Petroleum Workers Union of the Republic of Mexico v. Gomez
503 S.W.3d 9
Tex. App.2016Background
- Arriba (through a Bahamian receiver) obtained a 1986 default judgment against the Mexican Petroleum Workers Union arising from a 1984 oil-refining contract; later litigation and a 1989 default judgment followed.
- In 2002 U.S. authorities froze ~$43 million in a New York account allegedly tied to embezzlement ("Pemexgate"); Arriba garnished those funds and negotiated a 2004 "Garnished Funds Agreement" allocating 52% to Arriba and 48% to the Union (minus $1M to the receiver) and addressing enforcement of the 1986 judgment.
- The Garnished Funds Agreement was signed in the Bahamas by Arriba’s receiver and by Carlos Ryerson and Noe Moreno Alvarez purporting to represent the Union; Ryerson also secured a separate November 2004 $7M fee agreement from Alvarez.
- The New York writs were dissolved and the funds sent to Mexico; a Mexican court later declared the settlement and fee agreement nullities. Arriba and Ryerson sued the Union in Texas for breach; the Union counterclaimed.
- A jury found Ryerson and Alvarez had actual and apparent authority to sign the Garnished Funds Agreement (and Alvarez had authority on the Ryerson fee agreement). The trial court awarded no monetary damages to Arriba or Ryerson but declared Arriba entitled to enforce the 1986 judgment anywhere except Mexico; Arriba, Ryerson, and the Union appealed.
Issues
| Issue | Plaintiff's Argument (Union) | Defendant's Argument (Arriba/Ryerson) | Held |
|---|---|---|---|
| 1. Legality under Mexican law | Agreement illegal under Mexican law (Mexican AG declaration) so unenforceable | Mexican-law evidence was not timely pleaded or proved under Tex. R. Evid. 203 | Court: Union failed to follow Rule 203; illegality not established—issue overruled |
| 2. Res judicata / collateral estoppel (Mexican judgment) | Mexican judgment declaring settlement null bars enforcement in Texas | Arriba/Ryerson lacked proper notice/appearance in Mexican suit; chapter 36 issues; other defenses | Court: Union’s briefing insufficient and trial record supports denial; issue overruled |
| 3. Actual authority to sign agreements | No evidence authorizing Ryerson/Alvarez; powers of attorney invalid | Multiple circumstantial and documentary proofs (powers of attorney, long-term dealings, Ryerson’s role, confirmations) | Court: Evidence legally and factually sufficient to support jury finding of actual authority |
| 4. Consideration for settlement | No benefit to Union; agreement lacked consideration | Agreement gave Union immediate share (48% minus $1M) of garnished funds and avoided protracted litigation | Court: Presumption of sufficient consideration stands; issue overruled |
| 5. Choice of law / application of Mexican law to authority | Powers of attorney must be interpreted under Mexican law; trial court erred by excluding Mexican-law evidence | Determination of foreign law requires strict Rule 203 compliance; court decides foreign law as a question of law | Court: Trial court did not abuse discretion—Union failed to prove error or harm; issue overruled |
| 6. Discovery / mistrial (untimely evidence) | Arriba/Ryerson introduced material not timely disclosed (verification of Alvarez identity; Contalba affidavit) | Either testimony was elicited by Union, objections were sustained, or evidence not admitted | Court: No abuse of discretion; objections not timely or evidence excluded; mistrial motions denied |
| 7. Failure to submit Union counterclaims to jury | Trial court refused to submit wrongful garnishment and breach-of-fiduciary-duty questions | Trial court: insufficient evidence to support jury questions on damages and fiduciary breach | Court: No error—no adequate evidence to warrant jury questions |
| 8. Damages to Arriba and Ryerson (cross-appeals) | N/A (Appellants seeking damages) | Parties argued breach; but payment obligations tied to specific garnished funds that were never distributed; also no proof Union frustrated distribution causing damages | Court: No monetary damages shown; trial court correctly awarded only specific performance re: enforcement of 1986 judgment (limited to outside Mexico) |
Key Cases Cited
- City of Keller v. Wilson, 168 S.W.3d 802 (Tex. 2005) (standards for legal and factual-sufficiency review)
- Long Distance Int'l, Inc. v. Telefonos de Mexico, S.A. de C.V., 49 S.W.3d 347 (Tex. 2001) (foreign law determination is for the court; Rule 203 procedures)
- Amstadt v. U.S. Brass Corp., 919 S.W.2d 644 (Tex. 1996) (res judicata elements)
- Getty Oil Co. v. Ins. Co. of N. Am., 845 S.W.2d 794 (Tex. 1992) (collateral estoppel principles)
- BMC Software Belgium, N.V. v. Marchand, 83 S.W.3d 789 (Tex. 2002) (legal-sufficiency standard—more than scintilla)
- Cal Dive Offshore Contractors Inc. v. Bryant, 478 S.W.3d 914 (Tex. App.—Houston [14th Dist.] 2015) (strict compliance with Rule 203 for proving foreign law)
- West v. Triple B Servs., LLP, 264 S.W.3d 440 (Tex. App.—Houston [14th Dist.] 2008) (elements of breach of contract claim)