Yazdchi v. SACU (Tex.App.- Houston [1st Dist.] Feb. 19, 2009)(Higley) (law of the case doctrine)
AFFIRM TC JUDGMENT: Opinion by Justice Higley  
Before Justices Jennings, Keyes and Higley
01-07-00189-CV Abbas Yazdchi v. San Antonio Credit Union (SACU)
Appeal from 281st District Court of Harris County
Trial Court Judge  Hon. David J. Bernal

MEMORANDUM OPINION

Appellants, Abbas Yazdchi (“Abbas”), Habibollah Yazdchi (“Habibollah”), and Ahmad Habibollah (“Ahmad”),
challenge the trial court’s rendition of summary judgment in favor of appellees, San Antonio Federal Credit
Union and Jeff Farver Footnote (collectively, “SACU”), in appellants’ suit to recover funds transferred to
SACU by a court-appointed receiver.

In their sole issue, appellants contend that the trial court erred by granting summary judgment in favor of
SACU.

We affirm.

Background

The factual background in this case has already been fully presented by this court in Habibollah Yazdchi,
Abbas Yazdchi, and Ahmad Yazdchi v. Bank One, Texas, N.A. and Chase Bank, Texas, N.A., 177 S.W.3d
399, 400–03 (Tex. App.—Houston [1st Dist.] 2005, pet. denied).

Pertinent to the issue in this case is that, in 1999, the State of Texas sued Ali Yazchi (“Ali”), who is the son of
appellant Habibollah and the brother of appellants Abbas and Ahmad, for violations of the Texas Deceptive
Trade Practices–Consumer Protection Act Footnote (“the Ali action”). Footnote According to the State’s suit,
Ali bilked consumers Footnote and insurance companies out of over $2,000,000 through the use of 63
aliases—including the use of several social security numbers, driver’s license numbers, and dates of birth.
Among the aliases Ali used were names of his family members, Habibollah, Abbas, and Ahmad, who are
appellants in this case.

In the Ali action, the trial court ordered several banks across the state “holding money in the name of and/or
benefit of [Ali]” to freeze funds “belonging to or owned by, in the possession of custody of, standing in the
name of, or claimed by [Ali] or any of [Ali’s] aliases.” The trial court appointed a receiver to take possession
of funds in 24 accounts at 18 financial institutions and to distribute the funds as restitution to injured parties.

One such injured party was SACU, which had, three weeks prior to the Ali action, loaned Ali $36,900.00. The
receiver entered into a settlement agreement with SACU and issued a trustee’s check to SACU to pay the
loan in full.

In 2001, appellants sued the State, the receiver, Bank One and Chase Bank, alleging conversion,
negligence, and violations of the Texas Deceptive Trade Practices Act, asserting that the banks had
improperly frozen and turned over to the receiver money that belonged to appellants. Appellants asserted
that they, and not Ali, were the true owners of the funds. Summary judgment was rendered in favor of the
defendants.  

On appeal, appellants argued, in part, that their “rights to the funds on deposit were never adjudicated in
the Ali action because they were neither parties nor privies to the Ali action, and therefore no order entered
in that case could affect their legal rights”; that the banks “misinterpreted the orders entered in the Ali action
as applying to funds held in accounts under their names”; and that “the Banks unlawfully transferred assets
standing in their names without regard to whether Ali actually owned or was in possession of those assets.”
Bank One, Texas, N.A., 177 S.W.3d at 404.

This court affirmed the trial court’s summary judgment, based on statutory protections found in Texas Civil
Practice and Remedies Code section 31.010 and Texas Finance Code 59.008. See id. at 408. We
concluded that sections 31.010 and 59.008 are intended to encourage banks to comply with turnover orders
by protecting them from liability, even when there may be competing claims. See id. at 406–07.

We also recognized that “the orders entered in the Ali action did not adjudicate the appellants’ ownership
rights to the funds transferred by the Banks to the receiver.” Id. at 408. We reasoned, however, that “while
Ali and appellants were not named joint account holders, the court in the Ali action necessarily found that
the funds in ‘appellants’ accounts’ were actually in Ali’s possession or subject to Ali’s control” and that
appellants could be “characterized as ‘co-depositors.’” Id. at 407. We noted that appellants did not show that
they took any action, other than the filing of suit two years later, to prevent the banks from complying with
the trial court’s order. Id.

On April 23, 2004, appellants sued SACU, seeking to recover $38,606.36 that the receiver paid to SACU to
satisfy Ali’s loan. Appellants alleged conversion, negligence, fraud, and unjust enrichment on the ground
that SACU “converted” appellants’ funds for the payment of Ali’s debt; that SACU should have known that
the funds belonged to appellants, and not to Ali; and that SACU made a fraudulent demand on the receiver.

SACU moved for summary judgment on the basis that “law of the case” doctrine barred appellants’ claims.
SACU contended that appellants have asserted that the monies paid by [the receiver] to [SACU] belonged to
[appellants] since it came from accounts at [Bank One, Chase, etc.] which they allege was [sic] improperly
seized. However, the Court of Appeals has affirmed that the funds seized by the receiver were that [sic] of Ali
Yazdchi. Therefore, under the Law of the Case Doctrine, if the funds of the three financial institutions were
properly taken as belonging to Ali Yazdchi, their subsequent payment by the receiver to [SACU] in payment
of Mr. Yazdchi’s debt could not be wrongful as to these [appellants] since, the funds did not belong to these
[appellants].

To their motion, SACU appended a copy of this court’s decision in Bank One, Texas, N.A., 177 S.W.3d 399.  

In their response to the motion for summary judgment, appellants contended that SACU was relying “upon a
holding and opinion in an entirely separate lawsuit in which” SACU was not a party and that “law of the case”
doctrine was inapplicable.

On November 20, 2006, after a hearing, the trial court granted summary judgment in favor of SACU.
Appellants’ motion for new trial was denied. This appeal ensued. Footnote

Summary Judgment

Appellants contend that the trial court erred by granting summary judgment in favor of SACU. Specifically,
appellants contend that “law of the case” doctrine, which is the sole basis advanced by SACU in its motion
for summary judgment, is inapplicable to this suit.

A.      Standard of Review

We review a trial court’s ruling on a motion for summary judgment de novo. Valence Operating Co. v.
Dorsett, 164 S.W.3d 656, 661 (Tex. 2005). A summary judgment under Rule of Civil Procedure 166a(c) is
properly granted only when a movant establishes that there are no genuine issues of material fact and that
he is entitled to judgment as a matter of law. Tex. R. Civ. P. 166a(c); KPMG Peat Marwick v. Harrison County
Hous. Fin. Corp., 988 S.W.2d 746, 748 (Tex. 1999). A defendant moving for summary judgment must either
(1) disprove at least one element of the plaintiffs’ cause of action or (2) plead and conclusively establish
each essential element of an affirmative defense to rebut the plaintiffs’ cause. Cathey v. Booth, 900 S.W.2d
339, 341 (Tex. 1995).

First, the movant must conclusively establish its right to judgment as a matter of law. See MMP, Ltd. v.
Jones, 710 S.W.2d 59, 60 (Tex. 1986). A matter is conclusively established if reasonable people could not
differ as to the conclusion to be drawn from the evidence. City of Keller v. Wilson, 168 S.W.3d 802, 816
(Tex. 2005).

Then, if the movant conclusively establishes its right to judgment, the burden shifts to the non-movant to
respond with evidence raising a genuine issue of material fact that would preclude summary judgment. See
Rhone-Poulenc v. Steel, 997 S.W.2d 217, 222–23 (Tex. 1999) (explaining that non-movant has no burden
to respond to summary judgment motion unless movant conclusively establishes its cause of action or
defense). In deciding whether there is a disputed material fact precluding summary judgment, evidence
favorable to the non-movant will be taken as true, every reasonable inference must be indulged in favor of
the non-movant, and any doubts must be resolved in favor of the non-movant. Dorsett, 164 S.W.3d at 661.

B.      Legal Principles

“Law of the case” doctrine is defined as that principle under which questions of law decided on appeal to a
court of last resort will govern the case throughout its subsequent stages. Loram Maintenance of Way, Inc.
v. Ianni, 210 S.W.3d 593, 596 (Tex. 2006). Under the doctrine, a court of appeals is ordinarily bound by its
initial decision if there is a subsequent appeal in the same case. Briscoe v. Goodmark Corp., 102 S.W.3d
714, 716 (Tex. 2003). The doctrine is intended to achieve uniformity of decision as well as judicial economy
and efficiency through narrowing the issues at successive stages of litigation. Id. “The doctrine is based on
public policy and is aimed at putting an end to litigation.” Id. “Application of the doctrine lies within the
discretion of the court, depending upon the particular circumstances surrounding [the] case.” Id.; see also
LeBlanc v. State, 826 S.W.2d 640, 644 (Tex. App.—Houston [14th Dist.] 1992, pet. ref’d) (stating that
appellate courts have discretion to depart from “law of the case” doctrine in exceptional circumstances).

The doctrine has been held to apply “to implicit holdings, i.e., conclusions that are logically necessary
implications of positions articulated by the court, as well as explicit ones.” Intern. Fidelity Ins. Co. v. State,
No. 14-98-00324-CR, 2000 WL 729384 (Tex. App.—Houston [14th Dist.] June 8, 2000, pet. ref’d) (not
designated for publication) (citing Alberti v. Klevenhagen, 46 F.3d 1347, 1351 n.1 (5th Cir. 1995)).

C.      Analysis

By their petition, appellants sought to recover $38,606.36 that they assert SACU improperly obtained from
the receiver. Appellants presented their allegations as follows:

     CONVERSION, NEGLIGENCE, FRAUD, UNJUST ENRICHMENT

. . . .

8.       [SACU] knew that [appellants] were the true owners of the accounts from which they took the monies.
[SACU] then converted these funds for the debts of another, knowing such to be the debt of another, without
consent of [appellants], the true owners of the accounts. [SACU] engaged in such conversion with intent to
permanently deprive [appellants] of the use and value of such funds when in fact [appellants] did not owe
any money to [SACU].

9.[SACU] misrepresented a wrongful bill or fraudulent bill and knowingly knew [sic] that the bill or debts were
not owed by [appellants] and collect [sic] money for fraudulent bills, in this case, somebody else [sic] debts
not [appellants’].

. . . .

11.     [SACU] unjustly got richer without any good cause by defrauding [appellants].

12.     [SACU’s] negligence were [sic] a producing and proximate cause of the damages of which [appellants]
now complain.

13.     [SACU] knew or should have known that the money was coming from [appellants] . . . .

The record shows that SACU answered with a general denial and asserted several affirmative defenses,
including “res judicata, collateral estoppel, and law of the case.”

In its motion for summary judgment, SACU solely asserted “law of the case” doctrine as the basis for its right
to judgment as a matter of law. Footnote SACU asserted that the trial court was being asked to revisit the
propriety of the seizure of the money from the banks and the distribution of the same money by the receiver
under the trial court’s order. SACU contended that the issue of ownership or injury—requisite elements
common to each of appellant’s claims Footnote —was necessarily decided against appellants in Bank One,
Texas, N.A., 177 S.W.3d 399.

In their response to SACU’s motion for summary judgment, appellants argued that law of the case doctrine
was inapplicable because the doctrine applies only to later proceedings in the same case, and SACU was
not a party to the prior case.

We recognize that the matter before us is not a subsequent appeal in “the same case,” however, it has been
held that the doctrine applies when an appellate court is asked to decide a matter that it has itself previously
determined. See e.g., Ware v. State, 736 S.W.2d 700, 701 (Tex. Crim. App. 1987) Footnote (explaining that,
“in purely analytical terms the ‘law of the case’ doctrine is only applicable to subsequent appeals of the same
case” and that “this appeal is admittedly not exactly the same case” as the prior; however, “when the facts
and legal issues in a case on appeal are virtually identical with those in a previous appeal in which the legal
issues were resolved then logic and reason dictate that the appeals be viewed as the same case”).

In the prior suit, we recognized that “the orders entered in the Ali action did not adjudicate the appellants’
ownership rights to the funds transferred by the Banks to the receiver.” Bank One, Texas, N.A., 177 S.W.3d
at 408. We reasoned, however, that “while Ali and appellants were not named joint account holders, the
court in the Ali action necessarily found that the funds in ‘appellants’ accounts’ were actually in Ali’s
possession or subject to Ali’s control.” Id. at 407 (emphasis added).

Here, Ali’s ownership or control of the funds is a “logically necessary implication” of the position taken by this
court in the prior appeal, which involved the same appellants, the same claims (conversion, negligence,
forms of fraud, etc.), and the same money in dispute. See Alberti, 46 F.3rd at 1351. It would be illogical for
this court to determine herein that SACU injured appellants by accepting from the receiver the same money
that this court previously determined was properly turned over to the receiver under the trial court’s order
because they were “actually in Ali’s possession or subject to Ali’s control.”

We conclude that “law of the case” doctrine forecloses our reconsideration of this same issue. See Briscoe,
102 S.W.3d at 716 (recognizing that application of “law of the case” doctrine lies within the discretion of the
court, depending upon the circumstances surrounding each case). We hold that the trial court did not err by
granting summary judgment in favor of SACU. See Tex. R. Civ. P. 166a(c); KPMG Peat Marwick, 988 S.W.2d
at 748.

Accordingly, we overrule appellants’ sole issue.

Conclusion

We affirm the judgment of the trial court.


Laura Carter Higley

Justice


Panel consists of Justices Jennings, Keyes, and Higley.