Amegy Bank of TX v. MacDonell

Case: 22-10190 Document: 00516550172 Page: 1 Date Filed: 11/18/2022
United States Court of Appeals
for the Fifth Circuit
United States Court of Appeals
Fifth Circuit
No. 22-10190
Summary Calendar FILED
November 18, 2022
Lyle W. Cayce
Amegy Bank of Texas, Clerk
Plaintiff—Appellee,
versus
CGI Franchise Systems, Incorporated; Roger
MacDonell,
Defendants Appellees,
versus
Sharon MacDonell,
Defendant—Appellant.
Appeal from the United States District Court
for the Northern District of Texas
USDC No. 3:20-CV-375
Before Stewart, Duncan, and Wilson, Circuit Judges.
Case: 22-10190 Document: 00516550172 Page: 2 Date Filed: 11/18/2022
No. 22-10190
Per Curiam:*
In this interpleader action, Sharon MacDonell appeals the district
court’s grant of summary judgment for her ex-husband, Roger MacDonell,
and his company, CGI Franchise Systems, Incorporated (“CGIFSI”). 1
Because the district court correctly held that CGIFSI is the owner of the
interpleaded funds and Roger has authority over CGIFSI as its sole
shareholder, we affirm.
I. Background
Sharon and Roger married in California in 1992 and later moved to
France in 2006. The couple eventually initiated separate divorce
proceedings—Sharon in California and Roger in France—in 2010. A family
law court in France (“the French court”) dissolved the marriage and began
to identify and divide the assets between Sharon and Roger under
California’s community property laws. This process involved the French
court’s evaluation of Roger’s various business interests, including CGIFSI
and funds it held in a bank account (“the Account”) at Amegy Bank of Texas
(“Amegy”). Ultimately, the French court determined that California law
preserved a portion of CGIFSI’s share value to Sharon. However, it clearly
distinguished between Sharon’s interest in the value of CGIFSI’s shares or
stocks, and her interest in the assets of the company. It also explained that
Sharon had no business in the affairs or operations of CGIFSI. Specifically,
it noted that because Sharon had “no rights pertaining to the operation of
CGIFSI” she was not “justified in calling into question the transactions
carried out on the accounts of the company.”
*
Pursuant to 5th Circuit Rule 47.5, the court has determined that this
opinion should not be published and is not precedent except under the limited
circumstances set forth in 5th Circuit Rule 47.5.4.
1
CGIFSI is incorporated under the laws of Texas, with its principal place of
business in Dallas.
2
Case: 22-10190 Document: 00516550172 Page: 3 Date Filed: 11/18/2022
No. 22-10190
After the divorce proceedings, Roger contacted Amegy on CGIFSI’s
behalf to transfer funds from the Account to another account he owned.
Before Amegy could complete the transfer, it received a letter from Sharon
threatening legal action if it proceeded with the transaction. In response,
Amegy filed an interpleader action in federal district court seeking an order:
(1) discharging Amegy from all legal liability for any claim related to the
Account; (2) reasonable attorney’s fees; and (3) an order to deposit the
balance of the disputed funds in the district court’s registry. Roger and
CGIFSI maintained that CGIFSI was the true owner of the Account, while
Roger had authority over CGIFSI. Therefore, Roger’s decision to transfer
the funds was just his exercise of control over the operations of CGIFSI.
Sharon, however, claimed that she was entitled to a portion of the Account
pursuant to the French court’s divorce judgment and that Roger was
transferring the funds to ensure she never received her portion. She
maintained that the French court determined that both CGIFSI and its assets
were community property to be distributed in accordance with California
law.
Roger and CGIFSI filed for summary judgment, which the district
court ultimately granted. It observed that Roger was clearly the true owner of
the disputed funds in the Account and was also authorized to manage those
funds on CGIFSI’s behalf. The district court highlighted that the French
court was careful in ensuring it did not classify CGIFSI’s assets as
community property, instead distinguishing questions of control or
ownership of CGIFSI from its value. The district court held that the divorce
judgment expressly left control of CGIFSI, including its assets, to Roger. The
district court also noted Sharon’s concerns “that Roger may move assets
beyond her reach before the French divorce court issues an enforceable
judgment dividing the marital property,” but declined to hold a trial on
equitable grounds when the French court had the power and jurisdiction to
3
Case: 22-10190 Document: 00516550172 Page: 4 Date Filed: 11/18/2022
No. 22-10190
do the same. Ultimately, the district court held that “CGIFSI owns the
Account and the interpleaded funds,” and Roger, as the sole shareholder,
was authorized to act on CGIFSI’s behalf and transfer the funds where he
saw fit. It granted Roger’s and CGIFSI’s motion for summary judgment.
Sharon timely appealed.
On appeal, Sharon primarily argues that the district court erred in
concluding: (1) that the Account is not community property; (2) that Roger
had the authority to transfer funds in CGIFSI’s account; and (3) that Roger
had superior claim to the interpleaded funds in the Account. Alternatively,
she contends that the district court erred in failing to provide equitable relief
because it declined to stop Roger from devaluing CGIFSI by depleting its
assets.
II. Standard of Review
A. Summary Judgment
“We review the grant of a motion for summary judgment de novo,
applying the same standard as the district court.” Jackson v. Cal-Western
Packaging Corp., 602 F.3d 374, 377 (5th Cir. 2010). Summary judgment is
appropriate where “the movant shows that there is no genuine dispute as to
any material fact and the movant is entitled to judgment as a matter of law.”
FED. R. CIV. P. 56(a). We “view the evidence and draw all justifiable
inferences in favor of the nonmovant,” however, “the nonmovant must go
beyond the pleadings and come forward with specific facts indicating a
genuine issue for trial.” Hassen v. Ruston La. Hosp. Co., LLC, 932 F.3d 353,
355–56 (5th Cir. 2019) (quotation marks omitted). “An issue of material fact
is genuine if a reasonable jury could return a verdict for the nonmovant.”
Jackson, 602 F.3d at 377. We “may affirm the district court’s decision on any
basis presented to the district court.” LeMaire v. La. Dep’t of Transp. & Dev.,
480 F.3d 383, 387 (5th Cir. 2019).
4
Case: 22-10190 Document: 00516550172 Page: 5 Date Filed: 11/18/2022
No. 22-10190
B. Interpretation of Foreign Law & Orders
“The content of foreign law is a question of law and is subject to de
novo review.” Access Telecom, Inc. v. MCI Telecomms. Corp., 197 F.3d 694, 713
(5th Cir. 1999).
III. Discussion
A. The Owners of the Account
The “legal titleholder to a bank account is not always the owner of its
contents.” In re IFS Fin. Corp., 669 F.3d 255, 262 (5th Cir. 2012) (applying
Texas law). To ascertain the true owner of a bank account, we must look at
the “individual facts of each case.” Id. Moreover, we have emphasized that
“control over funds in an account is the predominant factor in determining
an account’s ownership.” Id. (citing In re Southmark, 49 F.3d 1111, 1116–17
(5th Cir. 1995).
Sharon first argues that Roger is not authorized to transfer funds from
the Account because: (1) he is not the true owner of the Account and (2)
California law—which the French court determined governed their
divorce—forbids him from transferring the funds. Regarding ownership of
the Account, she cites numerous bankruptcy cases, arguing that whether
Roger is the “legal owner” or “true owner” of the Account is a fact-intensive
inquiry not fit for summary judgment. See, e.g., In re IFS Fin. Corp., 417 B.R.
419, 435 (Bankr. S.D. Tex. 2009) (holding that the “legal title owner is not
5
Case: 22-10190 Document: 00516550172 Page: 6 Date Filed: 11/18/2022
No. 22-10190
always the true owner”). 2 Moreover, she highlights that this court has held
that true ownership of a bank account is “ultimately a fact-based inquiry that
will vary according to the peculiar circumstances of each case.” In re IFS Fin.
Corp., 669 F.3d at 262. Accordingly, she asserts that a trial is the only
appropriate vehicle for determining true ownership of the Account.
Alternatively, she maintains that even if Roger is the true owner of the
Account, the district court erred in permitting him to transfer funds in
violation of numerous California divorce laws. 3
Here, the district court correctly determined that Roger was the true
owner of the Account and enjoyed the right to transfer CGIFSI’s funds as its
sole shareholder and director. Sharon correctly contends that our inquiry into
the Account’s ownership is “fact-intensive.” She also persuasively argues
that Roger is not the legal owner of the Account. However, she
misunderstands the conclusions of the district court. The district court did
not hold that Roger was the legal owner. Instead, it reasoned that “CGIFSI
[was] the undisputed legal owner and titleholder of the Account,” but that
Roger was authorized to manage CGIFSI as its only shareholder and director.
2
Sharon also relies on the following out of circuit cases: In re Ulz, 388 B.R. 865,
868 (Bankr. N.D. Ill. 2008) (holding that “[a] person may have an interest in property—
and may even be considered the owner—although someone else has title”); In re Johnson,
232 B.R. 735, 739 (Bankr. C.D. Ill. 1999) (noting that “the contract between the bank and
the depositor” is not dispositive in determining the true owner of an account); In re Estate
of Muhammad, 520 N.E.2d 795, 797 (Ill. App. Ct. 1987) (holding that “true ownership of a
deposit may be proved to be in another than the person in whose name it is made, and courts
may use their equitable powers to determine the beneficial or equitable owner of an
account”) (quotation marks omitted).
3
See, e.g., Cal. Fam. Code § 2040(a)(2)(A) (“restraining both parties from
transferring, encumbering, hypothecating, concealing, or in any way disposing of, any
property, real or personal, whether community, quasi-community, or separate, without the
written consent of the other party or an order of the court, except in the usual course of
business or for the necessities of life . . .”).
6
Case: 22-10190 Document: 00516550172 Page: 7 Date Filed: 11/18/2022
No. 22-10190
Effectively, the district court determined that Roger was the “true owner”
of the Account by virtue of his authority over CGIFSI. We agree.
The district court’s conclusion aligns perfectly with this circuit’s
precedent. In In re IFS Financial Corporation—a case both parties rely
extensively on—the bankruptcy court held that “the true owner of an
account is measured by possession and control rather than bare legal title.”
417 B.R. at 435 (citing In re Southmark Corp., 49 F.3d at 1116–17). Here, the
record demonstrates that Roger enjoys complete control over CGIFSI as its
sole shareholder and president. The record similarly establishes that CGIFSI
is the undisputed legal owner of the Account, having opened and maintained
it since its inception. Consequently, the record supports the district court’s
conclusion that Roger has “possession and control” of the Account through
CGIFSI. In re IFS Fin. Corp., 417 B.R. at 435. Thus, he is validly authorized
to transfer CGIFSI’s funds through Amegy so long as “the funds are not
community property.”
B. The French Court’s Determination on CGIFSI
“In determining foreign law, the court may consider any relevant
material or source, including testimony, whether or not submitted by a party
or admissible under the Federal Rules of Evidence.” FED. R. CIV. 44.1.
“Differences of opinion regarding the content, applicability, or
interpretation of foreign law do not create a genuine issue as to any material
fact under Rule 56.” Gonzalez-Segura v. Sessions, 882 F.3d 127, 130 (5th Cir.
2018) (quotation marks omitted).
Sharon argues that the district court incorrectly interpreted the
French court’s divorce judgment which led the district court to erroneously
hold that CGIFSI’s assets are not community property. She contends that if
CGIFSI’s assets are community property, then we must prevent Amegy
from dividing the assets before the French court issues its ruling on how those
7
Case: 22-10190 Document: 00516550172 Page: 8 Date Filed: 11/18/2022
No. 22-10190
assets should be split. The district court rejected Sharon’s contention,
instead holding that “CGIFSI’s assets are not community property at all
according to the French court judgment.” We agree.
As the district court aptly recognized, the French court’s ruling was
clear in distinguishing between Roger’s control of CGIFSI’s assets and
Sharon’s entitlement to its stock value. Specifically, the French court noted
Roger’s request that it address whether “CGIFSI and Roger [] are both free
to transfer assets under their ownership and control without restriction or
legal hindrance.” It concluded that:
The dispute concerning the liquidation of the
patrimonial rights of the parties has to do, not with the
issue of the parties’ social rights over [CGIFSI], but
with the separate or common nature of the value of the
shares.
Therefore, these decisions have no impact on the
separate or common nature of [CGIFSI], since by
virtue of the distinction between title and finance,
Roger[’s] right to [CGIFSI] can be separate whereas
the company’s shares can become common property.
Nothing in the French court’s judgment creates ambiguity or uncertainty
regarding its determinations above. Indeed, the French court declared that
CGIFSI’s “shares can become common property,” and that there be “no
impact on the . . . nature” of the company. Thus, the French court
unequivocally separated ownership of CGIFSI’s “title” (the company’s
stock or share value) from its “finance” (operational control and assets).
In sum, Sharon fails to present any record evidence that casts doubt
on Roger’s ownership of CGIFSI or his claim to the Account. She is similarly
unpersuasive in her attempt to reanalyze the French court’s divorce
judgment and its decision regarding CGIFSI’s assets. At best, she proffers an
alternative interpretation of the French court’s order, and that fact alone is
8
Case: 22-10190 Document: 00516550172 Page: 9 Date Filed: 11/18/2022
No. 22-10190
not enough to survive summary judgment. Gonzalez-Segura, 882 F.3d at 130.
Absent a genuine issue of material fact, we affirm the district court’s grant of
summary judgment in favor of Roger. See Fed. R. Civ. P. 56(a).
C. Equitable Relief
Finally, Sharon contends that the district court erred in denying her
equitable relief because it failed to enjoin Roger from transferring the
Account’s funds, which will permit him to deplete CGIFSI’s value. We
decline to address this argument, however, because the proper venue for
addressing this concern is the French court, which explicitly addressed
Sharon’s apprehension and undoubtedly has jurisdiction over Roger and his
personal property in these divorce proceedings. The French court ordered
Roger to promptly provide information regarding the assets of all his
companies, including CGIFSI, as part of the ongoing liquidation of assets.
Moreover, the order prohibited Roger from making unsanctioned voluntary
concealments of his companies’ assets. 4 Accordingly, we hold that Sharon’s
arguments that Roger violated these orders should be addressed by the court
that issued them.
IV. Conclusion
For the foregoing reasons, we AFFIRM the district court’s grant of
summary judgment.
4
Specifically, the French court held that “unless Roger MACDONNELL’s
deliberate concealments are sanctioned, all community assets must be shared by half
between the parties.”
9