Jennifer Gwynne Capelo, as Adminstrator of the Estate of Decedent June Yvonne Rivera v. Gale Lilliman D/B/A Gulf Coast Bail Bonds ( 2022 )

Reversed and Remanded and Memorandum Majority Opinion and
Memorandum Concurring Opinion filed August 23, 2022.
In The
Fourteenth Court of Appeals
NO. 14-20-00804-CV
JENNIFER GWYNNE CAPELO, AS ADMINSTRATOR OF THE ESTATE
OF DECEDENT JUNE YVONNE RIVERA, Appellant
V.
GALE LILLIMAN D/B/A GULF COAST BAIL BONDS, Appellee
On Appeal from the Probate Court
Galveston County, Texas
Trial Court Cause No. PR-0077921-A
MEMORANDUM MAJORITY OPINION
Jennifer Gwynne Capelo, as administrator of the estate of decedent June
Yvonne Rivera, appeals the trial court’s grant of summary judgment favoring
appellee Gale Lilliman d/b/a Gulf Coast Bail Bonds. Capelo alleged that a
partnership existed between the decedent, Rivera, and Lilliman to own and operate
a bail bonds business and sought an accounting of partnership assets and a winding
up of partnership affairs. Lilliman denied that a partnership existed and filed a
traditional motion for summary judgment on that ground, which the trial court
granted. Concluding Lilliman has not demonstrated his entitlement to judgment as
a matter of law, we reverse the summary judgment and remand the case to the trial
court for further proceedings.
Background
After Rivera’s death, Capelo made demands to Lilliman as administrator of
Rivera’s estate concerning an alleged partnership to run a bail bonds business
between Rivera and Lilliman. Lilliman then filed a declaratory judgment action
against Capelo as administrator of the estate, and Capelo filed a separate action
seeking an accounting and winding up, among other things. The two actions were
then consolidated into the present lawsuit. In her petition, Capelo alleged that
Rivera and Lilliman formed a partnership in 1986 and jointly owned and operated
various bail bonds businesses in Galveston and surrounding counties. Rivera
provided the “business know how” and cash, and Lilliman provided “sweat equity”
and cash. Capelo further alleged that in 2001, Lilliman told Rivera, who apparently
had health issues, that she should stay home and still receive her share of
partnership profits, which she received until her death in 2016. As part of the
arrangement, Rivera agreed her partnership share would be reduced to 40 percent.
After Rivera’s death, Lilliman denied the existence of the partnership.
Lilliman filed a traditional motion for summary judgment, seeking a take
nothing judgment on all Capelo’s claims and a declaration that no partnership had
existed between himself and Rivera. The grounds for the motion will be discussed
in detail below. Lilliman attached his own affidavit denying a partnership existed
as well as other documents in support of the motion. In response, Capelo submitted
her own affidavit, as well as an affidavit from a former employee of the bail bonds
business; a deposition of Lilliman’s office manager, who confirmed Lilliman
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directed monthly payments to Rivera until her death; and other documents.
Lilliman also raised numerous objections to Capelo’s summary judgment
evidence. The trial court granted all the evidentiary objections and summary
judgment favoring Lilliman. In its final judgment, the trial court ordered Capelo
take nothing on her claims, declared the estate owns no ownership interest in the
business known as Gulf Coast Bail Bonds, and awarded attorney’s fees to
Lilliman.
In five issues on appeal, Capelo contends the trial court erred in (1) holding
no bail bonds business could be owned or operated as a partnership; (2) sustaining
Lilliman’s objections to Capelo’s summary judgment evidence; (3) finding that no
genuine issue of material fact existed and ordering Capelo take nothing on her
claims; (4) declaring the estate owns no interest in the bail bonds business; and (5)
awarding attorney’s fees to Lilliman. Lilliman expressly declined to file an
appellee’s brief in response to Capelo’s appellant’s brief.
Standards of Review
In a traditional motion for summary judgment, if the movant’s motion and
summary judgment evidence facially establish its right to judgment as a matter of
law, the burden shifts to the nonmovant to raise a genuine, material fact issue
sufficient to defeat summary judgment. See M.D. Anderson Hosp. & Tumor Inst. v.
Willrich, 28 S.W.3d 22, 23 (Tex. 2000). In our de novo review of a trial court’s
summary judgment, we consider all the evidence in the light most favorable to the
nonmovant, crediting evidence favorable to the nonmovant if reasonable jurors
could, and disregarding contrary evidence unless reasonable jurors could not. Mack
Trucks, Inc. v. Tamez, 206 S.W.3d 572, 582 (Tex. 2006). The evidence raises a
genuine issue of fact if reasonable and fair-minded jurors could differ in their
conclusions in light of all the summary judgment evidence. Goodyear Tire &
3
Rubber Co. v. Mayes, 236 S.W.3d 754, 755 (Tex. 2007).
Discussion
In his motion for summary judgment, Lilliman first noted that all issues in
the case hinged on whether a partnership existed between Lilliman and Rivera to
own and operate a bail bonds business. He then asserted that no such partnership
existed as a matter of law because Texas Occupations Code section 1704.001
prohibits the ownership of a bail bonds business by a partnership. He further
asserted that evidence conclusively established that no such partnership existed,
particularly citing his own affidavit denying the existence of a partnership, the
assumed name record certificate for Gulf Coast Bail Bonds that lists only Lilliman
as an owner, and two applications for bail bond licenses filed by Rivera in which
she did not state she had an ownership interest in Gulf Coast Bail Bonds. We will
first address the Occupations Code argument and then will turn to the evidentiary
argument.
Occupations Code. As stated, Lilliman’s first ground for summary
judgment asserted that under section 1704.001 of the Occupations Code, a bail
bonds business could not be owned by a partnership. He further argued that “an
agreement which is in violation of the law also violates public policy, is void and
will not be enforced,” citing McCreary v. Bay Area Bank & Trust, 68 S.W.3d 727,
733 (Tex. App.—Houston [14th Dist.] 2001, no writ). We disagree, however, with
Lilliman’s interpretation of section 1704.001.
The proper interpretation of statutory language is a matter for de novo
review. City of Rockwall v. Hughes, 246 S.W.3d 621, 625 (Tex. 2008). Our
objective in construing a statute is to determine and give effect to the legislature’s
intent. See Nat’l Liab. & Fire Ins. Co. v. Allen, 15 S.W.3d 525, 527 (Tex. 2000). If
possible, we must ascertain that intent from the language in the statute and not look
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to extraneous matters. Id. If the wording of the statute is unambiguous, we adopt
the interpretation supported by the plain meaning of the provision’s words and do
not engage in forced or strained constructions. St. Luke’s Episcopal Hosp. v.
Agbor, 952 S.W.2d 503, 505 (Tex. 1997). We presume that every word was
deliberately chosen and that excluded words were intentionally excluded. Cameron
v. Terrell & Garrett, Inc., 618 S.W.2d 535, 540 (Tex. 1981).
Section 1704.001 provides definitions for use in Chapter 1704 of the
Occupations Code, which concerns the regulation of bail bond sureties. In his
motion, Lilliman offered no analysis of the section to support his assertion that it
prohibits a partnership from owning a bail bonds business. The section states in
full as follows:
In this chapter:
(1) “Bail bond” means a cash deposit, or similar deposit or written
undertaking, or a bond or other security, given to guarantee the
appearance of a defendant in a criminal case.
(2) “Bail bond surety” means a person who:
(A) executes a bail bond as a surety or cosurety for another
person; or
(B) for compensation deposits cash to ensure the appearance in
court of a person accused of a crime.
(3) “Board” means a county bail bond board.
(4) “Bonding business” or “bail bond business” means the solicitation,
negotiation, or execution of a bail bond by a bail bond surety.
(4-a) “Final judgment” means a judgment that disposes of all issues
and parties in a case.
(5) “Person” means an individual or corporation.
Tex. Occ. Code § 1704.001.
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Nothing in the section explicitly states that a bail bonds business cannot be
owned or operated by a partnership. Subsection (2) notes that a “bail bond surety”
is a “person,” and subsection (5) provides that “person” in the chapter “means an
individual or corporation,” but this indicates at most that a partnership cannot be a
“bail bond surety”; it does not prohibit a partnership from owning and operating a
bail bonds business. Subsection (4) defines “bonding business” and “bail bond
business” as “the solicitation, negotiation, or execution of a bail bond by a bail
bond surety”; however, this does not explicitly or implicitly bar a partnership from
owning and operating a bail bonds business. Indeed, the use of those terms in the
remainder of Chapter 1704 finds them primarily used to identify the type of
business being regulated and not specific businesses. See, e.g., Tex. Occ. Code §§
1704.101, .109, .152, .252, .302. In other words, a “bonding business” or “bail
bond business” is the type of business involving “the solicitation, negotiation, or
execution of a bail bond by a bail bond surety.” This does not necessarily mean
that a partnership cannot own or operate a business that involves the solicitation,
negotiation, or execution of a bail bond, so long as a bail bond surety is involved in
the solicitation, negotiation, or execution. Lilliman does not cite and research has
not revealed any authority to the contrary.
For further understanding of the definitions in section 1704.001, we turn to
section 1704.252, which provides grounds for which a bail bond licensing board
may suspend or revoke a license. Subsection (9) of that section provides that a
board may revoke or suspend a license if the license holder “pays commissions or
fees to or divides commissions or fees with, or offers to pay commissions or fees to
or divide commissions or fees with, a person or business entity not licensed under
this chapter.” Id. § 17.04.252(9). At least one court has interpreted this section as
providing that someone authorized to execute bail bonds—in that case an attorney,
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not a licensee—may not form a partnership to operate a bail bonds business with
someone who was not authorized to execute bail bonds. Villanueva v. Gonzalez,
123 S.W.3d 461, 465–67 (Tex. App.—San Antonio 2003, no pet.). That
construction appears logical. It also suggests that the opposite would not be
prohibited, i.e., that a person licensed under the chapter could partner with and
divide commissions with another person licensed under the chapter. If that were
not the case, the legislature would have barred the splitting of bail bond
commissions rather than just barring the sharing of commissions between a
licensed person and a nonlicensed person.
As the Villanueva court noted, the purpose of subsection 1704.252(9)
appears to be to prohibit unregulated persons from participating in a bail bonds
business. Id. at 466 (“If individuals who are qualified to act as bail bond sureties
could split commissions or fees with those who do not meet the statute’s
requirements or exceptions, a bail bond board could not regulate them.”). In the
present case, Rivera and Lilliman were both licensed as bail bond sureties; thus,
both were subject to regulation by county bail bond boards. Although there is some
indication in the record that Rivera may have allowed her license to lapse at some
point in the 2000s, the question of what would happen to a partnership if one of the
partners lost their license is beyond the scope of this summary judgment appeal.
Lilliman’s first ground for summary judgment posited that Occupations Code
section 1704.001 bars the ownership of a bail bonds business by a partnership.
Contrary to Lilliman’s assertion, section 1704.001 does not prohibit partnerships
from owning or operating bail bond businesses.1 The trial court erred to the extent
1
Moreover, because section 1704.001 does not prohibit partnerships from owning or
operating bail bond businesses, Lilliman’s citation to McCreary, 68 S.W.3d at 733, for the
proposition that “an agreement which is in violation of the law also violates public policy, is void
and will not be enforced,” is inapplicable in this case.
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it based summary judgment on this ground.
Evidentiary arguments. In support of his contention that the existence of a
partnership was conclusively disproven, Lilliman cited his own affidavit as well as
two applications for a bail bond license filed by Rivera in Galveston County and
the assumed name record certificate for Gulf Coast Bail Bonds also filed in
Galveston County. In the two applications for a license, dating from 1998 and
2000, Rivera stated that “[t]he name under which my business as a professional
bondsman shall be conducted is A&A Associates Bail Bonds.” She did not deny in
the applications that she was a partner with Lilliman. Lilliman did not offer any
applications from other years or counties. In her petition, Capelo alleged that
Rivera and Lilliman formed a partnership in 1986 and jointly owned and operated
various bail bonds businesses, including specifically Gulf Coast Bail Bonds and
A&A Associates Bail Bonds. Nothing in the applications conclusively refutes the
claim that Rivera and Lilliman were partners.
The assumed name certificate from 1986 for Gulf Coast Bail Bonds states
that the business is a “proprietorship” and lists only Lilliman as owner. Although
this may be relevant evidence regarding whether a partnership existed, the fact that
Lilliman listed only himself as an owner of a business on this form does not
conclusively negate the existence of a partnership, and Lilliman has offered no
specific argument to the contrary.
Lilliman did not cite any specific part of his affidavit as conclusively
disproving a partnership existed, but we note that he denied the existence of a
partnership in the affidavit and asserted instead that he employed Rivera in the bail
bond business until the late 1990s when he terminated her employment but
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continued paying her monthly bills until her death in 2016.2 A summary judgment
may be based on the uncontroverted testimonial evidence of an interested witness
if the evidence is clear, positive, and direct; otherwise credible and free from
contradictions and inconsistencies; and could have been readily controverted. Tex.
R. Civ. P. 166a(c); see also Gabriel v. Associated Credit Union of Tex., No. 14-12-
00349-CV, 2013 WL 865577, at *2 (Tex. App.—Houston [14th Dist.] Mar. 7,
2013, pet. denied) (mem. op.). Assuming Lilliman’s denial of a partnership in his
affidavit could have been readily controverted if untrue, we turn to a consideration
of Capelo’s evidence.
Capelo’s key evidence was her own affidavit, to which Lilliman lodged and
the trial court sustained numerous objections including that the statements in the
affidavit were conclusory. Capelo challenges all of the trial court’s evidentiary
rulings in this appeal. We must therefore address the sustained objections to
Capelo’s evidence before we can reverse on the basis of that evidence. Capelo’s
affidavit is certainly not without problems. For example, many of the statements in
the affidavit, although relevant to issues in the case, do not identify any basis for
Capelo’s knowledge. To avoid being conclusory, an affidavit must provide specific
factual bases for the statements made. E.g., SouthTex 66 Pipeline Co. v. Spoor, 238
S.W.3d 538, 542 (Tex. App.—Houston [14th Dist.] 2007, pet. denied). Merely
reciting that an affidavit is based on personal knowledge is insufficient; the
affidavit must actually disclose the basis on which the affiant has personal
knowledge of the facts asserted. Id. at 542–43.3
2
Lilliman did not offer any specific reason for the continuing payments to Rivera but
mentioned she “had essentially become family to” him and suggested she had originally told him
about the business opportunity in bail bonds. In her petition, Capela asserted that Rivera and
Lilliman had a romantic relationship that ended in the early 1990s. Rivera was married at the
time of her death in 2016.
3
It appears from context in Capelo’s affidavit and statements in Lilliman’s affidavit that
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Among the statements in the affidavit that we will consider in our review,
Capelo explained that the business was originally run out of her mother Rivera’s
home and that Capelo would answer the phone when Rivera became too exhausted
to do so. Capelo also described an argument between Rivera and Lilliman that she
personally observed in 1987, in which Rivera “argued that they each owned fifty
percent and [Lilliman] countered with ‘most of the money was mine so you should
only get twenty percent.’” According to Capelo, they then settled on a 60/40 split
favoring Lilliman. Capelo provided sufficient basis for her personal knowledge
reflected in these statements (i.e., personal observation), and the trial court erred in
sustaining the conclusory objection to this portion of the affidavit. Viewed in the
light most favorable to Capelo, these statements directly controvert Lilliman’s
assertion that no partnership existed. See Mack Trucks, Inc., 206 S.W.3d at 582.
Lilliman additionally, specifically objected that the portion of Capelo’s
affidavit in which she asserted she observed an argument between Rivera and
Lilliman (1) constitutes a “sham affidavit” and (2) violates the Dead Man’s Rule.
The sham affidavit rule applies when a subsequent affidavit clearly contradicts the
witness’s earlier testimony involving the suit’s material points without explanation.
Lujan v. Navistar, Inc., 555 S.W.3d 79, 88 (Tex. 2018). The rule is not to be
mechanically applied but requires a case-by-case analysis. Id. Here, Lilliman
complained that Capelo’s affidavit contradicted Rivera’s prior statements in two
applications for bail bond licenses, wherein she identified her business as A&A
Associates Bail Bonds and not Gulf Coast Bail Bonds. However, even assuming
the rule could apply to Capelo’s affidavit in light of Rivera’s prior applications,
there is no “clear contradiction” between the two documents. As discussed above,
Capelo worked for the bail bonds business at some point, but her affidavit does not describe how
she obtained much of the information she provides regarding the alleged business relationship
between Rivera and Lilliman in the course of her employment or otherwise.
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Rivera did not deny the existence of a partnership in her license applications and
Capelo’s pleadings in this case assert a partnership existed and that the partners
jointly owned and operated various bail bonds businesses, including A&A
Associates Bail Bonds. The trial court erred in sustaining the sham affidavit
objection to this portion of Capelo’s affidavit.
We interpret Lilliman’s broad Dead Man’s Rule objection as encompassing
Capelo’s testimony regarding the argument and ultimate agreement that she
reportedly observed between Rivera and Lilliman. The Dead Man’s Rule generally
prohibits a party to certain types of lawsuits from testifying regarding oral
statements by a decedent unless the statements are corroborated or were solicited
by the opposing party. Tex. R. Evid. 601(b); Est. of Wright, 482 S.W.3d 650, 655
(Tex. App.—Houston [14th Dist.] 2015, pet. denied). Courts construe the Dead
Man’s Rule narrowly. Fraga v. Drake, 276 S.W.3d 55, 61 (Tex. App.—El Paso
2008, no pet.); Coleman v. Coleman, 170 S.W.3d 231, 239 (Tex. App.—Dallas
2005, pet. denied). To evade the rule, corroborating evidence need not be sufficient
standing alone but must tend to confirm and strengthen the testimony of the
witness and show the probability of its truth. Fraga, 276 S.W.3d at 61; Coleman,
170 S.W.3d at 239.
Here, Capelo’s affidavit testimony was to some degree corroborated by the
acknowledged fact that the bail bonds business continued to pay a monthly amount
to Rivera for years after she ceased actively working for the business. Lilliman
acknowledged this in his affidavit, and his office manager, Tammy Stephens,
confirmed in her deposition that the business made these regular payments to
Rivera. Lilliman objected to this portion of Stephens’ deposition as speculative and
irrelevant, and the trial court sustained the objections. However, the testimony that
the business paid amounts to Rivera is neither speculative nor irrelevant. See
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generally Tex. R. Evid. 401 (explaining that evidence is relevant if it has any
tendency to make the existence of a consequential fact more or less probable than
it would be without the evidence); Whirlpool Corp. v. Camacho, 298 S.W.3d 631,
637 (Tex. 2009) (“[S]peculative opinion testimony is not relevant evidence
because it does not tend to make the existence of material facts more probable or
less probable.”). The trial court therefore erred in sustaining these objections to
that portion of the deposition. Although Lilliman did not expressly state why the
business continued these payments, he did mention that Rivera “had essentially
become family to” him and suggested she originally informed him about the
business opportunity in bail bonds. However, the fact that there may be some
unspecified alternative explanation for the payments does not completely erode the
tendency of that evidence to corroborate Capelo’s statements regarding the
existence of a partnership between Rivera and Lilliman.
Statements in the affidavit of Gerald Ramos also tend to corroborate
Capelo’s statements regarding the existence of a partnership. Ramos explained that
he was employed by the bail bonds business from 1998 to 2000. Rivera
interviewed, hired, and trained him for the job and ran the business without
Lilliman for the first six months or so that Ramos worked there.4 Ramos also stated
that the mail delivered to the business was usually addressed to both Rivera and
Lilliman. Once Lilliman returned to the business, Ramos stated that Lilliman and
Rivera appeared to run the business as equals and each often deferred to the other.
Lilliman objected to Ramos affidavit on the ground that it was mostly irrelevant
and the portions that were not were conclusory. The trial court sustained the
objections. Although some of Ramos’s statements are irrelevant and some are
conclusory and do not clearly flow from his employment in the business, the
4
It has been alleged that Lilliman was in jail during this period of time, but the truth of
this assertion is not determinative of this appeal.
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nonclusory statements—the ones stemming directly from his personal
observation—tend to corroborate Capelo’s testimony regarding the existence of a
partnership, even if they are not sufficient standing alone to establish the existence
of a partnership. See Fraga, 276 S.W.3d at 61; Coleman, 170 S.W.3d at 239.
Because additional evidence tends to corroborate Capelo’s statements in her
affidavit, those statements are excepted from the Dead Man’s Rule. See Tex. R.
Evid. 601(b); Fraga, 276 S.W.3d at 61; Coleman, 170 S.W.3d at 239. Because
those statements and the corroborating evidence, viewed in the light most
favorable to Capelo, controvert Lilliman’s assertion that no partnership existed, the
trial court erred in granting summary judgment favoring Lilliman on the ground
that there was no genuine issue of fact regarding the existence of a partnership. See
Mack Trucks, Inc., 206 S.W.3d at 582.
Conclusion
We sustain Capelo’s first, third, and fourth issues challenging the trial
court’s grant of summary judgment. We also sustain in part Capelo’s second issue
to the extent that it challenged the trial court’s evidentiary rulings that we stated
above were in error. The remainder of Capelo’s challenges to the trial court’s
evidentiary rulings are moot. We further sustain Capelo’s fifth issue challenging
the trial court’s award of attorney’s fees to Lilliman, which was based on the grant
of summary judgment.
We reverse the trial court’s summary judgment and remand and the case to
the trial court for further proceedings.
/s/
Frances Bourliot
Justice
Panel consists of Chief Justice Christopher and Justices Bourliot and Spain.
(Christopher, J., concurring).
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