NUMBER 13-10-00693-CV
COURT OF APPEALS
THIRTEENTH DISTRICT OF TEXAS
CORPUS CHRISTI - EDINBURG
COUNSEL FINANCIAL SERVICES, L.L.C., Appellant,
v.
DAVID McQUADE LEIBOWITZ
AND DAVID McQUADE LEIBOWITZ, P.C., Appellees.
On appeal from the 370th District Court
of Hidalgo County, Texas.
MEMORANDUM OPINION
Before Chief Justice Valdez and Justices Rodriguez and Benavides
Memorandum Opinion by Justice Benavides
Appellant, Counsel Financial Services, L.L.C. (―Counsel Financial‖), appeals the
denial of its motion to transfer venue pursuant to section 15.003 of the Texas Civil
Practice and Remedies Code. See TEX. CIV. PRAC. & REM. CODE § 15.003 (West Supp.
2010). We dismiss the appeal for want of jurisdiction.
I. BACKGROUND
Counsel Financial loaned the law firm of David McQuade Leibowitz, P.C. more
than five million dollars. The loan was secured by David McQuade Leibowitz, P.C. and
David McQuade Leibowitz individually (collectively ―Leibowitz‖). The promissory note
evidencing the loan was secured by an agreement and guaranty executed by Leibowitz
in his individual capacity. The note and security agreement were modified several
times by the agreement of the parties over the course of several years. These
documents provided Counsel Financial with a security interest in Leibowitz’s legal fees, 1
accounts, and intangibles in the event of a default under the loan.
Leibowitz failed to make payments due under the loan, and Counsel Financial
brought suit against Leibowitz in cause number 12008–010002 in the Supreme Court of
the State of New York, in and for the County of Erie, styled Counsel Financial Services,
LLC v. David McQuade Leibowitz, P.C. et al. Following several trial court hearings,
Counsel Financial obtained a summary judgment on the note and security agreement. 2
1
Neither party has briefed the issue regarding whether such an agreement violates rule 5.04 of the
Texas Disciplinary Rules of Professional Conduct, and accordingly, this opinion does not address that
issue. See TEX. DISCIPLINARY R. PROF’L CONDUCT 5.04(a), reprinted in TEX. GOV’T CODE ANN., tit. 2, subtit.
G, app. A (West Supp. 2010) (providing generally that ―[a] lawyer or law firm shall not share or promise to
share legal fees with a non-lawyer‖).
2
The specific proceedings underlying the rendition of judgment in that case are detailed by the San
Antonio Court of Appeals in Counsel Financial Services, L.L.C., v. Leibowitz, P.C., 31 S.W.3d 45 (Tex.
App.—San Antonio 2010, pet. denied).
2
Leibowitz unsuccessfully appealed the judgment in the New York court system.
On December 2, 2008, Counsel Financial filed an authenticated copy of the New
York judgment in state district court in Bexar County, Texas. On December 29, 2008,
Leibowitz filed a motion for relief from enforcement of this foreign judgment, arguing that
the trial court should apply the Craddock standard for motions for new trial with regard to
the domestication of foreign judgments. See Craddock v. Sunshine Bus Lines, Inc.,
134 Tex. 388, 133 S.W.2d 124, 126 (1939) (holding that a default judgment should be
set aside and a new trial granted if (1) the failure to answer or appear at trial was not
intentional or the result of conscious indifference but was due to a mistake or accident;
(2) the defendant sets up a meritorious defense; and (3) the motion is filed at such time
that granting a new trial would not result in delay or otherwise injure the plaintiff). On
January 30, 2009, the trial court granted Leibowitz’s motion and refused to enforce the
New York judgment.
Counsel Financial appealed that determination. The San Antonio Court of
Appeals held that the Craddock motion for new trial standard relating to default
judgments does not apply to proceedings under the Uniform Enforcement of Foreign
Judgments Act. Counsel Fin. Serv., L.L.C., v. Leibowitz, P.C., 31 S.W.3d 45, 47 (Tex.
App.—San Antonio 2010, pet. denied). The court reversed and rendered judgment that
the New York judgment is entitled to full faith and credit and is fully enforceable in Texas.
Id. at 57. The Texas Supreme Court denied the petition for review of this cause on
August 20, 2010, and denied rehearing on October 15, 2010.
3
In separate trial court proceedings, which underlie this appeal, Leibowitz
represented Maria Alma Anzaldua in a personal injury lawsuit against Kmart Corporation
(―Kmart‖) in the 370th District Court of Hidalgo County. Upon learning that the parties
had reached a settlement in the personal injury lawsuit, Counsel Financial filed a plea in
intervention in that suit on grounds that Leibowitz had refused to pay the New York debt
and judgment. In this intervention, Counsel Financial sought ―an order from the Court
directing all Parties to pay directly to [Counsel Financial] all funds (up to the amount of
CFS’s lien) to which Leibowitz and the Law Firm may be entitled to as a result of this
case and the settlement.‖ Counsel Financial expressly stated that it ―[did] not seek to
disturb the proposed settlement agreement in the Lawsuit‖ and likewise ―[did] not seek to
disturb the rights of Plaintiff to receive the portion of the settlement that is rightfully hers,
or the release of Defendant from the Lawsuit.‖
On October 9, 2009, in response to Counsel Financial’s intervention, Leibowitz
also intervened in the Hidalgo County suit and asserted claims for affirmative relief
against Counsel Financial, including claims for declaratory and temporary injunctive
relief and damage claims for tortious interference and business disparagement. By his
first amended pleading, Leibowitz sought an anti-suit injunction and an anti-execution
injunction attempting to restrain Counsel Financial from enforcing either the security
agreement or the domesticated judgment. According to Leibowitz’s pleadings, Counsel
Financial claimed that it was entitled to his portion of the settlement funds based either
on ―a foreign default judgment which is not now enforceable under Texas law, or a
4
Security Agreement which [Counsel Financial] has itself breached.‖
Counsel Financial filed two separate motions to transfer venue from Hidalgo
County to Bexar County, and Leibowitz filed two responses to these motions. After
holding a hearing on the motions to transfer, the trial court ultimately denied both
motions on December 1, 2010. This appeal ensued.3
II. JURISDICTION
Counsel Financial contends that the trial court erred in denying its motion to
transfer venue to Bexar County because: (1) Leibowitz did not independently establish
that Hidalgo County is a proper venue for his affirmative claims against Counsel
Financial; and (2) Leibowitz did not independently establish each of the factors required
by section 15.003(a) of the Texas Civil Practice and Remedies Code. See TEX. CIV.
3
By separate appeal arising from the same trial court proceedings, Counsel Financial challenged a
temporary injunction which prevented it from instituting legal proceedings to enforce a security agreement
and collecting on a judgment in its favor. By opinion issued this same date, the Court reversed the trial
court’s order granting the injunction and remanded the cause for further proceedings consistent with that
opinion. See Counsel Fin. Servs., L.L.C. v. Leibowitz, No. 13-10-00200-CV, 2011 Tex. App. LEXIS, *__
(Tex. App.—Corpus Christi June 30, 2011, no pet. h.) (mem. op.).
By petition for writ of mandamus, also arising from the same underlying proceedings, Counsel
Financial sought to set aside an order of the trial court which allegedly denied Counsel Financial’s motion to
transfer venue. In re Counsel Fin. Servs., L.L.C., No. 13-10–00157-CV, 2010 Tex. App. LEXIS 3112, at *1
(Tex. App.—Corpus Christi Apr. 27, 2010, orig. proceeding). This Court concluded that the issue was
premature because the trial court has not yet ruled on relator’s motion to transfer venue and denied the
petition for writ of mandamus. See id. at **2–3. We note in this regard that section 15.0642 of the civil
practice and remedies code provides for mandamus relief to enforce a mandatory venue provision. TEX.
CIV. PRAC. & REM. CODE ANN. § 15.0642 (West 2002); In re Transcon. Realty Investors, 271 S.W.3d 270,
271 (Tex. 2008) (orig. proceeding); In re Tex. Dep’t of Transp., 218 S.W.3d 74, 76 (Tex. 2007) (orig.
proceeding). In cases regarding mandatory venue, the relator is not required to show the lack of an
adequate remedy by appeal. In re Mo. Pac. R.R., 998 S.W.2d 212, 215–16 (Tex. 1999) (orig. proceeding).
The only issue presented in such cases is the legal question regarding whether the trial court properly
interpreted the mandatory venue provision. In re Transcon. Realty Investors, 271 S.W.3d at 271; In re
Tex. Ass’n of Sch. Bds., Inc., 169 S.W.3d 653, 656 (Tex. 2005) (orig. proceeding).
5
PRAC. & REM. CODE § 15.003. In contrast, Leibowitz contends, inter alia, that Counsel
Financial waived its right to challenge venue; the relief requested by Counsel Financial
interferes with appellate jurisdiction because there is an appeal pending from another
ruling,4 and section 15.003 of the civil practice and remedies code is inapplicable, thus
no interlocutory appeal lies from the trial court’s determination regarding venue.
As a threshold matter, we address Leibowitz’s contention, raised by motion to
dismiss, that we lack jurisdiction over the appeal. The general rule is that a venue
ruling is not a final judgment ripe for appeal. See TEX. CIV. PRAC. & REM. CODE ANN. §
15.064(a) (West 2002); see also TEX. R. CIV. P. 87(6) (―There shall be no interlocutory
appeals from such determination.‖). Counsel Financial asserts that the denial of the
motion to transfer venue is appealable pursuant to section 15.003 of the civil practice
and remedies code. Section 15.003, entitled ―Multiple Plaintiffs and Intervening
Plaintiffs,‖ provides in relevant part:
(a) In a suit in which there is more than one plaintiff, whether the plaintiffs
are included by joinder, by intervention, because the lawsuit was begun by
more than one plaintiff, or otherwise, each plaintiff must, independently of
every other plaintiff, establish proper venue. If a plaintiff cannot
independently establish proper venue, that plaintiff’s part of the suit,
including all of that plaintiff’s claims and causes of action, must be
transferred to a county of proper venue or dismissed, as is appropriate,
unless that plaintiff, independently of every other plaintiff, establishes that:
4
On March 22, 2010, the trial court entered an order granting Leibowitz’s request for a temporary
injunction. Counsel Financial appealed that order in Counsel Financial Services, L.L.C. v. David Mcquade
Leibowitz and the Law Offices of David McQuade Leibowitz, P.C., currently pending before this Court in
appellate cause number 13-10-00200-CV.
6
(1) joinder of that plaintiff or intervention in the suit by that
plaintiff is proper under the Texas Rules of Civil Procedure;
(2) maintaining venue as to that plaintiff in the county of suit
does not unfairly prejudice another party to the suit;
(3) there is an essential need to have that plaintiff’s claim
tried in the county in which the suit is pending; and
(4) the county in which the suit is pending is a fair and
convenient venue for that plaintiff and all persons against
whom the suit is brought.
(b) An interlocutory appeal may be taken of a trial court’s determination
under Subsection (a) that:
(1) a plaintiff did or did not independently establish proper
venue; or
(2) a plaintiff that did not independently establish proper
venue did or did not establish the items prescribed by
Subsections (a)(1)–(4).
TEX. CIV. PRAC. & REM. CODE § 15.003. On appeal, the appellate court determines
whether the trial court’s order is proper based on an independent determination from the
record and not under either an abuse of discretion or substantial evidence standard.
See id. § 15.003(c).
Because we have no jurisdiction over this appeal unless Leibowitz qualifies as a
plaintiff, our analysis begins with this issue. It has long been established that an
intervening party may be characterized as either a defendant or as a plaintiff. Savage
v. Cowen, 33 S.W.2d 433, 434 (Tex. Comm’n App. 1930) (holding that intervenors may
occupy the position of either plaintiffs or defendants); Ivey v. Harrell, 1 Tex. Civ. App.
226, 230, 20 S.W. 775, 776 (Galveston 1892, no writ) (same). Compare HEB
7
Ministries, Inc. v. Tex. Higher Educ. Coordinating Bd., 235 S.W.3d 627 (Tex. 2007)
(intervening plaintiffs); O’Quinn v. Hall, 77 S.W.3d 452, 457 (Tex. App.—Corpus Christi
2002, orig. proceeding) (same), with Tex. Workers’ Comp. Comm’n v. Garcia, 893
S.W.2d 504 (Tex. 1995) (intervening defendants); Jenkins v. Entergy Corp., 187 S.W.3d
785 (Tex. App.—Corpus Christi 2006, pet. denied) (same); see also Anglo Irish Bank
Corp. v. Ashkenazy & Agus Ventures, LLC, No. 02-10-00299-CV, 2010 Tex. App. LEXIS
9765, at *3 (Tex. App.—Fort Worth Dec. 9, 2010, no pet.) (mem. op.) (―A party may
intervene in a lawsuit as either a defendant or a plaintiff.‖). Whether an intervenor is
characterized as a plaintiff or a defendant depends on the character of the rights
asserted and the relief requested through the intervention. Sec. State Bank v. Merritt,
237 S.W. 990, 992 (Tex. Civ. App.—Amarillo 1922, no writ); see also Anglo Irish Bank
Corp., 2010 Tex. App. LEXIS 9765, at **3–4.
The underlying lawsuit was instituted by Anzaldua against Kmart. Counsel
Financial intervened in the lawsuit on grounds that it ―is a secured creditor and judgment
creditor‖ of Leibowitz and his firm, who serve as counsel for Anzaldua. According to the
plea in intervention, Anzaldua and Kmart had agreed to settle the case ―which will result
in funds being paid to the Debtors for their attorney’s fees and costs.‖ Counsel
Financial asserted that it ―has a lien against such funds‖ on the grounds that Leibowitz
had ―wholly failed and refused to pay the debt and judgment due and owing‖ to Counsel
Financial. Leibowitz specifically sought ―an order from the Court directing all Parties to
pay directly to [Counsel Financial] all funds (up to the amount of CFS’s lien) to which
8
Leibowitz and the Law Firm may be entitled to as a result of this case and the
settlement.‖ As stated previously, Counsel Financial expressly stated that it did not
seek to obtain the funds allocated to Anzaldua as a result of the settlement, nor did it
intend to affect Kmart’s release from the lawsuit.
In response, Leibowitz intervened in the Hidalgo County suit to stop Counsel
Financial from obtaining any of the funds in the registry of the court. He asserted claims
for affirmative relief, including claims for declaratory and temporary injunctive relief and
damage claims for tortious interference and business disparagement. By his first
amended pleading, Leibowitz also sought an anti-suit injunction and an anti-execution
injunction attempting to restrain Counsel Financial from enforcing either the security
agreement or the domesticated judgment. According to Leibowitz’s pleadings, Counsel
Financial claimed that it was entitled to his portion of the settlement funds based either
on ―a foreign default judgment which is not now enforceable under Texas law, or a
Security Agreement which [Counsel Financial] has itself breached.‖
Based on the foregoing, we conclude that Counsel Financial intervened in the
lawsuit as a plaintiff because it was seeking to recover that portion of the funds Kmart
was paying to Anzaldua which represented her attorney’s fees. In short, Counsel
Financial sought to recover funds from Leibowitz out of Kmart’s settlement payment to
Anzaldua. In contrast, Leibowitz filed defensive pleadings seeking to avoid Counsel
Financial’s recovery, and there is no indication in the record that Leibowitz would have
filed an intervention or any other responsive pleading against Counsel Financial’s claims
9
if Counsel Financial had not first intervened in this action as an intervening plaintiff. The
record before the trial court and this Court is sparse with regard to the precise contour of
the litigation first fought in New York and then contested in Bexar County, but Leibowitz’s
pleadings in the underlying action confirm that his interests are adverse to intervening
plaintiff Counsel Financial’s. Based on our independent review of the record, we
conclude that Leibowitz’s intervention in the action below is best characterized as a
defensive intervention.
III. CONCLUSION
Generally, a party must wait until a final judgment occurs in order to appeal an
erroneous ruling regarding venue. TEX. CIV. PRAC. & REM. CODE ANN. § 15.064(b);
Surgitek, Bristol-Myers Corp. v. Abel, 997 S.W.2d 598, 601 (Tex. 1999); Elec. Data Sys.
Corp. v. Pioneer Elecs. (USA) Inc., 68 S.W.3d 254, 257 (Tex. App.—Fort Worth 2002, no
pet.). However, when a case involves multiple plaintiffs, wherein plaintiffs are included
by joinder or intervention, section 15.003 establishes a limited right of interlocutory
appeal to contest a trial court’s venue determination. See TEX. CIV. PRAC. & REM. CODE
ANN. § 15.003(b)-(c); Surgitek, Bristol-Myers Corp., 997 S.W.2d at 601; Elec. Data Sys.
Corp., 68 S.W.3d at 257. This limited right of interlocutory appeal extends only to
plaintiffs who are unable to independently establish proper venue apart from the joinder
factors set out in section 15.003(a). TEX. CIV. PRAC. & REM. CODE ANN. § 15.003(b)-(c);
Elec. Data Sys. Corp., 68 S.W.3d at 258. Because the record supports the
characterization of Leibowitz as an intervening defendant, section 15.003 does not
10
apply.5 Because no applicable statute allows for an interlocutory appeal to be heard,
the appeal must be dismissed for want of jurisdiction. Accordingly, we grant Leibowitz’s
motion to dismiss and we dismiss the appeal for want of jurisdiction.
________________________
GINA M. BENAVIDES,
Justice
Delivered and filed the
1st day of July, 2011.
5
In April, Counsel Financial provided this Court with a letter stating that this ―is an appeal under
section 15.003 of the Texas Civil Practice and Remedies Code‖ and this statute ―provides that the court of
appeals shall render judgment not later than the 120th day after the date the appeal is perfected.‖ TEX.
CIV. PRAC. & REM. CODE ANN. § 15.003. We have concluded that section 15.003 is inapplicable to the
instant case; however, even if we were to hold otherwise, section 15.003(c) is directory, not jurisdictional.
Wyeth v. Hall, 118 S.W.3d 487, 490 (Tex. App.—Beaumont 2003, no pet.) (citing TEX. R. APP. P. 19.2
regarding the plenary jurisdiction of appellate courts in the context of section 15.003(c)).
11
Counsel Financial Services, L.L.C. v. DAVID McQUADE LEIBOWITZ AND DAVID McQUADE LEIBOWITZ, P.C.
Combined Opinion