SAM RAYBURN MUNICIPAL POWER AGENCY v. GILLIS (2019)

MEMORANDUM AND ORDER PURSUANT TO RULE 1:28

Sam Rayburn Municipal Power Agency (SRMPA)³ brought this action to domesticate and to enforce the judgment it obtained in Texas against defendants Ralph J. Gillis and Obain Associates Limited (Obain).⁴ A Superior Court judge allowed SRMPA's motion for summary judgment, and the defendants appeal. The defendants contend that (1) the Texas judgment is not enforceable for collection in Massachusetts because it is pending on appeal in Texas; (2) a Texas judge issued an enforcement mechanism as security for the Texas judgment, which precludes the commencement of collection efforts in Massachusetts; (3) summary judgment should have been postponed pending discovery; and (4) the Massachusetts judgment is deficient. We agree that the Massachusetts judgment must include the amount of damages in order to obtain an execution, and thus remand for the limited purpose of allowing the judge, upon proper motion, to amend or to correct the judgment. We otherwise affirm.

Background. 1. The Texas judgment. In 2014, SRMPA filed a complaint in Texas against Gillis, Obain, and others.⁵ In 2016, following a trial in the Texas court, the jury found, inter alia, that Gillis violated his fiduciary duty to SRMPA, and awarded $ 1,799,059, with interest, as damages to SRMPA. The jury also found that Obain was responsible for Gillis's actions, as his alter ego, and awarded the same damages against Obain. A Texas judge “ordered that final judgment [be] rendered” in the Texas case.⁶ A Texas judge thereafter entered a “turnover order” requiring a different defendant in the Texas litigation to pay $ 60,000 per month from the funds distributable to Obain under the terms of a specified trust, into the Registry of the Texas Court.

2. The Massachusetts complaint. On December 12, 2016, SRMPA brought a complaint in the Massachusetts Superior Court seeking to domesticate and to enforce the Texas judgment. SRMPA moved for summary judgment pursuant to Mass. R. Civ. P. 56, 365 Mass. 824 (1974). The defendants subsequently moved for the summary judgment motion to be denied or continued pursuant to rule 56 (f). A Superior Court judge denied the rule 56 (f) motion and, following a hearing, allowed SRMPA's motion for summary judgment.

Discussion. The defendants contend that insofar as the Texas judgment is pending on appeal, it is not enforceable for collection in Massachusetts. They further argue that the enforcement action should have been stayed pending conclusion of the Texas appeal. SRMPA responds that the Texas judgment was final at the time SRMPA filed the Massachusetts action, even though certain claims were pending on appeal. We agree that the Texas judgment was final for purposes of the Massachusetts action and that summary judgment was warranted.

“Summary judgment is appropriate where there are no issues of material fact and the moving party is entitled to judgment as a matter of law.” Hanover Ins. Group, Inc. v. Raw Seafoods, Inc., 91 Mass. App. Ct. 401, 404 (2017), citing Mass. R. Civ. P. 56 (c), as amended, 436 Mass. 1404 (2002). “In the absence of certain defenses directed at the validity of a final judgment of a sister State, Massachusetts will recognize and enforce the judgment” (citations omitted). First Nat'l Bank of Houma v. Bailey, 29 Mass. App. Ct. 193, 197 (1990). See Bishins v. Richard B. Mateer, P.A., 61 Mass. App. Ct. 423, 428 (2004) (as long as judgment-rendering State had jurisdiction over parties and action, Massachusetts courts will recognize final judgment pursuant to full faith and credit clause of United States Constitution). See also J.L. Shapiro, M.G. Perlin, & J.M. Connors, Collection Law §§ 8:1, 8:6 (4th ed. 2015).

Here, the defendants moved to stay enforcement of the Texas judgment pending appeal, but a Texas judge denied that motion. Moreover, the defendants did not file a supersedeas bond.⁷ See Tex. R. App. P. 24.1 (methods of suspending enforcement of judgment pending appeal include by supersedeas bond). Therefore, the Texas judgment as applied to the matter at hand was final at the time the Superior Court judge ruled on the motion for summary judgment. See Clark v. Child, 136 Mass. 344, 347-348 (1884) (plaintiff entitled to maintain action in Massachusetts where out-of-State judgment pending on appeal, but appeal did not vacate judgment or stay execution in other State). See also Miga v. Jensen, 299 S.W.3d 98, 100 (Tex. 2009) (“If the debtor rejects the supersedeas option and does not otherwise suspend enforcement, the creditor may execute on the judgment”). In addition, as there is no dispute that the Texas court had jurisdiction over the defendants and the action, the grant of summary judgment was appropriate. See Hanover Ins. Group, Inc., 91 Mass. App. Ct. at 404; First Nat'l Bank of Houma, 29 Mass. App. Ct. at 197.⁸ Finally, the defendants did not succeed on their appeal to the Ninth District Court of Appeals in Texas, and did not petition for further review to the Supreme Court of Texas. For purposes of domesticating and enforcing the judgment in Massachusetts, the Texas judgment is final.

The defendants next argue that because a Texas judge previously ordered an enforcement mechanism through the turnover order, it would be repetitive for Massachusetts to order enforcement of the judgment. The defendants cite no legal authority to support the proposition that the turnover order precludes SRMPA from seeking enforcement of the Texas judgment in another State, or precludes the entry of summary judgment here. Thus, the argument does not rise to the level of appellate argument, and is waived.⁹ See Cameron v. Carelli, 39 Mass. App. Ct. 81, 85 (1995).

The defendants further contend that the Massachusetts judgment is deficient because it does not include the amount of the judgment. We agree that in order to obtain an execution, a judgment for money damages must expressly include the amount of those damages and interest. See J.L. Shapiro, M.G. Perlin, & J.M. Connors, Collection Law § 7:23 (4th ed. 2015).¹⁰

Accordingly, the matter is remanded to the Superior Court for the limited purpose of allowing the judge, upon proper motion, to amend or to correct the judgment to reflect the damages and interest thereon.¹¹ In all other respects, the judgment is affirmed.¹² ,¹³

So ordered.

Remanded and otherwise affirmed.

FOOTNOTES

3.   SRMPA is a joint electrical power agency and a political subdivision of Texas.

4.   Gillis is an attorney residing in Massachusetts who served as an attorney for SRMPA. Gillis also created and operated Obain, a Massachusetts corporation.

5.   The parties do not dispute that the Texas court had personal jurisdiction over Gillis and Obain.

6.   In or around September of 2016, SRMPA appealed certain claims to the Ninth District Court of Appeals in Texas, and Gillis and Obain cross-appealed. The Court of Appeals affirmed the Texas judgment on July 26, 2018. SRMPA filed a petition for review in the Supreme Court of Texas. That petition was denied and SRMPA filed a motion for rehearing, which is pending as of the date of this decision. Gillis and Obain did not petition for review of their appellate issues to the Supreme Court of Texas.

7.   In Texas, the filing of a supersedeas bond allows the party appealing the judgment to stay enforcement. See Tex. R. App. P. 24.1. See also Cudd Pressure Control, Inc. v. Sonat Exploration Co., 74 S.W.3d 185, 189 (Tex. App. 2002) (judgment debtor may supersede judgment by filing supersedeas bond, designed to prevent execution on judgment).

8.   The defendants' argument that the judge should have allowed discovery before hearing the motion for summary judgment is unpersuasive. The information sought in discovery by the defendants was unrelated to the issue whether the Texas judgment could be domesticated and enforced, and thus the judge did not abuse his discretion in denying the rule 56 (f) motion. See Commonwealth v. Fall River Motor Sales, Inc., 409 Mass. 302, 308-309 (1991).

9.   Enforcement of the judgment in Massachusetts would not allow SRMPA to collect more than the amount of the Texas judgment. See Restatement (Second) Conflict of Laws § 95 (1971). See also Restatement (Second) Conflict of Laws § 116 comment c (1971) (“When a judgment is rendered in one state upon the judgment of a court of another state, both judgments will remain in force until one of the judgments is discharged. As between States of the United States, payment, or other discharge, of one of these judgments under the local law of the State of its rendition will discharge the obligation of the other judgment”).

10.   We note that SRMPA complied with G. L. c. 235, § 14 (a), which provides that to execute the judgment, SRMPA must file “with the court rendering the judgment in the later action a transcript of the record of the judgment in the earlier case under the seal of the court rendering it, attested by the clerk of such court.” This does not, however, rectify the omission of the amount of damages and interest from the judgment itself.

11.   We disagree with the defendants' claim that “the amount of the judgment is likely to require some evidentiary findings to determine the appropriate amount.” The amount of the judgment is clear from the final judgment issued in the Texas court, which was filed in the Superior Court in accordance with G. L. c. 235, § 14 (a). See note 9, supra.

12.   We decline SRMPA's request for appellate attorney's fees.

13.   Other points argued by the defendants that are not discussed in this decision have not been overlooked. “We find nothing in them that requires discussion.” Commonwealth v. Domanski, 332 Mass. 66, 78 (1954).