Jose George, Matilde George, and Elaine George v. Compass Bank ( 2016 )

Fourth Court of Appeals
San Antonio, Texas
MEMORANDUM OPINION
No. 04-15-00676-CV
Jose GEORGE, Matilde George, and Elaine George,
Appellants
v.
COMPASS BANK,
Appellee
From the 45th Judicial District Court, Bexar County, Texas
Trial Court No. 2014-CI-03773
Honorable Dick Alcala, Judge Presiding
Opinion by: Marialyn Barnard, Justice
Sitting: Karen Angelini, Justice
Marialyn Barnard, Justice
Rebeca C. Martinez, Justice
Delivered and Filed: December 7, 2016
AFFIRMED
Appellant’s motion for rehearing is denied. This court’s opinion and judgment dated
September 14, 2016 are withdrawn, and this opinion and judgment are substituted.
Jose George, Matilde George, and Elaine George (the “Georges”) appeal the trial court’s
orders granting Compass Bank’s motion to approve interpleader and motion for summary
judgment. The Georges contend no evidence supported the granting of the interpleader, and the
trial court erred in awarding attorney’s fees. In addition to briefing the merits of their issues, the
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Georges also respond to Compass Bank’s motion to dismiss this appeal for lack of jurisdiction.
The motion was carried with the appeal. We affirm the trial court’s orders.
BACKGROUND
Jose George deposited funds into accounts in his son’s name at Citibank, N.A. and
Compass Bank. Jose subsequently sued his son, Jose Alberto George (“Alberto”), Alberto’s wife,
and Citibank for various causes of action after funds were transferred from the Citibank account
to other accounts owned by Alberto and Alberto’s wife. 1 Jose alleged he deposited the funds into
the accounts in anticipation of kidney surgery to provide his son with the liquidity to handle Jose’s
business and unexpected emergencies. Jose alleged Alberto had a fiduciary duty to use the funds
solely for Jose’s benefit.
In his original answer, Alberto asserted a counterclaim against Jose and cross-claims
against Matilde Diaz Yanez a/k/a Matilde George (who is Jose’s wife and Alberto’s mother),
Citibank, and Compass Bank. The claims against Compass Bank related to Jose’s withdrawal of
funds from an account in Alberto’s name.
Compass Bank answered and asserted a counterclaim against Alberto alleging Alberto’s
actions authorized Jose’s withdrawal of the funds. Compass Bank also asserted a cross-claim
against Jose, asserting if the bank was liable to Alberto, then Jose was liable to the bank for
fraudulent negotiation of the funds in the account. In addition to asserting these claims, Compass
Bank froze funds in accounts in the names of Jose, Alberto, and Matilde and sought to interplead
those funds into the registry of the court. Compass Bank alleged the funds Jose withdrew from
the account in Alberto’s name were deposited into an account in Jose’s name and funds were then
transferred from that account to an account in Matilde’s name. Compass Bank also froze funds in
1
Jose later non-suited Citibank and Alberto’s wife.
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an account in the name of Jose’s daughter, Elaine, because just as the funds in the account in
Alberto’s name were deposited by Jose, the funds in Elaine’s account also were deposited by Jose.
Compass Bank and Alberto filed competing motions for summary judgment against each
other, and Compass Bank filed a motion to approve interpleader. After a hearing, the trial court
denied all of the motions.
Compass Bank subsequently filed a second motion for summary judgment against Alberto.
The day before the hearing on Compass Bank’s motion, Alberto non-suited his claims against Jose,
Citibank, and Compass Bank, and Jose non-suited his claims against Alberto. The trial court
granted Compass Bank’s motion ordering that Alberto take nothing on his claims against Compass
Bank and awarding Compass Bank $100,836.55 in attorney’s fees. The trial court also severed
the claims between Compass Bank and Alberto into a separate cause.
Compass Bank then filed a second motion to allow interpleader or, in the alternative, to
declare the manner in which Compass Bank should pay the frozen funds. Compass Bank also filed
a motion for summary judgment with regard to the Georges’ claims against Compass Bank,
asserting the bank complied with the deposit agreements in freezing the funds. After a hearing,
the trial court granted both motions and awarded Compass Bank $100,836.55 in attorney’s fees
plus conditional appellate attorney’s fees. The order granting the interpleader authorized Compass
Bank to retain $100,836.55 in attorney’s fees from the frozen funds before depositing the balance
into the court’s registry. The trial court then severed the claims between Compass Bank and the
Georges into a separate cause.
The Georges filed a motion to modify and a notice of appeal in the original cause number,
and Compass Bank filed a response to the motion to modify in the original cause number. The
trial court subsequently entered an order in the original cause number allowing the Georges to
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withdraw all of the funds deposited into the registry of the court except $75,000, which was
retained to pay possible appellate attorney’s fees.
JURISDICTION
As previously noted, Compass Bank’s motion to dismiss this appeal for lack of jurisdiction
was carried with the appeal. In its motion, Compass Bank asserted: (1) the motion to modify filed
by the Georges in the original cause number did not extend the deadline for filing their notice of
appeal; and (2) the notice of appeal did not invoke this court’s jurisdiction over the orders that had
been severed into a separate cause. We disagree.
A. Motion to Modify
In arguing the motion to modify filed by the Georges in the original cause number did not
extend the deadline for filing their notice of appeal, Compass Bank primarily relies on Philbrook
v. Berry, 683 S.W.3d 378 (Tex. 1985). In Philbrook, Delvin Stanley Philbrook sued Owens-
Illinois, Inc. and other defendants. 683 S.W.2d at 379. After Owens-Illinois failed to answer,
“Philbrook moved to sever his claims against Owens-Illinois and obtained a default judgment in
the severed cause.” Id. Owens-Illinois filed a motion for new trial in the original cause rather than
the severed cause. Id. The trial court “nevertheless considered the motion as if filed in the severed
cause and signed an order” granting the motion for new trial fifty-three days after the default
judgment was signed. Id. Philbrook filed an original mandamus proceeding in the court of appeals
arguing the motion for new trial in the original cause did not extend the trial court’s plenary
jurisdiction in the severed cause. Id. The court of appeals denied mandamus relief; however, the
Texas Supreme Court granted relief concluding, “Because the motion for new trial was filed in the
wrong cause, it did not operate to extend the court’s plenary power over its judgment beyond the
thirty days prescribed by TEX. R. CIV. P. 329b(d).” Id. The court asserted, “In addition to being
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filed timely, the motion for new trial must be filed in the same cause as the judgment the motion
assails.” Id.
Although the Texas Supreme Court has not expressly overruled Philbrook, it has
questioned whether it was properly decided on numerous occasions. 2 See Blankenship v. Robins,
878 S.W.2d 138, 138-39 (Tex. 1994) (reversing court of appeals’ judgment dismissing appeal
based on Philbrook and asserting courts of appeals’ decisions should turn on substance rather than
procedural technicality); Tex. Instruments, Inc. v. Teletron Energy Mgmt., Inc., 877 S.W.2d 276,
278 (Tex. 1994) (noting court previously “questioned whether Philbrook was correctly decided”);
McRoberts v. Ryals, 863 S.W.2d 450, 455 (Tex. 1993) (noting “Philbrook is not to be given an
expansive reading that invalidates bona fide attempts to appeal”); City of San Antonio v. Rodriguez,
828 S.W.3d 417, 418 (Tex. 1992) (“Assuming that Philbrook was correctly decided, it is not
controlling in this case.”); Mueller v. Saravia, 826 S.W.2d 608, 609 (Tex. 1992) (“Assuming that
Philbrook was properly decided, Mueller’s appeal still survives dismissal under its standard.”).
The most relevant of these decisions for purposes of our analysis is Mueller.
In Mueller, Jolene Mueller filed a medical malpractice action against a doctor and a
pharmacy under cause number 90-CI-11255. 826 S.W.2d at 609. On February 11, 1991, the trial
court rendered a take-nothing summary judgment in favor of the doctor. Id. In that same judgment,
Mueller’s claims against the doctor were severed and assigned a new cause number, 90-CI-
11255A. Id. On February 26, 1991, a take-nothing summary judgment was granted in favor of
2
Many intermediate appellate courts, including this court, also have questioned the Philbrook decision and refused to
follow it. See, e.g., Manzo v. Lone Star Nat’l Bank, No. 13-14-00155-CV, 2015 WL 214012, at *1 n.1 (Tex. App.—
Corpus Christi Jan. 8, 2015, no pet.) (mem. op.); Leal v. City of Rosenberg, 17 S.W.3d 385, 386 (Tex. App.—Amarillo
2000, order); Hernandez v. Koch Mach. Co., 16 S.W.3d 48, 56 (Tex. App.—Houston [1st Dist.] 2000, pet. denied);
Matlock v. McCormick, 948 S.W.2d 308, 310 (Tex. App.—San Antonio 1997, no pet.); but see Levin v. Espinosa, No.
03-14-005340CV, 2015 WL 690368, at *1-3 (Tex. App.—Austin Feb. 3, 2015, no pet.) (following Philbrook where
trial court clerk notified appellant the motion for new trial was misfiled in the original cause number when appellant
could still timely file his notice of appeal) (mem. op.).
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the pharmacy in the original cause number. Id. On March 7, 1991, Mueller filed a motion for new
trial in the original cause number seeking a new trial in both the original cause and the severed
cause. Id. Mueller subsequently appealed the summary judgment in favor of the doctor. Id. The
court of appeals dismissed Mueller’s appeal relying on Philbrook “for the proposition that, when
a motion for new trial is filed in a cause not containing the judgment the motion assails, the court’s
plenary power over its judgment is not extended beyond the 30 days prescribed by TEX. R. CIV. P.
329b.” Id. The Texas Supreme Court held, “Assuming that Philbrook was properly decided,
Mueller’s appeal still survives dismissal under its standard.” Id. The court reasoned:
…. Philbrook demands no more than that “the motion for new trial must be filed
in the same cause as the judgment the motion assails.” Philbrook, 683 S.W.2d at
379 (emphasis added). That was the case here. First, the judgment assailed was
filed under the original cause number 90–CI–11255. Consequently, Mueller
properly filed her motion for new trial under that same cause number, rather than
the severed cause number 90–CI–11255A. Second, no document included within
the transcript contains the severed cause number. In fact, all subsequent motions
by the parties and rulings by the court were made under the original cause number,
90-CI-11255, rather than the severed cause number, 90-CI-11255A. To follow the
court of appeals’ own reasoning in a similar case, a party should not be punished
“for failure to comply with the terms of an order of severance ignored by [both the
opposing party] and the court ... [and] should be able to look to [the] judgment to
determine the cause number under which he should file his motion for new trial.”
Southland Paint Co., Inc. v. Thousand Oaks Racket Club, 687 S.W.2d 455, 457
(Tex. App.—San Antonio 1985, no writ).
Id. (emphasis in original).
Similarly, unlike the default judgment in Philbrook which was “signed in the severed
cause,” 3 the orders being appealed in the instant case were signed in the original cause, and the
caption of those orders contain the original cause number. In addition, Compass Bank filed its
response to the motion to modify in the original cause, and all subsequent filings and rulings with
regard to the money deposited into the court’s registry pursuant to the trial court’s order granting
3
683 S.W.2d at 379 (noting Philbrook “obtained a default judgment in the severed cause” and trial judge “signed the
default judgment in the severed cause”).
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the interpleader also were made in the original cause number. Therefore, the motion to modify
was properly filed in the original cause number and extended the deadline for the filing of the
notice of appeal. See Mueller, 826 S.W.2d at 609.
B. Notice of Appeal
Compass Bank also asserts the Georges’ notice of appeal did not invoke this court’s
jurisdiction because it was filed in the original cause number while the orders being appealed were
severed into a separate cause number.
An appellate court’s decisions should turn on substance rather than procedural technicality.
City of San Antonio, 828 S.W.2d at 418; LaGoye v. Victoria Wood Condo. Ass’n, 112 S.W.3d 777,
782 (Tex. App.—Houston [14th Dist.] 2003, no pet.). The Texas Supreme Court has rejected
“constructions of severances … that would have the effect of depriving or deceiving a party out of
the right to appeal.” Martinez v. Humble Sand & Gravel, Inc., 875 S.W.2d 311, 313 (Tex. 1994).
“[A] court of appeals has jurisdiction over any appeal in which the appellant files an instrument in
a bona fide attempt to invoke the appellate court’s jurisdiction.” Verburgt v. Dorner, 959 S.W.2d
615, 616 (Tex. 1997). “If there is no suggestion of confusion regarding which judgment the
appellant appeals, misnumbering should not defeat the appellate court’s jurisdiction.” LaGoye,
112 S.W.3d at 782; see also City of San Antonio, 828 S.W.2d at 418 (holding notation of incorrect
cause number on notice of appeal does not defeat jurisdiction of the court of appeals).
In this case, the notice of appeal states the orders being appealed include the partial
summary judgment and motion to approve interpleader signed on July 30, 2015. Even though the
notice of appeal bears the original cause number, we hold the notice of appeal was a bona fide
attempt to invoke our jurisdiction, and we have jurisdiction to consider this appeal. See Butler v.
Whitten, No. 02-13-00306-CV, 2014 WL 24232, at *2 (Tex. App.—Fort Worth Jan. 2, 2014, order)
(concluding court had jurisdiction over appeal even though notice of appeal was filed in the
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original cause number rather than severed cause number); LaGoye, 112 S.W.3d at 782 (same).
Therefore, Compass Bank’s motion to dismiss is denied.
INTERPLEADER
The Georges contend the record contains no evidence to support the interpleader because
Compass Bank did not present any evidence that anyone made conflicting demands regarding the
ownership or control of their accounts. Because no rival claims to the accounts existed, the
Georges assert Compass Bank could not have a reasonable doubt as to who was entitled to payment
on the accounts. The Georges also contend Compass Bank never made an unconditional tender of
the funds into the registry of the court because it always sought to retain an amount to secure its
possible liability to Alberto and its attorney’s fees.
An interpleader plaintiff is entitled to relief if three elements are met: (1) it is either subject
to, or has reasonable grounds to anticipate, rival claims to the same fund or property; (2) it has not
unreasonably delayed filing the action in interpleader; and (3) it has unconditionally tendered the
fund into the registry of the court. Saba Zi Expl., L.P. v. Vaughn, 448 S.W.3d 123, 128-29 (Tex.
App.—Houston [14th Dist.] 2014, no pet.); Young v. Gumfory, 322 S.W.3d 731, 743 (Tex. App.—
Dallas 2010, no pet.). In this case, the Georges challenge whether Compass Bank established the
first and third elements.
We review a trial court’s ruling that an interpleader action is appropriate under an abuse of
discretion standard. Bryant v. United Shoreline Inc. Assurance Servs., N.A., 972 S.W.2d 26, 31
(Tex. 1998); In re K.C., No. 04-03-00012-CV, 2003 WL 22955946, at *2 (Tex. App.—San
Antonio Dec. 17, 2003, no pet.) (mem. op.). In this review, “every reasonable doubt should be
resolved in favor of the stakeholder’s right to interplead.” Bryant, 972 S.W.2d at 31.
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A. Rival Claims
As noted, Compass Bank was required to establish that it was subject to, or had reasonable
grounds to anticipate, rival claims to the accounts held in each of the Georges’ names. Saba Zi
Exploration, L.P., 448 S.W.3d at 128-29; Young, 322 S.W.3d at 743. The Georges contend no
evidence of any conflicting claims existed because they each asserted they owned the money in
the account listed in their name. This contention, however, ignores the entire impetus for the claim
Alberto made against Compass Bank in the underlying lawsuit. Alberto asserted a claim against
Compass Bank because Jose claimed ownership of money Jose deposited into an account in
Alberto’s name. The evidence established that Jose similarly deposited money into accounts in
Matilde’s and Elaine’s names. In fact, after removing the funds from Alberto’s account, Jose
deposited those funds into an account in his name before writing a check from that account and
depositing those funds into an account in Matilde’s name. In response to requests for admission,
Jose admitted the funds in Alberto’s account truly belonged to him and further admitted he placed
the funds in his son’s name for FDIC insurance reasons. In response to interrogatories, Jose stated
he was authorized to remove the funds from Alberto’s account “and the bank knew it.”
Concerned that Jose might similarly claim ownership of the funds in the accounts in
Matilde’s and Elaine’s name, Compass Bank sent an interrogatory to Elaine requesting information
regarding the origin of the funds in Elaine’s account. Elaine responded the origin of the funds is
irrelevant. In response to requests for admissions, however, Elaine admitted Jose had access to
her banking account information. Elaine also admitted Jose wrote a check to her after he withdrew
the money from Alberto’s account. Elaine further admitted her father deposited the funds into the
account at Compass Bank styled in her name.
Compass Bank also sent requests for admission to Matilde in which she admitted Jose had
access to her banking account information and wrote a check to her after Jose withdrew the money
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from Alberto’s account. Matilde further admitted Jose deposited the funds into the account at
Compass Bank styled her in her name and that he did so for FDIC insurance reasons. Finally,
Alberto asserted claims against Matilde for conspiring with Jose in asserting claims against
Alberto.
In addition to the foregoing, the record contains a lengthy series of correspondence between
the attorneys for Compass Bank and the Georges regarding the bank’s concerns and its desire to
interplead the funds into the registry of the court. 4 In one letter, Compass Bank’s attorney
explained:
As we have also discussed, Compass Bank does not understand how and
why all of these funds keep being transferred between various accounts. At one
point, the Father told Compass Bank that he was doing many of these banking
transactions to try to put different funds into different people’s names to try to
spread money around so that it would not be subject to the $250,000 limit imposed
by the FDIC. Consequently, even though the money may technically be in an
account belonging to the mother or daughter, if the funds truly belong to the father
(and/or the son for that matter), such other people may or may not have claims to
such funds.
In another letter, Compass Bank’s attorney stated the bank was willing to write checks to Elaine
and Matilde based on the balances in their accounts if the Georges’ attorney would counter-sign a
letter representing, on behalf of his clients, that no one else could claim the funds. The Georges’
attorney did not sign the letter.
Although the Georges presented the affidavit of their attorney who stated each of the
Georges only claimed ownership of the funds in the accounts in their respective names, we resolve
every reasonable doubt in favor of Compass Bank’s right to interplead. Bryant, 972 S.W.2d at 31.
Therefore, based on the evidence presented, we hold the trial court did not abuse its discretion in
4
The correspondence spans the period from December of 2013 to June of 2015.
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finding Compass Bank had established it was subject to or had reasonable grounds to anticipate
rival or conflicting claims to the accounts.
B. Unconditional Tender
The Georges also contend Compass Bank never made an unconditional tender of the funds
because it sought to retain funds for its potential liability to Alberto and for its attorney’s fees. In
its second motion to allow interpleader, however, Compass Bank stated, “Compass Bank offers to
unconditionally tender the disputed funds to the Court.” Although the trial court allowed Compass
Bank to retain its attorney’s fees from the funds before depositing the balance into the court’s
registry, Compass Bank was only required to unconditionally tender the funds. See Clayton v.
Mony Life Ins. Co. of Am., 284 S.W.3d 398, 404 (Tex. App.—Beaumont 2009, no pet.); Heggy v.
Am. Trading Emp. Ret. Account Plan, 123 S.W.3d 770, 776 (Tex. App.—Houston [14th Dist.]
2003, pet. denied). As the courts have recognized, only an unconditional tender, not a deposit, is
required. See Clayton, 284 S.W.3d at 404; Heggy, 123 S.W.3d at 776.
ATTORNEY’S FEES
In their final issue, the Georges contend the trial court erred in awarding Compass Bank
attorney’s fees in an identical amount to the attorney’s fees Compass Bank was awarded in
defending against Alberto’s claims.
A party interpleading funds is entitled to have his attorney’s fees deducted from the
interpleaded funds. Gray v. Nash, 259 S.W.3d 284, 294 (Tex. App.—Fort Worth 2008, pet.
denied); In re K.C., 2003 WL 22955946, at *3. Such an award of attorney’s fees is within the trial
court’s sound discretion. Avila v. Lone Star Radiology, 183 S.W.3d 814, 816 (Tex. App.—Waco
2005, no pet.); In re K.C., 2003 WL 22955946, at *2.
Compass Bank was initially made a party to the underlying litigation on August 23, 2013,
when Alberto asserted claims against the bank. The appellate record contains a letter from the
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Georges’ attorney stating Compass Bank froze the accounts in August of 2013, apparently after
being served with Alberto’s pleading. Compass Bank froze all of the accounts because Jose had
taken the same actions with regard to each of the accounts, giving rise to Compass Bank’s
reasonable concern about the potential for rival claims to the funds in those accounts. Compass
Bank then began considering its options with regard to the frozen funds, including pursuing an
interpleader. Although the Georges argue Compass Bank spent more attorney’s fees on the claim
involving Alberto, the record reflects the actions taken by Compass Bank’s attorney regarding the
interpleader were intertwined with the attorney’s actions involving Alberto’s claim, especially in
view of the correspondence in the record between the attorneys discussing both matters
simultaneously. Accordingly, we hold the trial court did not err in awarding Compass Bank the
same amount of attorney’s fees as it was awarded in its summary judgment against Alberto. 5 See
Tony Gullo Motors I, L.P. v. Chapa, 212 S.W.3d 299, 313-14 (Tex. 2006) (holding segregation
not required “when discrete legal services advance both a recoverable and unrecoverable claim).
Finally, the Georges contend the affidavit they attached to their response to Compass
Bank’s motion for summary judgment raises a fact issue precluding summary judgment on the
amount of attorney’s fees to be awarded. This contention ignores that Compass Bank was
permitted to deduct its attorney’s fees in the trial court’s order granting the interpleader. 6 Gray,
259 S.W.3d at 294; In re K.C., 2003 WL 22955946, at *3. As previously noted, the trial court has
discretion to deduct an innocent stakeholder’s attorney’s fees from the interpleaded funds;
therefore, we review the trial court’s ruling under an abuse of discretion standard. Gray, 259
5
Since Compass Bank was paid its attorney’s fees from the funds that were interpleaded, it will not be able to also
collect the attorney’s fees from Alberto.
6
Although Compass Bank also was awarded its attorney’s fees in the order granting Compass Bank’s motion for
summary judgment, we need not decide whether or not that award was proper. See TEX. R. APP. P. 47.1 (noting
opinions need only address issues necessary to the disposition of the appeal). We note the Georges do not challenge
the trial court’s award of conditional appellate attorney’s fees in the order granting the motion for summary judgment.
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S.W.3d at 294; Avila, 183 S.W.3d at 816; In re K.C., 2003 WL 22955946, at *2. It is well-settled
that “[a]n abuse of discretion does not exist where the trial court bases its decisions on conflicting
evidence.” Davis v. Huey, 571 S.W.2d 859, 862 (Tex. 1978). Because the trial court was presented
with conflicting evidence regarding the amount of attorney’s fees Compass Bank should be
permitted to deduct from the interpleaded funds, the trial court did not abuse its discretion in
concluding Compass Bank could deduct attorney’s fees in the amount of $100,836.55.
CONCLUSION
The trial court’s orders are affirmed.
Marialyn Barnard, Justice
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