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Saks v. Rogers

Court of Appeals of Texas, Fourth District, San Antonio

July 26, 2017

Margaret Landen SAKS and Philip M. Ross, Appellants
v.
Marcus P. ROGERS, A. Chris Heinrichs, J. Barrett Shipp, and Heinrichs & De Gennaro, P.C., Appellees

         From the Probate Court No. 1, Bexar County, Texas Trial Court No. 2011-PC-3466B Honorable Kelly Cross, Judge Presiding

          Sitting: Rebeca C. Martinez, Justice, Patricia O. Alvarez, Justice Luz Elena D. Chapa, Justice

          MEMORANDUM OPINION

          Patricia O. Alvarez, Justice

         This appeal stems from the probate court's entry of final judgment confirming an arbitration award. The judgment also included a monetary sanction award against Appellant Philip M. Ross. On appeal, Appellants assert the probate court erred in the following: (1) granting Appellees' motion to abate and compel arbitration; (2) overruling Appellant Margaret Landen Saks's motion to overrule objections to arbitration; (3) compelling arbitration on claims not within the scope of the arbitration agreement; (4) entering judgment on the arbitrator's sanction order; and (5) entering the order confirming award of final judgment. We affirm the probate court's judgment.

         Factual and Procedural Background

         The original lawsuit, from which this case arises, was filed in 2011. Several appeals pending from the initial lawsuit have been before this court. Because this current appeal involves factual allegations from the previous causes, a rather lengthy factual background is set forth.

         A. Previous Appeal: Davis v. Merriman, Nos. 04-13-00518-CV, 04-13-00875-CV, 2015 WL 1004357 (Tex. App.-San Antonio Mar. 4, 2015, pet. denied)

         On January 2, 1991, Sandra C. Saks created the Saks Children Family Trust a/k/a ARFL&L benefitting her children, Gloria Lauren Nicole Saks (Lauren) and Margaret Landen Saks (Landen). Twenty years later, on August 17, 2011, Lauren filed suit against the trustee, Diane Flores, alleging breach of fiduciary duty and failure to comply with the trust agreement. Lauren sought an accounting, constructive trust, and the removal of the trustee. On December 21, 2011, the trustee ordered the trust dissolved. A week later, on December 28, 2011, an interim trustee, Marcus Rogers, was appointed by the probate court; the interim trustee concluded that any attempt by the original trustee to terminate the trust was ineffective.

         On April 2, 2012, the parties entered into a mediated settlement agreement (MSA) which included an arbitration agreement for "disputes aris[ing] with regard to the interpretation and/or performance of [the MSA] or any of its provisions, including the form of further documents to be executed . . . ." Although not present at the mediation, Landen provided Lauren a power of attorney to act on her behalf for the MSA. On May 8, 2012, the probate court signed an order approving the MSA and authorizing the interim trustee to sign the MSA.

         On August 21, 2012, Lauren filed a motion to compel arbitration. In that motion, Lauren asserted that matters regarding the interpretation and performance of the MSA remained unresolved. After a failed attempt at a court-ordered mediation, the matter was heard before an arbitrator on October 18, 2012. The arbitrator entered findings of fact, specifically that the parties to the MSA included Lauren, Landen, the original trustee, Sandra, and the interim trustee.[1] The arbitration award ordered Sandra and the original trustee to execute certain documents conveying to the trust all of their rights, title, and interests in certain property "no later than October 31, 2012." On May 7, 2013, the probate court signed the final judgment confirming the arbitrator's award and entered the award as the judgment of the court.

         On August 16, 2013, the probate court granted Appellee Shipp's motion to enforce the probate court's May 7, 2013 order. The probate court ordered Sandra and Landen to execute and deliver several conveyance agreements set out in the arbitration award.

         On August 16, 2013, Landen filed an objection to the application for the order enforcing judgment in which she asserted (1) she was not a party to the lawsuit, (2) the probate court had lost plenary power, and (3) the judgment was insufficient to serve as proof of title. More specifically, Landen averred the only parties to the MSA were Lauren, Sandra, and the original trustee. Landen asserted that she was not a party to either Lauren's lawsuit or to the MSA; she further contended her "approval" to the MSA was signed by Lauren's attorney, A. Chris Heinrichs, under apparent authority of a limited power of attorney prepared by Heinrichs, who was not Landen's attorney. Landen conceded that she signed a limited power of attorney designating Lauren, as her attorney in fact, and authorizing Lauren to settle the pending litigation in Landen's best interest. Landen argued, however, that she was misled by Lauren's attorneys, Heinrichs and Barrett Shipp, who drafted the power of attorney and advised her to sign it. Landen also contended that Heinrichs and Shipp negligently misrepresented that it was in Landen's best interest to sign the power of attorney and to agree to the terms of the MSA. When Landen sought the advice of an attorney of her choice, she discovered that, after the trust was dissolved, the MSA provided for payment of hundreds of thousands of dollars for attorney's fees and ad litem fees from the trust assets.

         On June 17, 2013, the probate court ordered Sandra and Landen to execute and deliver four conveyance documents, no later than October 4, 2013. When Sandra and Landen failed to comply, the interim trustee filed a motion to enforce orders and execute conveyance documents. On November 14, 2013, the probate court signed an order in aid of enforcement of judgment, finding that Sandra and Landen failed to comply with the arbitration award and probate court's judgment by failing to execute the court-ordered documents.

         Landen appealed the probate court's order in aid of enforcement. In her brief Landen argued: (1) the probate court lacked subject matter jurisdiction to compel Landen to convey her interests; (2) the probate court lost plenary power prior to the entry of judgment; and (3) the probate court's order in aid of enforcement was void. Landen did not appeal the arbitrator's finding that she was a party to the MSA. On March 4, 2015, this court affirmed the probate court's order in aid of enforcement. See Davis v. Merriman, Nos. 04-13-00518-CV, 04-13-00875-CV, 2015 WL 1004357, at *6 (Tex. App.-San Antonio Mar. 4, 2015, pet. denied).

         B. Current Appeal

         On March 19, 2014, pending this court's opinion regarding the probate court's order in aid of enforcement, Landen filed an original petition against Heinrichs and his law firm, Heinrichs & De Gennaro, P.C., Shipp, and Rogers (the interim trustee). In her petition, Landen alleged negligent representation, fraudulent inducement, conspiracy, and fraudulent claim against real property. The defendants filed a motion to abate and to compel arbitration. In her response, Landen asserted, inter alia, she was not a party to the MSA, she did not agree to the arbitration, her claims were not disputes between the parties to the MSA, and because the MSA did not require Landen to convey or assign her interests in the partnerships or ventures, her current claims were not related to an interpretation or enforcement of the MSA.

         On June 4, 2015, following a hearing on the motion to abate and compel arbitration, the probate court made the following findings of fact:

(1) Margaret Landen Saks was a party to the Mediated Settlement Agreement dated April 2, 2012, by way of a Power of Attorney given to her sister Lauren Saks and in her appearance in subsequent enforcement hearings and in her appeal regarding the arbitration issues arising out of the same MSA;
(2) Landen Saks now claims a conspiracy in procurement of the [power of attorney], negligent misrepresentation, fraudulent inducement and other acts and omissions by A. Chris Heinrichs, Marcus P. Rogers, J. Barrett Shipp and Heinrichs & De Gennaro, P.C.;
(3) The issue before the Court is whether the claims against A. Chris Heinrichs, Marcus P. Rogers, J. Barrett Shipp and Heinrichs & De Gennaro, P.C. are within the scope of the MSA;
(4) Landen Saks's claims against Marcus Rogers arise from, are clearly interwoven with and factually intertwined matters that have a significant relationship to the MSA; and
(5) Landen Saks's claims against A. Chris Heinrichs, J. Barrett Shipp and Heinrichs & De Gennaro, P.C. are also factually intertwined with the MSA and have a significant relationship to the MSA.

         The probate court granted the motion to abate and compel arbitration.

         On December 22, 2015, attorney Philip Ross represented Landen during a telephonic conference with the arbitrator. The arbitrator ordered Landen "to appear for such deposition in San Antonio before January 31, 2016." After Ross failed, or refused, to provide a date for Landen to appear for her deposition, the arbitrator noticed a telephonic conference on January 18, 2016.

         During the January 18, 2016 conference, Ross again represented Landen. Following arguments of counsel, the arbitrator ordered Landen to appear for her deposition, in person, at the Law Offices of Attorney Royal Lea, on January 25, 2016.

         On January 24, 2016, Ross notified the arbitrator that he did not expect Landen to appear. The arbitrator ordered Ross to appear at the deposition regardless of whether Landen would be attending the deposition; a telephonic conference was ordered for morning of January 25, 2016. The following morning, on January 25, 2016, Ross informed the arbitrator, for the first time, that he had a hearing in court and would not appear at Mr. Lea's office; neither Landen nor Ross appeared for deposition or contacted the arbitrator as ordered. Additionally, Landen failed to respond or comply with the arbitrator-ordered discovery requests that were due on January 29, 2016.

         The arbitrator requested dates for a hearing to address sanctions against Landen for her failure to attend the oral deposition or otherwise participate in discovery. On February 9, 2016, Ross emailed the arbitrator that he was available to attend the hearing on February 19, 2016. The hearing was scheduled for February 19, 2016. On February 18, 2016, Ross notified the arbitrator, by email, that neither he nor Landen would attend the February 19, 2016 hearing or any other conference or proceeding on this case.

         On February 19, 2016, a hearing was held before the arbitrator. All parties, either individually or through counsel, received notice. Neither Landen nor her attorney attended the hearing. On ...


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