Appendix — Schwager v. Texas Commerce Bank, N. A.

Supreme Court, US. |

9 n , : FILED

2-1265 | aie

tiles CLERK

| NO. :

IN THE

Supreme Court of the United States

OCTOBER TERM, 1992

BRUCE B. SCHWAGER, et al.,

Petitioners,

v.

TEXAS COMMERCE BANK, N.A., et al.,

Respondents.

PETITION FOR A WRIT OF CERTIORARI

TO THE SUPREME COURT OF TEXAS

APPENDIX TO

PETITION FOR WRIT OF CERTIORARI

BRUCE B. SCHWAGER- BETTE R. SCHWAGER

2001 Holcombe, Apt. 806

Houston, Texas 77030

(713) 796-2540

_

Pro Se

o——

ee

APPENDIX TABLE OF CONTENTS

Page

APPENDIX “A”: Newspaper Articles -

Campaign Contributions

Ck, err A-|

APPENDIX “B”: Ruling Texas Supreme Court, 9/9/92 .. B-1!

APPENDIX “C”: Ruling Texas Supreme Court,

ET eC TRE TE OEE TS C-]

APPENDIX “D”: Judgment Ist Court of Appeals,

EE ARM CEGe RAW OR ex tbe wk ees D-1

APPENDIX “E”: Incorrect and Inconsistent Statements .. E-1

APPENDIX “F”: Documents Showing Finality of

SG-O7S7O FUGGMAOME 2 ww wesc F-]

APPENDIX “G”: S.F. Hearing, 5/26/87 ............. G-1

APPENDIX “H”: List of Authorities Submitted to

Texas Supreme Court ............. H-]

APPENDIX “I”: > Newspaper Article: |

pS er I-1

APPENDIX “J”: | Newspaper Article:

Law Firm Top Donors to Justices ..... J-1

APPENDIX “K”: Newspaper Article:

somcting Our Judges ........5005. K-]

APPENDIX “L”: Answer to Action of Tnal Court ..... L-1

APPENDIX “M”: Answer to Ist Court of Appeals

GE EP 6 a 6600s Skee KS M-!

APPENDIX “N”:

APPENDIX “O”:

APPENDIX “P”:

APPENDIX “Q”:

APPENDIX “R”:

APPENDIX “S”:

APPENDIX “T”:

APPENDIX “*

APPENDIX “

APPENDIX “*

APPENDIX “

APPENDIX “

APPENDIX “

ge

Vv”:

WwW”:

a

ba

Si

ee

Bette Schwager’s Detailed Argument . .

Judgment Case #87-14551 .........

Respondents’ Trial Pleading ........

Co a ea ey

Argument for Finality of 86-07376

eee rr ere ee se et

Teonas Gloction CR iva dees sees

Arguments for Conspiracy & Perjury . .

Constitutions and Statutes ..........

Order Striking 42 Points of Error

MONEE 5666.6 345 084

Judgment Case #86-07396 .........

Campaign Contribution Report ......

Opinion Affirming Judgment

Cause #87-14551, 3/12/92 .........

Newspaper Article: There are better

ways to finance judicial races than

the way we do in Texas ...........

U-]

«al «

APPENDIX A

Article from Las Vegas Review Journal, Sunday, November 25,

_ 1990

Nevada’s judicial selection process akin to legalized bribery

By Albert G. Marquis

Special to the Review-Journal

Trial attorneys, who spend more time in front of judges than

anyone else, are in overwhelming agreement that judges should not

be forced to run for election. In the first place, there is no way to

compare one candidate’s judicial acumen with his opponent’s, and

it is certainly impossible for the general populace to recognize and

comprehend any difference. Of greater importance, this process,

which can require the expenditure of two to three times a judge's

annual salary, encourages favoritism and can give rise to the

perception of corruption.

Every time we go through a judicial election, candidates

struggle to compare themselves with their opponents and at the

same time stay within the bounds of decency and judicial ethics. It

is not uncommon for judicial opponents to argue about who is

tougher on crime—and to bellow about the incumbent's reversal

rate or debate who is more ethical.

During the recent election, Jeff Sobel cited Nevada Supreme

Court opinions that were critical of Judge John Mendoza, leading

Mendoza to respond that Sobel had violated judicial ethics by

commenting on a pending case. Sobel’s counterattack included a

threat to sue Mendoza for slander.

During the same campaign period, Reno attorney Ralph Crow

was suing the state bar, the attorney general, the secretary of state

and the Supreme Court because he was not allowed to run against

Supreme Court Justice Tom Steffen. Meanwhile, judicial candidate

Milos Terzich was accusing a Supreme Court justice of unethical

ee

conduct for endorsing Terzich’s opponent, Judge Norm Robison.

Obviously, even judicial candidates and their supporters find it

difficult to compare qualifications.

From this morass of mud-slinging, do we really expect the

public to be able to select the best person for the job? In fact, do

any of the accusations cited above actually reflect on a person’s

ability to be a good judge? All of this might be meaningful only if

we want to select a judge on the basis of who is able to make the

most scurrilous accusations against his opponent. In reality,

however, this bickering means more to the opponents than to the

electorate. In the final analysis, the winner will be the person who

has his face on the most billboards and who appears most frequent-

ly on television with his family. To win, therefore, it takes bucks—

big bucks.

Where does a judicial candidate accumulate such a war chest?

He solicits campaign contributions just like any other political

candidate. Almost all judges and attorneys who run for judicial

posts abhor the fact that they must “hit up” other attomneys and

businesses for contributions, but under our system they have no

choice.

Suppose a local corporation makes a $10,000 contribution to an

individual who is then elected judge. That money was vitally

important in winning the election, and it will be vitally important

’ again at re-election time. In the meantime, you happen to become

involved in a lawsuit with that company, and your case is assigned

to that judge. Aren’t we asking too much of any individual to

remain fair and impartial in the face of that reality?

As a matter of fact, there is nothing to prevent that corporation

(or anyone else) from making a campaign contribution to the judge

right before the trial is to begin. Of course, it is illegal to give the

judge a $10,000 “bribe,” but it is perfectly permissible to call this

payment a “campaign contribution.” What we have, then, is nothing

but a legalized system of bribery.

> 2

This is not to indict any of our judges. Most of them try their

best to be fair. But the reality is that we are subjecting our judges

to temptation. Moreover, we are giving corrupt citizens an avenue

by which they can attempt to influence judges with money.

Beyond that, the prospect of being forced to run for election,

along with the necessity of raising money, is so distasteful to many

individuals that some of our most qualified attorneys shy away

from judicial office. Combine this with the fact that judges are

grossly underpaid, and it is indeed miraculous that we have as

many fair, qualified judges as we do.

There are better systems. In Sweden, for example, the attorneys

are required to select from their ranks those individuals who they

think will make the best judges. Those attorneys are in essence

drafted for six-year terms. At the end of that term, new judges are

selected. The other attorneys know who is knowledgeable and fair,

and there is, consequently, little chance of an unqualified or biased

person becoming a judge. There are no slurs, ethical violations,

lawsuits or questionable campaign contributions.

Another method for selecting judges is the Missouri plan. It

provides that judicial candidates are interviewed by a screening

panel, which then submits three names to the governor, who

appoints one of them. This is the system we now use to fill

mid-term vacancies, and it has worked well. Under the Missouri

plan, a judge then runs against his own record, and the people

decide whether to retain him. This plan has been heralded across

the country as far superior to the general election process.

A couple of years ago, the Legislature put on the baliot

Question 4, which would have scrapped our system in favor of the

Missouri plan. As election day approached, it appeared that

Question 4 would pass. A few days before we went to the polls,

however, the R-J changed its position and announced its opposition

to Question 4. The stated basis for this change of heart was the

cliche that “the election process is a power that should not be taken

away from the people.” With that bit of drivel, Question 4 failed

a ee

by a few thousand votes, and we have since been forced to endure

more judicial campaigns.

In spite of this setback and the slight opposition that exists

among well-meaning but misguided individuals, the Nevada

Legislature should not give up. Our judicial selection process is in

dire need of reform, and it should be a priority when the Legisla-

ture convenes in January.

Marquis is a Las Vegas attorney.

y oe

APPENDIX B

THE SUPREME COURT OF TEXAS

P.O. Box 12248

Supreme Court Building

Austin, Texas 78711

John T. Adams, Clerk

September 9, 1992

Mr. T. Ransom Cornish

3131 Eastside, Suite 330

Houston, TX 77098

Mr. Robert Axelrad

1990 Post Oak Boulevard

14th Floor

Houston, TX 77056-3814

Mr. Newton B. Schwartz

Schwartz, Berger &

Valdez, P.C.

723 Main Street

Suite 325

Houston, TX 77002

Mr. John Zavitsanos

Baker & Botts

One Shell Plaza

910 Louisiana

Houston, TX 77002-4995

RE: Case No. D-2528

Ms. Cynthia G. Farris

Baker & Botts

One Shell Plaza, 910 Louisiana

Houston, TX 77002-4995

Mr. Neil S. Levin

Suite 710

4828 Loop Central Drive

Houston, TX 77081-2212

Mr. Joseph D. Cheavens

Baker & Botts

One Shell Plaza

910 Louisiana

Houston, TX 77002-4995

Style: BRUCE B. SCHWAGER ET AL.

v. TEXAS COMMERCE BANK, N.A. ET AL.

2.

Dear Counsel:

Today, the Supreme Court of Texas denied the above refer-

enced application for writ of error with the notation, “Writ

Denied.” Petitioner’s motion for Supreme Court not to consider

reply brief is overruled.

Sincerely,

John T. Adams, Clerk

by

Blanca Morin, Deputy

2

APPENDIX C

THE SUPREME COURT OF TEXAS

P.O. Box 12248

Supreme Court Building

Austin, Texas 7871!

John T. Adams, Clerk

October 28, 1992

Mr. T. Ransom Commish

3131 Eastside, Suite 330

Houston, TX 77098

Ms. Cynthia G. Farris

Baker & Botts

One Shell Plaza

910 Louisiana

Houston, TX 77002-4995

Mr. Neil S. Levin

4828 Loop Central Drive

Suite 710

Houston, TX 77081-2212

Mr. Joseph D. Cheavens

Baker & Botts

One Shell Plaza

910 Louisiana

Houston, TX 77002-4995

RE: Case No. D-2528

Mt. Bruce B. Schwager

2001 Holcombe

#806

Houston, TX 77030

Mr. Robert Axelrad

Webb Zimmerman Beck Flaum

& Axelrad, P.C.

1990 Post Oak Boulevard

14th Floor

Houston, TX 77056-3814

Mr. Newton B. Schwartz

Schwartz, Berger &

Valdez, P.C.

723 Main Street

Suite 325

Houston, TX 77002

Mr. John Zavitsanos

Baker & Botts

One Shell Plaza

910 Louisiana

Houston, TX 77002-4995

C2.

Style: BRUCE B. SCHWAGER ET AL.

v. TEXAS COMMERCE BANK, N.A. ET AL.

Dear Counsel:

Today, the Supreme Court overruled petitioner's motion for

rehearing of the application for writ of error in the above styled

case.

Sincerely,

JOHN T. ADAMS, CLERK

BY:

Tencha Damian, Deputy

for

‘led

~ 7

APPENDIX D

Court of Appeals

First District of Texas

COPY OF JUDGMENT

BRUCE B. SCHWAGER, Appeal from the 125th District

BETTE SCHWAGER, Court of Harris County (Tr. Ct.

B.B.B.M., LTD, AND No. 87-14551).

B.M. BAYOU Opinion delivered by Justices

CORPORATION, Cohen, Justices Bass and Wil-

APPELLANTS son also sitting.

NO. 01-90-00270-CV V.

TEXAS COMMERCE

BANK N.A.,

CHARLES BEST, FRED

FALLAS, MEYER

FALLAS, MALCOLM

MARCOE, HARVEY

RESNICK AND WILLIAM

CRAMER, APPELLEES

The cause heard today by the Court is an appeal from the

judgment rendered and entered by the court below on December 8,

1989. After hearing the cause on the record of the court below and

inspecting the same, it is the opinion of this Court that there was

no error in the judgment. It is therefore CONSIDERED, AD-

JUDGED, AND ORDERED that the judgment of the court below

be in all things affirmed.

It is further ORDERED that the appellants, BRUCE B.

SCHWAGER, BETTE SCHWAGER, B.B.M.M., LTD., AND

B.M. BAYOU CORPORATION, and their surety, LAWYERS

«Oa.

SURETY CORPORATION, pay all costs incurred by reason of

this appeal.

it is further ORDERED that this decision be certified below

for observance.

Judgment rendered by panel consisting of Justices Bass, Cohen,

and Wilson.

Judgment entered 3-12-92

of

i

5 =P

APPENDIX E

INCORRECT AND INCONSISTENT

STATEMENTS OF APPEALS COURT

IN OPINION (MARCH 12, 1992)

Note: Many of the following statements have been previously

set out in Appellants’ Motion for Sanctions and Gag Order (Date

Aug. 22, 1991) and their Response Brief filed on Feb. 12, 1992.

This is now the third time that Appellants have complained about

these incorrect statements. It is especially noted that Mr. Schwager

verified the preceding two documents.

This Court order does not state which documents were

reviewed as a basis for its opinion. Thus, it is presumed that the

Court did review the Appellants’ Opening Brief for substance,

Appellants’ Response Brief, Appellants’ various motions, the

transcript and statement of fact references made by Appellants.

However, it is apparent that the Court adopted Appellee TCB’s

Reply Brief in its entirety without a verification of the facts of this

case.

Appellants dedicated pages 1-9 in their Response Brief (filed

Feb. 13, 1992) just to point out the incorrect and misleading

Statements made by TCB in its opening statement of its Reply

Brief. Other untrue statements are also shown under the specific

response points.

The following is a showing of some of the incorrect and

inconsistent statements made in this Court Order denying Appel-

lants’ appeal dated March 12, 1992.

1. Bette Schwager and B.M. Bayou Corp. were not allowed to be

parties to the 1987 lawsuit by Judge Wittig. Judge Wittig stated

that Bette Schwager was not a party. (S.F. 828). This deprived

Bette Schwager of her property and her constitutional nght to

2.

due process. Bette Schwager was never served process by TCB,

and she had her own causes of action.

2. B.B.M.M., Ltd. did not buy the downtown Houston property to

operate a restaurant. It was boughi to sell the property for a

profit. See Partnership Agreement (Trial Exhibit Pl. 56).

3. Schwager also pledged a $25,000 C.D. for the InterFirst loan.

4. The Jow note was not payable to Schwager, but to Space City

Sizzler Corp.

5. The Partnership leased the property to B.M. Bayou Corp. to

operate a restaurant. Contradictory statement that Partnership

bought property to operate a restaurant. What this does show

is that B.B.M.M., Ltd. and B.M. Bayou were part of the same

entity.

6. The ownership of B.M. Bayou and B.B.M.M., Ltd were the

same. The only thing that was different was the tax write-off

distribution as shown in the Partnership Agreement 99%-1% in

favor of the Limited Partners in the Partnership and 50%-50%

in the Corporation. (Pl. Trial Exh. 50).

Note: Ownership was 50%-50% in both the Corporation and

Partnership. Schwager 50, Limiteds 50. Whether the money

was in Corporation or Partnership was irrelevant as Limiteds

would be entitled to the same distribution.

7. The Limiteds did not pay off the InterFirst loan. This was paid

from the TCB $825,000 loan.

8. Relationship between Schwager and Limiteds did not become

strained until W. Cramer tried to defraud all Limited Partners

and General Partner. (Appellants’ Point of Error #16, p. 26 and

Response Point #13, p. 33). -

9. The-partnership did not borrow $825,000 from TCB in Sept. of

1984. It was December of 1954.

10. Schwager and the Limiteds did not sign the Note with TCB.

Schwager signed the promissory note as General Partner of the

Partnership. The Limiteds did not sign the promissory note

either as individuals or Limited Partner of the Partnership.

Schwager and the Limiteds signed separate personal guaranty

agreements.

11. Schwager never endorsed the Jow note to TCB. A review of

the note would show this. (S.F. Contempt Hearing August 25,

1988).

ee

~ SS.

12. TCB did not believe the restaurant income would cover the

note. Neither the letters of intent nor the loan origination

document shows this. (Trial Exh. TCB 55B, 55C, 55D, S55F).

On the contrary, the restaurant is not mentioned at all in the

Letter of Intent. Source of repayment was the Partners’

income.

13. $125,000 was not used for operating capital. Plus, this state-

ment does not state whether the operating capital was for the

Partnership or the Corporation, clearly showing it was the same

transaction and the amendment to the lease claim made by

TCB and the Limiteds was a fraud on the trial court and now

on the Appeals Court.

14. The working capital was not exhausted due to the restaurant

continuing to lose money. Also, the $125,000 was not working

capital for the restaurant. (Restaurant was owned by Limiteds

as well as Schwagers, 50-50). The real unfaimess of the 1987

trial and this appeal is probably best shown by the false and

misleading statements made about the $125,000.

Note: The restaurant was closed in December of 1984 prior to

the TCB loan being funded. The restaurant did not open until

April of 1985. The $125,000 was used to pay the bank loan

payment of $11,000/mo. for January, February, and March of

1985 (approx. $33,000). Taxes on the property for 1985,

attorney fees for the Partnership, repair of the parking lot,

repair and remodeling of the Partnership building, 110-112

Travis Street, points for loan origination, etc. (Borrow state-

ment PI. trial exhibit 5).

15. The Limited Partners had to make payment to the Partnership

so that the Partnership could pay on the loan, not to TCB. The

Limiteds did not stop making payments on the TCB loan until

Jan. 1987. No charges of wrongdoing were made against

Schwager when the Limiteds stopped making payments. (S.F.

March 9 Hearing Pursuant to Request of Receiver, pp. 2, 3).

16. Schwager did not sue the Limited Partners for failing to make

capital contribution to cover the restaurant debts. Schwager

sued for capital contribution for the preservation of the

Partnership property and assets. (Tr. 128, ¥ 7; Tr. 131, ¥ 1).

17. The Limited Partners did no; counterclaim alleging misconduct

by Schwager in operating the restaurant. (Tr. 64-76).

_ *

18. The Limiteds did not seek damages for breach of fiduciary

duty, return of capital contributions as shown in their plead-

ings. (Tr. 64-76) (Tr. 1-8). As shown in Tr. references, the

Limiteds complained of wrongs done by Schwager which

included breach of fiduciary duty and breach of contract. The

requested dissolution was based on the alleged wrongdoings by

Schwager. Further action was requested by Limiteds after the

dissolution. (Tr. 75-76). As there was no grounds for dissolu-

tion, there was no wrongdoing by Schwager. The Partnership

was not dissolved; thus, the Partnership Agreement was still the

controlling document.

19. The 1986 suit was not tried on July 14, 1986. The 1986 tral

began on July 14, 1986 and concluded on July 23, 1986. This

was a full trial on the merits which did not last one day as

suggested by this Court as previously noted.

20. The trial court signed a “final” judgment on Oct. 14, 1986 as

indicated by its docket entry. (Tr. 1347).

21. The receiver was only appointed to sell the property (real estate

agent). Receiver had no control over the operation of

B.B.M.M., Ltd. or B.M. Bayou Corp. This has previously been

previously shown in this document. The intent of the Partner-

ship was to buy and sell the Property.

22. The Limiteds were -ordered to pay a total contribution of

$14,000/mo. (S.F. Mar. 9, 1987 Hearing Pursuant to Request

of Receiver, p. 3).

23. The 1986 Judgment also provided that the trial court would

consider requests from any parties to make agreements with

third parties that would eliminate the need for a receivership

and the sale of the Property. The preceding is not what the

Judgment said.

The actual quote is different from the above and has a far

different meaning:

“14. It is further ordered that the court will consider

requests of the Plaintiffs and Defendants to enter into any

agreements with third parties which would obviate the need

for continuation of the receivership or the ultimate forced

sale of the property of B.B.M.M., Ltd. (difference is empha-

sized) (Tr. 139).

el

24.

25.

26.

27.

28.

29.

30.

31.

mY

Note: Paragraph 14 of the Final Judgment was to allow the

Plaintiff and Defendant, if they agreed between themselves, to

deal with third parties.

Statement made by this Court that judgment did not adjudicate

the Limited Partners’ claims alleging breach of fiduciary duty

by Schwager and requesting return of capital contributions is

not true. Limiteds did not ask for return of the capital contribu-

tions. (Tr. 64-76; Tr. 1-8). Breach of Fiduciary duty was

thoroughly litigated as previously shown and as this was one

of the bases for dissolution of the partnership, it was also ruled

on and denied.

In late 1986, some of the Limited Partners approached TCB

seeking to refinance the loan. This statement shows the

conspiracy between TCB and the Bank as this was done

secretly and which they did not have right to do as they did not

sign the promissory note. (Pl. Trial Exhibit #3). This also

would change the Partnership Agreement.

TCB approved the refinancing without Schwager knowing

about it or having any input to it. (Def. Trial Exh. 48, 49, 50).

Schwager did not find out about negotiation between the

Limiteds and TCB until Jan. 21, 1989 almost four months after

negotiations began. (S.F. 493).

Schwager refused the Jan. 21 refinancing because it was an

attempt to obtain control of the Jow Note and also because he

would have to sign release of claims. Such document released

the bank of any wrongdoing. (Def. Trial Exh. 44).

The Limiteds again stopped paying the TCB loan (untrue). The

Limiteds always paid the TCB loan until Jan. of 1987.

The Limiteds approached TCB for a new way to obtain the

Jow Note from Schwager, not a new refinancing proposal. (PI.

Trial Exh. 75).

That TCB subsequently accelerated the loan is a true statement,

except it leaves out the wrongful acceleration and breach of the

Promissory Note. Note required ten-day cure period prior to

acceleration. TCB breached contract by not giving same. (PI.

Trial Exh. 3, pp. 3, 4).

Schwager was not sued for conversion of rental in 1987. (Tr.

208) (Point of Error #44).

86>

32. The Limited Partners were not sued on the Note as stated by

this Court. The Limiteds did not sign the Note and were only

sued on their personal guarantees.

33. Schwagers sued TCB and the Limiteds by requesting and

receiving a TRO on Mar. 27, 1987, three days before TCB

sued Schwager on Mar. 30. That is why Schwager should have

been Plaintiff in suit, as previously shown in paragraph III.

34. The trial judge directed a verdict for TCB as Plaintiff on

Schwager’s claims for wrongful acceleration and breach of

contract. This was done based on Schwager’s allegedly having

actual notice that the Note was not being paid. This was in

clear violation of the Supreme Court of Texas Ruling in Ogden

v. Gibraltar, 640 S.W.2d 232, 234 (Tex. 1982), which showed

that notice of intent to accelerate was required even though

borrower knew the loan was in default.

35. The trial judge submitted no jury question on any claims by

Bette Schwager and B.M. Bayou Corp. This statement is

conclusive proof that Bette Schwager was denied her constitu-

tional right of due process on her claims and that her property

was taken from her. Judge Wittig would not let Bette Schwager

be a party to the lawsuit. (Appellants’ Response Brief, pp. 14,

15, 16, filed Feb. 12, 1992).

’ 36. In the last paragraph on page 4 of this opinion, the Court states

in detail the ruling of the jury in Case #87-14551, while

leaving out the facts relating to the questions that the trial court

refused to submit to the jury such as the conspiracy issue,

forgery issue, wrongful acceleration issue, usury issue, good-

faith issue, breach of contract issue, Bette Schwager issues, and

mental anguish and pain and suffering issue. The result of this

refusal was a comment on the weight of the evidence by Judge

Wittig. The jury could only conclude that Schwager was lying

about these claims he made during trial. (Points of Error #7

and #42) (Tr. 1191-1212).

37. The Court further leaves out the fact that all of the charges

against Schwager were answered in the 42 points of error that

were stricken by this Court without being reviewed for

substance, only form. Davis v. City of San Antonio, 752

S.W.2d 518, 523 (Tex. 1988).

UP MUNA ei Ka aa i in vi Wi: hn No os

an ee Oe Se ee ge

38.

39.

ef me

Had the Court reviewed Appellants’ points of error for

substance, all the charges against Schwager would have been

reversed. An example of this is the fraudulent inducement

charge. Not only do the facts not support this charge, but as a

matter of law, this issue should never have been submitted to

the jury. (Appellants’ Points of Error #38 and #43 and Appel-

lants’ Response Point #26 and Response to Limiteds’ Brief, p.

59).

Under the preliminary procedure matter on appeal section, this

Court stated the fact that supported Appellants’ submission on

the 99-page brief. This Court leaves out an extremely important

event in the chronology of events. This Court approved a

motion for an extension of time to file a brief in excess of 78

pages and then cut off Appellants legs by denying the actual

submission of the brief in excess of 78 pages. A detailed

answer to the events stated by this Court is made in referenced

Motion to Reconsider Striking of Appellants’ 42 Points of

Error dated Mar. 8, 1992.

. The Court in order to support its striking of the 42 points of

error has raised some interesting questions:

a. Why did not the Court on August 8, 1991 strike the

Appellants’ Brief or order a re-briefing if in fact the Brief

was not adequate as the Limiteds stated in their Motion to

Strike Appellants’ Brief?

b. Why did the Court wait until Feb. 24 at 3:00 p.m. to fax

Appellants the order striking 42 of Appellants’ 44 points of

error? The appeal was submitted at approximately 9:30

p.m. on Feb. 26, 1992.

c. Why did the Court deny Appellees Limited Partners’

Motion to Strike Appellants’ Brief?

d. Why did this Court not mention that Appellants filed a

Response Brief (Supplement) to TCB’s Reply Brief on

Feb. 12, 1992, twelve days before this Court struck 42 of

Appellants’ points of error?

e. Why did this Court not rule on Appellants’ Motion to

Reconsider Striking of the 42 Points of Error filed on

March 8, 1992 prior to making its ruling on the entire

appeal on March 12, 1992?

- BS -

41. According to the bases for the ruling on Appellants’ 42 points

of error, Points of Error #1 and #4 should also have been

stricken. This, however, would not have been allowed. “We

concluded that the Court of Appeals should not have affirmed

based on Inpetco’s briefing inadequacies without first ordering

Inpetco to rebrief.” Davis v. City of San Antonio, 752 S.W.2d

518, 521 (Tex. 1988).

42. Appellants were never given the opportunity to re-brief based

on the specific objections made by the Appeals Court as ruled

on Feb. 24, 1992. This assumes that Appellants’ Supplemental

Brief was not reviewed. Appellants requested this opportunity

but did not receive a ruling on same. Appellants should have

been given time to re-brief after being given notice of the

specific defects or irregularities. Stevens v. Stevens, 809 S.W.2d

512, 513, 514 (Tex. App.—Houston [14th Dist.] 1991).

Appellants requested that TCB give specific objections to its

brief in its Motion for Reconsideration of Order Requiring

Appellants to Re-Brief and Order Striking Appellants’ Brief

(Filed May 20, 1991, p. 2).

43. Schwager filed a Motion to Reverse Judgment and Dismiss the

Case on Sept. 12, 1992. Schwager then filed another motion

due to the Court’s not ruling on the first motion.

44. On 11/21/91, the Court denied Schwager’s Motion to Reverse

the Judgment and Dismiss the Case.

45. Schwager submitted a Motion to Reconsider on 12/5/91.

46. On 1/30/92, 20 days before submission, the Court strangely

reactivated the Motion to Reverse Judgment and Dismiss Case

and carried it with the appeal.

47. Schwager states very succinctly in his Motion to Reverse the

Judgment and Dismiss (Sept. 12, 1991) Appellants’ position on

the jurisdiction of the trial court and Court of Appeals. Also,

in his second motion and his motion to reconsider, Appellants

do not believe that this Court has presented Appellants’

position adequately as set out in the Order of March 12, 1992

affirming the trial court opinion.

48. The Court leaves out the fact that Judge Wittig violated the

local rules of the Court when he consolidated the older case

into the newer case. Motion for Sanctions and Gag Order Exh.

“G” 8/22/91. The Rules called for Case #87-14551 to be

a ee

eo

consolidated into 86-07376. Sante Fe Drilling v. O'Neil, 774

S.W.2d 423, 424 (Tex. App.—Houston [14th Dist.] 1989).

.

APPENDIX F

LIST OF DOCUMENTS SHOWING

FINALITY OF 1986 JUDGMENT

1. 7/14/86 - 7/23/86 Docket Entry - All issues of law and fact

were submitted to the court. (Pages A2-3, A2-4)

2. 8/8/86 - Rendition of Judgment - Non-jury trial on merits of

case. (Pages A2-5, A2-6)

3. 8/11/86 - Docket Entry - Denied dissolution of Partnership.

(Page A2-4)

4. 8/26/86 - Letter - Limiteds’ Attomey - Final judgment that will

include receiver. (Pages A2-7, A2-8)

5. 10/14/86 Docket Entry - Final judgment signed. (Page A2-4)

6. 10/14/86 - Judgment - No issues left unresolved. (Pages A2-9

through A2-14)

7. 3/9/87 - Hearing - Transcript - Limiteds walked away -

financial reasons - no claim made against Schwager for

wrongdoing. (Pages A2-15 through A2-18)

8. 5/26/87 - Hearing Transcript - lawsuit is over and final, lost

jurisdiction in ’86 case, only thing I have jurisdiction over is

Receiver in aid of judgment, can’t bring up a whole new thing.

(Pages A2-19 through A2-21)

9. 7/27/89 - Order - clarities ’86-'87 case relationship. (Page A2-

22)

10. 3/4/88 - Order - Execution of judgment in '86 Case - used '86

case # on Executive Order. (Pages A2-23, A2-24)

11. 10/25/84 - Motion in Limine - Judge Wittig states that he was

not going to try claims between Limiteds and Schwagers.

(Pages A2-25, A2-26)

12. 7/16/91 - Motion TCB - “The Appellees incidentally obtained

a ju 'ssment against the other Appellees in a related case.” (86-

07376) (Page A-27)

13. 7/29/91 TCB Reply Brief (p. 12): “Even if a final judgment

had been entered .. . .” (Page A-28)

——<$<—<$

Re.

Additional Documents

14. Homestead Agreement. (Referenced at p. 14 of this document)

(Pages A2-29, A2-30)

15. Findings and Recommendations. (Referenced at p. 14 of this

document) (Pages A2-31, A2-32)

16. Pages 1 and 13 of Modified Final Judgment. (Referenced at p.

14 of this document) (Pages A2-33, A2-34).

17. Pleading Case #86-07376 (Tr. 74) (Referenced at 3 of this

document) (Page A2-35)

Note: The preceding documents are listed in Motion to Reverse

Judgment and Dismiss Case. This motion was ordered to be carried

with the appeal by the First Court of Appeals 1/30/92.

Omens AKDUSWHD —

YS

APPENDIX G

Statement of Facts Hearing, May 26, 1987

before --

MR. AXELRAD: Judge, this

lawsuit’s been pending since

1986, and the bank has been

brought into it only after the

bank filed suit in February of

*87.

‘THE COURT: No, your suit

was filed in 1987 on the note.

MR. AXELRAD: Right.

THE COURT: He has filed--

although he filed it under the 86

number as an amended petition,

that’s not correct.

MR. AXELRAD: But the bank

has never been a party to that

action in 86.

THE COURT: What you have

done -- and that’s why this file

got all screwed up, and they came

down to see me last week. What

you have is a counterclaim

against him in the 1987 lawsuit.

The 1986 lawsuit is over and

final. Okay?

Om KAU WH —

-G-2 -

MR. JOSEPH COHEN: Could we

have these parties instructed to

replead in the 87 cause number?

That goes right to the issue.

We've tried this case 99.9

percent once, and it’s not fair

to you or the parties to try this

case again.

THE COURT: You have a

counterclaim in his 1987 lawsuit,

and it’s all going to bear that

87 number henceforth.

MR. AXELRAD: Okay.

THE COURT: It is not an

amended petition against his

clients to which they were never

a party in a lawsuit that I’m

sure I’ve lost jurisdiction that

was entered in, God knows--

October of *86.

MR. JOSEPH COHEN: October

of last year.

THE COURT: The only thing I

have any continuing jurisdiction

over in aid of my judgment is a

35

O48.

Receiver, but that doesn't mean

everybody can tum around and

sue everybody and bring up a

whole new thing that doesn't

have anything to do with the

Receiver.

MR. RONALD COHEN: If the

Court please, my name is Ron

Cohen, and I'm appearing for

Steve Smith who was just served

and has an answer date next

Monday, June Ist.

THE COURT: Right.

MR. RONALD COHEN: He’s been

added as a brand new Defendant,

two and a half million dollars.

We'll do everything we can to

expedite everything we need to do

to go to trial on the merits.

You mentioned September. |

just want to make a record now so

that I can be heard the first

time on this case that I will be

in New Mexico during the week of

September 14th and couldn't try

=~.

APPENDIX H

LIST OF AUTHORITIES SUBMITTED IN

TEXAS SUPREME COURT

APPLICATION FOR WRIT OF ERROR

FEDERAL CASES

Page

Bankers Trust Co. v. Mallis, 435 U.S. 381

eG ee ee ee 25

TEXAS SUPREME COURT CASES

Alan Sales & Serv. Center, Inc. v. Ryan, 525

S.W.2d 863 (Sup.Ct. of Tex., 1975) .......-+--: 41

B & M Machine Co. v. Arionic Enterprises, 566

eo ee Ee er ee 10

Benson v. Wanda Petroleum, 468 S.W.2d 361

ERT MUON cane duee dee swiss ebevesees 34, A3-4

Bonniwell v. Beech Aircraft Corp., 663 S.W.2d

ee RD | ee ar ee A3-4

Brown v. Goldstein, 685 S.W.2d 640 (Tex.

SS ee ee eee ee 40, 44

Cecil v. Smith, 804 S.W.2d 509 (Tex. 1991) ....... 39, A3-9

Citizens State Bank v. Caney Investments, 746

S.W.2d 477 (Tex. 1988) ...........- 2, 8, 9, 12, 19

~ 8.2.

Collova v. Navarro, 574 S.W.2d 65 (Tex. 1978) ........ 44

Comet Aluminum Co. v. Dichell, 450 S.W.2d 56

Ch RR Teor eT Tee. eee eee - 38

Davis v. City of San Antonio, 752 S.W.2d 518

cS Serre eee ee ere eee TT 29, 32, 33, 34

Davis v. McCray Refrigeration Sales Corp.,

Sob R 6 Foes S| Oe ere 38

Dunn v. Dunn, 439 S.W.2d 831 (Tex. 1969) ............ &

Ferguson v. Ferguson, 16 Tex. 184, 338 S.W.2d

fi eee Tee CT ye Cree E EET Tee 7, 16

First Alief Bank v. White, 682 S.W.2d 251

| Terre eT ee RL eT TEEPE Tee 12

First Nat'l Bank of Dallas v. Brown,

Se ee ee Gs GUE AWA NOW e de Hew cba snwes 8

Ex Parte Godeke, 355 S.W.2d 701 (Tex. 1962) ........ 39

Hargrove v. Insurance Inv. Corp., 176 S.W.2d

I I ae OR er wa ae 7,8

Houston Health Clubs v. First Court of

Appeals, 722 S.W.2d 692 (Tex. 1986) .......... 10

Hunt v. Wichita County Water Improvement

District No. 2, 211 S.W.2d 743 (Tex. |

. Serr Ore Tee Lee eee eee ee eee 30

Inpetco, Inc. v. Texas American Bank/Houston,

pee b fy ere eT eee Ee Tee oe

Jackson v. Van Winkle, 660 S.W.2d 807 (Tex.

"SER ae ee, 11, 12

- 9.

Lopez v. Foremost Paving Co., 709 S.W.2d 643

i 3. Seeaererrererere torre rre teres 24

McCormick v. Guillot, 597 S.W.2d 345 (Tex. 1980) ....... 12

North East Indep. School Dist. v. Aldrige,

400 S.W.2d 893 (Tex. 1966) ..........2 eee eee 7

Ogden v. Gibraltar Sav. Ass'n, 640 S.W.2d 232

(Sup. Ct. of Tex., 1982) ........ cece e ee eees 4]

Pace Corp. v. Jackson, 284 S.W.2d 340 (Sup.

oY 5 | Serrereererr Terre niie 21

Pool v. Ford Motor Co., 715 S.W.2d 629 (Tex.

er ere rr ee eee 29

Salvaggio v. Brazos Cty. Water Control, 598

BWOS Zat CHOR. TOPED nc cet ease cccceress 25

Schwartz v. Jefferson, 520 S.W.2d 881 (Tex.

- SRT eee Lee ET eee 8

Shumway v. Horizon Credit Corporation,

801 S.W.2d 890 (Tex. 1991) ........- ee ee eeee 41

Thurshy v. Stovali, 647 S.W.2d 953 (Tex.

erate Perea ee ee 12

Touck v. McFall, 661 S.W.2d 923 (Tex. 1983) .......... I]

Trenholm v. Ratcliff, 646 S.W.2d 927 (Tex.

Er ree ere ay eee ee rare ee 31

Se , er res eee eee ee ee ee 2,8

Weaver v. Southwest Bank, 813 S.W.2d 481

CE ED cf cuhow dew es ences Ane hen enteeus 2,9

ae.

Williams v. Khalaf, 802 S.W.2d 651 (Tex.

‘tc EE rrr er eT 29

Wyatt v. Shaw Plumbing Co., 736 S.W.2d 763

(Tex. App.--Corpus Christi 1987) rev'd on

other grounds 760 S.W.2d 245 (Tex. 1988) ....... 31

ALASKA SUPREME COURT

Alaska State Bank v. Fairco, 674 P.2d 288

(Absbe, 1963) oon 4 cies eee 41

REPLY BRIEF

Page

FEDERAL CASES

Bankers Trust Co. v. Mallis, 435 U.S. 381

ti, |) Pere re ee ee 15

TEXAS SUPREME COURT CASES

Benson v. Wanda Petroleum Co., 468 S.W.2d 361

Tr, Sees oak eee elec ae ee ee 18

Buffalo v. Robbins, 811 S.W.2d 541 (Tex. 1991) ......... 13

Carlton v. Estate of Estes, 664 S.W.2d 322

| PPPS eT Teer T Ty etre te re ee 19

oe

Citizens State Bank v. Caney Investments, 746

S.W.2d 477 (Tex. 1988) .........-.

City of San Antonio v. Rodriguez, 35 Tex.

Sup. Ct. J. 536, 537 (February 26, 1992)

Collara v. Navarro, 574 S.W.2d 65 (Tex. 1978)

Cooper v. Texas Gulf Industries, Inc., 513

S.W.2d 200 (Tex. 1974) ........5-.

Crown Life Ins. Co. v. Estate of Gonzales,

820 S.W.2d 121 (Tex. 1991) ........

Dunn y. Dunn, 439 S.W.2d 830 (Tex. 1969) ..

Ferguson v. Ferguson, 338 S.W.2d 945 (Tex.

TPCT Ss thwas sb eee eesecess

Gani v. Gani, 495 S.W.2d 576 (Tex. 1973) ..

Grand Prairie Sch. D. v. Southern Parts, 813

Low Fe Re |) eee

Inpetco v. Texas American Bank/Houston N A.,

729 S.W.2d 300 (Tex. 1987) ........

McGhee v. Eply, 661 S.W.2d 924 (Tex. 1983)

Mueller v. Sararia, 35 Tex. Sup. Ct. J. 589,

589-90 (March 25, 1992) ........--

Ogden y. Gibraltar Sav. Ass'n, 643 S.W.2d 232

OE ee

Salvaggio v. Brazos Cty. Water Control, 598

S.W.2d 227 (Tex. 1990) .........--

a6.

Schwartz v. Jefferson, 520 S.W.2d 881 (Tex.

oo err ye See re ee eae Se 10

White Budd Van Ness Partnership v.

Major-Gladys Drive Joint Venture, 811

hoe Pay eerereo er ee er re eee re 13

MOTION FOR REHEARING

FEDERAL CASES

Armstrong v. Manzo, 380 U.S. 545 (1965) ........... 2, 14

Barbar v. Come, FG. Se CHRD ioc cc cee eeeseaseenss 7

Evias v. Cacey, 460 US. S60 (IFES) occ cece scccess 2, 14

Logan v. Zimmerman Brush te. 455 U.S. 422

COREE Saw eVisueas : code kewe ewes ns 4 aN ee es 14

McKane v. Durston, 153 U.S. 684 (1894) .............4. 14

Williams v. Oklahoma City, 395 U.S. 458 (1969) ......... 14

TEXAS SUPREME COURT CASES

Abbott Laboratories v. Gravis, 470 S.W.2d 639

Cok CE se oars 3 Cac a wks wale el ees ORE Oa 9

Brown v. Goldstein, 685 S.W.2d 640 (Tex. 1985) ......... 16

Citizens State Bank v. Caney Investments, 746

es CO SE wh oes Ses voce dee ceess 7

«>.

Davenport v. Garcia (D-1558) 6-17-92 Tx S Ct.

Ferguson v. Ferguson, 338 S.W.2d 945 (Tex.

are a a eee ee

Gentry v. Credit Plan Corporation of Houston,

Tae GS. Wa STt COUR. TPIS) nc ace sas

LeCroy v. Hanlon, 713 S.W.2d 335 (Tex. 1986) .

Matthews Const. Co., Inc. v. Rosen, 796

S.W.iae Gea Chen. TSR) wc ccc cet

Nelson v. Krusen, 678 S.W.2d 918 (Tex. 1984) .

Secrest v. Secrest, 649 S.W.2d 610 (Tex. 1983) .

Transamerica Natural Gas v. Powell, 811 S.W.2d

DT COEGE nak ak candies oa reess

APPENDIX I

Houston Chronicle

Sunday, Sept. 13, 1992

Texas justice for sale? Judge it yourself.

By Clay Robison

Austin — The business, medical and insurance communities

screamed bloody murder in the 1980s when trial lawyers shelled

out millions of dollars in campaign contributions to pro-plaintiff

candidates and purchased a Texas Supreme Court that seldom saw

a damage suit it didn’t like.

“Outrageous” was one of the milder terms sputtered by the old-

line establishment after it realized that it had been outmaneuvered

by a bunch of brash, greedy, political upstarts.

Gone were the days when the major, defense-oriented law firms

that had the establishment on retainer could, by and large, depend

on conservative legal interpretations from judges with whom they

could feel comfortable.

Outrageous? Of course.

The controversy even produced some national embarrassment

for the Texas judiciary in a segment on CBS-TV's 60 Minutes

program, not unfairly entitled, “Is Justice for Sale?”

But did it produce meaningful campaign finance reform from

the Texas Legislature? Unfortunately, no.

The pendulum on the high court has since largely swung back

the other way, but less from a sense of real reform than from a

compounding of the problem.

Doctors and business-oriented special interests ins deeper into

their own pockets and — in key, high-dollar elections in 1988 and

1990 — bought their own justices to replace activist members of

the high court.

I don’t use the words “purchased” and “bought” in the sense

that the trial lawyers or the business community backed specific

judicial candidates who had overtly promised to rule a certain way

on pending or aiticipated cases.

eee dD

.. e

I use them in the sense that each side dumped tons of money

into the campaigns of judges and candidates whom backers believe

or hoped would support their philosophical viewpoints on the

bench.

The practice is clearly unhealthy because a fair system of

justice demands not only a judiciary that is independent but also a

judiciary that promotes public confidence in its independence and

integrity, and both those requirements are jeopardized by a virtually

unrestricted campaign finance system.

The problem is an old one and has been discussed and studied

at length. Now, it is being studied again by the new Texas Ethics

Commission, which was instructed by the Legislature to look into

the problem of financing political campaigns generally and judicial

campaigns in particular. _

Special interest campaign financing is a problem in all

Statewide races and many local races as well, but most critics view

the potential tainting of judges with particular alarm because they

believe the interpreters of the law should be more independent than

most other public officials, including those who write the law.

The issue is more than just campaign finance. It also involves

the way Texas selects its judges. And most of the concern is

focused on the Texas Supreme Court, whose members are unknown

to most Texans but, as the state’s court of last resort in civil cases,

has tremendous power over our system of justice.

As long as members of the Supreme Court have to seek

election statewide against opponents who, like themselves are

unknown to most voters, campaign contributions will continue to

be crucial to their success.

“Texas is a big state, and there is not way to communicate that

is cheap,” Chief Justice Tom Phillips told the Ethics Commission

last week.

Even after voluntarily limiting individual contributions to his

campaign to $5,000, Phillips still managed to raise and spend a

record $2.5 million in a hotly contested race against a trial lawyer-

backed opponent two years ago. And those costs promise to

continue to escalate.

Changing to a system of appointed judges, creating a non-

partisan ballot for judges, shortening the campaign season with a

ee

later primary or imposing a system of taxpayer financing of judicial

races all have been discussed as potential solutions.

But the Legislature has consistently refused to change the

judicial selection process and isn’t likely to unless ordered by the

federal courts, and lawmakers aren’t likely to approve public

financing of judicial campaigns in the midst of state government’s

continuing financial problems.

Some experts think the federal courts will eventually order

major changes in the way Texas selects its judges. But, for now,

the most reasonable solution is the imposition of strong limits on

the amount of money that judges and judicial candidates — and all

other political candidates, for that matter — can raise.

Robinson is chief of the Chronicle’s Austin Bureau.

=

APPENDIX J

The Houston Post

Wednesday, September 2, 1992

Law firms top donors to justices

Trial layers urge reform of campaign law

By Mary Lenz

Post Austin Bureau

AUSTIN — Justice may not be for sale in Texas, but it’s

costing trial lawyers more than they want to pay.

Law firms in 1991 and 1992 contributed three times as much

to both Democratic and Republican candidates to the Texas

Supreme Court as doctors, political action committees or business-

es.

Special interest groups so far have made 79 percent of all

contributions to candidates seeking Supreme Court seats, according

to a study released Tuesday.

Austin trial lawyer David Bragg said a group of trial lawyers

commissioned the $50,000 analysis of more than 47,500 campaign

contributions.

They wanted to document the amount spent on successful high

court candidates by banks, insurance companies and other big

businesses since 1988.

Bragg said consumer groups “are having fewer favorable

decisions out of the court today than we have had in the last

decade.

Asked if that means trial lawyers aren’t getting their money's

worth for their campaign contributions, Bragg said: “That’s one

way to look at it.”

In 1991-1992, lawyers contributed nearly $1 million to

Republican Supreme Court nominees and $877,000 to Democratic

candidates. PACs followed, donating $323,000 to Republicans and

$135,000 to Democrats. Doctors and other medical professionals

trailed with $152,000 to Republicans and $8,710 to Democrats.

, a

= 2

State law sets no limits on campaign contributions to candidates

for nine Supreme Court posts. They serve staggered, six-year terms.

Doctors, lawyers, bankers, insurance companies, as well as

businesses and various PACs ponied up 87 percent of the $11

million spent by winning Supreme Court candidates in 1988 and

1990.

In 1991-1992, Texas’ top 25 defense law firms poured

$442,821 into the campaign chests of Supreme Court candidates,

with their opponents in plaintiff law firms throwing in $317,623.

Tracing law firm contributions is complicated by the practice

of “bundling,” or having a firm’s employees make smaller

contributions individually. Bragg said forcing law firms to report

the total of their contributions would be a step toward reform.

Activists at the news conference to release the study differed

on solutions, though they unanimously oppose giving the governor

power to name Supreme Court justices.

Bragg called for public financing for Supreme Court races, and

Tom Smith of Public Citizen suggested banning private contribu-

tions and financing the elections by adding $10 to the cost of filing

each lawsuit.

tS.

APPENDIX K

Houston Chronicle

Sunday, Dec. 6, 1992

Selecting our judges — are single-member districts the answer?

Other reforms would serve Texas’ legal system better

By Judge Michael T. McSpadden

McSpadden is judge in the 209th State District Court here.

The November defeat of state District Judge John Kyles here

has renewed calls for single-member judicial districts to ensure

politically correct numbers of minorities on the bench. Although

this may sound like a valid objective, it would effectively sacrifice

whatever is left of the independence of the judiciary.

Not surprisingly, we have heard once again the baseless cries

of racism simply because Judge Kyles is African-American. |

submit there were other more compelling reasons for his defeat.

For the past 10 years we have witnessed at the courthouse

many of the most qualified judicial candidates lose because of

partisan politics, with the uninformed straight-party lever pull on

both sides dictating race after race at the bottom of the ballot. I

have had many friends like Judge Kyles who have lost because of

partisan politics, name identification and other factors which in no

way relate to judicial qualifications and competence.

For the past several elections, I have sent a letter to all my

fellow judges urging them not to “group together” with other

judges of the same political party in promoting a straight-party

vote. To me, judges who engage in this become nothing more than

two-bit politicians at best. I also ask them not to accept any

contributions from attorneys who work in their courts because of

the automatic appearance of impropriety.

During the campaign season, Judge Kyles appeared on a

television show and urged a Clinton/Gore vote, upsetting many

voters who have every right to expect their judges to be above

partisan politics. After seemg the interview, I called Kyles as a

KO.

friend and told him that his political statements were inappropriate

by a judge and suggested that he make sure that portion of the

interview be deleted if shown again. He offered the excuse that it

was his understanding when he filmed the interview that the

Statement would be edited.

It has been reported that Kyles spent $150,000 on his cam-

paign, with the vast majority of contributions coming from lawyers.

I think the voters would have been more impressed had he not

accepted any contributions from attorneys in the criminal law area

and made that a campaign reform issue. His opponent also just

happened to be a woman during the “Year of the Woman.”

More importantly, Kyles was a political appointee of Gov. Ann

Richards, which would certainly be a huge liability with all the

publicity over the widely publicized Lena Guerrero qualifications

controversy. Many of Richards’ judicial appointments were

defeated across the state for this same reason.

These are, no doubt, considered insignificant details by Judge

Al Green of the local chapter of the National Association for the

Advancement of Colored People and by columnist Lori Rodriguez

of the Chronicle. To them, the call of racism is the automatic and

unqualified response. This unsupported response will always

provide Judge Green with media coverage at his press conferences

and will provide Rodriguez with more interest in her column. And

it will also further polarize an already segmented community.

Our whole legal system is based on the public’s faith that

difference between parties are settled in a court of law and not on

the streets. Whether it is a civil dispute, a child custody hearing,

the probate of a will or a criminal charge, every person entering a

courtroom door should have complete assurance that he or she will

be treated fairly by our judicial system. Right now in Texas we

have some serious problems in justifying this public trust. The 60

Minutes program on Justice For Sale 2nd the recent HBO docu-

mentary on our family law courts have focused on these problems

causing the Texas judicial system to be held with little respect by

the rest of the nation. And, unfortunately, there are valid reasons

for this.

We have perpetuated a system where we place our judges in

the political arena every four years for our trial courts and every

six years for our appellate courts. Because of our partisan election

7

. K-3 -

of judges, we see almost all of our jurists wholly dependent upon

the attorneys who practice before their courts for campaign

expenses and upon the respective political parties as a base of

support. With many of our judges, loyalty to the political party

overshadows any semblance of loyalty to the judiciary. This is not

the independence of the judiciary our forefathers envisioned when

they created this separate branch of government.

In order to restore integrity in our system, our lawmakers must

make decisions concerning judicial selection and judicial campaign

contributions based upon the public’s need rather than political

party considerations.

Either a non-partisan countywide election or a non-partisan

appointed/merit election of our judges would be the better method

of reducing politics in the judiciary and also placing the most

qualified candidates on the bench.

Not long ago, U.S. Supreme Court Justice Sandra Day

O’Connor was the featured speaker at a local dinner. I was able to

ask her about her thoughts on judicial selection. She stated the her

home state of Arizona had changed from partisan selection to an

appointed/merit election and that the quality of the judiciary had

improved 100 percent. Justice O’Connor said that this change also

solved the need for campaign contributions from the attomeys.

Single-member judicial districts would put a premium on

quotas and politics and would, in effect, diminish what should be

the most important consideration — the independence and compe-

tence of our judiciary. Reducing our judges to be representatives of

a particular district would place a political albatross over the

judiciary forever.

Further, a plan involving single-member districts would be

retreating to a concept of segregation of our community based upon

race, a thought which should be abhorrent to us all.

A contribution cap of $200 from any attorney who works in

that area of law would go far in removing the obvious appearance

of impropriety that automatically exists whenever a judge receives

a large amount of money from attorneys who practice before the

bench. If only our legislators would make these two essential

changes, they would create a more efficient and equitable system

both for us and future generations.

<n.

But this is probably not going to happen since it would cal!

upon our lawmakers to find the courage to take a non-partisan

stand for the benefit of those they represent. And the words

“courage” and “lawmakers” have never been synonymous in the

history of our state.

ce

APPENDIX L

B. ANSWER TO ACTIONS OF TRIAL COURT

(from Petitioners’ Application for Writ of Error)

The ruling of the Texas Supreme Court is clear as to jury

issues. The judge may refuse to submit an issue only if no evidence

exists to warrant its submission. Refusal to submit the jury issue

was reversible error. Brown v. Goldstein, 685 S.W.2d 640, 41, 42,

43 (Tex. 1985).

The District Court refused to submit a Special Issue to the jury

on the breach of good faith and fair dealing, breach of contract,

mental anguish, and forgery relying on its erroneous partial

summary judgment. The evidence of all refused jury issues is

clearly set out on p. 15 of Appellants’ Opening Brief.

Forgery of Deed of Trust was charged in hearing on June 27,

1988. (SF testimony of Dale Everett at hearing to remove receiver,

June 27, 1988 p. 125-27). L. Rand Dennis stated that numerous

loan-security documents, relied on by TCB, were forged. The Bank

brought forth an “expert” who testified there was no forgery.

Schwager was not allowed to produce rebuttal expert testimony

proving that the documents were, in fact, forgeries. The District

Court refused to submit Plaintiffs’ special issue on forgery. (Tr.

1191-1212). This refusal hopelessly prejudiced Appellants. The jury

could draw but one conclusion from the District Court's failure.

When Schwager testified about the forgeries, conspiracy, etc., he

was lying.

Likewise, although conspiracy was discussed throughout the

trial, the charge was silent on the issue and did not present

Plaintiffs’ theory of the case. The refusal of all of these submitted

issues was gross error which, in effect, prevented Petitioners from

presenting their theory of the case. To the extent that TCB allowed

or admitted evidence and testimony bearing upon the breach of

duty of good faith and fair dealing and forgery, TCB waived any

= 2

right to rely on the previous partial summary judgment entered in

its favor-—even if such judgment was correct.

The District Court erroneously granted a directed verdict on

Appellants’ claim against TCB for wrongful acceleration and

forgery. (SF November 22, 1989 pp. 130-131).

Both notice of default, intent to accelerate and notice of accel-

eration are required unless waived. Failure to provide any of the

notices is fatal to any subsequent acceleration and foreclosure.

Ogden v. Gibraltar Sav. Ass'n, 640 S.W.2d 232 (Sup. Ct. of Tex.,

1982) at p. 234. Citing Alan Sales & Serv. Center, Inc. v. Ryan,

525 S.W.2d 863 (Sup.Ct. of Tex., 1975) at pp. 865-866. TCB gave

no—

“Clear, positive, and unequivocal declaration in some

manner ... of its intent to accelerate the note if default

were not cured within reasonable time before it lowered the

boom.” Crow v. Heath, 516 S.W.2d 225 at p. 229.

Shumwaye Tux v. Horizon Credit Corporation, C-8669 (Tex. 1991).

Additionally, it is undisputed that TCB delayed over two

months after the purported default of January 19, 1987, from taking

any collection action and purportedly “negotiated” with the Appel-

lants and the Limited Partners concerning restructuring of the note

and/or cure. The TCB’s long delay constituted conduct of negotia-

tion which prevented TCB from declaring an immediate accelera-

tion. Alaska State Bank v. Fairco, 674 P.2d 288 (Alaska, 1983).

After these months of delay, TCB was required to provide notice

of default and a reasonable opportunity to cure before declaring any

acceleration. TCB failed to do this consequently the acceleration

was illegal. The promissory note utilized by TCB required notice

of default and a ten-day opportunity to cure. (Tr. 1125-26). The

provisions for notice of default and notice of acceleration must be

complied with for non-monetary as well as monetary defaults.

Covington v. Burke, 413 S.W.2d 158 (Ct. of Civ. App., Eastland,

1967) at p. 160. See also Jernigan v. O’ Brien, 303 S.W.2d 515 (Ct.

of Civ. App., Austin, 1957) at p. 517. The record is devoid of any

_

evidence that TCB demanded payment of past due installments

and/or a cure of any non-monetary defaults, within a reasonable

time, prior to its purported acceleration.

The Trial Court “gutted” the Schwagers’ case against TCB at

the close of the Schwagers’ case. Despite clear wording in the

contract to the contrary, the Court excused TCB’s failure to provide

notice and granted directed verdict on the Schwagers’ claims of

breach of contract and wrongful acceleration. (SF Vol. 11-21-89 p.

246, LL 1-25; p. 247, LL 1-25; p. 248, LL 1-25). The Trial Court

erroneously ruled that actual notice of the default excused TCB’s

compliance with the notes’ notice provisions. ((SF Vol. 11-21-89

p. 253, LL 2-11) and the laws of Texas).

The District Court should have submitted an Issue to the jury,

as requested by Appellants, on wrongful acceleration, forgery,

breach of the duty of good faith and fair dealing, breach of contract

and mental anguish. This failure to do so mandates reversal.

Furthermore, the District Court erred in granting a directed verdict

in favor of TCB, on Schwagers’ claims for wrongful acceleration

and forgery.

The Schwager Parties did not voluntarily withdraw their

affirmative counterclaim for conspiracy. They also retained the

right to use fraud and forgery with other claims. Tr. 888-894.

Appellants claimed the affirmative defense of forgery in their

answer (Tr. 976). Thus, the live pleadings for trial contain forgery

as a Claim against TCB as well as the conspiracy against TCB and

the Limiteds. (Tr. 907).

TCB’s summary judgment, if in fact there was one, was only

a partial summary judgment, which is interlocutory. The Court has

the right to set aside this judgment at any time. Allowing evidence

of all the counterclaims of Schwager Parties negated any effect of

the partial summary judgment and thus tried the case by consent.

City of Houston v. Socony Mobil Oil Co., 421 S.W.2d 427, 428,

430 (C.A. Texas—Houston [Ist Dist.] 1967). It is also noted that

the partial summary judgment did not eliminate claims made

against the Limiteds. Gainsville Oil & Gas v. Farm Credit Bank,

=

795 S.W.2d 826 (Tex. App.—Texarkana 1990). Limiteds did not

request a summary judgment.

The burden of proof is on the movant to establish his right to

a summary judgment. Non-movant lack of answer does not entitle

movant automatically to a summary judgment. Harley-Davidson

Motor Co. v. Young, 720 S.W. 211, 213, 214 (Tex. App.—Houston

[14th Dist.] 1986). Partial summary judgment is based on Ed

Stringer’s perjured testimony. When the credibility of the affidavit

is in question, a summary judgment is not proper. Soodeen v.

Rychel, 802 S.W.2d 361, 365 (Tex. App.—Houston [Ist Dist.]

1990).

In order for judgment to be valid, it must be signed or orally

pronounced in court with a record made of this announcement. The

docket sheet is not evidence of any judgment being rendered.

Miller v. Kendall, 804 S.W.2d 933, 943, 944 (Tex. App.—Houston

[Ist Dist.] 1990).

The right to discuss the Borrower Statement was reserved as

previously indicated. TCB’s attorney, Mr. Cheavens, was the one

who solicited the information on the forgery of the Borrowing

Statement (S.F. 752), not Mr. Schwartz. S.F. 1568-1569. Mr.

Cheavens did not make any objection to the forgery evidence, but

continued to extract 18 pages of testimony (S.F. 752-780) on the

forgery claims. TCB later called a handwriting expert to testify, and

Mr. Cheavens solicited another 28 pages of testimony on the

forgery issue. S.F. 1494-1522. Schwager Parties’ attorney, Mr.

Nixon, then cross-examined the handwriting expert for an addition-

al 18 pages of testimony on the forgery claim. Schwager Parties’

rebuttal handwriting expert was not allowed to testify. (S.F. 1695,

1696). A bill of exception was made. (S.F. 1697). Appellants do

not admit that the forgery claim was for rebuttal purposes only. As

previously stated, forgery was an affirmative defense properly pled.

A judge may refuse to submit an issue only if no evidence exists

to warrant its submission. Refusal to submit the jury issues on

forgery (Tr. 1191) was reversible error. Brown v. Goldstein, 685

S.W.2d 640, 641, 642, 643 (Tex. 1985).

ee &

The law on directed verdicts states that the “court must

consider all evidence in the light most favorable to the party

against whom the verdict was instructed, discarding all contrary

evidence and inferences.” Collova v. Navarro, 574 S.W.2d 65, 68

(Tex. 1978).

Forgery of the deed of trust was charged in the hearing on June

27, 1988 Hearing to Remove the Receiver 6/27/88, pp. 125, 127.

TCB never named an expert to testify about the forgery in any

document until trial. The judge committed reversible error in

allowing an unidentified expert to testify. The June 1988 hearing

was presided over by Judge Wittig, who certainly was aware of the

claim of forgery of the Deed of Trust.

TCB entered evidence of good faith early in the trial. There is

in excess of 50 S.F. references in Appellants’ Point of Error #7.

This was accomplished without any objections. Again, the Summa-

ry Judgment was interlocutory and thus was set aside when this

evidence was entered into the record. Hays v. Sullins, 442 S.W.2d

494, 496 (C.A. Texas—El Paso 1969); also Brown, supra.

Clearly, the issue of good faith and fair dealing is a fact issue

to be determined by the jury. Security Bank v. Dalton, 803 S.W.2d

443 (Tex. App.—Fort Worth 1991). As Appellees admit, the duty

of good faith and fair dealing can be contracted for. There was ar

imbalance of bargaining power between TCB and the Schwager

Parties.

The Guaranty Agreement clearly establishes the duty of good

faith as it is covered by the U.C.C. This was a document prepared

by TCB and was required by them as part of the loan. (PI. Exh.

18A, p. 2, 4 10). Also, the equipment, furniture, and fixtures were

covered under U.C.C. financing statement which also required a

duty of good faith and fair dealing. The TCB loan was not a “real

estate loan transaction,” but a business loan, the proceeds of which

were used to pay off an existing debt and provide working capital.

(Stephen Smith Testimony Hearing July 14, 1986, pp. 8-13). The

U.C.C. states the following: “U.C.C. 1-203 - Obligation of Good

Faith. Every contract or duty within this title imposes an obligation

EEE

eee eee

.. 2

of good faith in its performance or enforcement.” “Good faith -

means honesty in fact in the conduct or transaction.” Schmueser v.

Burkburnett Bank, 937 F.2d 1025, 1027, 1032 (Sth Cir. 1991).

Schwagers in their response to TCB’s Motion for Summary

Judgment, Tr. 888, ciearly and unequivocally claim that this second

acceleration was also wrongful. The harshness of the option of

accelerating the maturity of an extended obligation requires both a

strict reading of the terms of the option and notice to the debtor.

Brown v. Hewitt, 143 S.W.2d 223 (Tex. Civ. App.—Galveston

1940).

CONCLUSION

Schwagers seek appellate review of a substantial monetary

judgment entered against them in error. The court of appeals failed

to consider the judgment entered in Case #86-07376 as final. The

trial court did not have jurisdiction to consider Cases #86-07376

and #87-14551 and retry Case #86-07376 as a consolidated case.

This judgment should have been reversed and dismissed as set out

herein.

Suffering an erroneous adverse judgment and the denial of

appellate review, Schwagers respectfully request this Honorable

Court’s intervention so that justice may be done. Meaningful

appellate review should not be denied in this case.

Ironically, it was the Ist Court of Appeals in Texaco v.

Pennzoil, 729 S.W.2d 768, 815 (Tex. App.—Houston [Ist Dist.]

1987), that ruled “Having failed to brief points 7-8, Texaco has

waived any allegations of error, but in the interest of judicial

economy we will consider the argument.” Does the Ist Court of

Appeals practice a double standard?

PRAYER FOR RELIEF

Wherefore, Petitioners, “Schwagers,” request that this Applica-

tion for Writ of Error be granted and that the Supreme Court

reverse the judgment and dismiss the case for lack of jurisdiction.

Alternatively, Petitioners request that the judgment of the Court of

Fo

Civil Appeals be reversed and remanded to the Court of Civil

Appeals for consideration of the merits of the previously unreached

points of error. Alternatively, review the unreached points of error

for merit and remand the case to the district court for a new trial.

Petitioners respectfully request such other and further relief to

which they may be justly entitled.

Respectfully submitted,

T. Ransom Cornish

State Bar No. 04836100

3131 Eastside, Suite 330

Houston, Texas 77098

Telephone: (713) 528-1937

Fax: (713) 523-0547

ATTORNEY FOR PETITIONERS

- M-l -

APPENDIX M

ANSWER TO IST COURT OF APPEALS’

ORDER OF FEB. 24, 1992

APPENDIX III

(from Petitioners’ Application for Writ of Error)

The Appeals Court grouped points of error in its opinion of

Feb. 24, 1992. TCB in its Reply Brief filed 7/29/91 also grouped

points of error in violation of TRCP 74(c). The preceding has made

it extremely difficult to answer the Appeals Court order striking 42

of Petitioners’ 44 points of error.

The following shows that the Appeals Court erred when it

struck 42 of 44 points of error. (Opinion Feb. 24, 1992).

a. Point of Error #2 - The Petitioner did set out in the record

where the complaint was presented to the trial court and

received an adverse ruling. This was clearly shown in S.F. Ref.

178-186, p. 7, of Appellants’ Opening Brief where Judge

Wittig admitted this. The culmination of the res judicata issues

was alluded to at the very end of the trial when the trial judge,

Don Wittig, begged the appeals court’s indulgence for his error

and indicated he had looked at the entire record while wrestling

with the problem. (S.F. Vol. 10, pp. 1738, 1739). This refer-

ence was made on p. 9 of Appellants’ Opening Brief. The other

S.F. references in this point show other res judicata objections

and the ruling. Motion for New Trial (Tr. 1257 p. 3 also shows

objection for res judicata. This motion was denied by the trial

judge Tr. 1331. Point of Error #24. Judge Wittig also acknowl-

edged the issue of res judicata in S.F. Ref. Vol. 6, p. 1080, and

he overruled the objection on page 1090 (p. 7 Appellants’

Opening Brief). Appellants’ Response Brief point #2 is in

addition to these arguments (pp. 11-14). Res judicata objection

was made and denied. Appendix pages A2-1, A2-2.

b. Points of Error 5, 38, 43.

. aa

Point of Error #5 - Schwagers’ complaints were made in S.F.

reference on page 12, e.g., 11/20/1989, pp. 49-51. The refer-

ence also contained the adverse rulings. Also, objections were

contained in Petitioners’ Motion for New Trial Tr. 1257 pp. 23,

26, 31 and 36 which was denied Tr. 1331. See alsv Point of

Error #24.

Point of Error #38. - TRCP 324b and 329b require a Mbtion

for New Trial to preserve evidence and insufficiency of

evidence points of error. This was accomplished in Motion for

New Tnial p. 23 Tr. 1257 and denied in Crder dated 2/27/90

Tr. 1331.

Point of Error #43 - S.F. Ref. 11/12/89, pp. 107-109 shows the

submission and objection to the Parol Evidence. Response Brief

2/13/92 Response Points lists four authorities for Point of Error

43.

c. Point of Error #9 - there are in excess of three pages of fact

references in this point of error. TCB in the Reply Brief even

admits that an adverse ruling was made (vol. 11/22/91, pp.

129-131) in their Reply Brief of page 221. Also Motion for

New Tnial Tr. 1257, p. 31 which was denied. Tr. 1331.

d. Points of Error #18 and 19.

Point of Error #18 - It is incredible that the Appeals Court

Stated that there was no objection and adverse ruling on this

point. This point of error reference S.F. 11/21/89, pp. 3-52,

shows this information. This is the same complaint made by

TCB in its Reply Brief which was answered in Schwager’s

Response Brief Response Point #14, pp. 34-36. On page 3, line

13 (S.F. 11/21/89, pp. 3-52, Mr. Nixon, Schwager’s Attorney,

stated “I object to Zimmerman being called . . . .” Page 6, L.

17. Judge Wittig stated, “Okay, the Court overrules your

objection.”

Point of Error #19 - S.F. Ref. 694, 695 clearly shows when

Judge Wittig was not going to let Judge O’Brien testify based

on TRCE 605. These same objections were made by TCB and

answered in detail in Appellants’ Response Brief, pp. 36-38

Response Point #15. Also Point of Error #19 contains in excess

Ma.

of 40 pages of S.F. references that rebut Appeals Court claim

of waiver of this Point of Error.

Points of Error #21 and 24.

Point of Error #21 - Each reference made in point on bias

shows the objection to this bias and prejudice of the trial court.

The Appeals Court could not have expected Mr. Nixon to

complain about the judge’s conduct after the time of the trial

was set at the beginning when he admonished Mr. Nixon. S.F.

26 and 27.

Point of Error #24 - The Appeals Court makes the same

objection that TCB made in its Reply Brief. This was thor-

oughly answered in Appellants’ Response Brief Points # 16

and 17. This Court is requested to note p. 41 of the Response

Brief Point #17 in relation to the legal expert Alfred Zimmer-

man’s testimony at trial. It was Zimmerman’s law firm that

gave the argument against the Motion for New Trial. Response

Point #17 contains three authorities.

Point of Error #25 - this point of error contains S.F. references

and objections to the judgment issued in Case #87-14551.

Further. Response Points #19 and 20, Appellants’ Response

Brief show that objection was made to judgment and adverse

ruling made. Also, objections were made in Motion for New

Trial 1257, pp. 32-37 and denied by order (Tr. 1331). Also Tr.

1257 pp. 22, 23, 25, 26.

Point of Error #30 - The complaints about this point of error

are covered in Response Brief Point #24. Further, Mr. Schwa-

ger’s own attomey’s testimony was the basis for him being

held in contempt and being denied a jury trial on the excessive

$1,000 fine and 3 days in jail ruling by Judge Wittig. (Consti-

tutional right to a jury trial if fine exceeds $500.)

Point of Error #33. The objection and denial to the Point is

shown in Motion for New Trial Tr. 1257 p. 30 and the Denial

Tr. 1331 See also Point of Error #24.

Points of Error #35 and 44.

- M-4 -

Point of Error #35 - Objection and denial was made as required

by TRCP 324(b). Motion for a New Trial 1257 pp. 22, 23, 25,

26 Denial Tr. 1331. This is also shown on page 45 of Appel-

lants’ Brief. See also Point of Error #24 and Response Point

#26.

Point of Error #44 - Was to be read in conjunction with Points

of Error 25 and 35. Response Point #26 also contains answers

to complaints about Point of Error #44. Point of Error #44

contains the legal authorities for Point of Error #35.

j. Points of Error #36, 37, 38 and 39. These points of error were

not answered by TCB. These points of error are covered in Tr.

1257 Motion for New Trial, (pages 23, 24, 25 and 26), which

was denied. Tr. 1331. TRCP 324b was complied with. TRCP

329b was also complied with. See Point of Error #24.

k. Points of Error #40, 41 - These points of error were answered

by TCB as part of its answer to Appellants’ Point of Error #2.

Motion for New Trial 1257 - pp. 24, 35, 36 objected to these

jury issues. Order of 2/27/90 Tr. 1331 denied Motion for New

Trial. See also Point of Error #24.

1. Points of Error #3, 11 and 29. The authorities for these points

of error are contained in their respective Response Points.

Point of Error #3 - Response Point #3, pp. 15 and 10 contain

no less than six cases for Appellants’ Point of Error #3, starting

with Benson v. Wanda Petroleum Co., 468 S.W.2d 361, 362,

363 (Tex. 1971).

Point of Error #11 - Response Point #10, pp. 23 and 24 contain

no less than five cases for Appellants’ Point of Error #11,

Starting with Walker v. Sharpe, 807 S.W.2d 442, 446 (Tex.

App.—Corpus Christi 1991).

Point of Error #29 - Response Point #2, pp. 11, 12 & 13

contain no less than seven cases for Appellants’ Point of Error

#29, starting with Bonniweill v. Beech Aircraft Corp., 663

S.W.2d 816, 821 (Tex. 1984).

In addition the objection and adverse ruling shown under Point

of Error #2 S.F. Vol. 11/21/89, pp. 157-159.

- M-5 -

m. Point of Error #6 - the appeals court totally ignores the fact

that Appellants’ claim the Summary Judgment is invalid as it

was not signed. The Appeals Court’s justification striking this

point of error is wholly unfounded when entire point of error

is read. Also the Appeals Court again ignored Appellants’

Response Brief pp. 16, 17, 18. Response Point #4 which

further shows the invalidity of Appeals Court ruling.

n. Points of Error #12, 20 and 14.

Point of Error #12 - The evidence sought to be admitted, its

contents, and its refusal were not only shown in S.F. Ref. 226-

258, but also in S.F. reference Vol. Nov. 21, pp. 67-79 and

134-140. (Page 21 of Appellants’ Opening Brief). Page 22

again gives a list of the documents submitted and refused.

(Defendants’ Exh. 41, 42, 46, 54-66, 124). Appellants’ Re-

sponse Brief Response Point #11 conclusively removes any

question about Appellants’ Point of Error #12. It should be

noted that Judge Wittig denied the evidence after admitting his

vast knowledge of this case. $.F. 257, LL. 17-24.

Point of Error #20 - Point of Error #20 is to be read in

conjunction with Point of Error #12 as noted on page 29 of

Appellants’ Opening Brief. When combined, these two points

of error certainly discuss the substance of the excluded

evidence. However, Appellants’ Response Point #11, pp. 24-30

of the Response Brief gives the utmost detail on the contents

of this excluded document, starting with “The excluded

document would have proved fraud by trying to deprive Mr.

Schwager of his interest in the property and the collaterally

assigned Jow Note. Def. Exh. 124.” “The excluded documents

would have proved the conspiracy complained about by

Appellants and reversed the judgment of the jury.” The

preceding is found at the beginning of the Response Point #11

on page 24.

Point of Error #14 - S.F. Reference 133-139 on page 25 of

Appellants’ Opening Brief clearly sets out where the financial

information was submitted and refused. The document rejected

contained the financial information of Limiteds as stated in

Point of Error #14. Further, Response Point #11, pp. 24-30 of

- MS -

Appellants’ Response Brief filed 2/13/92 adds to the argument

for Point of Error #14.

Points of Error #23 and 42.

Point of Error #23 - The evidence that raised the conspiracy

issue was given to the jury. Appellants’ Point of Error #7 sets

out at least 100 references where evidence was introduced on

conspiracy. As noted in this point of error, it is to be read with

Point of Error #7.

Point of Error #42 - This point of error is also to be read with

Point of Error #7. Reading of Appellants’ Response Point #18,

pp. 41-43 of Appellants’ Response would fully eliminate the

objections being made by the Appeals Court. Note: TRAP 74

states in the first sentence that briefs shall be brief and TRAP

74(p) states that the briefing rules should be construed liberally.

Judge Cohen's interpretation of the requirements of 74(f)

makes it impossible to adhere to the requirements of TRAP 74

and 74(p). The record of the refused jury charge along with a

verbal statement of each conspiracy reference would take at

least 20 pages of the allotted 50 pages for the Appellants’ brief.

This is extremely unrealistic in a complex case as Judge Cohen

has stated this case was. In Henry S. Miller, a case that Judge

Cohen rendered decision, the Appellants had a 47-page brief.

Compare this case with Henry S. Miller:

Henry S. Miller (Schwager

Transcript 651 2,200

S.F. 823 4,500

Exhibits 600 pages 100’s of pages

Brief 47 pages 55

Refused jury Issue Unknown 20 pages

Note: “Schwager” was three cases in one as noted by Judge

Wittig and also included the '86 case, two summary judgment

and a mandamus in the case on appeal.

Based on the preceding, Judge Cohen’s ruling in Schwager

case on appeal is unbelievably unfair. How could Schwagers

ae

ms.

prepare an adequate brief on this complex case in 30 pages?

This case also included five law firms and eleven parties.

Points of Error #15 and 17 - These points are to be read in

conjunction with Point of Error #2. Appellants’ Opening Brief

(p. 26). Thus, authority for these points are contained in Point

of Error #2, also showing the interrelationship of these points.

Further, TCB in its Reply Brief answered Points of Error #15

and #17 with Reply Point #2. Appellants’ Response Brief

answered TCB’s Reply Point with Response Point #2, pp. 11-

14: there could not have been any question in the minds of the

Appeals Court if they had read the Appellants’ Response Brief

filed 2/13/92. This brief was filed prior to oral argument and

submission. Order striking Appellants’ 42 points of error was

faxed to Appellants on Feb. 24, 1992.

Point of Error #10. As noted by TCB in its Appellees’ Brief,

Point of Error #10 was replied to in Reply Points #2 and 9.

Thus, Appellants Response Brief Points #2 and 9 had to be

considered before Appeals Court struck this point of error. Jury

strikes are fundamental error and argument made in Response

Point # 9 clarifies questions on this point of error.

Points of Error #8 and 39.

Points of Error #2, 7, 8 and 39 are to be read together as

shown on pages 1, 17, 18, 49 of Appellants’ Opening Brief.

S.F. Ref. Vol. 6, 1008 at p. 7 shows that the Limited Partners

were in breach of the contract and had no right to sue Schwa-

gers. This objection was overruled. S.F. Vol. 6 1090 at page 7.

Court stated, “I will overrule the objection.” S.F. Reference

Nov. 21, 1989 pp. 243-255 at page 15 shows the objection and

adverse ruling on the wrongful acceleration and breach of

contract. Further, Appellants’ Response Brief Point also

clarifies this matter.

Point of Error #13 - Appellants’ request for a 100-page brief

was partly based on the appeal of the writ of mandamus (Feb.

1991). The ruling of the Appeals Court which complained

- M-8 -

about the lack of detailed briefing, while not allowing Appel-

lants the 100-page brief, is illogical and unfair.

However, the complaints made about Point of Error #13

are eliminated in Appellants’ Response Brief in Reply to

Appellees’ Brief. The pages in Appellants’ Response Brief are

30-33, Response Point #12.

Point of Error #16.

The evidence and objection to the evidence is shown in S.F.

Ref. Vol. 11/21/89 pp. 44-63. Page 62 shows the offer of the

evidence, and page 63 shows the adverse ruling. Further

clarification of Point of Error #16 is demonstrated in Appel-

lants’ Response Brief, pages 33 and 34 (Response Point #13).

Point of Error #26 - Any concerns about this point of error are

clarified by Appellants’ Response Brief Response Point #21,

pp. 46 and 47, and this point should be read in conjunction

with Respondents’ Point #2 as shown on page 47 of Appel-

lants’ Response Brief. The title of Point of Error demonstrates

what the evidence admitted was.

Points of Error #27 and 28.

Point of Error #27 - S.F. References in this point show the

evidence, the objection and adverse ruling. Vol. 6, pp. 1049,

1164-1169. However, in Appellants’ Response Brief, pages 47-

49 Response Point #22 a thorough discussion is made of Point

of Error #27 and the complaints made by TCB in their

Appellees’ Brief Reply Point #22.

Point of Error 28 - As shown in S.F. Ref. Vol. 7, pp. 1253-56,

Schwager was not allowed to justify closing the restaurant or

anything else. However, in Appellants Response Brief, pages

49-50, Response Point #23, discusses in detail Point of Error

#28 and TCB'’s objections made in its Appellees’ Brief Reply

Point #23. Authority is listed in Response Point #23 for Point

of Error #28 and it also contains the substance of the evidence

for this point of error.

. Points of Error #31, 32 and 34.

- M-9 -

Point of Error #31 - There was no rebuttal to Point of Error

#31 by Appellees (TCB). However, the Appeals Court struck

this point of error anyway. In Henry S. Miller, Judge Cohen

stated at 134 that the Court did not represent the Appellants, so

why here is he representing the Appellees?

Points of Error #32 and #34 - These points of error are

expounded upon in Appellants’ Response Brief, pages 52-55.

Response Point #25. This is in response to TCB’s Appellees’

Brief Reply Point #25.

A motion for a New Trial (Point of Error #24) is a

prerequisite to complain on appeal that evidence is factually

insufficient to support jury finding and that jury finding is

against overwhelming weight of evidence. TRCP 324(b) 2, 3.

This motion was denied on 2/27/90 (Tr. 1331).

Appellants complied with TRCP 329b’s filing requirements

for Motion for a New Trial. When Rule 324(b) requires a

motion for a new trial to preserve error, the complaining party

is required only to comply with the filing requirement in Rule

329b to preserve the point of error. Cecil v. Smith, 804 S.W.2d

509 (Tex. 1991).

- N-] -

APPENDIX N

BETTE SCHWAGER’S DETAILED ARGUMENT

(from Appellants’ Response Brief)

APPELLANTS’ RESPONSE POINT #3 TO APPELLEES’

REPLY POINT #3 TO APPELLANTS’ POINTS OF ERROR

#3 AND #25.

Bette Schwager has a constitutional right to plead and prove

her causes of action. Benson v. Wanda Petroleum Co., 468 S.W.2d

361, 362, 363 (Tex. 1971); Derbigny v. Bankone, 809 S.W.2d 292

(Tex. App.—Houston [14th Dist.] 1991).

Bette Schwager’s claims were for breach of good faith, breach

of contract, mental anguish, salary, punitive damages and attorney's

fees. Tr. 907-935.

TCB required Bette Schwager to sign a Homestead Affidavit,

thus having actual notice Bruce Schwager was married. (Tr. 929,

930, 931).

Community property subject to the joint management of both

spouses cannot be encumbered by one spouse acting without the

other’s consent. Williams v. Portland State Bank, 514 S$.W.2d 124

(Tex. Civ. App.—Beaumont 1974); Valone v. Miller, 663 S.W.2d

97, 99 (Tex. App.—Houston [14th Dist.] 1983). Thus, TCB was

required to have Bette Schwager sign pledge of Note. TCB cannot

now be heard to say it was entitled to her one half of the Jow Note.

The holding in Carlton v. Estate of Estes, 664 S.W.2d 322, 323

(Tex. 1983), clearly demonstrates that when the suit directly

concerns the community property, both spouses have the right to

represent themselves. One spouse does not have the right to

represent the other, as TCB claims.

- N-2 «

It is undisputed that this lawsuit was about the community

property “Jow Note,” among other things. Rights of the wife may

be affected only by suit in which she is called to answer. Cooper

v. Texas Gulf Industries, Inc., 513 S.W.2d 200, 202 (Tex. 1974).

There is no evidence that Bette Schwager put up her share of

community note as TCB suggests, nor did she default on any loan.

Appellees’ brief 16.

Carlton certainly does not suggest that Bette Schwager did not

have to be a party when the suit was about a piece of community

property.

The court erred in awarding the entirety of the Jow Note to the

Bank because one half of the Jow Note is Bette Schwager’s

community property. As she was not a party to the lawsuit in that

the Bank sought no affirmative relief from her, as none was pled

or proved, the judgment goes too far in awarding the entirety of the

Note to the Bank. There was also no basis for granting injunction

and equitable relief against Bette Schwager as no injunction,

equitable or affirmative relief was pled or proved by the Bank

against Bette Schwager. E.A. Nichols v. J.D. Wheeler, 304 S.W.2d

229, 230 (Tex. Civ. App.—Austin 1957).

The Jow Note interest of Bette Schwager was awarded to the

Bank without her permission or approval. Tr. 1234, 1236. No

service was made upon Bette Schwager by TCB. TRCP 124.

ts.

APPENDIX O

JUDGMENT CASE #87-14551

NO. 87-1455]

IN THE DISTRICT COURT OF

TEXAS COMMERCE

BANK, N.A.

VS.

§

§

§

§

s

B.B.M.M., LTD., a Texas §

Limited Partnership, § HARRIS COUNTY, TEXAS

HARVEY RESNICK, §

MALCOLM MARCOE, §

WILLIAM R. CRAMER, §

BRUCE SCHWAGER, §

FRED FALLAS, §

AND MEYER FALLAS’ §_— 125TH JUDICIAL DISTRICT

MODIFIED FINAL JUDGMENT

On the third day of November, 1989, came on to be heard the

trial in the above entitled and numbered cause; said cause being the

parent case into which Cause No. 86-07376, styled Bruce Schwager

and B.B.M.M., Ltd. vs. Harvey Resnick, et al, and Cause No. 87-

56638, styled City of Houston, et al, vs. B.B.M.M., Ltd., et al,

were consolidated. All parties appeared in person and by virtue of

their respective attorneys of record arid announced ready for trial.

Trial by jury having been previously demanded, a jury consisting

of twelve good and lawful jurors was duly empaneled and the case

proceeded to trial on the merits;

At the conclusion of the case-in-chief of B.B.M.M., Ltd., Bruce

Schwager, Bette Schwager, and B.M. Bayou Corporation, Texas

Commerce Bank, N.A. moved for an instructed verdict which was

granted as to the claims of B.B.M.M., Ltd. and Bruce Schwager

against Texas Commerce Bank, N.A. on their claim of wrongful

2s

acceleration and breach of contract. Other motions for instructed

verdict were made and denied.

At the conclusion of all evidence, the Court submitted the case

to the jury. The charge of the Court is incorporated herein by

reference. On November 27, 1989, the jury rendered its verdict by

answering the following jury questions as indicated hereunder:

10.

exemplary damages; in addition to such amount, Harvey

Resnick recover from Bruce Schwager the sum of $42,000.00

as reasonable and necessary attorneys fees; and

Bruce Schwager, Bette Schwager, B.B.M.M., Ltd. and B.M.

Bayou Corporation take nothing from either Texas Commerce

Bank, N.A. or Charles Best; and

Bruce Schwager, Bette Schwager, B.B.M.M., Ltd. and B.M.

Bayou Corporation take nothing from Meyer Fallas, Fred

Fallas, Malcolm Marcoe, William Cramer, or Harvey Resnick;

and

Harvey Resnick and William Cramer take nothing from either

Texas Commerce Bank, N.A. or Charles Best; and

. Bruce Schwager, Bette Schwager, and all of their attomeys,

agents and employees, are permanently enjoined from taking

any action, whether directly or indirectly, to collect any sum of

money due under the terms of that certain promissory note,

dated May 27, 1982, in the original principal amount of

$189,500.00, executed by Wai Han Jow, and made payable to

Space City Sizzler Corp.; and

. Bruce Schwager, Bette Schwager, and all of their attorneys,

agents and employees, are permanently enjoined from taking

any action, whether directly or indirectly, to collect any rent for

the use of the parking lot located at 110-112 Travis Street,

Houston, Texas; and

- O-3 -

13. The receivership established by this Court’s "Judgment" dated

October 14, 1986 is hereby dissolved. The receiver, Dale

y i

APPENDIX P

ADVERSE PARTY PLEADINGS

Limited Partners’ Trial Pleadings

Case #86-07376 July 11, 1988

14. In December of 1983, Schwager amended the Lease by

forfeiting the Limited Partnership’s right to collect rent from the

Corporation for the year 1985. Such amendment was without the

knowledge or consent of the Defendants. The Defendants asserted

that such conduct constituted a breach of the Partnership Agree-

ment and Schwager’s fiduciary duty thereunder.

15. In or about January of 1986, the General Partner amended

the Lease a second time under which the amount of rent to which

the Limited Partnership would be entitled from the Corporation in

1986 would be 3% of the gross receipts that exceed $8,000.00/

month rather than the guaranteed minimum monthly rent of

$10,500.00 as provided in the Lease. Such amendment was made

by Schwager without the knowledge or consent of the Defendants.

The Defendants assert that such conduct constituted a breach of the

Partnership Agreement and Schwager’s fiduciary duty thereunder.

16. The Defendants assert that Schwager has breached the

Partnership Agreement by (i) failing to safe keep and use all of the

Limited Partnership’s funds and assets for the purpose and benefit

of the Limited Partnership; and (ii) failing to keep a complete and

accurate set of books as required by paragraph 18(a) of the

Partnership Agreement.

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TCB Trial Pleadings Case #87-14551 Oct. 19, 1989

Page |

Bette Schwager has no standing to sue or recover in the capacity

in which she sues. Bette Schwager is not in privity of contract

with TCB on the 825,000 Note, nor the documents securing its

repayment.

Page 3

TCB Pleads the affirmative defense of res judicata and collateral

estoppel.

Limited Partners’ Trial Pleadings

Case #87-14551 Mar 31, 1980

Page |

Affirmative defense of res judicata, and/or collateral estoppel

Bette Schwager does not have standing to recover in the capacity

in which she has brought suit in this cause.

- QO] -

APPENDIX Q

VERIFICATION

STATE OF TEXAS §

mn

COUNTY OF HARRIS §

BEFORE ME, the undersigned authority, on this day personally

appeared Bruce B. Schwager, known to be the person whose name

is subscribed to the foregoing instrument as Petitioner who, after

being by me duly sworn, on his oath, did depose and testify that he

had read the foregoing instrument, that all of the facts alleged

therein are true and correct and within his own personal knowledge.

e ©

3 Lf,

Spec f 5 te tillage

Bruce B. samen

SUBSCRIBED AND SWORN TO on this the _/*_ day of

est 1993, to certify which witness my hand and

seal of office.

i

NOTARY PUBLIC IN AND FOR

THE STATE OF TEXAS

My commission expires: FSSSASSUSSS NSS Ge Aeeney,

S

a GL re ee CAROL S COX

wine wl 2 * % Natary Pybie State of Tera:

By \e “A - =. % ~ Jt TORQ ;

i Vy “AN es 9 de fé Ys 4

Te

APPENDIX R

ARGUMENT FOR FINALITY OF JUDGMENT IN

CASE #86-07376, 10/14/86

IN THE COURT OF APPEALS

FOR THE FIRST SUPREME JUDICIAL DISTRICT

HOUSTON, TEXAS

BRUCE B. SCHWAGER, §

ET AL. §

Appellants, §

§ CASE NO. 0)1-90-0270-CV

v. §

S

TEXAS COMMERCE BANK, §

ET AL. §

Appellees. §

MOTION FOR EN BANC REHEARING TO

RECONSIDER ORDER OF

MARCH 12, 1992 DENYING APPELLANTS’ APPEAL

(Oral Argument Requested)

Ref.: | Motion to Reconsider Order of Feb. 24, 1992 Striking 42

of Appellants’ 44 Points of Error, as if fully set out herein.

(Dated March 9, 1992)

TO THE HONORABLE JUSTICES OF SAID COURT OF

APPEALS:

Come now Bruce Schwager, B.B.M.M., Ltd., B.M. Bayou

Corporation and Bette Schwager, Appellants, by and through their

attorney of record, T. Ransom Cornish, and move this Court for the

entry of an order which vacates order of March 12, 1992, and

grants relief herein requested. In support of said motion, Appellants

would respectfully show unto the Court the following:

‘Re.

I.

POINT OF ERROR NO. 1

THIS JUDGMENT WAS ENTERED WITHOUT JURISDICTION

AND IS THEREFORE VOID.

Appellants reassert this point of error. The Court erred in

denying this point of error. The following is a response to page 6,

paragraph 2 of March 12, 1992 Order. This Court has erred by

ruling that the 1986 judgment is “intrinsically interlocutory”

because it appoints a receiver. This Court does not give any case

law to support its position but refers to Tex. Civ. Prac. & Rem.

Code Ann. § 51.014(1) (Vernon Supp. 1992). This statute does not

State that every order appointing a receiver is interlocutory, nor

does it even imply it. § 51.014 is to allow one to “appeal from an

interlocutory order which appoints a receiver.” The reason for

§ 51.014 was to allow for an appeal of an interlocutory order. An

interlocutory decree “is one made pending the case and before the

final hearing on the merits.” Magnolia Petroleum Co. v. Jackson,

80 S.W.2d 388, 389 (C.A. Tex. Texarkana 1934); also First Nat'l

Bank of Dallas v. Brown, 53 S.W.2d 604, 605 (Tex. 1932).

The 1986 Judgment was entered after a conventional trial on

the merits. (Motion to Reverse Judgment and Dismiss Case Sept.

12, 1991) Exh. “A.”

The following cases demonstrate that the appcintment of a

receiver after a conventional trial on the merits does not result in

an interlocutory order and does not affect the finality of the

judgment. Magnolia Petroleum Co. v. Jackson, 80 S.W.2d 388, 389

(C.A. Texarkana 1934); First Nat'l Bank of Dallas v. Brown, 53

S.W.2d 604, 605 (Tex. 1932); Dunn v. Dunn, 439 S.W.2d 831, 833

(Tex. 1969); Moody v. State, 520 $.W.2d 452, 456, 457 (C.A. Tex.

Austin 1975, RNRE); Citizen’s State Bank v. Caney Investments,

746 S.W.2d 477, 478 (Tex. 1988).

In addition, the following cases show that the finality of the

judgment is not affected by the fact that future proceedings are

expressly provided for in the face of the judgment to carry the

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judgment into full effect. Hargrove v. Insurance Inv. Corp., 176

S.W.2d 744, 746, 747 (Tex. 1944); Medical Administrators vy.

Koger Prop., 668 S.W.2d 719, 722 (Tex. App. 1 Dist. 1983);

Schwartz v. Jefferson, 520 S.W.2d 881 (Tex. 1975).

The trial court did not have jurisdiction to consolidate Case

#86-07376 and Case #87-14531 after judgment in Case #86-07376

which became final on Nov. 14, 1986. Citizens State Bank v. Caney

Investments, 746 S.W.2d 477, 478 (Tex. 1988); Grayson Cty.

Officials v. Dennard, 574 S.W.2d 179, 182 (C.A. Texas Eastland

1978).

For this Court to suggest that the receivership would be

perpetual if the court did not consolidate the two cases is errone-

ous. Surely, the court in Case #86-07376 could have terminated the

receivership.

Dissolving the receivership in Case #87-14551 was improper.

The receiver was appointed in Case #86-07376. A receiver was

never appointed in Case #87-14551.

The 1986 judgment was executed in Case #86-07376 by

visiting Judge Price on Mar. 4, 1988. This was done in the 1986

Case Number. (Tr. 639, 642). Judge Price was then the second

judge to recognize the finality of the 1986 Judgment.

The Court also suggests that because the Judgment does not say

final judgment, it is an interlocutory judgment. Thus, no matter

what the content of the judgment or the basis for its issuance would

be, as long as it says final judgment, it would be final. The heading

on the judgment does not determine whether a judgment is final or

interlocutory. It only shows the intention of the court. McClenna-

han vy. First Gibraltar Bank, 791 S.W.2d 607, 608, 610 (Tex.

App.—Dallas 1990); Winfield v. Daggett, 775 S.W.2d 431, 433,

434 (Tex. App.—Houston [Ist Dist.] 1989).

The Supreme Court also ruled that a judgment did not have to

say final in order to be a final judgment. The Court recognized as

_*

final a judgment that was headed “Amendment Judgment.” B & M

Machine Co. vy. Arionic Enterprises, 566 S.W.2d 901 (Tex. 1978).

The intention of Judge O’Brien in Case #86-07376 is shown on

the Docket Sheet (Tr. 1347) which states “10/14/86 “Final Judg-

ment Signed” (underlined for emphasis).

Judge O’Brien further stated the finality of the 1986 Judgment

on May 26, 1987 when he stated, “The 1986 lawsuit is over and

final.” (S.F. Hearing May 26, 1987, p. 34, lines 24, 25).

The Court further suggests that because the judgment did not

deny all relief not expressly granted, it automatically was an

interlocutory order. “Mother Hubbard” provision stating that “All

relief not expressly granted herein is denied” does not convert an

intrinsically partial summary judgment into a final appealable order,

and the converse is true that leaving out this statement does not

make a final judgment not final. Sakser v. Fitze, 708 S.W.2d 40,

41, 42 (Tex. App.—Dallas 1986).

The contents of the “Mother Hubbard” clause is only a

recommendation and is not a mandatory requirement for a judg-

ment to be considered final. Following a conventional trial on the

merits, a judgment is presumed final. Houston Health Clubs v.

First Court of Appeals, 722 S.W.2d 692, 693 (Tex. 1986).

The general rule of North East Indep. School Dist. v. Aldrige,

400 S.W.2d 893 (Tex. 1966), is that after a conventional trial on

the merits, judgment entered is presumed final. Walker v. Sharpe,

807 S.W.2d 442, 445, 446 (Tex. App.—Corpus Christi 1991).

A final judgment fully disposes of all issues and all parties in

the lawsuit.

However, a judgment which settles all the legal issues and

rights between the parties is final and appealable “though

further proceedings may be necessary in the execution of

it Or some incidental or dependent matter may still remain

1 inilabe:

Wn AD i RN Aaah Prt bE CN OSE RI Se MD i Nah MS le eth sid ecati ML'« ands

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Bia to EE ha eck iS TE Rp Rall hi

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to be settled.” Hargrove v. Insurance Investments Corp.,

[142 Tex. 111] 176 S.W.2d 744, 747 (Tex. 1944).

Reviere v. Spragins, 810 S§.W.2d 298, 300 (Tex. App.—Fort Worth

1991).

In determining whether a judgment is final “Texas Courts

have always given consideration to the nature of form and

effect of the judgment. In arriving at whether or not a

judgment is final the pleadings and evidence must also be

taken into consideration .. . .” Ferguson v. Ferguson, 16

Tex. 184, 338 S.W.2d 945, 946 (Tex. 1960).

Reviere, supra at 301 (emphasis added).

The receiver appointed in Case #86-07371 was done on the

court’s own motion to aid in execution of its judgment. (S.F.

Hearing May 26, 1987, pp. 35, 36).

The receiver’s only function was to operate as a real estate

agent and to sell the property. The receiver had nothing to do with

the operation of B.M. Bayou Corp. (restaurant) or the Limited

Partnership, B.B.M.M., Ltd. In fact, the receiver did not even have

a key to the premises at 110-112 Travis Street. (S.F. Hearing on

Emergency Motion for Supplemental Order Approving Sale by

Receiver May 20, 1988, vol. I, pp. 54-56).

It is mandatory that the Court review the pleadings and

evidence in determining the finality of the judgment. Ferguson v.

Ferguson, 338 S.W.2d 945, 947 (Tex. 1960). This obviously was

not accomplished by this Court as evidenced by the reasoning

behind its order of March 12, 1992. The issue of the 1986 lawsuit

was whether the court was going to uphold the B.B.M.M., Ltd.

Partnership Agreement and not dissolve the Partnership as request-

ed by the Limited Partners. This dissolution of the Partnership was

requested based on the wrongdoing of the General Partner, Bruce

B. Schwager. The wrongdoing complained of, among other things,

was a breach of fiduciary duty.

« ia

Not only was the Partnership not dissolved by the Judgment in

Case #86-07376, but the Limited Partners were ordered to pay

$14,000/mo. in capital contributions, or forfeit their interest.

Further, the 125th District Court Judge Michael O’Brien previously

ordered Mr. Schwager to continue to operate the restaurant under

its current conditions. (Rendition of Judgment Letter Aug. 8, 1986)

Exh. “A” in Motion to Reverse Judgment and Dismiss Case, Sept.

12, 1991).

The judgment in the 1986 case was ruled final as previously

indicated in this motion by Judge O’Brien and Judge Price. In

addition, Judge Wittig’s ruling concerning the date of Aug. I],

1986 also recognizes the fact that the 1986 Judgment was final.

TCB in its reply brief also recognized that the 1986 Judgment

was final. The Limited Partners’ attorney in the 1986 case, Joe

Cohen, also recognized that the 1986 Judgment was final. (Exh.

“B” page 2 Motion to Reverse Judgment and Dismiss Case Sept.

12, 1991). The files of the First Court of Appeals also demonstrate

that the 1986 Judgment was final when it stated that no appeal was

filed in the 1986 case.

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APPENDIX S

TEXAS ELECTION CODE

§ 251.003. Campaign Contributions

(a) It shall be lawful for an individual not acting in concert

with any other person to expend a sum in a campaign which shall

not in the aggregate exceed $100 per election for any lawful

purpose out of his own funds to aid or defeat any candidate or

measure, where the sum is not to be repaid to him. Such a sum

will not be reportable to any authority unless it constitutes a

contribution. If an individual not acting in concert with any person

wishes to expend more than $100 for any lawful purpose out of his

own funds to aid or defeat any candidate or candidates or measures,

he may do so either by making a contribution or by complying

with all of the provisions of this chapter as if he were a campaign

treasurer of a political committee.

(b) It shall be lawful for any individual to donate his own

personal services and personal traveling expenses to aid or defeat

any candidate or measure and such a donation shall not constitute

a contribution or expenditure, as defined in Section 251.001 only

so long as he either is not compensated or reimbursed for same.

(c) It shall be unlawful for any person to make any contribution

or expenditure in the name of another or on behalf of another

without revealing that fact in order that the proper disclosure may

be made.

(d) Except as expressly permitted by Subsections (a), (b), and

(e) of this Section it shall be unlawful for any person, other than a

candidate, his campaign treasurer, or assistant campaign treasurer,

or the campaign treasurer of a political committee, to make or

authorize any campaign expenditure. Except as provided in

Subsections (a), (b), and (e) of this Section, campaign expenditures

must be made by the candidate, campaign treasurer, or assistant

treasurer, or the campaign treasurer of a political committee.

1

(e)(1) It shall be lawful for a corporation or a labor organiza-

tion to expend its own funds for the purpose of aiding or defeating

a measure by making a contribution to a political committee that

supports or opposes measures exclusively.

(2) It shall be lawful for a corporation or labor organization,

nct acting in concert with any other person, to make direct

expenditures from its own funds for the purpose of aiding or

defeating a measure by complying with this Section as if the

corporation or labor organization were an individual.

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ks

APPENDIX T

ARGUMENTS FOR PROOF OF

CONSPIRACY AND PERJURY

A- Letter from Attorney Robert Axelrad to Bruce LaBoon

TCB - August 27, 1987 Page 3- Paragraph 4

The limited partners have recently offered to form another entity,

whereby they would present to the Receiver an offer to purchase the

downtown property for the sum of $745,000.00, consisting of

$320,000.00 cash and a note for $425,000.00, payable monthly,

amortized over 10 years, but with a five year balloon. The note

would bear interest at floating prime, and would be personally

guaranteed by each of the limited partners. If approved by the

Courts, the Bank would release these guarantors from liability on

the $825,000.00 note and proceed to judgment against Schwager

for the deficiency. Whether such a deficiency could be satisfied by

the collaterally assigned note is under consideration.

B- Appellants Opening Brief - March 18,1991 Page 25

Both the limited partners and TCB had previously denied any

discussions of meetings for the purpose of allowing the bank to

restructure the loan so as to cut off Schwager's interest in the

Partnership and, thereafter, sell the land back to the Limited

Partners after applying Schwager's Jow note (the sole family asset)

on TCB's previous indebtedness. Schwager's counsel offered a

letter which clearly impeached these denials. (Plaintiff's Exhibit

124). Schwager was a third party to the settlement proposal

outlined in the letter; therefore, the so-called settlement rule did not

apply.

So

C - Appellant's Response Brief - February 13, 1992

Pages 24, 25, 26, 28 and 29

The exciuded documents would have proved the perjury of Edward

Stringer, Charles Best and Limiteds. Hearing May 23, 1988, pp.

267-68, 353, S.F. 225, 292, Documents Def. Exh. 415, 48-66

(App. Br. p. 22, € 1). Attomey-client privilege was waived when

the contents of this letter were discussed with Mr. Stringer at the

hearing 5/23/89 pp. 267-68, 353, when he and Mr. Fallas denied

any knowledge about this type of arrangement and thus committed

perjury. If judge Wittig had reviewed this document, he knew or

should have known it proved among other things the perjury of Mr.

Stnnger and Mr. Fallas at the May 23, 1988 Hearings.

As previously shown, the Stringer memo dated 8/7/87 was the basis

for the Axelrad Letter 8/27/87. This memo as well as the adverse

loan documents proved the common scheme and perjury of Ed.

Stringer and Charles Best and the Limiteds. See S.F. 230-236,

244-245, 246-258; 11/21/89, pp. 76-79, 133-139. Def. Exh. 57

shows in the action and timetable portion (p. 3), the same deal to

defraud Schwager Parties as the Axelrad Letter (Def. Exh. 124)

and Stringer memo (Def. Exh. 55). The absolute proof of the

scheme is shown in Def. Exh. 59 action and timetable portion (p. 3)

when they change the deal to eliminate the Limiteds obtaining

property and eliminate the note to the Limiteds for $425,000.00.

The reason for this change was Mr. Schwager's receiving the

Axelrad letter (Def. Exh. 124) on Sept. 4, 1987. (S.F. 11/21/89, p

73).

ts.

APPENDIX U

CONSTITUTIONS AND STATUTES

United States Constitution

Amendment 5

No person shall be held to answer for a capital, or otherwise

infamous crime, unless on a presentment or indictment of a Grand

Jury, except in cases arising in the land or naval forces, or in the

Militia, when in actual service in time of War or public danger; nor

shall any person be subject for the same offence to be twice put in

jeopardy of life or limb; nor shall be compelled in any criminal

case to be a witness against himself, nor be deprived of life, liberty

or property, without due process of law; nor shall private property

be taken for public use, without just compensation.

Amendment 14

Section 1. All persons born or naturalized in the United States,

and subject to the jurisdiction thereof, are citizens of the United

States and of the State wherein they reside. No State shall make or

enforce any law which shall abridge the privileges or immunities

of citizens of the United States; nor shall any State deprive any

person of life, liberty, or property, without due process of law; nor

deny to any person within its jurisdiction the equal protection of

the laws.

Texas Constitution

Art. 1, § 3. Equal rights

Sec. 3. All free men, when they form a social compact, have

equal rights, and no man, or set of men, is entitled to exclusive

ie...

separate public emoluments, or privileges, but in consideration of

public services.

Art. 1, § 13. Excessive bail or fines; cruel and unusual

punishment; remedy by due course of law

Sec. 13. Excessive bail shall not be required, nor excessive

fines imposed, nor cruel or unusual punishment inflicted. All

courts shall be open, and every person for an injury done him, in

his lands, goods, person or reputation, shall have remedy by due

course of law.

Art. 1, § 14. Double jeopardy

Sec. 14. No person, for the same offense, shall be twice put in

jeopardy of life or liberty, nor shall a person be again put upon

trial for the same offense, after a verdict of not guilty in a court of

competent jurisdiction.

Art. 1, § 19. Deprivation of life, liberty, etc.; due course of law

Sec. 19. No citizen of this State shall be deprived of life,

liberty, property, privileges or immunities, or in any manner

disfranchised, except by the due course of law of the land.

Art. 5, § 8. Jurisdiction of District Court

Sec. 8. District Court jurisdiction consists of exclusive,

appellate, and original jurisdiction of all actions, proceedings, and

remedies, except in cases where exclusive, appellate, or original

jurisdiction may be conferred by this Constitution or other law on

some other court, tribunal, or administrative body. District Court

judges shall have the power to issue writs necessary to enforce

their jurisdiction.

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The District Court shall have appellate jurisdiction and general

supervisory control over the County Commissioners Court, with

such exceptions and under such regulations as may be prescribed

by law.

§ 51.014. Appeal From Interlocutory Order

A person may appeal from an interlocutory order of a district

court, county court at law, or county court that:

(1) appoints a receiver or trustee;

(2) overrules a motion to vacate an order that appoints a

receiver or trustee;

(3) certifies or refuses to certify a class in a suit brought

under Rule 42 of the Texas Rules of Civil Procedure;

(4) grants or refuses a temporary injunction or grants or

overrules a motion to dissolve a temporary injunction as

provided by Chapter 65; or

(5) denies a motion for summary judgment that is based on

an assertion of immunity by an individual who its in an officer

or employee of the state or a political subdivision of the state.

ee

APPENDIX V

ORDER STRIKING 42 OF 44 POINTS OF ERROR

In The

Court of Appeals

For The

First District of Texas

NO. 01-90-00270-CV

BRUCE B. SCHWAGER, BETTE SCHWAGER, B.B.M.M.,

LTD., AND B.M. BAYOU

CORPORATION, Appellants

V.

TEXAS COMMERCE BANK, N.A., CHARLES BEST,

FRED FALLAS, MEYER FALLAS, MALCOLM MARCOE,

HARVEY RESNICK AND WILLIAM CRAMER

Appellees

On Appeal from the 125th District Court

Harris County, Texas

Trial Court Cause No. 87-1455]

ORDER

Based on a jury verdict, the trial court granted judgment fc

Texas Commerce Bank (TCB), in its suit on a note again:

appellants, Bruce Schwager (Schwager) and B.B.M.M., Ltd., an

against appellees, Fred Fallas, Meyer Fallas, Malcolm Marco

OE,

nt for

gainst

., and

arcoe,

— .

Harvey Resnick and William Cramer (the limited partners), and on

its cause of action against Schwager for conversion. The judgment

also awarded the limited partners damages on their cross-claims

against Schwager for breach of contract and breach of fiduciary

duty. The judgment ordered that appellants,'' take nothing on

their counterclaims against TCB and on their cross-claims against

the limited partners. Schwager has appealed from this judgment.

This is a complex case involving multiple parties and multiple

claims. The record consists of 10 volumes of transcript totalling

approximately 2,200 pages, 34 volumes of statement of facts

totalling approximately 4,500 pages, and 14 volumes of exhibits

totalling hundreds of pages.

On January 28, 1991, Schwager filed a 99-page brief and a

motion to file a brief in excess of 50 pages. On February 14,

1991, we denied the motion and ordered him to file a 50-page

brief. TEX. R. App. P. 74(h). On March 14, 1991, we allowed

Schwager to file a 60-page brief. On May 16, 1991, we struck

Schwager’s second brief due to inadequate citations to the record,

and ordered him to rebrief. On June 17, 1991, Schwager filed his

third brief containing 44 points of error. On July 12, 1991, one of

the appellees moved to strike Schwager’s third brief due to, among

other things, inadequate citations to the record. We denied this

motion on August 8, 1991.

We now rule that all the points of error raised in Schwager’s

third brief, except points one and four, are deemed waived for

Schwager’s failure to comply with TEX. R. App. P. 74, despite

having had three opportunities to do so. See Jnpetco v. Texas Am.

Bank, 729 S.W.2d 300 (Tex. 1987); Henry S. Miller Management

Corp. v. Houston State Assoc., 792 S.W.2d 128, 133-35 (Tex.

App.--Houston [Ist Dist.] 1990, writ denied) (op. on reh’g), TEX.

R. App. P. 83. Therefore, we strike all the points of error in

"Except where otherwise indicated, the appellants will be

collectively referred to as Schwager.

~S.

Schwager’s third brief, except points one and four, and order that

part of Schwager’s appeal be dismissed.

Schwager’s second point of error asserts the limited partners’

claims against Schwager are barred by res judicata, collateral

estoppel, “and/or” issue preclusion. Schwager’s fifth point of error

asserts the limited partners’ claims were barred by the doctrine of

compulsory counterclaim. Schwager’s eighth point of error asserts

TCB had no standing to file suit for collection of the entire balance

on the note, and the limited partners had no standing to sue for

breach of contract. Schwager’s tenth point of error asserts the trial

court erred in allowing the limited partners and TCB, collectively,

more jury strikes than those allowed Schwager and in allowing

multiple and repetitive cross-examination of Schwager. Schwager’s

twenty-first point of error asserts the trial court “held impermissible

bias and prejudice against [Schwager],” therefore, Schwager was

deprived of a fair trial and the trial court should have recused itself

under “rule 18b(2)." Schwager’s thirtieth point of error asserts the

trial court abused its desertion by holding Schwager and his

counsel in contempt during trial creating a conflict of interest

which deprived Schwager of effective assistance of counsel and a

fair trial. These points do not set out where in the record Schwager

presented these complaints to the trial court and obtained an

adverse ruling. Henry S. Miller Management, 792 S.W.2d at 133-

35, TEX. R. App. P. 52(a), 74(d).

We strike points two, five, eight, 10, 21 and 30.

Schwager’s third point of error asserts the trial court erred in

striking Bette Schwager as a party. Schwager’s eleventh point of

error asserts that prejudicial and incurable oral argument entitles

him to a reversal. Schwager’s twenty-ninth point of error asserts

the trial court abused its discretion in allowing the jury to speculate

concerning the effect of a final judgment in a related case resulting

in the rendition of an improper verdict in this case. These points

cite no authority. See Henry S. Mitter Management, 792 S.W.2d

at 131; TEX. R. App. P. 74(f). Also, in point of error 29, Schwager

seems to be complaining about the improper admission of evidence

without discussing the substance of the evidence, or pointing out

» Vid -

where in the record he objected to the evidence and obtained an

adverse ruling. Henry S. Miller Management, 792 S.W.2d at 133-

35; TEX. R. App. P. 74(d), (f).

We strike points of error three, 11 and 29.

Schwager’s sixth point of error asserts the trial court erred in

granting TCB’s motion for summary judgment. Schwager claims

TCB’s summary judgment proof was legally insufficient. Without

discussing TCB’s summary judgment proof, Schwager asserts:

TCB’s summary judgment proof, when taken as a whole,

fails to establish, as a matter of law, that TCB can not be

held liable for the independent tort of duress and fraud or

forgery. (TR 809-846)

This point presents nothing for review because it does not contain

"a fair, condensed statement of the facts pertinent" to the point, as

required by rule TEX. R. App. P. 74(f).

We strike point of error six.

Schwager’s seventh point of error asserts the trial court:

erred in failing to submit a special issue on the breach of

the duty of good faith and fair dealing, wrongful accelera-

tion, forgery, conspiracy, breach of contract, and mental

anguish, pain and suffering. These issues were tried by

consent. Directed verdict should not have been granted on

Schwager’s wrongful acceleration and forgery claims.

Schwager cites to the record where the trial court refused his

requested charge and where the trial court granted a directed

verdict. Schwager argues evidence was presented to raise all of the

foregoing issues, citing to the record in support of this assertion as

follows:

(Breach of Good faith: Vol. 1 pp. 39, 40, 42, 79, 80, 84,

97, 113-137, 140-41, 146-152, 154-156, 165-173; Vol. 2

» iS

pp. 281-83, 287-88, 292, 317-331, 345, 358-62, 366-394;

Vol. 3 pp. 404-418, 422, 433, 445, 453, 454, 461, 464-466,

468-69, 476-484, 490-495-98, 499-504, 600; Vol. 8 p.

1492; Vol. 9 pp. 1679-81, 1688-92; Nov. 21 pp. 63, 67-79,

153, 154, 203, 204, 221, 234, 238-39, 247, 248, 249, 252,

253; Nov. 22 pp. 107-68; Wrongful Acceleration and

Breach of Contract: Vol. 1 pp. 39, 41, 48, 112, 142-147,

174-177; Vol. 3 pp. 419-422, 446, 448-49, 470-72; Vol. 4

pp. 673-74, 799; Vol. p. 925; Vol. 6 p. 1000; Vol. 9 pp.

1548-1551, 1588, 1592-1597; Nov. 20 pp. 110, 112, 114,

117; Nov. 21 pp. 243, 244, 249-55; Nov. 22 p. 130;

Forgery: Vol. 4 pp. 752-54, 759-770; Vol. 8 pp. 1494-

1542; Vol. 9 pp. 1580-1601, 1605-1617, 1618-1630, 1695-

92; Conspiracy: Vol. 1 pp. 37, 39, 40, 42, 45, 47-48, 50,

54, 97, 114, 115, 137, 140-41, 146-52, 162-165; Vol. 2 pp.

68-94, 269-70, 288-89, 292, 295-97, 318-331, 348-358,

366-68, 383; Vol. 3 pp. 404-418, 422, 423-429, 433, 445,

447-48, 458-461, 476-484-89, 490-95-96-98, 499-504, 521-

523, 585, 597-600, 600-611; Vol. 4 pp. 641-42, 654-55,

674, 684-94, 698; Vol. 5 pp. 898-907, 924-36; Vol. 6 pp.

1006, 1067-68, 1163-64; Vol. 7 p. 1310; Vol. 8 p. 1492;

Vol. 9 pp. 1582-85; Nov. 20 pp. 26, 55, 63, 86, 87-101,

102-110; Nov. 21 pp. 38-39, 67-79, 88-93, 95, 98, 134-

140, 154-56, 225-26; Nov. 22 pp. 104-05, 107-08).

Schwager then makes approximately six statements describing

evidence admitted at trial, but cites to the statement of facts for

only one.

This point presents nothing for review because Schwager’s

arguments do not “include a fair, condensed statement of the facts

pertinent to [this point], with references to the pages in the record"

where these facts may be found as required by rule 74(f).

Moreover, this point complains of the trial court’s refusal to submit

various questions to the jury without setting out such part of the

requested charge the trial court refused, as required by TEX. R.

App. P. 74(f).

We strike point of error seven.

ee

Schwager’s ninth point of error asserts, “[T)he trial court erred

in denying [Schwager’s] claim of usury and no mutuality of

contracts against [TCB] as the bank’s charges on the indebtedness

were usurious and no mutuality of remedies." Schwager’s twenty-

fifth point of error asserts the trial court entered an improper

judgment. These points do not set out where in the record

Schwager presented these complaints to the trial court and obtained

an adverse ruling. Henry S. Miller Management, 792 S.W.2d at

133-35, TEX. R. App. P. 52(a), 74(d). Also, the factual assertions

in these points are not supported by references to the record. TEX.

R. App. P. 74(f).

We strike points of error nine and 25.

Schwager’s twelfth point of error asserts the trial court abused

its discretion in refusing to admit evidence of a proposed compro-

mise and settlement agreement between the limited partners and

TCB resulting in an improper verdict and improper use of aban-

doned pleadings.

This point does not describe the substance of the evidence

sought to be admitted, as required by TEX. R. App. P. 74(f).

Schwager specifically complains of the exclusion of defendant's

exhibit 124, citing to pages 226 to 258 in the statement of facts.

Schwager cites to no portion of the record where he sought to

introduce the evidence and obtained an adverse ruling from the trial

court, as required by TEX. R. App. P. 74(d). Henry S. Miller

Management Corp., 792 S.W.2d at 133-35. Pages 226 to 258 in

the statement of facts contain no mention, and no refusal to admit

defendant’s exhibit 124.

We strike point of error 12.

Schwager’s thirteenth point of error asserts the trial court

abused its discretion in striking Schwager’s claims from punitive

damages and attorney’s fees because of Schwager’s counsel’s

failure to timely file a pretrial order.

Schwager’s discussion of this point begins by stating:

OS.

[Schwager’s] Petition for Writ of Mandamus (No. 01-89-

0913-CV) is incorporated by reference herein for all intents

and purposes. (See Motion filed 2-1-91)

This does not comply with TEX. R. App. P. 74(f) requiring a "fair,

condensed statement of the facts pertinent” to the point, and a

discussion of the facts and authorities relied upon to maintain the

point. The point contains no discussion of the facts surrounding

the trial court’s striking of the foregoing claims for failure to timely

file a pretrial order.

We strike point of error 13.

Schwager’s fourteenth point of error asserts the trial court

abused its discretion in ruling that Schwager could not present

evidence of the limited partners’ financial status to the jury.

Schwager’s sixteenth point of error asserts the trial court abused its

discretion in refusing to admit the portions of the tape transcript of

1985 offered by Schwager under the doctrine of completeness.

These points do not state where in the record Schwager offered

the evidence and obtained an adverse ruling. Henry S. Miller

Management Corp., 792 S.W.2d at 133-35; TEX. R. App. P. 52(a),

74(d). Also, the points contain no discussion of the substance of

the excluded evidence. TEX. R. App. P. 74(f).

We strike points of error 14 and 16.

Schwager’s twentieth point of error asserts the trial court

abused its discretion by denying Schwager his right to impeach

TCB and the limited partners with "Axelrad letter, Stringer memo,

and bank’s adverse loan review papers." Schwager’s twenty-

seventh point of error asserts the trial court abused its discretion in

refusing to allow Schwager to prove the factual circumstances

surrounding the temporary injunction entered in the cause against

TCB.

The points contain no discussion of the substance of the

excluded evidence, as required by TEX. R. App. P. 74(f).

ae

We strike points of error 20 and 27.

Schwager’s fifteenth point of error asserts the trial court abused

its discretion in admitting evidence proffered by TCB and the

limited partners of Schwager’s alleged breaches and misconduct

which occurred prior to October 14, 1986. Schwager’s seventeenth

point of error asserts the trial court abused its discretion in allowing

accounting testimony which violated the preclusive effects of a

prior judgment. Schwager’s eighteenth point of error asserts the

trial court abused its discretion in allowing an expert witness to

invade the province of the court and testify concerning the

applicable law of the disputed transactions. Schwager’s forty-

fourth point of error asserts the trial court erred in admitting

testimony that Schwager converted parking lot rentals.

These points do not set out where in the record he objected to

the foregoing evidence and obtained and adverse ruling. Henry S.

Miller Management Corp., 792 S.W.2d at 133-35; TEX. R. APP. P.

52(a), 74(d). Also, the points contain no discussion of the

substance of the objectionable evidence. TEX. R. App. P. 74(f).

The brief also cites no authority in support of points 15 and 17.

TEX. R. ApP. P. 74(f). Points 17 and 18 cite more than 150 pages

of the statement of facts, some in 50 and 65 page segments, in |

1/2 pages of total text, without identifying specifically the objec-

tionable testimony.

We strike points 15, 17, 18, and 44.

Schwager’s nineteenth point of error asserts the trial court

abused its discretion in refusing to allow Schwager to elicit

testimony from Judge Michael O’Brien "to refute testimony of

witnesses and in allowing hearsay testimony of receiver."

With respect to the excluded testimony, the point does not

discuss the substance of this testimony with references to the

record. TEX. R. App. P. 74(f). With respect to the testimony the

trial court admitted, the point does not discuss the substance of this

testimony, and it does not set out where in the record Schwager

objected to the testimony and obtained an adverse ruling. Henry

- V-9 -

S. Miller Management Corp., 792 S.W.2d at 133-35; TEX. R. APP.

P. 52(a), 74(f). Also, the brief cites no authority in support of this

point. TEX. R. App. P. 74(f).

We strike point of error 19.

Schwager’s twenty-sixth point of error asserts the trial court

abused its discretion in admitting evidence that Schwager violated

the partnership agreement and bank documents by changing the

terms of the lease between B.M. Bayou Corporation and B.B.M.M..,

Ltd. Schwager’s twenty-eighth point of error asserts the trial court

abused its discretion in refusing to admit Schwager’s testimony

concerning the factual circumstances surrounding the closing of the

restaurant operated by B.M. Bayou Corporation "and/or" B.B.M.M.,

Ltd., and the damages suffered by the loss of the "2500/mo."

payment. Schwager’s forty-third point of error asserts the trial

court erred in allowing the admission of parol evidence to vary the

terms of the subscription and partnership agreements.

These points to dot set out the substance of the objectionable

evidence admitted by the trial court. TEX. R. App. P. 74(f). Also,

many of the factual assertions in these points are not supported

with references to the record. Jd. The brief also cites no authority

in support of points 28 and 43. /d.

We strike points of error, 26, 28 and 43.

Schwager’s twenty-second point cf error asserts that cumulative

error in the pretrial and trial proceedings was harmful and requires

a new trial. This point is unsupported by any factual discussion.

TEX. R. App. P. 74(f).

We strike point of error 22.

Schwager’s twenty-third point of error asserts the trial court

abused its discretion by refusing to allow Schwager to amend his

claims "to include conspiracy against TCB. (No surprise and tried

by consent).”

- V-10 -

This point does not state where in the record Schwager

presented this complaint to the trial court and obtained an adverse

ruling. Henry S. Miller Management Corp., 792 S.W.2d at 133-35;

TEX. R. App. P. 52(a), 74(f). Also, Schwager claims the issue of

conspiracy was tried by consent without discussing the evidence

that allegedly raised the conspiracy issue. TEX. R. App. P. 74(f).

We strike point of error 23.

Schwager’s twenty-fourth point of error asserts the trial court

abused its discretion in denying Schwager’s motion for a new trial.

In support of this point, Schwager incorporates by reference the

arguments contained in his motion for new trial. This does not

comply with TEX. R. App. P. 74(f). Also, this point is neither

argued nor supported by authority. /d.

We strike point of error 24.

Schwager’s thirty-first through thirty-fourth points of error

assert the jury’s answer to various questions are against the great

weight and preponderance of the evidence. The points do not state

where in the record Schwager presented these complaints to the

trial court and obtained an adverse ruling. Henry S. Miller

Management Corp., 792 S.W.2d at 133-35; TEX. R. App. P. 52(a),

74(f); see also TEX. R. Civ. P. 324(b)(3). The brief also cites no

authority in support of these points. TEX. R. App. P. 74(f).

We strike points of error 31 through 34.

Schwager’s thirty-fifth through fortieth points of error assert

there is no evidence to support the jury’s answer to various

questions, and the evidence was insufficient to support the

submission of these questions to the jury.

The points do not state where in the record Schwager presented

these complaints to the trial court and obtained an adverse ruling.

Henry S. Miller Management Corp., 792 S.W.2d at 133-35; TEX.

R. ApP. P. 52(a), 74(f); see also Steves Sash & Door Co. v. Ceco

Corp., 751 S.W.2d 473, 477 (Tex. 1988). Also, these points

- V-11 -

complain about various aspects of the charge without setting out

those parts of the charge, as required by TEX. R. App. P. 74(f).

We strike points of error 35 through 40.

Schwager’s forty-first point of error asserts the jury’s answer

to two of the questions in the charge constitutes an impermissible

attack on the trial court’s final judgment in a related case. The

point does not state where in the record Schwager presented this

complaint to the trial court and obtained an adverse ruling. Henry

S. Miller Management Corp., 792 S.W.2d at 133-35; TEX. R. APP.

P. 52(a), 74(f). Also, the point cites no authority. TEX. R. App. P.

74(f).

We strike point of error 41.

Schwager’s forty-second point of error states the trial court

erred in refusing to submit special issues on Schwager’s theory of

the case or the issues supported by Schwager’s pleadings and tried

by consent. Although Schwager cites to the record where he

submitted his requested charge, which the trial court refused, the

point does not set out the part of his requested charge that the trial

court refused, as required by TEX. R. App. P. 74(f). Also, the point

contains no discussion of evidence supporting the requested charge.

TEX. R. App. P. 74(f).

Schwager also complains the trial court refused to allow him

to amend his pleadings at trial to conform to evidence of a

conspiracy between FCB and others. The point does not state

where in the record Schwager presented this complaint to the trial

court and obtained an adverse ruling. Henry S. Miller Management

Corp., 792 S.W.2d at 133-35; TEX. R. App. P. 52(a), 74(f).

We strike point of error 42.

Based on the foregoing discussion, we strike all of Schwager’s

points of error, except points one and four, and order this portion

of the appeal dismissed.

It is so ORDERED.

PER CURIAM

Panel consists of Justices Bass, Cohen and Wilson.

Do not publish. TEX. R. App. P. 90.

Order entered

True Copy Attest:

Feb.-24- 1992

Kathryn Cox

Clerk of Court

oe

APPENDIX W

JUDGMENT CASE #86-07376

NO. 86-07376

BRUCE B. SCHWAGER, § IN THE DISTRICT COURT OF

ET AL §

§

VS. § HARRIS COUNTY, TEXAS

§

HARVEY RESNICK, §

ET AL § 125TH JUDICIAL DISTRICT

JUDGMENT

On the 14th day of July, 1986, the above-entitled and num-

bered cause came on for trial. Plaintiffs, Bruce Schwager and B.

B. M. M., Ltd. (hereinafter sometimes collectively referred to as

"Plaintiffs") appeared by and through their respective representa-

tives and counsel. Defendants, Harvey Resnick, William Cramer,

Malcolm Marcoe, Meyer Fallas and Fred Fallas (hereinafter

sometimes collectively referred to as "Defendants") appeared by

and through their representatives and counsel.

A jury trial having been waived and all issues of fact and law

having been submitted to the Court, and the Court having consid-

ered the evidence, issues the following judgment:

1. It is ORDERED that the request of Defendants for a

dissolution of B. B. M. M., Ltd. is denied.

2. Because the Court finds that it would be in the best

interests of all parties that a receiver be appointed to effect an

orderly and satisfactory disposition of the property of B. B. M.

M., Ltd., it is ORDERED that Dale Everett is hereby appointed

as receiver for the property owned by B. B. M. M., Ltd.

including the real property that is situated at 110-112 Travis

. W-2 -

Street, Houston, Harris County, Texas described by metes and

bounds on the attached Exhibit "A".

3. It is further ORDERED that Mr. Everett shall post with

the Clerk of the Court a good and sufficient bond, to be

approved by such clerk, in the amount of $1,000 payable to

Plaintiffs and Defendants, conditioned as provided by law.

4. It is further ORDERED that Mr. Everett shall seek an

orderly and satisfactory sale of the property owned by B. B. M.

M., Ltd. and attempt to obtain fair market value for the

property owned by B. B. M. M., Ltd.

5. It is further ORDERED that Bruce Schwager may

continue to operate the restaurant presently operated in the

property owned by B. B. M. M., Ltd.

6. It is further ORDERED that Plaintiffs shall refrain from

selling the limited partnership interests of Defendant Malcolm

Marcoe so long as Defendant Malcolm Marcoe makes a capital

contribution to B. B. M. M., Ltd. in the amount of $3,500.00

(or such amount as the Court may fix hereafter) on the 15th

day of each month hereafter, beginning on September 15, 1986.

7. It is further ORDERED that Plaintiffs shall refrain from

selling the limited partnership interests of Defendant William

Cramer so long as Defendant William Cramer makes a capital

contribution to B. B. M. M., Ltd. in the amount of $3,500.00

(or such amount as the Court may fix hereafter) on the 1Sth

day each month hereafter, beginning on September 15, 1986.

8. It is further ORDERED that Plaintiffs shall refrain from

selling the limited partnership interests of Defendant Meyer

Fallas so long as Defendant Meyer Fallas makes a capital

contribution to B. B. M. M., Ltd. in the amount of $3,500.00

(or such amount as the Court may fix hereafter) on the 15th

day of each month hereafter, beginning on September 15, 1986.

- W-3 -

9. It is further ORDERED that Plaintiffs shall refrain from

selling the limited partnership interests of Defendant Fred

Fallas so long as Defendant Fred Fallas makes a capital

contribution to B. B. M. M., Ltd. in the amount of $1,750.00

(or such amount as the Court may fix hereafter) on the 15th

day of each month hereafter, beginning on September 15, 1986.

10. It is further ORDERED that Plaintiffs shall refrain

from selling the limited partnership interests of Defendant

Harvey Resnick so long as Defendant Harvey Resnick makes

a capital contribution to B. B. M. M., Ltd. in the amount of

$1,750.00 (or such amount as the Court may fix hereafter) on

the 1Sth day of each month hereafter, beginning on September

15, 1986.

11. It is further ORDERED that Bruce Schwager, as

General Partner of B. B. M. M., Ltd. shall apply the capital

contributions of Defendants to the following expenses of B. B.

M. M.. Ltd:

a. the monthly installment payment due on that

certain promissory note dated December 18, 1984

executed by B. B. M. M., Ltd., payable to Texas

Commerce Bank, Chemical;

real estate taxes;

c. premiums for casualty, liability and related insur-

ance coverage;

d. maintenance and repairs incurred in the ordinary

course of business; and

e. utilities.

12. It is further ORDERED that Bruce Schwager as

General Partner of B. B. M. M., Ltd. shall render a monthly

accounting of the disposition of all funds contributed to B. B.

M. M., Ltd. by the Defendants hereafter, such accounting to be

furnished to the Receiver, the Court and to Defendants by the

first day of the month following the month in which contribu-

tions are made.

- W-4 -

13. It is further ORDERED that Bruce Schwager shall

render a monthly accounting as to the operation of BM Bayou

Corporation and the restaurant known as Barton’s Landing,

such accounting to be made by the tenth (10th) day of each

month commencing October 10, 1986, and such accounting to

be furnished to the Receiver, the Court and the Defendants by

the tenth day of each month commencing October 10, 1986.

14. It is further ORDERED that the Court will consider

requests of the Plaintiffs and Defendants to enter into any

agreements with third parties which would obviate the need for

continuation of the receivership or the ultimate forced sale of

the property of B. B. M. M., Ltd.

15. It is further ORDERED that all costs incurred herein

are taxed one-half to Bruce Schwager and one-half to Defen-

dants.

Signed this _14th_ day of _October_, 19_86 .

Michael O’Brien

JUDGE PRESIDING

- W-5 -

APPROVED:

JOHNSON & ARTIZ

By:

J. W. (Don) Johnson

State Bar #10736000

2600 Niels Esperson Bldg.

Houston, Texas 77002

(713) 224-7083

ATTORNEY FOR PLAIN-

TIFFS AND COUNTER-DE-

FENDANTS BRUCE B.

SCHWAGER & B. B. M. M.,

LTD.

86082701

O19JSC

APPROVED AS TO FORM

ONLY:

HIRSCH & WESTHEIMER,

Pe.

By:

Joseph S. Cohen

State Bar #04508370

25th Floor

RepublicBank Center

Houston, Texas 77002

(713) 223-5181

ATTORNEYS FOR DEFEN-

DANTS AND COUNTER-

PLAINTIFFS HARVEY RES-

NICK, MALCOLM MARCOE,

MEYER FALLAS, FRED

FALLAS AND WILLIAM

CRAMER

a

« a

APPENDIX X

POLITICAL CONTRIBUTIONS TO THE

SUPREME COURT OF TEXAS

An Appearance of Impropriety

David F. Bragg

Principle Author

Contributing Authors:

Tom Smith, Public Citizen

Karl Bayer, Texas Consumer Association

Charlotte Flynn, Gray Panthers

Dee Simpson, American Federation of State,

County & Municipal Employees

September 2, 1992

EXCERPT FROM PAGE 6 OF REPORT

The Supreme Court of Texas is the highest appellate Court in

Texas. Not only does it judge cases which become the rule of law

for every other civil court in the State, it also enacts rules which

govern the behavior and ethical standards of lawyers. Because of

its ability to profoundly affect the lives of each member of our

society, the nine justices who are elected to the Court hold a sacred

trust. To insure that the Court's decisions are based only on law

and the facts of each case rather than current public opinion, the

Court is allowed to conduct its deliberations in secret. No other

branch of government is granted this nght. Because the public is

excluded from Supreme Court deliberations, the public has a nght

to demand that no other outside influence bear on the Court's

decisions. And, because of the secrecy which shrouds the

deliberations, like Caesar's wife, each member of the Court must

studiously avoid even the appearance of impropriety. Otherwise,

public trust, which is essential to the operation of the Court, is in

danger of being lost. When any single source makes large

campaign contributions to candidates for the Supreme Coun,

public suspicion naturally is aroused. The public's reaction is not

unique to the Supreme Court; it occurs at every level of

government, whenever those who make laws or enforce them

receive financial benefits from those who are affected by the

decisions. However, when the secrecy under which the Court must

operate is injected into the mix along with the enormous power of

the Court, significant financial contnbutions by special interest

become even more troubling. The unfortunate reality, however, is

that no one can get elected to the Supreme Court without a

substantial campaign war chest. Supreme Court campaigns are

very expensive. In the 1988-1990 elections, as illustrated in Table

3, more than $11 million was spent by justices who were successful

in their campaigns. ;

~~ Xe

EXCERPT FROM PAGE 13 OF REPORT

Bundling paves the way for voter deception. If the individual

contributions of the members of a law firm are not added together,

it is possible to make the misleading claim that a candidate has

imposed a "cap" on contributions When the individual

contributions of members of large firms are added together,

however, the claim becomes a sham that misleads voters

EXCERPT FROM PAGE 14 OF REPORT

TABLES 6,7 AND 8

ATTORNEYS WITH BAKER & BOTTS, A DEFENSE FIRM,

CONTRIBUTED MORE MONEY TO SUCCESSFUL

SUPREME COURT CANDIDATES THAN ANY OTHER

SINGLE GROUP OF LAWYERS IN’ THE STATE.

ATTORNEYS WITH VINSON & ELKINS, ANOTHER

DEFENSE FIRM, CONTRIBUTED THE SECOND HIGHEST

AMOUNT

eo

Top 50 Law Firm Contributors

1988 thru 1990

Firm Name Totals

Baker & Botts $197,208.57

Vinson & Elkins $158,212.00

Bracewell & Patterson $97,627.00

Law Offices of Frank Branson $96,985.62

Helm, Pletcher, Hogan, Bowen & Saunders $95,725.00

Fulbright & Jaworski $80,265.00

Law Office of Pat Maloney $72,550.00

Baldwin & Baldwin $66,500.00

Wellborn, Houston, Adkinson, Mann & Sadle $63,055.60

Locke, Purnell, Rain & Harrell $62,484.00

Fisher, Gallagher & Lewis $60,750.00

Baron & Budd $55,635.00

Krist, Gunn, Weller, Neumann & Morrison $55,100.00

Liddell, Sapp, Zivley, Hill & Laboon $53,570.00

Umphrey, Swearingen & Eddins $52,600.00

Haynes & Boone $49,600.00

Strasburger & Price $46,970.00

Mithof & Jacks $45,025.00

Thompson & Knight $44,430.00

Groce, Locke & Hebdon $44 285.00

Jones, Jones, Curry, & Roth $44,000.00

Andrews & Kurth $43,700.00

Reaud, Morgan & Quinn $43,350.00

Kelly, Appleman, Hart & Hallman $41,115.00

Glenn Vickery & Associates $40,620.66

Jamail & Kolius $38,550.00

Perry & Haas $38,500.00

Edwards & Terry $38,260.00

Tinsman & Houser $38,250.00

Stubbeman, McRae, Sealy, Laughlin & Browder $38,012.00

Jones, Day, Reavis & Pogue $37,750.00

Cantey & Hanger $37,050.00

Hughes & Luce $36,825.00

Law Offices of Stanley W. Crawford $36,500.00

= KX=§ «

Akin, Gump, Strauss, Hauer & Feld $3€

Ernest Cannon & Associates $

Graves, Dougherty, Hearon & Moody $34, a 47

Law Offices of Gilbert T. Adams. Jr. $3:

TABLE 6

So

APPENDIX Y

OPINION OF FIRST COURT OF APPEALS

AFFIRMING JUDGMENT

No. 01-90-00270-CV

In The

Court of Appeals

For The

First District of Texas

BRUCE B.SCHWAGER, BETTE SCHWAGER,

B.B.M.M..,

AND B.M. BAYOU CORPORATION, Appellants

VS.

TEXAS COMMERCE BANK, N.A., CHARLES BEST,

FRED FALLAS, MEYER FALLAS, MALCOLM MARCOE

HARVEY RESNICK, AND WILLIAM CRAMER,

Appellees

On Appeal from the 125th District Court

Harris County, Texas

Trial Court Cause No, 87-14551

OPINION

This is an appeal from a judgment based on a jury verdict.

We affirm. On December 8, 1989, the trial court signed a

judgment in favor of Texas Commerce Bank (TCB) on its note

claim against appellants, Bruce Schwager (Schwager) and

B.B.M.M. Ltd., and appellees, Fred Fallas, Meyer Fallas, Malcolm

Marcoe, Harvey Resnick, and William Cramer (the limited

partners), and on its conversion claim against Schwager. The

judgment also awarded the limited partners damages on their

cross-claims against Schwager for breach of contract and breach of

fiduciary duty. The trial court's judgment ordered that Schwager,

B.B.M.M., and the other appellants, Bette Schwager and B.M.

Bayou Corporation (B.M. Bayou),' take nothing on_ their

counterclaims against TCB and on their cross-claims against

the limited partners.

. = eS a SS Se”

v

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ee

Facts

In January 1984, Schwager and the limited partners formed

a limited partnership, B.B.M.M., Ltd. (the partnership), to buy land

in downtown Houston to operate a restaurant. Schwager agreed to

be the general partner, to manage the restaurant, and to account to

the limited partners. The limited partners agreed to pay the

partnership debts secured by partnership property. They expected

the restaurant's income to cover the partnership debts.

The partnership financed the purchase with a loan from

Interfirst Bank (Interfirst loan), which was secured by a lien on the

property, an assignment of rentals, and the assignment of a note

(the Jow note) payable to Schwager. The partnership leased the

property to B.M. Bayou to operate the restaurant. Schwager was

the sole director, president, and a 50% stockholder of B.M. Bayou,

and the limited partners owned the rest of B.M. Bayou's stock.

The restaurant operated at a loss, and the limited partners

had to pay the Interfirst loan. The relationship between Schwager

and the limited partners began to sour.

In September 1984, TCB loaned the partnership $825,000.

Schwager and the limited partners signed the note and personally

guaranteed the loan. The limited partners pledged additional

collateral for this loan, and Schwager pledged the Jow note. The

TCB loan was also secured by a lien on the property. TCB

believed the restaurant's income would cover its note.

Approximately $700,000 was used to extinguish the Interfirst loan,

and $125,000 was used for new working capital.

By March 1985, the working capital was exhausted and the

restaurant continued to lose money. The limited partners had to

make the payments to TCB to avoid a default, and their relationship

with Schwager continued to deteriorate. Finally, the limited

partners stopped making payments on the TCB loan.

Except where otherwise indicated, the appellants will be

collectively referred to as Schwager.

Wx

In February 1986, Schwager, on behalf of the partnership,

sued (the 1986 suit) the limited partners, alleging they breached the

partnership agreement by failing to make capital contributions to

cover the restaurant's debts. The limited partners counterclaimed,

alleging misconduct by Schwager in operating the restaurant, and

sought damages for breach of fiduciary duty, return of capital

contributions, dissolution, and an accounting.

The 1986 suit was tried without a jury on July 14, 1986

and the trial signed a judgment on October 14, 1986. This

judgment denied the limited partners’ request for dissolution, but

appointed a receiver to sell the partnership property. The 1986

judgment also ordered Schwager to refrain from selling the limited

partners’ partnership interests so long as they made capital

contributions as agreed in the partnership agreement. The 1986

judgment also provided that the trial court would consider requests

from any parties to make agreements with third parties that would

eliminate the need for a receivership and the sale of the property.

The judgment did not adjudicate the limited partners’ claims

alleging breach of fiduciary duty by Schwager and requesting

return of their capital contributions.

In late 1986, some of the limited partners approached

TCB, seeking to refinance the loan. The limited partners and TCB

agreed to do so, but Schwager refused. In January 1987, the

limited partners again stopped paying the TCB loan. In March

1987, the limited partners approached TCB with a new refinancing

proposal, but TCB rejected it. TCB subsequently accelerated the

loan, but received no payments.

Trial Court Proceedings

In 1987, TCB sued (the 1987 suit) Schwager, the

partnership, and the limited partners on the note, and sued

Schwager for conversion of rentals. Schwager individually and on

behalf of the partnership, his wife, Bette Schwager, and B.M

Bayou, filed counterclaims against TCB and cross-claims against

the limited partners, alleging various theories of recovery.

The 1987 suit went to a jury tnal on November 1989. The

trial judge directed a verdict for TCB as plaintiff on its note claim

“eks

and for TCB as defendant on Schwager's claims of wrongful

acceleration and breach of contract. The trial judge submitted no

jury questions on any claims by Bette Schwager and B.M. Bayou.

The jury found against Schwager and the partnership on

their claims against the limited partners for breach of the

partnership agreement, breach of fiduciary duty, and tortious

interference with contract. The jury found for TCB on its

conversion claim against Schwager, and award TCB compensatory

damages. The jury also found that Schwager's breach of fiduciary

duty was "committed intentionally, maliciously, or with heedless

and reckless disregard of the nghts" of the limited partners, and

awarded them punitive damages. The jury found that Schwager

fraudulently induced the limited partners to enter the partnership

agreement. On December 8, 1989, the trial judge signed a

judgment (the 1989 judgment), based on the jury findings and the

directed verdicts. This judgment is the subject of this appeal.

Preliminary Procedural Matters on Appeal

The appellate record consists of 10 volumes of transcript

totaling approximately 2,200 pages, 34 volumes of statements of

facts totaling approximately 4,500 pages, and 14 volumes of

exhibits totaling hundreds of exhibits.

On January 28, 1991, Schwager filed a 99-page brief and a

motion to file a brief in excess of 50 pages. On February 14, 1991,

we denied the motion and ordered Schwager to file a 50-page brief.

TEX. R. App P. 74.(h). On March 14, 1991, we allowed

Schwager to file a 60-page brief. On May 16, 1991, we struck

Schwager's second brief due to inadequate citations to the record,

and ordered him to rebrief. On June 17, 1991, Schwager filed this

third brief, containing 44 points of error. On July 12, 1991, one of

the appellees moved to strike Schwager's third brief due, among

other things, to inadequate citations to the record. We denied this

motion on August 8, 1991.

On February 24, 1992, we struck 42 of Schwager's 44

points of error because they did not meet the requirements of Tex

R. Arp P. 74. See Inpetco v. Texas American Bank, 729 §.W.2d

300 (Tex. 1987); Henry S. Miller Management Corp. v. Houston

State Associates, 792 $§.W.2d 128, 133-35 (Tex. App.--Houston

-Y-5 -

[1st Dist.] 1990, writ denied) (op. on reh'g); see generally Gunn,

Unsupported Points of Error on Appeal, 32 So. Tex. L. Rev. 105

(1990). We held that only points of error one and four were

properly briefed. Schwager has repeated moved to dismiss the

appeal. These motions were taken with the case because they are

also the subject of Schwager's first point of error. We will discuss

the motions and the first point of error together.

Points of Error

Schwager's first point of error and his motions assert the

trial court's 1989 judgment was granted without jurisdiction, and is,

therefore, void.

The trial judge consolidated in 1986 and the 1987 suits

under the cause number of the 1987 suit. Tex R. Civ P. 174(a). As

stated, the 1986 judgment appointed a receiver to sell the

partnership property. The 1989 judgment dissolved that

receivership and awarded damages to TCB and to the limited

partners. Schwager contends the 1989 judgment is void for lack of

jurisdiction because it modified the 1986 judgment after it was

final. An order appointing a receiver is interlocutory. See Tex

Civ Prac & Rem Cove Ann § 51.014(1) (Vernon Supp. 1992)

Therefore, the trial court had jurisdiction in the consolidated suit to

dissolve the receivership. Otherwise, the receivership would be

perpetual. Dissolving the receivership was not an improper

modification of a final order. The 1986 judgment is not labeled a

"final judgment," and it did not deny all relief not expressly granted.

We hold the 1986 judgment was not final. It was "intrinsically

interlocutory." North East Indep. School Dist. v. Alldridge, 400

S.W.2d 893, 897 (Tex. 1966).

In addition, that part of the 1989 judgment awarding the

limited partners damages against Schwager was based on

Schwager's conduct occurring after the trial in the 1986 suit. That

trial was held on July 14, 1986. In the 1987 suit, the jury found

that Schwager breached his fiduciary duty to the limited partners,

as well as the partnership agreement, after August 11, 1986. The

1986 judgment did not adjudicate any of the various claims for

damages. TCB was not a party in the 1986 suit. Therefore, the

1989 judgement did not "modify" the 1986 judgment.

wus.

The 1989 judgment is not void for lack of jurisdiction. Schwager's

first point of error is overruled, and his motions to reverse the trial

court's judgment and dismiss the appeal are denied. The fourth

point of error asserts the trial court erroneously denied Schwager

the right to open and close the evidence.

The trial court denied the Schwager parties’ motion to

realign the parties and designate them as plaintiffs. They argue

they should have been designated "plaintiffs" in the 1987 suit,

because they were plaintiffs in the 1986 suit, and the trial court

erred in consolidating the two suits under the 1987 suit's cause

number. They contend the trial court should have consolidated the

suits under the cause number of the 1986 suit, in which they were

plaintiffs. The Schwager parties do not contend they objected to the

consolidation, nor do they cite to the record where they objected to

the consolidation. Nothing is presented for review regarding any

error in the consolidation. See Tex R. Are P. 52(a), 74(f); State

Farm Mut. Automobile Ins. Co. v. Cowley, 468 S.W.2d 353, 354,

(Tex. 1971). Therefore, they have waived any error caused by an

improper consolidation.

Moreover, TCB was a plaintiff in the 1987 suit. Its note

claim and its conversion of rentals claim were tried before the jury.

We find no error. See Tex R. Ci P. 266.

Schwager's fourth point of error is overruled.

The judgment is affirmed.

/s/Murry B. Cohen

Murry B. Cohen

Justice

Justices Bass and Wilson also sitting.

Publish. Tex R. App P 90.

Judgment rendered and opinion delivered

True Copy Attest:

3/12/92

Kathryn Cox

Clerk of Court

+

APPENDIX Z

Houston Chronicle

Sunday, Oct. 18, 1992

There's better way to finance judicial races that the way we do

in Texas.

By Thomas R. Phillips Phillips is chief justice of the

Texas Supreme Court.

Texans want and deserve judges who are fair, impartial and

free of any suspicion that campaign contributions might influence

their decisions. Every election, however, questions of judicial

integrity are raised anew as judges enter the political world, raising

and spending money in an effort to keep their jobs. Not

surprisingly, most of these contributions come from those with a

direct interest in the decisions of the courts — lawyers and, to 2

lesser extent, litigants. During this process, most candidates,

contributors and citizens join Texas newspapers in asking: Isn't

there a better way? Surely there is. Texas is currently the only

state in the nation that does not place some limits on judicial

campaign fund-raising, either by size of contribution, time and

manner of solicitation of type of expenditure. If we are to continue

to the popular election of judges, we must pass laws that help

ensure public confidence in our judicial system. Although I believe

that real abuses, by either judges or donors, are comparatively rare,

the absence of meaningful campaign finance reform casts suspicion

on our entire legal system.

Fortunately, the Legislature recognized this problem. Last

year, it directed the newly formed Texas Ethics Commission to

study judicial campaign finance and disclosure. The commission is

conducting a series of public hearings across the state and will

complete its report by Jan. 1.

At a minimum, I hope the commission will recommend

these reforms:

Campaign contribution limits - The Legislature should cap

individual and political action committee contributions at some

reasonable limit.

Re.

That limit should be large enough to allow campaigns to raise

enough to keep anyone from believing that a judge owes his or her

position to the support of one individual or interest group.

Time limits - Judges (except for those holding statewide positions)

are now permitted to raise campaign funds at any time, regardless

of whether an election is impending or an opponent is likely.

Fundraising is a necessary evil that should be strictly limited to

election season. At other times, judges and those who appear

before them should be free from any pressure which the political

process might impose.

Shorter campaigns - Texas has a January filing deadline for a

March primary for a November election for a January swearing-in,

the longest campaign seasons in the nation. Judges, at least, should

be permitted to spend more time deciding cases and less time

attending fund-raisers.

Better financial disclosures - Judicial candidates should be

required to report more information about their donors, to file their

reports in more than one place to improve public access, and to

prepare more frequent reports, particularly in the closing weeks of

a campaign. In their annual financial statements, judges should be

required to disclose any business investments or dealing with

lawyers or litigants who appear before them. Of course there are

other, more fundamental ways to address these problems and they

should also be explored. Public financing of judicial campaigns or,

better yet, changing the method of electing judges in the first place

would reduce the potential for impropriety which burdens our

current partisan election system. But public financing is unlikely to

be embraced when the state is experiencing a revenue shortfall, and

selection reform seems unlikely until the voters' rights challenge to

our current system is resolved. Moreover, even those who support

these reforms in principle have strong differences about the the

details of their implementation. Meanwhile, we must not permit the

best to be the enemy of the good. We should address the most

serious problems of judicial campaign financing and reporting now,

while continuing our long-term efforts toward a better overall

system.