IN RE: Fort Apache Energy

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Court of Appeals of Texas, Dallas.

IN RE: Fort Apache Energy, Inc., Allan P. Bloxsom, and Drilling Risk Management, Inc., Relators

No. 05–15–01159–CV

Decided: December 16, 2015

Before Justices Lang–Miers, Evans, and Whitehill

OPINION

In this petition for writ of mandamus, relators request that we compel the trial court to vacate its August 7, 2015 order denying relators' plea in abatement and order the trial court to abate the lawsuit that is the subject of this petition.  We deny the petition because we conclude that relators have an adequate appellate remedy.  Because the facts and issues are familiar to the parties, we do not recount them here.

Ordinarily, to obtain mandamus relief, a relator must show both that the trial court has clearly abused its discretion and that relator has no adequate appellate remedy.  In re Prudential Ins. Co., 148 S.W.3d 124, 135–36 (Tex.2004) (orig.proceeding).  Controlling authority dictates that appeal is typically an adequate remedy to resolve errors in rulings with regard to dominant jurisdiction because such rulings are incidental rulings which can be corrected on appeal.  Hall v. Lawlis, 907 S.W.2d 493, 494 (Tex.1995) (orig.proceeding) (per curiam);  Abor v. Black, 695 S.W.2d 564, 566 (Tex.1985) (orig.proceeding);  Reynolds, Shannon, Miller, Blinn, White & Cook v. Flanary, 872 S.W.2d 248, 250 (Tex.App.—Dallas 1993, no writ) (“Mandamus relief will not lie, however, to determine dominant jurisdiction between two courts when both courts have jurisdiction to act and neither court is interfering with the other's exercise of jurisdiction.”);   see also In re Puig, 351 S.W.3d 301, 306 (Tex.2011) (orig.proceeding) (reaffirming rule in dictum).  Mandamus relief is appropriate, however, when the non-dominant court interferes with the jurisdiction of the dominant court.  Hall, 907 S.W.2d at 494;  Abor, 695 S.W.2d at 567;  Curtis v. Gibbs, 511 S.W.2d 263, 267 (Tex.1974) (orig.proceeding).

We cannot conclude, as relators urge us to, that the trial court's docket control order, which includes an “Initial Trial Setting” for February 22, 2016, amounts to the kind of direct interference with the jurisdiction of the Kendall County Court, which has set the case for jury trial on March 14, 2016, that warrants mandamus relief under currently governing law.  While the supreme court granted mandamus relief in a case with conflicting trial settings in Perry v. Del Rio, 66 S.W.3d 239 (Tex.2001) (orig.proceeding), the circumstances in that case were significantly different.  Only the supreme court, not the two different courts of appeals to which the redistricting cases would be appealed, “could timely determine which of the two courts had the dominant jurisdiction to proceed because the deadline simply did not leave room for normal appellate remedies.”  In re TXU Elec. Co., 67 S.W.3d 130, 135 (Tex.2001) (orig.proceeding) (Phillips, C.J., concurring).  As the supreme court explained in Perry:

In the current circumstances, further confusion or delay in the trial of the pending challenges to congressional districting poses the very real threat that the parties will not be able to obtain a decision in the state courts that is final on appeal before the October 1 deadline set by the federal courts.  Although counsel assured us at oral argument that they and the two district courts involved have cooperated in an effort to conduct two trials of the same issues, we think the inefficiency of such an approach and the uncertainty that will attend two appeals and a final appeal to this Court pose an intolerable risk to completing the process within the limited time remaining.  The Supreme Court has recognized that the right of a state's citizens to have districts drawn by state institutions is so substantial that federal courts must reasonably accommodate the state process and defer to a state solution.  We believe that protection of this right necessitates the issuance of mandamus relief here.

Perry,66 S.W.3d at 257 (footnote omitted).  Those sorts of concerns are simply not at play in this case.

We also cannot conclude that the advent of the balancing test mandated by In re Prudential permits us to disregard directly controlling precedent that has never been overruled by the supreme court.  See, e.g., In re ExxonMobil Prod. Co., 340 S.W.3d 852, 858 (Tex.App.—San Antonio 2011, orig. proceeding [mand. denied] ) (“Limiting mandamus relief as per Abor precludes the flexibility of the remedy in plea in abatement cases because Abor 's holding fails to account for any case-by-case consideration of the benefits and detriments of mandamus review.”).  It is the prerogative of the supreme court to overrule its own decisions if it determines the reasons have been rejected by another line of decisions.  See Rodriguez de Quijas v. Shearson/Am.  Express, Inc., 490 U.S. 477, 484 (1989) (“If a precedent of this Court has direct application in a case, yet appears to rest on reasons rejected in some other line of decisions, the [court] should follow the case which directly controls, leaving to this Court the prerogative of overruling its own decisions.”);  Owens Corning v. Carter, 997 S.W.2d 560, 571 (Tex.1999) (same);  In re Smith Barney, Inc., 975 S.W.2d 593, 598 & n.27 (Tex.1998) (same);  Va. Indon.  Co. v. Harris Cty. Appraisal Dist., 910 S.W.2d 905, 912 (Tex.1995) (same).

We deny the petition for writ of mandamus.

The primary dispute in this dominant jurisdiction–plea in abatement mandamus case is whether the second filed court's order setting the matter for trial one month before the dominant court's trial setting presents sufficient “active interference” with the first court's jurisdiction such that relators lack an adequate appellate remedy.

Relators moved to abate a lawsuit against them, contending that another Texas trial court possesses dominant jurisdiction over this controversy.  The trial court denied relators' motion to abate, and relators sought mandamus relief from this Court.  The majority concludes that relators have an adequate remedy by appeal and so denies relief.  I disagree and respectfully dissent.

I. Background

The real party in interest is Huddleston Exploration Limited Liability Company.  In November 2014, relator Fort Apache Energy, Inc. sued Huddleston in Kendall County, Texas.  Fort Apache alleged the following facts:

Fort Apache and Huddleston entered into a Participation Agreement and an Operating Agreement in June 2012.  These agreements obliged Huddleston to pay 65% of the drilling and completion costs of a certain mineral well, and Huddleston defaulted.

In October 2014, the parties met in Kendall County and executed a further Payment Agreement in which Huddleston promised to pay its past due obligations pursuant to a payment schedule or risk triggering remedies available to Fort Apache under the Operating Agreement.  After Huddleston breached the Payment Agreement, Fort Apache sought a court order transferring Huddleston's interest in the well to Fort Apache, plus court costs and attorneys' fees.

Huddleston answered the Kendall County suit, but two months later sued Fort Apache and the other relators in Dallas County.  After amending its Dallas County pleading twice, Huddleston alleged that (i) Fort Apache had breached the Participation Agreement and the Operating Agreement, (ii) Fort Apache and relator Bloxsom committed breach of fiduciary duty, fraud, and negligent misrepresentation, and (iii) Huddleston was entitled to an accounting from Fort Apache, Bloxsom, and relator Drilling Risk Management, Inc.

The parties litigated forum selection issues in both courts.  The Kendall County court refused to transfer venue to Dallas County.  Relators moved the Dallas County court to abate the case because the Kendall County court had dominant jurisdiction over the controversy, but the court denied that motion.

Meanwhile, in March 2015, the Dallas County court set its case for trial on February 22, 2016.  In June 2015, the Kendall County court set its case for trial on March 14, 2016.

Relators filed this original proceeding in September 2015, about six weeks after the Dallas County court denied relators' motion to abate.  We requested and received a response, to which relators replied.

II. Analysis

A. Did the trial court clearly abuse its discretion?

The majority does not address whether relators have shown that the trial court clearly abused its discretion by denying relators' motion to abate.  I would address that issue and hold that the trial court clearly abused its discretion because relators established that the Kendall County court possessed dominant jurisdiction over this controversy.

The question is whether there is an inherent interrelationship between the subject matters of the two lawsuits:

When an inherent interrelation of the subject matter exists in two pending lawsuits, a plea in abatement in the second action must be granted.  It is not required that the exact issues and all the parties be included in the first action before the second is filed, provided that the claim in the first suit may be amended to bring in all necessary and proper parties and issues․  In determining whether an inherent interrelationship exists, courts should be guided by the rule governing persons to be joined if feasible and the compulsory counterclaim rule.

Wyatt v. Shaw Plumbing Co.,760 S.W.2d 245, 247 (Tex.1988);  see also Tex.R. Civ. P. 97(a) (compulsory counterclaim rule).

The two lawsuits involved here are inherently interrelated.  Fort Apache is the plaintiff in Kendall County and a defendant in Dallas County.  Huddleston is the defendant in Kendall County and the plaintiff in Dallas County.  Although Bloxsom and Drilling Risk Management are parties only in the Dallas County suit, there is no indication they could not be added to the Kendall County suit.  And the claims and defenses in both suits arise from and relate to the same set of agreements and transactions.

The Wyatt test for dominant jurisdiction is satisfied.  The trial court had only one reasonable decision it could make:  abate its case in favor of the Kendall County action.

B. Do relators have an adequate remedy by appeal?

It is well settled that mandamus will issue only if the relator shows that it lacks an adequate remedy by appeal.  See Walker v. Packer, 827 S.W.2d 833, 840–44 (Tex.1992).  I disagree with the majority's conclusion that relators have failed to make that showing.

In Curtis v. Gibbs, the supreme court addressed a trial court's violation of the dominant jurisdiction rule and said, “If the second court refuses to sustain a proper plea in abatement, or attempts to interfere with the prior action, this court has the power to act by mandamus or other appropriate writ to settle the conflict of jurisdictions.”  511 S.W.2d 263, 267 (Tex.1974) (orig.proceeding) (emphasis added).

But in Abor v. Black, the court discussed Curtis and effectively changed Curtis 's “or” to an “and.”  See 695 S.W.2d 564, 567 (Tex.1985) (orig.proceeding).  Although the Abor trial court erred by refusing to yield jurisdiction to another court, the supreme court denied mandamus relief because the trial court had not granted an injunction or issued any other order that “actively interfere[d]” with the other court's exercise of jurisdiction.  Id.

We have interpreted Abor to hold the following:  “Mandamus relief will not lie, however, to determine dominant jurisdiction between two courts when both courts have jurisdiction to act and neither court is interfering with the other's exercise of jurisdiction.”  Reynolds, Shannon, Miller, Blinn, White & Cook v. Flanary, 872 S.W.2d 248, 250 (Tex.App.—Dallas 1993, no writ).

But in 2004, the supreme court indicated that the determination of whether a relator has an adequate remedy by appeal is not susceptible to rigid rules or formulas.  In re Prudential Ins. Co. of Am., 148 S.W.3d 124, 135–36 (Tex.2004) (orig.proceeding).  Rather, courts must consider a range of both public and private interests in determining whether the benefits of mandamus review outweigh the detriments.  Id.

Since the Prudential decision, our sister courts have split on the continued viability of Abor 's bright-line rule that mandamus relief will not issue unless there is active interference with the dominant court's jurisdiction.  San Antonio has concluded that Prudential lifted the constraint imposed by Abor. In re ExxonMobil Prod. Co., 340 S.W.3d 852, 857–59 (Tex.App.—San Antonio 2011, orig. proceeding [mand. denied] ).  However, Texarkana and the Houston Fourteenth Court have continued to follow Abor. In re E. Beach Project Phase I, Ltd., No. 14–11–00393–CV, 2011 WL 2650946, at *3 (Tex.App.—Houston [14th Dist.] July 7, 2011, orig. proceeding) (mem.op.);  In re Brown, No. 06–10–00108–CV, 2010 WL 4880675, at *2 (Tex.App.—Texarkana Nov. 30, 2010, orig. proceeding) (mem.op.).

We have denied relief for lack of active interference in a post-Prudential case.  In re City of Coppell, 219 S.W.3d 552, 562 (Tex.App.—Dallas 2007, orig. proceeding).  But we recently noted the conflict between our sister courts of appeals and, without citing City of Coppell, suggested that this Court has not yet decided whether Prudential changes the rule of Abor. See In re King, No. 05–15–01035–CV, 2015 WL 6334672, at *3 (Tex.App.—Dallas Oct. 22, 2015, orig. proceeding).

We need not reassess the viability of Abor in this case, consider the effect that Prudential might have on this case, or choose between our sister courts, because the Dallas County trial court's order setting the case for trial one month before the Kendall County case is set to be tried (and maintaining that trial setting) actively interferes with the Kendall County court's dominant jurisdiction, within Abor 's parameters.  For example, in Perry v. Del Rio, the supreme court faced an array of five lawsuits involving redistricting after the 2010 census.  66 S.W.3d 239–43 (Tex.2001) (orig.proceeding).  Four of the cases were set for trial the same day.  Id. at 258.  The supreme court first determined which trial court possessed dominant jurisdiction, id. at 248–56, and then held that the conflicting trial settings satisfied the Abor rule, id. at 258.  But Perry does not require that the trial settings must be contemporaneous before conflicting settings can be active interference.

Furthermore, the San Antonio Court of Appeals has held that a trial setting in violation of another court's dominant jurisdiction is sufficient interference to warrant mandamus relief under Abor and Perry, even though the dominant court in that case had apparently not yet set its case for trial.  See In re Benavides, No. 04–14–00718–CV, 2014 WL 6979438, at *3 (Tex.App.—San Antonio Dec. 10, 2014, orig. proceeding) (mem.op.).

In the present case, the trial court's trial setting precedes the trial setting in the dominant court by about three weeks.  This state of affairs has existed since June 2015, and the problem has not been remedied in the intervening months—despite relator's bringing this matter to the Dallas County court's attention.  The erroneous trial setting is now only about two months away, and what was a potential problem is now an actual problem.  Presently, the Dallas County trial court's trial setting interferes with the Kendall County court's ability to try the case at a time consistent with its own docket needs.

Moreover, refusal to correct the trial court's clear abuse of discretion by mandamus presents a strong likelihood of wasted public and private resources alike.  The parties will be put to the effort and expense of preparing and trying a case that will result in a judgment almost certainly subject to reversal on appeal.  See In re Prudential, 148 S.W.3d at 136 (mandamus can “spare private parties and the public the time and money utterly wasted enduring eventual reversal of improperly conducted proceedings”).

The above consequences make relators' remedy by appeal inadequate under even Abor.

For the foregoing reasons, I would grant mandamus relief and direct the trial court to abate the case.  Because the majority does not do so, I respectfully dissent.

Opinion by Justice Evans

Whitehill, J. Dissenting

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