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Adams v. Amoco Federal Credit Union

Court of Appeals of Texas, First District

July 30, 2019


          On Appeal from Civil County Court at Law No. 2 Harris County, Texas Trial Court Case No. 1100326

          Panel consists of Justices Lloyd, Landau, and Countiss.



         Appellant Leslie Wm. Adams & Associates appeals the trial court's order granting summary judgment in favor of appellee AMOCO Federal Credit Union on Adams & Associates's claims arising from an underlying garnishment proceeding. Adams & Associates contends that (1) the trial court's order is not a final judgment, and (2) the trial court erred in granting summary judgment because its claims are not barred by (a) the debtor's discharge in bankruptcy, (b) res judicata, or (c) the applicable statute of limitations. We affirm.


         In 2014, Adams & Associates sued a former client, Terence Martinez, to recover legal fees and obtained a judgment against him for $41, 235.20 in damages and $2, 858.50 in attorney's fees. On July 2, 2014, Adams & Associates filed an application for writ of garnishment to reach funds that Martinez had in his AMOCO accounts.[1] The trial court granted the application and issued a writ of garnishment.

         On August 14, 2014, AMOCO, as garnishee, filed its original answer stating that Martinez had $108, 601.56 in two AMOCO accounts. Martinez thereafter filed several motions to dissolve the writ of garnishment, alleging that all of the funds in his AMOCO accounts were exempt from garnishment because they came from Department of Veterans Affairs benefits, disability benefits, and insurance settlement proceeds. On January 15, 2015, AMOCO filed an amended answer to the writ of garnishment, stating that it "had maintained its hold" on the accounts "in the amount of $46, 741.81," but that it had allowed Martinez to have access to the excess balance of $60, 699.00, which was withdrawn by him.

         On October 12, 2015, the trial court held a bench trial to determine the amount of exempt and non-exempt funds remaining in the AMOCO accounts. That same day, the trial court entered an order for disbursement of garnished funds and release ("garnishment judgment"), in which it determined that of the $46, 741.81 remaining on deposit with AMOCO, $15, 328.00 constituted nonexempt funds. The court also ordered AMOCO to pay Adams & Associates $12, 869.64 out of Martinez's funds. The remainder of the balance of the nonexempt funds was awarded to AMOCO for attorney's fees. Adams & Associates appealed.

         While the garnishment judgment was on appeal before this Court, and before AMOCO released any funds to Adams & Associates, Martinez filed a petition for bankruptcy under Chapter 7 of the Bankruptcy Code. On December 6, 2016, the bankruptcy court entered a discharge order.

         On September 7, 2017, this Court issued an opinion holding that the bankruptcy court's order of discharge, which set aside the underlying judgment against Martinez in favor of Adams & Associates, voided the garnishment judgment. Leslie Wm. Adams & Assocs. v. AMOCO Fed. Credit Union, 537 S.W.3d 571 (Tex. App.-Houston [1st Dist.] 2017, no pet.). The Court also concluded that "[t]o the extent that a claim could have been asserted against AMOCO for improperly releasing funds in violation of the writ, it has not been properly raised in this appeal because it was not preserved in the trial court." Id. at 578.

         On October 23, 2017, Adams & Associates filed the underlying suit against AMOCO, alleging that it had violated the writ of garnishment and Texas Civil Practice and Remedies Code section 63.003, and additionally sought declaratory relief. Adams & Associates alleged that it had been damaged by AMOCO's wrongful disbursement of funds to Martinez and sought to recover the amount of $60, 699.00 disbursed in violation of the writ. On December 1, 2017, AMOCO filed its answer.

         On April 30, 2018, AMOCO filed a traditional motion for summary judgment arguing that it was entitled to judgment as a matter of law because (1) Adams & Associates's claims were barred by the two-year statute of limitations applicable to conversion claims and res judicata, and (2) Adams & Associates sustained no damages caused by AMOCO's alleged wrongful release of funds. The next day, AMOCO filed an amended answer asserting the affirmative defenses of limitations, laches, waiver, and estoppel.

         On May 17, 2018, Adams & Associates filed a first amended petition asserting additional claims of fraud, fraud by non-disclosure, and aiding and abetting fraud. On May 18, 2018, it filed a summary judgment response arguing that (1) its claims were not barred by the statute of limitations for conversion because it did not assert such a cause of action; (2) AMOCO did not raise res judicata prior to filing its motion and therefore waived the defense, and res judicata did not bar its claims; and (3) AMOCO waived the affirmative defense of discharge in bankruptcy because it failed to raise the defense in its pleadings and its claims are not barred. On May 25, 2018, AMOCO filed its summary judgment reply.

         On May 29, 2018, the trial court granted AMOCO's motion for summary ...

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