in Re Dennis L. Miga

COURT OF APPEALS
SECOND DISTRICT OF TEXAS
FORT WORTH
NO. 02-11-00074-CV
DENNIS L. MIGA APPELLANT
V.
RONALD L. JENSEN APPELLEE
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FROM THE 352ND DISTRICT COURT OF TARRANT COUNTY
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AND
NO. 02-11-00167-CV
IN RE DENNIS L. MIGA RELATOR
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ORIGINAL PROCEEDING
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MEMORANDUM OPINION1
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1
See Tex. R. App. P. 47.4.
The dispute between these parties has spanned more than sixteen years. 2
The current appeal and petition for mandamus result from the trial court‘s 2011
postjudgment injunction enjoining Appellant/Relator Dennis L. Miga and his wife
from spending, depleting, secreting, or transferring $21,560,150.67, plus
prejudgment interest—except in the ordinary course of business or for
reasonable and necessary household and living expenses or reasonable and
necessary attorney‘s fees—until that amount is finally paid to Appellee/Real Party
in Interest Ronald L. Jensen.
In his petition for writ of mandamus and appeal, which we consolidated,
Miga complains that the trial court had no jurisdiction to enter the postjudgment
injunction and, alternatively, that the trial court abused its discretion by doing so.
Because we hold that the injunction is not appealable, we dismiss Miga‘s appeal.
Because we hold that the trial court had jurisdiction to issue the injunction and
did not abuse its discretion by doing so, we deny Miga‘s petition for writ of
mandamus.
I. Facts and Procedural History
A. Miga’s Suit
In January 1998, Miga obtained a trial court judgment against his former
employer, Jensen, for about $18.8 million plus approximately $4.5 million in
2
See Miga v. Jensen, 96 S.W.3d 207, 209 (Tex. 2002) (Miga I).
2
prejudgment interest.3 Jensen appealed.4 To end the accrual of postjudgment
interest, the parties entered into an agreed order, signed by the trial court, under
which Jensen tendered $23,439,532.78 to Miga toward satisfaction of the
judgment.5 On appeal, the Supreme Court of Texas reduced Miga‘s judgment to
$1,034,400; reinstated prejudgment interest at a rate of 10%; and also awarded
postjudgment interest at a rate of 10% from the date of the trial court‘s judgment
to the date the agreed order terminated the accrual of postjudgment interest.6
On remand, the trial court rendered a modified judgment for Miga of
$1,879,382.11.7
B. Jensen’s Suit
Jensen then sought restitution of the difference between the modified
judgment and the amount he had already paid to Miga.8 Miga refused to repay
Jensen the $21,560,150.67, so Jensen filed suit against Miga for restitution
(Jensen‘s lawsuit).9
3
Id. at 210.
4
Id.
5
Id.
6
Id. at 217.
7
Miga v. Jensen, 299 S.W.3d 98, 101 (Tex. 2009) (Miga II).
8
Id.
9
Id.
3
In February 2004, while Jensen‘s lawsuit was pending, the trial court
entered a temporary injunction (the 2004 temporary injunction) prohibiting Miga
and his wife from spending, dissipating, or otherwise moving $21,560,150.67,
except in the ordinary course of business and reasonable and necessary living
expenses. The trial court found in the 2004 temporary injunction that injunctive
relief was necessary to preserve the status quo and that Miga had admitted that
he no longer had the whole amount Jensen had paid him. The 2004 temporary
injunction stated that it was effective ―until judgment in this cause is rendered by
this Court.‖ On March 3, 2005, the trial court entered an order extending the
2004 temporary injunction, stating that it ―shall survive the entry of final judgment
by this Court and shall remain in effect until a final, non-appealable judgment is
entered in this cause and all rights to appeal in this cause have been exhausted
or expired.‖
The next day, the trial court signed an order granting summary judgment
for Jensen. The trial court signed a final judgment in the cause on April 19, 2005,
ordering that Jensen recover $21,560,150.67 plus prejudgment and
postjudgment interest.10 The judgment states that the March 3, 2005 order
extending the 2004 temporary injunction ―shall remain in force following the entry
of this judgment in accordance with its terms.‖
10
Miga v. Jensen, 214 S.W.3d 81, 84–85 (Tex. App.—Fort Worth 2006),
aff’d, Miga II at 105.
4
On May 7, 2005, the trial court modified its judgment to dismiss without
prejudice all claims asserted against Miga‘s wife pursuant to the parties‘
stipulation. Like the previous judgment, the modified judgment provides that the
March 3, 2005 order extending the 2004 temporary injunction ―shall remain in
force following the entry of this [j]udgment in accordance with its terms.‖
This court affirmed the trial court‘s judgment, and the Supreme Court of
Texas affirmed this court‘s judgment on October 23, 2009.11 Miga filed a motion
for rehearing in that court.
C. Jensen’s Recent Attempts to Enforce Judgment Against Miga
While Miga‘s motion for rehearing was pending, the parties‘ attorneys filed
with the trial court a Rule 11 agreement (dated December 7, 2009) in which they
agreed to extend the 2004 temporary injunction ―for two weeks beyond the date
on which that Order would otherwise expire by its terms,‖ that is, two weeks
beyond the date on which all rights to appeal had been exhausted or expired.
Then, on January 15, 2010, the Supreme Court of Texas issued mandate.
Ten days later, Jensen filed with the trial court an application for a temporary
restraining order, injunction, and expedited discovery. On January 27, 2010,
after a hearing on Jensen‘s application, the parties filed with the trial court
another Rule 11 agreement, this time agreeing to extend the 2004 temporary
11
Miga II at 101, 105.
5
injunction ―until the time the Court enters a replacement temporary restraining
order or temporary injunction.‖ In March 2010, Jensen deposed Miga.
On January 14, 2011, Miga filed a motion to declare the 2004 temporary
injunction dissolved, asserting that (1) although the parties had filed the
December 2009 and January 2010 Rule 11 agreements with the trial court, that
court had never issued an order on the agreements and (2) he was withdrawing
his consent to the entry of any agreed order by the trial court based upon the
Rule 11 agreements. Miga asked the trial court to declare that the temporary
injunction had dissolved by its own terms. Miga argued in his motion that the
extension had been issued under civil practice and remedies code section
52.006 and rule of appellate procedure 24.2,12 that the trial court‘s authority
expired under those rules when the appeals were exhausted, that ―[t]he attempt
by the parties to confer on the Court by agreement additional authority after the
determination of the appeal [was] improper and ineffective,‖ and that ―[t]he
Court‘s authority under the statutes and rules during the pendency of the appeal
[was] no longer applicable . . . .‖ He further argued that the trial court had no
authority under section 31.002 of the civil practice and remedies code (the
turnover statute) to enter an injunction prohibiting him from making
expenditures.13
12
See Tex. Civ. Prac. & Rem. Code Ann. § 52.006 (West 2008); Tex. R.
App. P. 24.2.
13
See Tex. Civ. Prac. & Rem. Code Ann. § 31.002 (West 2008).
6
On January 26, 2011, Jensen filed a combined emergency motion to
enforce the Rule 11 agreement and application for temporary restraining order
and injunction. Jensen argued that the Rule 11 agreement was valid and
enforceable because it was in writing, signed by the parties, and filed with the
trial court. He asserted that the trial court had jurisdiction ―over this post-
judgment collection action,‖ including authority under sections 31.002 and
52.006(e) of the civil practice and remedies code.
The trial court held a hearing on February 14, 2011. The trial court
concluded that a valid and enforceable Rule 11 agreement existed and that Miga
had violated the agreement by secreting assets and concealing the existence
and location of the assets. The trial court further concluded that it had the
authority to enjoin Miga from secreting or further dissipating assets under the
turnover statute. The trial court entered a turnover order, ordering Miga to turn
over all assets in various accounts and to disclose to Jensen the location and
account numbers of any other bank or account over which Miga or his wife had
signature authority. Miga did not appeal or otherwise challenge the turnover
order.
The trial court also entered a ―temporary‖ injunction ordering Miga to
―cease, desist and refrain from spending, dissipating, depleting, secreting, or
otherwise moving, transferring, or burdening, other than in the ordinary course of
business and/or for reasonable and necessary household and living expenses
and/or reasonable and necessary legal fees‖ the amount of $21,560,150.67, plus
7
prejudgment and postjudgment interest. It is from this new injunction that Miga
both appeals and seeks mandamus relief.
D. Findings of Fact and Conclusions of Law
The new injunction signed by the trial court contains the following findings
and conclusions of law:
1. The mandate issued by the Texas Supreme Court on
January 15, 2010 made this Court‘s Judgment final and non-
appealable. The Judgment is now final, fully enforceable, and due
to Jensen in full as follows:
(a) The principal amount of $21,560,150.67 together with
pre-judgment interest thereon in the amount of
$1,465,204.21, calculated at the rate of 5.50% simple
interest from December 12, 2003, through March 8,
2005, plus $3,248.79 per day from March 8, 2005 until
the day preceding the date of this judgment; plus
(b) Post-judgment interest, calculated at the judgment
interest rate of 5.50% compounded annually on the
unpaid balance from the date of judgment until Jensen
is paid.
2. Miga has to date refused to pay the amount due on the
Judgment in whole or in part, and testified that he has no intention of
paying the Judgment.
3. In May 2004, in conjunction with Jensen‘s suit before
this Court to recover the $21.5 million Miga owed him at that time,
this Court entered a temporary injunction barring the Migas from
―spending, dissipating, depleting, secreting, or otherwise moving,
transferring, or burdening, other than in the ordinary course of
business and/or for reasonable and necessary household and living
expense, funds and assets in the amount of $21.560,150.67 . . . .‖
4. In March 2005, the Court signed an order extending the
temporary injunction, pursuant to the parties‘ agreement in return for
Jensen‘s agreement to waive the requirement of a supersedeas
bond, while Miga appealed this Court‘s grant of summary judgment
8
(the ―Injunction‖). The Injunction provided that it would automatically
dissolve ―upon entry of a final, non-appealable judgment in this
cause and the exhaustion or expiration of all rights of appeal.‖
5. On December 7, 2009, after the Texas Supreme Court‘s
decision denying Miga‘s appeal, but before the Court‘s denial of
Miga‘s Motion for Rehearing and issuance of the Mandate, the
parties filed a Rule 11 Agreement with the Court in which they
agreed to extend the Injunction an additional two weeks beyond
when it would otherwise expire.
6. The Texas Supreme Court denied Miga‘s Motion for
Rehearing and issued its Mandate on January 15, 2010, thus
making this Court‘s 2005 judgment (the ―Judgment‖) final and non-
appealable, and triggering the final two weeks of the Injunction.
7. Miga refused to extend the Injunction pending post-
judgment collection proceedings, and Jensen filed an Application for
Temporary Restraining Order and Injunction and Expedited
Discovery with this Court on January 25, 2010.
8. After the hearing on Jensen‘s motion on Jan. 27, 2010,
the parties filed a Rule 11 agreement (the ―Agreement‖) with the
Court extending the term of the Injunction ―until the time the Court
enters a replacement temporary restraining order or temporary
injunction, whichever comes first.‖
9. The Agreement is in writing, signed by the attorneys for
Jensen and for Mr. and Mrs. Miga, and was filed with the Court on
Jan. 27, 2010. The Injunction states that ―Either Party may seek
modification or amendment of this Order at any time for good cause
shown.‖
10. In March 2010, Miga testified that he had only about
$340,000 in collectible assets left from Jensen‘s $23.4 million
Payment and had no intention to pay the Judgment.
11. In an informal accounting in June 2003 captioned ―Use
of Rule 11 Agreement Funds,‖ Miga represented to Jensen that he
had $9.74 million remaining in ―Cash and securities on hand,‖ after
paying $4.838 million in taxes, paying $1.49 million in attorney‘s
fees, spending $2 million cash on a new house, incurring $2.5
million in losses on various investments, repaying a $1.8 million
9
business loan to a partner to his company Interfax, contributing
$220,000 to section 529 educational plans for his sons, contributing
$325,000 into an ―Irrevocable Trust‖ for his sons, and incurring
$550,000 in losses on municipal bonds.
12. In his deposition in this proceeding in August 2004,
Miga discussed the expenditures listed above in his schedule of the
―Use of Rule 11 Agreement Funds,‖ but refused to answer any
questions about the location of the $9.74 million in ―Cash and
securities on hand‖ on the grounds that those questions invaded his
constitutional right to privacy. When Jensen moved to compel
further disclosures, Miga also refused, on the same grounds.
13. In Miga‘s March 2010 deposition, he testified that
between March 13 and 19, 2003, within weeks after the Miga I
mandate, he transferred $9.47 million in cash and securities to ―RCR
Foundation,‖ a private ―foundation‖ in Vaduz, Liechtenstein, under
the administration of the Allgemeines Treuunternehmen (―ATU‖) and
associated with VP Bank. Specifically, Miga testified that:
a. The assets were located in Liechtenstein.
b. Miga had handwritten ―RCR Foundation‖ on the JP
Morgan Chase account statement next to the bank‘s
reference to the transfers to ―VP Bank.‖
c. Miga funded RCR Foundation to benefit his children
after his death, and that he understood it was akin to an
irrevocable trust in the United States.
d. Miga had no power to access the assets, to control what
VP Bank did with the assets, or even to see a balance
statement on value of the assets held by the Foundation
other than on annual visits by a representative of ATU
which ceased after 2008.
e. Miga had never received any disbursement of funds
from the Foundation.
f. Because Miga had no control over the Foundation, he
could not repatriate the assets for payment of the
Judgment.
10
g. Miga had no other bank, investment or other accounts
outside the United States and had produced all records
relating to such accounts.
14. After his March 2010 deposition, Miga produced what
purported to be an amendment to the by-laws of the RCR
Foundation, signed by Dr. Guido Meier, and a ―Letter of Wishes‖
expressing his desire that the assets of the Foundation be
distributed to his two sons at the discretion of the directors after the
deaths of Miga and his wife.
15. The deposition of Miga‘s personal accountant
established that Miga had not reported or paid taxes on what he
claimed to have been a complete and final gift of almost $10 million
to the RCR Foundation, nor had he filed the reports required for
offshore trusts and bank accounts.
16. After the March deposition, Miga also produced bank
records that showed, among other things, transfers into his JP
Morgan Chase bank account from various overseas banks, including
VP Bank BVI, as well as transfers from an entity identified on the
bank statements as ―Bridgeport Group‖ to meet capital calls from JP
Morgan.
17. A search of public records in the British Virgin Islands
disclosed that the Bridgeport Group, Inc. had been incorporated by
ATU (BVI) Limited, the British Virgin Islands subsidiary of the
Liechtenstein trust company affiliated with VP Bank, that ATU (BVI)
remained the general agent of Bridgeport and that Bridgeport
maintained its office at the same address as ATU [(]BVI). Bridgeport
Group was incorporated on March 6, 2003, three days after the
Mandate in Miga I.
18. At a continuation of his deposition in August 2010, after
he produced additional documents, Miga refused to answer any
questions on these subjects on the advice of his counsel, on the
grounds that his answers would tend to incriminate him.
19. On the morning of the August deposition, Miga
disclosed for the first time the existence of a former account at First
Curacao International Bank and produced for the first time a
statement from that account showing transactions from July 1, 2005
through October 23, 2006.
11
20. Miga testified that the First Curacao account was in his
name individually, but that he used it exclusively to receive
payments from customers of his business, Interfax, who were
located in Syria, Iraq, and Iran and therefore were not able to send
money directly into the United States because of restrictions on
currency transfers following the September 11, 2001 attacks.
21. Miga testified that although the funds received into the
First Curacao account represented payments due to Interfax, Miga
used them for personal purposes. Those purposes included making
capital contributions for his account and those of a family trust to
Interfax itself. Miga testified that he also accessed the funds directly
through an ATM card that he could use in the United States.
22. Miga testified that he never disclosed the First Curacao
account or the income received into the account to his accountant
who prepared his tax returns, or his Interfax business partner.
23. Following the August deposition, Miga represented,
through his litigation counsel . . . , that he might be willing to sign a
letter requesting or instructing VP Bank, RCR Foundation or ATU to
return the assets and all associated proceeds to enable Miga to pay
a part of his debt to Jensen. However, on November 1, 2010, Miga‘s
counsel communicated Miga‘s refusal to request repatriation of the
assets on the grounds that it would jeopardize his negotiations with
the IRS for tax amnesty. Miga refused to consent to allowing the
IRS to discuss resolution of their potentially conflicting . . . claims to
the assets in the Foundation.
24. On November 15, 2010, [Miga‘s litigation counsel]
informed [Jensen‘s litigation counsel] via email that Miga had sent a
letter to ATU requesting that RCR Foundation provide Miga with
copies of all documents referring or relating to the RCR Foundation
and/or to the Miga family‘s participation therein. To date, Miga has
represented through [his litigation counsel] that he has received no
responsive documents.
25. Based on Miga‘s testimony and other representations
about RCR Foundation, Jensen retained counsel in Liechtenstein to
obtain an injunction freezing the assets of the Foundation. The
District Court of the Principality of Liechtenstein granted an
injunction against Miga and the RCR Foundation c/o Allgemeines
Treuuternehmen (General Trust Company) on December 7, 2010.
12
However, by letter dated December 14, 2010, Dr. Guido Meier, on
behalf of the Foundation Council for the RCR Foundation, informed
the Liechtenstein court that there are not now nor have there ever
been any assets in the RCR Foundation.
26. On December 27, 2010, Miga produced a copy of a
letter that had been sent by counsel representing Mr. and Mrs. Miga
to the IRS in September in relation to a request for tax amnesty. In
that letter, the Migas state that:
a. In 2003 they ―transferred approximately $8.5 million in
liquid assets and/or negotiable securities to VP Bank‖;
b. The assets they transferred came from Jensen‘s
Payment;
c. The ―primary account‖ disclosed ―is located at VP Bank,
which has headquarters in Liechtenstein. The (Migas‘)
account is located at VP Bank in the British Virgin
Islands (―BVI‖), located at 3076 Sir Francis Drake‘s
Highway, PO Box 3463 Road Town, Tortola, British
Virgin Islands‖;
d. ―The Taxpayers‘ (Migas‘) VP Bank account is held in the
name of Bridgeport Group Inc.‖;
e. William Green, who is ―believed to be a businessman
and resident of BVI‖ is the sole director and officer of
Bridgeport Group;
f. Bridgeport Group was formed by RCR Foundation, a
foundation established by the Migas and domiciled in
Vaduz, Liechtenstein;
g. The Migas estimate their total unreported income
stemming from the account(s) to be between $0 and
$100,000 for the years 2003 through 2008; and
h. During 2005 and 2006, the Migas []also had an account
with First Curacao International Bank ―in order to have a
debit card.‖
13
27. Miga has not produced any account statements or other
documents relating to the account of Bridgeport Group, Inc. with VP
Bank (BVI) or any other foreign bank other than First Curacao
International Bank.
28. This Court has authority to enjoin Miga from secreting or
further dissipating assets pursuant to the Turnover Statute, Civil
Practice and Remedies Code § 31.002. In the Guardianship of De
Villarreal, 2009 Tex. App. LEXIS 2249, at *14 [2009 WL 888467, at
*4] (Tex. App.—Corpus Christi 2009, pet. [denied]) . . . .
29. To obtain injunctive relief in the pre-trial context, the
applicant must plead and prove: (1) a cause of action against the
defendant; (2) a probable right to the relief sought; and (3) a
probable, imminent, and irreparable injury in the interim. Butnaru v.
Ford Motor Co., 84 S.W.3d 198, 204 (Tex. 2002); Emeritus Corp. v.
Ofczarazak, 198 S.W.3d 222, 226–27 (Tex. App.—San Antonio
2006, no pet.). However, ―the first two elements that must be
established to obtain a pre-trial temporary injunction are necessarily
met when a judgment has been rendered against a defendant.[‖]
Emeritus Corp., 198 S.W.3d at 227.
30. The standard for injunctive relief to preserve assets
after judgment is different than the ―more general ‗probable,
imminent and irreparable injury‘ that is applicable in a variety of pre-
trial contexts.‖ Emeritus Corp., 198 S.W.3d at 227. In the post-
judgment context, the question is only ―whether the judgment debtor
is likely to dissipate or transfer its assets to avoid satisfaction of the
judgment.‖ Id. Evidence of the actual dissipation or transfer of
assets is not necessary to meet this standard. Id. at 228.
31. In this case, the evidence is undisputed that Miga has
transferred millions of dollars of money he received from Jensen to a
secret offshore account and taken extensive actions to prevent its
discovery, including falsely marking documents and deliberately and
repeatedly giving false testimony under oath.
32. The record therefore establishes that in the absence of
injunctive relief, Miga is likely to dissipate or transfer his assets to
avoid satisfaction of the judgment.
33. The record further establishes that Jensen is in
imminent and probable danger of being irreparably harmed if Miga is
14
not enjoined from spending, dissipating, depleting, secreting, or
otherwise moving, transferring, or burdening the assets that remain
available to satisfy the Judgment. The record establishes that
Jensen is faced with the threat of imminent and irreparable harm in
that any further depletion of Miga‘s assets could further reduce
Jensen‘s recovery, with Miga claiming to be unable to make up such
loss. Each day of delay increases the risk of additional irreparable
harm to Jensen‘s entitlement to payment of the Judgment.
Temporary relief is accordingly necessary to preserve the status
quo. If the Court does not issue a temporary restraining order to
preserve the status quo, the Judgment entered by the Court will be
rendered ineffectual in that the Funds will no longer be available, in
whole or in part, for collection.
34. Jensen has no adequate remedy at law for the
threatened injury, because Miga has admitted that he no longer
retains the full amount of the Judgment even now. Any further
expenditure, loss, concealment, dissipation, burdening or other
disposition of remaining funds would only further reduce Miga‘s
capacity to make restitution and Jensen‘s ability to recover what is
due to him. Given the magnitude of Miga‘s obligation, the total
losses to Jensen from Miga‘s conduct could easily exceed Miga‘s
financial worth so as to prevent adequate compensation to Jensen.
35. It clearly appears from these facts that unless Miga is
immediately restrained from spending, dissipating, depleting,
secreting, or otherwise moving, transferring, or burdening, other than
in the ordinary course of business and/or for reasonable and
necessary household and living expenses, funds and assets in the
amount of $21,560,150.67, together with pre-judgment interest
thereon in the amount of $1,465,204.21, calculated at the rate of
5.50% simple interest from December 12, 2003, through March 8,
2005; plus pre-judgment interest in the amount of $194,927.40 for
the dates March 8, 2005 until May 6, 2005, the day preceding the
date of judgment, calculated at the rate of $3,248.79 per day; plus
post-judgment interest thereon calculated at the judgment interest
rate of 5.50% compounded annually on the unpaid balance from
May 7, 2005, the date of judgment, until Jensen is paid, representing
the amount of Jensen‘s Payment less that amount awarded to Mr.
Miga under the Second Modified Judgment on Remand in Cause
No. 048-161505-95, he will commit the foregoing acts before Jensen
has opportunity to collect the Judgment; and that, if commission of
these acts is not restrained immediately, Jensen will suffer
15
irreparable injury because his ability to recover the Judgment will be
compromised.
II. Our Jurisdiction
Miga asks us to treat his original petition for writ of mandamus and his
subsequent brief on appeal and petition for writ of mandamus as one
consolidated brief. His issues can be divided into two main categories—those
complaining that the trial court had no jurisdiction to enter the postjudgment
injunction and those complaining that even if the trial court had jurisdiction, the
trial court nevertheless abused its discretion by entering the injunction.
As Miga‘s decision to seek both appellate and mandamus relief shows,
determining whether mandamus or appeal is the proper procedural vehicle for his
complaints is tricky. Caselaw provides that orders under the turnover statute are
appealable because of their mandatory nature,14 but this injunction is prohibitory
in nature, not mandatory.15 Temporary injunctions are appealable interlocutory
orders under section 51.014 of the civil practice and remedies code, 16 but this
14
Schultz v. Fifth Judicial Dist. Ct. of Appeals of Dallas, 810 S.W.2d 738,
740 (Tex. 1991), abrogated on other grounds by In re Sheshtawy, 154 S.W.3d
114, 124–25 (Tex. 2004).
15
See Lifeguard Benefit Servs., Inc. v. Direct Med. Network Solutions, Inc.,
308 S.W.3d 102, 112 (Tex. App.—Fort Worth 2010, no pet.) (explaining that a
prohibitive injunction forbids conduct but a mandatory injunction requires it).
16
Tex. Civ. Prac. & Rem. Code Ann. § 51.014(a)(4) (West 2008).
16
injunction, despite its label, is permanent, not temporary, in character.17 And
while permanent injunctions issued with a final judgment are appealable, 18 an
order enforcing a previously signed judgment generally is not a final judgment or
decree and cannot be appealed as such.19 Because we believe that the
challenged order is a permanent, prohibitory injunction designed to enforce the
money judgment previously awarded Jensen, we hold that it is not an appealable
order.20 We therefore dismiss Miga‘s appeal and address his issues brought via
his petition for writ of mandamus and subsequent brief.
III. The Trial Court’s Jurisdiction
Miga contends that the trial court had no jurisdiction under the turnover
statute or other law to enter the injunction. But a trial court has the inherent
power to enforce its judgments.21 ―That power is part of the court‘s jurisdiction,
17
See Del Valle Indep. Sch. Dist. v. Lopez, 845 S.W.2d 808, 809 (Tex.
1992); cf. Qwest Commc’ns Corp. v. AT&T Corp., 24 S.W.3d 334, 335–38 (Tex.
2000) (treating order as temporary injunction rather than permanent injunction
because it restrained Qwest immediately and while suit was pending).
18
See, e.g., Operation Rescue-Nat’l v. Planned Parenthood of Houston and
Se. Tex., Inc., 975 S.W.2d 546, 567–70 (Tex. 1998) (affirming judgment and
permanent injunction as modified).
19
Schultz, 810 S.W.2d at 740.
20
To foster judicial economy, we note that should the Supreme Court of
Texas ultimately determine that Miga‘s issues are in fact appealable, we would
alternatively overrule his appellate issues for the reasons provided herein and
dismiss his petition for mandamus relief.
21
Arndt v. Farris, 633 S.W.2d 497, 499 (Tex. 1982); see Tex. Gov‘t Code
Ann. § 21.001(a) (West 2004); Tex. R. Civ. P. 308.
17
and the court may employ suitable methods to enforce its jurisdiction.‖22 ―This
authority to enforce is not extinguished by the mere passage of time or the finality
of a judgment.‖23 The only limitations on a trial court‘s power to enforce its own
judgments is that any enforcement order must be consistent with the original
judgment and must not materially change the judgment.24 An order that does
materially change the judgment is void.25
The rules of procedure do not dilute the trial court‘s inherent power. Rule
308 of the civil rules of procedure provides that a trial court shall cause its
judgments to be executed.26 Rule 621 provides that they shall be enforced by
execution or other appropriate process.27
22
Arndt, 633 S.W.2d at 499.
23
In re Tarrant Cnty., No. 02-05-00274-CV, 2005 WL 3436582, at *4 (Tex.
App.—Fort Worth Dec. 12, 2005, orig. proceeding) (mem. op.) (Livingston, J.,
dissenting) (citing Tex. R. Civ. P. 329b; Wall Street Deli, Inc. v. Boston Old
Colony Ins. Co., 110 S.W.3d 67, 69 (Tex. App.—Eastland 2003, no pet.); and
Reynolds v. Harrison, 635 S.W.2d 845, 846 (Tex. App.—Tyler 1982, writ ref‘d
n.r.e.)).
24
Id. at *2, *5 (majority and dissenting ops.); Matz v. Bennion, 961 S.W.2d
445, 452 (Tex. App.—Houston [1st Dist.] 1997, writ denied).
25
In re Akin Gump Strauss Hauer & Feld, LLP, 252 S.W.3d 480, 493 n.20
(Tex. App.—Houston [14th Dist.] 2008, orig. proceeding) (citing Harris Cnty.
Appraisal Dist. v. West, 708 S.W.2d 893, 896–97 (Tex. App.—Houston [14th
Dist.] 1986, no writ) (holding that trial court‘s enforcement order was void
because it attempted to materially change the relief awarded in the trial court‘s
judgment)).
26
Tex. R. Civ. P. 308.
27
Tex. R. Civ. P. 621.
18
The legislature has also not attempted to reduce the judicial branch‘s
inherent power to enforce its own judgments. Section 31.002(a), the turnover
statute, specifically provides that injunction is a tool for achieving such
enforcement:
(a) A judgment creditor is entitled to aid from a court of appropriate
jurisdiction through injunction or other means in order to reach
property to obtain satisfaction on the judgment if the judgment
debtor owns property, including present or future rights to property,
that:
(1) cannot readily be attached or levied on by ordinary legal
process; and
(2) is not exempt from attachment, execution, or seizure for
the satisfaction of liabilities.
(b) The court may:
(1) order the judgment debtor to turn over nonexempt property
that is in the debtor‘s possession or is subject to the debtor‘s
control, together with all documents or records related to the
property, to a designated sheriff or constable for execution;
(2) otherwise apply the property to the satisfaction of the
judgment; or
(3) appoint a receiver with the authority to take possession of
the nonexempt property, sell it, and pay the proceeds to the
judgment creditor to the extent required to satisfy the
judgment.
(c) The court may enforce the order by contempt proceedings or by
other appropriate means in the event of refusal or disobedience.
(d) The judgment creditor may move for the court‘s assistance under
this section in the same proceeding in which the judgment is
rendered or in an independent proceeding.
19
(e) The judgment creditor is entitled to recover reasonable costs,
including attorney‘s fees.
(f) A court may not enter or enforce an order under this section that
requires the turnover of the proceeds of, or the disbursement of,
property exempt under any statute, including Section 42.0021,
Property Code. This subsection does not apply to the enforcement
of a child support obligation or a judgment for past due child support.
....
(h) A court may enter or enforce an order under this section that
requires the turnover of nonexempt property without identifying in
the order the specific property subject to turnover.28
Nowhere in the language of that statute does the legislature indicate an
intent to eradicate the trial court‘s authority to enforce its judgments by
restraining behavior rather than commanding other acts; we therefore reject
Miga‘s argument that ―[t]he turnover statute does not provide authority for the
court to enter a purely prohibitive injunction against a Defendant to aid the
judgment creditor in the collection of his judgment.‖
Miga also argues that the injunction impermissibly modifies the judgment
by granting Jensen a security interest in all of Miga‘s assets, current or future,
exempt or not. Miga cites with no discussion two El Paso cases for this
proposition,29 but we can see no correspondence between those cases and this
28
Tex. Civ. Prac. & Rem. Code Ann. § 31.002 (emphasis added).
29
Moseley v. EMCO Mach. Works Co., 890 S.W.2d 529, 531 (Tex. App.—
El Paso 1994, no writ); Seibert v. Seibert, 759 S.W.2d 768, 769 (Tex. App.—El
Paso 1988, writ denied).
20
issue, and we decline to develop Miga‘s argument for him.30 Further, our review
of the injunction here does not reveal any inconsistency between the judgment
and the injunction, and the injunction does not change the judgment but is merely
a vehicle for its enforcement.
Because we hold that the trial court had jurisdiction to enter the
postjudgment injunction and that the injunction does not exceed that jurisdiction,
we overrule all portions of Miga‘s issues contending otherwise. Also, because
the trial court did not rely on the existence of the prior written rule 11 agreement
to acquire its jurisdiction to enforce its judgment, we overrule Miga‘s issues
concerning that agreement as moot.
IV. No Abuse of Discretion by the Trial Court
In the remaining portions of his issues, Miga contends that the trial court
abused its discretion by issuing the injunction because (A) it is not based on the
evidentiary showing required by the turnover statute, (B) its use of terms
―ordinary,‖ ―reasonable,‖ and ―necessary‖ makes it impermissibly vague, and
(C) what a judgment debtor does with his property after the judgment is final and
nonappealable ―should not . . . be considered conduct that significantly interferes
with the administration of a trial court‘s core functions,‖ and holding otherwise
30
See Tello v. Bank One, N.A., 218 S.W.3d 109, 116 (Tex. App.—Houston
[14th Dist.] 2007, no pet.) (stating that ―we know of no authority obligating us to
become advocates for a particular litigant through performing [his] research and
developing [his] argument for [him]‖).
21
would ―open the flood gates for post-judgment actions by eager judgment
creditors . . . .‖
A. Evidentiary Showing Under Turnover Statute
Miga argues that it is impossible for the evidence to make the requisite
―showing that all of this unknown [future acquired] property cannot readily be
attached or levied on by ordinary legal process and/or it is not exempt from
attachment, execution[,] or seizure for the satisfaction of liabilities.‖ But that
statutory showing required for a turnover order is not required for a postjudgment
injunction. As the trial court explained in its findings of fact and conclusions of
law within the injunction, to obtain pretrial injunctive relief, an ―applicant must
plead and prove: (1) a cause of action against the defendant; (2) a probable right
to the relief sought; and (3) a probable, imminent, and irreparable injury in the
interim.‖31 But those first two elements are necessarily established when
judgment has already been rendered against a defendant.32 The requisites for
obtaining postjudgment injunctive relief to preserve assets are different than the
―more general ‗probable, imminent and irreparable injury‘ that is applicable‖
pretrial.33 To justify a postjudgment injunction, an applicant must prove only that
―the judgment debtor is likely to dissipate or transfer its assets to avoid
31
Butnaru, 84 S.W.3d at 204; Emeritus Corp., 198 S.W.3d at 226–27.
32
Emeritus Corp., 198 S.W.3d at 227.
33
Id.
22
satisfaction of the judgment.‖34 Evidence of the actual dissipation or transfer of
assets is not necessary to meet this standard.35 ―The trial court abuses its
discretion in ordering a post-judgment injunction if the only reasonable decision
that could be drawn from the evidence is that the judgment debtor would not
dissipate or transfer its assets.‖36
The trial court‘s unchallenged findings provide that
Miga has refused to pay any part of the judgment and has testified that
he has no intention of paying it;
Miga has testified that he has only about $340,000 left from Jensen‘s
$23.4 million payment;
In an informal accounting in June 2003, Miga represented to Jensen
that he had $9.74 million remaining in ―Cash and securities on hand,‖
after paying $4.838 million in taxes, paying $1.49 million in attorney‘s
fees, spending $2 million cash on a new house, incurring $2.5 million in
losses on various investments, repaying a $1.8 million business loan,
contributing $220,000 to college funds for his sons, contributing
$325,000 into an ―Irrevocable Trust‖ for his sons, and incurring
$550,000 in losses on municipal bonds;
In an August 2004 deposition, Miga refused to answer any questions
about the location of the $9.74 million in ―Cash and securities on hand‖;
In Miga‘s March 2010 deposition, he testified that within weeks after the
Miga I mandate, he transferred $9.47 million in cash and securities to
―RCR Foundation,‖ a private ―foundation‖ in Liechtenstein. Miga
testified that he understood that the RCR Foundation was like an
irrevocable trust in the United States; that he had no power to access
the assets, to control what the bank did with the assets, or even to see
34
Id.
35
Id. at 228.
36
Id. at 227.
23
a financial statement of the assets‘ value after 2008; and that he had
never received any disbursement of funds from the Foundation;
Miga testified that he had no other financial accounts outside the United
States and had produced all records relating to such accounts;
Later, Miga produced a document purporting to be an amendment to
the Foundation‘s bylaws and a letter indicating his desire that the
assets be distributed to his sons after he and his wife died, subject to
the discretion of the Foundation directors;
Miga‘s accountant‘s deposition established that Miga had neither
reported nor paid gift taxes on the purported gift of almost $10 million to
the Foundation, nor had he filed required reports for offshore trusts and
bank accounts;
After the March deposition, Miga also produced bank records that
showed transfers into his JP Morgan Chase bank account from various
overseas banks, including VP Bank BVI, as well as transfers from an
entity identified on the bank statements as ―Bridgeport Group‖ to meet
capital calls from JP Morgan;
A public record search revealed that on March 6, 2003, three days after
the mandate in Miga I, the Bridgeport Group was incorporated by a
subsidiary of the Liechtenstein trust company administering the RCR
Foundation;
In the continuation of his deposition in August 2010, Miga refused to
answer any questions on these subjects on the advice of his counsel,
on the grounds that his answers would tend to incriminate him;
In August 2010, Miga admitted that he had also had an account at First
Curacao International Bank, and he produced a statement from that
account showing transactions from July 1, 2005, through October 23,
2006;
Miga testified that the account was his individual account but that he
used it exclusively to receive payments from customers of his business
who were located in Syria, Iraq, and Iran and therefore prohibited from
sending money directly into the United States because of restrictions on
currency transfers following the September 11, 2001 attacks;
24
Miga admitted that he used funds received into the account for personal
purposes and that he accessed the funds directly in the United States
through an ATM card;
Miga testified that he never told his accountant or business partner
about the account or the income received via the account;
After the August 2010 deposition, Miga represented through his
attorney that he might be willing to ask or instruct the Liechtenstein
bank or trust company to return the Foundation assets and proceeds so
that he could pay part of his debt to Jensen;
On November 1, 2010, Miga‘s counsel communicated Miga‘s refusal to
request repatriation of the assets on the grounds that it would
jeopardize his negotiations with the IRS for tax amnesty. Miga refused
to consent to allowing the IRS to discuss resolution of Jensen‘s and the
IRS‘s potentially conflicting claims to the Foundation assets;
On November 15, 2010, Miga‘s lawyer stated that Miga had sent a
letter to the trust company asking that the foundation provide Miga with
copies of all documents referring or relating to the RCR Foundation
and/or to the Miga family‘s participation therein. As of the trial court‘s
judgment, Miga claimed that he had received no documents;
On December 7, 2010, Jensen obtained from a Liechtenstein court an
injunction freezing the assets;
A week later, Dr. Guido Meier, on behalf of the Foundation Council for
the RCR Foundation, informed the Liechtenstein court in writing that
there are not now nor have there ever been any assets in the RCR
Foundation;
On December 27, 2010, Miga produced a September 2010 letter to the
IRS in which he and his wife stated that in 2003, they transferred about
$8.5 million liquid assets or negotiable securities to the Liechtenstein
bank, that the assets came from Jensen‘s payment, that their account is
located at the bank‘s subsidiary in the British Virgin Islands, that the
account is held in the name of Bridgeport Group Inc., that Bridgeport
Group was formed by RCR Foundation, a foundation established by the
Migas and domiciled in Liechtenstein, that the Migas estimate their total
unreported income stemming from the account(s) to be between $0 and
$100,000 for the years 2003 through 2008, and that the Migas had the
25
account with First Curacao International Bank ―in order to have a debit
card‖;
The evidence is undisputed that Miga has transferred millions of dollars
of money he received from Jensen to a secret offshore account and
taken extensive actions to prevent its discovery, including falsely
marking documents and deliberately and repeatedly giving false
testimony under oath.
Accordingly, we reject Miga‘s argument and hold that Jensen has satisfied
his evidentiary burden to obtain the injunction.
B. Injunction Is Not Impermissibly Vague
Miga also argues that the order is impermissibly vague because it uses the
terms ―ordinary,‖ ―reasonable,‖ and ―necessary.‖ Miga cites no specific authority
for his proposition that these three common terms in legal and legislative drafting
are vague. Jensen, on the other hand, does cite specific Texas authority for the
proposition that ―ordinary course of business‖ is sufficiently precise. 37 Further, as
our sister court in Dallas has pointed out, courts routinely enforce provisions
requiring a party to pay reasonable and necessary expenses.38 We therefore
reject Miga‘s argument that the injunction is vague and ambiguous because it
uses the terms ―ordinary,‖ ―reasonable,‖ and ―necessary.‖
37
See, e.g., Metra United Escalante, L.P. v. Lynd Co., 158 S.W.3d 535,
545 (Tex. App.—San Antonio 2004, no pet.) (citing Helpinstill v. Regions Bank,
33 S.W.3d 401, 405 (Tex. App.—Texarkana 2000, pet. denied)).
38
Zidell v. Zidell, No. 05-96-00052-CV, 1997 WL 424429, at *7 & n.13 (Tex.
App.—Dallas July 30, 1997, no writ) (not designated for publication) (citing
Robbins v. Robbins, 601 S.W.2d 90, 93 (Tex. App.—Houston [1st Dist.] 1980, no
writ)).
26
C. Miga’s Policy Argument
Finally, Miga argues that what a judgment debtor does with his property
after mandate has issued does not significantly interfere with the administration
of a trial court‘s core functions and that upholding an injunction restricting the
expenditures of the debtor until the judgment is paid would encourage hordes of
creditors to seek postjudgment injunctive relief. Miga ignores the fact that
injunctions are fact-specific and ignores the many unchallenged findings of fact
included in the injunction itself.
Generally, a permanent injunction ―must not grant relief which is not
prayed for nor be more comprehensive or restrictive than justified by the
pleadings, the evidence, and the usages of equity.‖39 Here, Jensen requested
the relief awarded. Further, the unchallenged findings of fact show that Miga has
consistently flaunted the trial court‘s orders, wasting judicial resources at all
levels. Finally, the permanent injunction allows Miga to continue to spend money
in the ordinary course of business, for reasonable and necessary household and
living expenses, and for reasonable and necessary attorney‘s fees; the injunction
is therefore not overly broad but equitably precise.40 We consequently reject
Miga‘s remaining argument contending that the trial court abused its discretion,
39
Holubec v. Brandenberger, 111 S.W.3d 32, 39 (Tex. 2003) (citing 6 L.
Hamilton Lowe, Texas Practice: Remedies § 244 at 237 (2d ed. 1973)).
40
See Villalobos v. Holguin, 146 Tex. 474, 208 S.W.2d 871, 875 (1948);
Brown v. Petrolite Corp., 965 F.2d 38, 51 (5th Cir. 1992).
27
and we overrule all issues contending that the trial court abused its discretion by
issuing the permanent injunction against him.
V. Conclusion
Having held that this injunction is not appealable, we dismiss Miga‘s
appeal. Having held that the trial court had jurisdiction to issue this permanent
injunction enjoining Miga from spending money except in the ordinary course of
business, for reasonable and necessary household and living expenses, and for
reasonable and necessary attorney‘s fees and that the trial court did not abuse
its discretion by issuing the injunction, we deny all mandamus relief.
LEE ANN DAUPHINOT
JUSTICE
PANEL: DAUPHINOT, WALKER, and MEIER, JJ.
DELIVERED: March 8, 2012
28