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

> Briefs, arguments, decisions, and more.

URL: https://www.frixlaw.com/law-library/documents/brief%3Amicro_IA40386011_2030%3A2

## Record

- **Collection:** Supreme Court brief
- **Document type:** Appendix
- **Published:** January 1, 1993
- **Citation:** 507 U.S. 1030

## Text

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)

——.
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.

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.. 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.

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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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

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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.

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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.

---

Source: Frix Law Library, https://www.frixlaw.com/law-library/documents/brief%3Amicro_IA40386011_2030%3A2. Public record. Not legal advice.