Miles E. Baldwin and Irene Baldwin v. Robert Garner, Individually and Templeton & Garner--Appeal from 108th District Court of Potter County

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State: Texas

Court: Texas Northern District Court

Docket No: 07-03-00408-CV

Case Date: 01/11/2006

Plaintiff: James G. Gordon

Defendant: Steven H. Clemons, Jenny L. Martinez, Whitney Bowling, Leggett & Clemons, P.L.L.C., Godwin Pappas R

Preview:In The

Court of Appeals Ninth District of Texas at Beaumont ____________________
NO. 09-09-00475-CV

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JAMES G. GORDON, Appellant V. STEVEN H. CLEMONS, JENNY L. MARTINEZ, WHITNEY BOWLING, LEGGETT & CLEMONS, P.L.L.C., GODWIN PAPPAS RONQUILLO, L.L.P., AND PHILLIP W. OFFILL, JR., Appellees _________________________________________________ ____________________ On Appeal from the 9th District Court Montgomery County, Texas Trial Cause No. 08-01-00941 CV ____________________________________________________ MEMORANDUM OPINION James G. Gordon ("Greg Gordon") appeals the summary judgment granted in favor of Steven H. Clemons, Jenny L. Martinez, Whitney Bowling, Leggett & Clemons, P.L.L.C. (collectively "L&C"), Godwin Pappas Ronquillo, L.L.P. ("the Godwin Firm"), and Phillip W. Offill, Jr. The appellees are the lawyers and law firms that represented Greg Gordon's opponents in separate lawsuits concerning disputes over ownership, control, and corporate governance of SGD Holdings, Ltd. ("SGD"). Greg Gordon's pleadings and the summary judgment record establish a limitations bar for all claims 1

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against one group of lawyers and their firm. Greg Gordon failed to raise a fact issue regarding his claims against the other lawyer and his firm. Accordingly, we affirm the trial court's judgment. This Court affirmed the trial court's judgment in part and reversed and remanded in part for a new trial in related litigation between Greg Gordon and his brother, George David Gordon, Jr. ("David Gordon"). Gordon v. Gordon, No. 09-05-330 CV, 2006 WL 5961831 (Tex. App.--Beaumont July 31, 2008, pet. denied). In Gordon v. Gordon, Greg Gordon and his wife sued David Gordon and SGD for damages arising out of the merger of Greg's and Lisa's family business, Con-Tex Silver Imports, Inc. ("Con-Tex") with the publicly-traded SGD, and Greg Gordon's subsequent expulsion from SGD following a dispute concerning SEC filings. Id. at **1-2. A bench trial resulted in a take nothing judgment. Id. at *1. On appeal, this Court held that factually sufficient evidence

supported the trial court's findings that the Gordons failed to prove the existence of an attorney-client relationship or formal fiduciary relationship between the Gordons and David Gordon as SGD's corporate and securities counsel. Id. at **5-7. But we also held that the overwhelming weight and preponderance of the evidence supported the Gordons' claim of a confidential relationship giving rise to an informal fiduciary duty owed to them by David Gordon, and we reversed the judgment and remanded the case to the trial court on that ground. Id. at *10.

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In the case now before us, Greg Gordon alleged that L&C acted as general counsel for SGD while Greg Gordon was the majority shareholder and sole legitimate director of SGD. Greg Gordon further alleged that beginning in 2002, L&C engaged in a continuing scheme with David Gordon to wrest control and ownership of SGD from Greg Gordon. According to Greg Gordon, the defendants were aware that he was the only legitimate director of SGD but, while acting as general counsel for SGD, L&C acted to remove Greg Gordon as President of SGD and filed lawsuits against him. Greg Gordon asserted claims against L&C for breach of fiduciary duty, fraud, fraudulent concealment, and civil conspiracy. Greg Gordon alleged that in May 2003, as part of a scheme with David Gordon, Offill and the Godwin Firm filed a lawsuit for fraud and breach of fiduciary duty on behalf of Lakewood Development Corporation ("Lakewood") against Greg Gordon and SGD. Greg Gordon alleged that the Lakewood suit was dismissed for want of

prosecution in August 2007 and that the suit was frivolous and filed maliciously as part of a scheme to defraud Greg Gordon. Greg Gordon asserted claims against Offill and the Godwin Firm for malicious prosecution. He also alleged that all of the defendants engaged in an unlawful conspiracy with David Gordon "for the purpose and object of destroying" Greg Gordon and SGD. L&C's answer raised the affirmative defense of limitations, and L&C moved for summary judgment on its limitations defense. The trial court initially denied the motion

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for summary judgment and granted L&C's special exceptions, but granted the summary judgment on reconsideration after Greg Gordon amended his pleadings. Offill and the Godwin Firm moved for summary judgment on the grounds that as a matter of law Greg Gordon could not maintain a suit for malicious prosecution against counsel of record for the opposing party in litigation. Offill and the Godwin Firm also moved for summary judgment on the ground of no evidence of four of the elements of Greg Gordon's malicious prosecution claim. The trial court initially denied the motion for summary judgment and granted Offill's and the Godwin Firm's special exceptions. After Greg Gordon amended his pleadings, the Godwin Firm adopted the motion for reconsideration filed by L&C, and the trial court granted summary judgment in favor of the Godwin Firm. Offill did not appear for the pre-trial hearing or trial and the trial court entered a default judgment for Greg Gordon. Offill moved for new trial on grounds that he did not receive notice of the setting. After the trial court granted Offill's motion for new trial and set aside the default judgment, Offill filed a motion for summary judgment on the ground that as a matter of law, Greg Gordon could not maintain a suit for malicious prosecution against counsel of record for the opposing party in litigation, and on the ground that there was no evidence of any of the elements of malicious prosecution, fraud, or conspiracy. The trial court granted Offill's motion for summary judgment.

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We address the issues raised in this appeal under the familiar standards established for appellate review of summary judgments. A no-evidence motion for summary

judgment "is essentially a motion for a pretrial directed verdict." Mack Trucks, Inc. v. Tamez, 206 S.W.3d 572, 581 (Tex. 2006). To avoid summary judgment, the nonmovant must produce more than a scintilla of evidence to defeat the elements specified in the motion. Ford Motor Co. v. Ridgway, 135 S.W.3d 598, 600 (Tex.2004); see TEX. R. CIV. P. 166a(i). "We review the evidence presented by the motion and response in the light most favorable to the party against whom the summary judgment was rendered, crediting evidence favorable to that party if reasonable jurors could, and disregarding contrary evidence unless reasonable jurors could not." Tamez, 206 S.W.3d at 582. If the evidence rises to a level that would enable reasonable and fair-minded people to differ in their conclusions regarding an essential element challenged by the no-evidence motion, the nonmovant has met his burden under Rule 166a(i). Ridgway, 135 S.W.3d at 601. "To raise a genuine issue of material fact, however, the evidence must transcend mere suspicion. Evidence that is so slight as to make any inference a guess is in legal effect no evidence." Id. In a traditional motion for summary judgment, the movant has the burden of showing that there is no genuine issue of material fact and it is entitled to judgment as a matter of law. TEX. R. CIV. P. 166a(c). "We review the evidence presented in the motion and response in the light most favorable to the party against whom the summary

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judgment was rendered, crediting evidence favorable to that party if reasonable jurors could, and disregarding contrary evidence unless reasonable jurors could not." Mann Frankfort Stein & Lipp Advisors, Inc. v. Fielding, 289 S.W.3d 844, 848 (Tex. 2009). "In deciding whether there is a disputed issue of material fact, every doubt must be resolved in favor of the nonmovant and evidence favorable to the nonmovant must be taken as true." Fort Worth Osteopathic Hosp., Inc. v. Reese, 148 S.W.3d 94, 99 (Tex. 2004). "Issues not expressly presented to the trial court by written motion, answer or other response shall not be considered on appeal as grounds for reversal." TEX. R. CIV. P. 166a(c). Moreover, "a summary judgment cannot be affirmed on grounds not expressly set out in the motion or response." Stiles v. Resolution Trust Corp., 867 S.W.2d 24, 26 (Tex. 1993). Issue one contends that Greg Gordon's claims against L&C are not barred by limitations and that consequently the trial court erred in granting L&C's motion for summary judgment. L&C moved for summary judgment on the grounds that as a matter of law, Greg Gordon's claims against L&C accrued more than four years before suit commenced. Greg Gordon filed this suit against L&C on January 25, 2008. An affidavit by Clemons asserted that L&C was hired to represent SGD in connection with corporate governance issues and David Gordon continued to represent SGD as securities counsel. According to Clemons, Greg Gordon was represented by Robert Gordon after the November 25, 2002, meeting that resulted in Greg Gordon's ouster from the company.

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On December 13, 2002, L&C filed SGD Holdings, Ltd. v. James G. Gordon, in which SGD alleged that Greg Gordon improperly diverted corporate funds. Clemons and

Martinez represented SGD in that suit and defended SGD in Gordon v. Gordon, which Greg Gordon filed on January 2, 2003. L&C represented SGD until sometime in August 2004, when all representation of SGD by L&C ceased. According to Clemons, Bowling never performed any work for SGD. A cause of action generally accrues "when a wrongful act causes some legal injury, even if the fact of injury is not discovered until later, and even if all resulting damages have not yet occurred." S.V. v. R.V., 933 S.W.2d 1, 4 (Tex. 1996). Greg Gordon asserted claims against L&C for breach of fiduciary duty, fraud, fraudulent concealment, and civil conspiracy. In his amended petition, Greg Gordon alleged that [t]he termination and removal of Plaintiff was based on an illegal unauthorized board meeting, excluding Plaintiff from the meeting based on the false representations that Plaintiff's Seventy-five Million shares of SGD were no longer his. This was false and fraudulent as evidenced by the judicial determination by a federal bankruptcy judge in the SGD bankruptcy in May 2005 that Plaintiff was since 1999 the holder of those shares. The amended petition alleged that the meeting occurred on November 25, 2002. Greg Gordon alleged that L&G had a special relationship to him because he was the majority shareholder of SGD. Thus, Greg Gordon alleged that a breach of fiduciary duty by L&C occurred on November 25, 2002. Likewise, Greg Gordon alleged that the "conspiracy to wrestle control and ownership of SGD from Plaintiff and to retaliate against Plaintiff by

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and through the direction of others namely, David Gordon and Terry Washburn" began in 2002. According to the allegations in the amended petition, the fraud occurred when L&C continued to misrepresent who SGD's directors were at subsequent board meetings. This suit commenced in 2008, more than four years after his ouster as President and director caused a legal injury to Greg Gordon. As to each of his claims against L&C, Greg Gordon's own pleadings identify the first date on which a legal injury occurred as a date that is more than four years before he filed this lawsuit. Assuming the existence of a fiduciary duty for purposes of an analysis of the limitations issue, Greg Gordon's claim accrued no later than the date on which the fact of the fiduciary's misconduct became apparent. See S.V., 933 S.W.2d at 8. In his response to the motion for summary judgment, Greg Gordon submitted an affidavit that states that he told Clemons that the purported directors were not duly elected directors, but Clemons continued to serve at the request of the invalid directors. For purposes of a claim for conspiracy, Greg Gordon was aware of David Gordon's misconduct as well as L&C's alleged misconduct, because Greg Gordon filed a suit against David Gordon on January 2, 2003. The allegations the Gordons brought in that suit included a claim that Bowling met with David Covey, one of the Gordon v. Gordon defendants, and conspired with David Gordon, Washburn, and Horowitz to remove Greg Gordon as an officer and director of Con-Tex. Greg Gordon's fraud claims arise from L&C's continued

representation of SGD through its allegedly illegally constituted board of directors. Thus,

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a legal injury occurred and was apparent to Greg Gordon more than four years before he sued L&C. Greg Gordon argues that his cause of action accrued when the judge presiding in SGD's bankruptcy proceedings ruled that Greg Gordon was the legal owner of seventyfive million shares of stock in SGD. He also argues that SGD's bankruptcy tolled limitations on his claims against L&C. Thus, he contends, limitations began to run in May 2005. No authority is cited to support this argument. The filing of a bankruptcy automatically stays actions against the debtor. 11 U.S.C.A.

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