APPELLANTS REPLY BRIEF
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- Marcia Dickerson
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1 Case No CV ACCEPTED 225EFJ FIFTH COURT OF APPEALS DALLAS, TEXAS 12 January 20 P4:27 Lisa Matz CLERK IN THE FIFTH COURT OF APPEALS at Dallas, Texas QUI PHUOC HO and TONG HO Appellants, V. MACARTHUR RANCH, LLC Appellee. Appealed from the 14 th District Court Dallas County, Texas APPELLANTS REPLY BRIEF T. RICK FRAZIER Texas Bar No. # La Sierra Drive, Suite 220 Dallas, Texas (972) (972) fax ATTORNEY FOR APPELLANTS
2 TABLE OF CONTENTS TABLE OF CONTENTS... ii INDEX OF AUTHORITIES... iii SUMMARY OF ARGUMENT... 1 REPLY ARGUMENTS AND AUTHORITIES... 2 A. ISSUE NUMBER 1 APPELLEE DID NOT OFFER SUFFICIENT EVIDENCE TO PROVE THE ELEMENTS NECESSARY TO ESTABLISH FRAUDULENT TRANSFERS OF EITHER PROPERTY UNDER TUFTA... 2 B. ISSUE NUMBER 2 APPELLANTS DID NOT WAIVE THEIR RIGHT TO COMPLAIN ABOUT THE GRANTING OF A JOINT AND SEVERAL JUDGMENT OR THE FAILURE TO JOIN A PARTY UNDER RULE 39, T.R.C.P CONCLUSION AND PRAYER... 7 CERTIFICATE OF SERVICE... 9 ii
3 INDEX OF AUTHORITIES CASES City of San Antonio v. Pollock 284 S.W.3d 809 (Tex.2009)... 5 Coastal Transp. Co. v. Crown Cent. Petroleum Corp. 136 S.W.3d 227 (Tex.2004)... 5 Gammill v. Jack Williams Chevrolet, Inc. 972 S.W.2d 713 (Tex.1998)... 4 Guadalupe Blanco River Auth. v. Kraft 77 S.W.3d 805 (Tex.2002)... 3 Maritime Overseas Corp. v. Ellis 971 S.W.2d 402 (Tex.1998)... 3 Merrell Dow Pharm. v. Havner, 953 S.W.2d 706 (Tex.1997)... 4 Wal Mart Stores, Inc. v. Merrell 313 S.W.3d 837 (Tex.2010)... 5 STATUTES AND RULES Tex. R. App. P. 33.1(d)... 7 TEX. R. CIV TEX. R. CIV TEX. R. EVID. 104A... 4 TEX. R. EVID TEX. R. EVID iii
4 SUMMARY OF ARGUMENT In its brief, Appellee mischaracterizes the so-called expert testimony at trial with respect to fair market value of the properties he claims were the subject of fraudulent transfers. Second, Appellee incorrectly argues that Appellants, by failing to object at trial, waived their right to complain of the total lack of evidence as to any qualifications, knowledge or experience that might have supported Appellee s claim that his witness was indeed an expert as to the valuations of the properties involved. As to the second property (referred to as the Princess House ), Appellee repeatedly refers to findings of fact that the transferor transferred all of his interest in the house to his parents, with whom he shared ownership prior to the transfer. Appellee presented absolutely no evidence whatsoever as to what that interest was (if any the evidence showed the parents have at all times lived in the house and have claimed it as their homestead). Appellee and the trial court in its decision to order the sale of the home erred in assuming (based upon no evidence) that the transferor owned 100% of the value of the house prior to the transfer. 1
5 Finally, Appellee additionally incorrectly argues that Appellants waived their right to complain of the failure of the trial court to require to joinder of a party needed for just adjudication under rule 39, T.R.C.P. In this case, the transferor s mother (and a co-owner of the Princess House as shown by the evidence) was never sued nor joined into the lawsuit. Her rights in her own home and homestead have, however, been severely affected by the inappropriate order of the trial court to sell her home for the benefit of Appellee. Each of these points constitute clear abuses on the part of the trial court and require reversal of the rulings at trial. REPLY ARGUMENTS AND AUTHORITIES Issue 1: Appellee did not offer sufficient evidence to prove the elements necessary to establish fraudulent transfers of property under TUFTA. A necessary element of the cause of action of fraudulent transfer is proper evidence of the value of the thing that was transferred. Without knowledge of the value, one cannot judge to what extent (if any) the transferees received an uncompensated windfall to the detriment of the creditor. Mischaracterization of Evidence Appellee states in its brief, there is testimony in the record to support the valuations of the properties both on the tax rolls and the fair market values thereof. 2
6 Appellee goes on to state that evidence of a property s appraisal on the tax rolls is evidence of fair market value and cites authority to support that argument. However, Appellee has mischaracterized the actual testimony. Neither counsel for Appellee nor the witness ever referred to any tax rolls as the basis for either property s appraised value. Counsel s questions to the witness only used the phrase appraised value. (RR 2:8-19) No evidence was offered as to who made the appraisal, or to what was its source. Qualification based on knowledge and experience v. Reliability based on scientific technique Appellee apparently believes Appellants only contention with regard to Appellee s lack of evidence of fair market value was that the evidence offered was unreliable because of the underlying scientific techniques used. Appellee recites, [t]o preserve a complaint that expert evidence is unreliable and thus, no evidence, a party must object to the evidence before trial or when the evidence is offered, citing Guadalupe Blanco River Auth. v. Kraft, 77 S.W.3d 805, 807 (Tex.2002). The Kraft court does make such a statement, however, for support, the Kraft court cites Maritime Overseas Corp. v. Ellis, 971 S.W.2d 402, 409 (Tex.1998). The Ellis case states, To preserve a complaint that scientific evidence is unreliable and thus, no evidence, a party must object to the evidence before trial or when the evidence is offered. [emphasis added] 3
7 Appellants do not argue that any specific scientific technique or principle used by Appellee s witness was unreliable, especially since Appellee s witness offered no evidence of any technique, scientific or otherwise, used by her in determining the fair market value of the properties. The witness offered nothing more than a mere, unsubstantiated opinion, simply affirming the counsel s leading questions. Rule 702 of the Texas Rules of Evidence permits a witness qualified as an expert by knowledge, skill, experience, training, or education to testify on scientific, technical, or other specialized subjects if the testimony would assist the trier of fact in understanding the evidence or determining a fact issue. A preliminary question to be decided by the trial court is whether an expert is qualified under Rule 104(a) of the Texas Rules of Evidence. The party offering the expert s testimony bears the burden to prove the witness is qualified under Rule 702. The offering party must demonstrate that the witness possesses special knowledge as to the very matter on which he or she proposes to give an opinion. A trial court s acceptance of a witness s qualifications as an expert is reviewable for an abuse of discretion. Gammill v. Jack Williams Chevrolet, Inc., 972 S.W.2d 713, (Tex.1998). As stated first in Merrell Dow Pharm. v. Havner, 953 S.W.2d 706, 712 (Tex.1997), When the expert brings to court little more than his credentials and a 4
8 subjective opinion, this is not evidence that would support a judgment... If for some reason such testimony were admitted in a trial without objection, would a reviewing court be obliged to accept it as some evidence? The answer is no. In City of San Antonio v. Pollock, 284 S.W.3d 809, 816 (Tex.2009), the Texas Supreme stated: Bare, baseless opinions will not support a judgment even if there is no objection to their admission in evidence. Id. [I]f no basis for the opinion is offered, or the basis offered provides no support, the opinion is merely a conclusory statement and cannot be considered probative evidence, regardless of whether there is no objection. Id. at 818. [A] party may complain that conclusory opinions are legally insufficient evidence to support a judgment even if the party did not object to the admission of the testimony. Id. at 816. More recently, in Wal Mart Stores, Inc. v. Merrell, 313 S.W.3d 837 (Tex.2010), the Supreme Court reiterated, No-evidence challenges to allegedly conclusory expert testimony require us to examine the record on its face to determine whether the evidence lacks probative value, citing Coastal Transp. Co. v. Crown Cent. Petroleum Corp., 136 S.W.3d 227, (Tex.2004). In Coastal Transportation, we explained that [o]pinion testimony that is conclusory or speculative is not relevant evidence, because it does not tend to make the existence of a material fact more probable or less probable. Id. at 232 (quoting 5
9 TEX. R. EVID. 401). [S]uch conclusory statements cannot support a judgment even when no objection was made to the statements at trial. Id. Thus, since no credible evidence was offered by Appellee as to the knowledge, skill, experience, training, or education of the witness in regard to her ability to correctly determine the value of the properties in question, her mere affirmation of the Appellee counsel s leading and presumptuous questions must be dismissed as conclusory or speculative. This leaves Appellee with no credible evidence to support its valuations and thus a key element of its cause of action has failed to be proved. No evidence of the value of the transferor s interest More critically, as to the Princess House, the value of which clear evidence was essential for Appellee s case, was the value of the interest of the transferor prior to the transfer. The total market value of the home was not the relevant measure as this included the interests, prior to transfer, of both of the transferor s parents who jointly owned and actually lived in the home. The trial court committed grievous error by making the apparent assumption (albeit with no evidence at all presented on the point) that the value parents interest was exactly zero. 6
10 Issue No. 2: Appellants did not waive their right to complain about the granting a joint and several judgment or the failure to join a party under Rule 39, T.R.C.P. From the arguments in its brief, Appellee apparently believes issues first raised in a motion for new trial do not preserve error for appellate review. Appellants have not found any authority to support such a novel argument. Such an argument in fact flies in the face of rule 324, T.R.C.P., a rule that states that no motion for new trial is required to complain of error on appeal except under specific, limited circumstances set forth in the rule, and rule 33.1(d), T.R.A.P. that states sufficiency of evidence complaints in non-jury trials may be first raised on appeal. At the motion for new trial hearing, Appellants clearly raised both the issue of an improper joint and several judgment, as well as the failure to join a party needed for just adjudication under Rule 39. (RR 3:5-11) The trial court had the opportunity at that time to correct the errors but chose not to. That decision by the trial court has accorded Appellants the full legal right to seek appellate review notwithstanding the issues were first raised in the motion for new trial. CONCLUSION AND PRAYER Appellee failed to offer proper and sufficient proof of each of the required elements necessary to prove a fraudulent transfer under TUFTA. The trial court failed to undertake its role as gatekeeper in considering the total lack of evidence 7
11 required to qualify Appellee s witness as an expert in the evaluation of the properties involved. The trial court further failed to required the joinder of an individual whose rights would be (and have been) severely impaired by the court s disposition of her property without the opportunity to defend herself. Therefore, counsel for Appellant respectfully submits that it is the duty of this Court to reverse the trial court ruling and render the only proper judgment based on the fatal errors committed at trial, that the Appellee take nothing by its action. Respectfully submitted T. RICK FRAZIER State Bar ID # La Sierra Drive, Suite 220 Dallas, Texas (972) (972) fax - trickfrazier@me.com ATTORNEY FOR APPELLANTS 8
12 CERTIFICATE OF SERVICE I hereby certify that a copy of Appellant s Brief was served on Appellee, through counsel of record, Mr. J. Kent Davenport, DAVENPORT & EPSTEIN, P. C., Merit Drive, Suite 230, Dallas, TX by: 1. first class mail and 2. Fax to on January, 2012, before 5:00 p.m. /s/ T. Rick Frazier. T. Rick Frazier 9
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