In the matter of: DAVID C. RUSSELL, Debtor.
DAVID C. RUSSELL; RONALD J. SOMMERS, Appellants. JANNA F. RUSSELL, Appellee,
Appeals from the United States District Court for the
Southern District of Texas
OWEN, Chief Judge, and JONES and SMITH, Circuit Judges.
E. SMITH, CIRCUIT JUDGE:
Russell sued David Russell, her ex-husband and a Chapter 7
debtor, in bankruptcy court over a debt of $32, 500 plus
interest. After an evidentiary hearing, the bankruptcy court
ruled for David on the record, finding that David had paid
the debt. The district court reversed, holding that David had
not satisfied his obligation to Janna as a matter of law. We
affirm the district court.
case presents one snippet of a ten-plus-year legal battle
between ex-spouses. The dispute began when Janna filed a
petition to modify David's and her parent-child
relationship order. A Texas state court ordered David and
Janna to mediation, where they executed a mediation
settlement. The order approving the settlement mandated that
David pay Janna $32, 500. On receipt of payment, Janna was to
execute certain deeds to David.
David either failed or refused to pay Janna, the state court
ordered the parties to arbitration. The resulting arbitration
order awarded Janna $32, 500 plus interest. In relevant part,
the arbitration order states,
9.6 IT IS ORDERED that said money order, certified check or
cashier's check shall be made payable to "Janna
Russell" only and shall not have any other endorsement.
9.7 IT IS ORDERED that if payment of the judgment together
with post judgment interest at 5% is made by DAVID
CHRISTOPHER RUSSELL to JANNA RUSSELL in cash, then JANNA
RUSSELL shall execute the Special Warranty Deeds listed above
in 9.3.1, 9.3.2, 9.3.3 and DAVID CHRISTOPHER RUSSELL shall
execute the Special Warranty Deed listed in 9.4.1 on the same
day the judgments are paid in cash.
Janna expressly sought provisions requiring payments to go
directly to her.
the state proceedings, Janna and her attorney Ellen Yarrell
found themselves at odds and decided to part ways. On
December 23, 2010, two days after the state court had entered
its arbitration order, Yarrell moved to withdraw from
representing Janna. Janna agreed and signed the Order on
Motion of Withdrawal of Counsel on December 30, 2010. At that
time, Yarrell claimed that Janna owed her over $60, 000 in
unpaid attorney fees.
December 30, 2010, email, Yarrell asked Janna to sign the
deeds due to David on receiving his $32, 500 payment. Yarrell
also asked Janna to sign a statement authorizing Yarrell to
collect David's payment on her behalf. Yarrell stated
that she would then deposit the money to Janna's account
balance with her law firm. In return, Yarrell offered to sign
a complete release for the rest of the disputed attorney
fees. Janna rejected that offer and stated that she had been
"very clear about [her] position" with Yarrell,
David, and David's attorneys, and she would "not be
pressured or coerced . . . into signing the deed without
[David] first paying [her] directly the $32, 500." Janna
also expressed concern that Yarrell was not acting in her
best interest and repeatedly informed Yarrell that she was
not authorized to accept the $32, 500.
to Janna, David tried to manipulate Janna's conflict with
Yar-rell to "negotiate a better deal." In
particular, Janna claims that David threatened to deliver the
settlement funds to Yarrell unless Janna dismissed an
unrelated appeal. To support that claim, Janna presents
emails from David.
April 15, 2011, David went to Yarrell's office,
unannounced, and paid her $32, 500 in cash. Because David did
not receive Janna's deeds-which, per the arbitration
order, he was entitled to on paying Janna $32, 500-on June 6,
2011, David filed a motion "to ...