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Muller v. Stewart Title Guaranty Co.

Court of Appeals of Texas, Fourteenth District

June 20, 2017

THOMAS MULLER AND LA PAZ GOLF VILLAS, LLC, Appellants
v.
STEWART TITLE GUARANTY COMPANY AND JOSEPH ALVARADO, Appellees

         On Appeal from the 11th District Court Harris County, Texas Trial Court Cause No. 2014-22251

          Panel consists of Justices Christopher, Jamison, and Brown.

          OPINION

          Marc W. Brown Justice.

         This case arises out of a business venture involving property for a golf resort in La Paz, Mexico. Thomas Muller was one of three individuals who formed La Paz Golf Villas, LLC. La Paz and Desarrollos Punta La Paz S. de R.L. de C.V. entered into an escrow agreement with the international division of Stewart Title Guaranty Company (STGC) serving as escrow agent. Muller contributed funds for the escrow. After La Paz and Desarrollos cancelled the agreement, STGC released the remaining escrow funds to a La Paz account. In pertinent part, Muller brought claims against STGC and STGC's employee, Joseph Alvarado, for releasing the funds to the La Paz account instead of releasing the funds to him. The trial court granted STGC's and Alvarado's motions for traditional and no-evidence summary judgment; STGC's and Alvarado's motion to strike a fifth amended petition naming La Paz as an additional plaintiff; and STGC's and Alvarado's motion to strike La Paz's petition in intervention and to enter final judgment.

         On appeal, Muller argues that: the trial court erred in granting summary judgment against him on his contract and fiduciary claims; the trial court abused its discretion by not continuing the summary-judgment hearing for Muller to conduct additional discovery; the trial court abused its discretion in striking the fifth amended petition; and the trial court abused its discretion in striking La Paz's petition in intervention. We affirm.

         I. Background

         Thomas Muller, James Limperis, and Frederick Stock formed La Paz Golf Villas, LLC, a Nevada company, in order to purchase development property for a golf resort in La Paz, Mexico, from Desarrollos Punta La Paz S. de R.L. de C.V., a Mexican company. In August 2005, Desarrollos as Seller and La Paz as Purchaser entered into an escrow agreement. Under the agreement, Stewart Information International[1] served as escrow agent. The agreement stated that "[t]he parties mutually desire[d] to create an escrow account with [STGC] for the purpose of receiving, holding, administering and distributing the funds deposited as required herein." The agreement provided that $1, 172, 000 would be deposited in the agent's escrow account, with half of that amount being released immediately to Desarrollos for "advance real estate commissions." The agreement stated that "Seller and Purchaser are sometimes collectively identified as the 'Parties.'" The agreement also provided that "the Party(ies) making deposit(s)" could have the escrowed funds maintained in an interest-bearing money market account and that "[a]ll interest thereon shall be paid to Purchaser." Muller was not listed as a party to the escrow agreement. Limperis signed the agreement on behalf of La Paz. STGC sent La Paz a letter confirming the receipt of a deposit of $1, 172, 000 from Cummings & Lockwood and of $1, 172, 000 from Thomas R. Muller.

         A few months later, there arose "a disagreement among the members of La Paz." Muller, Limperis, and Stock signed a settlement agreement in 2006 and another settlement agreement and mutual release in 2008.

         In August 2011, Limperis sent STGC a letter as a "managing member" of La Paz. In that letter, La Paz requested a transfer of "interest only to date" from the escrow account to La Paz's "business bank account with Nevada State Bank." The letter provided wiring instructions for this account.

         In October 2011, Muller (on behalf of himself and Stock) and Limperis signed the "La Paz Golf Villas, LLC, Agreement." This agreement stated that Limperis as a "managing member" of La Paz "has established our entity bank account and facilitated the withdrawal of interest only from our Escrow Account with" STGC, and that the interest-only amount of $183, 531.77 was wired and received in La Paz's bank account in August 2011. This agreement outlined what would occur in the event the closing and acquisition of the property was unsuccessful. In pertinent part, the agreement provided that Limperis would release the escrow funds to the same La Paz bank account at Nevada State Bank.

         On April 19, 2012, La Paz and Desarrollos sent STGC a signed notice of cancellation and requested that the remaining escrow funds be released to La Paz's bank account at Nevada State Bank. Limperis signed the notice for La Paz. The notice included wiring instructions with the same account number and routing number as in the August 2011 interest request.

         On April 23, 2012, Alvarado sent Limperis an email regarding processing the cancellation. Alvarado stated:

In order to return the funds back, we need to send the funds back to the account(s) from which they originated from. According to our records, we received funds from two different accounts:
Cummings & Lockwood LLC (Bank of America)
Thomas R. Muller (US Trust Company of NY)
Can you please provide the wiring instructions for each account? If the account(s) are no longer valid, can you please provide us with new wiring instructions?

         Limperis replied to Alvarado's email:

Those accounts are no longer valid. I have given instructions to wire to our business account at Nevada State Bank as part of the cancellation requirement. If for any reason you cannot distribute funds to our business account at Nevada State Bank I would request that NO cancellation take place and the contracts and escrow remain in place. Please send confirmation that you understand the request and verify that if canceled the escrow funds will be distributed as directed to Nevada State Bank. . . .
Thank you,
Jim Limperis
La Paz Golf Villas

STGC released just under $1.76 million to La Paz's account at Nevada State Bank.

         In April 2014, Muller originally brought suit against Limperis, STGC, Alvarado, Does 1-10, and Roes Cos. 11-20. By April 2015, Muller had amended his petition four times. Muller removed Limperis as a defendant and named five additional defendants (Steve Gottardy, Mitch Creekmore, Tanya M. Harris, Farah A. Najjar, and Veronica Ramos) who allegedly were employees of STGC.[2]Against STGC, Muller brought claims for breach of contract, negligence, gross negligence, breach of fiduciary duty, negligent hiring, retention, and supervision, and vicarious liability. Against Alvarado, Muller brought claims for negligence, gross negligence, and breach of fiduciary duty. Muller requested attorney's fees pursuant to section 38.001 of the Texas Civil Practice and Remedies Code.

         On September 29, 2015, STGC filed a traditional and no-evidence motion for summary judgment, and a notice of hearing.[3] Alvarado also filed a traditional and no-evidence motion for summary judgment, which incorporated STGC's summary-judgment motion and exhibits. Muller filed a response.[4]

         STGC's and Alvarado's summary-judgment motions were set for hearing on Monday, December 14, 2015. On Sunday, December 13, Muller sent counsel for STGC and Alvarado a supplemental declaration in support of opposition to defendants' traditional and no-evidence motions for summary judgment, as well as a fifth amended petition naming La Paz as a plaintiff. The file stamps on these documents indicate that they were filed first thing on December 14, 2015. That same day, the trial court held the summary-judgment hearing and signed orders granting STGC's and Alvarado's traditional and no-evidence motions.

         In January 2016, STGC and Alvarado filed a verified motion to strike the fifth amended pleading and to show authority, and motion to enter final judgment. The trial court held a hearing on the motion on February 22, 2016. On February 25, 2016, La Paz as intervenor-plaintiff filed a petition in intervention. On March 2, 2016, the trial court signed an order of dismissal and interlocutory judgment. The next day, STGC and Alvarado filed a motion to strike the petition in intervention and to enter final judgment. The trial court held another hearing on March 14, 2016. That same day, the trial court signed its order striking intervention and rendering final judgment.

         Muller and La Paz timely appealed.

         II. ...


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