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Trahan v. Lone Star Title Co. of Elpaso, Inc.

Court of Appeals of Texas, Eighth District, El Paso

July 12, 2005


          Appeal from the 120th Judicial District Court of El Paso County, Texas (TC# 2004-4470)

          Before Chew, C.J., McClure, and Carr, JJ.



         This appeal involves a mortgage closing dispute between Appellants Jennifer Trahan and Alto Trahan ("the Trahans") and Appellee Lone Star Title Company of El Paso, Inc. ("Lone Star"), the escrow agent. The Trahans challenge the trial court's granting of a no-evidence summary judgment in favor of Lone Star, various trial court rulings, and the denial of their motion to recuse the trial judge. We affirm.

         On November 12, 2003, the Trahans refinanced their home with Amerigroup Mortgage Corporation ("Amerigroup"). Lone Star acted as the settlement agent for the closing. The summary of the transaction in the HUD-1 Settlement Statement listed county taxes in the amount of $3, 613.03 as due by the borrowers and required by the lender to be paid in advance. This amount was included in the Trahans' total settlement charges. The Trahans signed the Statement's certification, to "direct and authorize [Lone Star] to make the distributions indicated for my account on the attached HUD-1 Settlement Statement" and that they understood "that prorations were based on figures for the preceding year, or estimates for the current year, and in the event of any change for the current year, all necessary adjustments must be made between Seller and Borrower direct." They also certified that they had "carefully reviewed the HUD-1 Settlement Statement and to the best of my knowledge and belief, it is a true and accurate statement of all receipts and disbursements made on my account or by me in this transaction." Graciela ("Gracie") Cadena was Lone Star's closing agent in the transaction. Ms. Cadena certified that to the best of her knowledge the HUD-1 Settlement Statement which she had prepared was a true and accurate account of the funds which were received and have been or will be disbursed by Lone Star as part of the settlement of the transaction. According to Mrs. Trahan, Ms. Cadena told the Trahans that $3, 613.03 had been added into their loan to pay the ad valorem taxes on the property. Mrs. Trahan told Ms. Cadena that the taxes had already been paid by their former lender, Waterfield Mortgage Company. Ms. Cadena told the Trahans that once the tax payment was posted at the County Tax Office, she would refund the amount that Waterfield had paid. The Trahans signed the Settlement Statement based on what Ms. Cadena told them about the tax refund.

         On November 20, Ms. Cadena informed the Trahans that Lone Star was issuing them a check in the amount of $2, 505.97 as a refund for overpayment of taxes. The next morning, the Trahans picked up the check. Later that afternoon, Ms. Cadena called the Trahans asking for the check back or else she would stop payment on the check. The Trahans, however, had already cashed the check and had spent most of the money paying bills. Lone Star stopped payment on the check, informing its banker that the check had been "lost or misplaced." On December 1, 2003, Mrs. Trahan spoke with Ms. Cadena and during their conversation, Ms. Cadena made numerous statements to Mrs. Trahan as to why she was not entitled to the money. Mrs. Trahan spoke with Mike Blough, Chief Financial Officer of Lone Star on December 17. Based on her conversation with Mr. Blough, Mrs. Trahan believed that the refund money had been sent to Amerigroup and the loan had been reduced by $2, 500. Over a period of several months, the $2, 505.07 was not applied to the loan and Mrs. Trahan received no response from Lone Star. In April 2004, the Trahans' attorney, Michael "Mickey" Milligan, sent a pre-suit demand letter to Lone Star. By letter dated May 14, 2004, Lone Star's attorney, Darryl Vereen, responded to the demand letter, informing the Trahans that Lone Star had the disputed funds in escrow because both the Trahans and their lender claimed to own the funds. In the May 14 letter, Mr. Vereen requested that Mr. Milligan contact him within a week with an agreement between the Trahans and the lender as to how the funds should be handled. Mr. Vereen further stated, "[o]therwise, my client may not have any other choice but to interplead the funds. This is something we are hoping to avoid." On May 25, 2004, at the lender's direction, Lone Star issued a check payable to Amerigroup on behalf of the Trahans' account, in the amount of $2, 565.29.

         On October 20, 2004, the Trahans filed suit against Lone Star, alleging breach of contract, theft, fraud, and breach of its fiduciary duties as the escrow agent for the closing. On July 6, 2005, Lone Star filed a no-evidence summary judgment motion, in which it challenged elements of each cause of action and exemplary damages. During the course of litigation, a visiting judge denied the Trahans' motion to recuse the trial judge and then the trial court granted Lone Star's motions for discovery sanctions and to designate a responsible third party, denied the Trahans' objection to the official court reporter, granted Lone Star's objection to the Trahans' summary judgment evidence, and granted Lone Star's no-evidence motion for summary judgment. The Trahans now bring this appeal.


         First, we will address the Trahans' contention that the visiting judge abused her discretion by denying their motion to recuse the trial judge, the Honorable Luis Aguilar. The Trahans filed a motion to recuse Judge Aguilar, claiming that the judge's derogatory and demeaning remarks at a pretrial hearing conducted on May 5, 2005, demonstrated that Judge Aguilar's impartiality might reasonably be questioned and that Judge Aguilar had a personal bias or prejudice against the subject matter of the case, the Trahans' attorney and/or the Trahans. See Tex.R.Civ.P. 18b(2)(a), (b). The motion also alleged further bias and prejudice in that the official court reporter failed to make a record of the May 5 hearing and Judge Aguilar's behavior at the hearing was part of a continuing course of conduct of persistent use of derogatory and demeaning remarks in the courtroom for which the judge had been publically reprimanded on December 21, 2004. After a hearing, the visiting judge denied the Trahans' recusal motion.

         We review the judge's ruling for an abuse of discretion. See Tex.R.Civ.P. 18a(f); Chandler v. Chandler, 991 S.W.2d 367, 385 (Tex.App.--El Paso 1999, pet. denied); see also Downer v. Aquamarine Operators, Inc., 701 S.W.2d 238, 241-42 (Tex. 1985). In reviewing the denial of a recusal motion, we apply a reasonable person standard in determining whether the alleged act or acts indicating bias or impartiality emanated from an extrajudicial source. See Chandler, 991 S.W.2d at 385; Ludlow v. DeBerry, 959 S.W.2d 265, 281 (Tex.App.--Houston [14th Dist.] 1997, no writ)(Opin. on reh'g). A judge's opinions formed on the basis of facts introduced or events occurring during trial court proceedings do not constitute a basis for a recusal motion unless they display a deep-seated favoritism or antagonism that would make fair judgment impossible. See Liteky v. U.S., 510 U.S. 540, 555, 114 S.Ct. 1147, 1157, 127 L.Ed.2d 474 (1994); Chander, 991 S.W.2d at 385-86; Ludlow, 959 S.W.2d at 271. Thus, judicial remarks during the course of a trial that are critical or disapproving or even hostile to counsel, parties, or their cases, ordinarily do not support recusal. Liteky, 510. U.S. at 555, 114 S.Ct. at 1157; Chandler, 991 S.W.2d at 386; Ludlow, 959 S.W.2d at 271. Rather, such remarks may support recusal if they reveal an opinion deriving from an extrajudicial source and such remarks will do so if they reveal such a high degree of favoritism or antagonism as to make fair judgment impossible. Liteky, 510 U.S. at 555, 114 S.Ct. at 1157; Chandler, 991 S.W.2d at 386; Ludlow, 959 S.W.2d at 271. Otherwise, "[a] judge's ordinary efforts at courtroom administration-even a stern and short-tempered judge's ordinary efforts at courtroom administration-remain immune." Liteky, 510 U.S. at 556, 114 S.Ct. at 1157.

         At the recusal hearing, Mr. Milligan testified about Judge Aguilar's conduct at the May 5, 2005 hearing on Lone Star's Motion for Leave to Designate Responsible Third Party and his motion for a continuance. Judge Aguilar heard Lone Star's motion first. Mr. Milligan argued in response to Lone Star's motion, directing Judge Aguilar to the deposition testimony and transcripts attached to the Trahans' response. According to Mr. Milligan, when he handed the documents to Judge Aguilar, he pitched them across the bench and said "I'm not going to read that. I don't have to read it." Judge Aguilar told Mr. Milligan to tell him what the attachments said and Mr. Milligan replied that he could not recite all the evidence in such a short time and asked the judge to just read it. Judge Aguilar then screamed at Mr. Milligan, stating twice in a loud voice "[i]f I believe what Mr. Vereen tells me, I'm going to poor [sic] you out without a jury trial and I've been known to do it before." According to Mr. Milligan, the judge's statement was directed to him, not Mr. Vereen, and he interpreted it as telling him that he was never getting a jury trial in this case.

         At some point, Judge Aguilar asked the parties about the possibility of mediation in the case. Mr. Milligan informed the judge that mediation was not going to work out right now. Judge Aguilar asked why he thought that and Mr. Milligan replied, "[b]ecause I've been doing this a long time . . . . And what I found is a lot of times mediation becomes more viable the closer we get to trial." In response, Judge Aguilar started to scream at him, stating, "[d]on't tell me how to practice law" and "I've tried 140 cases." As Mr. Milligan tried to apologize, Judge Aguilar picked up the court file, raising it up with both hands. Judge Aguilar then looked at Mr.Vereen and asked the same question about mediation to which Mr. Vereen also replied that mediation was not going to work. Judge Aguilar then screamed and said, "That's all I want, a simple answer to a simple question" and threw the file. Mr. Milligan believed the judge's anger was directed at him, not Mr. Vereen.

         Mr. Milligan testified about Judge Aguilar's hostile demeanor towards him in the courtroom with regard to his motion for a continuance. According to Mr. Milligan, Judge Aguilar called the case himself and in a snide manner remarked, "what's this about your [sic] not feeling well," even though the judge knew that Mr. Milligan was recovering from a heart attack and had filed a doctor's certificate along with the motion for a continuance. Mr. Milligan recalled that the judge was angry that Mr. Vereen did not oppose the motion.

         During the May 5 hearing, Mr. Milligan observed the court reporter, Jason Mestas, moving his hands on his stenographer's machine, not on his computer, and believed that Mr. Mestas was making a record of the proceedings. After the hearing, Mr. Milligan asked Mr. Mestas to prepare a copy of the transcript from the hearing. A few days later, Mr. Mestas informed Mr. Milligan that there was no record because the case was not called.

         Mr. Milligan testified that he felt hostility from Judge Aguilar at the May 5 hearing. Based on the way he and his clients' case was treated that day and the fact that there was no record of that hearing, even though he watched the court reporter take the record, he did not believe his clients could get a fair trial before Judge Aguilar. Mr. Milligan also believed that Judge Aguilar had exhibited such a high degree of antagonism toward him and his clients and such a high degree of favoritism toward Mr. Vereen's clients that the judge should be recused from the case. Similarly, Mrs. Trahan testified that Judge Aguilar was angry and raised his voice when speaking to her attorney at the hearing. She recalled the judge taking the file and slamming it down. Mrs. Trahan also remembered the judge saying that if Mr. Vereen convinced him, he was going to pour out their case. Mrs. Trahan believed that Judge Aguilar belittled and berated Mr. Milligan to a level that demonstrated favoritism toward Mr. Vereen and antagonism toward Mr. Milligan.

         Contrary to Mr. Milligan's and Mrs. Trahan's testimony, Lynda Menapace, the court coordinator, did not recall Judge Aguilar yelling or screaming at anyone or picking up papers and slamming them down. She explained that the judge does not like to grant continuances and usually gives the person asking for a continuance a hard time and always requires a hearing before granting a motion for a continuance, which are infrequently granted. With regard to the mediation discussion, Ms. Menapace recalled that the judge asked Mr. Milligan why he thought they might go to mediation later and Mr. Milligan said something about his opinion being based on decades of experience. Judge Aguilar then began comparing his own trial experience to Mr.Milligan's, but the judge did not scream or yell or lose his temper. As for the comment about pouring out the case, Ms. Menapace believed Judge Aguilar was talking to Mr. Vereen. Ms. Menapace thought the judge's comment was made in reference to Mr. Vereen's argument on his motion in which he was pointing the finger at a third party and the judge replied that if there was nothing there, he was going to pour it out. She did not think the judge displayed favoritism toward Mr. Vereen, but rather treated both attorneys equally. Ms. Menapace testified that there was no record of the hearing because no one asked to put it on the record and the judge never called the case.

         Jason Mestas, the court reporter, testified that the bailiff, not the judge called the case on May 5. Mr. Mestas recalled stating in his affidavit that he began reporting the case, but then it moved into a very informal posture with overlapping conversations and professional jovial comments. Mr. Mestas explained that he usually reports what the bailiff calls out as a frame of reference in his notes to mark when a case ends or begins. Mr. Mestas stated that as usual practice, the docket moves very fast and not always in sequence. The judge normally informs him when there is something to be put on the record and calls all the cases in a similar manner. However, when the bailiff calls the case, it is not on record, but he does make references in his notes to locate the information, which helps him to prepare a more accurate record. Mr. Mestas then waits for the judge to call the case. When this particular case moved into an informal posture, Mr. Mestas proceeded to clean up earlier docket matters on his computer because it did not seem like he was reporting anything. Because no one called the case, he just moved on to other things. When he noticed that things started to heat up, he was ready for them to give him direction and go on the record. As to the actual proceeding, Mr. Mestas recalled that comments were made to incite the judge to anger and given the judge's "strong personality," he responded. Mr. Mestas had heard Judge Aguilar yell a lot louder than he did at the hearing. He did not remember the judge picking up any papers or a file. Judge Aguilar did not tell him not to record the hearing. If Mr. Milligan or Mr. Vereen had asked him to make a record of the hearing, he would have done so, but neither did.

         Mr. Vereen testified at the recusal hearing. He explained that it was his understanding that the court's ruling on his motion for leave to designate responsible third party was to be based solely on the face of the pleading, not on outside evidence. Therefore, evidence such as deposition testimony or telephone transcripts that Mr. Milligan presented in response to the motion was irrelevant. In response to Mr. Milligan's argument, Mr. Vereen stated that he felt his pleadings were sufficient to satisfy the pleading requirements, that it was his job to present evidence at trial to support the allegations, and if he did not, then it was the judge's job to pour him out. Judge Aguilar then looked at Mr. Vereen and said "that's right. I will pour you out." The judge then addressed both attorneys generally and said "I've granted summary judgments and I've granted directed verdicts, and I will do that." According to Mr. Vereen, the words "pouring out" came from him, and then the judge said "I will pour you out" while looking directly at Mr. Vereen and in response to the allegations he had made in his motion for leave to designate responsible third party.

         Mr. Vereen did not recall Judge Aguilar screaming or yelling at Mr. Milligan. He did recall the judge having a number of files on the bench and setting one down a littler harder during the conversation, but he did not think it was as big a deal as was described at the recusal hearing. However, he did not recall the judge picking up Mr. Milligan's response to his motion for leave and pitching it across the bench. Based on what he saw at the hearing, Mr. Vereen did not believe Judge Aguilar displayed favoritism towards himself or his client nor did he believe the judge displayed antagonism towards Mr. Milligan or his clients. Mr. Vereen also did not think a reasonable person would question Judge Aguilar's impartiality on the case nor had the judge expressed a personal bias or prejudice about the merits of the case.

         After close review of the recusal hearing record, we can not find that it was an abuse of discretion to deny the recusal motion. The judge's actions which form the basis of the Trahans' complaint occurred during court proceedings and the Trahans have not asserted that his statements emanated from an extrajudicial source. While we certainly do not condone the sort of behavior alleged by the Trahans, the visiting judge was presented with conflicting evidence concerning Judge Aguilar's conduct at the May 5 hearing, some of which supports the visiting judge's implicit finding that Judge Aguilar did not display a high degree of favoritism toward Mr.Vereen or Lone Star or a high degree of antagonism toward Mr. Milligan and the Trahans and did not express a personal bias or prejudice concerning the subject ...

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