                        COURT OF APPEALS
                         SECOND DISTRICT OF TEXAS
                              FORT WORTH

                             NO. 02-12-00337-CV

LIBERTY BANK, F.S.B.                                                APPELLANT

                                       V.

ANDREW B. ETTER D/B/A                                                APPELLEE
ANDREW B. ETTER LAW OFFICES


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          FROM COUNTY COURT AT LAW NO. 3 OF TARRANT COUNTY

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                        MEMORANDUM OPINION1

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                                I. INTRODUCTION

      In four issues, Appellant Liberty Bank, F.S.B. challenges a summary

judgment granted in favor of Appellee Andrew B. Etter d/b/a Andrew B. Etter Law

Offices. The sole issue we decide is whether an Iowa judgment obtained by

Liberty Bank (as assignee of an equipment rental agreement between

NorVergence, Inc. and Etter) may be given effect in Texas when, prior to entry of


      1
       See Tex. R. App. P. 47.4.
the Iowa judgment, the 270th District Court of Harris County declared all

equipment rental agreements procured between NorVergence and Texas

consumers to be void ab initio as a result of a Deceptive Trade Practices Act

(DTPA) suit filed by the Texas Attorney General.2 Because the equipment rental

agreement upon which Liberty Bank sued Etter was void ab initio and was

unenforceable against Etter, we will affirm the trial court’s summary judgment for

Etter.

                    II. FACTUAL AND PROCEDURAL BACKGROUND

                      A. The Equipment Rental Agreement

         In April 2004, a representative from NorVergence contacted Etter at his

place of business concerning the purchase of a telecommunications system that

would offer cellular service at a lower price than his then-existing telephone

carrier.     The NorVergence representative explained that the new patented

technology in their telecommunications system involved the use of a device

called a “Matrix” box that could deliver both landline and cellular services. Etter

executed an “Equipment Rental Agreement” (ERA) with NorVergence. Under the

terms of the ERA, Etter agreed to make monthly rental payments of $290.69,

including taxes, for sixty months. After NorVergence installed a Matrix in Etter’s

         2
        The judgment states, “All Equipment Rental Agreements or other
contracts procured between NorVergence and Texas consumers or between
finance companies and Texas consumers as a result of a NorVergence
solicitation directed to any Texas consumer are the result of deceptive and unfair
practices and fraud on the part of NorVergence and, therefore, are declared void
ab initio and are unenforceable.”

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office, he inquired whether the equipment was operational and was told that it

would be “hooked up” to the phone line in a few days. According to Etter, the

Matrix was never completely installed and has never provided telephone service.

      In May 2004, NorVergence assigned the ERA to Liberty Bank.              The

assignment contained a clause stating that any action or proceeding relating in

any manner to the assignment must be brought in court in Polk County, Iowa.

      In June 2004, an involuntary bankruptcy petition was filed against

NorVergence in New Jersey.

      In August 2004, Liberty Bank notified Etter that he was in default under the

ERA. Thereafter, multiple, successive lawsuits involving NorVergence’s ERAs

commenced in several jurisdictions. We need not detail all the different lawsuits

or the filings in those lawsuits, which are well known to the parties, in order to

reach our decision. Instead, we set forth only the pertinent procedural history

necessary for the disposition of this appeal.

    B. The Texas Attorney General Sues NorVergence in Harris County

      On November 18, 2004, the Texas Attorney General filed suit against

NorVergence, Inc. in the 270th District Court of Harris County on behalf of 1,020

Texas small businesses that were victims of NorVergence’s fraud and deceptive

acts and practices.       The following day, the Texas Attorney General notified

Liberty Bank by letter,

           The Texas Attorney General has learned that your company is
      demanding payments from Texas small business consumers on
      agreements purchased from NorVergence, the New Jersey company

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      now in Chapter 7 bankruptcy in New Jersey. We have reason to
      believe that these agreements are based on fraud and should be
      voided.

             Please respond promptly to the attached Civil Investigative
      Demand. In the meantime, we request that you immediately cease
      all efforts to collect on agreements purchased from NorVergence
      until such time as there is a determination as to whether they are
      enforceable.

            Continuing to attempt collection efforts on agreements
      secured by fraud could subject your company to substantial
      penalties under Texas law.

      On April 29, 2005, the Harris County court granted the Texas Attorney

General a default judgment against NorVergence. The default judgment stated

that all contracts or agreements between NorVergence and Texas consumers,

businesses, or persons “are hereby declared void ab initio and unenforceable.”

The default judgment further enjoined NorVergence and any other person in

active concert or participation with NorVergence from enforcing, attempting to

enforce, collecting, or attempting to collect any monies purportedly owed under

any NorVergence ERA from any Texas consumer, business, or entity. In a letter

dated June 6, 2005, Liberty Bank informed Etter that it was aware of this

judgment.

                     C. Liberty Bank Sues Etter in Iowa

      Shortly before the Texas Attorney General brought suit in Harris County,

Liberty Bank instituted proceedings against Etter in Iowa in October 2004.

Almost four years later, on July 15, 2008, the Iowa court granted Liberty Bank’s

motion for summary judgment.

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 D. Etter Sues Liberty Bank in Tarrant County Court at Law Number Three

      One day before the Iowa court issued its judgment, Etter sued Liberty

Bank in Tarrant County Court at Law Number Three, seeking a declaratory

judgment that the NorVergence ERA was void and unenforceable. That same

day, County Court at Law Number Three issued a temporary restraining order

restraining NorVergence, Inc.; NorVergence Capital, L.L.C.; and Liberty Bank,

F.S.B. from taking any action to collect or attempt to collect monies from Etter,

including any further proceedings in the Iowa suit, and from taking any action to

enforce the ERA.

  E. Liberty Bank Sues Etter in Tarrant County Court at Law Number One

      Four months later, in November 2008, in Tarrant County Court at Law

Number One, Liberty Bank filed notice pursuant to the Uniform Enforcement of

Foreign Judgment Acts of its intent to enforce the Iowa judgment. Etter filed a

motion to vacate the judgment or stay its enforcement, asking that the Iowa

judgment be vacated and declared null and void. Etter also filed a motion to

consolidate the two county court at law cases.      The parties later agreed to

transfer Liberty Bank’s suit in County Court at Law Number One to County Court

at Law Number Three.

                   F. The Consolidated Tarrant County Cases

      The parties filed competing motions for summary judgment. The trial court

ultimately denied Liberty Bank’s motion for summary judgment and granted

Etter’s motion for summary judgment, finding that “there is no question of

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material fact necessary to establish that the actions of the 270th Judicial District

Court of the State of Texas rendered the contract upon which Defendant brought

suit in Iowa void and thus deprived the Iowa court of subject matter jurisdiction.”

This appeal followed.

               III. ETTER CONCLUSIVELY ESTABLISHED HIS RIGHT TO
                     SUMMARY JUDGMENT AS A MATTER OF LAW

      Etter moved for summary judgment on the ground that the 270th District

Court of Harris County had declared void ab initio and unenforceable the ERAs

procured between NorVergence and Texas consumers or between finance

companies and Texas consumers, including the ERA that Liberty Bank relied

upon in its suit against Etter.3 Etter’s summary judgment evidence included the

default judgment the Texas Attorney General obtained against NorVergence in

the 270th District Court of Harris County; the November 2004 letter that the

Texas Attorney General sent to Liberty Bank regarding the lawsuit in Harris

County, along with the “Civil Investigative Demand” that the letter referenced;

and Etter’s affidavit, which stated that Liberty Bank was aware of the Harris

County judgment. In its first issue, Liberty Bank argues that the trial court erred

by granting Etter’s motion for summary judgment because Etter’s summary

judgment proof is insufficient and does not overcome the Iowa judgment’s full-

faith-and-credit presumption of validity.

      3
       Etter’s motion to vacate the Iowa judgment or to stay its enforcement, filed
in response to Liberty Bank’s attempt to domesticate the Iowa judgment, also
raised this exact point.

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      We review a summary judgment de novo. Travelers Ins. Co. v. Joachim,

315 S.W.3d 860, 862 (Tex. 2010). We consider the evidence presented in the

light most favorable to the nonmovant, crediting evidence favorable to the

nonmovant if reasonable jurors could, and disregarding evidence contrary to the

nonmovant unless reasonable jurors could not. Mann Frankfort Stein & Lipp

Advisors, Inc. v. Fielding, 289 S.W.3d 844, 848 (Tex. 2009). We indulge every

reasonable inference and resolve any doubts in the nonmovant’s favor. 20801,

Inc. v. Parker, 249 S.W.3d 392, 399 (Tex. 2008). A defendant is entitled to

summary judgment on an affirmative defense if the defendant conclusively

proves all the elements of the affirmative defense.        Frost Nat’l Bank v.

Fernandez, 315 S.W.3d 494, 508–09 (Tex. 2010), cert. denied, 131 S. Ct. 1017

(2011); see Tex. R. Civ. P. 166a(b), (c). To accomplish this, the defendant-

movant must present summary judgment evidence that conclusively establishes

each element of the affirmative defense. See Chau v. Riddle, 254 S.W.3d 453,

455 (Tex. 2008).

      When both parties move for summary judgment and the trial court grants

one motion and denies the other, the reviewing court should review both parties’

summary judgment evidence and determine all questions presented.           Mann

Frankfort, 289 S.W.3d at 848; see Myrad Props., Inc. v. Lasalle Bank Nat’l Ass’n,

300 S.W.3d 746, 753 (Tex. 2009).       The reviewing court should render the

judgment that the trial court should have rendered. Mann Frankfort, 289 S.W.3d

at 848.

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      The Texas Attorney General is specifically authorized to bring an action in

the public interest against an entity it believes is engaged in conduct prohibited

by the DTPA. Tex. Bus. & Com. Code Ann. § 17.47(a) (West 2011); Bara v.

Major Funding Corp. Liquidating Trust, 876 S.W.2d 469, 471 (Tex. App.––Austin

1994, writ denied).   One of the purposes of enforcement of the DTPA by the

attorney general is to prevent a multiplicity of suits. Bara, 876 S.W.2d at 472.

Here, the Texas Attorney General did just that and obtained a final judgment

from the 270th District Court of Harris County declaring that all NorVergence

ERAs were obtained in violation of the DTPA and were void ab initio.

      Liberty Bank complains that although it had actual knowledge of the Texas

suit and the judgment signed by the 270th District Court of Harris County, it was

not served with process in the Texas lawsuit and therefore cannot be bound by

the Texas judgment. NorVergence assigned its ERA with Etter to Liberty Bank;

as an assignee, Liberty Bank stands in the shoes of NorVergence. See, e.g.,

Burns v. Bishop, 48 S.W.3d 459, 466 (Tex. App.––Houston [14th Dist.] 2001, no

pet.) (stating that “[i]t is axiomatic that an assignee or subrogee walks in the

shoes of his assignor”). The fact that Liberty Bank, as NorVergence’s assignee,

was not served with process in the Texas Attorney General’s DTPA suit does not

result in Liberty Bank’s possessing more rights than its assignor, NorVergence.

That is, Liberty Bank’s rights are dictated by its status as an assignee; because

NorVergence’s ERA with Etter was void ab initio and because NorVergence



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possesses no right to enforce the ERA, NorVergence’s assignee Liberty Bank

likewise possesses no right to enforce the ERA against Etter. See id.

      Liberty Bank also argues that because NorVergence assigned Etter’s ERA

to Liberty Bank before NorVergence’s bankruptcy, Liberty Bank’s assignment

falls within an exception in the judgment and is still enforceable. In making this

argument, Liberty Bank focuses on one part of the judgment providing that

NorVergence consumer financing agreements assigned to a third party after

those contracts were rejected in the bankruptcy case were void and uncollectible

by any person or entity. This portion of the judgment cannot, however, be read in

isolation; when read as a whole, the judgment’s declaration that all

NorVergence’s ERAs are void ab initio is not temporally limited. To the contrary,

another provision of the judgment enjoins NorVergence and “any other person in

active concert or participation with” NorVergence from “[e]nforcing, attempting to

enforce, collecting, or attempting to collect any monies purportedly owed under

any NorVergence equipment rental agreement from any Texas consumer,

business[,] or entity.” [Emphasis added.]

      Liberty Bank also argues that Etter was not entitled to summary judgment

because Texas courts must give full faith and credit to the Iowa judgment. But

Liberty Bank has not cited any cases in support of this proposition that present

facts comparable to the current facts. A Texas court found Etter’s ERA with

NorVergence void ab initio before the Iowa court signed a summary judgment for

Liberty Bank as assignee of NorVergence’s ERA with Etter that purported to

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enforce the ERA against Etter. Liberty Bank has not cited, and we are not aware

of, any authority that Liberty Bank’s full-faith-and-credit argument applies to the

present facts. As indicated by the trial court, “[a]s a matter of public policy[,] an

action such as that pursued by the Attorney General in the discharge of his

[c]onstitutional obligations must be given effect.” See Tex. Const. art. IV, § 2.

      Liberty Bank further argues that Etter did not timely attack the Iowa

judgment.    But a void judgment, such as the one here, can be collaterally

attacked at any time. See PNS Stores, Inc. v. Rivera, 379 S.W.3d 267, 272 (Tex.

2012). The record reveals that Etter has been attempting to stop Liberty Bank’s

efforts to enforce the void ab initio ERA since June 2005, when he originally filed

suit in Tarrant County Court at Law Number Three requesting a temporary

restraining order that would enjoin Liberty Bank from proceeding with attempts to

collect monies from him and from proceeding with the suit against him in Iowa,

and that he re-filed suit the day before the Iowa judgment was signed. We

therefore conclude that under Rivera and the record presented here, Etter timely

attacked the Iowa judgment as void ab initio. See id.

      In summary, considering Etter’s summary judgment evidence in the light

most favorable to Liberty Bank as the nonmovant, crediting evidence favorable to

Liberty Bank if reasonable jurors could, and disregarding evidence contrary to

Liberty Bank unless reasonable jurors could not, we hold that Etter conclusively

established that he was entitled to summary judgment because the ERA

assigned to Liberty Bank that it sought to enforce against him was void ab initio

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and unenforceable. See Fielding, 289 S.W.3d at 848; Chau, 254 S.W.3d at 455.

Because Etter established his right to summary judgment on this basis, we need

not address the grounds for summary judgment presented in Liberty Bank’s

competing motion for summary judgment. We overrule Liberty Bank’s first issue,

which is dispositive of the appeal.      See Tex. R. App. P. 47.1 (stating that

appellate court needs to address every issue necessary for final disposition of

the appeal).

                                 IV. CONCLUSION

      Having overruled Liberty Bank’s first issue, which is dispositive of the

appeal, we affirm the trial court’s judgment.


                                                SUE WALKER
                                                JUSTICE

PANEL: GARDNER, WALKER, and MCCOY, JJ.

DELIVERED: September 19, 2013




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