Opinion issued December 6, 2018




                                       In The

                                Court of Appeals
                                       For The

                           First District of Texas
                              ————————————
                                NO. 01-16-00589-CV
                             ———————————
                   WINNIE STACEY ALWAZZAN, Appellant
                                          V.
   ISA ALI ALWAZZAN AND INTERNATIONAL AGENCIES CO., LTD.,
                          Appellees


                     On Appeal from the 306th District Court
                            Galveston County, Texas
                        Trial Court Case No. 13-FD-0848


                             DISSENTING OPINION

      This case involves four divorce actions between the parties to the same marriage

filed consecutively in three different counties. I agree with the majority opinion that

petitioner Winnie Stacey Alwazzan (Winnie) failed to satisfy the Family Code’s
statutory residency requirement for maintaining a divorce action against her husband

Isa Ali Alwazzan (Isa) and a Bahrani company owned in part by Isa’s family,

International Agencies Co., Ltd. (IACL), in Galveston County; thus, the trial court

correctly dismissed the underlying Galveston County divorce action on that basis. I

also agree with the majority opinion that evidence supported the trial court’s sanctions

award against Winnie.

      However, failure to establish residency is not a jurisdictional issue. I would hold

that the Harris County district court had both subject-matter jurisdiction and personal

jurisdiction over all the parties, that the Harris County divorce was final, and that

subject-matter jurisdiction not only did not attach in Galveston County but could not

attach, and therefore that the Galveston County court correctly entered judgment

dismissing the case for lack of jurisdiction. I would transfer this case to Harris County

for entry of the decree.

      The majority opinion, by contrast, reverses both of the Galveston County court’s

jurisdictional holdings. In the majority’s opinion, the trial court did have subject-

matter jurisdiction over the divorce action and the issue of the court’s personal

jurisdiction over IACL was never reached and remains pending in Galveston County.

Accordingly, it holds that the trial court erred both by granting Isa’s plea to the

jurisdiction on the basis of lack of subject-matter jurisdiction and by finding that it

lacked personal jurisdiction over both Isa and IACL.

                                           2
      I disagree on all these matters. I believe the majority opinion inaccurately

represents the proceedings and record below, and that the opinion is internally

inconsistent and incompatible with the facts of the case and the law. Therefore, I agree

with the majority opinion only insofar as it holds that dismissal was proper on statutory

grounds and affirms the sanctions award against Winnie, which remained pending

after dismissal of the action on jurisdictional grounds and was supported by evidence

before the Galveston County court.

      In my view, the majority errs in holding that the Galveston County trial court

properly granted Isa’s plea to the jurisdiction based on Winnie’s failure to meet the

statutory residency requirement, which is a non-jurisdictional requirement, as the

majority acknowledges. It further errs in holding subject-matter jurisdiction still

inherently remained in the Galveston County court, requiring only that Winnie

establish residency there at some point. And it errs in leaving pending in that court

IACL’s special appearance and bill of review. The majority opinion and judgment thus

violate Texas Rule of Appellate Procedure 47.1, which requires the court of appeals to

hand down a written opinion that is as brief as practicable but that addresses every

issue raised and necessary to final disposition of the appeal. See TEX. R. APP. P. 47.1.

      The majority makes other mistakes. It states in its fact section that because

Winnie objected to the trial court’s hearing IACL’s bill of review, pending in the same

court in a separately-filed action under the pendent jurisdiction afforded by the filing

                                           3
of Winnie’s action in Galveston County, and because that bill of review had a separate

cause number, the Galveston County court did not hear the bill of review. Yet the

record shows on its face that the Galveston County court did hear the bill of review.

The majority also states that IACL’s special appearance was not heard and is not

pending before this court in this appeal, even though (1) IACL filed a special

appearance both in the underlying action and in the bill of review; (2) IACL’s

appearance at the July 19, 2016 hearing on Isa’s plea to the jurisdiction was expressly

made subject to its special appearance, as was expressly acknowledged in the trial

court’s dismissal order; and (3) the trial court, in fact, heard and sustained the special

appearance and found the in rem order entered against IACL void and sanctionable

precisely because the trial court lacked personal jurisdiction over IACL as well as

subject-matter jurisdiction over the underlying Galveston County action.

      Both of the Galveston County court’s July 21, 2016 Orders entered following

the July 19 hearing and now on appeal—its “Order Granting Isa Ali Alwazzan’s Plea

to the Jurisdiction” and its separate “Order Vacating May 6, 2016 Order for Judgment

in Rem Subject to Co-Respondent’s [IACL’s] Special Appearance”—reflect a record

different from the record as represented by the majority and support an understanding

different from the majority’s as to what transpired in the July 19 hearing. The trial

court’s rulings are based on facts the majority fails to credit that support jurisdictional

rulings the majority fails to make.

                                            4
      The Galveston County trial court’s “Order Granting Isa Ali Alwazzan’s Plea to

the Jurisdiction” states that, “after considering the motions, the law, the evidence

submitted in the Motions, including the Declaration of Isa Alwazzan, the evidence

submitted at the hearing, and the arguments of counsel,” the court determined that Isa’s

Plea to the Jurisdiction should be granted because the court “lacked both subject matter

jurisdiction over the subject matter of this divorce action and personal jurisdiction of

the Respondents Isa Alwazzan and International Agencies Co. Ltd.” Because of these

jurisdictional rulings, the trial court did not reach the issues in Isa’s Motion for New

Trial. The trial court sustained the Plea to the Jurisdiction and held that it had no

jurisdiction to hear the divorce filed in Galveston County “or any of the motions,

orders and ancillary matters filed thereafter (including [but] not limited to the Turnover

and Appointment of Receiver Order and any and all actions related to a Receiver

and/or levy or other attachment of assets, property and/or funds)” related to the default

judgments taken against Isa and IACL. It ordered that the final decree of divorce

entered in Galveston County in June 2014 was “void and vacated,” dissolved the

receivership of IACL it had created by previous order, and ordered that “all other

judgments, orders and matters related to this cause are void, a nullity, of no effect,

vacated and not enforceable.”

      The trial court’s “Order Vacating May 6, 2016 Order for Judgment in Rem

Subject to Co-Respondent’s Special Appearance” stated that, as a result of the July 19

                                            5
hearing and the various filings the court considered during the hearing—including

Isa’s plea to the jurisdiction and IACL’s bill of review—the court found that “the

Petitioner [Winnie] never had jurisdiction to commence this action.” The Order also

reflected that the court ruled that “the action be dismissed, the June 2014 judgment be

vacated, and that all subsequent supplemental orders be vacated,” including the

November 6, 2015 order for turnover and appointment of receiver for IACL and “the

May 6, 2016 Order which had granted the Receiver Judgment in Rem of funds that

had been levied from HSBC Bank[.]” The trial court vacated the May 6, 2016 Order

for Judgment In Rem and ordered HSBC Bank to release IACL’s funds restrained by

the receiver’s levy.

      After obtaining dismissal of the Galveston County action and vacatur of the

court’s prior orders, Isa and IACL pursued sanctions against Winnie and her attorneys,

in the form of attorney’s fees, pursuant to Civil Practice and Remedies Code Chapter

10, Texas Rule of Civil Procedure 13, and the trial court’s inherent jurisdiction. Isa

and IACL claimed that Winnie and her attorneys violated Rule 13 and Chapter 10 by

“fil[ing] groundless pleadings in bad faith seeking to create jurisdiction where none

existed, alleging that separate property was community property, and seeking an

improper third attempt at a judgment against IACL and Isa[.]” Following a three-day

evidentiary hearing on the motion for sanctions in September 2016, the trial court

signed an order on October 25, 2016, awarding monetary sanctions, in the form of

                                          6
attorney’s fees, against Winnie only. At Winnie’s request, the court entered findings

of fact and conclusions of law.

      For the reasons set forth below, I would hold that neither subject-matter

jurisdiction nor personal jurisdiction over either Isa or IACL ever properly attached in

Galveston County—and could never properly attach there under the established facts

of this case and the law—and that all actions of the Galveston County court, other than

its rulings on jurisdictional and related issues, its vacating of its prior orders, and its

sanctions award against Winnie, are null and void.

      I would further hold that the non-suit obtained by Winnie in Harris County was

improper and that all claims pertinent to that divorce action were finally adjudicated

by the associate judge of that court. Therefore, the final order of the associate judge

constitutes the decree of divorce between Isa and Winnie, effective as of the day it was

signed and entered by the associate judge. Accordingly, all subsequent claims other

than post-judgment motions filed in the Harris County district court should have been

dismissed with prejudice.

      I would affirm the order of the Galveston County court dismissing this action

on jurisdictional grounds, granting sanctions against Winnie, and vacating all other

orders. I would order this case transferred back to Harris County district court for entry

of the final decree of divorce in accordance with this opinion.



                                            7
                                    I. Background

      The complex material facts are restated below for clarity and completeness.

      Isa, a citizen of the Kingdom of Bahrain, moved to Texas in the 1980s to attend

college, where he met Winnie. They married in 1985. Isa ultimately became an

American citizen, but he maintained his Bahraini citizenship. Isa and Winnie had three

children: a daughter born in 1985, a son born in 1995, and another son born in 1997.

Isa and Winnie lived with their children in Montgomery County, Texas.

A.    The Montgomery County Divorce Actions

      In 2011, Isa and Winnie separated. Winnie first filed for divorce in Montgomery

County in May 2011. She non-suited this action in July 2011 and re-filed for divorce

in the same county one week later. Four months after that, Winnie and Isa signed a

mediated settlement agreement (MSA). The MSA covered issues relating to

conservatorship, geographic restrictions on residency of the minor children, child

support, and division of the parties’ marital property. On the signature page, the MSA

cautioned the parties that it was “not subject to revocation,” that the “the Mediator will

only report to the Court that we have agreed on settlement terms,” and that “it is [the

parties’] responsibility to file this MSA with the Court.” Isa alleged that his attorney

informed him that she had filed the MSA with the Montgomery County court.

      The MSA provided that Winnie’s attorney would prepare a final decree of

divorce by December 1, 2011. Winnie’s attorney forwarded the proposed final decree

                                            8
to Isa’s attorney on December 22, 2011. In partial compliance with the MSA, Isa

deposited $168,000.00 with the First Community Bank in Tomball as a lump-sum

child support payment. However, the Montgomery County court never signed a

divorce decree. Instead, Winnie retained new counsel, and, on February 7, 2012, her

new counsel filed a non-suit of the Montgomery County action.

B.    The Harris County Divorce Action

      On February 7, 2012, the same day that she filed her non-suit in the Montgomery

County action, Winnie filed an “Original Petition” for divorce in Harris County district

court. The petition did not mention the Montgomery County divorce action or the fact

that it had resolved all issues between the parties. Instead, Winnie averred that there

were “no court-ordered conservatorships . . . or other court ordered relationships”

concerning the couple’s two minor children.

      In April 2012, Isa returned to Bahrain. Isa appeared in the Harris County divorce

action by retained counsel and filed a counter-petition against Winnie alleging that her

claims were barred by res judicata. Winnie also added IACL, Isa’s family’s company

in Bahrain, to the divorce suit, claiming that she had a community property interest in

the company.

      Following a hearing on March 6, 2012, the associate judge of the Harris County

court signed temporary orders appointing Isa and Winnie joint managing conservators

of their minor sons K.A. and E.A. The orders provided, “These Temporary Orders

                                           9
shall continue in force until the signing of the Final Decree of Divorce or until further

order of this Court.” On April 27, 2012, the associate judge signed additional orders,

including an order that Isa pay Winnie’s expert fees and expenses and that he pay

“reasonable interim attorney’s fees and expenses” to Winnie’s attorneys. On August

1, 2012, the associate judge issued additional temporary orders ordering that Isa’s

income be withheld to pay child support. Each of these orders recited that the orders

remained in full force and effect until the final decree of divorce was signed.

      The Temporary Orders were subsequently partially modified in the associate

judge’s December 2012 Report.

      On December 10, 2012, the Harris County case was tried before the district

court’s associate judge. IACL had not filed an answer and was not represented by

counsel at trial. Winnie averred that IACL had been served through the Texas

Secretary of State’s Office and would be in default. The court observed that the citation

lacked the signed return of service on IACL required by the Texas Rules of Civil

Procedure and that this meant “you don’t have good service.” The court then took

judicial notice that the citation “indicates that service was made on P.O. Box 1207,

Austin, Texas, Secretary of State Third Amended Petition for Divorce.”

      Isa did not personally appear at trial, but he was represented by his retained

counsel. Because Isa was out of the country and not present, the associate judge ruled

that he was in default, struck Isa’s pleadings, and did not permit his counsel to raise

                                           10
his res judicata affirmative defense that all issues had been resolved in the MSA filed

in Montgomery County. Winnie’s counsel called her as the sole witness at trial.

      At the end of the trial, counsel for both parties informed the associate judge that

they had agreed to waive a de novo hearing to the referring district court judge.

Winnie’s counsel stated, “[E]verybody is waiving appeal to the referring Court . . . so

that we’re trying it once.” Isa’s counsel responded, “That is correct, Judge. That is our

agreement.” The associate judge rejected Winnie’s counsel’s request that he

pronounce the divorce, explaining that only the district court judge could grant the

divorce by signing the decree.

      Following trial, the associate judge issued a written report, addressing issues

that included conservatorship of the children and division of the community estate.

Winnie was awarded sole managing conservatorship and Isa possessory

conservatorship of the children. In the report, the associate judge awarded IACL’s

“assets and liabilities” to Isa. The associate judge awarded Winnie $3.5 million against

Isa but did not award her monetary relief against IACL.

      Winnie then filed a motion “for additional findings.” In the motion she included

a request that the associate judge reconsider his finding of no liability against IACL.

She asked the associate judge to award a money judgment against IACL and Isa,

jointly and severally. Winnie asserted that she had shown at trial that Isa “hides his

money within [IACL] and withdraws it at his whim” and that IACL “is a sham to

                                           11
protect [Isa] from his creditors.” The associate judge denied Winnie’s motion on

February 21, 2013.

      On April 10, 2013, Winnie filed a notice of non-suit in the Harris County action,

as she had in the Montgomery County action. The notice was served on Isa’s retained

counsel. The presiding judge of the Harris County district court signed an “Order on

Notice of Non-Suit” on April 12, 2013. The order stated that “the case is dismissed.”

C.    The Galveston County Divorce Action

      1.     The April 10, 2013 Galveston County Divorce Action

      On April 10, 2013—the same day that she non-suited her Harris County divorce

action following trial with its agreed waiver of a de novo hearing before the district

court—Winnie filed the suit underlying this appeal by filing an “Original Petition for

Divorce” in the Galveston County district court. Winnie named both Isa and IACL as

respondents. In her petition, she represented that she was “a resident of this

[Galveston] county or will have resided in [Galveston County] by final trial for the

preceding 90-day period.” Winnie stated that she and Isa had two minor children “who

are not under the continuing jurisdiction of any other court.” She also alleged that there

were “no court-ordered conservatorships . . . or other court-ordered relationships

affecting the children,” even though the Harris County action had not yet been

dismissed by order of the Harris County district court at that time. The petition made

no mention of either the Montgomery County divorce action or the Harris County

                                           12
divorce action.

      In her affidavit in support of her original petition in the Galveston County

action, Winnie swore that she had “no idea” where Isa was and was unable to locate

him, despite her due diligence. She asserted that citation by publication would be the

appropriate means of serving Isa. She also asserted that IACL could be served through

the Texas Secretary of State, although she made no allegation that IACL was doing

business in Texas. She asserted only that IACL was a foreign corporation located at

“131 Cel-Khalefa Avenue, Manama, Kingdom of Bahrain.”

      Winnie filed an amended petition in the Galveston County divorce action on

June 3, 2013. Winnie continued to seek relief from IACL in this petition. She alleged:

      16. Relief from [IACL] for Fraudulent Transfer

      [IACL] is a corporation established under the laws and customs of the
      Kingdom of Bahrain. It is alleged to be the recipient of community funds,
      interests, and/or property that was fraudulently transferred by [Isa] to
      [IACL], without consideration and/or for less than reasonably equivalent
      value. The purpose of the transfer was to defraud [Winnie’s] property
      rights in that property and/or [Winnie’s] separate property rights in that
      property, and [IACL] had notice of [Isa’s] intent to injure [Winnie’s]
      rights. [Isa] has transferred and/or delivered and/or given to [IACL]
      interests in the community estate.

      [IACL] has further subjected itself to the jurisdiction of Texas and
      furthered the villainous aims of the fraud, [waste], and emotional distress
      of [Winnie] by attempting to form INTERCOL USA, LTD, CO, a
      whol[ly] owned subsidiary of [IACL] formed by [Isa] to further
      perpetrate scams on [Winnie’s] property rights through transfers of
      property and structuring of the businesses.


                                          13
      17. Sham corporation

      [Isa] has disregarded the formalities of the corporation and treats the
      assets and income of [IACL] as his own. By doing so, [Isa] has ignored
      and disavowed the corporate veil. The assets of [IACL] should be treated
      as community assets.

      18. Fraud

      [IACL] is alleged to have engaged in a pattern of conduct that
      demonstrates a conspiracy to defraud [Winnie] of her interest in the
      community estate. [IACL] has assisted and permitted [Isa] to open
      businesses such as Innovative Design Concepts, Ltd., a British
      Corporation . . . under the auspices of [IACL]. EXIT LONE STAR
      REALTY is a Texas Corporation that was created as a subsidiary of
      [IACL] in Texas to avoid the participation of [Winnie] and the
      community.

      Although Winnie alleged that IACL was involved in a fraudulent transfer, she

did not indicate which, if any, property had been fraudulently transferred. She did not

allege a factual basis for IACL’s liability in the divorce action. She alleged no factual

basis for finding that Isa exercised dominion and control over IACL, that IACL was

Isa’s alter ego, or that Isa managed the corporation. She alleged no facts to show that

IACL ignored its corporate form or to show that its assets could be treated as

community assets. She also failed to allege facts sufficient to establish jurisdiction

over IACL.

      On June 3, 2013, Winnie filed a motion to serve Isa by publication. In her

supporting affidavit, she averred:

      I have not seen my husband Isa Ali Alwazzan, since April 24, 2012. I
      have no idea where he is at present. . . . [Isa] is a transient person. I have
                                           14
      exercised due diligence to locate the whereabouts of [Isa] and have been
      unable to do so. I have attempted to contact [Isa] at his old addresses, old
      phone numbers, old friends, and hangouts. I have been unsuccessful in
      finding him. [Isa] can be contacted through his company [IACL].
      Although they will not tell me where he is, they can always get him a
      message or money. Serving him through [IACL] would be as likely as
      any other method of service to provide actual notice of this suit.

Winnie failed to inform the Galveston County court that she had been in regular

contact with Isa through her children, who spoke with him regularly by phone and had

taken several trips to visit him overseas, which were approved by Winnie in

accordance with the terms of the temporary orders in the Harris County suit. Winnie

also concealed from the Galveston County court that she communicated regularly with

Isa through email, and, although he did not respond, she knew from her children that

he was receiving and reading her emails.

      The trial court granted Winnie’s motion, ordering that Winnie serve Isa “by

publishing notice in the Galveston County Daily News.” Winnie filed a return of

service, indicating that notice of the suit had been published on July 23, 2013. Winnie

made no other attempt to serve Isa in the Galveston County action.

      Winnie also alleged that IACL could be served through the Texas Secretary of

State’s office. The citation and amended petition was served on the Texas Secretary

of State’s office on June 10, 2013. The Secretary of State then forwarded the amended

divorce petition and citation to an address in Bahrain that Winnie had provided.

However, the Secretary of State never returned proof to the Galveston County clerk to

                                           15
indicate whether service was made on IACL, and the record of filings with the

Secretary of State indicated that the citation was mailed to an incorrect address that

excluded a P.O. Box number: “131 Al-Khalefa Avenue, Manama, Kingdom of

Bahrain.” The certification by the Texas Secretary of State, dated September 3, 2013,

stated, “As of this date, no response has been received in this office.”

      On November 7, 2013, the Galveston County court appointed an attorney ad

litem, W. David Marion, to represent Isa in his absence. Marion filed an answer on

Isa’s behalf, generally denying Winnie’s claims.

      On June 10, 2014, Winnie’s counsel served a three-day “Notice of Intention to

Proceed with Default” on “each attorney of record.” The only attorney of record

besides Winnie’s attorneys was the court-appointed ad litem counsel for Isa. Neither

IACL nor Isa was given actual or constructive notice of the default trial.

      2.     The June 13, 2014 Galveston County Trial and Default Divorce Decree

      The case was tried in the Galveston County district court before a visiting judge

on June 13, 2014. Winnie and her counsel attended trial, but neither Isa nor IACL

appeared. Isa’s appointed ad litem counsel appeared at trial on Isa’s behalf, arriving

late because of lack of notice. No counsel appeared for IACL.

      Winnie was the only witness to testify at the default trial. She answered

affirmatively when asked by her counsel if, prior to filing the Galveston County action,

she had lived in Texas for at least six months and in Galveston County for at least

                                           16
ninety days. Winnie testified that Isa had left the country in 2012 with another woman

with whom he was having an affair and that Isa had cut off all funds to her. Winnie

testified that Isa had physically abused the children, including giving their youngest

son, E.A., a black eye shortly before Isa left the country.

      Winnie testified that she served Isa by publication in the Galveston County

action because Isa was transient, traveling around Europe and the Middle East with no

fixed address. She stated that she tried to contact Isa through his family and through

IACL, but neither his family nor IACL would give her his address. She testified that

she had no way to contact Isa and stated that he had “cut off” communications with

her and their children. Winnie testified that E.A. had spoken to Isa via Skype, but Isa

did not tell E.A. where he was living.

      Winnie testified concerning IACL and its connection to Isa’s family. She stated

that the company, which has its headquarters in Bahrain and engages in numerous

different types of businesses, was founded by Isa’s father, and ownership had later

been transferred to Isa and his two brothers after she and Isa married. She stated that,

during her marriage to Isa, IACL’s value had increased greatly, and it had built

numerous buildings in Bahrain. Although she offered no documentation concerning

the total assets of IACL or what it was worth, she testified that Isa often bragged that

IACL was worth $5 billion.

      With respect to IACL’s connection to the United States, Winnie testified that

                                           17
IACL had provided all the funding for a real estate business that Isa had started on

IACL’s behalf in the United States. She also offered into evidence a “certificate of

filing” from the Texas Secretary of State’s Office for “INTERCOL USA LTD CO.,”

which, according to Winnie, was a company IACL used to conduct operations in the

Unites States. She did not provide details concerning the nature of these operations or

what actions IACL had taken or what business it had conducted in Texas. Winnie

agreed with her counsel that Isa would “bring [items] into the United States as

[IACL’s] agent and would sell stuff in the United States and likewise would buy stuff

in the United States, ship it at the request of [IACL] to sell at [IACL].”

      Winnie did not testify that she had any first-hand knowledge of the affairs of

IACL or of any company it used for operation or business it conducted in Texas.

However, she characterized IACL as a corporate sham, testifying that Isa and his

family routinely disregarded IACL’s corporate form and intermingled assets with

IACL, including community property assets. She testified that, after she and Isa

separated, Isa transferred $500,000 of community funds to IACL, leaving her with

significant unpaid community debt. As a result, their martial residence, worth

$800,000, had been foreclosed upon.

      Winnie’s documentary evidence included her inventory, which listed hers and

Isa’s assets and liabilities. She valued Isa’s 16.6666% ownership interest in IACL at

$666,000,000.00.

                                           18
      On June 13, 2014, the visiting Galveston County judge signed a default divorce

decree, dissolving Winnie and Isa’s marriage. At the time of the decree, E.A. was

Winnie and Isa’s only minor child, and the decree appointed Winnie as E.A.’s sole

managing conservator and Isa as his possessory conservator. The decree ordered Isa

to pay child support and spousal maintenance to Winnie. The decree also awarded

Winnie a money judgment of $416,532,514.56 against Isa and IACL, jointly and

severally.1 The visiting judge made no findings of fact.

      On June 15, 2014, Isa’s appointed attorney ad litem sent a letter to Isa informing

him of the default divorce decree. The letter was addressed and sent to IACL. Isa

received the letter in early August 2014. Isa remarried in 2015. Isa’s appointed counsel

did not file a motion for new trial.

      3.     Winnie’s October 2015 Motion for Turnover and Appointment of a
             Receiver for IACL, the Receiver’s Motion for Judgment In Rem
             Against IACL, and IACL’s May 2, 2016 Special Appearance

      More than a year after the visiting Galveston County judge signed the default

divorce decree, in October 2015, Winnie filed an “Application for Turnover after

Judgment and Appointment of Receiver.” She alleged that she had been unable to

collect the $416,532,514.56 money judgment from Isa and IACL, and she requested

that the trial court appoint a receiver to assist in the collection of the judgment. On


1
      The Galveston County visiting judge signed a reformed decree of divorce on June 19,
      2014. This decree specifically awarded Winnie real property in Hockley, Texas, and
      a condo in Galveston, and the decree divested Isa of his interest in these properties.
                                            19
November 6, 2015, the trial court—a different judge than the visiting judge who signed

the default divorce decree in June 2014—granted Winnie’s application, appointed a

receiver, and authorized the receiver “to take possession of all non-exempt property”

in Isa’s or IACL’s “actual or constructive possession.” The court required the receiver

to post a bond of only $100.

      In December 2015, the receiver issued a “Revised Court Levy” to HSBC Bank,

requesting the bank to intercept any wire transactions to IACL or Isa and send any

intercepted funds to the receiver. In response to the levy, HSBC Bank suspended a

series of wire transfers that were either originated by IACL or for which IACL was

the intended beneficiary.

      On April 20, 2016, the receiver filed a motion for judgment in rem, requesting

that the court order HSBC Bank to place approximately $1,500,000 into the registry

of the court for eventual distribution to Winnie. A hearing was set for May 4, 2016, on

this motion.

      On May 2, 2016, two days before the hearing on the receiver’s motion, IACL

filed a special appearance, which it amended on May 4. IACL challenged the trial

court’s personal jurisdiction over it, arguing that the trial court lacked personal

jurisdiction because IACL did not have sufficient minimum contacts with Texas.

IACL also asserted that Winnie failed to serve it with process, stating, “IACL has

never accepted or consented to service and it appears that the Secretary of State has no

                                          20
recorded proof of service.”

      4.     IACL’s May 4, 2016 Plea to the Jurisdiction

      On May 4, 2016, IACL filed a “Motion to Set Aside Default Judgment for Lack

of Personal Jurisdiction and Subject Matter Jurisdiction and for Limited Discovery

Related to the Issues Raised for Vacatur,” subject to its special appearance. It sought

to set aside the default judgment signed on June 13, 2014, for lack of personal

jurisdiction over IACL because IACL did not have sufficient minimum contacts with

Texas and Winnie failed to serve IACL with process. IACL also argued that the

Galveston County court lacked subject-matter jurisdiction over IACL as a foreign

corporation because its amenity to jurisdiction had not been shown by the pleading of

jurisdictional facts in Winnie’s divorce petitions, such as facts relevant to a finding

that IACL was Isa’s alter ego, and could not be shown. IACL sought discovery of

jurisdictional facts and facts related to service of process.

      The trial court signed an order denying IACL’s special appearance on May 5,

2016, without hearing the merits of the application. That same day, the trial court

signed an order granting the receiver’s motion for an in rem judgment, ordering HSBC

Bank to deposit over $3.6 million in funds originating from IACL into the court’s

registry to be distributed to the receiver and Winnie.

      5.     IACL’s May 11, 2016 Petition for Writ of Mandamus to this Court

      On May 11, 2016, IACL filed a petition for writ of mandamus in this Court and

                                            21
a motion to stay the Galveston County court’s May 5, 2016 order enforcing the June

2014 default judgment, complaining that the trial court had not held a hearing on its

special appearance and asserting that the trial court did not have personal jurisdiction

over IACL and that the court had failed to hear and decide its special appearance. In

response to an emergency motion filed by IACL, this Court stayed the trial court’s

order requiring HSBC Bank to deposit funds originating from IACL into the registry

of the Galveston County court.

      6.     Isa’s June 13, 2016 Plea to the Jurisdiction and Motion for New Trial

      While the mandamus petition was pending in this Court, on June 13, 2016, Isa

filed a motion for new trial and plea to the jurisdiction in the Galveston County court,

using newly retained counsel.

      In his plea to the jurisdiction, Isa asserted that the Galveston County court

lacked subject-matter jurisdiction over this suit because, when suit was filed, the Harris

County court had continuing, exclusive jurisdiction over the matter. Isa also argued

that the rulings in the Harris County action had a res judicata effect, barring the

Galveston County court from considering Winnie’s claims. Isa further argued that the

parties had signed a binding MSA in the Montgomery County action which precluded

the Galveston County court from issuing contradictory rulings or orders. Finally, Isa

argued that the Galveston County court could not render a decree of divorce because

neither party had been a resident of Galveston County for the ninety days preceding

                                           22
the filing of the Galveston County divorce action, as required by the Texas Family

Code section 6.301. See TEX. FAM. CODE ANN. § 6.301 (West 2006).

      Isa’s motion for new trial, supported by his declaration, sought to vacate and

dismiss the June 2014 default divorce decree. See TEX. R. CIV. P. 329(a) (authorizing

trial court to grant motion for new trial filed within two years of judgment, if judgment

was rendered on service by publication and defendant did not appear in person or by

attorney of his own selection). Isa argued that a new trial was proper because:

(1) service of process by publication was invalid; (2) Winnie had not satisfied the

mandatory residency requirement of section 6.301; (3) the Harris County associate

judge had conducted a trial on the merits and entered a ruling, and thus res judicata

barred re-litigation of Winnie’s claims; (4) the MSA entered into in the Montgomery

County action remained enforceable; and (5) Winnie’s actions of filing the Galveston

County divorce action, after previously filing and non-suiting the same claims in both

Montgomery County and Harris County, constituted “blatant forum shopping.”

      7.     IACL’s June 30, 2016 Bill of Review

      On June 30, 2016, IACL filed a separate bill-of-review action in the Galveston

County court, also seeking to vacate and dismiss the June 2014 default judgment

against it in this case. This action was filed under a different trial court cause number

from Winnie’s Galveston County divorce action. In its bill-of-review petition, IACL

asserted that the Galveston County court’s June 2014 divorce decree in this case should

                                           23
be vacated because the Galveston County court lacked both subject-matter and

personal jurisdiction to render the decree, Winnie did not properly serve IACL with

process, and res judicata barred re-litigation of claims already decided by the Harris

County court.

      Along with numerous other exhibits, IACL attached the affidavit of Abdul

Rahman Ali Alwazzan, the older brother of Isa. In it, Abdul Rahman averred that he

was one of two Directors of IACL and had been “for more than forty-four years.” He

averred that IACL is a Bahraini corporation “duly formed under the laws of The

Kingdom of Bahrain” in 1957, half of which is owned by the Alwazzan family. In

early 1972, his and Isa’s father died and half of the company passed equally to his

three sons. Abdul Rahman further averred that Isa moved to Texas in the early 1980s

and lived there until 2012; that Isa had never served as a manager, director, or officer

of IACL; and that he had not been employed by IACL. Although Isa used the name

“Intercol” for several of his businesses in Texas, these businesses sold different

products in a different market in a line of business—real estate brokerage—in which

IACL had never been involved.

      Abdul Rahman further averred, “IACL did not do any business in Texas at any

time during the marriage between Isa and Winnie Stacey,” did not ship goods to Texas,

never had an interest in real property in Texas, never owned a subsidiary in Texas,

“and was not in any way doing business in Texas in any capacity, since the 1970’s.”

                                          24
Finally, he averred that, according to the face of the certification of service, the Texas

Secretary of State sent notice to the wrong address that was inadequate for service to

reach IACL and that he “did not learn of the Galveston case until after the Receiver

had been appointed” in November 2015, “and [the Receiver] started with the intent of

disrupting IACL’s business.”

      8.     The Galveston County Court’s July 19, 2016 Hearing and Ultimate
             Dismissal of Winnie’s Galveston County Divorce Action for Lack of
             Subject-Matter and Personal Jurisdiction

      The Galveston County court held a hearing on Isa’s motion for new trial and

plea to the jurisdiction on July 19, 2016. The court determined to proceed on Isa’s

motions, after which it stated it would “look at proceeding” on IACL’s bill of review.

      Testimony elicited by Isa’s counsel established that, at the time of the June 2014

default hearing, Winnie worked for Tomball Ford. She had, in connection with a

request for a background check before starting employment, listed her current and past

addresses as in Magnolia, Texas, in Montgomery County, and then in Houston, in

Harris County; but she never had provided an address in Galveston County.

      The ad litem attorney appointed by the court to represent Isa in the Galveston

County divorce action, David Marion, also testified. He testified, in response to

questions from Isa’s counsel, that he had been unable to contact Isa because he was

never given any information other than that Winnie could not find him. Nevertheless,

he appeared at trial in June 2014 on Isa’s behalf and attempted to represent his client.

                                           25
He was unaware at that time that Isa and Winnie had previously signed an MSA, but

he testified that, had he known that the parties had settled all of their claims, he would

have advised the Galveston County court of that and would have asked that the current

case be abated or dismissed. He was also unaware of the trial on the merits before the

associate judge in Harris County, which would also have caused him to bring the

Harris County action to the attention of the Galveston County court and to seek that

this current case be dismissed or abated. He also testified that he was given three days’

notice of Winnie’s intention to take a default judgment in June 2014, rather than the

standard forty-five days’ notice of a first setting, but he did appear for part of the

default hearing. He did not know that at the time of the hearing Winnie was receiving

her mail in Tomball, Texas.

      On cross examination by Winnie’s counsel, Marion admitted that he did not

send any discovery to find out facts from Winnie. He did not have any contact with

IACL, and he did not seek Isa’s address from IACL, but only sought Isa’s address

online and failed to find it.

      On questioning from IACL’s attorney, Marion admitted that IACL did not

appear at the trial. Marion further testified that, after his appointment, he was made

aware that service had been authorized on IACL by serving anyone eighteen years of

age or older at a certain address in Bahrain. He knew that Isa had been authorized to

be served by publication in a Galveston newspaper or at the same address as IACL in

                                           26
Bahrain, but he had not seen evidence that service was ever effected on IACL or on

Isa. However, after the June 2014 default trial, Marion sent notice to Isa at the Bahrain

address, and Isa spoke with him and referred to that letter at a later time. Marion also

testified that, while he did not know of the non-suit taken in the Harris County case,

he did know that it is not possible under Texas Rule of Civil Procedure 162 to take a

non-suit after a trial on the merits. Marion did not file a motion for new trial or any

appellate proceeding on Isa’s behalf following the default hearing; he only signed the

divorce decree as to form and substance. Marion first spoke to Isa in the summer of

2014 after the default hearing, and they subsequently exchanged a few telephone calls

and emails. Isa retained Marion to file a brief in support of Isa’s motion for new trial

filed by Isa’s subsequently retained counsel. Marion appeared at the July 19, 2016

hearing as a witness, not as retained counsel.

      Winnie testified on examination by IACL’s attorney that she had signed the

MSA and that she had represented to the Galveston County court by affidavit that the

MSA was never filed in Montgomery County. She admitted that, in fact, it was filed

in Montgomery County. She also admitted that, after the MSA was signed, she non-

suited the Montgomery County divorce action and the same day filed a new petition

for divorce in Harris County. She also admitted that when she applied for work at

Tomball Ford in 2015 she did not give her employer any address other than Houston

in Harris County and Magnolia in Montgomery County. She likewise admitted that

                                           27
she gave testimony in the Harris County divorce action before the associate judge. She

also admitted that she worked for her counsel of record, Daniel Lemkuil, during 2014.

      Winnie testified that she did not remember asking the Harris County associate

judge to award her $666 million against Isa and IACL or the judge declining to do so.

She did recall non-suiting her Harris County divorce action and filing a new petition

for divorce in Galveston County on the same day, April 10, 2013. Winnie also admitted

that while she was claiming she did not know where Isa was or have any way to reach

him at the time the Harris County action was tried and non-suited and the Galveston

County action filed,2 she had sent numerous emails to Isa, she had signed the passport

application permitting her minor son to visit Isa in London the month before the default

hearing in June 2014, and she had emailed Isa where to pick their son up in baggage

claim when he landed, but she did not notify the court that she knew where Isa was.

Instead, she affirmatively represented to the Galveston County court at the default

hearing that her children had only Skyped once with Isa and had gotten a few emails.

She was unable to point to any documentation showing receipt of service by either Isa

or IACL at the address in Bahrain. Isa offered evidence to show that Winnie had not

used due diligence to locate him before claiming that she needed to serve him by

publication and she had not spoken with his court-appointed ad litem attorney.


2
      Winnie admitted that her counsel provided notice of her non-suit of the Harris County
      action to Isa’s retained counsel in that action, but she never sent a copy of the
      Galveston County action to that counsel.
                                           28
       The parties also presented evidence regarding whether Winnie had been a

resident of Galveston County for the preceding ninety days when she filed the

Galveston County action on April 10, 2013, as required by Family Code section 6.301.

In both her original and amended petitions, Winnie had represented that she was “a

resident of [Galveston] [C]ounty or will have resided in this county by final trial for

the preceding ninety-day period.” At the June 2014 default trial, Winnie had answered

affirmatively when her counsel asked whether she had “lived in Galveston County 90

days prior to filing suit.”

       At the July 2016 hearing, Winnie testified that she had moved to Galveston

County in February 2013, less than ninety days before filing suit in April 2013. In

response to questioning from her attorney, Winnie testified that she had moved from

Montgomery County to Galveston, where she spent “a majority of the time,” although

she also had a house in Hockley, in Harris County. Winnie’s counsel pointed out that

she had filed her amended petition in June 2013, more than ninety days after the date

Winnie testified she had moved to Galveston.

       Isa presented evidence at the hearing to show that Winnie had never established

residency in Galveston County. In his declaration supporting his motion for new trial,

Isa stated that Winnie told him, in an email dated July 24, 2013, that she was only

going to Galveston on the weekends, and that she was still living in their “old area.”

Isa also called as a witness Linda McCann, custodian of records for Tomball Ford. Isa

                                          29
offered business records from Tomball Ford, including Winnie’s employment

application from January 2015, in which she listed her address as a Houston address.

As part of the application process, Winnie had also filled out an authorization for a

background check, which asked her to list her “addresses within the past seven years.”

She listed a Magnolia, Texas address and indicated that she had lived there from 2001

until 2010. She also listed a Houston address on the background check, but not a

Galveston address.

      At the hearing, Winnie was asked why she had not listed a Galveston address

on the background check if she had resided there in 2013. She responded, “I didn’t see

this within the past seven years [instruction] or I would have put my other addresses.”

Winnie also stated that she had not provided the Galveston address for the background

check because she “didn’t have a Galveston address” because she could not receive

mail at her Galveston condo. She agreed that by signing the authorization she was

representing to her employer that her answers were true.

      Winnie also testified that she had filed a non-suit of her Harris County action

and filed a new suit in Galveston County after the Harris County associate judge failed

to award her damages against IACL because she could not afford to appeal. She

admitted that Isa had signed the Montgomery County MSA. She also admitted that her

testimony at the default hearing that IACL did business in the United States was based

on the shipment of a Mazda vehicle to her son from IACL as a gift paid for by Isa.

                                          30
      Winnie admitted, in response to questioning, that Isa inherited his shares in the

family business, IACL, as a child, before his marriage to Winnie. But when Winnie’s

lawyers attempted to elicit her testimony that IACL was formed in 2002, during the

marriage, as evidence that Isa’s ownership interest in IACL was community property,

the court refused to allow further pursuit of Isa’s and Winnie’s property interests other

than to acknowledge that there were both separate and community property interests

at stake, and it refused to admit evidence on this issue.

      Finally, IACL’s counsel read into the record from the transcript of the trial

before the Harris County associate judge the statement of Winnie’s counsel that

“everybody is waiving appeal to the referring court [the Harris County district court]

to you so that we’re trying it once. That was my understanding.” And he read the

response of Isa’s counsel, “That is correct, Judge. That is our agreement.” Winnie

testified that she could not remember that.

      At the end of the hearing, the trial court remarked, “What a mess,” and recited

numerous problems with the case, including active pleadings by Isa on file in the

Montgomery County action when it was non-suited by Winnie so that it was “a court

of continuing jurisdiction in the Montgomery County case” when the Harris County

action was filed; that Harris County was “a court of continuing jurisdiction when the

Galveston County case was filed”; that the non-suit in the Harris County action was

“not a nonsuit” because Winnie “had put on her case and rested,” leaving that case

                                           31
active; that Winnie failed to use due diligence in locating Isa and IACL in the

Galveston County action; that the Galveston County court had granted a default

judgment without required notice when there was an answer on file by Isa’s court-

appointed attorney ad litem, which required “a regular final hearing with a 45-day

notice”; and that the Galveston County lacked venue because Winnie testified she had

moved to Galveston in February 2013 and filed her suit on April 10, 2013, which was

less than the ninety days required to establish venue.

      The trial court commented, “[T]his is probably one of the most egregious

examples of forum shopping out there. I’ve never read a case this bad. . . . I am going

to grant the plea to the jurisdiction and dismiss the case.” The court asked the parties

to draft appropriate orders, including an order “rescinding [its] previous order

regarding the money” and vacating its orders appointing the receiver and ordering

money placed in the registry of the court. The trial court refused to sever the cases

against Isa and IACL at Winnie’s counsel’s request. The court indicated a belief that

IACL’s separately-filed bill of review would be mooted by the final orders in the

divorce action.

      On July 21, 2016, the trial court signed an “Order Granting Isa Ali Alwazzan’s

Plea to the Jurisdiction,” providing in relevant part:

      The Court held a hearing on both motions [Isa’s plea to the jurisdiction
      and motion for new trial] on July 19, 2016. . . .


                                           32
      After considering the motions, the law, the evidence submitted in the
      Motions, including the Declaration of Isa Alwazzan, the evidence
      submitted at the hearing, and the arguments of counsel, the Court has
      determined that the Plea to the Jurisdiction should be SUSTAINED
      because—from the inception of this divorce proceeding to the present—
      the Court lacked both subject matter jurisdiction over the subject matter
      of this divorce action and personal jurisdiction of the Respondents Isa
      Alwazzan and International Agencies Co. Ltd. Because of the ruling on
      jurisdiction, the Court did not reach the issues on the Motion for New
      Trial.

      It is therefore, ORDERED, that Isa Alwazzan’s Plea to the Jurisdiction is
      SUSTAINED and that the court has no jurisdiction to hear the divorce
      filed on April 10, 2013 or any of the motions, orders and ancillary matters
      filed thereafter (including [but] not limited to the Turnover and
      Appointment of Receiver Order and any and all actions related to a
      Receiver and/or levy or other attachment of assets, property and/or
      funds).

      It is further ORDERED that the July 19, 2014 Reformed Final Decree of
      Divorce is void and vacated.

      It is further ORDERED that the Receivership that was created by Order
      dated November 8, 2015, is hereby dissolved.

      It is further ORDERED, that all other judgments, orders and matters
      related to this cause are void, a nullity, of no effect, vacated and not
      enforceable.

      It is further ORDERED, that the Receiver is discharged from his duties
      and all monies and property collected by him shall be released, or
      returned to the proper party forthwith. . . .

      That same day, the trial court also signed its “Order Vacating May 6, 2016 Order

for Judgment In Rem.” That order stated,

             On the 19th Day of July, 2016 day came on to be heard Respondent
      Isa Al Wazzan’s Plea to the Jurisdiction.

                                           33
            The Receiver appeared in person. The Petitioner Winnie Stac[e]y
      Alwazzan, appeared in person and by counsel. The Respondent Isa
      Alwazzan appeared by counsel. The co-respondent, Internal Agencies
      Co. Ltd. (“IACL”) appeared through counsel.

             After the Court’s review of the respondent Isa Alwazzan’s Plea to
      the Jurisdiction, and briefs filed by the Petitioner and Receiver in
      opposition, and by co-respondent IACL in support of its Bill of Review
      in a separate but related action, captioned as International Agencies Co.
      Ltd. v. Alwazzan, et al., 16 FD1958, arguments by the parties and
      evidence entered during the hearing, including testimony of two
      witnesses, the Court found that the Petitioner never had jurisdiction to
      commence this action, and ruling that the action be dismissed, the June
      2014 judgment be vacated, and that all subsequent supplemental orders
      be vacated, including the November 8, 2015 Order for Turnover and
      Appointment of Receiver and the May 6, 2016 Order which had granted
      the Receiver Judgment in Rem of funds that had been levied from HSBC
      Bank USA N.A. (“HSBC”) and restrained in the amount of $3,693,091.42
      (the “Restrained Funds”). THE COURT FINDS that the May 6, 2016
      Order for Judgment In Rem is hereby vacated, and the full amount of
      restrained funds via the Receiver’s Levy, be immediately released from
      the creditor process initiated by the Receiver.

          IT IS ORDERED that the receivership is dissolved . . . and that
      HSBC shall immediately release the Restrained Funds.

      Based on the trial court’s July 21 orders vacating the June 2014 default divorce

decree, dismissing the Galveston County divorce action, dismissing the receiver, and

vacating the receiver’s judgment in rem, this Court dismissed as moot IACL’s

previously filed mandamus petition regarding these matters. In re Int’l Agencies Co.,

Ltd., No. 01–16–00383–CV, 2016 WL 6462199, at *1 (Tex. App.—Houston [1st

Dist.] Nov. 1, 2016, orig. proceeding) (mem. op.).



                                         34
      9.     Isa’s and IACL’s Motion for Sanctions and the September 2016
             Hearing

      After obtaining dismissal of the Galveston County action and vacatur of the

court’s prior orders, Isa and IACL pursued sanctions against Winnie and her attorneys.

They requested that the trial court impose sanctions, in the form of attorney’s fees,

pursuant to Civil Practice and Remedies Code Chapter 10, Texas Rule of Civil

Procedure 13, and the trial court’s inherent power. Isa and IACL argued that Winnie

and her attorneys filed suit in Galveston County “to seek a different result against

IACL” after they “failed in their earlier attempt [to recover against IACL] in Harris

County.” They argued that sanctions were appropriate because Winnie and her

attorneys had made “intentional misrepresentations of fact to this Court [to] falsely

create jurisdiction and deny [Isa and IACL] notice of the Galveston County” suit.

      Isa and IACL argued that Winnie and her attorneys violated Rule 13 and

Chapter 10 by “fil[ing] groundless pleadings in bad faith seeking to create jurisdiction

where none existed, alleging that separate property was community property, and

seeking an improper third attempt at a judgment against IACL and Isa[.]” Isa and IACL

pointed out that Winnie and her attorneys had: (1) falsely alleged and maintained that

Winnie had resided in Galveston County for the required ninety-day period; (2) falsely


                                          35
asserted that Winnie had “no idea where Isa was” to obtain service by publication;

(3) falsely asserted that there were no prior court orders of conservatorship affecting

the children; (4) asserted that Isa had fraudulently transferred community assets to

IACL with no supporting evidence; and (5) concealed the Montgomery County MSA

and the Harris County divorce action from the Galveston County court.

      The trial court conducted a three-day evidentiary hearing on the motion for

sanctions in September 2016. Winnie and her attorneys testified at the hearing, and

each of them had separate counsel. In October 2016, the trial court signed an order

awarding monetary sanctions, in the form of attorney’s fees, against Winnie only.3 The

trial court did not award sanctions against her attorneys. Winnie requested that the trial

court issue findings of fact and conclusions of law regarding the sanctions, which the

trial court did in November 2016.

      In addition to its findings and conclusions with respect to its previous orders,

the court found facts supporting sanctions pursuant to Chapter 10 and Rule 13. The

court found that the original petition for divorce in Galveston County was filed by

Winnie’s counsel, Jared Woodfill, on her behalf on April 10, 2013, after consultation


3
      The trial court imposed $50,000 in sanctions against Winnie on behalf of Isa and
      $100,000 in sanctions on behalf of IACL. The court imposed an additional $25,000 in
      sanctions against Winnie on behalf of Isa and $25,000 on behalf of IACL if she
      continued to litigate her claims in the trial court; $85,000 in sanctions on behalf of
      ISA and $85,000 on behalf of IACL if Winnie appealed to the court of appeals; and
      $35,000 in sanctions on behalf of Isa and $35,000 on behalf of IACL if Winnie filed
      a petition for review with the Texas Supreme Court.
                                            36
with Winnie’s additional counsel Daniel Lemkuil. The court found that the filing of

the suit constituted “inappropriate forum shopping, a violation of the rules of Texas

procedure, and violation of the duties of candor and obligations imposed under

[Chapter] 10 and Rule 13, for Winnie Stacey, and her attorneys Daniel Lemkuil and

Jared Woodfill, . . . to file the Original Galveston Petition in this Court on April 10,

2013, and to proceed in this Court” for a number of reasons.

      The facts found by the trial court in support of sanctions included:

      (1) the original filing of divorce in Montgomery County that was later
      reasserted in Harris County and then again in Galveston County, even
      though the MSA reached during the pendency of the Montgomery County
      action was intended to and did resolve all issues between the parties;
      (2) the subsequent filing of the Harris County action and trial to a final
      decision before the associate judge on December 21, 2012, the parties’
      agreed waiver of the right to a de novo hearing before the referring district
      court, Winnie’s request for “additional rulings” after the associate judge
      awarded Winnie $3.5 million against Isa but did not find liability on the
      part of IACL, and Winnie’s filing of a non-suit of the final decision on
      the merits and commencement of a new case in Galveston County “as an
      alternative to appealing the Harris County decision” without
      “precedential or statutory authority” to non-suit the decision on the
      merits;
      (3) the filing of the original Galveston County divorce petition “for the
      improper purpose of attempting to get a judgment against IACL, after the
      Harris County court had adjudicated the same claims against the same
      parties in a final disposition on the merits,” in a petition that “included
      false or misleading statements,” the filing of a false affidavit signed by
      Winnie stating that she did not know how to contact Isa even though she
      knew Isa had been represented by counsel in the Harris County action,
      which was non-suited the same day she filed her petition in Galveston
      County; and
      (4)    the provision of false testimony regarding Winnie’s residence at
                                           37
         the time of filing the Galveston County action, the concealment of the
         final trial on the merits in Harris County and a decision by the associate
         judge, false pleadings regarding IACL “for the improper purpose of
         falsely invoking Jurisdiction over IACL in Texas,” and the failure to
         attempt to give either Isa or IACL actual notice of the suit at any time
         prior to the June 2014 default hearing with the knowledge that neither Isa
         nor IACL would have reasonable notice to appear.

The court also entered conclusions of law finding sanctionable behavior based on these

facts.

                    II. Winnie’s Appeal and the Majority’s Rulings

         Winnie now appeals, raising three issues. In her first two issues, Winnie

 contends that the trial court erred in “dismissing the case on a plea to the jurisdiction,”

 asserting that no jurisdictional grounds were presented to the trial court to support

 vacatur of the June 2014 divorce decree and dismissal of the case. The majority

 agrees with Winnie but affirms dismissal of the Galveston County action anyway on

 statutory grounds that did not form the basis of the trial court’s dismissal of the suit,

 namely that Winnie failed to establish residency in Galveston County ninety days

 prior to filing her divorce action there. I agree that Winnie failed to satisfy the ninety-

 day residency requirement for filing suit for divorce, but I do not find that issue

 dispositive.

         In her third issue, Winnie challenges the sanctions award. The majority affirms

 that as well. I agree with the majority’s holding on this issue.

         I would affirm the Galveston County court’s judgment dismissing the case on

                                            38
Isa’s plea to the jurisdiction for lack of both subject-matter jurisdiction and personal

jurisdiction, granting sanctions, and vacating all other orders of that court. Rather than

attempting to refute the majority’s reasoning and conclusions on each of the issues, I

have set out below what I consider to be a correct analysis of the law on the facts of

the case and the correct disposition.

                                 III. Plea to the Jurisdiction

A.    Standard of Review of a Plea to the Jurisdiction

      A plea to the jurisdiction seeks dismissal of a case based on lack of subject-

matter jurisdiction. Harris Cty. v. Sykes, 136 S.W.3d 635, 638 (Tex. 2004); see also

City of Houston v. Rhule, 417 S.W.3d 440, 442 (Tex. 2013) (per curiam) (stating that

subject-matter jurisdiction is essential to court’s power to decide case). A trial court

must decide at the earliest opportunity whether it has the constitutional or statutory

authority to decide a case before allowing the case to proceed. Tex. Dept. of Parks &

Wildlife v. Miranda, 133 S.W.3d 217, 226 (Tex. 2004). “As a general proposition,

before a court may address the merits of any case, the court must have jurisdiction over

the party or the property subject to the suit, jurisdiction over the subject matter,

jurisdiction to enter the particular judgment, and capacity to act as a court.” State Bar

of Tex. v. Gomez, 891 S.W.2d 243, 245 (Tex. 1994).

B.    Subject-Matter Jurisdiction

      1. Standard of Review of Subject-Matter Jurisdiction

                                           39
      Whether a court has subject-matter jurisdiction is a question of law. Miranda,

133 S.W.3d at 226; Tex. Nat. Res. Conservation Comm’n v. IT-Davy, 74 S.W.3d 849,

855 (Tex. 2002). Whether a pleader has alleged facts that affirmatively demonstrate the

trial court’s subject-matter jurisdiction is a question of law which we review de novo.

Miranda, 133 S.W.3d at 226; see City of Dallas v. Carbajal, 324 S.W.3d 537, 538

(Tex. 2010) (per curiam) (stating that whether court has subject-matter jurisdiction is

question of law that we review de novo). Likewise, whether undisputed evidence of

jurisdictional facts establishes a trial court’s jurisdiction is a question of law. Miranda,

133 S.W.3d at 226. In some cases, disputed evidence of jurisdictional facts that

implicate the merits of the case may require resolution by the fact-finder. Id.

      When a plea to the jurisdiction challenges the pleadings, we determine whether

the pleader has alleged facts that affirmatively demonstrate the trial court’s jurisdiction

to hear the case. Id.; Tex. Ass’n of Bus. v. Tex. Air Control Bd., 852 S.W.2d 440, 446

(Tex. 1993). We construe the pleading liberally in favor of the plaintiff and look to the

pleader’s intent. Miranda, 133 S.W.3d at 226. If the pleadings do not contain facts

sufficient to affirmatively demonstrate the trial court’s jurisdiction, but do not

affirmatively demonstrate that the defects are incurable, the plaintiff should be allowed

the opportunity to amend. Id. at 226–27. However, if the pleadings affirmatively negate

the existence of jurisdiction, the plea to the jurisdiction may be granted without

affording the plaintiff the opportunity to amend. Id. at 227.

                                            40
      If a plea to the jurisdiction challenges the existence of jurisdictional facts, we

consider relevant evidence submitted by the parties when it is necessary to resolve the

jurisdictional issues. Id. When the jurisdictional challenge implicates the merits of the

plaintiff’s cause of action and the plea to the jurisdiction includes evidence, the trial

court must examine the relevant evidence to determine whether a fact question exists.

Id. If the evidence creates a fact question concerning the jurisdiction issue, the trial

court cannot grant the plea to the jurisdiction. Id. at 227–28. “However, if the relevant

evidence is undisputed or fails to raise a fact question on the jurisdictional issue, the

trial court rules on the plea to the jurisdiction as a matter of law.” Id. at 228. “[T]his

standard generally mirrors that of a summary judgment under Texas Rule of Civil

Procedure 166a(c).” Id. When reviewing a plea to the jurisdiction in which the pleading

requirements have been met and evidence that implicates the merits of the case has

been submitted in support of the plea, we take as true all evidence favorable to the

nonmovant and indulge every reasonable inference and resolve any doubts in favor of

the nonmovant. Id. The scheduling of a hearing on a plea to the jurisdiction is left to

the sound discretion of the trial court, “which is in the best position to evaluate the

appropriate time frame for hearing a plea in any particular case.” Id. at 229.

      2.     Whether the Galveston County Court Had Subject-Matter Jurisdiction

      The trial court granted Isa’s plea to the jurisdiction, ruling, among other things,

that the court lacked subject-matter jurisdiction over the Galveston County divorce

                                           41
action. Winnie appealed the trial court’s dismissal of the Galveston County divorce

action. On appeal, Isa argues that the trial court’s dismissal was proper, contending

that the Galveston County court did not obtain jurisdiction because (1) subject-matter

jurisdiction never properly attached in Galveston County due to Winnie’s failure to

establish residency in Galveston County and (2) Winnie could never establish

jurisdiction over her claims in Galveston County as the Harris County court had made

a final ruling on the merits when the associate judge issued his written report following

a bench trial and the parties agreed to waive appeal to the referring district court;

therefore, Winnie’s subsequent non-suit of the Harris County action resulted in a

dismissal with prejudice of all claims decided in that action, leaving only the final

decree of divorce to be entered by the Harris County court. I agree with Isa.

             a.     Failure to satisfy statutory residency requirements for divorce
                    suit

      Family Code section 6.301 provides that “[a] suit for divorce may not be

maintained in this state unless at the time the suit is filed either the petitioner or the

respondent has been . . . (1) a domiciliary of this state for the preceding six-month

period; and (2) a resident of the county in which the suit is filed for the preceding 90-

day period.” TEX. FAM. CODE ANN. § 6.301. Although this section is not jurisdictional,

it controls a petitioner’s right to sue for a divorce, is mandatory, and cannot be waived.

In re Milton, 420 S.W.3d 245, 252 (Tex. App.—Houston [1st Dist.] 2013, orig.


                                           42
proceeding); In re Green, 385 S.W.3d 665, 669 (Tex. App.—San Antonio 2012, orig.

proceeding). Typically, when neither the petitioner nor the respondent meets the

residency requirements, the trial court abates the suit so that one of them can meet the

requirements. In re Milton, 420 S.W.3d at 252. However, when the record indicates

that neither party intends to reside in the county of suit, abatement will not cure a

failure to meet the residency requirements, and the proper remedy is dismissal. Id.; In

re Green, 385 S.W.3d at 670.

      Here, it is undisputed that Isa did not reside in Galveston County at the time suit

was filed and did not intend to reside in that county. And the trial court found, among

other things, that “[o]n July 19, 2016, Winnie Stacey testified that she did not reside

in Galveston County 90 days before filing the April 10, 2013 petition,” that “there is

no credible evidence that Winnie Stacey was ever a resident of Galveston in 2013 and

2014,” and that “Winnie Stacey and her counsel changed the typical pleading language

as a basis for venue in divorce petitions to obscure the fact that she had no basis for

venue in Galveston” at the time of filing. This Court may set aside a finding of fact

only if the finding is so contrary to the overwhelming weight of the evidence as to be

clearly wrong or unjust. Cain v. Bain, 709 S.W.2d 175, 176 (Tex. 1986) (per curiam)

(stating such with regard to jury findings); Ferrara v. Nutt, 555 S.W.3d 227, 235 (Tex.

App.—Houston [1st Dist.] 2018, no pet.) (stating that courts review legal and factual

sufficiency of evidence supporting trial court’s fact findings by using same standards

                                           43
to review jury verdicts). Here, that is not the case.

      I would hold that jurisdiction never attached in the Galveston County trial court

and that court lacked subject-matter jurisdiction to address the merits of the Galveston

County divorce action. See Gomez, 891 S.W.2d at 245 (“As a general proposition,

before a court may address the merits of any case, the court must have jurisdiction

over the party or the property subject to the suit, jurisdiction over the subject matter,

jurisdiction to enter the particular judgment, and capacity to act as a court.”). However,

because the statutory residency requirement for filing a suit for divorce is not

jurisdictional, subject-matter jurisdiction theoretically could attach over Winnie’s

divorce action, reviving all of Winnie’s claims against both IACL and Isa and forcing

them to defend themselves again on issues of personal and subject-matter jurisdiction

and venue already brought before the court in this action, all other things being equal.

Thus, a ruling that jurisdiction over this divorce suit failed to attach because the parties

failed to meet statutory requirements for filing a divorce action in Galveston County

is not enough by itself to dispose of all of the jurisdictional issues properly raised by

the parties and heard and addressed by the trial court or to dismiss the suit on a plea to

the jurisdiction. See Miranda, 133 S.W.3d at 226–27 (stating that when pleadings do

not affirmatively demonstrate incurable jurisdictional defect, plaintiff should be

allowed opportunity to amend, but when pleadings affirmatively negate jurisdiction,

plea to jurisdiction may be granted). Therefore, I disagree with the majority that the

                                            44
trial court dismissed the suit on this basis, which the court did not even mention in its

order dismissing the suit on Isa’s plea to the jurisdiction.

             b.     Effect of improper taking of non-suit on subsequent actions

      In his plea to the jurisdiction, Isa asserted, among other things, that the

Galveston County court lacked subject-matter jurisdiction over the suit because, when

suit was filed, the Harris County court had continuing, exclusive jurisdiction over the

matter and that the Harris County action had a res judicata effect, barring the Galveston

County court from considering Winnie’s claims. I agree.4


4
      Isa further claimed that the trial court “lack[ed] jurisdiction to issue rulings or orders
      that contradicted the parties’ binding mediated settlement agreement” they had signed
      in the Montgomery County divorce action. A mediated settlement agreement is
      enforceable in the same manner as any other written contract. TEX. CIV. PRAC. & REM.
      CODE ANN. § 154.071(a) (West 2011). Moreover, a written settlement agreement may
      be enforced as a contract even if one party withdraws consent before judgment is
      entered on the agreement. Ford Motor Co. v. Castillo, 279 S.W.3d 656, 663 (Tex.
      2009); Padilla v. LaFrance, 907 S.W.2d 454, 461 (Tex. 1995). Therefore, I would
      hold that the mediated settlement agreement in the Montgomery County action
      became valid and enforceable when it was signed by the parties and filed with the
      Montgomery County trial court. However, I would conclude that Winnie breached the
      agreement by her bad faith dismissal of the Montgomery County action and filing of
      the same divorce action in Harris County and that her prior material breach excused
      Isa’s performance under the MSA. See Mustang Pipeline Co. v. Driver Pipeline Co.,
      134 S.W.3d 195, 196, 198 (Tex. 2004) (per curiam); Henry v. Masson, 333 S.W.3d
      825, 835 (Tex. App.—Houston [1st Dist.] 2010, no pet.). Isa did not continue
      performing under the MSA but instead retained counsel and entered an appearance in
      the Harris County duplicate divorce action improperly filed by Winnie, acquiesced in
      the associate judge’s issuance of temporary orders, participated through his counsel in
      the trial to the associate judge, agreed to waive appeal of the associate judge’s report
      to the referring judge, and opposed Winnie’s subsequent motion asking the associate
      judge to modify his report to impose liability on IACL. Accordingly, both Winnie and
      Isa knowingly and voluntarily waived any rights accorded to them by the MSA. I
      would hold that the Montgomery County MSA does not affect the proper disposition
                                              45
      Texas Rule of Civil Procedure 162 provides that “[a]t any time before the

plaintiff has introduced all of his evidence other than rebuttal evidence, the plaintiff

may dismiss a case, or take a non-suit, which shall be entered in the minutes.” TEX. R.

CIV. P. 162; see Villafani v. Trejo, 251 S.W.3d 466, 468–69 (Tex. 2008) (“Under Texas

law, parties have an absolute right to nonsuit their own claims for relief at any time

during the litigation until they have introduced all evidence other than rebuttal

evidence at trial.”). A non-suit is “effective when it is filed.” Univ. of Tex. Med. Branch

at Galveston v. Estate of Blackmon ex rel. Shultz, 195 S.W.3d 98, 100 (Tex. 2006) (per

curiam). “If a claim is timely nonsuited, the controversy as to that claim is

extinguished, the merits become moot, and jurisdiction as to the claim is lost.” City of

Dallas v. Albert, 354 S.W.3d 368, 375 (Tex. 2011).

      The Texas Supreme Court has also held, however, that a party’s right to take a

non-suit “cannot be used to disturb a court’s judgment on the merits of a claim.”

Villafani, 251 S.W.3d at 469. In Hyundai Motor Co. v. Alvarado, the Texas Supreme

Court addressed the effect of the plaintiffs’ non-suit filed after the trial court had

granted partial summary judgment in favor of the defendant on several of the plaintiffs’

claims. See 892 S.W.2d 853, 854 (Tex. 1995) (per curiam). In Alvarado, the plaintiffs,

who had been injured in a car accident, sued Hyundai in Webb County and alleged

several theories of liability. Id. Hyundai moved for partial summary judgment, arguing


      of this suit.
                                            46
that almost all of the claims were preempted by federal law, and the trial court granted

the motion. Id. The plaintiffs then non-suited their case in Webb County and filed suit

against Hyundai in Duval County, raising identical claims as in their first petition,

including the claims on which the Webb County court had granted partial summary

judgment. Id. The Webb County court signed an order of non-suit. Id. Hyundai then

requested the Webb County court modify that order, arguing that the plaintiffs could

not refile the claims on which partial summary judgment had been granted. Id. The

trial court agreed with Hyundai, entering an order stating that the claims adjudicated

by the prior summary judgment were dismissed with prejudice. Id.

      In addressing whether the trial court’s summary judgment order survived the

plaintiffs’ subsequent non-suit, the Texas Supreme Court noted the general rule that

plaintiffs have the right to take a non-suit at any time until they introduce all of their

evidence other than rebuttal evidence and that a non-suit may have the effect of

vitiating earlier interlocutory orders. Id. The court then stated, however, that a trial

court’s decisions on the merits, such as summary judgment orders and partial summary

judgment orders, are not vitiated by a subsequent non-suit. Id. at 855. Noting that, in

summary judgment practice, the plaintiff need not produce any evidence, the court

reasoned that if Rule 162 governing non-suits “provided the only cut-off point after

which a plaintiff could no longer take a nonsuit,” then plaintiffs could essentially avoid

any summary judgment ruling by requesting a non-suit after the trial court ruled on the

                                           47
summary judgment. Id.

      The supreme court held, “Once a judge announces a decision that adjudicates a

claim, that claim is no longer subject to the plaintiff’s right to nonsuit. A non-suit

sought after such a judicial pronouncement results in a dismissal with prejudice as to

the issues pronounced in favor of the defendant.” Id.; see Gen. Agents Ins. Co. of Am.,

Inc. v. El Naggar, 340 S.W.3d 552, 556–57 (Tex. App.—Houston [14th Dist.] 2011,

pet. denied) (stating that court’s reasoning in Alvarado was “rooted in the doctrines of

res judicata and collateral estoppel, which ‘promote judicial efficiency, protect parties

from multiple lawsuits, and prevent inconsistent judgments by precluding the

relitigation’ of matters that have already been decided”) (quoting In re Team Rocket,

L.P., 256 S.W.3d 257, 260 (Tex. 2008) (orig. proceeding)); Curry v. Bank of Am., N.A.,

232 S.W.3d 345, 354 (Tex. App.—Dallas 2007, pet. denied) (stating that party who

has had his claims “adjudicated unsuccessfully cannot later non-suit his claims to

avoid the judgment”). The court stated, “The dismissal is with prejudice as to the issues

disposed of by the summary judgment.” See Alvarado, 892 S.W.2d at 855 (remanding

case to appellate court to consider plaintiffs’ argument that trial court erred in ruling

that most of their claims were preempted by federal law). A similar holding should be

made here.

      Here, Winnie and Isa, through his former counsel, participated in a trial on the

merits before the associate judge in the Harris County action on December 10, 2012.

                                           48
The associate judge heard testimony from Winnie, admitted exhibits into evidence,

and considered the arguments of counsel. At the end of the trial, counsel for both

Winnie and Isa informed the associate judge that they had agreed to waive a de novo

hearing to the referring district court judge. Winnie’s counsel stated on the record in

open court, “[E]verybody is waiving appeal to the referring Court . . . so that we’re

trying it once,” and Isa’s counsel responded, “That is correct, Judge. That is our

agreement.” This agreement was made on the record prior to the start of any hearing

in the referring court.

      The associate judge executed his written report on December 21, 2012, entered

it on January 11, 2013, and sent it to all counsel of record. The associate judge’s report

addressed conservatorship of the then-minor children, payment of child support, and

division of the parties’ community estate. The report awarded Winnie sole managing

conservatorship and Isa possessory conservatorship of the children. Among the

property awarded to Isa, the associate judge awarded IACL “and its assets and

liabilities” to Isa. The associate judge awarded Winnie $3.5 million against Isa, but

specifically denied Winnie any recovery against IACL.

      Winnie subsequently filed a request that the associate judge reconsider some of

his property awards and make “additional rulings.” In that motion, she requested that

the associate judge reconsider his findings of no liability against IACL. She asked that

a money judgment be awarded in her favor against IACL and Isa, jointly and severally.

                                           49
Winnie asserted that Isa “hides his money within [IACL] and withdraws it at his

whim,” and she claimed that IACL “is used as a sham to protect [Isa] from his

creditors.” The associate judge denied Winnie’s request on February 21, 2013, stating

that “[t]he judgment in favor of [Winnie] against [Isa] includes consideration of the

value of [IACL].”

      On April 10, 2013, Winnie filed a notice of non-suit in the Harris County action,

and on the same day she filed her original petition for divorce in the Galveston County

action. The referring district judge of the Harris County court signed an “Order on

Notice of Non-Suit” on April 12, 2013, dismissing the Harris County action.

      I would apply the Texas Supreme Court’s holding in Alvarado to this case in

which a full trial on the merits was held before a Harris County associate judge; the

parties affirmatively represented to the associate judge that they did not wish to seek

a trial de novo before the referring district court; the associate judge issued a written

report that resolved issues of conservatorship and property division and that awarded

Winnie $3.5 million against Isa but denied her recovery against IACL; Winnie sought

additional rulings from the associate judge concerning, among other things, IACL’s

liability to her; and, after the associate judge declined to reconsider its rulings or make

any additional rulings, Winnie non-suited the Harris County action and filed an

identical divorce proceeding against Isa and IACL on the same day in Galveston

County.

                                            50
      I would hold that the associate judge “announce[d] a decision that

adjudicate[d]” all of Winnie’s claims, such that her claims were no longer subject to

her right to non-suit. See Alvarado, 892 S.W.2d at 855; see also TEX. FAM. CODE ANN.

§ 201.007 (West Supp. 2018) (setting out powers of associate judge, including powers

to conduct hearing, hearing evidence, make findings of fact, formulate conclusions of

law, recommend order to be rendered, and, in certain situations, render and sign final

order). The actions of Winnie and her counsel in non-suiting the Harris County action

and immediately filing an identical action in Galveston County were clearly taken to

avoid the associate judge’s rulings following a trial on the merits which, although

awarding Winnie $3.5 million against Isa, awarded her no recovery against IACL. I

would therefore hold that Winnie’s subsequent non-suit of the Harris County action

resulted in a dismissal of the action with prejudice to its refiling in another county. See

Alvarado, 892 S.W.2d at 855 (“The dismissal is with prejudice as to the issues

disposed of by the summary judgment.”).

      The only remaining question is what, if anything, is left to be adjudicated in the

Harris County divorce action.

      In 2007, the Texas Legislature amended Family Code section 201.007. That

section, as amended, permitted an associate judge to sign a final order including a

waiver of de novo appeal to the referring court as authorized by section 201.015 of the

Code, but it did not expressly state that the associate judge had authority to render a

                                            51
decision. Thus, at the time of the parties’ hearing before the Harris County associate

judge, Family Code section 201.007(a)(16) allowed an associate judge to “sign a final

order that includes a waiver of the right of appeal [for a trial de novo before the

referring district court] pursuant to Section 201.015.” Act of May 25, 2007, 80th Leg.,

R.S., ch. 839, § 1, 2007 Tex. Gen. Laws 1748, 1749 (amended 2017) (current version

at TEX. FAM. CODE ANN. § 201.007(a)); see also Act of May 23, 2007, 80th Leg., R.S.,

ch. 1235, § 7, 2007 Tex. Gen. Laws 4150, 4152 (amended 2015) (current version at

TEX. FAM. CODE ANN. § 201.015(a), (g)) (providing that, after hearing before associate

judge, party may request de novo hearing before referring court, but also providing

that parties may waive right to de novo hearing).

      In 2017, however, following a decision of this Court holding that under Family

Code section 201.007, as amended in June 2007, an associate judge of a family court

had the power to sign a final order but not to render a final decision,5 the Texas

Legislature again amended section 201.007 to make clear that associate judges had

had such power at all times subsequent to the addition of new subsection

201.007(a)(16) in June 2007.

      Current section 201.007(e), effective September 2017, clarifies the intent of the

Legislature in amending section 201.007 in 2007. It provides, “An order signed before



5
      See Gerke v. Kantara, 492 S.W.3d 791, 792–95 (Tex. App.—Houston [1st Dist.]
      2016, no pet.).
                                          52
May 1, 2017, by an associate judge under Subsection (a)(16) is a final order rendered

as of the date the order was signed.” TEX. FAM. CODE ANN. § 201.007(e).

         Here, the parties agreed on the record in open court at the end of the trial before

the Harris County associate judge to waive a de novo hearing before the referring

court. The associate judge adjudicated all issues in the case but erroneously informed

the parties that only the referring court could grant the divorce by signing the decree.

The associate judge subsequently signed and filed his final report on December 21,

2012. Under section 201.007(e), that final report constituted a final order of the

referring court. See id. Winnie then filed a motion for additional findings, which the

associate judge denied on February 21, 2013. Only after failing to get a favorable

ruling on this motion did Winnie file a non-suit in the Harris County district court and

immediately file a new divorce action in Galveston County. That suit was improperly

filed.

         The majority opines that the associate judge’s final report did not satisfy the

requirements of a final order under section 201.007(a)(16) and also did not contain a

written waiver of appeal to the trial court entered prior to “a hearing” before the

associate judge. I respectfully disagree. I would hold that the final report issued by the

associate judge substantially complied with the requirements of section 201.007(a)(16)

by disposing of all issues before the trial court. And I would further hold that, even if

the parties’ agreement to waive trial de novo to the referring judge did not meet the

                                              53
technical requirements of section 201.007(a) by being entered “before the start of a

hearing,” trial de novo was waived “on the record,” as permitted by Family Code

section 201.015(g). See Act of May 23, 2007, 80th Leg., R.S., ch. 1235, § 7, 2007 Tex.

Gen. Laws 4150, 4152 (“Before the start of a hearing by an associate judge, the parties

may waive the right of a de novo hearing before the referring court in writing or on

the record.”) (emphasis added). Furthermore, the parties’ agreement to waive that de

novo hearing complied with the requirements of an agreement of counsel under Texas

Rule of Civil Procedure 11 and was therefore enforceable. See TEX. R. CIV. P. 11

(providing that no agreement between counsel will be enforced unless it is in writing,

signed, and filed with papers of court as part of record, or “unless it be made in open

court and entered of record”). Moreover, while the appellate record is silent as to

whether a hearing was held before the associate judge denied Winnie’s request for

additional findings of fact and conclusions of law in February 2013 after entering its

final report in December 2012, there is no question that both Isa and Winnie

understood the rulings of the associate judge disposing of all the issues in the case to

be final and were awaiting only the entry of a final decree of divorce on those rulings,

which the associate judge mistakenly believed only the referring court could enter,

when Winnie non-suited the entire divorce suit.

      I would hold that the parties waived de novo appeal to the referring court as to

any of the issues adjudicated by the associate judge. Accordingly, the associate judge’s

                                          54
final order constituted a final order of the referring court that became effective as of

the date of the associate judge’s final order. I would hold that subject-matter

jurisdiction never attached to this Galveston County action for divorce because of

Winnie’s failure to satisfy statutory residency requirements. And I would further hold

that subject-matter jurisdiction over the merits of this divorce suit could never properly

be established in Galveston County because of Winnie’s non-suit of her Harris County

action after the Harris County associate judge had heard the merits and rendered its

final order and post-order rulings. This non-suit was plainly designed to thwart the

referring Harris County court’s entry of a final decree of divorce incorporating the

associate judge’s final report.

      I agree with the Texas Supreme Court’s ruling in Hyundai v. Alvarado requiring

dismissal with prejudice of all issues decided by the associate judge prior to improper

non-suit, preventing their refiling in another county. See Alvarado, 892 S.W.2d at 855

(“The dismissal is with prejudice as to the issues disposed of by the summary

judgment.”). Under the circumstances of this case, I would likewise dismiss with

prejudice in Galveston County all issues decided by the associate judge’s final order

in the Harris County divorce action. Concluding that the associate judge’s final order

was not final in the Harris County action because Winnie’s non-suit caused the decree

of divorce not to be signed by the referring court, I would remand the case to the

Galveston County court and direct that court to transfer the case to Harris County, the

                                           55
county of proper jurisdiction and venue, for entry of the decree of divorce. In re Milton,

420 S.W.3d at 254 (directing trial court to transfer divorce case from county where

residency was not established to county having both jurisdiction and venue).

C.    Whether the Galveston County Court Had Personal Jurisdiction over Isa
      and IACL

      Because I would sustain the trial court’s dismissal of this case for lack of subject-

matter jurisdiction and would remand this case for transfer to the Harris County district

court for entry of a decree of divorce incorporating the associate judge’s final order, I

would not find it necessary to address the trial court’s ruling that it lacked personal

jurisdiction over both Isa and IACL. However, even if I did not find that the Galveston

County trial court lacked subject-matter jurisdiction over this suit for divorce, I would

hold that the Galveston County court correctly ruled that it lacked personal jurisdiction

over both Isa and IACL, and I would affirm its vacatur of the default judgments against

Isa and IACL for lack of personal jurisdiction.6

      1.     Standard of Review of Personal Jurisdiction

      Texas courts may only exercise in personam jurisdiction over nonresidents if



6
      I address the issue of personal jurisdiction primarily because the majority’s
      representation of the record and analysis of the applicable law on both subject-matter
      and personal jurisdiction leave the issue of the proper forum in which to resolve this
      case and the issue of personal jurisdiction over both litigants open for future litigation
      in multiple forums, violating Rule of Appellate Procedure 47.1. See TEX. R. APP. P.
      47.1 (requiring court of appeals to address every issue necessary for final disposition
      of appeal).
                                              56
(1) the Texas long-arm statute authorizes the exercise of jurisdiction, and (2) the

exercise of jurisdiction is consistent with federal and state constitutional due process

guarantees. See Moki Mac River Expeditions v. Drugg, 221 S.W.3d 569, 574 (Tex.

2007); Glob. Paragon Dallas, LLC v. SBM Realty, LLC, 448 S.W.3d 607, 611 (Tex.

App.—Houston [14th Dist.] 2014, no pet.). “Personal jurisdiction is composed of two

elements: (1) the defendant must be amenable to the jurisdiction of the court; and (2) if

the defendant is amenable to the jurisdiction of the court, the plaintiff must validly

invoke that jurisdiction by valid service of process on the defendant.” Kawasaki Steel

Corp. v. Middleton, 699 S.W.2d 199, 200 (Tex. 1985) (per curiam); Velasco v. Ayala,

312 S.W.3d 783, 798 (Tex. App.—Houston [1st Dist.] 2009, no pet.); Furst v. Smith,

176 S.W.3d 864, 868 (Tex. App.—Houston [1st Dist.] 2005, no pet.).

      “A Texas court may assert personal jurisdiction over a nonresident defendant

only if the requirements of both the Fourteenth Amendment’s due process clause and

the Texas long-arm statute are satisfied.” Silbaugh v. Ramirez, 126 S.W.3d 88, 95

(Tex. App.— Houston [ 1st Dist.] 2002, no pet.); see Kawasaki Steel, 699 S.W.2d at

200 (stating that Texas long-arm statute “reaches as far as the federal constitutional

requirements of due process will permit”). The exercise of personal jurisdiction by a

Texas court is proper when the nonresident defendant has established minimum

contacts with Texas, and the exercise of jurisdiction comports with “traditional notions

of fair play and substantial justice.” Moki Mac River Expeditions, 221 S.W.3d at 575

                                           57
(quoting Int’l Shoe Co. v. Washington, 326 U.S. 310, 316, 66 S. Ct. 154, 158 (1945)).

For purposes of due process, “[a] defendant establishes minimum contacts with a

state when it ‘ purposefully avails itself of the privilege of conducting activities

within the forum state, thus invoking the benefits and protections of its laws.’”

Retamco Operating, Inc. v. Republic Drilling Co., 278 S.W.3d 333, 338 (Tex. 2009)

(quoting Hanson v. Denckla, 357 U.S. 235, 253, 78 S. Ct. 1228, 1240 (1958)).

      The validity of issuance, service, or return of citation is not presumed. See

Velasco, 312 S.W.3d at 797 (citing Amato v. Hernandez, 981 S.W.2d 947, 949 (Tex.

App.—Houston [1st Dist.] 1998, pet. denied)). “If the record does not show strict

compliance with the rules regarding service of citation, then service was invalid

and the judgment is void.” Id. “Strict compliance” means literal compliance with the

rules governing issuance, service, and citation. Id. An incorrect name is sufficient

to show a citation is not in strict compliance with the rules. Id.; Medeles v. Nunez,

923 S.W.2d 659, 662–63 (Tex. App.—Houston [ 1st Dist.] 1996, writ denied)

(concluding that citation was invalid because it named “Maria Mendeles,” rather than

“Maria Medeles,” as defendant), overruled on other grounds by Barker CATV

Constr. Inc. v. Ampro Inc., 989 S.W.2d 789 (Tex. App.—Houston [1st Dist.] 1999,

no pet.).

      To support a default judgment upon substituted service, as here, two

requirements must be met: “(1) the pleadings must allege facts that, if true, would

                                         58
make the defendant amenable to process by the use of the long-arm statute; and

(2) there must be proof in the record that the defendant was in fact served in the

manner required by statute.” Comm’n of Contracts of Gen. Exec. Comm. of

Petroleum Workers Union of Republic of Mex. v. Arriba, Ltd., 882 S.W.2d 576, 585

(Tex. App.—Houston [ 1st Dist.] 1994, no writ) (citing Capitol Brick, Inc. v. Fleming

Mfg. Co., 722 S.W.2d 399, 401 (Tex. 1986)); Whitney v. L & L Realty Corp., 500

S.W.2d 94, 95–96 (Tex. 1973) (holding that, in cases involving substituted service on

Texas Secretary of State, record must contain showing that Secretary of State

forwarded copy of process to defendant to establish personal jurisdiction over

defendant).

      The plaintiff bears the initial burden to plead sufficient allegations to bring a

nonresident defendant within the reach of Texas’s long arm statute. Moki Mac

River Expeditions, 221 S.W.3d at 574. If the plaintiff has pleaded sufficient

jurisdictional allegations, the defendant assumes the burden of negating all bases for

jurisdiction. BMC Software Belg., N.V. v. Marchand, 83 S.W.3d 789, 793 (Tex.

2002). “Because the plaintiff defines the scope and nature of the lawsuit, the

defendant’s corresponding burden to negate jurisdiction is tied to the allegations in

the plaintiff’s pleading.” Kelly v. Gen. Interior Constr., Inc., 301 S.W.3d 653, 658

(Tex. 2010). But if the plaintiff fails to plead facts sufficient to bring the defendant

within reach of the Texas long-arm statute, the defendant must only prove that it does

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not reside in Texas to negate jurisdiction. Id. at 658–59.

       Whether a court has personal jurisdiction over a defendant is a question of law

that appellate courts review de novo. Moki Mac River Expeditions, 221 S.W.3d at 574.

Appellate courts review the trial court’s factual findings for legal and factual

sufficiency and review the trial court’s legal conclusions de novo. BMC Software, 83

S.W.3d at 794. The court may set aside a finding of fact only if the finding is so

contrary to the overwhelming weight of the evidence as to be clearly wrong or unjust.

Cain, 709 S.W.2d at 176. When there is a legal sufficiency challenge, if there is more

than a scintilla of evidence to support the questioned finding, the no-evidence point

fails. BMC Software, 83 S.W.3d at 795. “If findings of fact are not challenged, they

are binding on the parties and on this Court.” In re K.R.P., 80 S.W.3d 669, 673

(Tex. App.—Houston [1st Dist.] 2002, pet. denied); see also Botter v. Am. Dental

Ass’n, 124 S.W.3d 856, 860 n.1 (Tex. App.—Austin 2003, no pet.) (“When a court

issues findings of fact we are to assume that they are valid unless they are challenged

by the appellant . . . .”).

       “[A] judgment entered without notice or service is constitutionally infirm,” and

some form of attack must be available when defects in personal jurisdiction violate

due process. Peralta v. Heights Med. Ctr., Inc., 485 U.S. 80, 84, 108 S. Ct. 896,

899 (1988). A complete failure of service deprives a litigant of due process and a

trial court of personal jurisdiction; the resulting judgment is void and may be

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challenged at any time. In re E.R., 385 S.W.3d 552, 566 (Tex. 2012); see Peralta,

485 U.S. at 84, 108 S. Ct. at 899 (“Failure to give notice violates ‘the most rudimentary

demands of due process of law.’”) (quoting Armstrong v. Manzo, 380 U.S. 545, 550,

85 S. Ct. 1187, 1190 (1965)). “[A] judgment may also be challenged through a

collateral attack when a failure to establish personal jurisdiction violates due process.”

PNS Stores, Inc. v. Rivera, 379 S.W.3d 267, 273 (Tex. 2012).

      Texas Rule of Civil Procedure 107 prohibits a default judgment until proof of

service has been on file for ten days. TEX. R. CIV. P. 107(h). In cases involving

substituted service on the Texas Secretary of State, the proof of service that is filed

at least ten days before a default judgment must include a Whitney certificate

reflecting that the Secretary of State forwarded citation and process to the defendant.

MC Phase II Owner, LLC v. TI Shopping Ctr., LLC, 477 S.W.3d 489, 492–93 (Tex.

App.—Amarillo 2015, no pet.) (recognizing continued viability of Whitney and its

certificate requirement).

      2. The Galveston County Court’s Lack of Personal Jurisdiction over Isa

      In his motion for new trial, Isa asserted that service of process on him by

publication was ineffective. He claimed that Winnie did not use reasonable diligence

to locate him for service. Isa asserted that Winnie lied to the trial court in her affidavit

supporting substituted service when she testified that she did not know Isa’s location

or how to find him.

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       Winnie has consistently taken the position that Isa left the United States

permanently in April 2012. Although she had an address in Bahrain—IACL’s

headquarters—with which to serve Isa, his email address, and other means to

communicate with him—including through the attorney who represented Isa in the

Harris County action, which Winnie non-suited the same day she filed the Galveston

County action—Winnie requested leave to serve Isa by publishing a notice in a

Galveston newspaper.

      The Galveston County court found, in its findings of fact issued following the

sanctions hearing—none of which Winnie challenges on appeal—that Winnie had a

physical address where Isa or IACL could likely be reached, knew how to contact Isa

and his family in Bahrain, and continued to write emails to him after filing the Galveston

County action, but she never informed him of the Galveston lawsuit. The court found

that, instead, Winnie swore in two affidavits that “she did not know how to contact

Isa . . . when in fact she and her attorneys knew that Isa was represented by an

attorney in the Harris County action on the very day” that she filed the Galveston

County action and served Isa’s attorney with a notice of non-suit for the Harris County

action. The court also found that, despite Winnie’s affidavit testimony that she did

not know how to get in touch with Isa and her testimony during the June 2014

default hearing that their children had been “cut off” and that she did not have a

way to contact Isa a f t e r he left the United States, Winnie knew the children had

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been communicating with Isa, she knew that her children had made trips to visit him

out of the country, and she had facilitated one of the trips that her youngest son, who

was a minor at the time, took to see Isa while the Galveston County action was

pending. Winnie, however, did not give Isa actual notice of the Galveston County

action prior to the June 2014 default hearing.

      The Texas Supreme Court recently addressed the adequacy of notice by

publication in In re E.R. After discussing cases from the United States Supreme Court

concerning notice by publication, the Texas Supreme Court summarized these

decisions by stating, “[W]hen a defendant’s identity is known, service by publication

is generally inadequate.” In re E.R., 385 S.W.3d at 560. The court further noted that

notice by publication, which was already “constitutionally suspect” in the mid-

twentieth century, “is even more vulnerable today given the precipitous decline in

newspaper readership.” Id. at 561. “[S]ervice by publication should be a last resort, not

an expedient replacement for personal service.” Id. When it is both “possible and

practicable to more adequately warn” a defendant of a pending lawsuit, especially one

concerning a parent’s relationship with his minor child, notice by publication is

constitutionally inadequate. Id. at 566; see Jones v. Flowers, 547 U.S. 220, 237, 126

S. Ct. 1708, 1720 (2006) (stating that “chance alone” brings person’s attention to

advertisement in newspaper and notice by publication is adequate only where “it is not

reasonably possible or practical to give more adequate warning”) (quoting Mullane v.

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Cent. Hanover Bank & Tr. Co., 339 U.S. 306, 315, 317, 70 S. Ct. 652, 658 (1950)).

      I agree with Isa that, in the Galveston County action, Winnie used notice by

publication “as a first resort,” not as a last resort, and that her request to publish notice

in the Galveston County Daily News when she knew that Isa did not live in the United

States and when she had several methods for getting in contact with him at her disposal

was “reasonably calculated to avoid actual notice to Isa.” Because it was both possible

and practicable for Winnie to have given Isa notice of the filing of her suit in Galveston

County, and she did not do so, I would hold that service on Isa was constitutionally

ineffective and the trial court properly concluded that it lacked personal jurisdiction

over Isa.

      3.     Lack of Personal Jurisdiction over IACL

      IACL also claimed that it was not properly served with process. It raised this

claim in its separately filed June 30, 2016 bill-of-review action seeking to overturn the

divorce decree and orders issued in this action by default, which was docketed in the

same Galveston County court under a separate cause number. IACL claimed that

service through the Texas Secretary of State’s Office was not effective because Winnie

had provided an incorrect address for IACL. In its bill-of-review petition, IACL also

claimed that it was not amenable to process because it lacked sufficient minimum

contacts with Texas to be sued in this forum and Winnie failed to plead jurisdictional

facts to support a finding that IACL purposefully availed itself of doing business in

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Texas.

      Winnie’s divorce petitions in the Galveston County action did not allege any

specific act or transaction performed by IACL in Texas. Instead, with respect to IACL’s

activities in Texas, the petitions only alleged that IACL “attempt[ed] to form” an

entity called “Intercol USA” as a subsidiary and that a company called “Exit Lone

Star Realty” was formed as a Texas subsidiary of IACL. The Galveston County

court specifically found that these allegations were false.

      The Galveston County court also found that the only documentary evidence

linking IACL to Texas was a bill of lading entered into evidence at the default hearing.

Although Winnie had offered this document as evidence that IACL was doing business

in Texas—and thus possessed sufficient minimum contacts with Texas to support

personal jurisdiction—Winnie later acknowledged during the July 2016 hearing that

the bill of lading related to a gift that Isa had shipped from Bahrain to K.A., their eldest

son. The court found that Winnie offered no evidence that any company formed or

doing business in Texas during her marriage to Isa “either (i) [was] a subsidiary of

IACL, (ii) was controlled by IACL, (iii) was going business through IACL, or (iv) was

doing business with IACL in Texas.” The court therefore found that Winnie had

knowingly pleaded facts without a good faith basis “for the improper purpose of falsely

invoking jurisdiction over IACL in Texas.”

      Winnie does not challenge the sufficiency of the evidence supporting the

                                            65
Galveston County court’s findings of facts. I would hold that the Galveston County

court’s findings are fully supported by the record on appeal and that Winnie produced

no evidence that IACL ever purposefully availed itself of the privilege of doing business

in Texas or established sufficient minimum contacts with Texas. See Retamco

Operating, 278 S.W.3d at 338 (“A defendant establishes minimum contacts with a

state when it ‘ purposefully avails itself of the privilege of conducting activities

within the forum state, thus invoking the benefits and protections of its laws.’”).

      IACL also argues that, as with Isa, Winnie failed to properly serve it with

process, thus depriving the Galveston County court of personal jurisdiction over it. As

IACL points out, Winnie attempted to serve it by means of substituted service on

the Texas Secretary of State. The record contains the return of service which indicated

that the citation was sent by the Galveston County Clerk to the Secretary of State on

June 24, 2013.

      Rule of Civil Procedure 108a governs service of process in foreign countries and

allows for the usage of several methods of service. See TEX. R. CIV. P. 108a(1). The

Rule requires that the method used “must be reasonably calculated, under all of the

circumstances, to give actual notice of the proceedings . . . in time to answer and

defend.” Id.

      The correct address for Abdul Rahman Alwazzan—Isa’s older brother and a

director of IACL—is at 131 Al-Khalifa Avenue, P. O. Box 584, in Manama, Kingdom

                                           66
of Bahrain. Winnie, however, attempted service by using an address that did not use

the Post Office box number. Using this incorrect address would not have resulted in

service, and, thus, the method of service that Winnie used was not “reasonably

calculated” to give IACL “actual notice of the proceedings . . . in time to answer and

defend” the Galveston County action. See id.

         For the forgoing reasons, I would hold that the Galveston County court failed to

obtain personal jurisdiction over IACL because, in addition to the complete lack of

evidence of a connection between IACL and the State of Texas, IACL had not been

served with process and IACL therefore lacked constitutionally required notice of the

Galveston County action when default judgment was entered against it, in violation of

its due process rights under the Fourteenth Amendment to the United States

Constitution. I would further hold that the default judgment of the Galveston County

trial court against it is void for this reason. See In re E.R., 385 S.W.3d at 566 (holding

that complete failure of service deprives litigant of due process and trial court of

personal jurisdiction; resulting judgment is void and may be challenged at any

time).




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                                       IV. Conclusion

    I would hold that the Galveston County court did not err when it concluded that it

lacked both subject-matter jurisdiction over this divorce action and personal

jurisdiction over both Isa and IACL, and granted Isa’s plea to the jurisdiction. I would

affirm the judgment of the trial court granting Isa’s plea to the jurisdiction, awarding

sanctions against Winnie, and vacating all other orders of that court. I would further

hold that the Harris County associate judge’s December 21, 2012 report constituted a

valid final order of the Harris County district court, and I would transfer this case to

the Harris County court for entry of the final order of the Harris County associate

judge’s December 21, 2012 final order as the decree of divorce in this case.




                                               Evelyn V. Keyes
                                               Justice

Panel consists of Justices Jennings, Keyes and Higley.

Justice Keyes, dissenting.




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