MARTHA HILL JAMISON, Justice.
Who, if anyone, speaks for a Mexican union when the union leadership is mired in scandal? That is the central question in this three-way appeal concerning enforcement of a purported 2004 settlement agreement (the "Garnished Funds Agreement") attempting to finally resolve 30 years of litigation. Among other things, the Garnished Funds Agreement provided for the distribution of certain garnished funds held in a New York bank account between the Petroleum Workers Union of the Republic of Mexico (the "Union") and James Gomez, as receiver for Arriba Limited ("Arriba").
Ultimately, all of the garnished funds were sent to Mexico for a Mexican court to determine their ownership. Arriba and Ryerson then sued the Union for breach of the agreements, and the Union counterclaimed for wrongful garnishment and breach of fiduciary duty among other allegations. The key issue for the jury to decide at trial was whether Ryerson and Noe Moreno Alvarez had authority to sign the agreements on behalf of the Union. The jury found that both men had both actual and apparent authority to sign the Garnished Funds Agreement and Alvarez had actual and apparent authority to sign the Ryerson Agreement. In its judgment, the trial court declined to award monetary damages to any party but declared that Arriba was entitled to enforce the 1986 Judgment against the Union anywhere except in Mexico. The court further awarded Arriba its court costs.
In its appeal, the Union contends: (1) the Garnished Funds Agreement is illegal under Mexican Law and therefore cannot be enforced; (2) Arriba and Ryerson are precluded from enforcing the Garnished Funds Agreement under the doctrine of res judicata; (3) the evidence is legally and factually insufficient to support the jury's finding that the signatories had actual or apparent authority to sign the Garnished Funds Agreement; (4) the Garnished Funds Agreement lacked consideration; (5) the trial court should have applied Mexican law to the authority issues; (6) the trial court erred in its jury instruction on apparent authority; (7) the trial court erred in denying motions for mistrial when evidence was revealed to the jury that had not been timely disclosed in discovery; and (8) the trial court erred in refusing to submit jury questions regarding the Union's counterclaims for wrongful garnishment and breach of fiduciary duty. In their respective appeals, Arriba and Ryerson contend the trial court erred in failing to award them monetary damages for breach of the Garnished Funds Agreement and the Ryerson Agreement. We affirm.
The parties largely agree on the order of relevant events and the identities of the key players. The main factual disagreements revolve around the relationships between the players and the events. Essentially, Arriba contends that the Union has regularly employed a scheme of using certain people or entities to enter agreements and then claiming that those people or entities were without authority to bind the Union. Meanwhile, the Union asserts that Arriba has continually dealt with people and entities that did not have authority to bind the Union and then has sought to hold the Union accountable for the other parties' promises.
The relevant history begins in 1984 when Texas attorney David Black and businessman Billy Flanigan approached certain Mexican individuals—whom Black and others testified represented the Union—with a proposal for the refinement of residual oil from Mexican refineries.
In June 1985, Arriba filed a lawsuit against the Union, the Commission, and certain individuals in Harris County, Texas (sometimes, the "Judgment Debtors"), alleging breach of the 1984 contract. When the Union failed to answer in the lawsuit, Arriba took a default judgment for over $92 million in 1986.
According to Black, he then began seeking assets of the Judgment Debtors in the United States and managed to discover a safe deposit box owned by one of the individual defendants. As described by Black, Arriba soon was approached by Union representatives with an interest in resolving their disputes. A new agreement was entered in 1987, a joint venture between Arriba and Comater, S. de R.L. ("Comater").
It is undisputed that no residual oil was provided by Comater or the Union pursuant to the joint venture agreement. Thus, Arriba filed a new lawsuit in 1989, alleging breach of the joint venture agreement and claiming that the 1987 release was unsupported by consideration. Arriba named the Judgment Debtors as defendants but not Comater. Arriba received another default judgment in 1989 ("Second Judgment"). Among other things, the Second Judgment purported to rescind the 1987 release and revive the 1986 Judgment.
In 1990, the Union filed a bill of review seeking dismissal of the Second Judgment. Although the trial court denied relief, the First Court of Appeals reversed the trial court and remanded for trial. See Comm'n of Contracts of Gen. Exec. Comm. v. Arriba, Ltd., 882 S.W.2d 576 (Tex. App.-Houston [1st Dist.] 1994, no pet.).
In May 2002, at the behest of the Mexican government, the United States government obtained a restraining order in a United States district court in New York freezing approximately $43 million in a New York bank account. Allegedly, these funds had been embezzled as a part of the Mexican political scandal commonly referred to as "Pemexgate."
Arriba then sought to negotiate a settlement of all claims between the parties.
At this time, Arriba was represented by Stan Nelson, a Texas attorney hired by the receiver, Gomez. Nelson and Black negotiated on behalf of Arriba primarily with Ryerson, a Texas attorney who began representing the Union in Arriba matters in 1990. Ryerson was hired to represent the Union by one of its Mexican lawyers, Ruben Choreno. As part of his duties, Ryerson, who is not a trial attorney, hired other lawyers to take the lead at trial and in the appeals, but, according to numerous witnesses, continued to provide assistance and direction to the litigators and appellate specialists and maintain client contact. The Union contends, however, that by the time the funds were restrained in New York, Ryerson was no longer actively engaged in representing the Union, having taken an in-house counsel position with another company. Ryerson and Arriba, on the other hand, assert that Ryerson was always involved on some level in the Union-Arriba matters and was never relieved of his duties for the Union until after the Garnished Funds Agreement was signed. Ryerson stated that his employer was fully aware of and approved his continued work on Arriba matters while he was employed with the company.
Ryerson testified that, given the charges against the top leaders of the Union, he wanted to ensure that whomever he dealt with from the Union had the proper authority. He named three men as his primary contacts regarding settlement: Choreno, LaQuina, and Alvarez. According to Ryerson, Choreno and Alvarez both had valid powers of attorney from the Union, Choreno was a long-time lawyer for the Union, and either Choreno or LaQuina told Ryerson to deal with Alvarez on Union business. Ryerson stated that he also confirmed Choreno's and LaQuina's authority with the office of Mexican President Vicente Fox. The Union points out that during that time period, LaQuina had no official role within the Union, after having served a prison sentence on weapons charges, and that Choreno had been replaced on Arriba-related matters by a different attorney, Eduardo Gonzalez, years before the Garnished Funds Agreement was entered.
The Garnished Funds Agreement was signed in the Bahamas in May 2004 by Gomez, on behalf of Arriba, and Ryerson and Alvarez, on behalf of the Union and the Commission. Prior to its execution, a Bahamian attorney working for Gomez, Ruth Bowe-Darville, purportedly verified Alvarez's identity.
Under article III of the Garnished Funds Agreement, Arriba was to receive 52 percent of the garnished funds and the Union was to receive the remainder, minus $1 million to Gomez for his expenses as Arriba's receiver. Article III further provides that the parties would "use their best efforts to resolve any outstanding claims affecting the Garnished Funds that have been made, or which may be made, in the action pending in the United States District Court, Eastern District of New York." Under article IV, the agreement provided that the Union waived any claims challenging the validity of the 1986 Judgment and would not contest enforcement of that judgment. The agreement, however, limited to some degree Arriba's ability to collect. First, it specified that Arriba would not attempt to enforce the 1986 Judgment prior to distribution of the garnished funds. Then, if for some reason the garnished funds were not distributed according to the terms of the agreement, Arriba could enforce the judgment "in any legal manner, anywhere in the world, except in the country of Mexico." But, if the funds were distributed according to the agreement, the judgment then "could be enforced anywhere without restriction." Alvarez also signed a separate agreement in November 2004 purportedly binding the Union to pay Ryerson $7 million in legal fees, also out of its 48 percent share of the garnished funds.
It was undisputed at trial that the individuals negotiating the agreements intentionally did not share such information with Deschamps or Prieto, who were at the time still, respectively, the Secretary General and number two official of the Union. The Union identifies this fact as evidence that the negotiators were not authorized to settle the case on behalf of the Union; whereas, Arriba and Ryerson contend that this secrecy made sense, as Deschamps and Prieto were facing criminal charges at the time.
On August 21, 2006, the trial court dissolved Arriba's and Ryerson's writs of garnishment.
In the present lawsuit, Arriba seeks monetary damages for breach of the Garnished Funds Agreement as well as specific performance to collect on the 1986 Judgment. Ryerson seeks monetary damages as well as attorney's fees for breach of the Ryerson Agreement and claims the Union committed fraud. The Union raises claims of fraud and conspiracy as well as wrongful garnishment and breach of fiduciary duty.
The jury determined that Ryerson and Alvarez each had both actual and apparent authority to sign the Garnished Funds Agreement on behalf of the Union and that Alvarez had actual and apparent authority to sign the Ryerson Agreement on behalf of the Union. The jury further found that Ryerson did not commit fraud against the Union, the Union did not defraud Ryerson, and Ryerson and Arriba did not conspire to harm the Union. Lastly, the jury found reasonable and necessary attorney's fees for Ryerson in prosecuting his breach of contract claim. The trial court refused to submit the Union's counterclaims for wrongful garnishment or breach of a fiduciary duty to the jury.
In its final judgment, the trial court held that Arriba and Ryerson should take nothing on their claims for damages but that Arriba was entitled to recover on its claim for specific performance of article IV of the Garnished Funds Agreement. More specifically, the court ordered that Arriba was "entitled to enforce the [1986 Judgment] in any legal manner, anywhere in the world, except in the country of Mexico." In a separate "Opinion and Order," the trial court further explained that the Garnished Funds Agreement itself provided that Arriba was to recover money only if the New York funds were released pursuant to the writs of garnishment, and if the funds were not so released, the agreement provided that Arriba would be entitled to enforce the 1986 Judgment in any legal manner anywhere in the world except Mexico. Since the trial court dissolved the writs and the funds were not released pursuant to the writs, the trial court concluded that Arriba was not entitled to monetary damages but was entitled to the bargained for specific performance on the 1986 Judgment. All parties have appealed.
In its first issue, the Union contends that the Garnished Funds Agreement was illegal under Mexican law and therefore unenforceable as a matter of law. See Cruse v. O'Quinn, 273 S.W.3d 766, 776 (Tex. App.-Houston [14th Dist.] 2008, pet. denied) (explaining that contracts requiring performance that violates the law are unenforceable). The Union bases its contention on a declaration issued by the Mexican Attorney General in 1990. The translation of the declaration in the record appears to be a partial document.
The Union pleaded illegality of the Garnished Funds Agreement as an affirmative defense.
Texas law prescribes specific procedures for proving and determining the law of foreign countries. These procedures are principally set forth in Texas Rule of Evidence 203, which states in full:
Rule 203 is often described as a "hybrid rule by which the presentation of the foreign law to the court resembles the presentment of evidence but which ultimately is decided as a question of law." Long Distance Int'l, Inc. v. Telefonos de Mexico, S.A. de C.V., 49 S.W.3d 347, 351 (Tex. 2001). The Rule 203 procedures must be strictly followed for the determination of foreign law. Cal Dive Offshore Contractors Inc. v. Bryant, 478 S.W.3d 914, 920-21 (Tex. App.-Houston [14th Dist.] 2015, no pet.). A party relying on foreign law must strictly plead and prove the law. Nguyen v. Nguyen, 355 S.W.3d 82, 89 (Tex. App.-Houston [1st Dist.] 2011, pet. denied).
The Union does not mention Rule 203, much less assert that it fulfilled any of the rule's requirements in presenting the Mexican Attorney General's declaration. The Union instead relies on two federal cases for the proposition that it proved illegality as a matter of law through the declaration: United States v. Pink, 315 U.S. 203 (1942) and D'Angelo v. Petroleos Mexicanos, 422 F.Supp. 1280 (D. Del. 1976). In both of these cases, however, the party seeking to establish foreign law timely and properly presented evidence to prove the substance of that law. See Pink, 315 U.S. at 220-21 (considering official declaration of Russian law by Commissariat for Justice when it was properly presented as evidence pursuant to New York procedural law and holding referee's determination regarding authority of Commissariat was supported by evidence); D'Angelo, 422 F.Supp. 1284-85 (examining expert testimony in concluding that declaration by Mexican attorney general should be accepted as an "official declaration" of Mexican law in the absence of an adjudication by a Mexican court).
Here, the Union neither timely offered the declaration pursuant to Rule 203 nor established illegality as a matter of law. The Union's attachment of the attorney general declaration to a post-hearing brief on its JNOV motion did not conclusively establish the illegality of the agreements as the Union contends. Accordingly, we overrule the Union's first issue.
In its second issue, the Union contends that Arriba and Ryerson's claims based on the Garnished Funds Agreement are barred by the doctrines of res judicata and collateral estoppel due to a 2008 judgment the Union obtained from a Mexican court holding that the settlement agreement was a nullity. The Union asserts that it met all of the requirements for filing foreign judgments for full recognition, see Texas Civil Practice and Remedies Code chapter 36 (the Uniform Foreign Country Money—Judgments Recognition Act) and Arriba or Ryerson failed to object.
"Res judicata precludes relitigation of claims that have been finally adjudicated, or that arise out of the same subject matter and that could have been litigated in the prior action." Amstadt v. U.S. Brass Corp., 919 S.W.2d 644, 652 (Tex. 1996). It requires proof of (1) a prior final judgment on the merits by a court of competent jurisdiction, (2) identity of parties or those in privity with them, and (3) a second action based on the same claims as were raised or could have been raised in the first action. Id. "[C]ollateral estoppel precludes relitigation of ultimate issues of fact actually litigated and essential to the judgment in a prior suit." Getty Oil Co. v. Ins. Co. of N. Am., 845 S.W.2d 794, 801 (Tex. 1992). A party asserting the doctrine must prove that (1) the facts sought to be litigated in the second action were fully and fairly litigated in the first action, (2) the facts were essential to the judgment in the first action, and (3) the party against whom collateral estoppel is sought was a party in the first action. Eagle Props., Ltd. v. Scharbauer, 807 S.W.2d 714, 721 (Tex. 1990).
Under chapter 36 of the Civil Practice and Remedies Code, a foreign judgment that meets the requirements of the chapter, is filed with proper notice, and is not refused recognition for the grounds specified in the chapter, becomes "conclusive between the parties to the extent that it grants or denies recovery of a sum of money." Tex. Civ. Prac. & Rem. Code § 36.004. Sections 36.0042 and 36.0043 set forth detailed rules for notice, requiring that the party seeking recognition file an affidavit with the court clerk providing identifying information for the judgment creditor and debtor so that the clerk can ensure notice or, alternatively, provide proof that notice of the filing of the foreign judgment was mailed to the other party. Id. §§ 36.0042-.0043. Sections 36.0044 and 36.005 set forth, respectively, the procedures for contesting recognition and available grounds for nonrecognition. Id. §§ 36.0044-.005. Under section 36.005(a)(2), a foreign judgment is not considered conclusive if the foreign country did not have personal jurisdiction over the defendant. Section 36.006 further governs when a court can refuse to recognize a foreign judgment because the issuing court lacked personal jurisdiction over the defendant. Id. § 36.006.
Arriba filed its motion to enforce the Garnished Funds Agreement in March 2005. In January 2006, the Union filed a lawsuit in a Mexican court challenging the validity of the agreement. Arriba and Ryerson have steadfastly maintained that they never received notice of the Mexican lawsuit; indeed, they made no appearance in the Mexican court, and the equivalent of a default judgment was entered in October 2008, holding, among other specifics, that the Garnished Funds Agreement was a nullity. In March 2012, the Union alleges it filed a Notice of Filing of Foreign Country Judgment with the Harris County Clerk's Office, seeking to domesticate the Mexican judgment. The notice of filing is not in our record.
The Union thereafter raised its res judicata and collateral estoppel defenses in the present action in two motions for partial summary judgment and its motion for JNOV, attaching the Mexican judgment to each motion.
In its opening brief to this court, the Union spends a little over one page setting forth procedural facts and then stating in conclusory fashion that the Mexican judgment was properly domesticated and thus any claims based on the settlement agreement are barred by res judicata and collateral estoppel. Citations to legal authority and the record are scant and unhelpful. The Union merely argues "Arriba unquestionably had notice of the Union's filing, yet it failed to file a motion for nonrecognition of the judgment within the time periods provided in section 36.0044." As it did in the trial court, the Union leaves most of the grounds appellees raised for denying the motions unaddressed in its briefing.
In its third issue, the Union contends that the evidence was legally and factually insufficient to support the jury's findings in response to jury question 1 that Alvarez and Ryerson had actual authority to sign the Garnished Funds Agreement on the Union's behalf.
Question 1 instructed the jury on actual authority as follows:
Flutobo, Inc. v. Holloway, 419 S.W.3d 622, 630 (Tex. App.-Houston [14th Dist.] 2013, pet. denied). An agency relationship will not be presumed, and the party asserting the relationship has the burden to prove its existence. MEMC Pasadena, Inc. v. Riddle Power, Inc., 472 S.W.3d 379, 399 (Tex. App.-Houston [14th Dist.] 2015, no pet.). Actual authority denotes authority that a principal intentionally confers upon an agent, or intentionally allows the agent to believe he has, or by want of ordinary care allows the agent to believe himself to possess. Flutobo, Inc., 419 S.W.3d at 630-31. An agent has express authority when the principal makes it clear to the agent that it wants certain acts to be done; implied authority is the authority to do whatever is reasonably necessary and proper to carry out the agent's express powers. Crooks v. M1 Real Estate Partners, Ltd., 238 S.W.3d 474, 483 (Tex. App.-Dallas 2007, pet. denied).
The Union argues that proof of actual authority in this case turns on the validity of the alleged powers of attorney given to Choreno (plaintiff's exhibit 22) and Alvarez (defendant's exhibit 50-B), since Arriba admitted it did not have direct discussions about the Garnished Funds Agreement with any Union official.
The Union begins its challenge to the powers of attorney by urging that the trial court should have applied Mexican law to the question of actual authority under the powers of attorney; it then relies on statements made by its experts regarding Mexican law that were presented in an offer of proof at the conclusion of trial. These arguments, however, are not well-placed in a challenge to the sufficiency of the evidence supporting the jury's actual authority finding. Since the trial judge overruled the Union's motion to have Mexican law apply before trial began, the case was not tried under Mexican law. The jury never heard either the Union's or Arriba's experts on Mexican law, so that testimony is not relevant to a review of the evidence the jury did consider. Cf. Transp. Ins. Co. v. Faircloth, 898 S.W.2d 269, 275 (Tex. 1995) (explaining that evidence cannot be deemed conclusive in a legal sufficiency review unless it was actually admitted into evidence); Nat'l Family Care Life Ins. Co. v. Fletcher, 57 S.W.3d 662, 671 (Tex. App.-Beaumont 2001, pet. denied) (holding fact that defendant's offer of proof cast doubt on plaintiff's damages calculation did not affect sufficiency review of damages award).
The two powers-of-attorney exhibits are somewhat difficult to read, as the originals are in Spanish and the translations are not always in standard English. Exhibit 22 purports to be a "General Power of Attorney" from the Union in favor of Choreno, authorizing him, among other things, to "bring all types of suits, file complaints and litigations, desist from proceedings even from proceedings of relief, compromise, challenge, bind in arbitration." (Emphasis added.) The highlighted language could certainly be read by the jury as supporting the notion that Choreno could settle lawsuits on behalf of the Union. Exhibit 50-B is more difficult to understand, but it references and purports to quote from a document deeming Alvarez a "General Attorney in Fact of the Oil Workers of the Mexican Republic's Union, S.C." It is not clearly explained in the record what difference the added "S.C." makes.
The Union additionally complains that the powers of attorney did not contain any language specifically authorizing Choreno or Alvarez to settle the case or permitting Choreno to delegate any authority to Ryerson or Alvarez to sign the agreement, citing In re Estate of Miller, 446 S.W.3d 445, 455 (Tex. App.-Tyler 2014, no pet.) (stating powers of attorney should be strictly construed), and Hardy v. Robinson, 170 S.W.3d 777, 780 (Tex. App.-Waco 2005, no pet.) ("The nature and extent of the authority granted must be ascertained from the instrument granting the power of attorney.").
Contrary to the Union's emphasis, however, the evidence offered to support the actual authority claim was not limited to the powers of attorney. Much of the additional evidence came in testimony from and regarding Ryerson. Ryerson testified that he had been hired to represent the Union in the subject litigation. He acknowledged that his relationship with the Union did not permit him to settle the case without the Union's authorization, but he steadfastly maintained that he received that authorization. The Union, on the other hand, portrays Ryerson's representation of the Union as having dwindled to essentially nothing by the time the Garnished Funds Agreement was signed and suggests that Ryerson and others without proper authority "cooked up" the settlement to defraud the Union. See generally City of Keller, 168 S.W.3d at 820 ("It is the province of the jury to resolve conflicts in the evidence. Accordingly, courts reviewing all the evidence in a light favorable to the verdict must assume that jurors resolved all conflicts in accordance with that verdict.").
Ryerson testified that Choreno hired him to represent the Union in matters pertaining to Arriba in 1990 and that he remained counsel for the Union until he filed his intervention in the present case in February 2005. Documentary and testimonial evidence showed that Ryerson was the lead attorney for the Union in Arriba matters for many years, with authority to hire other lawyers and generally guide the litigation. Ryerson stated that the Union consistently left it solely to him to protect their interests in these matters. It is undisputed that no documents were filed with the trial court or communications made to opposing parties in this matter indicating Ryerson was no longer representing the Union prior to execution of the Garnished Funds Agreement. David Black, an attorney and part owner of Arriba, testified that he considered Ryerson to be his main legal adversary from 1990 to 2004 and that he dealt "constantly" with Ryerson during that time period. Nelson, Arriba's attorney for many years of litigation, stated that Ryerson was the Union's lead attorney and clearly was the attorney with the closest relationship with the Union itself.
The Union presented Eduardo Gonzalez as its chief witness to portray Ryerson as effectively no longer representing the Union at the time the Garnished Funds Agreement was signed. Gonzalez, external counsel for the Union in Mexico, replaced Choreno in overseeing the Arriba cases for the Union in 1992. He described Ryerson's participation as dwindling to nothing, as he only attended the 1997 trial for about 15 minutes and had taken an in-house counsel job with another company. Several aspects of Gonzalez's testimony, however, were disputed by other witnesses. For example, the Union's trial counsel for the 1997 trial, Bill Burke, testified that Ryerson attended the entire trial and was active in both developing the case and communicating with the client. Additionally, Gonzalez stated that if Ryerson wanted to contact the client, he should have gone through Gonzalez, but several witnesses, including Burke, described Ryerson as having a close working relationship with the Union.
Ryerson stated that Choreno first contacted him about the possibility of negotiating a settlement. Ryerson said that he learned that LaQuina was handling certain issues for the Union because of the evolving scandal involving Pemex and other officials, which saw the Union's top two elected leaders, Deschamps and Aldana, charged with embezzling the very funds discovered in the New York bank account. Ryerson and others described LaQuina as having been very influential within the Union even at times when he held no official title.
Ryerson testified that he was initially hired for the Union by Choreno, and some early documents filed in the litigation bear Choreno's signature. Ryerson further described Choreno as having been a longtime attorney for the Union.
Ryerson further testified that extensive negotiations leading up to the Garnished Funds Agreement ensued between him—with Choreno as his primary contact with the Union—and Nelson and Black, representing Arriba. Nelson also testified that, given past history, it was "ridiculous" to suggest Ryerson was not representing the Union at the time of the negotiations. Meetings were had, telephone calls were made, and emails were sent back and forth with proposals. Both sides had to discuss proposals with and get approval from their respective clients. Nelson said that he dealt with Ryerson because "he was the guy," he had the relationship with the Union. Nelson further testified that he also dealt with Choreno and Alvarez regarding the settlement and thinks LaQuina may have been involved as well. Ryerson additionally testified that it made no sense for him to have negotiated the Garnished Funds Agreement if he did not think he was representing the Union: "There's no purpose to concoct something that isn't going to take place."
The Union attacked Ryerson's testimony by pointing out that he failed to inform Deschamps, Aldana, the Union's executive committee, or the other lawyers representing the Union in the garnishment action about the Garnished Funds Agreement until he filed his motion for intervention in the garnishment action. Indeed, Arriba also was cautioned not to inform these individuals. Ryerson explained that Deschamps and Aldana had been charged with illegally taking the funds and noting that the executive committee was comprised of "Deschamps' people." Ryerson further said, however, that he believed others in the Union were aware of the settlement.
Arriba and Ryerson presented significant evidence that people with power in the Union authorized the Garnished Funds Agreement. That evidence was not without its weaknesses, particularly the lack of official titles within the Union for the key actors, LaQuina, Choreno, Alvarez, and Ryerson, and the lack of direct proof of any authority the Mexican president's office may have held. However, given the unique and complex picture presented in this case concerning Mexican politics and the Union's internal workings, we cannot say that the jury's verdict was unreasonable or so contrary to the overwhelming weight of the evidence as to be wrong and manifestly unjust. See City of Keller, 168 S.W.3d at 822; Cain, 709 S.W.2d at 176. Accordingly we overrule the Union's third issue challenging the legal and factual sufficiency of the evidence supporting the actual authority finding.
In its fifth issue, the Union contends that the Garnished Funds Agreement was invalid due to a lack of consideration. Generally, a contract must be supported by consideration to be enforceable. Alex Sheshunoff Mgmt. Servs., L.P. v. Johnson, 209 S.W.3d 644, 659 (Tex. 2006). Consideration consists of a benefit to the promisor or a detriment to the promisee. N. Natural Gas Co. v. Conoco, Inc., 986 S.W.2d 603, 607 (Tex. 1998). A written instrument reciting consideration is presumed to be sufficient. McLernon v. Dynergy, Inc., 347 S.W.3d 315, 335 (Tex. App.-Houston [14th Dist.] 2011, no pet.). Lack of consideration for a contract is an affirmative defense to its enforcement; therefore, the burden of proof is on the party alleging the lack of consideration. Id. What constitutes consideration is a question of law for the court. Hall v. Hubco, Inc., 292 S.W.3d 22, 28 (Tex. App.-Houston [14th Dist.] 2006, pet. denied).
The Union insists that under no reasonable interpretation of the Garnished Funds Agreement did it receive any benefit from entering the agreement, nor did Arriba incur any detriment. However, as Arriba notes, at the time the agreement was entered, Arriba had garnished $43 million in Union funds in a New York bank account. Indeed, Arriba was actively pursuing claims that could potentially have resulted in the entirety of the New York funds being awarded to it. Under the Garnished Funds Agreement's terms, the Union was to be entitled to 48 percent of those funds, minus $1 million to Gomez, without having to continue lengthy and expensive litigation. Viewed from the time that the agreement was entered, this provided a clear benefit to the Union. See generally Restatement (Second) of Contracts § 74 ("Settlement of Claims"); In re Estate of Childs, No. 04-15-00623-CV, 2016 WL 3452624, at *3 (Tex. App.-San Antonio June 22, 2016, no pet.) (mem. op.) (discussing forbearance of suit as consideration for settlement agreement).
The Union additionally notes that the agreement reinstated the 1986 default judgment, which entitled Arriba to recover even more than the garnished $43 million. While that is true, it did not prevent the immediate return of the 48 percent (minus $1 million), and the agreement potentially restricted Arriba's ability to recover on the 1986 Judgment to "outside of Mexico." Moreover, David Black, as well as other witnesses, testified regarding how difficult it was to locate Union assets outside of Mexico. Thus, the reinstatement of the 1986 Judgment did not deprive the settlement agreement of consideration.
In issue six, the Union contends that the trial court erred in determining "that Texas law alone applied to the issue of actual authority and by excluding the Union's evidence of the proper interpretation of [Choreno's and Alvarez's purported] powers of attorney under Mexican law." In its briefing and during oral argument, the Union more specifically complains that the trial court should have (1) held a hearing and determined that Mexican law applied to the powers of attorney, or (2) in the alternative, permitted the Union to present testimony and evidence to the jury regarding the interpretation of the powers of attorney under Mexican law.
As discussed regarding the Union's first issue, supra, the procedures for proving and determining the law of foreign countries are set forth in Texas Rule of Evidence 203. Tex. R. Evid. 203. A party relying on foreign law must strictly plead and prove the law. Nguyen v. Nguyen, 355 S.W.3d 82, 89 (Tex. App.-Houston [1st Dist.] 2011, pet. denied). Although the presentation of foreign law to the court resembles the presentment of evidence, the issue is decided as a question of law. Long Distance Int'l, Inc. v. Telefonos de Mexico, S.A. de C.V., 49 S.W.3d 347, 351 (Tex. 2001). The issue of whether Texas or foreign law applies to a particular controversy is also a question of law that we review de novo. See Duncan v. Cessna Aircraft Co., 665 S.W.2d 414, 421 (Tex. 1984). Texas courts typically resolve such disputes under the principles enunciated in the Restatement (Second) of Conflict of Laws. See Minn. Mining and Mfg. Co. v. Nishika Ltd., 955 S.W.2d 853, 856 (Tex. 1996).
The Union urged the application of Mexican law to the authority issue in a motion to apply Mexican law, two motions to reconsider the denial of that motion, assorted other responses and letters to the court, and two hearings.
We turn first to the Union's contention that the trial court should have held an evidentiary hearing on the foreign law issue.
Next, we consider the Union's contention that the trial court should have permitted it to present evidence to the jury regarding the interpretation of the powers of attorney under Mexican law. We begin by noting that it is not clear on what basis the Union contends that it should have been permitted to introduce this testimony.
The Union may be suggesting that it should have been permitted to offer its expert testimony to the jury on a mixed question of law and fact. See GTE Sw., Inc. v. Bruce, 998 S.W.2d 605, 619-20 (Tex. 1999); Greenberg Traurig of N.Y., P.C. v. Moody, 161 S.W.3d 56, 94 (Tex. App.-Houston [14th Dist.] 2004, no pet.). The Union, however, does not make this argument explicitly, and does not argue any other theory by which the terms of the contract would be interpreted by the jury.
Moreover, in order to support reversal of the trial court's judgment, it is not enough for the Union to merely argue that the trial court should have assessed the powers of attorney under Mexican law; it needed to have established that the trial court's failure to apply Mexican law probably caused the rendition of an improper judgment or probably prevented the Union from properly presenting its case on appeal. See Tex. R. App. P. 44.1(a) ("No judgment may be reversed on appeal on the ground that the trial court made an error of law unless the . . . error complained of: (1) probably caused the rendition of an improper judgment; or (2) probably prevented the appellant from properly presenting the case to the court of appeals."); Ford Motor Co. v. Castillo, 279 S.W.3d 656, 667 (Tex. 2009) (holding it is the complaining party's burden to show harm on appeal); see also Guniganti v. C & S Components Co., 467 S.W.3d 661, 665-66 (Tex. App.-Houston [14th Dist.] 2015, no pet.) (overruling appellate issue because complaining party failed to demonstrate harm). The Union offers no analysis on appeal, and offered no argument below, regarding why its experts' reading of Mexican law should be preferred over that of Ryerson and Arriba's experts. Additionally, as discussed above in the section of the opinion on actual authority, despite the Union's insistence to the contrary, the authority issue did not turn wholly on the validity of the powers of attorney but also involved an assessment of other evidence.
The Union has failed to establish that the trial court erred in failing to have an evidentiary hearing regarding Mexican law or in refusing to permit the Union's legal experts to testify before the jury, and it has failed to demonstrate harm in the event the court did err. Accordingly, we overrule the Union's sixth issue.
In its eighth and ninth issues, the Union asserts that the trial court erred in denying the Union's two motions for mistrial based on Arriba and Ryerson's allegedly untimely disclosure of certain pieces of evidence. Specifically, the Union contends that Arriba failed to disclose information pertaining to the verification of Alvarez's identity prior to execution of the Garnished Funds Agreement and Ryerson failed to disclose an affidavit apparently supporting his version of events occurring at a Mexican bank.
We review a trial court's denial of a motion for mistrial under an abuse of discretion standard. E.g., Schlafly v. Schlafly, 33 S.W.3d 863, 868 (Tex. App.-Houston [14th Dist.] 2000, pet. denied). A trial court abuses its discretion if it acts without reference to any guiding rules or principles. Downer v. Aquamarine Operators, Inc., 701 S.W.2d 238, 241-42 (Tex. 1985). With certain exceptions not alleged here, under Texas Rule of Civil Procedure 193.6, "[a] party who fails to make, amend, or supplement a discovery response in a timely manner may not introduce in evidence the material or information that was not timely disclosed, or offer the testimony of a witness (other than a named party) who was not timely identified." Tex. R. Civ. P. 193.6. The purpose of the rule is to prevent trial by ambush. Reservoir Sys., Inc. v. TGS-NOPEC Geophysical Co., 335 S.W.3d 297, 311 (Tex. App.-Houston [14th Dist.] 2010, pet. denied).
The Union's first motion for mistrial concerned testimony surrounding Arriba's attempts to verify Alvarez's identity prior to execution of the Garnished Funds Agreement. During the Union's questioning of Arriba receiver Gomez, he suggested that his attorney in the Bahamas, Ruth Bowe-Darville, performed some degree of due diligence to make sure Alvarez was who he claimed to be prior to execution of the agreement. Although Gomez did not recall the specifics of how this was done, he stated that he might review a passport or power of attorney for identification purposes.
The Union suggests Gomez's testimony was grounds for a mistrial because Arriba failed to acknowledge Bowe-Darville's role in its discovery responses or produce the documents she used to verify Alvarez's identity.
Furthermore, the Union failed to timely object to Gomez's testimony regarding Bowe-Darville's actions or request that the jury be instructed to disregard his answers at the time it elicited the testimony. See Tex. R. App. P. 33.1(a) (requiring timely request, objection, or motion to preserve complaint for appellate review); Kheir v. Progressive Cty. Mut. Ins. Co., No. 14-04-00694-CV, 2006 WL 1594031, at *8 (Tex. App.-Houston [14th Dist.] June 13, 2006, pet. denied) (mem. op.) (holding party complaining of admission of evidence that was not produced in response to discovery requests waived error by not timely objecting based on Rule 193.6). The Union elicited the testimony from Gomez on February 6, 2014. It filed a written motion for mistrial and brought the issue to the attention of the judge on February 12 and again on February 14. To be considered on appeal, an objection to the admission of evidence must be made when the evidence is offered, not well after it was introduced. See Caterpillar Tractor Co. v. Boyett, 674 S.W.2d 782, 793 (Tex. App.-Corpus Christi 1984, no writ) (holding complaint regarding improper evidence was waived where, at the time of testimony, no objection, request for an instruction, or motion was made but a motion for mistrial was filed four days later). We overrule the Union's eighth issue.
The Union's second motion for mistrial was based on Ryerson's attorney's questioning of one of the Union's lawyers, Gonzalez, about an incident that occurred at a Mexico City bank. According to Ryerson's own testimony, he expected to receive that day a $3.5 million cash payment for services, but the Union's secretary general, Deschamps, took $2.5 million of the cash, leaving Ryerson with only $1 million. In his testimony, Gonzalez denied several aspects of Ryerson's story, including that Gonzalez had told Ryerson he could "either take a million dollars or nothing." Ryerson's attorney then asked Gonzalez: "If Mr. [Juan] Contalba gave an affidavit saying that Mr. Ryerson only received a million dollars, would you have any reason to refute that?"
The only authority the Union cites under this issue is the Lopez case discussed above, which relies on Rule 193.6, also discussed above. See Tex. R. Civ. P. 193.6; Lopez, 200 S.W.3d 854. As mentioned, Rule 193.6 operates to prevent a party from introducing evidence that was not timely disclosed in the party's discovery responses. In Lopez, the rule was applied where a party attempted to introduce impeachment evidence that had not been timely disclosed. 200 S.W.3d at 856. In the present case, however, Ryerson never actually sought to introduce the Contalba affidavit; he merely attempted to show a document to the witness. At that point, the Union objected, the trial court sustained the objection, and the trial moved forward without any document being offered into evidence or any further reference being made to an affidavit by Contalba.
Furthermore, at the time the affidavit was mentioned, the Union received the exact relief it requested, i.e., its hearsay objection was sustained and the affidavit was not mentioned again. The Union did not raise a timely objection based on Rule 193.6 or timely request an instruction to the jury or a mistrial. See Tex. R. App. P. 33.1(a) (requiring timely request, objection, or motion to preserve complaint for appellate review); State Bar of Tex. v. Evans, 774 S.W.2d 656, 658 n.6 (Tex. 1989) ("Failure to request the court to instruct the jury to disregard the inadmissible testimony results in waiver of the alleged error where the instruction would have cured the error."); Cal Dive Offshore, 478 S.W.3d at 929 (affirming denial of motion for mistrial where error in admitting evidence could have been cured by instruction to disregard but no such instruction was requested); Moran v. Mem'l Point Prop. Owners Ass'n, 410 S.W.3d 397, 407 (Tex. App.-Houston [14th Dist.] 2013, no pet.) (holding complaints on appeal must comport with objections raised in trial court to preserve error); Kheir, 2006 WL 1594031, at *8 (holding party waived error by not timely objecting based on Rule 193.6). Accordingly, we overrule the Union's ninth issue.
Lastly, in issue ten, the Union contends the trial court erred in declining to submit jury questions regarding the Union's claim for wrongful garnishment damages against Arriba and Ryerson and claims of breach of fiduciary duty against Ryerson. A party is entitled to a jury question on a properly pleaded cause of action if there is some evidence to support its submission. See Tex. R. Civ. P. 278; Hiles v. Arnie & Co., P.C., 402 S.W.3d 820, 830 (Tex. App.-Houston [14th Dist.] 2013, pet. denied).
The Union claims that the trial court found the writs of garnishment to be wrongful as a matter of law in dissolving them, but erroneously refused to submit an issue on its damages to the jury. A garnishment is generally considered to be wrongful when false statements of fact are made in the affidavit prescribed by Civil Practice and Remedies Code section 63.001.
In its reply brief, the Union argues that Arriba's garnishment was wrongful because it "ultimately hinged on the validity of the `contractual reinstatement' of the 1986 Default Judgment." The Union, however, does not cite any evidence establishing as a matter of law that the reinstatement was invalid; moreover, that issue is apparently still in dispute in the pending litigation between the parties concerning the 1989 default judgment. In order to be entitled to a jury question on damages, the Union must first prevail on its wrongful garnishment action by motion for summary judgment or trial on the merits. The motion to dissolve was neither. See id. The Union has failed to demonstrate its entitlement to a jury charge question on the issue of wrongful garnishment damages.
The Union asserts that Ryerson used his position as the Union's attorney to negotiate two contracts that benefitted Ryerson to the Union's detriment and, therefore, breached his fiduciary duty to it. The elements of a breach-of-fiduciary-duty claim against an attorney are (1) the existence of a fiduciary relationship, (2) a breach of a fiduciary duty by the attorney defendant, and (3) resulting damages to the plaintiff. Frankoff v. Norman, 448 S.W.3d 75, 85 (Tex. App.-Houston [14th Dist.] 2014, no pet.). An attorney owes fiduciary duties to a client as a matter of law. Willis v. Maverick, 760 S.W.2d 642, 645 (Tex. 1988). The Union begins its brief argument by asserting that Ryerson was not the Union's attorney at the time he negotiated the Garnished Funds Agreement and the Ryerson Agreement.
In their cross-appeals, Arriba and Ryerson contend the trial court erred in refusing to award them any monetary damages based on the Union's breach of, respectively, the Garnished Funds Agreement and the Ryerson Agreement. The breach of contract claims were submitted to the judge after the jury decided the question of authority to enter the agreements, among other issues. In its judgment, the trial court concluded that Arriba and Ryerson were not entitled to monetary damages but Arriba was entitled to specific performance concerning the Garnished Funds Agreement's provisions regarding enforceability of the 1986 default judgment.
To prevail on a breach of contract claim, a party must establish the following elements: (1) a valid contract existed between the plaintiff and the defendant, (2) the plaintiff tendered performance or was excused from doing so, (3) the defendant breached the terms of the contract, and (4) the plaintiff sustained damages as a result of the defendant's breach. West v. Triple B Servs., LLP, 264 S.W.3d 440, 446 (Tex. App.-Houston [14th Dist.] 2008, no pet.). A breach occurs when a party fails or refuses to do something it has promised to do. Id. The evidence must show that the damages are the natural, probable, and foreseeable consequence of the defendant's conduct. Mead v. Johnson Group, Inc., 615 S.W.2d 685, 687 (Tex. 1981). The absence of a causal connection between the alleged breach and the alleged damages precludes recovery. Gotch v. Gotch, 416 S.W.3d 633, 638 (Tex. App.-Houston [14th Dist.] 2013, no pet.).
The construction of an unambiguous written contract is a question of law for the court. See Matagorda Cty. Hosp. Dist. v. Burwell, 189 S.W.3d 738, 740 (Tex. 2006). When construing a contract, we must ascertain the true intentions of the parties as expressed in the writing itself. See Ital. Cowboy Partners, Ltd. v. Prudential Ins. Co. of Am., 341 S.W.3d 323, 333-34 (Tex. 2011). In identifying the intention of the parties, we examine and consider the entire writing in an effort to harmonize and give effect to all the provisions of the contract so that none will be rendered meaningless. Valence Operating Co. v. Dorsett, 164 S.W.3d 656, 662 (Tex. 2005). Contract terms are given their plain, ordinary, and generally accepted meanings unless the contract itself shows them to be used in a technical or different sense. Id.
When reviewing for legal sufficiency, we consider the evidence in the light most favorable to the finding and indulge every reasonable inference that supports the challenged finding. City of Keller v. Wilson, 168 S.W.3d 802, 822 (Tex. 2005). We credit favorable evidence if a reasonable factfinder could and disregard contrary evidence unless a reasonable factfinder could not. Id. at 827. If there is more than a scintilla of evidence to support the finding, the legal-sufficiency challenge fails. BMC Software Belgium, N.V. v. Marchand, 83 S.W.3d 789, 795 (Tex. 2002).
Arriba begins by asserting that the trial court misconstrued the Garnished Funds Agreement as only requiring distribution of the garnished funds if they were released pursuant to the writs of garnishment. In its "Opinion and Order," issued the same day as the judgment, the trial court indeed stated, "The Garnished Funds Agreement provided terms for dividing the garnished funds if they were released pursuant to the writs of garnishment" (emphasis added). The court went on to conclude:
The trial court further emphasized that the Garnished Funds Agreement contained specific consequences depending on whether the funds were or were not distributed pursuant to the terms of the agreement. For example, under article IV of the agreement, if the funds were not so distributed, Arriba could enforce the judgment "in any legal manner, anywhere in the world, except in the country of Mexico," but if the funds were so distributed, the judgment then "could be enforced anywhere without restriction."
Arriba argues that the trial court's emphasis on the consequences for nondistribution was misplaced. According to Arriba, the fact that the agreement contained certain consequences did not otherwise excuse the Union from its obligation to pay Arriba 52 percent plus $1 million of the garnished funds. Arriba instead stresses that article III of the Garnished Funds Agreement provides that "the funds . . . shall be distributed" (emphasis added). Arriba insists that the Union's failure to distribute or pay funds to Arriba constituted a breach of the agreement.
We begin our analysis by noting that the Garnished Funds Agreement clearly considered distribution of particular funds and not a general or unconditional payment obligation by the Union to Arriba; there is no other reasonable way to read the agreement's identification of the funds and distribution of percentages rather than specific amounts.
The difficulty with Arriba's position is that even if its interpretation of the agreement is correct, i.e., that the Union promised to pay Arriba 52 percent plus $1 million of the funds in the New York bank account regardless of whether they were distributed according to the writs of garnishment, Arriba still has to demonstrate breach and an injury resulting from that breach in order to be entitled to monetary damages. See West, 264 S.W.3d at 446; Gotch, 416 S.W.3d at 638; see also Tex. R. App. P. 44.1 (harmless error rule). The mere failure to distribute funds to Arriba could not be a breach of the agreement if the Union never gained access to the specific funds that were to be distributed. See Walston, 2009 WL 2176320, at *3-5; Clear Lake City Water Auth., 123 S.W.3d at 745; McWilliams, 715 S.W.2d at 763-64; City of Seymour, 96 S.W.2d at 816-17. Apparently recognizing this, Arriba additionally argues that the Union breached the Garnished Funds Agreement not only in failing to distribute the funds according to the agreement's terms but also in actively working to prevent such distribution.
While it is true that the Union did not promptly present an agreed order to the trial judge, neither did Arriba.
As to using best efforts to resolve outstanding claims, the Union maintains that having the funds—and hence the issues concerning ownership of the funds— sent back to Mexico to be decided by a Mexican court was a reasonable effort to resolve other outstanding claims. This was the result sought by the Mexican government and the United States government on behalf of the Mexican government and permitted by the federal district court. Arriba does not cite to any evidence suggesting that return of the funds to Mexico was not a reasonable effort to resolve the outstanding claims. Arriba has therefore failed to establish breach, causation, or injury based on the parties' "best efforts" obligation.
Because Arriba has not established any basis for it to be awarded actual damages, the trial court did not err in declining to do so. Accordingly, we overrule Arriba's sole issue.
The one page Ryerson Agreement provides in relevant part that "[w]ith respect to the recovery of the [garnished funds], we have agreed . . . that Carlos A. Ryerson, Esq., shall receive, of the 48% that are apportioned or belong to [the Union,] the amount of US $7,000,000.00 as legal fees. . . ." In his appellate briefing, Ryerson acknowledges the obvious, that the Ryerson Agreement looked solely to particular funds for payment of his legal fees and did not create a general or unconditional obligation to pay those fees. In short, if the particular funds, i.e., the Union's 48 percent share of the funds subject to the Garnished Funds Agreement, were unavailable, then the Ryerson Agreement placed no obligation on the Union to pay Ryerson's legal fees. See Walston, 2009 WL 2176320, at *3-5; Clear Lake City Water Auth., 123 S.W.3d at 745; McWilliams, 715 S.W.2d at 763-64; City of Seymour, 96 S.W.2d at 816-17. As discussed above regarding Arriba's appeal, the garnished funds were not established to be available for distribution, either to Arriba and the Union or, by extension, to Ryerson. Ryerson additionally raises some of the same arguments as Arriba discussed above, alleging the Union actively worked to frustrate distribution of the garnished funds. For the reasons stated above, we reject these arguments. Because Ryerson has not established any basis for an award of actual damages, we overrule his sole issue.
Having overruled all issues bought by the parties in these three appeals, we affirm the trial court's judgment.
The Union suggests that because the Garnished Funds Agreement had spaces for two Union signatories, both Ryerson and Alvarez needed to have possessed actual (or apparent) authority in order to bind the Union to the agreement. The Union does not offer any legal argument for this suggestion but instead points out that Nelson, attorney for Arriba, wanted more than just Ryerson's signature on behalf of the Union. The Union does not explain how Nelson's preference meant that Ryerson's signature alone would be insufficient to bind the Union.
LaQuina had been the Union's secretary general, among other positions, and in other testimony it was represented that an individual could be secretary general for only two terms, which might explain why LaQuina left the position but retained substantial power. Indeed, Black recounted being summoned to meet with LaQuina at a Union convention in the 1980s when he was no longer secretary general, but Black said he was still "clearly the person in charge."
The picture painted for the jury regarding the inner workings of the Union contained allegations from both sides of corruption, factionalism, and political intrigue. In light of this background, it would not have been unreasonable for the jury to conclude that LaQuina was still a powerful figure in the Union at the time the Garnished Funds Agreement was entered, and that he might be someone who could step in while the elected leaders were facing criminal investigation and charges.
Tex. Civ. Prac. & Rem. Code § 63.001.
96 S.W.2d at 816 (quoting 13 C.J. Contracts §701 (1971)) (emphasis added in Arriba's brief).