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Click here for the full text of this decision FACTS:Robert Hageman and Thomas Luth were partners in a real estate joint venture. In 1987, the pair and their venture, Settlers Development, lost an $89,000 tort case brought by Dora and Reece Turner. Hageman, Luth and the venture were represented by the law firm Jackson Walker. The judgment was entered against the two individually and together, doing business as Settlers Development, a joint venture. In a 1989 bankruptcy action, Hageman received a discharge of his debts, including the Turner judgment. The Turners were never able to collect against Luth or Settlers Development. Years later, Hageman and Luth formed a new business partnership, Radiant Solutions, to develop and market a product called Kool Ply. Hageman sold all of his rights and interests in the product to a third-party, which Luth claimed Hageman did without his consent. Luth subsequently filed suit against Hageman. As part of the contingency fee agreement Luth had with his law firm, Fritz, Byrne & Head, Luth assigned the firm an undivided interest in his claim against Hageman, who was represented by Strasburger & Price. After extensions of several trial settings, the parties reached an initial settlement in June 2001 whereby Hageman would pay Luth $169,000, though the agreement did not specify the form of payment. In that time, Hageman’s attorney had moved from Strasburger & Price to Jackson Walker and Luth’s attorney had left his firm, though he stayed on as of counsel to complete the Kool Ply litigation. Just over a week after the settlement, Dora Turner, who was also represented by Jackson Walker, agreed to assign her and her husband’s rights in the Turner judgment to Hageman for $12,500. At the final settlement conference, after Hageman and Luth signed the agreement, Hageman produced a clear, plastic bag, which he had kept under the table on instruction from his attorney, containing $183,250 in cash. Luth and another attorney from Fritz, Byrne & Head counted the money. Moments later, two Travis County deputy constables entered the room and announced they had a writ of execution for a judgment against Luth. Though Luth denied that the money was his, and his attorney claimed that a portion of the funds belonged to her law firm, the constables seized the money. Fritz, Byrne & Head and Luth sued Hageman to recover the funds. The firm claimed both tortious conversion on the part of Hageman and that it had a superior right to the funds. It also sought a declaration that the assignment of the Turner judgment was invalid because it represented satisfaction of Luth’s obligation on the judgment. Finally, Luth and FBH asked for attorneys’ fees and exemplary damages. Luth appeared with counsel from another firm. The trial court granted partial summary judgment to Luth and the firm, declaring that they were entitled to the funds, that Hageman’s acquisition of the assignment of the Turner judgment operated to extinguish that judgment, and that Hageman acted intentionally, wrongfully and with malice. In a bench trial on fees, the court awarded Luth and the firm attorneys’ fees under the declaratory judgment act. Then, it divided the disputed funds, plus interest, to Luth and the firm pursuant to the contingency fee agreement. Hageman appeals. HOLDING:Affirmed in part; reversed and rendered in part. The trial court’s holding that the assignment of the Turner judgment to Hageman extinguished it is affirmed; the holding on attorneys’ fees is reversed and rendered that Luth and the firm take nothing. Hageman claims that the assignment of the Turner judgment did not extinguish the judgment because his liability on the Turner judgment had been discharged in bankruptcy. Before turning to the specifics of Hageman’s claim, the court first reaffirms the continuing viability of the extinguishment rule: that if two parties are jointly and severally liable on a judgment, the acquisition of the judgment by one judgment debtor extinguishes the judgment for all judgment debtors. The court notes that the right is for the protection of plaintiffs and ought not to be used in equity by one or more of the judgment debtors for enforcement against the others. The court next considers whether Hageman’s discharge in bankruptcy affects his relationship to the Turner judgment. The court rejects Hageman’s argument that his discharge made him a stranger to the judgment. The court relies on Property Code �52.042. Under federal bankruptcy law, a discharge voids a judgment, but it is neither a payment nor an extinguishment of a debt. It simply bars future legal proceedings to enforce the discharged debt against the debtor. Other actions could proceed, such as a landlord moving to recover possession of a premises for which rent is still owed. Under �52.042, a judgment is discharged and cancelled if the debt or obligation evidenced by the judgment is discharged in the bankruptcy. Examining Texas case law in light of the federal approach, the court is convinced that �52.042(a)(2) of the property code mirrors the federal approach to the proper characterization of a discharge in bankruptcy. Consequently, Hageman’s obligation for the Turner judgment continued to exist, even though the obligation was not legally enforceable any more. Because his obligation still existed, his assignment to Dora Turner effectively extinguished the judgment, “which is now satisfied in whole.” The court finds that to hold otherwise would allow Hageman to use the bankruptcy discharge process as a sword to take unfair advantage, instead of as a shield to protect him with a fresh start. The court, however, finds attorneys’ fees were improperly awarded under the Uniform Declaratory Judgment Act. The act does not justify the award of attorneys’ fees on its own; attorneys’ fees are not generally available in a conversion case. OPINION:Law, C.J.; Law, Smith and Patterson, JJ.

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