston [1st Dist.] 2018, no pet.). Generally, to obtain a stay of the later
action, the petitioner must show that the two suits “involve the same cause of action,
concern the same subject matter, involve the same issues, and seek the same relief.”
Griffith v. Griffith, 341 S.W.3d 43, 54 (Tex. App.—San Antonio 2011, no pet.).
During the hearing, West Prado’s counsel argued that the trial court should
abate the proceedings until the Mexican Court established a permanent guardian.
The trial court determined that it had jurisdiction to determine ownership of the funds
in the court’s registry, and that the guardianship proceeding in Mexico did not affect
her ruling on the interpleader action. Here, the two suits at issue do not involve the
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same cause of action or seek the same relief. See id. A final judgment in the
interpleader action does not eliminate the need to proceed with the prior
guardianship proceeding in Mexico, and the Mexican Court does not have
jurisdiction over the funds in the court’s registry and cannot grant relief in the
interpleader action. We conclude that the trial court did not abuse its discretion by
denying West Prado’s motion to abate. See Dolenz, 620 S.W.2d at 575; Fuentes, 555
S.W.3d at 160. We overrule issue two.
Augustina Prado Diaz died after the submission of the appeal but before our
opinion issued. See Tex. R. App. P. 7.1(a)(1). The trial court’s judgment, which
ordered the Clerk of the Court to disburse 98.16% of the funds in the registry of the
court directly to Augustina Prado Diaz, cannot be executed in this manner because
she is deceased. See Tex. R. Civ. P. 150, 151, 152. Having overruled both of West
Prado’s issues, we vacate the trial court’s judgment only as to the disbursement
ordered to Augustina Prado Diaz, affirm the remainder of the judgment, including
the allocation of ownership interests to the parties, and remand the case to the trial
court for a determination of the proper payee for the funds owned by Augustina
Prado Diaz at the time of her death. See Tex. R. App. P. 43.2(b).
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AFFIRMED IN PART, VACATED IN PART, AND REMANDED.
_________________________
STEVE McKEITHEN
Chief Justice
Submitted on March 30, 2020
Opinion Delivered October 22, 2020
Before McKeithen, C.J., Horton and Johnson, JJ.
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