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OHK GLOBAL, INC., Obaid Uddin, Janoob, Inc., Saahel, Inc., and Emrooz, Inc., Appellants v. Mohammad MOTAGHI, Appellee
In the trial court, Mohammad Motaghi, Zeba, L.L.C. and Jamshid, Inc., sued the appellants. The trial court granted a partial summary judgment in Motaghi's favor against two of the appellants, Obaid Uddin and OHK Global, Inc. Later, Zeba and Jamshid nonsuited their claims, and the trial court denied the appellants leave to amend their pleadings to add counterclaims and third-party claims. The appellants now appeal, asserting that Zeba and Jamshid lacked the capacity to sue when they filed suit against the appellants and the trial court erred in denying leave to amend.
Because the appellants did not timely file their notice of appeal, which is a prerequisite to our jurisdiction, we dismiss the appeal for lack of jurisdiction.
Mohammad Motaghi and two companies, Zeba, L.L.C. and Jamshid, Inc., sued Obaid Uddin and four other companies: OHK Global, Inc., Janoob, Inc., Saahel, Inc., and Emrooz, Inc. The lawsuit arose out of a series of agreements involving the sale of Janoob, Saahel, and Emrooz and certain inventory and real-estate leases to operate multiple gas stations and convenience stores in Corpus Christi. As part of this sale, Uddin and OHK Global executed a promissory note and the company appellants executed a security agreement for certain collateral. Several months later, Uddin and OHK Global fell behind on the payments due under the note. The parties resolved their ensuing disputes by settlement agreement. Motaghi, Zeba, and Jamshid then brought this suit when the other side did not fulfill that agreement, asserting contract claims relating to the settlement and security agreements.
Subsequent Procedural History
In February 2020, Jamshid nonsuited all its claims. The trial court entered an order dismissing Jamshid's claims that same month.
In March 2020, Motaghi moved for summary judgment, arguing that there was no genuine issue of material fact on his contract claims. The appellants filed a response and Motaghi replied.
In April 2020, the trial court granted Motaghi's summary-judgment motion. The trial court ordered Uddin and OHK Global to pay him $1,738,614.38 owed under the settlement agreement and to turn over property subject to the security agreement. The property subject to turnover included Janoob, Saahel, and Emrooz. The trial court awarded attorney's fees, including conditional awards of appellate fees. But the trial court's order, which neither disposed of all parties and claims nor purported to do so, was interlocutory rather than an appealable final judgment.
Four days after the summary judgment, the appellants moved for leave to amend their pleadings in two motions. Uddin and OHK Global did so in one motion, and Janoob, Saahel, and Emrooz did so in the other. In both motions, the appellants sought leave to add counterclaims against Motaghi and Zeba and third-party claims against nonparties. Both the counterclaims and third-party claims related to the underlying sale, alleging, for example, that the appellants were not given business-related documents necessary to make an accounting of the three companies subject to the sale as well as documents sent to or filed with the state. In addition, the appellants alleged that Motaghi and a nonparty withheld assets subject to the sale.
In May 2020, Motaghi and Zeba nonsuited their claims against Janoob, Saahel, and Emrooz. The trial court entered an order dismissing Motaghi's and Zeba's claims against these entities that same month.
In May 2020, Uddin and OHK Global also moved for reconsideration of the trial court's partial summary judgment. They contemporaneously filed objections to the trial court's summary-judgment order. The record does not contain a ruling on the motion or objections, which were overruled by operation of law. See Tex. R. Civ. P. 329b(c) (providing that new-trial motion is overruled by operation of law 75 days after judgment is signed if motion is not decided by written order in that time).
In January 2021, the trial court denied Uddin and OHK Global's motion for leave to amend. But the other appellants’ motion to amend remained pending.
In February 2021, Zeba nonsuited its remaining claims. The trial court entered an order dismissing these claims that same month.
In March 2021, the trial court denied Janoob, Saahel, and Emrooz's motion for leave to amend to add counterclaims and third-party claims.1
In April 2021, Uddin and OHK Global again moved for reconsideration of the trial court's partial summary judgment. Janoob, Saahel, and Emrooz contemporaneously moved for a new trial and for reconsideration. The record does not contain a trial-court ruling with respect to these motions.
In June 2021, the appellants filed their notice of appeal.
Motaghi contends that we lack subject-matter jurisdiction to hear this appeal because the appellants did not file a timely notice of appeal. He reasons that the last pending claim in the suit was disposed of in February 2021, when Zeba nonsuited its remaining claims and the trial court dismissed them. At this point, Motaghi maintains, the trial court's previous partial summary-judgment order became an appealable final judgment. He further contends that Janoob, Saahel, and Emrooz's pending motion for leave to amend to add counterclaims and third-party claims does not alter this result because these claims were never before the trial court, which later denied leave to amend. Thus, Motaghi concludes that the appellants had to file a notice of appeal in March 2021. Having waited until June 2021 to do so, Motaghi asserts that the appellants’ appeal notice was untimely, depriving us of jurisdiction.
Standard of Review
Subject-matter jurisdiction presents a threshold issue. Whether we have jurisdiction to hear an appeal is a question of law that we review de novo. Bonsmara Nat. Beef Co. v. Hart of Tex. Cattle Feeders, 603 S.W.3d 385, 390 (Tex. 2020).
Though exceptions exist, as a general rule Texas appellate courts only have subject-matter jurisdiction to hear appeals from final judgments. Lehmann v. Har–Con Corp., 39 S.W.3d 191, 195 (Tex. 2001). When there has not been a full trial on the merits, a trial court's judgment is final and appealable in two circumstances: when the judgment unambiguously states that it disposes of all parties and claims in the case, whether it actually does so or not, and when the judgment actually disposes of all parties and claims in the case, regardless of its language. Id. at 200, 204–05.
As a result, a partial summary judgment or other order that does not dispose of the entire case becomes final when the trial court subsequently enters an order that disposes of all remaining parties and claims in the case. See Clarendon Nat'l Ins. Co. v. Thompson, 199 S.W.3d 482, 492 (Tex. App.—Houston [1st Dist.] 2006, no pet.) (stating that interlocutory default judgment became final when trial court later signed order of nonsuit); see also Lehmann, 39 S.W.3d at 200, 204 (observing that order determining last claim in case is final and noting, for example, that partial summary judgment disposing of lone remaining party and issue is final). And the appellate timetables are triggered by whatever order makes the judgment final and appealable by disposing of all remaining parties and claims in the case. Noorian v. McCandless, 37 S.W.3d 170, 173 (Tex. App.—Houston [1st Dist.] 2001, pet. denied); see also Bonsmara Nat. Beef Co., 603 S.W.3d at 390 (stating that when trial court renders final judgment, trial court's interlocutory orders merge into that final judgment and may be challenged by appealing from that final judgment).
To timely appeal from a final judgment rendered in a conventional civil case, a party must file a notice of appeal within 30 days after the trial court signs the judgment. Tex. R. App. P. 26.1(a). But if any party timely files certain posttrial motions in the trial court, including motions for new trial or to modify the judgment, a party must file a notice of appeal within 90 days after the trial court signs the judgment. Id.; see also Tex. R. Civ. P. 329b(a) (requiring motions for new trial to be filed within 30 days after trial court signs judgment or other order at issue). Without a timely notice of appeal, an appellate court lacks subject-matter jurisdiction to hear the merits of the appeal. Mitschke v. Borromeo, 645 S.W.3d 251, 253 (Tex. 2022).
The dispositive jurisdictional question in this appeal is what order made the trial court's judgment final and appealable. There are two possibilities before us.
First, there is the possibility presented by Motaghi. He advocates that the trial court's February 2021 nonsuit order disposed of the only remaining parties and claims. As no one moved for new trial or to modify the judgment within 30 days of that nonsuit, Motaghi argues, the appellants had to file a notice of appeal in March 2021. And even if the appellants had timely moved for new trial or to modify the judgment, their notice of appeal would have been due in May 2021. As the appellants did not file a notice of appeal until June 2021, their notice of appeal was untimely.
Second, there is the possibility Motaghi discounts. He acknowledges that the trial court did not deny Janoob, Saahel, and Emrooz's motion for leave to amend to add counterclaims and third-party claims until March 2021. Motaghi urges that because the trial court denied leave, these claims were not before the trial court and are irrelevant to our jurisdictional inquiry. But if the trial court's March 2021 order denying leave was the one that finally disposed of all parties and claims, then the appellants timely filed their notice of appeal in June 2021, given that their posttrial motions were timely filed within 30 days of the March 2021 trial-court order.
Hence, the key question is whether the trial court had to dispose of Janoob, Saahel, and Emrooz's motion for leave to amend to add counterclaims and third-party claims to dispose of all parties and claims and thereby render a final judgment. On the record before us, we hold the trial court did not have to do so, and the trial court's February 2021 nonsuit order therefore resulted in an appealable final judgment. Consequently, the appellants’ notice of appeal was untimely and we lack jurisdiction. Though this result may at first blush seem counterintuitive, it is the logical result when one takes into account settled law on partial summary judgments.
When a trial court renders a partial summary judgment, its judgment is a decision on the merits that remains binding unless it is set aside by the trial court. Hyundai Motor Co. v. Alvarado, 892 S.W.2d 853, 855 (Tex. 1995) (per curiam). So, if the trial court does not set aside a partial summary judgment (or the court of appeals does not reverse the partial summary judgment on appeal), a party cannot relitigate the issues subject to the summary-judgment order or amend its pleadings to reassert the same claims that were resolved by the trial court in the order. Brumfield v. Williamson, 634 S.W.3d 170, 211–12 (Tex. App.—Houston [1st Dist.] 2021, pet. denied). In general, even if the partial summary judgment is an interlocutory one and thus unappealable, it nonetheless is final in the limited sense of having disposed of the issues in question, unless the trial court later changes, modifies, or sets aside its summary-judgment order. Id. This has long been settled law. E.g., City of Houston v. Socony Mobil Oil Co., 421 S.W.2d 427, 430 (Tex. App.—Houston [1st Dist.] 1967, writ ref'd n.r.e.); see also Maldonado v. Maldonado, 556 S.W.3d 407, 413 n.7 (Tex. App.—Houston [1st Dist.] 2018, no pet.) (noting that trial court generally has inherent authority to reconsider interlocutory partial summary judgment at any time before expiration of its plenary power). Under these circumstances, a trial court cannot grant a motion for leave to amend without first setting aside the partial summary judgment. Brumfield, 634 S.W.3d at 211–12. Accordingly, unless the trial court sets aside a partial summary judgment, it is not obliged to address a motion seeking leave to amend to add claims that merely seeks to relitigate the issues disposed of by partial summary judgment. See, e.g., Robles v. Consol. Graphics, 965 S.W.2d 552, 558 n.5 (Tex. App.—Houston [14th Dist.] 1997, pet. denied) (holding that party could not relitigate issue decided in prior interlocutory partial summary judgment, this issue was not before the trial court when it considered subsequent summary-judgment motion, and trial court properly refused to consider issue in connection with subsequent motion); Methodist Hosps. of Dallas v. Corp. Communicators, 806 S.W.2d 879, 883 (Tex. App.—Dallas 1991, writ denied) (holding that once trial court rendered partial summary judgment, it was not obliged to consider further motions on same issue). In sum, the trial court may elect to reexamine a prior interlocutory partial summary judgment, but the trial court does not have any obligation to do so. See Cunningham v. Eastham, 465 S.W.2d 189, 192 (Tex. App.—Houston [1st Dist.] 1971, writ ref'd n.r.e.) (stating interlocutory partial summary judgment is final unless set aside and that trial court may elect to reexamine evidence and change its prior judgment).
Here, the trial court had already granted partial summary judgment in Motaghi's favor. In this judgment, the trial court determined that Uddin and OHK Global owed Motaghi $1,738,614.38 under the settlement agreement, which the parties had executed to resolve their disputes concerning the underlying transaction involving the sale of Janoob, Saahel, and Emrooz, certain inventory, and real-estate leases. The trial court also ordered Uddin and OHK Global to turn over property subject to the security agreement that was executed as part of the underlying transaction. Property subject to turnover included Janoob, Saahel, and Emrooz.
In their motion for leave to amend, Janoob, Saahel, and Emrooz sought to add multiple counterclaims and third-party claims. In their proposed counterclaims and third-party claims alike, they alleged that Motaghi, Zeba, and/or nonparties:
• did not give Janoob, Saahel, and Emrooz documents needed to make an accounting of the businesses subject to the underlying sales transaction;
• did not notify Janoob, Saahel, and Emrooz about regulatory filings affecting the businesses subject to the underlying sales transaction; and
• withheld and tried to convert for their own use assets belonging to Janoob, Saahel, and Emrooz and improperly continued to receive their mail.
According to Janoob, Saahel, and Emrooz, the preceding conduct misled them as to the revenues and expenses of the businesses, placed the businesses in jeopardy, and deprived the businesses of their rightful property. Based on these allegations, Janoob, Saahel, and Emrooz asked for leave to add counterclaims and third-party claims for fraud, breach of fiduciary duty, breach of the implied covenant of good faith and fair dealing, and conversion.
The allegations made by Janoob, Saahel, and Emrooz, which Motaghi had sold to Uddin and OHK Global in the underlying sales transaction, call into doubt aspects of the sale. But the parties resolved their disputes as to what was owed and to whom under the sale through settlement. The trial court's partial summary judgment enforced their settlement agreement and an underlying security agreement. Any attempt to litigate aspects of the underlying sales transaction, or the parties’ conduct in connection with that sales transaction, at this juncture necessarily would have required the trial court to revisit the partial summary judgment.
On appeal, the appellants implicitly concede that their proposed counterclaims and third-party claims necessarily would have required the trial court to revisit the partial summary judgment. In their brief, they characterize their counterclaims and third-party claims as “mandatory claims that must be brought with the main claims” asserted by Motaghi. The appellants elaborate that all of these claims “arise out of the same contracts with the same parties” and “find their origin in the same set of inextricable transactions based on the same set of facts.”
The trial court had the authority to revisit its interlocutory partial summary judgment. Cunningham, 465 S.W.2d at 192. But the trial court did not revisit this judgment. Nor was the trial court obliged to do so. Id. When, as here, a trial court has rendered an interlocutory partial summary judgment, parties like Janoob, Saahel, and Emrooz cannot relitigate issues that are necessarily laid to rest by that judgment unless the trial court later sets the judgment aside in whole or in relevant part. Brumfield, 634 S.W.3d at 211–12; see also Martin v. First Republic Bank, Fort Worth, 799 S.W.2d 482, 488–89 (Tex. App.—Fort Worth 1990, writ denied) (holding that trial court did not err in refusing to allow parties to assert counterclaim seeking rescission or reformation of guaranties and damages for misrepresentations allegedly made about remedies available if guaranteed loan went into default after trial court had already decided guaranties in question were enforceable in interlocutory partial summary judgment). The trial court therefore was not required to consider Janoob, Saahel, and Emrooz's motion asking for leave to amend to add counterclaims and third-party claims, which they filed only after the trial court had rendered the partial summary judgment and by which they sought to relitigate various aspects of the underlying sales transaction. Robles, 965 S.W.2d at 558 n.5; Methodist Hosps., 806 S.W.2d at 883. Indeed, the trial court could not grant leave to amend under these circumstances. Brumfield, 634 S.W.3d at 211–12. And because the trial court was not required to reconsider issues it had already decided and could not grant their motion for leave to amend without doing so, their proposed counterclaims and third-party claims were not pending before the court in a manner that would prevent the rendition of a final, appealable judgment. See Pending, Black's Law Dictionary (11th ed. 2019) (defining adjective “pending” as “[r]emaining undecided” or “awaiting decision”); see also Lehmann, 39 S.W.3d at 205 (holding that when there has not been conventional trial on the merits, trial court renders final judgment when court “actually disposes of every pending claim and party” or “it clearly and unequivocally states that it finally disposes of all claims and all parties”); cf. Coastal Terminal Operators v. Essex Crane Rental Corp., 133 S.W.3d 335, 336–38 (Tex. App.—Houston [14th Dist.] 2004, no pet.) (per curiam) (abating appeal to seek clarification from trial court as appellate court appeared to lack jurisdiction because judgment was not final in case in which trial court granted summary judgment, granted timely motion for new trial and set aside summary judgment, held hearing on renewed summary-judgment motion but reserved its decision, other party then filed counterclaim without seeking leave from trial court, and trial court granted summary judgment again afterward without addressing counterclaim or including finality language in its new summary-judgment order).
The trial court disposed of the last pending claim and party when it entered its February 2021 nonsuit order dismissing Zeba's remaining unresolved claims. This triggered the appellants’ deadline for filing a notice of appeal. See Farmer v. Ben E. Keith Co., 907 S.W.2d 495, 496 (Tex. 1995) (per curiam) (reiterating that when judgment is interlocutory due to unadjudicated claims or parties and one moves to have these unadjudicated claims or parties nonsuited, appellate timetable runs from trial court's signing of order disposing of them); Clarendon Nat'l Ins. Co., 199 S.W.3d at 492 (agreeing that deadline runs from court's nonsuit order). The appellants’ June 2021 notice of appeal was not timely. Tex. R. App. P. 26.1(a). Therefore, we lack jurisdiction to hear this appeal. Mitschke, 645 S.W.3d at 253.
We dismiss this appeal for lack of subject-matter jurisdiction.
1. Relying on a November 2020 hearing, the appellants argue that the trial court had previously granted Janoob, Saahel, and Emrooz leave to amend in open court. The trial court did initially indicate that it was granting those appellants leave to amend, but after further thought the trial court concluded: “I am retracting the ruling at this time.” So, the appellants’ representation that the trial court granted leave to amend is not accurate. We remind lawyers appearing before us that we expect them to abide by the Standards For Appellate Conduct, which admonish that counsel “should not misrepresent, mischaracterize, misquote, or miscite the factual record.” See Order, Misc. Docket No. 99-9012 (Tex. Feb. 1, 1999) (adopting and promulgating Standards For Appellate Conduct). The Standards are posted on the Texas Judicial Branch's website. See http://www.txcourts.gov/media/1437423/standards-for-appellate-conduct.pdf. Setting aside the inaccuracy of the appellants’ representation, even if the trial court had orally granted leave to amend, when a conflict exists between a trial court's oral and written rulings in a civil case, the written order prevails over the oral pronouncement. Ifiesimama v. Haile, 522 S.W.3d 675, 684 (Tex. App.—Houston [1st Dist.] 2017, pet. denied).
Gordon Goodman, Justice
Response sent, thank you
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Docket No: NO. 01-21-00353-CV
Decided: May 02, 2023
Court: Court of Appeals of Texas, Houston (1st Dist.).
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