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  • COURT OF APPEALS

    COURT OF APPEALS

    EIGHTH DISTRICT OF TEXAS

    EL PASO, TEXAS

     

    NICOLAS DOUCAKIS, Individually and as     )

    Principal, Owner, and Sole Shareholder of        )

    FIBERMESH (Sussie) S.A. and as Director and    )

    Sole Shareholder FND INDUSTRIES               )     No.  08-00-00296-CV

    (Overseas), Ltd., FIBERMESH (Suisse), S.A., )

    and FND INDUSTRIES, (Overseas), LTD.,     )                   Appeal from the

                                                                                  )

    Appellants,                       )               192nd District Court

                                                                                  )

    v.                                                                           )     of Dallas County, Texas

                                                                                  )

    SPEISER, KRAUSE, MADOLE, P.C., KENT )     (TC# 98-07432K)

    KRAUSE, and KEITH EVANS,                         )

                                                                                  )

    Appellees.                        )

                                                                                  )

     

    O P I N I O N

     

    Appellants Nicolas Doucakis (ADoucakis@), Fibermesh (Suisse) S.A. (AFibermesh@), and FND Industries (Overseas), Ltd. (AFND@) appeal from the trial court=s denial of the Appellants= plea in abatement and granting of the plea to jurisdiction and summary judgment for Appellees Speiser, Krause, Madole, P.C. (ALaw Firm@), Kent Krause (AKrause@), and Keith Evans (AEvans@).  On appeal, Doucakis, Fibermesh, and FND raise six issues:  (1) the trial court erred in dismissing Fibermesh and FND from the suit when the corporations had a right to reinstatement; (2) the trial court abused its discretion in denying the plea in abatement for Fibermesh and FND; (3) the trial court erred in granting the summary judgment against Doucakis; (4) the trial court erred in denying Doucakis=s standing as the representative of Fibermesh and FND; (5) the trial court erred in not applying estoppel to bar the Appellees from contending the nonexistence of Fibermesh and FND; and (6) the trial court erred in dismissing the claims based on the misnomer of parties.  We will affirm in part and reverse and remand in part.

    SUMMARY OF THE EVIDENCE

    Background

    In 1985, Doucakis and Fibermesh entered into a distribution contract with Synthetics Industries (Texas) Inc. (ASynthetics@), the manufacturer of a polypropylene fiber additive for concrete, called Afibermesh.@  Doucakis and Fibermesh were the sole distributor of fibermesh in Switzerland at the time.   Since Synthetics was located in Georgia, the contract called for all disputes to be arbitrated there.

    FND was setup as a tax-saving mechanism for Fibermesh. Synthetics would send the invoice for Fibermesh to FND, and FND in turn would bill Fibermesh.  FND was also made a part of the arbitration agreement between Synthetics and Fibermesh.

    A dispute arose between Fibermesh and Synthetics in 1989. Fibermesh accused Synthetics of endorsing a French distributor, Pieri, just across the border from Geneva. Fibermesh demanded that Synthetics prohibit Pieri from marketing the product in Switzerland, but the attempt was allegedly futile.   Fibermesh also accused Synthetics of (1) conspiring with Fibermesh=s employees to steal trade secrets, such as customer lists, and (2) selling the fibers independently of Fibermesh.  In 1993, Fibermesh informed Synthetics of its intention to bring suit for breach of contract.

    To pursue the arbitration in Georgia, Fibermesh, FND, and Doucakis entered into a retainer agreement with the Law Firm. Kent Krause and Keith Evans were assigned to the case.  Krause was the managing partner of the Law Firm=s Dallas, Texas branch, and Evans was a British attorney practicing with the Law Firm=s California branch.

    An arbitration order was entered against Doucakis, Fibermesh, and FND on September 20, 1996.  A motion to reconsider was filed on October 10, 1996 and denied by the arbitrator on November 18, 1996, and Synthetics filed a motion to confirm the order with a Georgia Superior Court on November 21, 1996.  A final order was entered on May 9, 1997, after the sixty-day period to contest the arbitration order had passed.

    Procedural History

    On September 22, 1998, Doucakis brought this suit for legal malpractice as an individual and Ain his representative capacity@ as the Director, Creditor, Liquidator, and Sole Shareholder of Fibermesh and on behalf of FND as its Director and Sole Shareholder.  In the fourth amended petition, Doucakis, Fibermesh, and FND alleged that the Law Firm, Krause, and Evans had committed legal malpractice, breach of contract, breach of fiduciary duty, and violation of the Texas Deceptive Trade Practices Act.

    The Law Firm, Krause, and Evans filed a motion for summary judgment on October 29, 1999, in which they claimed that Doucakis, Fibermesh, and FND lacked standing and that they could not prevail on the elements of their causes of action.  On February 2, 2000, the Law Firm, Krause, and Evans filed a second motion for summary judgment coupled with a plea to the jurisdiction.  In the second motion, the Law Firm, Krause, and Evans again challenged the standing of the parties and brought the statute of limitations defense as well as a motion to contest the authority of the plaintiffs= counsel to bring the claim under Tex.R.Civ.P 12.  Doucakis, Fibermesh, and FND filed a plea in abatement along with their response to the plea to the jurisdiction and summary judgment.

    Without stating the basis of his decision, the trial court granted the summary judgment and plea to the jurisdiction for the Law Firm, Krause, and Evans and dismissed Doucakis, Fibermesh, and FND from the suit on March 10, 2000.  On May 10, 2000, the trial court overruled the motion to rehear the plea in abatement and the dismissal for want of jurisdiction, and on May 22, 2000, the trial court issued an order denying the plea in abatement.

    DISCUSSION

    Doucakis, Fibermesh, and FND have brought six issues upon appeal, which may be classified into two sub-groups:  (1) the trial court=s granting of the Appellees= plea to jurisdiction and the motion for summary judgment; and (2) the trial court=s denial of the Appellants= plea for abatement and defenses.  We will discuss each category in turn.

    Granting of the Summary Judgment and the Plea to Jurisdiction

    The Law Firm, Krause, and Evans filed a motion for summary judgment coupled with a challenge to the trial court=s jurisdiction, alleging that Doucakis, Fibermesh, and FND had no standing, could not establish the elements of their claim, the statute of limitations had run on FND, and the Appellants= counsel lacked authority under Tex.R.Civ.P. 12.  The trial court did not provide findings or grounds for summary judgment.  We can therefore affirm the judgment on appeal if any of the theories advanced are meritorious.  See State Farm Fire & Casualty Co. v. S.S. & G.W., 858 S.W.2d 374, 380 (Tex. 1993); American Eagle Ins. Co. v. Nettleton, 932 S.W.2d 169, 174 (Tex.App.--El Paso 1996, writ denied).

    Unlike other final judgments reviewed on appeal, we do not review the summary judgment evidence in the light most favorable to the judgment of the trial court.  See Borrego v. City of El Paso, 964 S.W.2d 954, 956 (Tex.App.--El Paso 1998, pet. denied).  As explained in Nixon v. Mr. Property Management Co., Inc., 690 S.W.2d 546, 548‑49 (Tex. 1985), the movant for summary judgment has the burden of showing there is no genuine issue of material fact and that it is entitled to summary judgment as a matter of law.  See Tex.R.Civ.P. 166a(c). In deciding whether there is a disputed material fact issue precluding summary judgment, all admissible evidence favorable to the non‑movant will be taken as true; every reasonable inference must be indulged in favor of the non‑movant, and all doubts resolved in the non‑movant=s favor.  The movant is required to disprove at least one element of each of the non-movant=s theories of recovery or to plead and conclusively establish an affirmative defense, which defeats the non-movant=s cause of action. City of Houston v. Clear Creek Basin Auth., 589 S.W.2d 671, 679 (Tex. 1979).  The purpose of summary judgment is the elimination of patently unmeritorious claims or untenable defenses; it is not intended to deprive litigants of their right to a full hearing on the merits of any real issue of fact.  See Gulbenkian v. Penn., 151 Tex. 412, 416, 252 S.W.2d 929, 931 (1952); Judge David Hittner & Lynne Liberato, Summary Judgments in Texas, 34 Hous.L.Rev. 1303, 1307 (1998).

    We will first discuss the standing of the Appellants, their claim, the statute of limitations defense, and finally the motion under Tex.R.Civ.P. 12.

    Standing and Capacity of the Appellants

    The Law Firm, Krause, and Evans challenged the jurisdiction of the trial court on the basis that Doucakis, Fibermesh, and FND lacked standing, because the two corporations are non-existent and Doucakis cannot bring suit as the corporations= representative. Doucakis asserts on appeal that he has standing, because he is the personal representative of the corporations and was bound personally on the contracts that the corporations were a party to and he also claims that Fibermesh and FND have standing, because they have the right to be reinstated. 

    Standing is a party=s justiciable interest in the suit, or a personal stake in the controversy.  See Nootsie, Ltd. v. Williamson City Appraisal Dist., 925 S.W.2d 659, 661 (Tex. 1996).  Standing is an aspect of subject-matter jurisdiction.  See Texas Ass=n of Bus. v. Texas Air Control Bd., 852 S.W.2d 440, 446 (Tex. 1993). Capacity is however the legal authority of a party to file or defend a suit, whether it has standing or not.  See Nootsie, 925 S.W.2d at 661.  A court may enter judgment only in the capacity in which the defendant was sued.  See Werner v. Colwell, 909 S.W.2d 866, 870 (Tex. 1995).  When reviewing a challenge to a dismissal for lack of jurisdiction, the appellate court must accept as true all factual allegations in the plaintiff=s pleadings.  See Huston v. F.D.I.C., 663 S.W.2d 126, 129 (Tex.App.--Eastland 1983, writ ref=d n.r.e.), quoting International Bank of Commerce of Laredo v. City of Laredo, 608 S.W.2d 267, 270 (Tex.Civ.App.--San Antonio 1980, writ dism=d).  The reviewing court looks to the pleader=s intent and construes the pleadings in the plaintiff=s favor.  See Texas Ass=n of Bus., 852 S.W.2d at 446.

    The Corporations

    In Texas, a suit is not void even if a corporation lacks the capacity to sue, and a defendant must challenge a plaintiff=s lack of capacity through a verified plea in abatement.  See Tex.R.Civ.P. 93(1); Nootsie, 925 S.W.2d at 662; El T. Mexican Restaurants, Inc. v. Bacon, 921 S.W.2d 247, 250 (Tex.App.--Houston [1st Dist.] 1995, writ denied).  If a verified plea in abatement is not filed, then the defendant waives the challenge to capacity.  See Nootsie, 925 S.W.2d at 662.  Although the Law Firm, Krause, and Evans confused Astanding@ with Acapacity@ in its Aplea for jurisdiction,@ it clearly intended to challenge both the standing and capacity of the corporations in the plea based on the fact of their non-existence; therefore, the Appellants did not waive the challenge to capacity.

    Whether a foreign corporation exists for the purpose of prosecuting and defending a suit is determined by the law of the place of its incorporation.  See Miller Management Co. v. State, 140 Tex. 370, 167 S.W.2d 728, 730 (1943); Country Cupboard, Inc. v. Texstar Corp., 570 S.W.2d 70, 72 (Tex.Civ.App.--Dallas 1978, writ ref=d n.r.e.).  Fibermesh was incorporated under Swiss law, while FND was incorporated in the Isle of Man. The Appellants have pleaded the foreign law, and therefore we will apply the foreign law to ascertain the corporations= status.

    Fibermesh

    Both parties point to the same section of Swiss law as controlling:  Swiss Corporate Law ' 56, N 151-156, translated in Swiss Corporate Law (Stämpfli+Cie AG Bern 1996):

    152(d)  The cancellation of the company has only declaratory effect.  The company does not lose its legal existence as a result of the deletion, but only as a result of the termination of the liquidation activities. On the one hand, a completely liquidated company loses its existence even if the cancellation of its entry in the register of commerce is omitted.  On the other hand, a company can continue to exist, as long as it still has assets.

     

    153      However, the cancellation of the entry in the Register of commerce has de facto consequences, as the cancelled company loses its capacity to act externally:  it may neither sue nor start debt collection proceedings, nor can it be sued or be subject to debt collection proceedings.  In order to liquidate still existing activities a re-registration may be necessary;

     

                                                                 .                .               .

     

    154(a)  Upon request of a debtor, an executive organ of the company or of a shareholder, a company may exceptionally be re-registered, if assets or liabilities that were not taken into consideration during the liquidation proceedings are subsequently discovered. [Emphasis in original].  [Footnotes omitted].

     

    In October 1995, Fibermesh was placed on involuntary liquidation, which was revoked in January 1996.  In that same month, Fibermesh entered into voluntary liquidation, and the liquidation proceeding commenced in a Geneva court in June 1997. However, when the Swiss Bankruptcy Office and the Geneva Court found Fibermesh had insufficient assets to cover the cost of the bankruptcy proceeding, it was terminated in November 1998, and the company was deleted from the Swiss registry of Commerce.

    Under the Swiss law, since the bankruptcy and the liquidation proceeding were not completed, Fibermesh was not completely dissolved, although it was deleted from the Swiss registry of commerce, and it still has an asset in the form of the current lawsuit and may be restored by re-registration.  Therefore, Fibermesh lacks the capacity to bring a lawsuit on its own, but it is not deprived of the right to the lawsuit.

    FND

    The Isle of Man=s Companies Act 1931 governs the dissolution, restoration, and actions of corporations incorporated in the Isle of Man:

    ' 274(1)          Where a company is dissolved, all property and rights whatsoever vested in or held on trust for the company immediately before its dissolution (including leasehold property but not including property held by the company on trust for any other person) shall be deemed to be bona vacantia and shall accordingly vest in the Treasury in trust for the Crown and may be dealt with in the same manner as other bona vacantia accruing to the Crown.  [Emphasis in original].

     

    Under the Companies Act 1931 ' 273B, a company struck from the registers of Isle of Man may be restored within twelve years.  We have been unable to find any provisions on the power of a dissolved corporation to act in the excerpts of the Companies Act filed by the parties. 

    FND was struck from the registry of the Isle of Man on December 6, 1993.  While the dispute between Synthetics and Fibermesh arose in 1989, Fibermesh and Doucakis did not enter into a retainer agreement with the Law Firm until August 6, 1994, the arbitration order was entered against them on September 20, 1996, and the final judgment entered by a Georgia Superior Court on November 21, 1996.[1]  The current suit was filed on September 22, 1998.

    Arguably, the cause of action did not arise before FND was dissolved by the Isle of Man Department of Treasury.  In the absence of a pleading to the foreign rule, the foreign law is construed to be the same as that of Texas law.  See Gevinson v. Manhattan Construction Co. of Oklahoma, 449 S.W.2d 458, 465 n.2 (Tex. 1969), citing Milner v. Schaefer, 211 S.W.2d 600, 603 (Tex.Civ.App.--San Antonio 1948, writ ref=d).  Since the cause of action arose after FND was struck from the registry of the Isle of Man, we will apply Texas Law. 


    In Texas, a corporation maintains legal title to its assets, such as a cause of action, until it is permanently dissolved.  See Regal Constr. Co. v. Hansel, 596 S.W.2d 150, 153 (Tex.Civ.App.--Houston [1st Dist.] 1979, writ ref=d n.r.e.).  Until it is dissolved, a corporation has the standing to sue, because it has the legal title to the cause of action; however, because the privilege to sue has been taken away, it is incapacitated from maintaining the suit.  See Wingate v. Hajdik, 795 S.W.2d 717, 718-19 (Tex. 1990).  A corporation does not cease to exist merely because its charter has been forfeited, so long as there is a statutory right to have the corporate charter reinstated.  See Longoria v. Atlantic Gulf Enter., Inc., 572 S.W.2d 71, 79 (Tex.Civ.App.--Corpus Christi 1978, writ ref=d n.r.e.).  In Lighthouse Church of Cloverleaf v. Texas Bank, 889 S.W.2d 595, 600-01 (Tex.App.--Houston [14th Dist.] 1994, writ denied), the Court held that a deed executed to a corporation that had forfeited its charter was not void, since the corporation had a statutory right to reinstatement.  See id.

    Under the law of Isle of Man, FND had to seek restoration by December 6, 2005.  It initiated the effort to seek restoration on December 8, 1999, when it sent a notice to the Isle of Man Customs Department of its intention.  Since FND has the statutory right to be restored to the registry and has taken steps to be restored, FND has not yet been permanently dissolved.  Under Texas law, a corporation with the statutory right to be restored has the legal title to property, such as a lawsuit.  See Regal Constr. Co., 596 S.W.2d at 153.  FND has the standing but not the capacity to maintain the current suit.

    Doucakis

    Doucakis urges that he has standing individually and as a representative of Fibermesh and FND.  We will examine if Doucakis has standing (1) individually and (2) as a representative of Fibermesh and FND.

    Doucakis=s Individual Claim

    The Law Firm, Krause, and Evans argue that Doucakis had to establish he was a party to the contract and arbitration agreement that underlie the current legal malpractice action, in order to recover on the legal malpractice claim.  To recover in a legal malpractice action, the plaintiff must prove he or she would have prevailed but for the negligence of the attorney.  See Jackson v. Urban, Coolidge, Pennington & Scott, 516 S.W.2d 948, 949 (Tex.Civ.App.--Houston [1st Dist.] 1974, writ ref=d n.r.e.).  We agree that for Doucakis to recover individually in the current suit, he must have been able to recover at the arbitration.  Although the record does not contain the pleadings or claims submitted in arbitration, we presume the claims would be based on an agreement between Synthetics and Fibermesh or Doucakis.  If there is no agreement between Doucakis and Synthetics, then Doucakis could not have recovered, and hence could not recover individually on the current legal malpractice action.

    Both parties have filed the distribution contract and the amendment to the arbitration agreement between Synthetics and Fibermesh.[2]  Doucakis argues that the distribution contract clearly named him as an individual and that this is supported by the fact that the later amendment to the arbitration agreement names him individually along with Fibermesh and FND. The Law Firm, Krause, and Evans point out that the first paragraph of the distribution contract states that the parties to the contract are Synthetics and Subil S.A., with Subil (for an inexplicable reason) to be referred thereafter as ADoucakis.@

    Whether a contract is ambiguous is a question of law for the court.  See R & P Enterp. v. LaGuarta, Gavrel & Kirk, Inc., 596 S.W.2d 517, 518 (Tex. 1980).  A trial court=s conclusions of law are reviewed de novo.  See Hervey v. Flores, 975 S.W.2d 21, 23 (Tex.App.‑-El Paso 1998, writ denied).  A contract is ambiguous when its meaning is uncertain and doubtful or it is reasonably susceptible to more than one meaning.  See Coker v. Coker, 650 S.W.2d 391, 393 (Tex. 1983).  When a contract contains an ambiguity, the interpretation of the contract becomes a fact issue, and a summary judgment is improper. See Coker, 650 S.W.2d at 394.

    The language of the distribution agreement states:[3]

    Agreement, effective ______ [blank] by and between Synthetic Industries (Texas) Inc., d.b.a. Fibermesh Company, herein referred to as Fibermesh, and Subil S.A., herein referred to as DISTRIBUTOR Doucakis.

     

    The amendment to the arbitration paragraph of the distribution agreement also states:

    WHEREAS, in 1985 an agreement was entered into between Synthetic Industries (Texas), Inc. d/b/a Fibermesh Company and Subil, S.A. (ASwitzerland Agreement@) which provided, inter alia, for Subil, S.A. to distribute Fibermesh in Switzerland;

                                                                  .               .               .

     

    WHEREAS, after September, 1985, Subil, S.A. changed its name to Fibermesh (Suisse), S.A. . . . .

     

    In his affidavit, Doucakis stated that he had entered into a distribution agreement with Synthetics, and he referred to the above-referenced distribution contract.  However, the original distribution contract only states that the parties to the agreement are Synthetics and Subil S.A., and that Subil will be referred as ADoucakis.@  Furthermore, the later amendment to the arbitration agreement clearly states that the original agreement was entered into between Synthetics and Subil, without naming Doucakis as an individual.  A contract is ambiguous only when the face of the instrument leaves it genuinely uncertain which of two or more meanings is the proper one; if only one reasonable meaning emerges, it is not ambiguous.  We do not think the contracts are ambiguous.

    In construing an unambiguous contract, we discern the parties= intent from the face of the agreement itself, without their present interpretation.  See Intratex Gas Co. v. Puckett, 886 S.W.2d 274, 277-78 (Tex.App.--El Paso 1994, no writ).  The face of the contracts are clear:  The parties to the original distribution contract were only Synthetics and Subil, S.A. (later changed to Fibermesh).  If Doucakis was not a party to the distribution agreement, then he could not have prevailed at the arbitration.  Doucakis does not have an individual claim against the Law Firm, Krause, and Evans. 

    Doucakis=s Claim as a Representative of Fibermesh and FND

    Neither party has plead the proper foreign law governing the standing or capacity of a representative of the foreign corporations. In the absence of proper invocation of foreign law, Texas courts must presume the foreign law to be the same as that of Texas.  See J. Parra e Hijos, S.A. de C.V. v. Barroso, 960 S.W.2d 161, 167 n.6 (Tex.App.‑-Corpus Christi 1997, no pet.), citing Country Cupboard, Inc., 570 S.W.2d at 72.  Therefore, we shall analyze Doucakis=s standing under Texas law.

    It is well-established that a shareholder of a corporation, even a sole shareholder, may not bring suit on the corporation=s cause of action in the shareholder=s own name.  See Wingate, 795 S.W.2d at 719; El T. Mexican Restaurants, Inc., 921 S.W.2d at 251.  However, in Texas, when a corporation is incapacitated and forfeits its right to bring suit, its assets are bifurcated so that while legal title remains in the corporation, the beneficial title vests in the shareholders. See El T. Mexican Restaurants, Inc., 921 S.W.2d at 251.  A holder of the beneficial title to the corporation=s assets may prosecute or defend in the courts as necessary to protect the holder=s property rights. See id., citing Humble Oil & Ref. Co. v. Blankenburg, 149 Tex. 498, 235 S.W.2d 891, 894 (1951). Therefore, a shareholder does not have the standing to bring suit on a corporation=s cause of action but may have the capacity to sue as the representative of the corporation.  See El T. Mexican Restaurants, Inc., 821 S.W.2d at 51.  The shareholder may not recover individually.  See id.  A temporary change in a corporation=s status bars a shareholder from becoming the corporation=s Asuccessor in interest.@  See id. at 252.

    Both Fibermesh and FND have applied for restoration to the registries of their respective countries.  Paul David, a licensed auditor and Afiduciaire@ authorized to represent corporations before the Swiss bankruptcy office, stated in an affidavit that he had initiated the proceeding to reinstate Fibermesh to the Swiss registries. FND=s English solicitor, Paul Roystan Beckett, stated in an affidavit that FND had initiated restoration of the corporation.[4]

    Karl Arnold, Fibermesh=s expert and a Swiss bankruptcy attorney, stated in his affidavit that A[i]n the event that, upon application, Fibermesh (Suisse) S.A. will be re-entered in the Register of Commerce of Geneva, Nicolas P. Doucakis will be in a position to represent the company as liquidor with single signing authority, unless the Geneva Court, the Geneva Bankruptcy Office, the Register of the Geneva Registrar of Commerce or the shareholders of Fibermesh (Suisse) S.A. will decide otherwise.@

    The record indicates that the corporations have not yet been fully dissolved but rather are in a temporary change of status. Under Texas law, since the corporations have standing but lack capacity, Doucakis is authorized to bring suit on behalf of the incapacitated corporations but is not a

    Asuccessor-in-interest@ to the corporations.

    Appellants= Claims

    We have already dealt with Doucakis=s individual claim and have held that he was not a party to the original distribution contract between Synthetics and Fibermesh.  As to Fibermesh and FND=s claims, the Law Firm, Krause, and Evans alleged that the plaintiffs could not establish that they could have prevailed against Synthetics, that they had damages, and that there were no experts named.  In response, Fibermesh and FND filed depositions from two witnesses involved in the fibermesh trade; the affidavit of John G. Parker, an expert on the standard of legal practice; the affidavit of David M. Katzen, an expert on the damages suffered by the plaintiffs; the affidavit of Dr. Marc Casthelaz, who had treated Doucakis from 1988 to at least 1999; and finally Dr. Casthelaz=s medical records on Doucakis.  After reviewing the record, we cannot say that the Law Firm, Krause, and Evans have established that there are no fact issues as to Fibermesh=s and FND=s claims, since there is a fact issue at least as to the negligence of the Law Firm, Krause, and Evans.

    The Statute of Limitations Defense Against FND

    The Law Firm, Krause, and Evans argued in their motion for summary judgment that the statue of limitations have run on FND, because FND was named as AFND Industries, Ltd.@ without the A(Overseas).@  On appeal, FND contends that the misnomer did not mislead the Appellees.  Appellees Law Firm, Krause, and Evans did not address this issue in their brief.


    The statute of limitations is an affirmative defense.  See Woods v. William M. Mercer, Inc., 769 S.W.2d 515, 517 (Tex. 1988).  A defendant may move for summary judgment on its own affirmative defense.  See Randall=s Food Mkts., Inc. v. Johnson, 891 S.W.2d 640, 644 (Tex. 1995).  A defendant moving for summary judgment on its affirmative defense must prove each element of the defense as a matter of law, leaving no issues of material fact.  See Velsicol Chem. Corp. v. Winograd, 956 S.W.2d 529, 530 (Tex. 1997).

    In the motion for summary judgment, the Law Firm, Krause, and Evans argued that FND had actually filed suit on December 31, 1999, because FND was identified as AFND Industried, Ltd.@ until the name was corrected to AFND Industried (Overseas) Ltd.@ in the plaintiffs= fourth amended petition.   However, in the amendment to the arbitration agreement, FND was identified merely as AFND Industries@ without the A(Overseas).@  Since the Law Firm, Krause, and Evans must have reviewed that document in their representation of FND during the arbitration, they must have been aware that FND was not always referred by AFND Industries (Overseas) Ltd.@  We do not think that the misnomer misled the Law Firm, Krause, and Evans.  The statute of limitations does not apply to FND. 

    Tex.R.Civ.P. 12 Motion

    In their motion for summary judgment, the Law Firm, Krause, and Evans also challenged the authority of the Appellees= counsel to represent Fibermesh and FND in the lawsuit, since the corporations did not have standing. There is no record that the trial court ruled upon the issue.  In any case, any error has been overruled by our holding above that Fibermesh and FND has standing but not the capacity to bring suit.

    Appellants= Plea in Abatement and Defense

    Doucakis, Fibermesh, and FND filed a plea in abatement, to hold the case open until both Fibermesh and FND should be reinstated on their respective country=s registries and asserted the defense of estoppel against the Law Firm, Krause, and Evans.[5]

    Plea in Abatement

    A plea in abatement is filed by a defendant to challenge a plaintiff=s pleadings and to identify an impediment to the suit.  See America Online, Inc. v. Williams, 958 S.W.2d 268, 272 (Tex.App.--Houston [14th Dist.] 1997, no pet.).  Doucakis, Fibermesh, and FND, the plaintiffs below, filed the plea to ask the trial court to indefinitely hold the case open while Fibermesh and FND completed the process of re-registering and thus restore the companies and their standing.  Having concluded already that the corporations have standing, we see no need to reach this issue.

    Defense:  Estoppel

    We have already concluded that Fibermesh and FND have standing and that Doucakis may maintain the suit as the incapacitated corporations= representative.  Therefore, we see no need to address the issue of estoppel.

    For the foregoing reasons, we affirm the judgment in part as to Doucakis=s individual claims and reverse and remand in part as to the claims of the two corporations FND and Fibermesh for trial.

     

    June 27, 2002

    DAVID WELLINGTON CHEW, Justice

     

    Before Panel No. 2

    Barajas, C.J., McClure, and Chew, JJ.

     

    (Do Not Publish)


    [1] The retainer agreement in the record does not name FND as a party; however, the Appellants claim that the Law Firm agreed to represent FND later, without limitations.

    [2]  The agreement originally named Subil, S.A. as a party.  Subil, S.A. was later renamed as Fibermesh (Suisse), S.A.

    [3] The contract was a Afill-in-the-blank@ type of form, with the parties= names filled-in at the appropriate places.

    [4] The record indicates that the only barrier to the restoration of FND was an objection from one of its creditors.  Paul Beckett stated that the parties were negotiating to resolve the dispute, but that the creditor had rejected their first offer.

    [5] Although the Law Firm, Krause, and Evans assert in their brief that Doucakis, Fibermesh, and FND failed to assert the defense of estoppel in any of their responses to the motion for summary judgment or in their plea in abatement, Doucakis, Fibermesh, and FND clearly argued in their supplemental response to the motions for summary judgment filed on January 4, 2000, that the Law Firm, Krause, and Evans should be estopped from asserting that the corporations did not exist.