Fredye Long Alford v. Lynn Thomas Thornburg, Jr., and Michael R. Augustine

Citation: Not availableDocket: 06-02-00168-CV

Court: Court of Appeals of Texas; August 7, 2003; Texas; State Appellate Court

Original Court Document: View Document

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Fredye Long Alford and Thomas Lynn Thornburg, Jr. were divorced on October 17, 1995, with an agreement that Thornburg owed Alford $85,000. Alford was to collect this amount through trust fund proceeds earmarked for Thornburg, which were to be paid directly to her. The divorce decree specified that the payment was contingent upon either Thornburg receiving his inheritance from a trust fund managed by Michael Augustine or his death, at which point Alford would be named the irrevocable beneficiary of a life insurance policy.

Thornburg executed a lien designation instructing Augustine to pay Alford directly once the trust was funded; however, the trust contained a spendthrift clause that rendered any assignments of the trust proceeds invalid. Subsequently, Augustine petitioned a California court to confirm the Assignment's validity, leading to a July 3, 2000, order that declared the Assignment void, directing Augustine not to pay Alford directly.

On February 27, 1997, Thornburg filed for Chapter 13 bankruptcy, which imposed an automatic stay on all legal actions against him. The bankruptcy court later granted Alford limited relief from the stay, allowing her to sue Thornburg for enforcement of the divorce decree regarding a life insurance policy. Alford won a final judgment against Thornburg and filed an abstract of judgment and a notice of lis pendens on Thornburg's property without the bankruptcy court's permission. On March 12, 2002, the bankruptcy court ruled that both the abstract of judgment and the lis pendens were void for violating the automatic stay. Alford has since appealed this decision, which is still pending.

On August 27, 1999, Alford initiated legal action against Thornburg, who subsequently filed a motion to release a judgment and remove a lis pendens from Alford's homestead. The court ruled in favor of Thornburg, ordering Alford to release the abstract of judgment and the lis pendens. Alford claimed she would have approached the collection of an $85,000 payment differently had she known the trust proceeds needed to be distributed to Thornburg prior to her receiving payment. In her second amended petition, she accused Thornburg of fraud, civil conspiracy, and breach of contract, while attributing fraud and civil conspiracy to Augustine. Alford sought rescission, reformation, or a bill of review concerning the divorce decree. The trial court granted summary judgment for Thornburg and Augustine, prompting Alford to appeal on several grounds, including lack of subject matter jurisdiction, denial of due process, improper consideration of evidence, and erroneous striking of her affidavits. 

On appeal, Alford argued that the state court lacked jurisdiction to release the judgment and lis pendens since a bankruptcy court's order regarding the same matter was pending appeal. However, the court countered that the mere existence of a federal case does not prevent state court proceedings. Although staying the state proceedings would have been prudent, neither party requested such a stay, allowing the state court to maintain jurisdiction. Alford's first point of error was overruled. Regarding her due process claim, Alford asserted the trial court erred by acting without notice or a hearing. A hearing took place on August 12, 2002, where the court discussed the abstract judgment and lis pendens with Alford's counsel.

The court reviewed the status of a lis pendens notice and a motion for lien related to the release of judgments. Thornburg indicated they were awaiting closure but faced delays. The court sought to understand the position of Mr. Peek, counsel for Alford, regarding the release. Peek noted that a bankruptcy court had deemed certain judgments void but clarified that no actions had been mandated by the bankruptcy court. The court emphasized the need for Alford to execute a release to clarify the record, which she ultimately did.

Under Texas Rule of Appellate Procedure 33.1, an appellant must make a timely objection and receive a ruling to preserve errors for appellate review. Alford did not raise a due process violation in the trial court, resulting in a waiver of that complaint for appeal, leading to the overruling of her second point of error.

Regarding summary judgment, Alford argued the trial court incorrectly considered Thornburg's factual statements and evidence without a ruling on her objections. The court referenced precedent indicating that a party objecting to summary judgment proof must obtain a ruling on their objections, which can be implied if the trial court grants summary judgment. Alford claimed the court's order indicated it had ruled on her objections, as it stated that the court considered the motion and attached evidence, along with the plaintiff's response and counsel's arguments.

The court clarified that simply considering objections does not indicate they were ruled upon, referencing the Trusty case. Alford's numerous objections and Thornburg's multiple grounds for summary judgment prevent an implied ruling, which means Alford failed to preserve error for appeal under Texas Rule of Appellate Procedure 33.1. Alford also argued that the trial court erred by allowing Thornburg to testify during the summary judgment hearing. To preserve this error, a timely objection specifying grounds is required, along with a ruling from the trial court. Although Alford's counsel objected to the testimony, the court's response suggested it sustained the objection without making an adverse ruling, leading to a failure to preserve error for appeal.

In her second amended petition, Alford claimed Thornburg committed fraud, civil conspiracy, and breach of contract, and alternatively sought a bill of review to cancel or reform a divorce decree. Thornburg sought summary judgment on grounds that Alford's claims were discharged in bankruptcy, the case was not ripe, and her suit was barred by a prior settlement. The trial court granted this motion, which the reviewing court believes was improper. Summary judgments are reviewed de novo, focusing on whether the evidence establishes no genuine issue of material fact. The movant must show entitlement to judgment as a matter of law, with all favorable evidence to the nonmovant accepted as true. If a motion cites multiple grounds and the trial court does not specify the basis for its ruling, the appellant must demonstrate that each ground is insufficient for summary judgment.

In Thornburg's 1997 bankruptcy, Alford was initially an unsecured creditor for $85,000. However, a court order designated this amount as Alford's separate property and excluded it from the bankruptcy estate. Thornburg argued that this meant Alford could not claim the funds, but the court's intention was to clarify that Alford's right to the $85,000 was not part of the bankruptcy proceedings for discharge. The bankruptcy court's memorandum further indicated that the automatic stay did not prevent Alford from pursuing her claim, leading to the conclusion that the trial court misinterpreted the order, rendering the summary judgment based on bankruptcy discharge improper.

Regarding ripeness, a cause of action must show that an injury has already occurred for it to be ripe for judicial determination. Thornburg argued that his cause was not ripe since any harm depended on future events, specifically the death of his stepmother and the subsequent funding of a trust with life insurance proceeds. He claimed that if he predeceased her, the issue would become moot. In contrast, Alford argued that her acceptance of the divorce decree was based on the validity of the Assignment, and she would have sought alternative means to collect the $85,000 had she known the trust proceeds were contingent on Thornburg. The determination of whether there is a material fact dispute preventing summary judgment requires taking the nonmovant's evidence as true and making reasonable inferences in their favor.

Alford alleges she suffered an injury because the divorce decree lacked provisions for trust proceeds or life insurance policies, which she would have been aware of had she known the trust proceeds required passage through Thornburg. The court is required to accept Alford's evidence favorably, indicating that her claim is ripe for determination, and the trial court incorrectly granted summary judgment based on the ripeness doctrine. 

On October 14, 1996, Alford and Thornburg reached a final settlement and release, confirmed by court order, wherein both parties agreed to resolve all disputes from their relationship since 1991, except for Alford's entitlement to $85,000 from Thornburg and Thornburg's responsibility for the life insurance policy premiums. This order permanently enjoined both parties from filing lawsuits or claims against each other, except for the specified rights of Alford.

Thornburg argues that this release precludes Alford from filing her lawsuit, while Alford counters that her lawsuit is permissible because the order allows her to pursue the $85,000 and the claims in question arose after the settlement date. The interpretation of court orders follows similar rules to other written instruments, focusing on the court's intent. The court's adoption of the parties' agreement aimed to enable Alford to collect the $85,000 directly from the trust proceeds. Since the contemplated Assignment was valid at the time of the order and the court intended for it to be effective, the trial court erred in granting summary judgment based on the final settlement, release, and order.

Augustine raised objections to three affidavits submitted by Alford during trial. The first objection was against Rick Lindsey's affidavit, which was criticized for lacking factual support for its conclusions. Augustine contended that the affidavit failed to provide necessary facts about the monetary impact of life expectancies on receiving a sum upon death. The trial court sustained this objection and struck Lindsey's affidavit, although the summary judgment ruling was deemed incorrect since Lindsey's statements, while minimal, reflected knowledge consistent with a Certified Public Accountant.

The second objection targeted Demaris Hart’s affidavit, arguing it lacked factual basis for legal conclusions, contained hearsay, and was incomplete as Augustine did not receive the last pages. The trial court upheld this objection and struck Hart's affidavit entirely.

The third objection was against Alford's own affidavit, which included legal conclusions and hearsay. The court struck certain portions of this affidavit but erroneously removed parts that contained Alford’s personal knowledge, such as her relationship with Augustine and her receipt of a confirmation letter. The court's ruling was flawed because these statements were within Alford's competence to testify, as they involved her direct knowledge and were properly authenticated, meeting the requirements of Texas Rules of Civil Procedure.

The statement attributed to Augustine in Alford's affidavit should not have been dismissed, as it qualifies as non-hearsay under Texas law since it was offered against Augustine and is his own statement. Thus, the trial court erred in striking parts of Alford's affidavit.

Regarding Hart's affidavit, Alford failed to serve the complete document, specifically page three containing the signature, to Augustine at least seven days before the hearing, as required by Texas Rules of Civil Procedure. Despite being aware of this omission, Alford did not request the court's permission for late service or a continuance to address Augustine's objections, which included the missing page. Consequently, Hart's unsworn affidavit was not considered valid evidence by the trial court, and Alford did not preserve her right to appeal this issue, as there is no record of her taking necessary steps to rectify the situation.

In Augustine's motion for summary judgment, he claims entitlement based on two arguments: the case is not ripe for determination, and Alford has not presented evidence of fraud or civil conspiracy. In a no-evidence motion for summary judgment, the burden shifts to the nonmovant (Alford) to provide more than a scintilla of evidence to establish a genuine issue of material fact. Augustine specifically challenges the elements of Alford's fraud claim, asserting a lack of evidence for: (1) a material representation made by Augustine, (2) the falsity of that representation, (3) knowledge of its falsity at the time it was made, (4) intent for the representation to be acted upon by Alford, and (5) resulting injury to Alford.

Evidence exists indicating Augustine may have committed fraud against Alford. Alford's affidavit claims Augustine knowingly made a false material representation regarding the permissibility of an assignment under the trust's provisions, which Augustine drafted and was a trustee of. A letter from Augustine to Alford further suggests he intended for her to rely on his representations regarding the divorce settlement, leading to her injury, as she would have sought alternative means to collect $85,000 had she known the assignment was void. This establishes a genuine issue of material fact regarding the fraud claim, making the trial court's summary judgment in favor of Augustine erroneous.

Regarding Alford's civil conspiracy claim against Augustine, the court found insufficient evidence to demonstrate a meeting of the minds between Augustine and Thornburg to commit an unlawful act. The only evidence presented was Augustine's letter referencing conversations with Thornburg, which did not substantiate a conspiracy. Consequently, without evidence of an agreement to defraud Alford, the court upheld the summary judgment regarding the civil conspiracy claim.

The trial court's order directing Alford to release the abstract of judgment and lis pendens is affirmed. Thornburg's summary judgment is reversed, and Alford's claims against Thornburg are remanded for further proceedings. Augustine's summary judgment is upheld regarding Alford's civil conspiracy claim, but reversed concerning the fraud claim, which is also remanded for further proceedings. The document notes that Alford has previously been known as Lynch and highlights relevant details about Thornburg's trust, Alford's lack of awareness regarding the spendthrift clause, and the timing of Thornburg's bankruptcy discharge. It addresses Alford's reliance on case law which the court found not supportive of her argument. 

In a separate matter, Kennedy contends that the dismissal of his petition was erroneous because all district judges in Anderson County should have recused themselves as they were defendants in his original complaint. He argues that this recusal should have applied to the 12th Court of Appeals justices, as well. Additionally, Kennedy claims racial discrimination in the judicial process affecting his right to self-representation. The court notes previous rulings on Kennedy's disqualification claims, stating that since he did not seek monetary damages, the constitutional disqualification provisions did not apply, and the judges were not deemed disqualified due to a lack of direct pecuniary interest.

Kennedy did not seek monetary damages in this case, unlike a related case decided concurrently. The trial judge who dismissed the lawsuit was not disqualified and had the authority to do so, consistent with the previous ruling in Kennedy v. Wortham. Kennedy has been notably active in the legal system, with over 250 proceedings since 1988, primarily since 2004. Recently, he has altered his approach by alleging conspiracies involving judges to secure different judges for his cases. However, his recusal request lacked formal adherence to Texas Rule of Civil Procedure 18a, as it was neither a motion nor verified, thereby failing to trigger the required referral process. A judge may initially assess the conformity of a recusal motion with Rule 18a, and failure to properly file such a motion results in a waiver of the right to contest a judge's failure to recuse. The procedural requirements for recusal are mandatory, and Kennedy's issues regarding the failure to refer the case to an administrative judge are without merit. In evaluating whether the trial court dismissed Kennedy's lawsuit as frivolous, the core question is whether his complaint presents any arguable basis in law or fact, a matter previously addressed in related appeals.

The court affirms the trial court's decision, concluding that the underlying lawsuit was frivolous and that the trial court did not abuse its discretion in dismissing the suit. The appeal relates to a case involving an incarcerated individual, Kennedy, whose cases were transferred to this Court after the justices of the Twelfth Court of Appeals recused themselves. No conflicts with precedent between the two courts were identified. Kennedy filed a single brief for two appeals, one of which involved a previous sentencing hearing resulting in a ninety-nine-year sentence, up from sixty-two years. Additionally, Kennedy's reference to a defendant's name was identified as a misspelling; he intended to name the chief justice of the Twelfth Court of Appeals. The Fifth Circuit Court of Appeals was also listed as a defendant, despite not being named in the lawsuit.