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Fritts v. McDowell

Court of Appeals of Texas, Second District, Fort Worth

August 31, 2017



          PANEL: WALKER, MEIER, and KERR, JJ.



         I. Introduction

         This is a summary-judgment appeal from a suit seeking judicial foreclosure of a judgment lien against two properties. In five issues, Appellant Jeff Fritts challenges the trial court's summary judgment, which denied all the relief he sought in his motion for summary judgment, granted the motion for summary judgment filed by Appellees Mary Pat McDowell and CMP Family Limited Partnership on their affirmative defense of release, awarded Mary Pat and CMP attorney's fees, and released Appellee Leslie Haley's property from Fritts's lien. For the reasons set forth below, we will affirm.

         II. Factual and Procedural Background

         At the center of the underlying case are two pieces of property-3600 Scenic Drive in Flower Mound, Texas, and a smaller, contiguous strip of land- that Mary Pat and CMP[2] sold to Haley. Because prior to the sale of the properties numerous events occurred that are relevant to the present appeal- including the prior suit from which Fritts obtained the judgment lien at issue, as well as various transactions with nonparties-we set forth a detailed factual and procedural background.

         A. Fritts Files Suit Against the McDowells and Obtains a Judgment

         In 2008, Fritts filed suit in Dallas County against Mary Pat, her husband Joseph C. McDowell (Cole), and several entities they owned. While Fritts's suit was pending, Mary Pat and Cole divorced, and Mary Pat was awarded her sole and separate property, which included 3600 Scenic Drive. Fritts's suit was resolved in January 2011 when the trial court entered judgment (the Final Judgment) in favor of Fritts and against the McDowells and one of their entities, jointly and severally, and awarded attorney's fees to Fritts. Fritts abstracted the Final Judgment in the Denton County real property records in April 2011, and he refiled the abstract of the Final Judgment the following month (collectively, the Judgment Lien).

         B. Cole and Mary Pat Sign the Investment Agreement Transferring Assets between their Entities

         In February 2012, Cole and Mary Pat entered into an Investment Agreement in which CMP and Mary Pat transferred certain property to an entity owned by Cole called Safe Parking, Ltd., and as consideration for the transferred property, Cole and Safe Parking transferred to CMP a 20% interest in Safe Parking. As additional consideration, Mary Pat agreed "to dedicate at least 5 hours per week, subject to her personal schedule, to the activities and management of Safe Parking."

         C. Fritts Obtains a Charging Order

         In March 2012, when no amount of the Judgment Lien had been paid by Mary Pat, [3] Fritts obtained a Charging Order. The trial court found that CMP is Mary Pat's alter ego and ordered that any distributions owed to Mary Pat or CMP be paid to Fritts to satisfy her portion of the Final Judgment.[4]

         D. Fritts Enters into a Settlement Agreement and Release

         In June 2013, Fritts filed suit against Cole, Safe Parking, and the general partner of Safe Parking, which is an entity known as smmramjcm, LLC. Two months later, Safe Parking filed a Chapter 11 bankruptcy.[5] Fritts's lawsuit was transferred to the bankruptcy court and was given an adversary proceeding cause number. In April 2014, the parties in the bankruptcy case entered into a "Compromise, Global Settlement Agreement[, ] and Mutual Release" (the Settlement Agreement) to resolve Fritts's adversary proceeding. The Settlement Agreement referenced the Investment Agreement, specifically stating that

[o]n or about February 22, 2012, Cole McDowell, Safe Parking, Mary Pat, and CMP Family Limited Partnership ("CMP"), entered into that certain Investment Agreement, pursuant to which CMP transferred title in certain property interests to Safe Parking (the "Transferred Property"), and, in return, Safe Parking and Cole McDowell agreed to provide CMP with a twenty percent (20%) interest in Safe Parking, certain proprietary information related to automated parking, and in the future real estate investments, developments, and activities of Cole McDowell and Safe Parking[, ] and Mary Pat agreed to devote at least five hours per week, without compensation, to the activities of Safe Parking.

         The Settlement Agreement states that "Fritts, through counsel[, ] received a copy of the Investment Agreement." The Settlement Agreement further states that

Fritts . . . hereby waives, releases, and forever discharges, Safe Parking, . . . Cole McDowell, and the GP, and all of their directors, officers, shareholders, employees, representatives, agents, attorneys, affiliates, successors, and predecessors, from any and all claims, obligations, counterclaims, offsets, demands, actions, causes of action, and liabilities, of whatsoever kind and nature, character and description, whether in law or equity, whether concerning tort, contract, or under other applicable law, whether known or unknown, and whether anticipated or unanticipated, which he ever had, now has, or may ever have, including, without limitation, any claim asserted in the 2008 Lawsuit, [6] the Adversary Proceeding, or by way of the Final Judgment[7] or Charging Order;[8]provided, however, that nothing herein releases any Party from any obligation imposed upon them in this Agreement.

         The bankruptcy court approved the Settlement Agreement. After Cole tendered payment in accordance with the terms of the Settlement Agreement, Fritts executed a document entitled "Complete Release Of Joseph Coleman McDowell, Jr." in December 2014 and reiterated in substantially similar language the release provision from the Settlement Agreement.[9]

         E. Mary Pat and CMP Sell Property to Haley

         In June 2015, Mary Pat sold 3600 Scenic to Haley. As part of the same transaction, CMP sold Haley a contiguous strip of land containing 1.2957 acres (the Smaller Tract) and conveyed to Mary Pat an easement over 3600 Scenic.

         F. Fritts Files Suit Against Appellees

         In September 2015, Fritts filed suit against Haley, Mary Pat, and CMP requesting a judicial foreclosure on 3600 Scenic and the Smaller Tract and a declaratory judgment that title to those properties rests in him alone and that Appellees have no claim to those properties. Fritts also sought to have the trial court cancel and declare null and void Mary Pat's easement over 3600 Scenic. In the alternative, Fritts asserted a claim under the Uniform Fraudulent Transfer Act to void the sale of the Smaller Tract, alleging that the Smaller Tract was sold at an artificially low sales price to defraud him, and asserted an alternative claim for an easement of necessity over the Smaller Tract in case he was successful in foreclosing on 3600 Scenic but not successful in foreclosing on the Smaller Tract.

         G. Appellees Answer and File ...

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