DIXON FINANCIAL SERVICES, LTD. and Hyperdynamics Corporation, Appellants v. James CHANG, Nick H. Johnson, Riley L. Burnett, Jr., Johnson, Burnett & Chang, L.L.P., Bill Knollenberg, and Erin Oil Exploration, Inc., Appellees.
In four issues, appellants, Dixon Financial Services, Ltd. (“Dixon Financial”) and Hyperdynamics Corporation (“Hyperdynamics”), contend that the trial court erred (1) by granting summary judgment in favor of appellees, James Chang, Nick H. Johnson, Riley L. Burnett, Jr., and Johnson, Burnett & Chang, L.L.P ., (2) by rendering a take-nothing judgment against appellee, Erin Oil Exploration, Inc. (“Erin Oil”), and (3) by refusing to render judgment against appellee, Bill Knollenberg.
We affirm, in part, and reverse and remand, in part.
In September 1999, Ron Bearden, and R.F. Bearden Associates, Inc. (collectively, “Bearden”), Erin Oil, and Bill Knollenberg, principal of Erin Oil, obtained an arbitration award against Michael Watts, a securities broker, and Texas Capital Securities, the securities brokerage firm for whom Watts worked. As part of the award, Bearden, Knollenberg, and Erin Oil were awarded, jointly and severally, “140,000 shares of common stock and 200,000 warrants in Hyperdynamics.” In the arbitration proceeding, Greenberg, Peden, Siegmyer & Oshman, P.C. (“Greenberg Peden”) represented Bearden, and the law firm of Johnson, Burnett, & Chang (“JBC”) represented Erin Oil and Knollenberg.
In an effort to collect the arbitration award, JBC attorney James Chang notified Hyperdynamics's transfer agent, Fidelity Transfer Company (“Fidelity”), of the award. Chang sent a number of correspondences to Fidelity to secure his clients' interest in the Hyperdynamics stock by instructing Fidelity that the subject stock should not be transferred or conveyed. Chang told Fidelity that “some of [the] securities of [Hyperdynamics] that our client is entitled to in accordance with the [arbitration award] are held or deposited in an account in the name of Island Communications Investments, Ltd.” Chang warned Fidelity that it should not transfer or convey common stock or other securities held or owned by Island Communications.
Chang, on behalf of Erin Oil and Knollenberg, and Greenberg Peden attorney Gerald Siegmyer, on behalf of Bearden, filed suit (“the Watts litigation”) against Texas Capital, Michael Watts, and Hyperdynamics, seeking confirmation of the arbitration award and injunctive relief. Erin Oil, Knollenberg, and Bearden (“the Watts plaintiffs”) alleged that Watts had sold securities belonging to them for Watts's own personal benefit. The Watts plaintiffs further alleged that Watts had transferred shares of Hyperdynamics stock, to which they were entitled, into the account of Island Communications. The Watts plaintiffs obtained a temporary restraining order restricting the transfer of Hyperdynamics stock out of Island Communications's account.
The Watts plaintiffs entered into a settlement agreement with Hyperdynamics in the Watts litigation. The Watts plaintiffs agreed to dismiss Hyperdynamics from the suit, and Hyperdynamics agreed that it would not allow Michael Watts “to sell, transfer, assign or exercise any warrant or option to purchase any securities of HyperDynamics.”
Chang tried unsuccessfully to obtain information from Fidelity regarding which Hyperdynamics stock being held in Island Communications's name belonged to his clients. Fidelity informed Chang that Kent Watts, principal of Hyperdynamics and brother of Michael Watts, had requested the transfer of 574,500 shares of Hyperdynamics stock held in Island Communications's name to Dixon Financial. Chang informed Fidelity that “there were adverse claimants to those shares held in the name of Island and that [Hyperdynamics] may be prohibited from transferring any shares in the name of Island.”
Approximately one year later, Dixon Financial filed the underlying suit against Hyperdynamics, Fidelity, Greenberg Peden, Siegmyer, Bearden, Erin Oil, Knollenberg, James Chang, JBC, and two other JBC partners: Nick Johnson and RileyBurnett, Jr.2 Dixon Financial asserted that Chang and his “co-conspirators” had falsely claimed and misrepresented that Dixon Financial's stock shares held in the name of Island Communications were subject to the arbitration award obtained by the Watts plaintiffs. Specifically, Dixon Financial alleged that Chang had misrepresented to Fidelity that “the 574,500 shares of stock of Hyperdynamics held in the name of Island Communications was in fact property of Chang and Siegmyer's clients and the subject of an arbitration award.” Dixon Financial further alleged that, based on the misrepresentation, Fidelity had “placed a ‘hold’ on the 574,500 shares of Hyperdynamics stock” owned by Dixon Financial thereby preventing Dixon Financial “from exercising any ownership rights to the stock, including its ability to sell the stock at a time when the stock was trading large volume at a higher price.”
Dixon Financial also claimed that “[t]he defendants intentionally and knowingly misrepresented facts to the court in order to obtain the Temporary Restraining Order” in the Watts litigation. Dixon Financial asserted that the restraining order was “sought and obtained” by “using a false and perjurious affidavit signed by Chang.” Dixon Financial further alleged that Chang, “with the knowledge and consent of his co-conspirators [including Bearden, Greenberg Peden, and Siegmyer], intentionally and knowingly on numerous times contacted Fidelity ․ and wrongfully advised [Fidelity]” that the temporary restraining order “prohibited Fidelity” from issuing the Hyperdynamics stock to Dixon Financial. Dixon Financial further alleged that, when Fidelity finally transferred the stock to it, the stock “had dropped from a high in January 2000 of $7.75 per share when Dixon Financial was entitled to receive the shares to less than $2.00 resulting in a loss [to Dixon Financial] in excess of $3,000,000.”
Dixon Financial asserted causes of action against Bearden, Greenberg Peden, Siegmyer, Erin Oil, Chang, JBC, Nick Johnson, and Riley Burnett, Jr. for conversion, abuse of process, tortious interference, and fraud. Dixon Financial claimed that the defendants were jointly and severally liable based on theories of conspiracy, agency, and concert of action.
Hyperdynamics also filed a cross-claim against Bearden, Greenberg Peden, Siegmyer, Erin Oil, Chang, JBC, Johnson, and Burnett asserting claims for negligent misrepresentation, tortious interference, abuse of process, malicious prosecution of a civil suit, and contribution. Like Dixon Financial's claims, Hyperdynamics's cross-claims were premised on allegations that Chang had misrepresented to the trial court and to Fidelity the extent to which the arbitration award applied to Hyperdynamics's stock held in the name of Island Communications.
Hyperdynamics also filed a cross-claim for breach of contract. Hyperdynamics asserted that the defendants had breached the settlement agreement between it, Erin Oil, and Bearden in the Watts litigation. Hyperdynamics claimed that the defendants continued to interfere with the transfer of its stock to Dixon Financial “in violation of the spirit and terms of the agreement.”
Greenberg Peden and Siegmyer filed motions for summary judgment, asserting that Dixon Financial had no actionable claim against them, as a matter of law, for conduct undertaken in the representation of a client. The attorneys based the motions for summary judgment on Dixon Financial's pleadings. Concomitantly, Bearden filed a motion for summary judgment contending that, as a matter of law, it could not be liable for the conduct of its attorneys.
Chang, JBC, Johnson, and Burnett (collectively hereinafter “the JBC defendants”) also filed a motion for summary judgment. Like Greenberg Peden, the JBC defendants asserted that Dixon Financial failed to state an actionable claim. The JBC defendants pointed out that, as pled, Dixon Financial's claims were premised on conduct undertaken in the representation of JBC's clients during litigation and was therefore privileged. Greenberg Peden, Siegmyer, and the JBC defendants also filed a joint motion for summary judgment against Hyperdynamics, which asserted this same argument with respect to Hyperdynamics's tort claims. The joint motion for summary judgment also raised a no-evidence challenge, asserting that Hyperdynamics could present no evidence of damages, an essential element of its cross-claims, including its breach of contract claim.
The trial court granted each of the motions for summary judgment. Greenberg Peden, Siegmyer, and Bearden (“the Greenberg Peden defendants”) requested the trial court to sever Dixon Financial's and Hyperdynamics's claims against them from the remainder of the case. In May 2006, the trial court granted the severance converting the order granting summary judgment in favor of the Greenberg Peden defendants into a final, appealable judgment. The JBC defendants did not seek a severance of Dixon Financial's and Hyperdynamics's claims against them. The order granting the JBC defendants' motion for summary judgment remained interlocutory. In addition, Dixon Financial's and Hyperdynamics's claims against Knollenberg and Erin Oil remained in the trial court.
In appellate cause number 01-06-00696-CV, Dixon Financial and Hyperdynamics appealed the summary judgments granted by the trial court in favor of the Greenberg Peden defendants. We affirmed the summary judgments obtained by the Greenberg, Peden defendants against Dixon Financial and Hyperdynamics in Dixon Financial Services, Ltd. v. Greenberg, Peden, Siegmyer & Oshman, P.C., No. 01-06-00696-CV, 2008 WL 746548 (Tex.App.-Houston [1st Dist.] Mar. 20, 2008, pet. denied) (mem.op.). There, we discussed the law regarding an attorney's immunity from suit with respect to action he takes in the representation of a client. See id. at *7-8. We recognized that to promote zealous representation, courts have held that an attorney has “qualified immunity” from civil liability, with respect to non-clients, for actions taken in connection with representing a client in litigation. Id. at *7 (citing Alpert v. Crain, Caton & James, P.C., 178 S.W.3d 398, 405 (Tex.App.-Houston [1st Dist.] 2005, pet. denied)).
We agreed with the Greenberg Peden defendants that the conduct alleged by Dixon Financial and Hyperdynamics as being tortious was not actionable because it constituted conduct undertaken by an attorney to assist a client in securing and recovering an arbitration award. See id. at *11. For this reason, we concluded that the Greenberg Peden defendants were entitled to summary judgment as a matter of law. Id.
As mentioned, Dixon Financial's and Hyperdynamics's claims against Knollenberg and Erin Oil remained pending in the trial court, as did the interlocutory order granting summary judgment in favor of the JBC defendants. On February 22, 2007 the trial court signed a “Final Judgment” addressing the remaining claims.
The Final Judgment reflected that the trial court conducted a jury trial between January 29, 2007 and February 1, 2007. The judgment recited that Knollenberg, who had previously appeared in the lawsuit pro se and had notice of the trial setting, did not appear at trial. The judgment reflected that, after receiving proper service, Erin Oil never filed an answer or otherwise appeared.
In the Final Judgment, the trial court ordered that the interlocutory summary judgments obtained by the JBC defendants against Dixon Financial and Hyperdynamics became final. The Final Judgment also ordered:
• A default judgment should be entered against Erin Oil. Dixon Financial should recover $3,500,000 in actual damages from Erin Oil.
• Judgment should be entered against Knollenberg on the jury's verdict. Dixon Financial should recover $3,500,000 in actual damages and $500,000 in exemplary damages from Knollenberg.
• Hyperdynamics should recover from Knollenberg $3,550,000 in actual damages, $245,000 in attorney's fees through trial, and $110,000 in attorney's fees for appeal.
• The interlocutory summary judgment obtained by Dixon Financial against Hyperdynamics “as to liability only” is “final.” On the jury's verdict, Dixon Financial should recover $3,500,000 in actual damages, $1,400,000 in attorney's fees through trial, and $175,000 in attorney's fees on appeal from Hyperdynamics.
• Based on the jury's verdict, Hyperdynamics was entitled to contribution from Knollenberg in the amount of $5,075,000, to the extent that Hyperdynamics paid Dixon Financial monies to satisfy its obligation as defined in the judgment.
After the trial court signed the Final Judgment, Knollenberg retained counsel. On March 22, 2007, Knollenberg filed a “Motion to Modify the Judgment, or in the Alternative, for Entry of Judgment N.OV.” In the motion, Knollenberg challenged the portions of the Final Judgment awarding damages against him in favor of Dixon Financial and Hyperdynamics on the basis that Dixon Financial and Hyperdynamics had non-suited their respective claims against him in April 2005.
Knollenberg also challenged the contribution award of $5,075,000 in favor of Hyperdynamics to compensate Hyperdynamics for monies it was required to pay Dixon Financial under the Final Judgment. Knollenberg pointed out that, not only had the jury not made a damages finding against Hyperdynamics in favor of Dixon Financial, the jury had found that Hyperdynamics caused no damages to Dixon Financial.
The trial court conducted two hearings in which the issue of whether Dixon Financial and Hyperdynamics had non-suited Knollenberg was discussed. Although Knollenberg's post-judgment motion challenging the Final Judgment had already been overruled by operation of law, the trial court ultimately agreed that Dixon Financial and Hyperdynamics had non-suited Knollenberg two years earlier.
On May 22, 2007, the trial court signed an “Amended Judgment,” which provided, in relevant part, as follows:
The court finds that Defendant Erin Oil Exploration, Inc. was properly served with citation by Plaintiff Dixon Financial Services, Ltd., but failed to answer or appear and that the return of citation has been on file a sufficient period of time and that default judgment should be entered against Defendant Erin Oil Explorations, Inc. The court finds that Dixon failed to submit an issue related to damages to the jury. Accordingly, the Court orders that Dixon take nothing on its claims against Erin Oil.
The Court, having finalized the interlocutory summary judgment against Hyperdynamics Corporation [as described in an earlier portion of the judgment] finds that Dixon did not submit an issue related to damages caused by the conduct of Hyperdynamics to the jury. Accordingly, it is THEREFORE ORDERED, ADJUDGED and DECREED that Dixon Financial Services, Ltd. take nothing on its claims against Hyperdynamics Corporation.
A footnote in the Amended Judgment further provides,
The Court hereby amends its final judgment dated February 20, 2007. The Court does so, acting sua sponte, after it has [inadvertently] let defendant Bill Knollenberg's motion to modify the judgment or in the alternative, for entry of judgment N.O.V. be overruled by operation of law. The Court concludes that defendant Knollenberg was non-suited by plaintiff Dixon and by defendant, cross plaintiff, Hyperdynamics. The Court reaches this conclusion on the basis of matters raised by Knollenberg and through the doctrine of misnamed pleadings which the Court raised sua sponte.
(Brackets in original.)
Presenting four issues, Dixon Financial and Hyperdynamics appeal the trial court's Amended Judgment.
In their first issue, Dixon Financial and Hyperdynamics challenge the summary judgments obtained by the JBC defendants against Dixon Financial and Hyperdynamics.
A. Summary Judgment Against Dixon Financial
The JBC defendants sought summary judgment against Dixon Financial on the basis that Dixon Financial had failed to plead an actionable claim against them. Pointing to the allegations in Dixon Financial's pleadings, the JBC defendants asserted that Dixon Financial's claims were premised on conduct undertaken by an attorney in the representation of his clients during litigation. The JBC defendants argued that such conduct is privileged conduct for which attorneys are immune from suit by non-clients.
The Greenberg Peden defendants asserted this same legal argument in support of their motion for summary judgment in the severed action. Dixon Financial premised its claims against the Greenberg Peden defendants on the same conduct by the same actors, primarily James Chang, as it based its claims against the JBC defendants. As described supra, this Court upheld Greenberg Peden's summary judgment against Dixon Financial based on the same principle of law (i.e., an attorney's qualified immunity from suit by a non-client for litigation conduct) that the JBC defendants asserted to support their motion for summary judgment at issue here. See Dixon Financial, 2008 WL 746548, at *5, 11. We held, based on qualified immunity, that the Greenberg Peden defendants could not be held liable, as a matter of law, for the conduct alleged by Dixon Financial. See id. at *11. Dixon Financial sought review of our decision. The Supreme Court has denied the petition for review. Our earlier decision on this issue governs our decision in this appeal. The “law of the case” doctrine mandates that the ruling of an appellate court on a question of law raised on appeal will be regarded as the law of the case in all subsequent proceedings, unless clearly erroneous. Briscoe v. Goodmark Corp., 102 S.W.3d 714, 716 (Tex.2003). The doctrine applies when the issues of law and fact are substantially the same in the second proceeding as the first. See Hudson v. Wakefield, 711 S.W.2d 628, 630 (Tex.1986).
As discussed, the issues of law and fact in this appeal, with regard to determining the propriety of the summary judgment in favor of the JBC defendants, are the same as those involved in the earlier appeal with respect to the summary judgment granted in favor of the Greenberg Peden defendants. We follow our holding in that appeal and conclude that the JBC defendants cannot be held liable, as a matter of law, for the conduct pled by Dixon Financial. See Sledge v. Mullin, 927 S.W.2d 89, 93 (Tex.App.-Fort Worth 1996, no writ) (determining that the holding in earlier appeal, in severed part of case, was binding on determining issue in later appeal of remainder of case). We hold that the trial court properly granted summary judgment in favor of the JBC defendants against Dixon Financial.
B. Summary Judgment Against Hyperdynamics
Hyperdynamics challenges the summary judgment obtained by the JBC defendants with regard to its breach of contract claim.
In the instant litigation, Hyperdynamics alleged that the signatories and their attorneys breached the February 4, 2000 settlement agreement (“the Agreement”) signed in the Watts litigation. Pursuant to the terms of the Agreement, Hyperdynamics agreed to prevent Michael Watts from conveying or transferring Hyperdynamics securities. In return, Erin Oil, Knollenberg, and Bearden agreed to, and then did, dismiss Hyperdynamics from the Watts litigation.
In its cross-action, Hyperdynamics alleged that “[n]othwithstanding the agreement and the dismissal of all claims [against Hyperdynamics], [the cross-defendants] continued to communicate with Fidelity Transfer for the express purpose of preventing Fidelity Transfer from transferring specific shares into free trading shares in Dixon.” Hyperdynamics continued, “In the course of those communications, [the cross-defendants] continued to assert that Hyperdynamics was restrained from transferring these shares to Dixon.” Hyperdynamics alleged that such communications violated “the spirit and terms of the agreement.”
The joint motion for summary judgment filed by the cross-defendants to Hyperdynamics's claims was a traditional motion for summary judgment, asserting the qualified immunity privilege, and a no-evidence motion for summary judgment. The no-evidence motion for summary judgment averred that “Hyperdynamics has offered no evidence of any actual damages suffered,” an essential element of each of Hyperdynamics's cross-claims, including its breach of contract claim.
Hyperdynamics responded to the no-evidence motion for summary judgment by asserting that it had sustained damages as a result of breach. Particularly, Hyperdynamics claimed that it continued to incur legal fees and expenses after its dismissal from the Watts litigation as a result of the breach. Hyperdynamics also alleged that it had “suffered” damages because Fidelity had sent it a demand letter to pay its legal fees in the instant litigation.
To support its damages allegations, Hyperdynamics offered the affidavit of its attorney, David Sacks, and the affidavit of its president, Kent Watts. The cross-defendants, including the JBC defendants, objected to and moved to strike the affidavits. Sustaining the defendants' objections, the trial court signed an order striking all evidence offered in support of Hyperdynamics response, including the Sacks and Watts affidavits.
The trial court granted summary judgment against Hyperdynamics on its cross-claims without identifying the basis for its ruling. On appeal, Hyperdynamics contends that the trial erred by striking the affidavits and by granting summary judgment against it on its breach of contract cross-claim.
C. Standard of Review: No-Evidence Motion for Summary Judgment3
We review summary judgments de novo. Valence Operating Co. v. Dorsett, 164 S.W.3d 656, 661 (Tex.2005).
A party seeking a no-evidence summary judgment contends that there is no evidence of one or more essential elements of a claim on which an adverse party would have the burden of proof at trial. Tex.R. Civ. P. 166a(i); Hamilton v. Wilson, 249 S.W.3d 425, 426 (Tex.2008). Summary judgment must be granted unless the non-movant produces competent summary judgment evidence raising a genuine issue of material fact on the challenged elements. Tex.R. Civ. P. 166a(i); Hamilton, 249 S.W.3d at 426. A non-moving party is “not required to marshal its proof; its response need only point out evidence that raises a fact issue on the challenged elements.” Tex.R. Civ. P. 166a (Notes & Comments 1997). This means that the non-movant must point to some, but not all, evidence supporting challenged elements. Cmty. Initiatives, Inc. v. Chase Bank, 153 S.W.3d 270, 280 (Tex.App.-El Paso 2004, no pet.).
A no-evidence summary judgment motion is essentially a motion for a pretrial directed verdict. Mack Trucks, Inc. v. Tamez, 206 S.W.3d 572, 581-82 (Tex.2006). Accordingly, we apply the same legal-sufficiency standard of review that is applied when reviewing a directed verdict. City of Keller v. Wilson, 168 S.W.3d 802, 823 (Tex.2005). Applying that standard, a no-evidence point will be sustained when (1) there is a complete absence of evidence of a vital fact, (2) the court is barred by rules of law or evidence from giving weight to the only evidence offered to prove a vital fact, (3) the evidence offered to prove a vital fact is no more than a mere scintilla, or (4) the evidence conclusively establishes the opposite of a vital fact. King Ranch, Inc. v. Chapman, 118 S.W.3d 742, 751 (Tex.2003); see City of Keller, 168 S.W.3d at 810.
We review a no-evidence summary judgment for evidence that would enable reasonable and fair-minded jurors to differ in their conclusions. Hamilton, 249 S.W.3d at 426 (citing City of Keller, 168 S.W.3d at 822). In so doing, we view the summary judgment evidence in the light most favorable to the party against whom summary judgment was rendered, crediting evidence favorable to that party if reasonable jurors could, and disregarding contrary evidence unless reasonable jurors could not. See Mack Trucks, 206 S.W.3d at 582; City of Keller, 168 S.W.3d at 822.
Applying these principles, we determine whether Hyperdynamics offered competent summary judgment evidence to raise a genuine issue of material fact regarding whether it incurred damages as a result of the alleged breach of the Agreement.4 We need not decide whether the trial court properly sustained the objections to Hyperdynamics's summary judgment evidence because, even with this evidence, we conclude that Hyperdynamics did not meet its burden to offer sufficient evidence on the challenged element of actual damages.
D. Analysis of Evidence Offered to Show Breach-of-Contract Damages
On appeal, Hyperdynamics points to the affidavit of its attorney, David Sacks, who represented Hyperdynamics in the Watts litigation, as evidence of its breach of contract damages. Hyperdynamics contends that the Sacks affidavit shows that it incurred attorney's fees as actual damages as a result of the breach of the February 4, 2000 settlement agreement.
In his affidavit, David Sacks, testified as follows, with regard to damages:
As part of the representation of Hyperdynamics in the Injunction Lawsuit [the Watts litigation], I charged and invoiced [Hyperdynamics] for the attorney's fees and expenses incurred. After the Agreement of February 4, 2000, I continued to represent Hyperdynamics in its efforts to aid the transfer of shares into Dixon. I invoiced my client for my time and expenses for this representation as well. My total fees and expenses were at least $30,000.00. These attorneys fees and expenses would not have been incurred, but for the conduct of the Erin Oil plaintiffs during the Injunction Lawsuit and after the Agreement of February 4, 2000.
Unless expressly provided for by statute or by contract, attorney's fees incurred in the defense or prosecution of a lawsuit are generally not recoverable. Turner v. Turner, 385 S.W.2d 230, 233 (Tex.1964). This general rule is not without exception. Equitable principles allow the recovery of attorney's fees as actual damages when a party was required to prosecute or defend a prior legal action as a consequence of a wrongful act of the defendant. Turner, 385 S.W.2d at 234; Massey v. Columbus State Bank, 35 S.W.3d 697, 701 (Tex.App.-Houston [1st Dist.] 2000, pet. denied); Lesikar v. Rappeport, 33 S.W.3d 282, 306 (Tex.App.-Texarkana 2000, pet. denied). For the equitable exception to apply, the following two prerequisites must be met: (1) the plaintiff must have incurred the attorney's fees in a prior action, and (2) the action must have involved a third party. Turner, 385 S.W.2d at 234. From Sacks's affidavit, it is not clear that the claimed fees were incurred in the defense or prosecution of a prior action involving a third party. As described, the claimed fees were incurred in relation to the Watts litigation. The claimed attorney's fees were not incurred in litigation with a third person, rather, the fees were incurred following litigation with Hyperdynamics' present adversaries in this litigation. See id. at 237.
To obtain attorney's fees as actual damages, the plaintiff must also show that the claimed attorney's fees were reasonable and necessary. See id. at 234; Lesikar, 33 S.W.3d at 306; Powell v. Narried, 463 S.W.2d 43, 46 (Tex.Civ.App.-El Paso 1971, writ ref'd n.r.e.). As pointed out by the JBC defendants, the Sacks affidavit makes no showing that any attorney's fees incurred as a result of the alleged breach of the Agreement were reasonable or necessary. See Lesikar, 33 S.W.3d at 308 (reversing award of attorney's fees as actual damages on legal sufficiency ground because no evidence was offered to show reasonableness of attorney's fees). Nor does Sacks's affidavit testimony make any attempt to segregate the amount of fees attributable to alleged breach of the Agreement and those incurred defending against the Watts litigation. See Powell, 463 S.W.2d at 46 (sustaining appellant's challenge to award of attorney's fees as damages because no evidence offered to show reasonableness of fees and no attempt made to segregate attorney's fees pertaining only to defense of action brought by third party). Applying the no evidence standard within the context of the principles governing attorney's fees as damages, we conclude that Sacks's testimony falls short of being competent summary judgment evidence to raise a genuine fact issue regarding whether Hyperdynamics sustained actual damages as a result of the alleged breach of the Agreement.
Hyperdynamics also relies on the affidavit of its president, Kent Watts. On appeal, Hyperdynamics cites the following provision of the Watts affidavit:
As a result of the underlying injunction action [the Watts litigation], Hyperdynamics was compelled to retain counsel to represent it. It incurred legal fees and expenses through that counsel of at least $30,000. In addition, Hyperdynamics' agreement with its transfer agent includes the right of the transfer agent to seek to recover its costs and attorney's fees from any dispute or litigation in which the transfer agent becomes involved. Fidelity Transfer has made demand upon Hyperdynamics for payment of the attorney's fees and expenses it may incur in this lawsuit. See exhibit “1” attached which is a true and correct copy of a letter from Fidelity Transfer seeking reimbursement of its attorney's fees and expenses. Those damages are in addition to the damages sought by Dixon in this lawsuit and the attorneys [sic] which are accruing for Hyperdynamics' involvement in this lawsuit.5
In the letter attached to Watts's affidavit, Fidelity informed Hyperdynamics that it “had been forced to retain local council [sic] in Houston” with regard to the instant suit filed by Dixon Financial in which Fidelity was a named defendant. The letter requested that Hyperdynamics “overnight” a check for $3,000 to Fidelity.
On appeal, Hyperdynamics contends that Fidelity's demand for monies to cover its attorney's fees that it “may incur” is evidence that Hyperdynamics itself incurred damages as a result of the breach of the Agreement. The important aspect of the Watts affidavit is not, however, what is says, but what it does not say. Watts never states that Hyperdynamics paid Fidelity's attorney's fees, planned to pay the fees, or felt legally obligated to pay the fees. Nor does the affidavit indicate how Fidelity's attorney's fees incurred in the present litigation are attributable to the alleged breach of the Agreement. To the contrary, Fidelity was sued in this lawsuit by Dixon Financial for its own alleged tortious acts.
The Supreme Court of Texas has explained, “[W]hen the evidence offered to prove a vital fact is so weak as to do no more than create a mere surmise or suspicion of its existence, the evidence is no more than a scintilla and, in legal effect, is no evidence.” Ford Motor Co. v. Ridgway, 135 S.W.3d 598, 601 (Tex.2004) (quoting Kindred v. Con/Chem, Inc., 650 S.W.2d 61, 63 (Tex.1983)). To raise a genuine issue of material fact, the evidence must transcend mere suspicion. Id. Evidence that is so slight as to make any inference a guess is in legal effect no evidence. Id. Here, Watts affidavit testimony does nothing more than raise a surmise or suspicion that Hyperdynamics incurred damages as a result of the alleged breach of the Agreement. Any inference made from Watts's testimony that Hyperdynamics sustained damages attributable to the alleged breach would be purely speculative. See id. Accordingly, the Watts affidavit constitutes “no evidence” of damages. See id.
Taken either individually or together, the affidavits do not constitute legally sufficient evidence to prevent a no-evidence summary judgment on grounds of lack of breach of contract damages. See Mack Trucks, 206 S.W.3d at 583. Hyperdynamics did not meet its burden to defeat the JBC defendants' summary judgment contention that no evidence existed to support the actual-damages element of Hyperdynamics's breach of contract claim. We hold that the trial court properly granted summary judgment in favor of the JBC defendants with respect to Hyperdynamics's breach of contract claim.
We overrule Dixon Financial's and Hyperdynamics's first issue.
Non-suit of Claims Against Knollenberg
In their third and fourth issues, Dixon Financial and Hyperdynamics (referred to as “appellants” in this discussion) contend that the trial court erred (1) by concluding that appellants had non-suited Knollenberg and (2) by its concomitant refusal to render judgment against Knollenberg on the jury's verdict. Knollenberg and Erin Oil (referred to as “appellees” in this discussion) assert that they were both non-suited by appellants. Appellees point to “numerous representations” made by appellants to the trial court that appellants had non-suited appellees. More particularly, appellees point to a proposed “Agreed Final Judgment” attached to a Joint Motion to Enter Judgment filed by appellants in April 2005.
The decretal portions of the proposed Agreed Final Judgment awarded Dixon Financial actual damages against Hyperdynamics in the amount of $2,015,264 and set forth the various summary judgment rulings of the trial court. Toward the end of the Agreed Final Judgment was a provision that read, “[Dixon Financial] and Hyperdynamics do hereby Non-Suit without prejudice their claims against the Defendants Erin Oil Exploration, Inc. and Bill Knollenberg.” The Agreed Final Judgment was signed only by Hyperdynamics's attorney but contained signature lines for all counsel to sign. The proposed judgment indicated that the signatories were approving the judgment “as to form.” The Joint Motion to Enter Judgment was signed by Hyperdynamics's counsel and Dixon Financial's counsel by permission.
The trial court denied appellants' request to sign the Agreed Final Judgment. Through a series of hearings and signed orders, the trial court explained to appellants that it would not sign the agreed judgment unless all parties approved the judgment not only as to form, but also as to substance.
In two amended motions to enter judgment, at several hearings, and in a “Brief in Support of Counsel Approved Judgment,” Dixon Financial and Hyperdynamics explained to the trial court that they requested rendition of the proposed judgment to facilitate a settlement reached between them and to obtain a final, appealable judgment. Obtaining a final judgment would allow appellants to pursue an appeal of the summary judgments granted in favor of the attorney defendants. Appellants explained to the trial court that, if they approved the judgment as to substance, they would be precluded from challenging the summary judgments on appeal.
Appellants submitted two more proposed final judgments to the trial court in January and February 2006. Each of these proposed judgments contained similar decretal provisions to the first Agreed Final Judgment. Each contained a non-suit provision regarding appellees, and each approved the judgment only as to form, but not as to substance. The proposed judgment filed in February 2006 was signed by all counsel. The certificates of service indicate that Knollenberg, who was pro se, was sent copies of the various filings relating to appellants' request for entry of judgment.6
Despite all counsel having approved the February 2006 proposed judgment and despite numerous attempts to persuade the trial court to sign the proposed judgment, the trial court remained resolute that it was contrary to Texas law to enter a judgment that was not approved as to substance, as well as to form. The court continued to sign written orders denying appellants' request to enter an agreed judgement.
In March 2006, Hyperdynamics filed its request for a jury trial and for a trial setting. Hyperdynamics described the trial court's refusal to sign the agreed judgment. Hyperdynamics stated that “[a]s a result of the Court's rulings as described [ ], there remains to be tried the question of damages against Hyperdynamics, and the claims and causes of action, in their entirety, against Erin Oil and Knollenberg.” Again, counsel indicated that Knollenberg was sent a copy of the request for a jury trial and for a trial setting.
In November 2006, appellants filed a “Joint Motion to Enter Judgment on Stipulated Damages.” Attached to the motion was yet another proposed judgment similar to the earlier proposed judgments. The trial did not grant the motion or sign the judgment. A couple of days before trial in January 2007, appellants each filed a “Notice of Withdrawal of Joint Motion to Enter Judgment.” Each appellant stated that the notice was filed “[i]n an abundance of caution and to eliminate any confusion.” Each appellant expressly withdrew the “Joint Motion to Enter Judgment on Stipulated Damages” and withdrew “the proposed Final Judgment previously filed.” Appellants also proclaimed that [a]ll claims or causes of action” asserted before “the Joint Motion continue in full force and effect for all purposes and will be asserted at trial.” The withdrawal notices indicate that they were sent to Knollenberg. On appeal, appellees contend that appellants had indeed non-suited their claims against them. Appellees rely primarily on the non-suit language of the proposed agreed judgment submitted to the trial court and on the accompanying motion requesting entry of the proposed judgment. Appellees cite the well-established principle that a non-suit is effective when it is filed and “extinguishes a case or controversy from ‘the moment the motion is filed.’ “ Univ. of Tex. Med. Branch at Galveston v. Estate of Blackmon, 195 S.W.3d 98, 100 (Tex.2006).
Appellants counter that the non-suit language cannot be read in isolation. Rather, it is but one provision found in a series of proposed judgments that were never signed. Appellants contend that, when read in the context of not only the entire proposed judgment, but also the entire record, it is clear that the non-suit was conditioned on the trial court's rendition of the proposed judgment. Appellants assert that, because the trial court never signed the judgment, the non-suit never became effective.
We agree with appellants. The only way to reach the conclusion that appellants non-suited their claims against appellees is to read the non-suit provision in isolation by removing it from the proposed judgment and the entirety of the proceedings. When read contextually, it is clear that the non-suit clause is not an independent provision, but was one part of appellants' plan to expedite the conclusion of the litigation in an efficient and beneficial manner. The record, including the numerous motions for entry of judgment and the transcripts from the various hearings, show that the non-suit in the proposed judgments was contingent on appellants obtaining what they truly desired: a final, appealable judgment that would allow them to pursue their appeals against the attorney defendants and a settlement between Hyperdynamics and Dixon Financial. Because appellants were unable to obtain the end result that they were seeking, the inclusion of the non-suit language in the proposed judgment did not effectuate a dismissal of appellants' claims against appellees.
Appellees also rely on a statement made by Hyperdynamics's attorney at a March 2, 2006 hearing on the joint motion for entry of judgment. To persuade the trial court to sign the proposed judgment, Hyperdynamics's counsel described how each of the claims were or would be resolved. In this regard, counsel was attempting to show that the suit was ripe for the entry of a final judgment. It was in this context that Hyperdynamics's counsel made the following statement: “Hyperdynamics and Dixon resolved the remaining issues in the case dismissing by non-suit the parties that we decided not to pursue further and agreeing on a settlement by which Hyperdynamics may or will pay Dixon some amount of money in damages.” When read in context, it is apparent that the statement was not intended to, and did not, effectuate or recognize a non-suit of appellants' claims but was offered in support of argument to persuade the trial court to allow entry of the proposed judgment submitted by appellants.7
Appellants' contention that they did not non-suit their claims against appellees is further supported by their notices of withdrawal filed before trial. The withdrawal notices unequivocally stated that appellants no longer consented to the entry of the proposed judgment, which necessarily included the non-suit, and expressly indicated that appellants intended to prosecute their claims against appellees.
In Texas, a party has the right to revoke its consent to a judgment at any time before the rendition of judgment. Golodetz Trading Corp. v. Curland, 886 S.W.2d 503, 504 (Tex.App.-Houston [1st Dist.] 1994, no writ). This includes a party's right to withdraw consent to a non-suit before rendition of judgment. See id. at 505 (holding that party was entitled to withdraw consent to non-suit with prejudice before rendition occurred). Here, even if we assume that appellants had agreed to a non-suit, they had the right to withdraw consent before judgment was rendered. See id. at 504.
We conclude that appellants did not non-suit their claims against appellees. We hold that the trial court erred by failing to render judgment on the jury's verdict against Knollenberg.
We sustain appellants' third and fourth issues.
Default Judgment Against Erin Oil
In its second issue, Dixon Financial contends that the trial court erred by rendering judgment that it take nothing against Erin Oil.
As discussed, despite proper service by Dixon Financial, Erin Oil did not answer or appear in the trial court. In the Final Amended Judgment, the trial court stated that a default judgment should be entered against Erin Oil. Nonetheless, the trial court ordered that Dixon Financial take nothing against Erin Oil because Dixon Financial did not submit “an issue related to damages to the jury.”
On appeal, Dixon Financial argues that it was not required to submit a damages issue to the jury. Dixon Financial correctly points out that Rule of Civil Procedure 243 provides that when, as here, the damages being claimed are unliquidated, the court rendering a default judgment must hear evidence regarding damages. Tex.R. Civ. P. 243; see Holt Atherton Industries, Inc. v. Heine, 835 S.W.2d 80, 86 (Tex.1992). Only when the defendant requests a jury trial must the issue of damages be submitted to the jury. See Tex.R. Civ. P. 243. It is undisputed that Erin Oil made no appearance at trial and no request that the damages issue be submitted to the jury.
We agree with Dixon Financial that it was not required to submit a damages issue to the jury. See id. The trial court should have heard evidence regarding damages and, if it found the evidence established damages, should have rendered a money judgment against Erin Oil.8 See id. Thus, the trial court erred by rendering a take-nothing judgment in favor of Erin Oil on the basis that Dixon Financial failed to submit a damages issue to the jury.
The question arises regarding the proper disposition given the trial court's error in rendering a take-nothing judgment against Erin Oil. We note that when an appellate court sustains a legal sufficiency point after an uncontested hearing on unliquidated damages following a no-answer default judgment, the appropriate disposition is not the rendition of a take-nothing judgment, but rather a remand for a new trial on the issue of unliquidated damages. Holt, 835 S.W.2d at 86. In other words, even when a plaintiff fails to offer legally sufficient proof at an uncontested damages hearing following a no-answer default, it is entitled to another chance to prove its damages. See id. Thus, regardless of the level of proof of damages offered at trial by Dixon Financial with respect to Erin Oil, we conclude that the proper disposition is remand for a new trial on the issue of unliquidated damages.9
We sustain Dixon Financial's second issue.
We affirm the portion of trial court's judgment that grants summary judgment in favor of the JBC defendants against Dixon Financial and Hyperdynamics. We reverse the portion of the trial court's judgment that renders a take-nothing judgment against Erin Oil, and we reverse the judgment to the extent that it fails to render judgment against Bill Knollenberg. We remand the case (1) for a new trial on the issue of unliquidated damages against Erin Oil and (2) for the trial court to render judgment against Bill Knollenberg on the jury's verdict.
OPINION DISSENTING IN PART
The majority errs in holding that an attorney, “based on qualified immunity,” cannot be held liable, as a matter of law, for fraudulently misrepresenting to a stock transfer agent that the attorney's client, pursuant to an arbitration award, had ownership rights to shares of stock which were, in fact, wholly owned by another. The majority's holding extends qualified immunity for attorneys beyond its logical bounds and contradicts the Texas Supreme Court's express holding that an attorney may be held liable for negligent misrepresentations made to a non-client. See McCamish, Martin, Brown & Loeffler v. F.E. Appling Interests, 991 S.W.2d 787, 788-95 (Tex.1999) (applying Restatement (Second) of Torts § 552).
Accordingly, I respectfully dissent from the portion of this Court's judgment affirming the trial court's summary judgment against appellant, Dixon Financial Services, Ltd. (“Dixon”), in its lawsuit against appellees, James Chang, Nick Johnson, Riley Burnett, and Johnson, Burnett & Chang, L.L.P. (“JBC”). I otherwise join the remainder of the majority opinion and this Court's judgment.
Factual and Procedural Background
In their third amended original petition, appellants, Dixon and Hyperdynamics Corporation (“Hyperdynamics”), allege that appellees, Chang, Johnson, Burnett, and JBC, while representing Erin Oil Exploration, Inc. (“Erin Oil”), contacted Fidelity Transfer Company (“Fidelity”) and misrepresented that “574,500 shares of Hyperdynamics stock ․ [were] in fact the property of [Erin Oil] and the subject of an arbitration award.” However, Chang knew that “at most, only 60,000 shares of Hyperdynamics stock ․ could be owned by any of the parties to that litigation.”
Relying on Chang's misrepresentations, Fidelity placed a “hold” on all 574,500 shares of Dixon's Hyperdynamics stock, which prevented Dixon “from exercising any ownership rights to the stock, including its ability to sell the stock at a time when the stock was trading large volume at a higher price.” Specifically, Dixon and Hyperdynamics allege that Dixon had intended to sell its Hyperdynamics stock in January 2000, when the stock was worth approximately $4.45 million. Dixon was able to sell its stock only after “Chang and his co-conspirators admitted to Fidelity that the stock truly belonged to Dixon” and its value had dropped to less than $1.15 million.
Chang, Johnson, Burnett, and JBC filed their summary judgment motion, asserting that all of Dixon's “causes of action should be dismissed as barred by absolute privilege: an attorney's conduct undertaken in the context of litigation is not actionable.” The trial court granted summary judgment against Dixon and in favor of Chang, Johnson, Burnett, and JBC.1
In its first issue, Dixon argues that the trial court erred in granting summary judgment in favor of Chang, Johnson, Burnett, and JBC because they do not, as a matter of law, enjoy qualified immunity for fraudulently misrepresenting to Fidelity that Dixon's shares of Hyperdynamics stock were subject to an arbitration award.
When a party moves for summary judgment based solely on the nonmovant's pleadings, we “must accept all facts and inferences in the pleadings as true in the light most favorable to” the nonmovant. Positive Feed, Inc. v. Guthmann, 4 S.W.3d 879, 882 (Tex.App.-Houston [1st Dist.] 1999, no pet.).
In support of its holding that Chang, Johnson, Burnett, and JBC enjoy qualified immunity, the majority relies upon, “as law of the case,” Dixon Fin. Servs., Ltd. v. Greenberg, Peden, Siegmyer & Oshman, P.C., No. 01-06-696-CV, 2008 WL 746548 (Tex.App.-Houston [1st Dist.] Mar. 20, 2008, pet. denied). In Greenberg, this Court reasoned:
Construing the pleadings and summary judgment evidence liberally in favor of appellants, the acts alleged by appellants constitute conduct undertaken by attorneys to assist a client in securing and recovering an arbitration award. Such conduct is the kind of conduct in which an attorney engages in discharging his duties to his client. Labeling the conduct as fraudulent does not automatically make it actionable and the attorneys liable for tort damages. We conclude that Greenberg[,] Peden, Siegmeyer, [R.F. Bearden Associates,] and Bearden were, as a matter of law, not liable for the conduct alleged in this case.
Id. at *11 (emphasis added). This Court held that the trial court did not err in granting summary judgment in favor of Greenberg, Peden, Siegmeyer, R.F. Bearden Associates, and Bearden against Dixon, on its fraudulent misrepresentation claim, and against Hyperdynamics, on its negligent misrepresentation claim. Id.
It is true that, generally, Texas case law has discouraged lawsuits against an opposing counsel if the lawsuit is based on the fact that counsel represented an opposing party in a judicial proceeding. Alpert v. Crain, Caton & James, P.C., 178 S.W.3d 398 (Tex.App.-Houston [1st Dist.] 2005, no pet.). As we explained in Alpert,
An attorney has a duty to zealously represent his clients within the bounds of the law․ In fulfilling this duty, an attorney has the right to interpose defenses and pursue legal rights that he deems necessary and proper, without being subject to liability or damages․ If an attorney could be held liable to an opposing party for statements made or actions taken in the course of representing his client, he would be forced constantly to balance his own potential exposure against his client's best interest․ Thus, to promote zealous representation, courts have held that an attorney is “qualifiedly immune” from civil liability, with respect to non-clients, for actions taken in connection with representing a client in litigation.
Id. at 405 (citations omitted).
In determining whether an attorney enjoys such immunity, the focus is on the “type of conduct” engaged in by the attorney. Id. at 406. For example, if a lawyer participates in independently fraudulent activities, his action is “foreign to the duties of an attorney.” Id. at 406. Thus, a lawyer “cannot shield his own willful and premeditated fraudulent actions from liability simply on the ground that he is an agent of his client.” Id. (emphasis added). Moreover, even when acting in a representative capacity, attorneys are not immune from liability when they engage in conduct that a non-attorney could have performed. See Miller v. Stonehenge/FASA-Tex., JDC, L.P., 993 F.Supp. 461, 464-65 (N.D.Tex.1998) (discussing development of qualified immunity for attorneys in Texas courts and synthesizing various holdings). In Greenberg, this Court erred in holding that the attorney defendants, “based on qualified immunity,” could not be held liable, as a matter of law, for fraudulently misrepresenting to Fidelity that Erin Oil, pursuant to an arbitration award, had ownership rights to shares of Hyperdynamics stock which were, in fact, wholly owned by Dixon. Here, likewise, the majority so errs. Taking the pleadings of Dixon and Hyperdynamics as true, as we must, Chang knowingly misrepresented to Fidelity that Erin Oil had an ownership interest in shares of stock which were wholly owned by Dixon. In making the misrepresentation to Fidelity, Chang was not engaged in an adversarial relationship with Fidelity. As alleged, his fraudulent action, “foreign to the duties of an attorney,” is not subject to qualified immunity.
Under Texas law, an attorney may be liable to a non-client for making a false statement of material fact to a known person who justifiably relies on the false statement, even if the attorney's purpose is to advance his client's interests. McCamish, 991 S.W.2d at 794-95. In McCamish, the McCamish law firm represented Victoria Savings Association (“VSA”). Id. at 788. VSA was attempting to reach a settlement agreement with Boca Chica Development Company, but the managing partner of Boca Chica refused to sign the settlement agreement unless the law firm affirmed that the settlement agreement had “been approved by the Board of Directors of [VSA]․” Id. Ralph Lopez, a McCamish attorney, assured Boca Chica's managing partner that the VSA Board of Directors had approved the settlement agreement. Id. In fact, VSA's Board of Directors had not approved the agreement. Id . As a result of Lopez's misrepresentation, Boca Chica did not receive the benefit of the settlement agreement and sued McCamish for negligent misrepresentation. Id. at 789-90. Similarly, here, Chang's misrepresentation prevented Dixon from selling its stock, causing Dixon to realize a loss of over $3 million.
This Court's erroneous holding in Greenberg and the panel's similarly erroneous holding in the instant case are contrary to the Texas Supreme Court's reasoning and ultimate holding in McCamish. Accordingly, I would overrule Greenberg, sustain the first issue of Dixon, and hold that the trial court erred in granting summary judgment in favor of Chang, Johnson, Burnett, and JBC on Dixon's claims. I would, in regard to the claims of Dixon against Chang, Johnson, Burnett, and JBC, reverse the judgment of the trial court and remand for further proceedings.
OPINION DISSENTING IN PART
I respectfully dissent in part. I join that part of the panel's opinion which affirms the summary judgment in favor of James Chang and Johnson, Burnett, & Chang (“the JBC defendants”) on the ground that Dixon Financial Services, Ltd. (Dixon Financial's) and Hyperdynamics Corporations' (Hyperdynamics') claims against JBC are not actionable. I respectfully dissent from that part of the panel's opinion that reverses the take-nothing judgment in favor of Erin Oil Exploration, Inc. (Erin Oil) and the non-suit of Bill Knollenberg. I would hold that both this Court and the trial court lack subject matter jurisdiction over the claims against Erin Oil and Knollenberg both because Hyperdynamics and Dixon Financial non-suited their claims against both in the trial court and because the non-suited claims were based entirely on actions by Chang in his capacity as an attorney that this Court has now twice held to be not actionable. I would also hold that, even if the trial court and this Court had jurisdiction to address the merits of the judgments taken by Hyperdynamics and Dixon Financial against Knollenberg and Erin Oil, Hyperdynamics and Dixon Financial would be judicially estopped from asserting a cause of action for damages against either of them.
Because, in my view, the correct resolution of Dixon Financial's and Hyperdynamics' claims against Erin Oil and Knollenberg depends upon the details of the procedural history of this case, I have restated the procedural facts below.
As the majority opinion states, this case arises out of an attempt by the law firm of Johnson, Burnett, & Chang (“JBC”) to collect an arbitration award entered ten years ago, in September 1999, in favor of JBC's clients, Erin Oil and Knollenberg, principal of Erin Oil, and in favor of Ron Bearden and R.F. Bearden Associates, Inc. (collectively, “Bearden”) against Michael Watts, a securities broker, and Texas Capital Securities, the securities brokerage firm for which Watts worked.
As part of the 1999 arbitration award, Bearden, Knollenberg, and Erin Oil were awarded common stock and warrants in Hyperdynamics. They filed suit to confirm the award in their favor (the Watts litigation). In the course of that litigation, the Watts plaintiffs-Bearden, Knollenberg, and Erin Oil-alleged in the trial court that Watts had sold Hyperdynamics securities belonging to them for his own personal benefit and that he had transferred shares of Hyperdynamics to which they were entitled into the account of Island Communications. In the course of representing the Watts plaintiffs, appellee James Chang, an attorney for JBC, tried unsuccessfully to obtain from Hyperdynamics' transfer agent, Fidelity Transfer Company (“Fidelity”), information regarding the Hyperdynamics stock held by Fidelity in the name of Island Communications, and he informed Fidelity that Hyperdynamics “may be prohibited from transferring any shares in the name of Island.”
In response to Chang's communications with Fidelity in the Watts litigation, Dixon Financial and Hyperdynamics sued Fidelity, Erin Oil and Knollenberg and Erin Oil's and Knollenberg's attorneys, the JBC defendants, including Chang, as well as Bearden and its attorneys, the law firm of Greenberg, Peden, Siegmyer & Oshman, P.C. (“Greenberg Peden”) in the instant litigation, claiming that Chang's actions had tortiously interfered with their business relations and cost them millions of dollars in damages. The trial court granted Fidelity's special appearance. It also granted motions for summary judgment filed by Bearden and Greenberg Peden (collectively “the Bearden defendants”) and by the JBC defendants against Dixon Financial and Hyperdynamics. Knollenberg never appeared in the litigation, and Erin Oil filed an answer but subsequently took no part in the action. Hyperdynamics and Dixon Financial then settled their mutual differences between themselves.
On April 27, 2005, Hyperdynamics and Dixon Financial filed in the trial court a “Joint Motion to Enter Judgment.” Attached to the “Joint Motion” was an “Agreed Final Judgment,” signed by Dixon Financial and Hyperdynamics as to form only. The Agreed Final Judgment represented that all of the parties to the Agreed Final Judgment had appeared and that the issues among them had been disposed of by summary judgment, except for Dixon Financial's claim against Hyperdynamics, which had been settled. The joint motion asked the court to grant the motions for summary judgment in favor of the Bearden defendants and the JBC defendants on all of Hyperdynamics' and Dixon Financial's claims and to order that Dixon Financial recover $2,015,264,000, plus pre- and post-judgment interest, from Hyperdynamics. The “Agreed Final Judgment” specifically reserved Dixon Financial's and Hyperdynamics' right to appeal the summary judgments in favor of the Bearden defendants and the JBC defendants. The “Agreed Final Judgment” also contained a representation by Dixon Financial and Hyperdynamics that they did “hereby Non-Suit without prejudice their claims against the Defendants Erin Oil Exploration, Inc. and Bill Knollenberg.” All of the terms of the Agreed Final Judgment, including the non-suits, were incorporated by reference into the Motion for Entry of Judgment filed by Dixon Financial and Hyperdynamics.
At the time the non-suit was filed in the Motion for Entry of Judgment, Erin Oil had appeared in the case only to answer and Knollenberg had not appeared. After the April 27, 2005 non-suit of the claims against them by Dixon Financial and Hyperdynamics, neither took any part in the action before the trial court, nor is there any evidence that they received any pleadings or notices.
The trial court did not rule on Hyperdynamics' and Dixon Financial's Joint Motion for Entry of Judgment, nor did it enter the “Agreed Judgment” as a consent judgment, as requested in the Motion and the attached “Agreed Judgment.” However, on November 16, 2005, the trial court did grant the JBC defendants' motion for summary judgment, on which it had previously entered interlocutory judgment.
A week later, on November 23, 2005, Dixon Financial and Hyperdynamics filed an “Amended Joint Motion to Enter Judgment.” In that amended motion they again requested that the trial court enter their “Agreed Judgment” as the judgment of the court, and they explained that they had approved it as to form only because they did not agree with the substance of the judgment to the extent it made final any of the summary judgments or interlocutory orders against them, but they wished to finalize those orders so that the judgment could be appealed. The trial court, however, denied their Amended Joint Motion on December 7, 2005.
On January 20, 2006, Dixon and Hyperdynamics filed a Second Amended Motion to Enter Judgment, attaching the same proposed final “Agreed Judgment.” Dixon Financial, Hyperdynamics, and Greenberg Peden appeared at hearings on the Second Amended Motion on February 9, 2006 and again on March 2, 2006. The trial court denied the Second Amended Motion to Enter Judgment by written order entered March 2, 2006 because the Agreed Judgment was agreed to only as to form and was agreed to by only some of the parties to the litigation, namely Dixon Financial and Hyperdynamics. Hyperdynamics moved the court to reconsider the motion.
On March 6, 2006, counsel for Dixon Financial, Hyperdynamics, and Bearden appeared at a third hearing before the trial court on their Second Amended Motion for Entry of Judgment, seeking entry of final judgment in the case so that it could be appealed. The trial court again refused to enter the judgment on the ground that it “doesn't comport with [Rule] 301[of the Texas Rules of Civil Procedure, governing final judgments,] because it's not an agreed judgment.”1 Counsel for Hyperdynamics, Philip Livingston, demurred and made the following representation to the court:
Your honor, as I read Rule 301, it's the rule for entry of judgment after jury verdict. This case was never submitted to a jury. In fact, it was-this court granted summary judgments, granting no liability summary judgments for what I have referred to in this case as the bad lawyers. It then granted no liability summary judgment as to the bad lawyers' clients or at least some of them. The court then granted a special appearance as to Fidelity and then the court granted summary judgment as to liability against Hyperdynamics in this case.
At that point, Hyperdynamics and Dixon resolved the remaining issues in the case dismissing by non-suit the parties that we decided not to pursue further and agreeing on a settlement by which Hyperdynamics may or will pay Dixon some amount of money in damages. And we believe that that will resolve all the issues in the case. Both for the summary judgments that were not final and for the issues that were remaining between Dixon and Hyperdynamics.
(Emphasis added). In short, Hyperdynamics and Dixon reiterated in open court their dismissal by non-suit of Erin Oil and Knollenberg, which they had filed on April 27, 2005 in their Joint Motion to Enter Judgment.
The trial court, however construed Rule 301 “to mean a court can enter three types of judgments, summary judgment-actually four. A verdict, judgment on the verdict, a judgment disregarding the verdict[,] or a wholly and completely agreed judgment.” Hyperdynamics then stated, “Okay. Then I guess what we need to do then is set the case for trial,” and the court replied, “And the other defendants are invited but not required and the court's not going to sua sponte sever.” Hyperdynamics then advised the court it might ask the court to reconsider the summary judgments.
Subsequently, in its request for trial setting, filed March 22, 2006, Hyperdynamics stated that it had tried to have the “Agreed Judgment” entered as the judgment of the trial court at a hearing that it, Dixon, and the Bearden defendants had attended, that “[n]o other party or counsel appeared or opposed the motion or the proposed judgment,” that the trial court had refused to enter the judgment, and that, “[a]s a result of the Court's rulings as described above, there remains to be tried the question of damages as against Hyperdynamics, and the claims and causes of action, in their entirety, against defendants Erin Oil and Knollenberg.” Hyperdynamics acknowledged in its certificate of service that it had “been unable to contact Erin Oil or Knollenberg prior to the filing of this Request and the Request is therefore filed as opposed.” Hyperdynamics also affirmatively stated in its request, “Because neither Erin Oil nor Knollenberg are [sic] likely to be in attendance at the hearing on this Request, Hyperdynamics requests that this matter be set for jury trial at least 45 days from the date of the hearing on this Request.”
Additional filings followed in which the parties attempted repeatedly to obtain a final judgment, during all of which the non-suits of Knollenberg and Erin Oil remained on file and no new claims were filed against them or served on them. On May 19, 2006, the trial court severed the summary judgment it had granted the Bearden defendants. On November 14, 2006, Dixon Financial and Hyperdynamics filed a “Joint Motion to Enter Judgment on Stipulated Damages,” which rendered as a stipulation their agreement as to the damages owed Dixon Financial by Hyperdynamics as a result of the actions of Chang. That agreement was supported by an affidavit from Watts, which was required by the trial court. The attached agreed “Final Judgment” reiterated the non-suits of Hyperdynamics' and Dixon Financial's claims against Knollenberg and Erin Oil and was again signed by counsel for Dixon Financial and Hyperdynamics. It was not signed by the JBC defendants, the only other parties with a signature blank, the Bearden defendants having been severed and Knollenberg and Erin Oil having been non-suited.
Without ruling on the “Joint Motion to Enter Judgment on Stipulated Damages,” the trial court set the case for trial on January 29, 2007, as Hyperdynamics and Dixon Financial each stated in separate filings styled “Notice of Withdrawal of Joint Motion to Enter Judgment,” filed on January 22 and 26, 2007, respectfully. Although Hyperdynamics and Dixon Financial withdrew their Joint Motion to Enter Judgment, there is no indication in the record that they filed and served any pleadings reinstating their claims against Knollenberg and Erin Oil or gave them notice that they were expected to appear for trial on Monday, January 29, 2007.
The trial court then went ahead, three days later, on Monday, January 29, 2007, with a jury trial on Dixon Financial's claims for damages due to the loss of value of its stock during the time it could not be traded, which it had stipulated it was owed by Hyperdynamics. In the absence of Knollenberg and Erin Oil, and with no indication that they had ever received actual notice of the trial or notice that Hyperdynamics and Dixon Financial intended to try the non-suited claims to a jury, Dixon Financial and Hyperdynamics tried the case exclusively against Erin Oil and Knollenberg and obtained jury findings that Knollenberg was liable for $3,500,000 in actual damages and $500,000 in exemplary damages owed to Dixon, and $3,550,000 in actual damages and $500,000 in exemplary damages owed to Hyperdynamics, or $7,050,000 total. Neither Dixon Financial nor Hyperdynamics sought damages against Erin Oil in the jury charge.
On February 20, 2007, the trial court entered a final judgment on Hyperdynamics' and Dixon Financial's claims against Knollenberg and Erin Oil. After acknowledging that Knollenberg and Erin Oil had not appeared for trial and that “Erin Oil made no answer to Plaintiff's pleadings after service,” the court entered judgment awarding Dixon $12,480,000 against Knollenberg, including double recovery and attorney's fees, plus interest. In addition, it made Erin Oil liable to Dixon for costs, “despite the fact that Dixon neither requested, nor obtained, any jury findings against Erin Oil, and despite the fact that the Final Judgment does not award Dixon any relief against Erin Oil,” as Knollenberg pointed out in his timely “Motion to Modify the Judgment, or in the Alternative, for Entry of Judgment N.O.V.” Following a response by Hyperdynamics to Knollenberg's Motion to Modify and a hearing, the trial court signed an Amended Final Judgment on May 22, 2007. That is the judgment now on appeal.
In its May 22, 2007 Final Judgment, the trial court amended its February 20, 2007 Final Judgment to reflect “that defendant Knollenberg was non-suited by plaintiff Dixon and by defendant, cross plaintiff, Hyperdynamics.” The trial also court held that Erin Oil was properly served but failed to answer or appear and that default judgment should be entered against it. However, since both Dixon and Hyperdynamics had failed to submit an issue related to damages against Erin Oil to the jury, the court awarded Dixon and Hyperdynamics take nothing judgments against Erin Oil.
Meanwhile, Hyperdynamics and Dixon Financial appealed the summary judgments obtained against them by the Bearden defendants, which had been severed prior to trial. On March 20, 2008, this Court affirmed the summary judgment in favor of Bearden, holding, as the majority opinion in this case states, that “to promote zealous representation, courts have held that an attorney has ‘qualified immunity’ from civil liability, with respect to nonclients, for actions taken in connection with representing a client in litigation .” Slip Op. at 9 (citing Dixon Financial Services, Ltd. v. Greenberg, Peden, Siegmyer & Oshman, P.C., No. 01-06-00696-CV, 2008 WL 746548 (Tex.App.-Houston [1st Dist.] Mar. 20, 2008, pet. denied) (not designated for publication).
The panel majority now affirms the summary judgment in favor of the JBC defendants on essentially the same ground on which it affirmed the summary judgment in favor of the Bearden defendants, stating that “the conduct alleged by Dixon Financial and Hyperdynamics as being tortious was not actionable because it was conduct undertaken by an attorney to assist a client in securing and recovering an arbitration award.” Slip Op. at 9 (emphasis added).
Nevertheless, with no indication that either the trial court or this Court has jurisdiction over the non-suited and non-justiciable claims tried against Knollenberg and Erin Oil in their absence, the panel majority inexplicably decides to reverse the non-suit of Knollenberg and to hold that Knollenberg is liable for millions of dollars in damages to Dixon Financial and Hyperdynamics on claims this Court has twice found to be non-actionable. Whether the majority is holding that Knollenberg is liable for the $7,500,000 actually awarded Hyperdynamics and Dixon Financial in the verdict or for the $12,480,000 awarded Hyperdamics and Dixon from Knollenberg in the trial court's superseded February 20, 2006 judgment is unclear. The majority likewise reverses the trial court's take-nothing judgment entered against Erin Oil in favor of Dixon Financial and Hyperdynamics on the non-justiciable claims against Erin Oil on which they did not seek damages at trial; holds that Erin Oil's liability to Dixon Financial and Hyperdynamics is established as a matter of law; and orders that the case be remanded so that the amount of damages Erin Oil owes Dixon Financial and Hyperdynamics can be determined.
For the foregoing reasons, I join that portion of the majority opinion that affirms the summary judgment granted in favor of the JBC defendants, but I would dismiss the claims of appellants, Dixon Financial and Hyperdynamics against Erin Oil and Knollenberg for lack of subject matter jurisdiction.
1. Justiciability of Claims Against Knollenberg and Erin Oil
“[B]efore 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 Texas v. Gomez, 891 S.W.2d 243, 245 (Tex.1994). “Subject matter jurisdiction requires that the party bringing the suit have standing, that there be a live controversy between the parties, and that the case be justiciable. Id.; see Texas Ass'n of Bus. v. Texas Air Control Bd., 852 S.W.2d 440, 443-46 (Tex.1993). Standing is a necessary component of subject matter jurisdiction and is, therefore, a threshold issue. Patterson v. Planned Parenthood of Houston and Se. Tex., Inc., 971 S.W.2d 439, 442 (Tex.1998); Barshop v. Medina County Underground Water Conservation Dist., 925 S.W.2d 618, 626 (Tex.1996). Standing focuses on the question of who may bring an action and “emphasizes the need for a concrete injury for a justiciable claim to be presented.” Patterson, 971 S.W.2d at 442. The constitutional roots of standing as a doctrine of justiciability lie in the prohibition against courts' rendering advisory opinions, which, in turn, stems from the separation of powers doctrine. Patterson, 971 S.W.2d at 442-43; Texas Ass'n of Bus., 852 S.W.2d at 444 (explaining that supreme court has construed separation of powers article of Texas Constitution to prohibit courts from issuing advisory opinions because that is function of executive rather than judiciary). “The courts of this state are not empowered to give advisory opinions.” Patterson, 971 S.W.2d at 443.
This Court has twice held that Dixon Financial and Hyperdynamics have no justiciable cause of action arising from Chang's communications with Hyperdynamics' transfer agent, Fidelity, on which all of Dixon Financial's and Hyperdynamics' claims against Knollenberg and Erin Oil are based. If Hyperdynamics and Dixon Financial have no justiciable cause of action arising from Chang's communications with Fidelity made the basis of their suit, then the courts of this state have no jurisdiction over those claims. See Patterson, 971 S.W.2d at 443-44; Barshop, 925 S.W.2d at 626. Nevertheless, even though the majority has twice held that Hyperdymanics' and Dixon Financial's claims are non-justiciable, it reverses the take nothing judgment rendered by the trial court against Erin Oil on claims arising from the exact same non-justiciable actions by Chang and “reverse[s] the judgment to the extent that it fails to render judgment against Bill Knollenberg,” against whom it determines the trial court improperly failed to award judgment for millions of dollars in damages. It then remands the case “(1) for a new trial on the issue of unliquidated damages against Erin Oil and (2) for the trial court to render judgment against Bill Knollenberg on the jury's verdict.”
I can find no legal basis for the majority's judgment with respect either to Erin Oil or to Knollenberg. I would hold that Dixon Financial's and Hyperdynamics' claims against Erin Oil and Knollenberg, which were based exclusively on the actions of Chang twice found to be not justiciable, are likewise not justiciable and that the trial court therefore lacked subject matter jurisdiction to entertain them and this Court has jurisdiction only to dismiss them for lack of jurisdiction. See Gomez, 891 S.W.2d at 245.
2. Non-Suit of Knollenberg and Erin Oil
In addition, I would hold that Dixon Financial and Hyperdynamics had an absolute right to non-suit Knollenberg and Erin Oil, which they exercised by filing a motion in the trial court on April 27, 2005, incorporating the non-suit of their claims against those defendants. That non-suit was repeatedly reinforced by the statements of Dixon Financial and Hyperdynamics on the record in open court and in their pleadings. Neither Dixon Financial nor Hyperdynamics ever filed and served pleadings reinstating their claims against Knollenberg and Erin Oil. Therefore, I would hold that the trial court lacked jurisdiction to adjudicate those claims on that additional ground as well.
Texas Rule of Civil Procedure 162 provides, “At 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․” Tex.R. Civ. P. 162. The Texas courts have long held that, under Rule 162, “[a] plaintiff has an absolute right to a non-suit of its case at the moment the plaintiff files the motion with the clerk or makes a motion in open court.” Harris County Appraisal Dist. v. Wittig, 881 S.W.2d 193, 194 (Tex.App.-Houston [1st Dist.] 1994, no pet.). “The plaintiff's right to take a nonsuit is unqualified and absolute as long as the defendant has not made a claim for affirmative relief.” BHP Petroleum Co. v. Millard, 800 S.W.2d 838, 840 (Tex.1990) (emphasis in original). The trial court's granting of a nonsuit is merely ministerial; “a plaintiff's right to nonsuit of its own action exists at the moment a motion is filed, and ․ the only requirement is the mere filing of the motion with the clerk of the court.” Shadowbrook Apartments v. Abu-Ahmad, 783 S.W.2d 210, 211 (Tex.1990). When a party non-suits a legal action, the action “places the parties in the position that they were in before the court's jurisdiction was invoked just as if the suit had never been brought.” Crofts v. Court of Civil Appeals for the Eighth Supreme Judicial Dist., 362 S.W.2d 101, 104 (Tex.1962); see also Old Farms Owners Ass'n v. Houston Ind. Sch. Dist., 277 S.W.3d 420, 423 (Tex.2009); Hagberg v. City of Pasadena, 224 S.W.3d 477, 484 (Tex.App.-Houston [1st Dist.] 2007, no pet.).
The majority reads the record as showing that the non-suits of Knollenberg and Erin Oil were a matter of an agreement between Hyperdynamics and Dixon Financial that was conditioned on rendition of judgment by the trial court and was withdrawn before rendition. This is not the case. The non-suits were stated not only in the original “Agreed Judgment” filed with the court to which neither Erin Oil nor Knollenberg was a party, but in the motion for Entry of Judgment filed April 27, 2005 and in many subsequent “agreed judgments” filed by Hyperdynamics and Dixon Financial as attachments to their subsequent motions for entry of judgment-none of which called for the signature of Knollenberg and Erin Oil. The non-suits were also reiterated repeatedly in the motions of Hyperdynamics and Dixon Financial and on the record in open court by counsel for Hyperdynamics as a fait accompli without any conditions being attached.
The majority relies on Golodetz Trading Corp. v. Curland, 886 S.W.2d 503 (Tex.App.-Houston [1st Dist.] 1994, no pet.), for its holding on non-suits. Golodetz is, however, inapplicable to this case. In Golodetz, the parties announced in open court the non-suit of their claims against each other, after which Curland offered “mutual dismissal with prejudice” on the record and Golodetz agreed. Id. at 505. The trial court thanked the parties and told them they could withdraw their exhibits, but it did not otherwise orally accept the agreement of the parties to dismiss their claims with prejudice, nor did it enter a written judgment adopting that agreement as a judgment of the court. See id. Golodetz subsequently filed a motion for new trial in which he complained “that in this case Judge Millard only accepted a nonsuit and not a mutual dismissal with prejudice.” Id.
The sole issue on appeal of the denial of the motion was whether Judge Millard had rendered judgment on Curland's and Golodetz's agreement to dismiss with prejudice their claims against each other. Id. This Court held that by merely thanking the parties and telling them they could withdraw their exhibits the court had not rendered judgment dismissing the claims with prejudice. Id. That the parties had non-suited their claims against each other by their statements on the record was not in dispute. See id . The non-suits were not contested by Golodetz and were not affected by this Court's judgment. Thus, Golodetz in no way alters the established law that, unlike a settlement agreement, which does not become an agreed judgment of the court if consent to the agreement is withdrawn by a party prior to rendition, a non-suit occurs as soon as it is filed or announced in open court and the trial court's acceptance of the non-suit is “merely ․ ministerial.” Shadowbrook Apartments, 783 S.W.2d at 211. Golodetz's acknowledgment that the claims had been mutually non-suited and his failure to contest the non-suit in his motion for new trial both indicate that in that case the parties understood and did not challenge established law. Moreover, in this case there was no agreed judgment as to non-suit since neither Knollenberg nor Erin Oil was made a party to the “Agreed Judgments” filed with the trial court; they were simply non-suited by those and other pleadings and averments of counsel on the record.
I would find, on the basis of the foregoing law, that Hyperdynamics and Dixon Financial non-suited their claims against both Knollenberg and Erin Oil on April 27, 2005. See BHP Petroleum, 800 S.W.2d at 840; Shadowbrook Apartments, 783 S.W.3d at 211. The parties were therefore returned to their original positions prior to suit on that date. Old Farms Owners Ass'n, 277 S.W.3d at 423; Crofts, 362 S.W.2d at 104. Because Hyperdynamics' and Dixon Financial's claims against Knollenberg and Erin Oil were no longer before the trial court after April 27, 2005 and no new claims were filed against them, I would hold that there was no live case against Knollenberg and Erin Oil before the trial court and that it, therefore, lacked jurisdiction to adjudicate the claims against them on this ground as well. See Gomez, 891 S.W.2d at 245; Patterson, 971 S.W.2d at 442-43.
3. Judicial Estoppel
Finally, even if I thought that the trial court had jurisdiction to adjudicate Hyperdynamics' and Dixon Financial's claims against Knollenberg and Erin Oil, I would still hold that Hyperdynamics and Dixon Financial were judicially estopped from trying those claims.
Estoppel generally prevents one party from misleading another to the other's detriment or to the misleading party's own benefit. Ulico Cas. Co. v. Allied Pilots Ass'n, 262 S.W.3d 773, 778 (Tex.2008); Johnson & Higgins of Tex., Inc. v. Kenneco Energy, Inc., 962 S.W.2d 507, 515-16 (Tex.1998). More specifically, the equitable rule of judicial estoppel generally prevents a party from prevailing in one phase of a case on an argument and then relying on a contradictory argument to prevail in another phase. Maine v. New Hampshire, 532 U.S. 742, 749-51, 121 S.Ct. 1808, 1814-15, 149 L.Ed.2d 968 (2001); Schmidt v. State, 278 S.W.3d 353, 358 (Tex.Crim.App.2009). The doctrine is not, strictly speaking, estoppel, but rather a rule of procedure based on justice and sound public policy. Pleasant Glade Assembly of God v. Schubert, 264 S.W.3d 1, 6 (Tex.2008). It precludes a party from adopting a position inconsistent with one that it maintained successfully in an earlier proceeding. Id. Contradictory positions taken in the same proceeding do not, however, invoke the doctrine of judicial estoppel. Id. Rather, its essential function “is to prevent the use of intentional self-contradiction as a means of obtaining unfair advantage.” Id . (quoting Andrews v. Diamond, Rash, Leslie & Smith, 959 S.W.2d 646, 650 (Tex.App.-El Paso 1997, writ denied)). The basis for judicial estoppel is “the assertion of a position clearly inconsistent with a previous position accepted by the court,” and “the determinative factor is whether the appellant intentionally misled the court to gain an unfair advantage.” Id. (quoting Tenneco Chem. v. William T. Burnett & Co., 691 F.2d 658, 665 (4th Cir.1982)).
Here, while the frustration of Hyperdynamics and Dixon Financial at their inability to obtain a final judgment from the trial court is understandable, their actions in non-suiting Erin Oil and Knollenberg and nevertheless trying a multi-million dollar case for damages against them after they had been non-suited without repleading of the claims against them and in a trial at which they did not appear and of which there is no evidence that they had actual knowledge brings their claims within the purview of the doctrine of judicial estoppel.
Specifically, Dixon Financial and Hyperdynamics non-suited their claims against both Erin Oil and Knollenberg on April 27, 2005 by incorporating the non-suit into their original motion for entry of agreed judgment and filing that motion with the trial court. That non-suit was effective immediately upon filing. Dixon Financial and Hyperdynamics then appeared before the trial court in the absence of Knollenberg and Erin Oil and reaffirmed the non-suits in open court. When the court refused to accept the “Agreed Judgment” they offered and stated that it would go ahead with trial and that “the other defendants are invited but not required” to attend, Hyperdynamics' counsel affirmed to the court that it did not expect Knollenberg and Erin Oil to attend the trial. It then set the case for trial, but acknowledged in the certificate of service that it had not contacted Knollenberg and Erin Oil about the filing. Meanwhile, without ever filing new pleadings against Erin Oil and Knollenberg reinstating their suit against them, Hyperdynamics and Dixon Financial prepared for trial and, one business day before trial, withdrew their Motion for Entry of Stipulated Damages and proceeded to trial exclusively on their non-suited claims against Erin Oil and Knollenberg in the absence of both. They then submitted a jury charge that sought $7,050,000 in damages against Knollenberg, to be split between Dixon Financial and Hyperdynamics. Dixon Financial and Hyperdynamics were awarded by the trial court in its first judgment not only the damages they sought at trial, but also an additional $5,000,000 that they did not seek, as well as costs against Erin Oil, which they likewise did not seek.
Only after being reminded of the non-suit of the claims against Knollenberg and the failure of Hyperdynamics and Dixon Financial to seek damages against Erin Oil at trial by Knollenberg's “Motion to Modify the Judgment,” did the trial court correct the judgment to reflect accurately the non-suit of Knollenberg and the fact that no damages were sought at trial or found against Erin Oil. The majority opinion in this Court undoes both of these correct rulings.
Far from being a case in which Knollenberg and Erin Oil should be held liable for millions of dollars in damages on non-justiciable claims tried against them by non-suiting parties long after they were non-suited and in their absence, as the panel majority holds, this is a classic case in which jurisdiction is lacking over the claims the majority adjudicates both because the claims asserted against them were not justiciable and because both parties had been non-suited. Moreover, even if jurisdiction were not lacking, the doctrine of judicial estoppel would preclude Hyperdynamics and Dixon Financial from profiting from the advantage they gained by their misleading actions in the trial court. I would hold that the trial court lacked subject matter jurisdiction over the non-justiciable claims against Knollenberg and Erin Oil and, therefore, had jurisdiction only to dismiss them. I would also hold, as did the trial judge, that the non-suit filed by Dixon Financial and Hyperdynamics was effective to non-suit Knollenberg-and also Erin Oil-the moment it was filed with the clerk of the trial court on April 27, 2005, and, for that reason also, the trial court lacked jurisdiction to try the claims asserted against them. See Shadowbrook Apartments, 783 S.W.2d at 211. Finally, if I believed that the trial court had jurisdiction to adjudicate the claims against Knollenberg and Erin Oil, I would hold that Dixon Financial and Hyperdynamics were judicially estopped to try them under the circumstances of this case.
I join that part of the panel's opinion affirming the portion of the trial court's judgment that granted summary judgment in favor of the JBC defendants against Dixon Financial and Hyperdynamics. I would dismiss appellants' claims against Erin Oil and Knollenberg for lack of subject matter jurisdiction.
LAURA CARTER HIGLEY, Justice.
Justice JENNINGS, dissenting, in part. Justice KEYES, dissenting, in part.