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.