Monthly Archives: November 2020

Property Divisions Are Forever (Maybe)

Leave a reply

The case of the week is Moore v. Moore, 568 S.W.3d 725 (Tex. App.—Eastland 2019, no pet.). Divorces are never pretty, and they are seldom quick. They usually keep going long after the judge has signed the decree. But this week’s case takes it to a new level.

Background

Ronald and Zuzanna Moore were divorced in June 2005. During the proceedings, Ronald gave Zuzanna “a list of his mineral interests.” 568 S.W.3d at 733. The divorce decree, however, did not list the mineral interests. Instead, it divided the “oil, gas or other minerals . . . standing in the name of the parties or either party” equally between them, and did not award any oil and gas interests to either party as their separate property.  568 S.W.3d at 728. Ronald filed a motion for new trial, but he did not appeal.

Eight years later, Zuzanna discovered “multiple interests that [Ronald] had not included on the list.” 568 S.W.3d at 733. She contacted the producers and instructed them to pay her half the revenues from those interests. They did. When Ronald found out, he filed a petition for clarification in the divorce court, asking that court to clarify that the oil and gas interests were his separate property. In response, Zuzanna filed a motion to enforce the decree, asking the Court to order Ronald to execute the necessary documents to properly transfer her share of the oil and gas interests to her. The divorce court denied Ronald’s petition for clarification and granted Zuzanna’s motion to enforce. Ronald appealed, making four interesting (if unsuccessful) arguments. (He made others, but they are not as interesting and did not succeed.)

Limitations

Ronald argued that Zuzanna’s claims were barred by the statute of limitations. Chapter 16 of the Civil Practice & Remedies Code contains most of the statutes of limitations in Texas law. The two statutes he relied on were the 4-year statute for foreclosing on liens on real property and the 4-year “residual statute,” for actions “for which there is no express limitations period.” Tex. Civ. Prac. & Rem. Code §§ 16.035, 16.051. But statutes of limitations only apply to independent causes of action. Zuzanna, however, was not asserting an independent cause of action; she was trying to enforce a final judgment—to obtain the relief she had already been awarded. Therefore, the ordinary statutes of limitations set forth in Chapter 16 do not apply.

Rather, Chapter 9 of the Family Code governs the time limits for enforcing divorce decrees. Chapter 9 provides that a party has two years to enforce the division of “tangible personal property” and “future property.” Tex. Fam. Code § 9.003. But Chapter 9 is silent about the time limit for enforcing the division of real property.

We presume that the legislature chooses the language of a statute carefully, purposefully choosing each word that it includes and purposefully omitting words that it did not include. [¶] We believe it to be significant that the legislature did not include provisions in Chapter 9 of the Family Code that limit the time within which a party must seek to enforce the division of real property.

568 S.W.3d at 731 (citations omitted). In other words, there is no statute of limitations to enforce a property division (or at least Ronald didn’t carry his burden to prove it). Issue number one overruled.

Laches

Ronald argued that Zuzanna’s claims were barred by the related defense of laches. Laches is a time-based defense like limitations, but it is less mathematically strict. The elements of laches are (1) an unreasonable delay caused by the plaintiff in asserting some legal or equitable right, and (2) a goof-faith change in position by the defendant because of the delay.  528 S.W.3d at 732 (citing City of Fort Worth v. Johnson, 388 S.W.2d 400, 403 (Tex. 1964)).

But Ronald failed to prove unreasonable delay caused by Zuzanna. First, the reason it took her eight years to find the mineral interests was because Ronald failed to disclose them. Once she found them, she promptly researched the claims, hired lawyers, obtained the appropriate division orders, all “within two years after she discovered the existence of the mineral interests.”  528 S.W.2d at 732. When Ronald sued to stop her from taking the royalties, she promptly filed a counterclaim to enforce the property division. None of that delay was unreasonable. No unreasonable delay means no laches defense. Issue number two overruled.

Separate Property

Ronald argued that the oil and gas interests were his separate property and always had been, so the trial court could not divest him of his separate property rights, either in 2005 or 2013. But the time for proving separate property rights is the divorce itself, not in a later enforcement action. Any property held at the time of the divorce is presumed to be community property.  See Tex. Fam. Code § 3.003(a), Pearson v. Fillingim, 332 S.W.3d 361 (Tex. 2011). Because Ronald did not prove the separate property character of his mineral interests during the initial divorce proceedings, that issue could not be revisited—or visited for the first time—at the enforcement stage.

Adverse Possession

Ronald argued that, even if the mineral interests were community property and even if half the interests were awarded to Zuzanna in the divorce, he nevertheless should get to keep them under the doctrine of adverse possession. Adverse possession is one of the most controversial concepts in real property law. The basic idea is that a non-owner of real property can become the owner by making “an actual and visible appropriation” of the real property that “is inconsistent with and is hostile to the claim of another person” for a certain amount of time. Tex. Civ. Prac. & Rem. Code § 16.021(1). The requisite duration of the appropriation depends on the circumstances. For example, a person who merely cultivates, uses, or enjoys property “in peaceable and adverse possession” must do so for 10 years, while somebody who cultivates, uses, or enjoys the property and pays taxes and registers a deed need only wait 5 years. See Tex. Civ. Prac. & Rem. Code §§ 16.025(a); 16.026. Not everything can be adversely possessed. Mineral interests can be adversely possessed, but “nonpossessory interests, including royalty interests, are not subject to adverse possession.”  568 S.W.3d at 733 (citing Nat. Gas Pipeline Co. of America v. Pool, 124 S.W.3d 188, 192 (Tex. 2003)). The distinction between a mineral interest and a royalty interest is a bit beyond my ken, but the important thing to remember is that the adverse possessor bears the burden of proof. Ronald, however, “did not meet his burden to show ‘an actual and visible appropriation’ of the property.” 568 S.W.3d at 734. No appropriation means no adverse possession.

How Not to Keep a Secret

1 Reply

The case of the week is Denny v. State, No. 11-18-00270-CR, ___ S.W.3d ___ (Tex. App.—Eastland Oct. 30, 2020, no pet. h.) (Google Scholar, Slip Opinion).

Reversals on appeal in criminal cases are rare. When they do happen, it’s usually because of some procedural problem in the courts below—an unconstitutional search, an unreliable confession, an unfair trial. Reversals on sufficiency grounds—there wasn’t enough evidence to convict—are exceedingly, vanishingly rare. But the argument continues to be made because of cases like this one.

In August 2012, an unresponsive child was taken to Abilene Regional Medical Center. The hospital called CPS, which sent Investigator Tapia to check on the other children in the home. As she was leaving, the child in the hospital was pronounced dead. Sergeant Beard with the Abilene Police Department took a photograph (a digital photograph) of the child and sent it to Tapia’s supervisor, McDaniel. McDaniel showed the APD photo to Tapia (to prepare her for what she might find) and sent a copy to her supervisor, Gretchen Denny. When Tapia arrived at the home, she determined that the children needed medical attention.

Tapia took the children to the hospital and wanted to show the APD photo to medical staff, “[h]oping that the photograph would help the medical staff diagnose and treat the two children.” Slip Op. at 3. But Tapia didn’t actually have the APD photo; she had only seen it on McDaniel’s phone. Tapia asked McDaniel to send her the photo. McDaniel checked with Denny, who said “No . . . delete it.” Slip Op. at 3. Meanwhile, Sergeant Beard sent the APD photo to Detective Shoemaker, who was at the hospital. The opinion is silent on whether Shoemaker showed the APD photo to the medical staff or whether it helped medical staff diagnose and treat the children’s injuries.

The fallout from this case was huge. The mother of the children was sentenced in 2014 to 30 years in prison. The father of the children (who was on deployment  with the Air Force at the time) was prosecuted through the Air Force and initially sentenced to 3 years’ confinement on one count of adultery and three counts of child neglect. The regional supervisor for CPS was indicted, though the charges against her were ultimately dismissed.

And Gretchen Denny was indicted in December 2015 for concealing evidence in violation of Tex. Penal Code § 37.09(a)(1). She was convicted by a jury in April 2018 and sentenced to six years’ confinement, with the sentence suspended and community supervision imposed for six years. She appealed and argued, among other things, that the evidence was insufficient to support her conviction.

The first hurdle in a sufficiency challenge is pretty high. The court of appeals must consider “all of the evidence admitted at trial,” both direct and circumstantial, and “including evidence that may have been improperly admitted.” Slip Op. at 4. When there are conflicts in the evidence, the court of appeals will “defer to the jury” and “presume that the jury resolved the conflicts in favor of the verdict.” Slip Op. at 4. Finally, the court will compare the evidence, including its “combined and cumulative force,” to the “hypothetically correct jury charge” to determine whether “a rational jury could find each essential element of the offense beyond a reasonable doubt.” Slip Op. at 4 (citing Jackson v. Virginia, 443 U.S. 307 (1979); Brooks v. State, 323 S.W.3d 893 (Tex. Crim. App. 2010)).

In this case, the hypothetically correct jury charge would have required the jury to find that she actually concealed the APD photo by directing CPS personnel to refuse to provide it. Slip Op. at 6. But, she argued, CPS got the APD photo from the APD, so she could not possibly have concealed the APD photo from the APD. The court of appeals agreed:

Independent of whether law enforcement in this case spoke to Appellant or any other CPS investigator, law enforcement knew that the photograph existed and knew that they had a copy of it. Law enforcement had no difficulty locating the photograph in question. In fact, the evidence established that the photograph was already in the possession of the APD, and Detective Shoemaker ultimately received a copy of the photograph from Sergeant Beard.

Slip Op. at 8. Accordingly, “there is no evidence from which a rational trier of fact could have found beyond a reasonable doubt that the photograph was actually concealed.” Slip Op. at 8. Without any evidence of actual concealment, the evidence was insufficient to sustain a conviction for concealment.

The second hurdle in the sufficiency analysis is equally high. A conviction for one offense (say, concealing evidence) must be “reformed” to a conviction for a lesser included offense (say, attempting to conceal evidence) if “(1) in the course of convicting the appellant of the greater offense, the factfinder must have necessarily found every element of the lesser included offense; and (2) . . . there is sufficient evidence to support a conviction for the lesser included offense.” Slip Op. at 8–9 (citing Thornton v. State, 425 S.W.3d 289 (Tex. Crim. App. 2014)). The court of appeals answered the first question without much discussion. Slip Op. at 9.

But as to the second question: “The dispositive question to be decided is whether there was sufficient evidence of a specific intent to conceal the photograph.” Slip Op. at 10. Denny argued that she could not have had the specific intent (or conscious objective) to conceal the APD photo because she knew that APD already had the photo (because she had gotten it from APD) and that she could not possibly conceal the APD photo from APD. In other words, she could not specifically intend something she knew was impossible.

The Texas Court of Criminal Appeals has dealt with this issue before: “it is less likely (though not impossible) that the appellant would harbor a ‘conscious objective’ to cause a result he knew to be impossible.” Thornton, 425 S.W.3d at 305. The line seems to be drawn somewhere around plausibility: “Although Thornton was not likely to succeed in his attempt to hide the pipe, the court found that a jury could reasonably infer that Thornton intended to conceal the pipe based on its material composition, size, and the dimly lit hour of the day.” Slip Op. at 10–11 (citing Thornton, 425 S.W.3d at 305). In other words, what Thornton called an “impossible” result was actually only unlikely one and therefore something he could have intended.

But this case is different:

Here, the object at issue is a digital photograph—something that, by its very nature, is easily copied, shared, and stored in multiple locations. . . . Although it is not impossible for a person to harbor a conscious objective to produce an impossible result—here concealing something from someone who already has a copy—the unique facts surrounding the creation of the photograph by the APD, combined with Appellant’s knowledge about the photograph’s origin, weigh heavily against a finding that Appellant intended to conceal the photograph from the investigation.

Appellant, in her police interview, stated that she knew McDaniel had received the photograph from the APD. Further, the photograph remained in the possession of the APD throughout the investigation: Sergeant Beard took the original photograph and it never left his possession; he eventually sent a copy of it to Detective Shoemaker.

Slip Op. at 11. In other words, concealing a digital photograph from the person who took it is impossible (at least under the facts alleged in this case), so no rational juror could have concluded that she intended to conceal the APD photo from the APD. Without sufficient evidence that she specifically intended to conceal the APD photo, there was not sufficient evidence to sustain a conviction for attempting to conceal.

Gretchen Denny cleared both hurdles on the sufficiency challenge track, so her conviction was reversed.

This case is food for thought in a couple ways. First, what does this mean for future prosecutions for deleting pictures from a phone? Second, what the heck is going on here? I fear that this prosecution went as far as it did because of petty grievances and interpersonal squabbles. Truth be told: one of the greatest dangers to the rule of law is the use of law by local officials to settle personal scores. We must be vigilant not to let that happen.

Bankruptcy, Filing Fees, and the Constitution

Leave a reply

The case of this week is In re Buffets LLC, No. 19-50765 (5th Cir. Nov. 3, 2020) (slip op.; Google Scholar).

When I was in college, doing moot court, I dreamed of one day doing “constitutional law.” In my head, constitutional law was this amazing and heady thing, dealing with rights to esoteric things like Life and Liberty and Property and Due Process. I imagined myself sitting in an appellate courtroom, with oak paneling , hardwood floors, and judges in wigs, waxing philosophical: “Mm, yes, your honor, but exactly how much ‘process’ is due?” When I got into the real world of practice, I learned that most of the practice of law is people on one side trying to find some excuse not to pay the people on the other side. Questions of how much process is due rarely come up. But they do, occasionally, and almost always because the side that doesn’t want to pay has a creative lawyer.

Buffets LLC operates a chain of buffet restaurants, including Ryan’s Family Steakhouse. It filed for bankruptcy under Chapter 11 in 2016, confirmed a plan in 2017, and was still making disbursements under that plan in 2018, when Congress amended 28 U.S.C. § 1930(a)(6).

Section 1930 governs the fees payable in bankruptcy cases, and paragraphs (a)(6) and (7) provide for quarterly fees payable in Chapter 11 cases. Subsection (a)(6) says that in most of the country (in “UST courts”) a “quarterly fee shall be paid to the United States trustee” based on the amount of disbursements by the debtor under the plan in that quarter. Subsection (a)(7) says that, in the rest of the country (in “BA courts”), the Judicial Conference “may require the debtor . . . to pay fees equal to those imposed by paragraph (6) of this subsection.” There  are two paragraphs because the country operates two systems for administering bankruptcy cases: the UST system and the BA system. U.S. trustees and bankruptcy administrators do essentially the same thing: they both monitor bankruptcy cases to make sure fees are paid, schedules and reports are filed, bank accounts are opened properly, etc. But U.S. trustees are funded by filing fees while bankruptcy administrators are funded out of the general budget of the judiciary. So: Congress controls quarterly fees in UST courts while the judiciary, through the Judicial Conference, controls quarterly fees in BA courts.

In 2018, to address budgetary problems in the UST system, Congress raised the cap on quarterly fees under section 1930(a)(6) from $30,000 to $250,000. The change was effective on a certain date and applied to all Chapter 11 cases pending on that date. In 2019, the Judicial Conference raised the quarterly fees under section 1930(a)(7) to match Congress’s raise, but limited the effect of the change to new cases filed on or after that date.

Now, like I said, Buffets LLC was still making disbursements under its Chapter 11 plan when the amendment came into effect in 2018. Because Buffets LLC had filed in the Western District of Texas (a UST court), its quarterly fee increased from $30,000 to $250,000. As you might expect, Buffets LLC resisted the fee hike. It raised number of factual and legal challenges—including that the fees were unconstitutional because they violate the Bankruptcy Clause of the Constitution.

Wait. What? Filing fees are unconstitutional? And there’s a bankruptcy clause in the Constitution? Yep:

The Congress shall have Power . . . To establish . . . uniform Laws on the subject of Bankruptcies throughout the United States[.]

U.S. Const. art. I, § 8, cl. 4. “The Bankruptcy Clause ‘might win’ a ‘contest for least-studied part’ of Article I’s congressional powers.” Slip Op. at 14. It “received ‘meager’ attention” at the Constitutional Convention after Charles Pinckney proposed it alongside the Full Faith and Credit Clause. “Roger Sherman raised the only doubt about the Bankruptcy Clause, expressing concern because ‘in England, some bankrupts were sentenced to death’.” Slip Op. at 14-15 n.8. The Bankruptcy Clause is mentioned only once in the Federalist Papers: “The power of establishing uniform laws of bankruptcy is so intimately connected with the regulation of commerce, and will prevent so many frauds where the parties or their property may lie or be removed into different States, that the expediency of it seems not likely to be drawn into question.” The Federalist No. 42. So if you’ve never heard of it before, you’re in good company.

The lawyers for Buffets LLC, though, had heard of it. They argued that a scheme under which one set of fees was payable in one part of the country and a different set of fees was payable in a different part is unconstitutional because it is not “uniform . . . throughout the United States.” [n.1]

The Fifth Circuit was not persuaded. The Bankruptcy Clause “forbids only two things . . . arbitrary regional differences in the provisions of the bankruptcy code [and] private bankruptcy bills.” In re Reese, 91 F.3d 37, 39 (7th Cir. 1996). [n.2] The fee statute is clearly not a private bankruptcy bill, but is it an arbitrary regional difference? Not according to the majority: regional difference yes, but it is justified by the different funding mechanisms for UST courts and BA courts and so is not “arbitrary.” After all, Congress made two systems for a reason, so Congress can fund the two systems however best it makes sense to fund them. If you’re scratching your head, again, you’re not alone. Doesn’t that answer just beg the question about the uniformity—and therefore constitutionality—of the dual UST-BA system? Maybe, but Buffets LLC “do not ask us to ‘hold that the permanent division of the country into UST districts and BA districts violates the Bankruptcy Clause.” Slip Op. at 19. Constitutional question averted.

But maybe not forever. The dissent relied heavily on St. Angelo v. Victoria Farms, Inc., in which the Ninth Circuit held that the dual UST-BA system is dis-uniform and therefore unconstitutional. 38 F.3d 1525 (9th Cir. 1994), amended by 46 F.3d 969 (9th Cir. 1995). Now that we have sophisticated lawyers fighting over hundreds of thousands of dollars, the issue may come to a head sooner rather than later.

Notes:

  1. In fact, because of the geography of UST courts and BA courts, Buffets LLC could have argued that there is one part of the United States where the fees are not uniform even within city limits. The federal courthouse in Texarkana sits on the state line. The bankruptcy courts on one side, in the Eastern District of Texas, are UST courts. The bankruptcy courts on the other side, in the Western District of Arkansas, are BA courts.
  2. The Fifth Circuit had to cite the Seventh Circuit because Supreme Court case law is not particularly helpful—it only provides that the Bankruptcy Clause is “not an Equal Protection Clause for bankrupts.” Railway Labor Executives Ass’n v. Gibbons, 455 U.S. 457, 470 n.11 (1982). Whatever that means.

The Case of the Precedent for Refusing to Leave Office

Leave a reply

The case of the week is Ex Parte Rodriguez, 39 Tex. 705 (Tex. 1873).

Jose Rodriguez was arrested on December 13, 1873, for voting twice in the gubernatorial election of December 2, 1873. Three days later, he filed a petition for writ of habeas corpus. He was represented by former Texas Governor A.J. Hamilton and made a simple argument:

  1. Rodriguez was arrested for voting twice, but
  2. the election of December 2, 1873, was unconstitutional and therefore invalid, so
  3. it could not be a crime to vote twice in that election.

The State was represented initially by Frank Spencer, the district attorney for Harris County. He was not opposed to the relief sought — he agreed that Rodriguez should be released — but his basis was that the arrest was not a real arrest but an engineered ploy to test the constitutionality of the election. He submitted an affidavit from George Goldthwaite to the effect that the former sheriff of Harris County (A.B. Hall) paid Rodriguez to get arrested and paid Hamilton to file the petition. When the court declined to accede to his request, he withdrew and the court appointed Bingham Trigg, the district attorney of Travis County, to take over for the state and defend the constitutionality of the election. Trigg made many of the same arguments as Spencer.

The court ultimately sided with Rodriguez. The Constitution of 1869 provided:

All elections for State, district and county officers shall be held at the county seats of the several counties, until otherwise provided by law; and the polls shall be opened for four days, from 8 o’clock a.m. until 4 o’clock p.m. of each day.

Tex. Const. of 1869 art. 3, § 6 (emphasis added). In March of 1873, the Republican-controlled Legislature passed a statute providing that elections could be held in the justice of the peace precincts (which may or may not be in the county seat), but limiting elections “to one day only . . . from 8 o’clock a.m. to 6 o’clock p.m.” The statute also provided that voting more than once in the same election was a felony.

The court was ok with the first part. The location provision of article 3, section 6 was modified by the phrase “until otherwise provided by law.” The March 1873 statute “otherwise provided by law,” so no problem there.

  • The Legislature undoubtedly have the power to provide for holding the elections at places other than the county seats;
  • but it is equally clear that the Constitution is mandatory, and that the Legislature have no power to limit the time within which the elections must be held;
  • and Section 12 of the act of March 31, 1873, is in open conflict with the Constitution, and for that reason is null and void;
  • and no valid election having been held at the city of Houston, in the county of Harris, on the second day of December, 1873, the relator is not guilty of a felony, and is therefore entitled to his enlargement.

39 Tex. at 774 (bullet points added for clarity). In other words, the semicolon meant that the Legislature could not change the Constitutional mandate of four-day polls, and any election that lasted less than four days was invalid.

But Rodriguez’s release is not quite the end of the story. First, the three judges of that court (Moses B. Walker, Wesley B. Ogden, and John D. McAdoo) collectively came to be called the “Semicolon Court.” Its opinions are generally not considered binding authority on other Texas courts. Second, the case report ends with a note from the reporters:

To the historian, rather than the law reporter, belongs the duty of perpetuating the memory of the events connected with the installment of the State officers chosen at the general election pronounced illegal by this opinion. Those who are not familiar with what followed will find it faithfully detailed in “a lengthy note to Pasehal’s Digest of the Laws of Texas. (Edition of 1874, Vol. 2, page 1398e et seq.) The note contains the dispatches between the President, Attorney-General of the United States, and ex-Governor Davis, in regard to the application made by the latter for military assistance to prevent Governor Coke from occupying the executive office.
We may properly say, that the question before the court in [Ex] Parte Rodriguez received its final practical solution as a political and not a judicial question.

39 Tex. at 776 (reporters’ note).

The sitting governor, Republican Edmund J. Davis, had lost the election of December 2, 1873, to Democrat Richard Coke by something like a 2-to-1 margin. But, following the decision, Davis physically refused to leave office. Coke and the Democrats got the keys to the Capitol and took possession anyway. Davis called in the Travis Rifles (sort of a local militia) to help keep him in office, but they aligned with themselves with Coke. Davis then called on President Grant to send in federal troops, but he too declined. Davis found himself on the bad end of Andrew Jackson’s warning — “John Marshall has made his decision; now let him enforce it!” When Davis realized he couldn’t enforce the Semicolon Court’s judgment, he left the office, locked the door on his way out, and took the keys. Coke was inaugurated as governor the next day, and his first act of office was literally to break down the door with an axe.

After Davis, there wouldn’t be another Republican in the governor’s mansion for 105 years.