Republic Petroleum LLC and Republic Petroleum Partners, LP v. Dynamic Offshore Resources NS LLC and W&T Offshore Inc. ( 2015 )

ACCEPTED
01-14-00370-cv
FIRST COURT OF APPEALS
HOUSTON, TEXAS
4/13/2015 4:04:08 PM
CHRISTOPHER PRINE
CLERK
No. 01-14-00370-CV
FILED IN
1st COURT OF APPEALS
HOUSTON, TEXAS
IN THE COURT OF APPEALS FOR
4/13/2015 4:04:08 PM
THE FIRST JUDICIAL DISTRICT CHRISTOPHER A. PRINE
HOUSTON, TEXAS Clerk
REPUBLIC PETROLEUM L.L.C. AND REPUBLIC PETROLEUM PARTNERS
L.P.,
Appellants,
v.
DYNAMIC OFFSHORE RESOURCES NS L.L.C. AND W&T OFFSHORE,
INC., SUCCESSOR BY MERGER OF OFFSHORE SHELF L.L.C.,
Appellees.
Appeal from the 270th Judicial District Court
of Harris County, Texas
Oral argument requested
REPLY BRIEF OF CROSS-APPELLANTS DYNAMIC OFFSHORE RESOURCES NS L.L.C.
AND W&T OFFSHORE, INC. SUCCESSOR BY MERGER OF OFFSHORE SHELF, L.L.C.
GIEGER, LABORDE & LAPEROUSE,
L.L.C.
KENNETH H. LABORDE
Texas State Bar No. 11786070
klaborde@glllaw.com
DANIEL G. RAUH
drauh@glllaw.com
Louisiana State Bar No. 27280
(Pro Hac Vice)
i
CHARLOTTE A. FIELDS
cfields@glllaw.com
Texas State Bar No. 24032175
Gieger, Laborde & Laperouse,
1177 West Loop South, Suite 750
Houston, Texas 77027
Telephone: (832) 255-6000
Facsimile: (832) 255-6001
COUNSEL FOR DEFENDANT
DYNAMIC OFFSHORE RESOURCES NS,
L.L.C.
- AND-
JOHNSON DELUCA KURISKY &
GOULD
A Professional Corporation
BRADLEY L. DELUCA
bdeluca@jdkglaw.com
Texas Bar No. 05653800
BRIGID D. ASHCRAFT
bashcraft@jdkglaw.com
Texas Bar No. 09193167
4 Houston Center
1221 Lamar, Suite 1000
Houston, Texas 77010
(713) 652-2525 – Telephone
(713) 652-5130 – Facsimile
COUNSEL FOR DEFENDANT
W&T OFFSHORE, INC., successor by
merger of OFFSHORE SHELF, L.L.C.
ii
TABLE OF CONTENTS
Index of Authorities ........................................................................................iv
Statement of Facts ............................................................................................1
SUMMARY OF ARGUMENT ..............................................................2
I. Republic L.L.C. had no standing and/or capacity to sue or recover
damages ..............................................................................................2
A. Privity of contract..............................................................................2
B. Standing and capacity........................................................................2
C. Rule 93 verifications ........................................................................3
D. Republic L.L.C.’s working interest ..................................................3
E. The Charge ........................................................................................4
ARGUMENT ....................................................................................................5
I. Privity of contract does not equate with standing .............................5
II. The HI 115 OOA did not give Republic L.L.C. capacity to sue or
recover damages ...............................................................................6
III. Defendants’ rule 93 verifications were sufficient ..........................9
IV. Republic L.L.C.’s working interest ownership is relevant ...........10
V. Defendants did not waive any points of error ...............................12
Prayer ............................................................................................................16
Appendix ........................................................................................................16
Certificate of Compliance .............................................................................18
Certificate of Service ....................................................................................18
iii
INDEX OF AUTHORITIES
Cases
Austin Nursing Ctr. Inc. v. Lovato, 171 S.W.3d 845
(Tex. 2005) .....................................................................................................13
Byrd v. Estate of Nelms, 154 S.W.3d 149
(Tex. App. - Waco 2004, pet. denied) ............................................................14
Cecil v. Smith, 804 S.W.2d 509 (Tex. 1991) ..................................................15
Cooper v. Circle Ten Council Boy Scouts of America, 254 S.W.3d 689
(Tex. App. - Dallas 2008, no pet.) ..................................................................10
Damian v. Bell Helicopter Textron, Inc., 352 S.W.3d 124
(Tex. App. - Fort Worth 2011, pet. struck) .....................................................14
Denman v. SND Operating, L.L.C., No. 06-04-00061-CV, 2005 WL 2316177
(Tex. App. - Texarkana Sept. 23, 2005, no pet.) .......................................12,13
Fuqua v. Taylor, 683 S.W.2d 735
(Tex. App. – Dallas 1984, writ ref’d n.r.e.) ....................................................11
Genender v. USA Store Fixtures, LLC, 451 S.W.3d 916
(Tex. App. - Houston [14th Dist.] 2014, no pet.) .............................................1
Harmon v. 1401 Elm Street Condominium Ass'n, 139 S.W.3d 411
(Tex. App. - Dallas 2004, no pet.) ..................................................................16
Interstate Contracting Corp. v. City of Dallas, 135 S.W.3d 605
(Tex. 2004) .......................................................................................................5
John C. Flood of DC, Inc. v. SuperMedia, L.L.C., 408 S.W.3d 645
(Tex. App. - Dallas 2013, pet. denied) ...........................................................13
Mayhew v. Town of Sunnyvale, 964 S.W.2d 922
(Tex. 1998) .....................................................................................................14
iv
Mekeel v. U.S. Bank Nat. Ass'n, 355 S.W.3d 349
(Tex. App. - El Paso 2011, pet. dism'd) ..........................................................10
Nauslar v. Coors Brewing Co., 170 S.W.3d 242
(Tex. App. - Dallas 2005, no pet.) ...................................................................6
Republic National Bank of Dallas v. National Bankers Life Ins. Co, 427
S.W.2d 76 (Tex. Civ. App. - Dallas 1968, writ ref’d n.r.e.) ............................5
Rhey v. Redic, 408 S.W.3d 440
(Tex. App. - El Paso 2013, no pet.) ................................................................15
Shipley v. Unifund CCR Partners, 331 S.W.3d 27
(Tex. App. - Waco 2010, no pet.) ...................................................................13
Solares v. Solares, 232 S.W.3d 873
(Tex. App. - Dallas 2007, no pet.) ............................................................15, 16
Star Enterprise v. Marze, 61 S.W.3d 449
(Tex. App. - San Antonio 2001, pet. denied) ..................................................14
State Bar v. Gomez, 891 S.W.2d 243 (Tex. 1994)............................................5
Texas Workers' Compensation Comm'n v. Garcia, 893 S.W.2d 504
(Tex. 1995) ........................................................................................................5
T.O. Stanley Boot Co. v. Bank of El Paso, 847 S.W.2d 218
(Tex. 1992) ................................................................................................14, 15
United Parcel Serv., Inc. v. Tasdemiroglu, 25 S.W.3d 914
(Tex. App. - Houston [14th Dist.] 2000, pet. denied) .....................................15
Webb v. Voga, 316 S.W.3d 809
(Tex. App. - Dallas 2010, no pet.).. ..................................................................6
Rules / Statutes
Tex. R. App. P. 33.1(a) ...................................................................................10
Tex. R. App. P. 38.1(g). ....................................................................................1
v
Tex. R. Civ. P. 93 ...........................................................................................10
Tex. Civ. Prac. & Rem. Code §132.001 .........................................................10
Other Authorities
2 McDonald & Carlson Tex. Civ. Prac. § 7:21 (2d. ed.) ................................10
vi
STATEMENT OF FACTS
Republic L.L.C. did not address or controvert the following statements in
Defendants’ Appellants’ Brief, Statement of Facts:
1. Effective October 15, 2008, Republic L.L.C. assigned 100% of its
working interest in HI 115 to Republic L.P., removing Republic L.L.C. from any
ownership interest in HI 115. (52 RR Defs.’ Ex. 0915-0079, item F); (52 RR
Defs.’ Ex. 926); (4 RR 31); (CR 504).
2. Effective May 11, 2007, by various assignments, Republic L.P.
acquired all ownership interest previously held by Republic L.L.C. (52 RR Defs.’
Ex. 927); (52 RR Defs.’ Ex. 0915-0079, item G); (4 RR 44-45, 47, 51-52).
3. The damages sought by Republic L.L.C. did not begin to accrue until
July 3, 2008. (9 RR Pls.’ Ex. 39-143).
4. Should Republic L.L.C. be awarded damages through October 15,
2008, the damage award should be rendered in the amount of $32,971.73 (23.75%
of $138,828.35, the damages incurred through October 15, 2008). (52 RR Defs.'
Exs. 915-0069-0079 and 926); (9 RR Pls.’ Ex. 139-143); (CR 504).
5. Republic L.L.C. presented the case as though it were seeking 100% of
the damages. (5 RR 137-138).
Thus, these facts are uncontroverted. See Tex. R. App. P. 38.1(g) (“The
court will accept as true the facts stated unless another party contradicts them.”)
See also, Genender v. USA Store Fixtures, LLC, 451 S.W.3d 916, 923 n.7 (Tex.
App. - Houston [14th Dist.] 2014, no pet.).
1
SUMMARY OF ARGUMENT
I. Republic L.L.C. had no standing and/or capacity to sue or recover
damages
The undisputed facts establish that Republic L.L.C. did not have standing
and/or capacity to sue or recover damages as it had no ownership in the HI 115
Well effective May 11, 2007, and did not file suit as operator or on behalf of the
other HI 115 owners.1 Republic L.L.C.’s efforts to establish otherwise fail.
A. Privity of contract
Republic L.L.C. argues that it has standing because it was in privity of
contract with the Defendants. Privity of contract, however, does not equate with
standing.
B. Standing and capacity
Republic L.L.C. argues that it had standing and capacity by virtue of the HI
115 OOA and references one portion of the record in support of same. However,
the cited reference actually reflects that effective July 16, 2010, Rooster Petroleum
L.L.C. (“Rooster”) became the operator of the HI 115 Well. (52 RR Defs.’ Ex.
1
Republic L.L.C. argues in point II that this Court should not reverse and render a Final
Judgment that Republic L.L.C. be awarded zero damages or, alternatively, $32,971.73, because
Defendants did not meet “any of the standards of review available to them.” Brief, p. 36. In
support of this argument, Republic L.L.C. sets forth inapplicable standards of review, states that
because Defendants filed a motion for new trial, “the filing of a motion to modify judgment was
improper”, Id., citing no legal authority for such a proposition, and that it was “inexplicably
unfair and fundamentally erroneous for the trial court to grant Defendants’ Motion to Modify
Judgment.” Id. Defendants previously addressed each of these arguments in its Appellants’
Brief as well as in their Appellees’ Brief, and incorporate the arguments herein by reference.
Defendants note, however, that the uncontroverted facts set forth in the Statement of Facts alone
establish that a take-nothing judgment should be entered by this Court.
2
915-0094). Republic L.L.C was not the operator when suit was filed and has no
capacity or standing to sue or recover damages as such.
Republic L.L.C.’s reliance on the testimony of Scott Stanford (“Stanford”)
in support of its standing and capacity arguments is misplaced. The testimony
presented was in a bill of exception which the district court ruled inadmissible.
C. Rule 93 verifications
Republic L.L.C. complains that although Defendants filed verified denials
regarding capacity, such verifications were insufficient because Defendants did not
allege the bases of personal knowledge. While Defendants’ verifications were
sufficient, Defendants could have utilized unsworn declarations in which the bases
of personal knowledge is not required. Moreover, an objection regarding lack of
personal knowledge must be lodged at the district court level and a ruling obtained,
which Republic L.L.C. failed to do and waived the complaint.
D. Republic L.L.C.’s working interest
Republic L.L.C. argues for the first time that the PHA “does not concern the
working interest ownership of the [HI 115 Well]” and thus its working interest
(ownership share) is “irrelevant” to the dispute. Were this new and novel
argument accepted, hundreds of years of case law regarding the need for ownership
to recover damages would be turned on its head.
3
Aside from these issues, Republic L.L.C. entered into the PHA as the
“owner” of the HI 115 Well and the terms of the HI 115 OOA establish that
expenses and revenue (and thus, damages) derived from the production of gas from
the HI 115 Well were allocated based upon the working interest ownership. The
PHA and ownership are relevant and inextricably entwined.
E. The Charge
Lastly, Republic L.L.C. argues that since Defendants “make no claim of
charge error”, Defendants’ “capacity challenge can have no merit.” Brief, p. 25-
26. While Republic L.L.C.’s argument is unclear, Defendants are not required to
allege charge error as they are claiming that the district court erred, inter alia, in
denying Defendants’ JNOV and Motion to Modify Judgment. Even if Defendants
were required to assert charge error, their complaints were not waived as 1)
Defendants’ objected to Republic L.L.C.’s questions, 2) Defendants properly filed
verified denials which shifted the burden to Republic L.L.C. to obtain a jury
finding on the issue, 3) the district court held as a matter of law that Republic
L.L.C. did not file suit as operator or in any representative capacity thus the issue
should not be submitted to the jury, 4) standing and capacity are legal issues which
should not be submitted to the jury, and 5) Defendants properly preserved error by
objecting to the questions, filing a Motion for Directed Verdict, JNOV, Motion for
New Trial and Motion to Modify Judgment.
4
The Modified Final Judgment should be reversed and rendered that Republic
L.L.C. take-nothing, or, alternatively, that Republic L.L.C.’s damages are limited
to $32,971.73 and attorney’s fees through trial of $125,000.
ARGUMENT
I. Privity of contract does not equate with standing
Republic L.L.C. argues that since it was a signatory to the PHA, privity of
contract existed which “provides a party with standing to maintain a suit on the
contract.” Brief, p. 10. However, the case cited by Republic L.L.C. for this
proposition, Interstate Contracting Corp. v. City of Dallas, 135 S.W.3d 605, 618
(Tex. 2004), actually states that “…our recognition of pass-through claims does not
run afoul of our long-held tradition of requiring privity of contract and standing for
a party to maintain suit.” (Emphasis added.) The only other case cited by
Republic L.L.C. for this proposition does not mention standing, only privity of
contract. Republic National Bank of Dallas v. National Bankers Life Ins. Co, 427
S.W.2d 76, 79 (Tex. Civ. App. - Dallas 1968, writ ref’d n.r.e.).
While Republic L.L.C. was in privity of contract with Defendants, it did not
have standing as standing limits subject matter jurisdiction to cases involving a
distinct injury to the plaintiff. See Texas Workers' Compensation Comm'n v.
Garcia, 893 S.W.2d 504, 517–18 (Tex. 1995). See also State Bar v. Gomez, 891
S.W.2d 243, 245 (Tex. 1994). Republic L.L.C. has no distinct injury since it had
5
no working interest ownership in the HI 115 Well.2 Nauslar v. Coors Brewing
Co., 170 S.W.3d 242, 252 (Tex. App. - Dallas 2005, no pet.) (“[Plaintiff] asserts
standing in its roles as former general partner of Willow's general partner and
former limited partner of Willow. […] [Plaintiff] sold…the entirety of its interest
in Willow. None of the cases it cites stands for the proposition that a partner that
has sold its entire interest in the partnership can personally recover on a claim
belonging to that partnership.”) (Emphasis in original); Webb v. Voga, 316 S.W.3d
809, 815 (Tex. App. - Dallas 2010, no pet.) (“The evidence shows Webb was not a
property owner. We conclude that Webb lacked standing for her causes of action
…and, therefore, the trial court lacked subject matter jurisdiction over those causes
of action.”)
II. The HI 115 OOA did not give Republic L.L.C. capacity to sue or
recover damages
Republic L.L.C. argues that it had capacity to sue as operator under the HI
115 OOA. Even if this were true, which it is not, the district court ruled that
Republic L.L.C. did not bring suit as the operator. (CR 1055) (5 RR 138)
Moreover, Republic L.L.C.’s request for a trial amendment to remedy its lack of
2
Republic L.L.C. also alleges that it established standing because Defendants did not
assert that other parties should be joined to the lawsuit and that Defendants made judicial
admissions. Defendants addressed these allegations in their Response to Republic L.L.C’s
Appellant’s Brief and incorporate the arguments herein.
6
capacity was denied.3 (CR 1056) (6 RR 119).
Further, Republic L.L.C. was not the operator when the lawsuit was filed,
contrary to its statement to this Court that “[e]ffective July, 16, 2010, the [OOA]
was again amended… However, Republic remained the designated Operator under
the [OOA].” Brief, p. 17. The cite to which Republic L.L.C. refers actually states:
III. The operator for the Lease shall be:
Rooster Petroleum, LLC
(52 RR Defs.’ Ex. 915-0094). When suit was filed on December 9, 2010, Republic
L.L.C. could not have brought claims in the capacity of operator since that position
was held by Rooster. (4 RR 58).
Republic L.L.C. also cites inadmissible testimony for the proposition that
“any recovery in the lawsuit will be split out to the non-operating working interest
partners.” Brief, p. 16. This testimony was obtained while Republic L.L.C. was
making its bill of exception and was ruled as inadmissible by the district court.
(5 RR 113-138). A portion of the objection and bill of exception follows:
Q. Was it the understanding of your partners… that this provision authorized
Republic Petroleum, LLC, to prosecute the litigation?
MR. DELUCA: Objection, Your Honor. May we approach.
THE COURT: Okay.
3
Republic L.L.C. does not challenge the district court’s denial of leave to file a trial
amendment on appeal.
7
(Bench discussion…)
MR. DELUCA: Republic Petroleum, LLC, and Republic Petroleum
Partners, LP, brought this case in their individual capacity. They did not
bring it as an operator…. [T]he PHA names Republic Petroleum, LLC, as,
quote, Producer, not Operator.
THE COURT: What part am I missing here?
MR. DELUCA: They didn't bring it on behalf of everybody else. They only
brought it on behalf of themselves.
……
MR. DELUCA: For their own damages, not all the partners.
THE COURT: Is that what your trying to do?
MR. BATTAGLINI: That's what our pleading says.
BILL OF EXCEPTIONS
BY MR. BATTAGLINI
Q. Mr. Stanford, is it true that the damages that were calculated in this case
are 100 percent damages?
A. They are.
Q. Is it true, when you brought this lawsuit, you brought it on behalf of 100
percent of the gas stream owners?
A. Yes, I did. (5 RR 113-138).
The district court ruled the testimony inadmissible, stating, “I don’t see anything in
it [Plaintiffs’ Fourth Amended Petition] that indicates that it was brought in any
kind of representative capacity or was seeking to recover damage on behalf of
8
anybody other than the Republic entities. That’s my ruling.”4 (5 RR 113-138).
No evidence or admissible testimony supports Republic L.L.C.’s contention that
the HI 115 OOA conferred capacity to bring suit.
III. Defendants’ rule 93 verifications were sufficient
Republic L.L.C. admits that Defendants filed verified denials disputing
Republic L.L.C.’s capacity to sue or recover damages, but contends that such
verifications were defective because they did not set forth the bases of personal
knowledge. Brief, p. 19. Republic L.L.C. cites a few cases dealing with the need
for personal knowledge in an affidavit supporting a summary judgment, but no
cases dealing with such a requirement for a verified denial. Nonetheless,
Defendants’ verifications are not deficient. (CR 687) (CR 701). In fact, the
verifications 1) specifically recite personal knowledge, 2) reference the paragraphs
in the Answers to which they refer, and 3) the referenced paragraphs set forth the
public documents which indicate Republic L.L.C.’s lack of capacity including the
fact that Rooster was the operator at the time suit was filed. (CR 650-651) (CR
697-98).
4
Republic L.L.C.’s contention that the language in the OOA permitting the operator to
“supervise the handling, conduct and prosecution of all Claims involving activities or
operations” somehow “authorized Republic to prosecute the lawsuit” is belied by the fact that
Republic L.L.C. was not the operator when suit was filed and by the terms of the OOA itself
which require consent of the other working interest owners as fully addressed by Defendants in
their Response to Republic L.L.C’s Appellant’s Brief which is incorporated herein.
9
Furthermore, Defendants did not have to file a verification setting forth
personal knowledge inasmuch as an unsworn declaration is sufficient. See Tex.
Civ. Prac. & Rem. Code §132.001. See also, 2 McDonald & Carlson Tex. Civ.
Prac. § 7:21 (2d. ed.) (“Under Rule 93,…[i]n lieu of [a] … verification …a litigant
may use an unsworn declaration.”)
Lastly, “an objection that an affidavit is not based on personal knowledge is
an objection to a defect in form. Cooper v. Circle Ten Council Boy Scouts of
America, 254 S.W.3d 689 (Tex. App. - Dallas 2008, no pet.). As a prerequisite to
presenting a complaint for appellate review, such an objection must be timely and
specifically raised, and a ruling obtained.” Mekeel v. U.S. Bank Nat. Ass'n, 355
S.W.3d 349, 357 (Tex. App. - El Paso 2011, pet. dism'd) (citing Tex. R. App. P.
33.1(a) [other citations omitted]). Republic L.L.C. did not object to the
verifications at the district court level and thus waived any alleged error.
IV. Republic L.L.C.’s working interest ownership is relevant
Republic L.L.C. contends that its lawsuit “does not concern Republic’s
working interest ownership in the Satellite Well, but instead concerns a breach of
the PHA,” thus its working interest ownership is “irrelevant.” Brief, p. 22-23.
Republic L.L.C. does not cite a single case for this proposition, nor does it
distinguish the plethora of authority holding that an ownership interest is necessary
to recover damages.
10
Moreover, the PHA would not exist without the HI 115 Well and the
production there-from. Under the HI 115 OOA, the parties paid expenses and
received revenues (including, logically, any damages) associated with production
according to their participating interest (working interest ownership) as follows:
Basis of Charge to the Parties. Subject to the other provisions of this
Agreement, Operator shall pay all costs incurred under this Agreement, and
each Party shall reimburse Operator in proportion to its Participating
Interest. (18 RR Pls.’ Ex. 190-0008)
Statements and Billings. Operator shall bill Non-Operators … for their
proportionate share of the Joint Account…. (42 RR Defs.’ Ex. 756-0286-
0287)
"Joint Account" shall mean the account showing the charges paid and credits
received in the conduct of the Joint Operations and which are to be shared
by the Parties. (42 RR Defs.’ Ex. 756-0286)
See also (46 RR Defs.’ Ex. 0773-2058 et seq.) (Invoices pertaining to production
under the PHA setting forth charges and credits to the HI 115 working interest
owners based upon their ownership interest).
Contrary to Republic L.L.C.’s position, the case law is clear that without an
ownership interest or suit in a representative capacity, there can be no standing
and/or capacity. See Fuqua v. Taylor, 683 S.W.2d 735, 739 (Tex. App. - Dallas
1984, writ ref’d n.r.e.) (“It would violate equitable principles to allow appellees,
who owned but thirty-one percent of the working interest, to recover one hundred
percent of the trust income…. [W]e remand … for a determination of the amount
of each individual appellee's recovery, to be calculated according to the percentage
11
of the entire working interest … owned by each appellee.”); Denman v. SND
Operating, L.L.C., No. 06-04-00061-CV, 2005 WL 2316177, at *8 (Tex. App. -
Texarkana Sept. 23, 2005, no pet.) (“The Denmans … have standing to sue for
discharges of hydrocarbons and for damages…during their ownership.”)
(Emphasis added.) Republic L.L.C.’s lack of working interest ownership is not
only relevant; it is determinative and establishes that a take-nothing judgment
should be rendered.
V. Defendants did not waive any points of error
Republic L.L.C. alleges that since Defendants “make no claim of charge
error” the Defendants “are bound by the charge on appeal” and “because the jury
was not requested to consider damages in the context of Republic’s working
interest ownership,” Defendants’ “capacity challenge can have no merit.”5 Brief,
p. 25-26. Although Republic L.L.C.’s allegation is unclear, and no cases are cited
that are even peripherally on point, Defendants are not required to claim charge
error as they contend that the district court erred, inter alia, in denying Defendants’
JNOV and Motion to Modify Judgment. Even if Defendants had to claim charge
error, they did not waive any complaints.
5
Republic L.L.C. fails to note that it has no pleading to support a 100% damage award
and that if the Modified Judgment is not reversed and rendered, damages will be awarded to non-
parties. These issues were preserved for appeal as well and not addressed by Republic L.L.C.
12
To the extent Republic L.L.C. suggests that it was incumbent upon
Defendants to submit a damage question to preserve Defendants’ capacity
complaint on appeal,6 Brief, p. 25-26, Republic L.L.C. is mistaken for many
reasons.7
First, the issue of Republic L.L.C.’s working interest ownership relates to
standing, not capacity. See Shipley v. Unifund CCR Partners, 331 S.W.3d 27, 29
(Tex. App. - Waco 2010, no pet.) (“We find that without evidence of any
ownership interest or title in the account that Unifund CCR Partners does not have
standing to bring this suit and that the trial court did not have subject matter
jurisdiction over the action.”); Denman, No. 06-04-00061-CV, 2005 WL 2316177,
at *8 (Accord). Moreover, “standing is a component of subject matter jurisdiction
and can never be waived.” John C. Flood of DC, Inc. v. SuperMedia, L.L.C., 408
S.W.3d 645, 650-51 (Tex. App. - Dallas 2013, pet. denied) (citing Austin Nursing
Ctr. Inc. v. Lovato, 171 S.W.3d 845, 849 (Tex. 2005)).
Second, even if ownership is a capacity issue, Defendants properly filed
verified denials. As such, the burden shifted to Republic L.L.C. to obtain a jury
6
Incredibly, Republic L.L.C. argues the opposite position on page 26 of its Brief stating
that “standing and capacity are legal questions which … should not have been argued to the jury”
and on page 34 that “because Defendants do not challenge the jury charge, the sufficiency of the
evidence must be reviewed in light of the charge submitted.”
7
Defendants also objected to the submission of the damage question on the bases of 1) no
evidence of damages due to the fact that Republic L.L.C. did not own an interest in the HI 115
Well, 2) lack of standing, and 3) lack of capacity. (7 RR 81-83) (7 RR 86-87). All objections
were overruled. (7 RR 77-87).
13
finding on the issue as stated in Damian v. Bell Helicopter Textron, Inc., 352
S.W.3d 124, 141 (Tex. App. - Fort Worth 2011, pet. struck):
[I]f a verified denial is filed, the issue of the plaintiff's capacity to sue is
controverted, and the plaintiff bears the burden of proving at trial that he is
entitled to recover in the capacity in which he has filed suit. As the party
with the burden of proof then, it is incumbent upon the plaintiff to obtain
a jury finding on this particular issue.
(Emphasis added.)
Third, prior to submission of the case to the jury, the district court held as a
matter of law that Republic L.L.C. did not file suit as operator or in any
representative capacity, and denied the request for leave to file a Fifth Amended
Petition. (5 RR 128); (6 RR 119). As such, the issue of capacity was already
decided and Defendants did not waive any complaint. See Byrd v. Estate of Nelms,
154 S.W.3d 149, 160 (Tex. App. - Waco 2004, pet. denied) (“Any question
concerning the Nelms Partnership's capacity to sue was determined by the trial
court as a matter of law …. Issues of capacity to sue are questions of law. Mayhew
v. Town of Sunnyvale, 964 S.W.2d 922, 928–29 (Tex. 1998). Issues found as a
matter of law should not be submitted to the jury. Star Enterprise v. Marze, 61
S.W.3d 449, 459 (Tex. App. - San Antonio 2001, pet. denied) (citing T.O. Stanley
Boot Co. v. Bank of El Paso, 847 S.W.2d 218, 222–23 (Tex.1992)).”
The lack of Republic L.L.C.’s working interest was also established as a
matter of law and not controverted by Republic L.L.C. either in the district court or
14
on appeal. A fact issue that is established with uncontroverted evidence and is not
in dispute should not be submitted to the jury. Bank of El Paso, 847 S.W.2d at
223.
Fourth, as admitted by Republic L.L.C. in its brief, standing and capacity
should not be submitted to the jury. Rhey v. Redic, 408 S.W.3d 440, 463 (Tex.
App. - El Paso 2013, no pet.) (“To the extent Rhey's argument is related to the
standing and capacity …, both issues are legal questions which would not be
submitted to the jury.”) Brief, p. 26.
Lastly, Defendants properly preserved error by objecting to the damage
question (7 RR 81-83) (7 RR 86-87), filing a Motion for Directed Verdict (CR
841-846) (6 RR 5), JNOV (CR 888-903) and a Motion for New Trial (CR 1122-
1150). See United Parcel Serv., Inc. v. Tasdemiroglu, 25 S.W.3d 914, 916 (Tex.
App. - Houston [14th Dist.] 2000, pet. denied) (citing Cecil v. Smith, 804 S.W.2d
509, 510–11 (Tex. 1991)). (“To preserve a no evidence or matter of law point for
appeal, a party must raise the issue through one of the following: (1) a motion for
directed verdict, (2) a motion for JNOV, (3) an objection to the submission of the
question to the jury, (4) a motion to disregard the jury's answer to a vital fact
question, or (45) a motion for new trial.”) Moreover, Defendants filed a Motion to
Modify Judgment (CR 1050-1070) and “[m]otions to modify preserve error for
appellate review of an erroneous damage award in a judgment.” Solares v.
15
Solares, 232 S.W.3d 873, 881 (Tex. App. - Dallas 2007, no pet.) (citing, Harmon
v. 1401 Elm Street Condominium Ass'n, 139 S.W.3d 411, 416–17 (Tex. App. -
Dallas 2004, no pet.)).
PRAYER
Defendants Dynamic and W&T Offshore pray that the Court of Appeals
reverse and render judgment that Republic L.L.C. takes nothing, or alternatively
that Republic L.L.C. be awarded damages of $32,971.73 and attorney’s fees
through trial of $125,000. Defendants also pray for such other relief to which they
may be justly entitled.
APPENDIX
1. Attachment to the HI 115 OOA indicating that the operator for the lease
effective July 16, 2010 is Rooster Petroleum, LLC (52 RR Defs.’ Ex.
915-0094)
2. Genender v. USA Store Fixtures, LLC, 451 S.W.3d 916 (2014)
3. Nauslar v. Coors Brewing Co., 170 S.W.3d 242 (2005)
4. Shipley v. Unifund CCR Partners, 331 S.W.3d 27 (2010)
Respectfully submitted,
GIEGER, LABORDE & LAPEROUSE,
L.L.C.
KENNETH H. LABORDE
Texas State Bar No. 11786070
klaborde@glllaw.com
DANIEL G. RAUH
drauh@glllaw.com
Louisiana State Bar No. 27280
16
(Pro Hac Vice)
CHARLOTTE A. FIELDS
cfields@glllaw.com
Texas State Bar No. 24032175
Gieger, Laborde & Laperouse,
1177 West Loop South, Suite 750
Houston, Texas 77027
Telephone: (832) 255-6000
Facsimile: (832) 255-6001
COUNSEL FOR DEFENDANT
DYNAMIC OFFSHORE RESOURCES NS,
- AND-
JOHNSON DELUCA KURISKY &
GOULD
A Professional Corporation
BRADLEY L. DELUCA
bdeluca@jdkglaw.com
Texas Bar No. 05653800
BRIGID D. ASHCRAFT
bashcraft@jdkglaw.com
Texas Bar No. 09193167
4 Houston Center
1221 Lamar, Suite 1000
Houston, Texas 77010
(713) 652-2525 – Telephone
(713) 652-5130 – Facsimile
COUNSEL FOR DEFENDANT
W&T OFFSHORE, INC., successor by
merger of OFFSHORE SHELF, L.L.C.
17
CERTIFICATE OF COMPLIANCE
As required by Rule 9.4, Texas Rules of Appellate Procedure, the
undersigned certifies that this brief contains 3814 words, exclusive of the portions
described in Rule 9.4(i)(1).
/s/ Kenneth H. Laborde
Kenneth H. Laborde
/s/ Bradley L. DeLuca
Bradley L. DeLuca
CERTIFICATE OF SERVICE
I hereby certify that on April 13, 2015, the Reply Brief of Cross-Appellants
Dynamic Offshore Resources NS and W&T Offshore, Inc. Successor By Merger of
Offshore Shelf was electronically filed with the Clerk of Court for The First Court
of Appeals by using the EFSP-EFM System. Participants in this case who are
registered EFSP-EFM System users will be served electronically by the EFSP-
EFM System. Other participants will be served by e-mail in accordance with TEX.
R. APP. P. 9.5(e).
KB BATTAGLINI
Texas State Bar No. 01918060
kbattaglini@strongpipkin.com
JOHN G. BISSELL
Texas State Bar No. 02356000
jbissell@strongpipkin.com
Strong Pipkin Bissell & Ledyard, L.L.P.
4900 Woodway Drive, Suite 1200
Houston, Texas 77056
Telephone: (713) 651-1900
Facsimile: (713) 651-1920
Counsel for Plaintiffs/Appellants Republic Petroleum, and Republic
Petroleum Partners, L.P.
18
KENNETH H. LABORDE
Texas State Bar No. 11786070
klaborde@glllaw.com
DANIEL G. RAUH
Louisiana State Bar No. 27280 (PHV)
drauh@glllaw.com
CHARLOTTE A. FIELDS
Texas State Bar No. 24032175
cfields@glllaw.com
Gieger, Laborde & Laperouse,
1177 West Loop South, Suite 750
Houston, Texas 77027
Telephone: (832) 255-6000
Facsimile: (832) 255-6001
Counsel for Defendant/Cross-Appellant Dynamic Offshore Resources
NS
/s/ Kenneth H. Laborde
Kenneth H. Laborde
JOHNSON DELUCA KURISKY &
GOULD
A Professional Corporation
BRADLEY L. DELUCA
bdeluca@jdkglaw.com
Texas Bar No. 05653800
BRIGID D. ASHCRAFT
bashcraft@jdkglaw.com
Texas Bar No. 09193167
4 Houston Center
1221 Lamar, Suite 1000
Houston, Texas 77010
(713) 652-2525 – Telephone
(713) 652-5130 – Facsimile
Counsel for Defendant W&T Offshore, Inc., Successor by Merger of
Offshore Shelf, L.L.C.
/s/ Bradley L. DeLuca
Bradley L. DeLuca
19
L. Pipeline Ownership in Segment#17167 (OC8-G 28359):
WI
Rooster Oil & Gas, LLC 23.00000%
PROBE HIGH ISLAND ll5 LID. 18.54486%
PROBE RESOURCES US LID. 30.95514%
Republic Petroleum Partners, LP 19.10000%
Sierra Pine Resources International, Inc. 00.62500%
DBL Oil & Gas, LLC 00.62500%
100.00000%
ID. The Operator for the Lease shall be:
Rooster Petroleum, LLC
IV. Notification addresses and titles of the designed representatives are as follows:
Republic Petroleum, LLC Blue Dolphin Petroleum Company
2425 West Loop South, Suite. 200 801 Travis, Suite 2100
Houston, Texas 77027 Houston, Texas 77002
Attn: Scott Stanford Attn: Ivar Siem
Telephone: (713) 297-9180 Telephone: (713) 568-4730
Fax: (713) 297-8864 Fax: (713) 227-7626
Email: sstanford@•:omcast.net Email: ivar.siem@blue-dolphin.com
Sierra Pine Resou.rces International, Inc. PROBE RESOURCES US LTD.
110 Cypress Station Drive, #155 24 Waterway, Suite 1450
Houston, Texas 77090 · The Woodtimds, Texas 77380
Attn: Bruce Ganer Attn: Roger B. Souders
Telephone: (713) :197-8864 Telephone: (281) 210-1173
Fax: (713) 297-8864 Fax: (281) 210-1193
Email: BLGaner@aol.com Email:rsouders@probe-resources.com
PROBEIDGHlSLAND 115 LTD. Republic Petroleum Partners, LP
24 Waterway, Suite 1450 2425 West Loop South, Suite 200
The Woodlands, Texas 77380 Housto~ Texas 77027
Attn: Roger B. Souders Attn: Scott Stanford
Telephone: (281) 210- II 73 Telephone: (713) 297-9180
Fax: (281)210-1193 Fax: (713) 297-8864
Email: rsouders@probe-resources.com Email: ssstanford@comca.st.net
Rooster Oil & Gas, LLC Rooster Petroleum, LLC
16285 Park Ten Place, Suite 120 16285 Park Ten Place, Suite 120
Houston, Texas 77084 Houston, Texas 77084
Attn: Kenneth F. Tamp lain, Jr. Attn; Kenneth F. Tamplain, Jr.
Telephone: (713) 574-7558 Telephone: (713) 574-7558
Fax: (832) 772-6314 Fax: (832) 772-6314
Email: ktamplain@roosternetroleum.com Email: ktamplain@roostemetroleum.com
DBL Oil & Gas, LLC
8427 E. Copper Village Dr.
Houston, Texas 77095
Attn: Tod Dan:ey
Telephone: (281) 728-8894
Email: tdarcey@darceyoifandgas.com
V, Permitted Encumbrances:
A. A I% of 8/Sths overriding royalty interest in favor of Leopard Energy and
Trading, Inc. (Leopard ORR!), specifically limited to production from the High
Island 115, B-1 STI completion in the Lower Cris R Forn1ation found at a depth
of !6,862' measured depth, only per the Bonding Support Agreement dated
August 11, 2006 by and between Republic Petroleum, LLC and Leopard Energy
and Trading, Inc. (This burden affects all parties llllder this Operating
Agreement).
ffi 115 Exhibit ,.A" to Second Amendment to OOA
Page 4
DEFENDANTS' TRIAL EXHIBIT
0915-0094
Genender v. USA Store Fixtures, LLC, 451 S.W.3d 916 (2014)
[7]
settlement negotiations between buyer and seller did
451 S.W.3d 916 not constitute “presentment”;
Court of Appeals of Texas,
Houston (14th Dist. [8]
affidavit of seller’s attorney filed after jury reached
verdict was not evidence of presentment; and
Jamie Genender and Critter Stuff, LLC, Appellants
v. [9] once jury returned verdict on claim for breach of
USA Store Fixtures, LLC, Appellee contract, trial court should not have reopened record to
allow evidence on disputed issue of presentment.
NO. 14–14–00048–CV | Opinion filed December 23,
2014.
Affirmed as modified.
Synopsis
Background: Seller filed petition against buyer and
buyer’s owner, arising out of reversal of charge on
West Headnotes (19)
buyer’s credit card for payment of used shelving
purchased from seller. The Justice Court entered
take-nothing judgment against seller, and seller appealed. [1]
Justices of the Peace
Following trial de novo, the County Court at Law No. 1,
Evidence
Harris County, awarded seller damages in amount of
$2,303.42, and attorney fees in amount of $38,000 for
Seller of used shelving was presumed to have
trial, $20,000 for appeal to Court of Appeals, and $20,000
orally pleaded claim for breach of contract
for appeal to Supreme Court. Buyer and owner appealed.
against buyer in justice court and, thus, county
court had subject matter jurisdiction over claim
in de novo trial; seller filed petitions in justice
Holdings: The Court of Appeals, Sharon McCally, J., court against buyer and buyer’s owner asserting
held that: that defendants were legally indebted to it and
that seller reserved right to plead further orally
[1]
county court had subject matter jurisdiction over claim upon trial of matter, and buyer did not rebut
for breach of contract; presumption of oral pleading. Tex. R. Civ. P.
525 (Repealed).
[2]
evidence supported jury’s finding that defendants
breached contract to purchase shelving;
Cases that cite this headnote
[3]
seller’s written “quote” to buyer was not evidence of
seller’s “presentment” to buyer of demand for payment on
contract, as prerequisite to seller’s right to recover
attorney fees on claim; [2]
Justices of the Peace
[4] Evidence
notification to seller of reversal of charge on buyer’s
credit card that was used to purchase shelving was not The presumption that a claim was orally pleaded
“presentment”; in the justice court, for the purposes of
[5] determining whether the county court has
documents from seller’s merchant account provider subject matter jurisdiction over the claim upon a
reflecting communications between provider, buyer, and trial de novo, is rebuttable. Tex. R. Civ. P. 525
seller did not include presentment of demand for payment (Repealed).
on contract;
[6]
seller’s discovery responses did not constitute Cases that cite this headnote
“presentment” of claim;
© 2015 Thomson Reuters. No claim to original U.S. Government Works. 1
Genender v. USA Store Fixtures, LLC, 451 S.W.3d 916 (2014)
[3]
Justices of the Peace
Evidence
[6]
Costs
The lack of a notation as to an orally pleaded Contracts
claim in the justice court’s docket does not rebut
the presumption of oral pleading, for the No particular form of presentment of a demand
purposes of determining whether the county for performance or payment of a contract, in
court has subject matter jurisdiction over the order to recover attorney fees on a claim for
claim upon trial de novo. Tex. R. Civ. P. 525 breach of contract; however, merely filing suit
(Repealed). for a breach of contract, by itself, does not
constitute “presentment.” Tex. Civ. Prac. &
Rem. Code Ann. § 38.001.
Cases that cite this headnote
Cases that cite this headnote
[4]
Consumer Credit
Credit Cards
[7]
Sales Costs
Excuses for default or delay Form and requisites of application in general
Costs
Evidence supported jury’s finding that buyer Evidence as to items
and buyer’s owner failed to comply with
agreement to purchase used shelving from seller, The claimant bears the burden of both pleading
as required to support seller’s claim for breach and proving presentment of a demand for
of contract, arising out of buyer’s submission of performance or payment on a contract, as a
dispute with credit card company that resulted in prerequisite to the recovery of attorney fees on a
company reversing charge, where buyer agreed claim for breach of contract. Tex. Civ. Prac. &
to purchase shelves, accepted shelves, and then Rem. Code Ann. § 38.001.
refused to pay for shelves, and fact that credit
card company reversed charge had no bearing
on buyer’s legal obligation to pay for shelves. Cases that cite this headnote
Tex. Bus. & C. Code § 2.607(a).
Cases that cite this headnote [8]
Costs
Contracts
The purpose of the presentment requirement is
[5] to allow the party against whom the claim for
Costs
Contracts breach of contract is asserted an opportunity to
pay it or tender performance within 30 days
“Presentment,” as a prerequisite to an award of after they have notice of the claim without
attorney fees on a claim for breach of contract, incurring an obligation for attorney’s fees. Tex.
is a demand or request for payment or Civ. Prac. & Rem. Code Ann. § 38.001.
performance of a contract, whether written or
oral. Tex. Civ. Prac. & Rem. Code Ann. §
38.001. Cases that cite this headnote
Cases that cite this headnote
© 2015 Thomson Reuters. No claim to original U.S. Government Works. 2
Genender v. USA Store Fixtures, LLC, 451 S.W.3d 916 (2014)
[9]
Costs charge, where quote was prepared several weeks
Duties and proceedings of taxing officer before buyer agreed to purchase any shelving,
before any contract was formed, and quote did
Generally, presentment of a claim for breach of not reflect parties’ actual agreement as to
contract, as a prerequisite to the recovery of amount of shelving and cost of shipping. Tex.
attorney fees on the claim, is an issue of fact. Civ. Prac. & Rem. Code Ann. § 38.001.
Tex. Civ. Prac. & Rem. Code Ann. § 38.001.
Cases that cite this headnote
Cases that cite this headnote
[13]
Costs
[10]
Costs Evidence as to items
Duties and proceedings of taxing officer
Evidence that the plaintiff sent an invoice to the
When the issue of the amount of attorney’s fees defendant can satisfy a plaintiff’s burden to
is found by the jury without a request for a jury prove presentment of a demand for performance
finding on the issue of presentment of demand or payment on a contract, as a prerequisite to an
for payment or performance of the contract to award of attorney fees on a claim for breach of
the defendant, presentment is deemed found. contract. Tex. Civ. Prac. & Rem. Code Ann. §
Tex. Civ. Prac. & Rem. Code Ann. § 38.001; 38.001.
Tex. R. Civ. P. 279.
Cases that cite this headnote
Cases that cite this headnote
[14]
Costs
[11]
Appeal and Error Vendor and purchaser; sales
Allowance or disallowance of costs and fees
Notification to seller of reversal of charge on
An award of attorney’s fees on a claim for buyer’s credit card that was used to purchase
breach of contract must be reversed if there is no used shelves from seller was not “presentment”
evidence of presentment of the demand for by seller of demand to buyer for payment on
payment or performance of the contract. Tex. contract to purchase shelves, as prerequisite to
Civ. Prac. & Rem. Code Ann. § 38.001. seller’s right to recover attorney fees on claim
for breach of contract. Tex. Civ. Prac. & Rem.
Code Ann. § 38.001.
Cases that cite this headnote
Cases that cite this headnote
[12]
Costs
Vendor and purchaser; sales
[15]
Costs
Seller’s written “quote” to buyer on price for Vendor and purchaser; sales
used shelving was not evidence of seller’s
“presentment” to buyer of demand for payment Documents from seller’s merchant account
on contract, as prerequisite to seller’s right to provider reflecting communications between
recover attorney fees on claim after buyer provider, buyer, and seller contained no demand
disputed charge for shelves on credit card with by seller for payment on contract to purchase
credit card company, resulting in reversal of used shelving, and thus, did not constitute
© 2015 Thomson Reuters. No claim to original U.S. Government Works. 3
Genender v. USA Store Fixtures, LLC, 451 S.W.3d 916 (2014)
“presentment” of claim, as prerequisite to the purpose of the presentment requirement to
seller’s right to recover attorney fees on claim provide the defendant with the opportunity, by
against buyer for breach of contract. Tex. Civ. undertaking specific action, to avoid paying
Prac. & Rem. Code Ann. § 38.001. attorney’s fees. Tex. Civ. Prac. & Rem. Code
Ann. § 38.001.
Cases that cite this headnote
Cases that cite this headnote
[16]
Costs
[19]
Vendor and purchaser; sales Judgment
Basing motion on records of case
Seller’s discovery responses did not constitute
demand for payment on contract to purchase On used shelving buyer’s motion to disregard
used shelving from seller, and thus, did not jury’s finding on issue of attorney’s fees and
constitute “presentment” of claim, as buyer’s amended motion for judgment
prerequisite to recovering award of attorney fees notwithstanding verdict (JNOV), in seller’s
on a claim for breach of contract against buyer. breach of contract action, trial court improperly
Tex. Civ. Prac. & Rem. Code Ann. § 38.001. reopened evidence on a controverted matter
when it considered affidavit submitted by
seller’s attorney averring that he made demand
Cases that cite this headnote for payment of invoice for shelving purchased
by buyer to buyer’s counsel, where affidavit was
filed after jury reached verdict, and motions and
the affidavit concerned parties’ dispute as to
[17] whether seller had made presentment of its
Costs breach of contract claim, which was prerequisite
Vendor and purchaser; sales to recovering attorney fees. Tex. Civ. Prac. &
Rem. Code Ann. § 38.001; Tex. R. Civ. P. 270.
Settlement negotiations between buyer and
seller of used shelving with respect to buyer’s
failure to pay for shelving did not constitute Cases that cite this headnote
“presentment” of demand for payment on
contract, as prerequisite to seller’s right to
recover attorney fees on claim for breach of
contract. Tex. Civ. Prac. & Rem. Code Ann. §
38.001.
*919 On Appeal from the County Civil Court at Law No.
1, Harris County, Texas, Trial Court Cause No. 1016718.
Cases that cite this headnote Debra I. Mayfield, Judge.
Attorneys and Law Firms
Cameron Weir, Jan Woodward Fox, Houston, TX, for
[18]
Costs Appellants.
Contracts
Jerrad D. Bloome, Houston, TX, for Appellee.
Evidence that the parties to a contract
participated in settlement negotiations, without Panel consists of Justices McCally, Brown, and Wise.
more, is no evidence of “presentment” of a
demand for payment or performance on the
contract, as a prerequisite to the non-breaching
party’s right to recover attorney fees on a claim
for breach of contract, because it does not satisfy
© 2015 Thomson Reuters. No claim to original U.S. Government Works. 4
Genender v. USA Store Fixtures, LLC, 451 S.W.3d 916 (2014)
OPINION Store Fixtures did not fail to comply with the agreement,
Store Fixtures suffered damages of $2,303.42, and Store
Fixtures’ reasonable and necessary attorney’s fees were
Sharon McCally, Justice $38,000 for preparation and trial, $20,000 for an appeal to
the court of appeals, and $20,000 for an appeal to the
Appellee USA Store Fixtures, LLC sued appellants Jamie Supreme Court of Texas. The county court signed a final
Genender and her business Critter Stuff, LLC in justice judgment consistent with the jury’s verdict. This appeal
court after Genender successfully obtained a chargeback followed.
on her credit card related to her purchase of $2,303.42 in
used shelving from Store Fixtures. Store Fixtures
appealed a take-nothing judgment from the justice court
to the county court, which held a trial de novo. A jury
awarded Store Fixtures damages of $2,303.42 and II. SUBJECT MATTER JURISDICTION
attorney’s fees of $38,000 for trial, $20,000 for an appeal
to the court of appeals, and $20,000 for an appeal to the In their first issue, appellants contend the county court’s
Supreme Court of Texas. In three issues, appellants judgment is void because the county court lacked subject
contend the county court lacked jurisdiction over Store matter jurisdiction over the only claim and basis for
Fixtures’ breach of contract claim, the evidence is legally attorney’s fees supporting the judgment. Appellants argue
insufficient, and Store Fixtures is not entitled to attorney’s that Store Fixtures did not plead a breach of contract
fees because it failed to plead and prove presentment of claim in the justice court, and Store Fixtures’ contract
its claim. claim was a “new ground of recovery” pleaded for the
first time on appeal to the county court. See Tex.R. Civ. P.
We hold that the trial court had jurisdiction over Store 574a, 50 Tex. B.J. 868 (1987, repealed 2013) (on appeal
Fixtures’ breach of contract claim and the evidence is from justice court, “no new ground of recovery shall be
legally sufficient to support the jury’s finding on that set up by the plaintiff”).
claim, but Store Fixtures failed to prove presentment.
Accordingly, we modify the trial court’s judgment to Store Fixtures contends that it pleaded a breach of
delete the award of attorney’s fees and affirm the trial contract claim in the justice court because Store Fixtures
court’s judgment as modified. reserved the right to plead orally and, at the justice court
trial, Store Fixtures “sought to recover the total invoice
amount under the theory that Genender and Critter Stuff
had breached the contract by not paying for the shelving.”
I. BACKGROUND First we will review the relevant proceedings and
evidence in the record. Then we overrule appellant’s issue
Using a credit card, Genender purchased some used because appellants failed to rebut the presumption that
shelving from Store Fixtures for Genender’s business. Store Fixtures orally pleaded its breach of contract claim
Store Fixtures shipped the shelving to Genender in in the justice court.
Wisconsin. But she was disappointed with the quantity
and quality of the shelving she received and with Store
Fixtures’ response to her concerns, so she filed a dispute
with her credit card company that resulted in a A. Background and Evidence
chargeback to Store Fixtures. Store Fixtures sued Store Fixtures, acting through its president,1 filed two
appellants in justice court; all parties were pro se. After a petitions in justice court. The petition naming Genender
bench trial, the justice court signed a take-nothing as a defendant alleged as follows:
judgment in appellants’ favor, and Store Fixtures
appealed to the county court. The parties hired attorneys That the defendant is legally
and ultimately proceeded to a de novo jury trial with each indebted to the plaintiff in the sum
side asserting claims for breach of contract and attorney’s of $10,000.00 based upon the
fees. following facts: Defendant, Jaimie
Michele Genender, purposefully
The only issues submitted to the jury were whether any intended to defraud USA Store
party failed to comply with the agreement, and if so, the Fixtures LLC from financial gain
amounts of damages and attorney’s fees. The jury found by refusing payment on her credit
that appellants failed to comply with *920 the agreement, card. Defendant also acted outside
© 2015 Thomson Reuters. No claim to original U.S. Government Works. 5
Genender v. USA Store Fixtures, LLC, 451 S.W.3d 916 (2014)
of her title and personally defamed 2013). Store Fixtures alleged dismissal was the proper
and slandered this company in remedy because the county court lacked subject matter
writing. Invoice $2,303.42 damages jurisdiction over appellants’ newly pleaded
for slander $7,697.58. counterclaims.2 Appellants responded that severance was
the proper remedy3 and also requested severance of Store
The petition naming Critter Stuff as a defendant alleged Fixtures’ newly pleaded claims of breach of contract,
as follows: quantum meruit, fraudulent inducement, and negligent
misrepresentation. The county court granted partial relief
That the defendant is legally to both sides, ordering severance of Store Fixtures’
indebted to the plaintiff in the sum negligent misrepresentation claim and appellants’ DTPA
of $10,000.00 based upon the claim. At the de novo trial, only the contract claims were
following facts: Defendant, Jamie tried, along with the amounts of attorney’s fees.
Michele Genender, purposefully
intended to defraud USA Store
Fixtures LLC from financial gain
by refusing payment on her credit B. Analysis
[1]
card. Defendant also slandered and Regardless of whether Store Fixtures alleged a breach
defamed this company in writing. of contract claim in its written petitions in justice court,
Invoice amount $2,303.42 plus the law recognizes a presumption that Store Fixtures
damages for slander and orally pleaded its breach of contract claim in justice court.
defamation. See Gordon v. Zoes, 125 S.W.2d 1049, 1049–50
(Tex.Civ.App.—Galveston 1939, no writ) (holding that
Both petitions stated, “THAT plaintiff reserves the right the county court’s judgment was not void based on an
to plead further orally upon trail [sic] of this matter.” See allegation that the plaintiff brought a new cause of action
Tex.R. Civ. P. 525, 3 Tex. B.J. 607 (1940, repealed 2013) not pleaded in justice court; “While plaintiff filed certain
(in justice court, “[t]he pleadings shall be oral, except written pleadings in the justice court, he expressly
where otherwise specially provided”). reserved the right in said pleadings to plead orally on the
trial of the case. It is uniformly held in this State that in
After Store Fixtures appealed to the county court and cases originating in the justice court, pleadings may be
retained counsel, it filed an amended petition asserting either oral or written, or partly oral and partly written. In
claims for *921 breach of contract, negligent the absence of a showing to the contrary, it will be
misrepresentation, fraud, fraud in the inducement, and presumed that said written pleadings were supplemented
quantum meruit. Store Fixtures also sought attorney’s by such oral amendments as cured any defects therein,
fees. Appellants filed counterclaims for breach of contract and that such pleadings as amended supported the
and violations of the Deceptive Trade judgment rendered by the trial court.”); Garcia v. Rendon,
Practices—Consumer Protection Act (DTPA), Tex. Bus. 59 S.W.2d 881, 881 (Tex.Civ.App.—San Antonio 1933,
& Com.Code Ann. subch. E. Appellants also sought no writ) (“If the oral plea made by appellee was not
attorney’s fees. pleaded in the justice’s court, appellant should have
shown it. The mere fact that the justice of the peace did
Store Fixtures filed a plea to the jurisdiction and motion not note the oral pleadings *922 did not prove that they
to dismiss all of appellants’ counterclaims under former were not made.”).4 This presumption exists because the
Rule 574a. The rule provided, rules specifically require oral pleadings in the justice
court. See Tex.R. Civ. P. 525, 3 Tex. B.J. 607 (1940,
repealed 2013) (“The pleadings shall be oral ...”).5
Either party may plead any new
matter in the county or district [2]
The presumption is rebuttable. See Gordon, 125 S.W.2d
court which was not presented in
at 1049–50; Garcia, 59 S.W.2d at 881. For example, a
the court below, but no new ground
statement regarding the oral pleadings may be noted on
of recovery shall be set up by the
the justice court’s docket. See Tex.R. Civ. P. 525, 3 Tex.
plaintiff, nor shall any set-off or
B.J. 607 (1940, repealed 2013) (“The pleadings shall be
counterclaim be set up by the
oral ... but a brief statement thereof may be noted on the
defendant which was not pleaded in
docket ....”); see also Subcomm. on Interpretation of
the court below.
Rules of Civil Procedure, State Bar of Tex., Op. 27–a, 5
B.J. 287 (1942) (noting that this statement may be
Tex. R Civ. P. 574a, 50 Tex. B.J. 868 (1987, repealed necessary because “it may become important to show
© 2015 Thomson Reuters. No claim to original U.S. Government Works. 6
Genender v. USA Store Fixtures, LLC, 451 S.W.3d 916 (2014)
what the old pleadings were with ... contentions that a suggest that in general (or under any specific
new cause of action has been set up for the first time in circumstances), a buyer has not breached a sale-of-goods
the county court”). contract as a matter of law when a credit card company
reverses a charge in favor of the buyer at the buyer’s
[3]
The record here contains no such notation, but the lack request. In fact, there is authority that a party’s obtaining
of a notation does not rebut the presumption of oral a credit card chargeback does not erase liability for
pleading. See Gordon, 125 S.W.2d at 1049–50; Garcia, obligations owed. See CSL Prop. Mgmt. Co. v.
59 S.W.2d at 881; Amarillo Commercial, 140 S.W. at Thyssenkrupp Elevator Co., No. 01–11–00665–CV, 2013
378. Nor does the record contain any evidence that Store WL 396252, at *2, *6 (Tex.App.—Houston [1st Dist.]
Fixtures did not orally plead a breach of contract claim in Jan. 31, 2013, no pet.) (mem.op.) (upholding summary
the justice court.6 Because appellants did not rebut the judgment for the plaintiff on its indemnity claim where
presumption of oral pleading, we presume that Store the factual basis for part of the claim was the defendant’s
Fixtures orally pleaded a breach of contract claim in the failure to indemnify an amount reversed by a third party’s
justice court, and therefore, the claim was not a new credit card company). Defendant’s Exhibit No. 3 does not
ground of recovery in the county court. conclusively establish that the parties agreed to resolve
disputes solely under their credit card companies’
Appellants’ first issue is overruled. chargeback policies. To the extent there was an
ambiguity, the jury resolved it in favor of Store Fixtures.
See Reilly v. Rangers Mgmt., Inc., 727 S.W.2d 527, 529
(Tex.1987) (ambiguity in contract creates question of fact
for jury).9
III. SUFFICIENCY OF THE EVIDENCE
[4] Store Fixtures adduced evidence that it sent appellants the
Appellants’ second issue is that “there is legally shelving Genender ordered, that appellants accepted the
insufficient evidence that Jamie Genender or Critter Stuff shelving, and that Genender initiated a chargeback on her
breached any contractual duty to USA Store Fixtures.” credit card, resulting in appellants’ failures to pay for the
Appellants argue that there is no evidence to support the goods accepted.10 A buyer’s failure to *924 pay the
jury’s “yes” answer for each appellant in Jury Question contract rate for goods accepted constitutes a breach of
No. 1, which asked, “Did Jamie Genender and/or Critter contract. See Tex. Bus. & Com.Code Ann. 2.607(a); see
Stuff fail to comply with the agreement?” Thus, also Garden Ridge, L.P. v. Advance Int’l, Inc., 403
appellants challenge the “breach” element of Store S.W.3d 432, 445 (Tex.App.—Houston [14th Dist.] 2013,
Fixtures’ claim and contend that the claim “must be based pet. denied) (proper to instruct the jury about what
entirely upon Genender’s action in submitting a dispute of constitutes acceptance of goods and about “the UCC’s
the transaction *923 through the chargeback process provision that the buyer must pay the contract rate for
established by her credit card company.” goods it accepts”).11 Accordingly, the evidence is legally
sufficient to support the jury’s affirmative answer to Jury
Appellants contend that their “promise to pay was Question No. 1.
stipulated upon compliance with the Cardholder
Agreement” because when Store Fixtures charged Appellants’ second issue is overruled.
Genender’s credit card, Store Fixtures sent her an
unsigned receipt (Defendant’s Exhibit No. 3), which
states, “I agree to pay above total amount according to
card issuer agreement. (Merchant Agreement if Credit
Voucher).”7 So, because it is undisputed that Store IV. PRESENTMENT
Fixtures lost the credit card dispute due to its “failure to
comply” with its merchant account agreement, appellants In their third issue, appellants contend “the county court
claim they could not possibly have breached the contract erred in submitting to the jury and entering judgment on
for the sale of the shelving.8 [Store Fixtures’] attorney’s fee award because there are
no pleadings or legally or factually sufficient evidence of
Store Fixtures contends that there is evidence of timely presentment.” We agree with appellants that there
appellants’ breach because they agreed to purchase goods, is no evidence to support an implied finding that Store
accepted the goods, and ultimately did not pay for the Fixtures presented its claim.
goods. We agree with Store Fixtures.
[5] [6]
To recover attorney’s fees for a breach of contract
We find no authority, and appellants have cited none, to claim under Section 38.001 of the Texas Civil Practice
© 2015 Thomson Reuters. No claim to original U.S. Government Works. 7
Genender v. USA Store Fixtures, LLC, 451 S.W.3d 916 (2014)
and Remedies Code, Texas Rules of Civil Procedure operates so presentment is
deemed found. See Adams v. Petrade Int’l, Inc., 754
(1) the claimant must be represented by an attorney; S.W.2d 696, 720 (Tex.App.—Houston [1st Dist.] 1988,
writ denied) (deemed finding on presentment); Atkin v.
(2) the claimant must present the claim to the opposing Cobb, 663 S.W.2d 48, 53 (Tex.App.—San Antonio 1983,
party or to a duly authorized agent of the opposing writ dism’d) (same). Appellants now challenge the
party; and sufficiency of the evidence to support the deemed finding.
See Serv. Corp. Int’l v. Guerra, 348 S.W.3d 221, 228–29
(3) payment for the just amount owed must not have (Tex.2011) (deemed findings may be reviewed for
been tendered before the expiration of the 30th day sufficiency of the evidence); see also Adams, 754 S.W.2d
after the claim is presented. at 720 (legally sufficient evidence supported deemed
finding on presentment).14
Tex. Civ. Prac. & Rem.Code Ann. § 38.002. Presentment
is a “demand or request for payment or performance,
Store Fixtures contends that it proved presentment in a
whether written or oral.” Gibson v. Cuellar, 440 S.W.3d
number of ways: (1) by sending appellants an invoice; (2)
150, 157 (Tex.App.—Houston [14th Dist.] 2013, no pet.)
by making a demand for payment during the credit card
(citing Jones v. Kelley, 614 S.W.2d 95, 100 (Tex.1981)).
dispute; (3) by providing appellants discovery responses
No particular form of presentment is required. Id.
showing a claim for breach of contract; and (4) by
However, merely filing suit for a breach of contract, by
engaging in settlement negotiations and orally making a
itself, does not constitute presentment. See Huff v. Fid.
demand for payment during those negotiations. We
Union Life Ins. Co., 158 Tex. 433,312 S.W.2d 493, 500
address each contention in turn.
(1958) (addressing predecessor statute).12
[7] [8]
The claimant bears the burden of both pleading and
proving presentment. See, e.g., Gibson, 440 S.W.3d at A. Invoice
157 (citing Ellis v. Waldrop, 656 S.W.2d 902, 905 [12] [13]
Store Fixtures contends that Genender admitted to
(Tex.1983)). “The purpose of the presentment receiving an invoice *926 as well as having the credit
requirement is to allow the party against whom the claim card charge reversed, “thus constituting non-payment of
is asserted an opportunity to pay it or tender performance the invoice.” Evidence that the plaintiff sent an invoice to
within 30 days after they have notice of the claim without the defendant can satisfy a plaintiff’s burden to prove
incurring an obligation for attorney’s fees.” Id. (citing presentment. See Gordon v. Leasman, 365 S.W.3d 109,
Jones, 614 S.W.2d at 100).13 116 (Tex.App.—Houston [1st Dist.] 2011, no pet.);
[9] Roylex, Inc., 559 S.W.2d at 838. But Store Fixtures cites
Generally, presentment is an issue of fact. See id. at 157 to Plaintiff’s Exhibit No. 1, which is not an “invoice” but
n.7 (trial court’s *925 finding of presentment was a rather a “quote” dated April 18, 2011. It is undisputed that
finding of fact, not a conclusion of law); see also France this quote was prepared several weeks before appellants
v. Am. Indem. Co., 648 S.W.2d 283, 286 (Tex.1983) (trial agreed to purchase any shelving—before any contract was
court erred to conclude that the plaintiff was not entitled formed—and it did not reflect the parties’ actual
to attorney’s fees when there was some evidence of agreement as to the amount of shelving and cost of
presentment; “At the very least, a fact issue was raised shipping.
here as to presentment.”); cf. Roylex, Inc. v. Avco Cmty.
Developers, Inc., 559 S.W.2d 833, 838 Because no contract then existed, Store Fixtures had no
(Tex.Civ.App.—Houston [14th Dist.] 1977, no writ) breach of contract claim against appellants, and there was
(“Since the evidence on presentment was conclusive, that no “just amount owed” to Store Fixtures. Accordingly,
issue did not have to be submitted to the jury.”); Turner v. Plaintiff’s Exhibit No. 1 is not evidence of presentment as
Lubbock Cnty. Hosp. Dist., No. 07–96–0272–CV, 1998 a matter of law. See Brainard v. Trinity Universal Ins.
WL 3554, at *5–6 (Tex.App.—Amarillo Jan. 6, 1998, no Co., 216 S.W.3d 809, 817–19 (Tex.2006) (plaintiff’s
pet.) (not designated for publication) (finding reversible demand for underinsured motorist benefits made before a
jury charge error because the issue of presentment court signed a judgment on the motorist’s liability and
“should have been submitted to the jury for damages was not evidence of presentment as a matter of
determination” when the evidence was disputed). law because at the time of the alleged presentment there
[10] [11] was no contractual duty to pay; when there is no
When, as here, the issue of the amount of attorney’s contractual duty to pay, there is no “just amount owed”
fees is found by the jury without a request for a jury under Section 38.002; reasoning that a contract claim
finding on the issue of presentment, Rule 279 of the requires the existence of a duty or obligation that the
© 2015 Thomson Reuters. No claim to original U.S. Government Works. 8
Genender v. USA Store Fixtures, LLC, 451 S.W.3d 916 (2014)
opposing party has failed to meet); cf. McNeil v. BMC Store Fixtures refers to an entry for July 12, 2012: “confer
Software Inc., 306 Fed.Appx. 889, 894 (5th Cir.2009) with opposing counsel re: potential to resolve.” Evidence
(employee’s request that employer promise to pay a bonus that the parties participated in settlement negotiations,
that had not yet accrued was not presentment as a matter without more, is no evidence of presentment. See Border
of law; at the time of the request, there was no “just Gateway, L.L.C. v. Gomez, No. 14–10–01266–CV, 2011
amount owed” and no “claim” to present; request for a WL 4361485, at *9 (Tex.App.—Houston [14th Dist.]
party to meet its future contractual obligations is not a Sept. 20, 2011, no pet.) (mem.op.). Such evidence is
claim for a just amount owed).15 insufficient to prove presentment because it does not
satisfy the purpose of the presentment requirement: to
provide the defendant with “the opportunity, by
undertaking specific action, to avoid paying attorney’s
B. During the Credit Card Dispute fees.” Belew v. Rector, 202 S.W.3d 849, 856–57
Store Fixtures contends that it presented its breach of (Tex.App.— Eastland 2006, no pet.) (evidence that
contract claim by “inform[ing] the credit card company counsel “had some settlement discussions” was
during the credit card dispute that it would seek legal insufficient).
action if the charges were reversed,” and by making a
demand for payment “during the entire dispute.” Store [19]
Next, Store Fixtures refers to an affidavit from its
Fixtures cites Defendant’s Exhibits Nos. 26 and 32. counsel, Jerrad Bloome, where he testified that he made a
demand for payment of the invoice amount to appellants’
[14]
Defendant’s Exhibit No. 26 is a one-page document counsel on July 12, 2012. However, Store Fixtures filed
titled “chargeback notification” apparently sent from this affidavit after the jury had reached a verdict, only in
“merchant services” to Store Fixtures to notify Store response to appellants’ motion to disregard the jury’s
Fixtures of the chargeback and explain what Store answer to Jury Question No. 5 concerning attorney’s fees.
Fixtures could do to contest the chargeback. This Appellants objected to the trial court’s consideration of
document does not show a demand for payment from the affidavit,17 but the trial court overruled the objection.
Store Fixtures.
Although a trial court has discretion to permit additional
[15]
Defendant’s Exhibit No. 32 consists of about ninety evidence to be offered at any time, “in a jury case no
pages of documents from Bank of America Merchant evidence on a controversial matter shall be received after
Services, Store Fixtures’ merchant account provider. the verdict of the jury.” Tex.R. Civ. P. 270. Here, the
Appellants had requested, among other things, any and all issue of presentment was controverted. Appellants had
records reflecting “any communications by Chase, pleaded in their answer that Store Fixtures failed to
Merchant Services, *927 and/or the parties.” We have present its claim, and appellants objected during trial to
reviewed the exhibit. It contains no demand for payment the submission of Jury Question No. 5 because Store
from Store Fixtures. Fixtures had failed to offer any evidence of presentment.
After the jury’s verdict, appellants filed a motion to
disregard the jury’s finding on attorney’s fees and an
amended JNOV on the issue because there was no
C. Discovery Responses evidence of presentment. At the hearing on the
[16]
Store Fixtures contends that it presented its claim by post-verdict motions, after the trial court had overruled
providing appellants “discovery responses,” which appellants’ objection to the affidavit, the trial court
“show[ed] Plaintiff’s claim for breach of contract, the allowed appellants to make a record about the lack of
basis of the claim and it[s] claim for damages.” Store presentment. Counsel for appellants, *928 Jan Fox,
Fixtures does not cite to the record for this assertion nor testified that she had no records of any July 12
describe in any way how a demand for payment was made conversation with Bloome, that it would have been her
through its “discovery response.”16 practice to document such a conversation, and that no
such conversation occurred based on her records. 18
Under these circumstances, the trial court abused its
D. Settlement Negotiations discretion by reopening the evidence on a controverted
[17] [18]
Finally, Store Fixtures contends that it orally matter after dismissing the jury, and the trial court should
presented its claim to appellants’ counsel during have granted appellants’ motion to disregard the jury’s
settlement negotiations. As evidence, Store Fixtures first finding on the issue of attorney’s fees and entered
cites to Plaintiff’s Exhibit No. 6, which consists of judgment accordingly. See Helping Hands Home Care,
copious billing records from Store Fixtures’ lawyers.
© 2015 Thomson Reuters. No claim to original U.S. Government Works. 9
Genender v. USA Store Fixtures, LLC, 451 S.W.3d 916 (2014)
Inc. v. Home Health of Tarrant Cnty., Inc., 393 S.W.3d Appellant’s first and second issues are overruled, but
492, 516–17 (Tex.App.—Dallas 2013, pet. denied) (trial appellants’ third issue is sustained. We modify the trial
court correctly granted JNOV on attorney’s fees and court’s judgment to delete the award of attorney’s
refused to reopen the case for evidence of presentment fees—in particular, the following paragraph:
because “the evidence is insufficient to show Specialties
met the procedural requirements for the award”); see also It is hereby ORDERED that Jamie
Univ. of Tex. at Austin v. Ables, 914 S.W.2d 712, 718 Michele Genender and Critter
(Tex.App.—Austin 1996, no writ) (trial court abused its Stuff, L.L.C., jointly and severally,
discretion under Rule 270 by considering evidence about pay to USA Store Fixtures the
the amount of attorney’s fees after the jury’s verdict; amount of $38,000, representing
rendering take-nothing judgment on attorney’s fees), cited the reasonable and necessary
with approval in Hatfield v. Solomon, 316 S.W.3d 50, 67 attorneys’ fees in this case and a
(Tex.App.—Houston [14th Dist.] 2010, no pet.). contingent award of attorneys’ fees
in the amount of $20,000 if this
Because there was no evidence before the jury to support case is appealed to the Court of
a deemed finding that Store Fixtures presented its claim to Appeals, and $20,000 if this case is
appellants, we sustain appellants’ third issue.19 appealed to the Supreme Court of
Texas.
We affirm the trial court’s judgment as modified.
V. CONCLUSION
Footnotes
1 See Tex. Gov’t Code Ann. 27.031(d) (“A corporation need not be represented by an attorney injustice court.”).
2 See Hatmaker v. Farmers Tex. Cnty. Mut. Ins. Co., No. 14–98–00552–CV, 1999 WL 459788, at *3 (Tex.App.—Houston [14th
Dist.] July 8, 1999, no pet.) (not designated for publication); Kramek v. Stewart, 648 S.W.2d 399, 401–02 (Tex.App.—San
Antonio 1983, no writ); Tex. Co. v. Henderson, 154 S.W.2d 911, 911 (Tex.Civ.App.—El Paso 1941, no writ); Racugno v. Hanovia
Chem. & Mfg. Co., 110 S.W.2d 249, 250 (Tex.Civ.App.—Fort Worth 1937, no writ); see also Neal v. Beck Funeral Home, 131
S.W.2d 778, 780–81 (Tex.Civ.App.—Fort Worth 1939, writ dism’d).
3 See New Wave Props., Inc. v. Wikoff, No. 13–11–00762–CV, 2012 WL 2929623, at *3 (Tex.App.—Corpus Christi July 19, 2012,
no pet.) (mem.op.); Harrill v. A.J.’s Wrecker Servs., Inc., 27 S.W.3d 191, 195 (Tex.App.—Dallas 2000, pet. dism’d w.o.j.); D’Tel
Commc’ns v. Roadway Package Serv., Inc., 987 S.W.2d 213, 214 (Tex.App.—Eastland 1999, no pet.).
4 See also Fort Worth & D.C Ry. Co. v. Brewer, 1 S.W.2d 686, 686 (Tex.Civ.App.—Amarillo 1928, no writ) (“If the record does not
disclose that the written pleadings constituted the whole pleadings, it will be presumed that there were oral pleadings necessary to
support the judgment.”); Amarillo Commercial Co. v. Chicago, R.I. & G. Ry. Co., 140 S.W. 377, 378 (Tex.Civ.App.—Amarillo
1911, no writ) (“[If] no oral pleadings on the part of the plaintiff are noted on the docket, it will be presumed that there was some
oral pleading by plaintiff at the time the account was filed, from which the justice received that information, and which he failed to
note upon the docket.”).
5 Parties have pleaded orally in justice courts since the early days of the Republic, and the practice continued in early statehood.
See, e.g., Act approved Nov. 4, 1837, 2d Cong., R.S., § 1, 1837 Repub. Tex. Laws 14, reprinted in 1 H.P.N. Gammel, The Laws of
Texas 1822–1897, at 1356 (Austin, Gammel Book Co. 1898) (“[A]ll civil proceedings before justices of the peace, shall be had in a
summary manner, and without the formality of a petition in writing....”); Act approved Aug. 13, 1870, 12th Leg., C.S., ch. 65, § 7,
1870 Tex. Gen. Laws 87, 93, reprinted in 6 H.P.N. Gammel, supra, at 261, 267 (“The pleading in a justice’s court shall be
oral....”).
6 In fact, in the first pleading filed in county court—appellants’ answer—appellants pleaded an “affirmative defense of failure of
consideration,” thus indicating that Store Fixtures had previously pleaded a breach of contract claim. At the time, the only written
pleadings Store Fixtures had filed were its justice court petitions.
7 Although some of these words on Defendants’ Exhibit No. 3 appear illegible, Store Fixtures’ does not contest appellants’
interpretation, so we accept as true this factual allegation. See Tex.R.App. P. 38.1(g) ( “In a civil case, the court will accept as true
© 2015 Thomson Reuters. No claim to original U.S. Government Works. 10
Genender v. USA Store Fixtures, LLC, 451 S.W.3d 916 (2014)
the facts stated unless another party contradicts them.”).
8 Appellants suggest this case has
enormous implications for consumers in Texas and across the country [because it] addresses an all-too-common occurrence
but a novel legal question: whether a consumer who properly and successfully disputes a credit card charge pursuant to a
merchant’s agreement with its credit card company may nevertheless be sued by and found liable to that same merchant for
the full disputed amount despite the merchant’s failure to comply with such agreement.
9 Appellants also ask this court to consider several excluded exhibits related to the credit card dispute, including Genender’s
two-page complaint filed with her credit card company and a notification from Store Fixtures’ credit card company that the dispute
was resolved in Genender’s favor. These exhibits do not support appellants’ construction of the contract or remove any ambiguity
about the terms of the contract.
10 There was conflicting evidence about whether appellants accepted the shelving and whether the shelving conformed to the
contract. But the jury resolved this conflicting evidence in Store Fixtures’ favor, finding that appellants failed to comply with the
agreement and Store Fixtures did not fail to comply with the agreement. We must defer to the jury’s resolution of conflicting
evidence. See, e.g., City of Keller v. Wilson, 168 S.W.3d 802, 820–21 (Tex.2005).
11 The jury charge here defines “acceptance” and declares, “A buyer must pay at the contract rate for any goods accepted.”
12 See also Gutierrez v. Wright Lawfirm, PLLC, No. 05–10–00725–CV, 2012 WL 1898950, at *6 (Tex.App.—Dallas Apr. 27, 2012,
no pet.) (mem.op.); Belew v. Rector, 202 S.W.3d 849, 857 (Tex.App.—Eastland 2006, no pet.); Harrison v. Gemdrill Int’l, Inc.,
981 S.W.2d 714, 719 (Tex.App.—Houston [1st Dist.] 1998, pet. denied); Evans Cooperage of Houston, Inc. v. Port Drum Co.,
No. C14–92–00966–CV, 1994 WL 7243, at *4 (Tex.App.—Houston [14th Dist.] Jan. 13, 1994, writ denied) (not designated for
publication); Jim Howe Homes, Inc. v. Rogers, 818 S.W.2d 901, 904 (Tex.App.—Austin 1991, no pet.); Mackey v. Mackey, 721
S.W.2d 575, 579 (Tex.App.—Corpus Christi 1986, no writ).
13 The parties dispute when exactly presentment must be made, and this court appears to have conflicting precedent on the subject.
Compare Caldwell & Hurst v. Myers, 714 S.W.2d 63, 65 (Tex.App.—Houston [14th Dist.] 1986, writ ref’d n.r.e.) (“Proper
presentment is the assertion of a claim and a request for payment made 30 days before initiation of a suit.”), with Peissel v. Peissel,
620 S.W.2d 796, 800 (Tex.Civ.App.—Houston [14th Dist.] 1981, no writ) (“The rule in Texas is presentment of the claim must be
made at least 30 days before trial, even if made after the suit is filed.”), and Cano v. Nino’s Paint & Body Shop, No.
14–08–00033–CV, 2009 WL 1057622, at *7 (Tex.App.—Houston [14th Dist.] Apr. 16, 2009, no pet.) (mem.op.) (“Presentment
may be made either before or after filing suit, provided it is made at least 30 days before judgment.”). Because we hold that Store
Fixtures failed to prove presentment under the latest timeframe possible—30 days before judgment—we need not resolve when
presentment must be made.
14 An award of attorney’s fees must be reversed if there is no evidence of presentment. See Helping Hands Home Care, Inc. v. Home
Health of Tarrant Cnty., Inc., 393 S.W.3d 492, 516–17 (Tex.App.—Dallas 2013, pet. denied) (trial court correctly granted JNOV
denying attorney’s fees because there was no evidence of presentment); Border Gateway, L.L.C. v. Gomez, No. 14–10–01266–CV,
2011 WL 4361485 (Tex.App.—Houston [14th Dist.] Sept. 20, 2011, no pet.) (mem.op.) (trial court abused its discretion in a bench
trial by awarding attorney’s fees because there was “no evidence” of presentment); Edinburg Meat Prods. Co. v. Vernon Co., 535
S.W.2d 432, 437 (Tex.Civ.App.—Corpus Christi 1976, no writ) (sustaining “no evidence” point on presentment issue).
15 Although not cited by Store Fixtures on appeal, Plaintiff’s Exhibit No. 3 is an “invoice” contained in this the record. It is dated
May 3, 2011, the date that appellants paid for the shelving on Genender’s credit card. But it shows a “Payments/Credits” of the full
amount of the invoice and a “balance due” of $0.00. This does not show a demand for payment on an existing claim for a just
amount owed. Further, we note that Store Fixtures contends that nonpayment occurred when the credit card charge was reversed.
But Store Fixtures’ president testified that Store Fixtures never demanded payment or contacted Genender about a contract claim
before initiating suit in the justice court. There is no evidence that Store Fixtures sent an invoice to appellants showing a balance
owing—no demand for payment.
16 We have reviewed Exhibit C to Store Fixtures’ response to appellants’ motion to disregard the jury’s answer to Jury Question No.
5 regarding attorney’s fees, which is Store Fixtures’ response to appellants’ request for disclosures. The document does not
demand payment of the claim but rather explains the legal theories and factual bases for the claim. Regardless, the trial court would
have abused its discretion by considering the document for the same reasons articulated below in Part IV.D of this opinion
regarding the affidavit.
17 Appellants objected because the affidavit was “an improper and untimely attempt to supplement the record before the jury.”
© 2015 Thomson Reuters. No claim to original U.S. Government Works. 11
Genender v. USA Store Fixtures, LLC, 451 S.W.3d 916 (2014)
18 Although Bloome testified before the jury about the amount of his fees, he did not testify about the alleged July 12 demand.
19 Because we conclude Store Fixtures failed to prove presentment, we do not address appellants’ contention that Store Fixtures
failed to plead presentment. See Tex.R.App. P. 47.1.
End of Document © 2015 Thomson Reuters. No claim to original U.S. Government Works.
© 2015 Thomson Reuters. No claim to original U.S. Government Works. 12
Nauslar v. Coors Brewing Co., 170 S.W.3d 242 (2005)
170 S.W.3d 242
Court of Appeals of Texas, Affirmed in part, reversed in part, and remanded.
Dallas.
Dennis NAUSLAR and Nauslar Investments,
L.L.C., Appellant
v. West Headnotes (34)
COORS BREWING CO. and Golden Distributing
Enterprises, L.P., Appellees.
[1]
Appeal and Error
No. 05–04–00704–CV. | Aug. 19, 2005. Cases Triable in Appellate Court
Because the question of standing is a legal
question, the appellate court reviews de novo a
Synopsis
trial court’s ruling on a plea to the jurisdiction.
Background: Individual, who was sole owner of limited
liability company (LLC) which had been both limited
partner in beer distributorship limited partnership and 3 Cases that cite this headnote
general partner in limited partnership’s general partner,
and the LLC, brought claims, personally and on behalf of
limited partnership, against brewery for breach of contract
and violation of Texas Beer Industry Fair Dealing Law
(BIFDL), and against brewery and its assignee for [2]
Action
conspiracy, negligence per se, and tortious interference, Persons entitled to sue
relating to defendants’ conduct in blocking limited
partnership’s proposed joint venture with another Standing is a component of a court’s
distributor, with brewery eventually approving of sale of subject-matter jurisdiction.
limited partnership to the other distributor. The 193rd
District Court, Dallas County, David Evans, J., granted
defendants’ plea to the jurisdiction, based on lack of 5 Cases that cite this headnote
standing, and denied attorney fee award to brewery under
BIFDL. Cross-appeals were taken.
[3]
Courts
Holdings: The Court of Appeals, Michael J. O’Neill, J., Allegations, pleadings, and affidavits
held that:
The plaintiff has the burden of alleging facts that
[1]
individual plaintiff lacked standing to bring affirmatively demonstrate a court’s
common-law claims; subject-matter jurisdiction to hear a cause.
[2]
LLC lacked standing to bring common-law claims;
1 Cases that cite this headnote
[3]
plaintiffs lacked standing to bring claims under BIFDL;
[4]
BIFDL does not prohibit a beer distributor from
making a warranty of non-assignment of BIFDL claims; [4]
Pleading
[5]
plaintiffs lacked capacity to sue on behalf of limited Plea to the Jurisdiction
partnership; and
A plea to the jurisdiction challenges a trial
[6]
brewery was entitled to prevailing-party attorney fees court’s authority to hear a case by alleging that
under BIFDL. the factual allegations in the plaintiff’s
pleadings, when taken as true, fail to invoke the
© 2015 Thomson Reuters. No claim to original U.S. Government Works. 1
Nauslar v. Coors Brewing Co., 170 S.W.3d 242 (2005)
trial court’s subject-matter jurisdiction. personally aggrieved by the alleged wrong.
1 Cases that cite this headnote 3 Cases that cite this headnote
[5] [9]
Pleading Action
Construction in General Persons entitled to sue
The court construes the allegations in the A person has “standing” to sue if: (1) he has
pleadings in favor of the pleader. sustained, or is immediately in danger of
sustaining, some direct injury as a result of the
wrongful act of which he complains; (2) he has a
Cases that cite this headnote direct relationship between the alleged injury
and claim sought to be adjudicated; (3) he has a
personal stake in the controversy; (4) the
challenged action has caused the plaintiff some
[6] injury in fact, either economic, recreational,
Pleading environmental, or otherwise; or (5) he is an
Amendments following sustaining of pleas appropriate party to assert the public’s interest in
the matter, as well as his own.
When a plaintiff fails to plead facts that
establish subject-matter jurisdiction, but the
petition does not affirmatively demonstrate 14 Cases that cite this headnote
incurable defects in jurisdiction, the issue is one
of pleading sufficiency and the plaintiff should
be afforded the opportunity to amend after
granting of plea to the jurisdiction.
[10]
Action
Persons entitled to sue
1 Cases that cite this headnote
Without a breach of a legal right belonging to
the plaintiff, the plaintiff has no standing to
litigate.
[7]
Pleading
Amendments following sustaining of pleas 5 Cases that cite this headnote
If the pleadings affirmatively negate the
existence of subject-matter jurisdiction, then a
plea to the jurisdiction may be granted without
[11]
allowing the plaintiff an opportunity to amend. Action
Persons entitled to sue
Cases that cite this headnote Only the person whose primary legal right has
been breached may seek redress for an injury.
10 Cases that cite this headnote
[8]
Action
Persons entitled to sue
A person has “standing” to sue when he is
[12]
Action
© 2015 Thomson Reuters. No claim to original U.S. Government Works. 2
Nauslar v. Coors Brewing Co., 170 S.W.3d 242 (2005)
Persons entitled to sue brewery and its assignee for conspiracy,
negligence per se, and tortious interference, so
An individual stakeholder in a legal entity does as to recover, on his own behalf, damages for
not have a right to recover personally for harms injuries to limited partnership that diminished
done to the legal entity. the value of individual’s ownership interest and
affected his prospective employment, with such
claims relating to brewery’s invocation of its
6 Cases that cite this headnote right under its distributorship agreement with
limited partnership to negotiate exclusively to
buy limited partnership, brewery’s subsequent
assignment of that right, and brewery’s and
[13] assignee’s efforts to block the joint venture, with
Action brewery eventually approving of outright sale of
Persons entitled to sue limited partnership to other distributor; right of
recovery for injuries to limited partnership was
Where damage is to the business entity’s worth, limited partnership’s alone.
the individual stakeholder cannot personally
recover, whether the damages sought are in
terms of diminished value of an ownership 6 Cases that cite this headnote
interest or loss of employee benefits.
1 Cases that cite this headnote
[16]
Partnership
Persons entitled to sue;  standing
[14] Limited liability company (LLC), as both former
Partnership limited partner in beer distributorship limited
Partnership or Partners as Plaintiffs partnership and former general partner in limited
partnership’s general partner, lacked standing to
A partner has no individual, separate cause of sue brewery for breach of contract, and to sue
action for losses suffered by reason of tortious brewery and its assignee for conspiracy,
interference with a contract between the negligence per se, and tortious interference, so
partnership and a third party; damages for loss as to recover damages, on behalf of LLC, for
in value of the partnership interest or the injuries to limited partnership that diminished
partner’s employment losses are subsumed in the value of LLC’s ownership interest, with such
the partnership’s causes of action. claims relating to brewery’s conduct, in
response to proposal for joint venture between
5 Cases that cite this headnote limited partnership and another beer distributor,
in invoking its right under its distributorship
agreement with limited partnership to negotiate
exclusively to buy limited partnership,
brewery’s subsequent assignment of that right,
[15]
Partnership and brewery’s and assignee’s efforts to block the
Persons entitled to sue;  standing joint venture, with brewery eventually
approving of outright sale of limited partnership
Individual who was sole owner of limited to other distributor; right of recovery for injuries
liability company (LLC) which had been both to limited partnership was limited partnership’s
limited partner in beer distributorship limited alone, and LLC no longer held ownership
partnership and general partner in limited interest in limited partnership.
partnership’s general partner, and who was also
prospective company manager for proposed
4 Cases that cite this headnote
joint venture between limited partnership and
another beer distributor, lacked standing to sue
brewery for breach of contract, and to sue
© 2015 Thomson Reuters. No claim to original U.S. Government Works. 3
Nauslar v. Coors Brewing Co., 170 S.W.3d 242 (2005)
generally interprets the statute according to its
plain meaning.
[17]
Action
Persons entitled to sue
Cases that cite this headnote
Standing to sue can be predicated upon either
statutory or common-law authority.
[22]
3 Cases that cite this headnote Statutes
Language
The court begins statutory interpretation by
examining the exact wording of the statute and
[18]
Action applying the tenet that the legislature chooses its
Persons entitled to sue words carefully and means what it says.
Common-law rules of standing apply unless
statutory authority for standing exists. 2 Cases that cite this headnote
3 Cases that cite this headnote
[23]
Statutes
Statute as a Whole;  Relation of Parts to
Whole and to One Another
[19]
Appeal and Error
Cases Triable in Appellate Court The court determines legislative intent from the
entire act and not just its isolated portions.
The appellate court reviews matters of statutory
construction de novo.
6 Cases that cite this headnote
Cases that cite this headnote
[24]
Intoxicating Liquors
Judicial review and enforcement
[20]
Statutes
Intent Neither an individual, who was sole owner of
limited liability company (LLC) which had been
In construing a statute, the court’s objective is to both limited partner in beer distributorship
determine and give effect to the legislature’s limited partnership and general partner in
intent. limited partnership’s general partner, nor the
LLC, was the distributor under brewery’s
distributorship agreement with limited
3 Cases that cite this headnote partnership, and thus, individual and LLC
lacked standing to bring action against brewery
under Texas Beer Industry Fair Dealing Law
(BIFDL) for unreasonably withholding approval
[21] of transfer of distributorship interest. V.T.C.A.,
Statutes Alcoholic Beverage Code §§ 102.76(a),
Plain language;  plain, ordinary, common, or 102.79(a).
literal meaning
If a statute’s meaning is unambiguous, the court Cases that cite this headnote
© 2015 Thomson Reuters. No claim to original U.S. Government Works. 4
Nauslar v. Coors Brewing Co., 170 S.W.3d 242 (2005)
liability company (LLC) which had been both
limited partner in beer distributorship limited
partnership and general partner in limited
partnership’s general partner, and the LLC, after
[25]
Intoxicating Liquors sale of limited partnership’s assets to another
Quantity, and sale at retail or wholesale; distributor, without any pre-sale assignment to
regulation of wholesalers in general individual and LLC of limited partnership’s
causes of action against brewery and its
A beer distributor’s representation, in a release, assignee, lacked capacity to sue brewery and its
that it has not assigned its statutory claims under assignee, on behalf of limited partnership, for
the Texas Beer Industry Fair Dealing Law breach of contract, and to sue brewery and its
(BIFDL), if any, to a third party does not violate assignee, on behalf of limited partnership, for
the provision of BIFDL prohibiting agreements conspiracy, negligence per se, and tortious
varying the effect of BIFDL, because BIFDL interference, relating to brewery’s conduct, in
grants a right of action only to distributors or response to proposal for joint venture between
manufacturers who are parties to a limited partnership and other distributor, in
distributorship agreement. V.T.C.A., Alcoholic invoking its right under its distributorship
Beverage Code §§ 102.72(c), 102.79(a). agreement with limited partnership to negotiate
exclusively to buy limited partnership,
brewery’s subsequent assignment of that right,
1 Cases that cite this headnote and brewery’s and assignee’s efforts to block the
joint venture, with brewery eventually
approving of outright sale of limited partnership
to other distributor.
[26]
Action
Persons entitled to sue 3 Cases that cite this headnote
Parties
Capacity and interest in general
A plaintiff must have both standing and capacity
to bring a lawsuit. [29]
Corporations and Business Organizations
Construction, operation, and effect
Corporations and Business Organizations
1 Cases that cite this headnote Assumption of or Succession to Transferor’s
Debts and Liabilities
When a business entity is acquired in its entirety
[27] by another, in the absence of specific terms to
Parties
the contrary, both the liabilities and assets of the
Capacity and interest in general
acquired company are transferred to the
purchaser.
A party has capacity to sue when it has legal
authority to act, regardless of whether it has a
justiciable interest in the controversy. Cases that cite this headnote
Cases that cite this headnote
[30]
Evidence
Pleadings
[28]
Partnership
Individual, who was sole owner of limited
Persons entitled to sue;  standing
liability company (LLC) which had been both
limited partner in beer distributorship limited
Individual, who was sole owner of limited
© 2015 Thomson Reuters. No claim to original U.S. Government Works. 5
Nauslar v. Coors Brewing Co., 170 S.W.3d 242 (2005)
partnership and general partner in limited
partnership’s general partner, and the LLC, by
making assertion of fact, in their petition against
brewery, that brewery had conditioned its
[33]
approval of sale of limited partnership to another Intoxicating Liquors
distributor on limited partnership warranting that Judicial review and enforcement
it had not assigned its claims against brewery to
another party, judicially admitted that individual Prevailing-party attorney fee award is
and LLC had not been assigned legal title to mandatory, in provision of Texas Beer Industry
limited partnership’s causes of action against Fair Dealing Law (BIFDL) stating that
brewery, which admission was relevant to prevailing party “shall” recover reasonable
whether individual and LLC had capacity to sue attorney fees in an action for violation of
brewery on behalf of limited partnership. BIFDL. V.T.C.A., Alcoholic Beverage Code §
102.79(a), (c).
1 Cases that cite this headnote
3 Cases that cite this headnote
[31]
Pleading
[34]
Statement of cause of action in general Intoxicating Liquors
Judicial review and enforcement
A party may plead himself out of court, e.g., the
plaintiff may plead facts which affirmatively Brewery was “prevailing party,” and therefore
negate his cause of action. was entitled to prevailing-party attorney fees
under Texas Beer Industry Fair Dealing Law
(BIFDL), in action brought under BIFDL by
Cases that cite this headnote individual who was sole owner of limited
liability company (LLC) which had been both
limited partner in beer distributorship limited
partnership and general partner in limited
[32]
partnership’s general partner, and by the LLC,
Appeal and Error where the court concluded that individual and
Reversal ineffectual or not beneficial LLC lacked standing to sue under BIFDL.
V.T.C.A., Alcoholic Beverage Code §
Appellate court would not remand to trial court, 102.79(a), (c).
so that individual, who was sole owner of
limited liability company (LLC) which had been
both limited partner in beer distributorship 3 Cases that cite this headnote
limited partnership and general partner in
limited partnership’s general partner, and the
LLC, could plead more specifically a basis for
their capacity to sue brewery on behalf of
limited partnership, for brewery’s interference
with limited partnership’s proposed joint Attorneys and Law Firms
venture, where remand would be futile;
individual and LLC had already in their *246 Martin J. Siegel, Houston, TX, for Appellant.
pleadings affirmatively negated that they owned
Jon P. Christiansen, Michael J. Aprahamian, Foley &
legal title to the causes of action, asserting
Lardner LLP, Milwaukee, WI, Monica Wiseman Latin, J.
instead a legal theory to overcome their lack of
Michael Hughes, Rodney H. Lawson and John Franklin
legal title, which theory the appellate court
Guild, Carrington, Coleman, Sloman & Blumenthal,
rejected.
L.L.P., David Bryant, Diamond, McCarthy, Taylor,
Finley, Bryant & Lee, Sean Joseph McCaffity, Dallas,
2 Cases that cite this headnote TX, for Appellee.
© 2015 Thomson Reuters. No claim to original U.S. Government Works. 6
Nauslar v. Coors Brewing Co., 170 S.W.3d 242 (2005)
Before Justices BRIDGES, O’NEILL, and MAZZANT. rejected the deal. Instead, Coors invoked its right under
the distributorship agreement to negotiate exclusively to
buy Willow. It assigned that exclusive right to Golden
Distributing Enterprises, L.P. (Golden). Over the next
year, according to Plaintiffs, it became clear that Golden
could not feasibly consolidate with or purchase Willow.
OPINION Subsequently, Nauslar approached Miller again, but this
time Miller was interested in only an outright purchase of
Opinion by Justice O’NEILL. Willow. Coors approved an outright sale to Miller. Coors,
relying on a clause in the distributorship agreement,
The trial court granted the Defendants’ pleas to the required Nauslar to sign a “mutual release” on behalf of
jurisdiction for lack of standing *247 on all of the Willow. Under that agreement, both Willow and Coors
Plaintiffs’ claims and dismissed the case. We conclude released any and all claims each had against the other and
that (1) Plaintiff–Appellants lack standing on the statutory also warranted that neither party had assigned any such
and common-law causes of action brought on their own claims to a third party. Nauslar signed the release, and
behalf. Concerning the causes of action asserted “on Miller bought Willow and DEN L.P. from Nauslar and
behalf of” the business entity that they sold, they Nausar Investments for $57.8 million.
affirmatively negate having capacity to bring those
claims. Accordingly, we affirm the trial court’s dismissal Nauslar and Nauslar Investments sued Coors, alleging it
of all of Plaintiffs’ claims. We reverse the trial court’s unreasonably disapproved the proposed Consolidation
order denying Coors attorneys’ fees and remand that with Miller, in violation of the Texas Beer Industry Fair
issue. Dealing Law. They also brought a number of
common-law claims against Coors and Golden, including
one for tortious interference with the Consolidation. After
two hearings, the trial court granted Coors’s and Golden’s
Facts pleas to the jurisdiction and dismissed all of the Plaintiffs’
The crux of this dispute is the disapproval by Coors causes of action for lack of standing. Plaintiffs brought
Brewing Co. (“Coors”) of a proposed consolidation in this appeal, challenging the trial courts’ dismissal of their
2001 between Willow Distributors, L.P. (“Willow”), an statutory and common-law causes of action.
entity distributing Coors beer in the Dallas area, and the
distributor of Miller beer, Miller of Dallas (“Miller”).
Plaintiffs alleged that Willow and Miller had agreed to a
joint venture that would be operated by a new entity, *248 Summary
United LP. Willow and Miller would each own 50% of Plaintiffs seek to bring their claims in their own right, as
the new entity, and the cash flow from the new business individual claims brought on their own behalf. They also
would be shared equally. In addition, Nauslar asserts the assert—as former partners and owners of Willow—claims
new enterprise would employ him as a company manager. “on behalf of” Willow, for alleged injuries to Willow
itself, but with recovery going to Plaintiffs, not Willow.
At the time of the proposed consolidation (the First, we address the individual claims and conclude that
“Consolidation”), neither of the Plaintiffs was party to the Plaintiffs lack standing to bring either the common-law or
distributorship agreement with Coors. Rather, Willow was statutory causes of action in their own right. We address
the contracting party and the named distributor under the next the claims brought “on behalf of” Willow, i.e., the
distributor agreement with Coors. Plaintiff Dennis Willow partnership’s claims. We conclude that Plaintiffs,
Nauslar, individually, did not have a direct ownership in their live pleading, affirmatively negate that they have
interest in Willow, and Plaintiff Nauslar Investments was capacity to bring claims on behalf of Willow. Having
the limited partner in Willow. The structure underpinning rejected their other theory by which to allege capacity, we
Willow is as follows: Willow’s general partner was DEN affirm dismissal of the claims asserted on behalf of
L.P. and its limited partner was Nauslar Investments LLC. Willow. We conclude that an award of attorney’s fees
Nauslar, individually, was 100% owner of Nauslar under the statute is mandatory if one party prevails in an
Investments, which in turn was the limited partner in action under that statute, and thus we reverse the trial
DEN L.P (general partner in Willow). court’s order denying Coors its attorney’s fees and
remand that issue.
When, in September 2001, Nauslar presented the
proposed Consolidation to Coors for its approval, Coors
© 2015 Thomson Reuters. No claim to original U.S. Government Works. 7
Nauslar v. Coors Brewing Co., 170 S.W.3d 242 (2005)
I. Common–Law Causes of Action Asserted as jurisdiction, but the petition does not affirmatively
Individual Right of Action demonstrate incurable defects in jurisdiction, the issue is
We address whether the Plaintiffs have standing, in their one of pleading sufficiency and the plaintiff should be
own right, to bring and personally recover on the afforded the opportunity to amend. County of Cameron v.
common-law causes of action1 they assert against Brown, 80 S.W.3d 549, 555 (Tex.2002). On the other
Defendants. We note first the injury asserted. Plaintiffs hand, if the pleadings affirmatively negate the existence
allege that Willow was weakened by Coors’s efforts to of jurisdiction, then a plea to the jurisdiction may be
force a deal with Golden, and that Willow’s value granted without allowing the plaintiff an opportunity to
declined between the time of the disapproval in 2001 and amend. Id.
the subsequent sale to Miller in 2003. Specifically,
[8] [9]
Plaintiffs assert damages as follows: Nauslar, A person has standing to sue when he is personally
individually, seeks redress for (1) the distributions, profits aggrieved by the alleged wrong. Nootsie Ltd. v.
and other benefits of ownership he would have reaped as Williamson County Appraisal Dist., 925 S.W.2d 659, 661
the sole owner of Willow and other corporate entities, had (Tex.1996). A person has standing if (1) he has sustained,
Coors approved the Consolidation; and (2) loss of salary, or is immediately in danger of sustaining, some direct
bonuses and other employment compensation he would injury as a result of the wrongful act of which he
have been paid by United (the operating entity to be complains; (2) he has a direct relationship between the
formed upon Consolidation) as well as alleged injury and claim sought to be adjudicated; (3) he
employment-related losses as an employee of Willow. has a personal stake in the controversy; (4) the challenged
Nauslar Investments, Inc. asserts that, as the former action has caused the plaintiff some injury in fact, either
general partner of DEN LP (the general partner of economic, recreational, environmental, or otherwise; or
Willow) and as the former limited partner of Willow, it (5) he is an appropriate party to assert the public’s interest
was “injured to the same degree as—and could assert all in the matter, as well as his own. Precision Sheet Metal
claims of DEN LP and Willow.” Mfg. Co., Inc. v. Yates, 794 S.W.2d 545, 552
(Tex.App.-Dallas 1990, writ denied).
In sum, Nauslar seeks damages for loss of the benefits of
[10] [11]
ownership and employment-related losses. Nauslar Without a breach of a legal right belonging to a
Investments, as former general partner of the general plaintiff, that plaintiff has no standing to litigate. Exxon
partner of Willow, seeks damages that mirror those Corp. v. Pluff, 94 S.W.3d 22, 27 (Tex.App.-Tyler 2002,
suffered by Willow. pet. denied); Cadle Co. v. Lobingier, 50 S.W.3d 662,
669–70 (Tex.App.-Fort Worth 2001, pet. denied);
Brunson v. Woolsey, 63 S.W.3d 583, 587 (Tex.App.-Fort
Worth 2001, no pet.). Only the person whose primary
A. Standard of Review and Principles Governing legal right has been breached may seek redress for an
Standing injury. Nobles v. Marcus, 533 S.W.2d 923, 927
[1] [2] [3] [4] [5]
Because the question of standing is a legal (Tex.1976) (defrauded party only can bring suit to set
question, we review de novo a trial court’s ruling on a aside deed obtained by fraud). “Without breach of a legal
plea to the jurisdiction. Mayhew v. Town of Sunnyvale, right belonging to the plaintiff no cause of action can
964 S.W.2d 922, 928 (Tex.1998). Standing is a accrue to his benefit.” Id.
component of a court’s subject-matter jurisdiction. Tex.
Ass’n of Bus. v. Tex. Air Control Bd., 852 S.W.2d 440,
446 (Tex.1993). The plaintiff has the burden of alleging
facts that affirmatively demonstrate a court’s jurisdiction B. Legal Principles: Whose Primary Legal Right Was
to hear a cause. Id. A plea to the jurisdiction challenges a Allegedly Infringed?
trial court’s authority to hear a case by alleging that the Plaintiffs’ principle argument is that the issue raised
factual allegations *249 in the plaintiff’s pleadings, when concerns who owns the claims, and thus presents a
taken as true, fail to invoke the trial court’s jurisdiction. question of capacity, not standing. They rely on Pledger
El Paso Cmty. Partners v. B & G/Sunrise Joint Venture, v. Schoellkopf, 762 S.W.2d 145, 146 (Tex.1988) (a
24 S.W.3d 620, 623 (Tex.App.-Austin 2000, no pet.) challenge to a shareholder’s right to bring a cause of
(citing Bybee v. Fireman’s Fund Ins. Co., 160 Tex. 429, action for wrongs done to the corporation raises a
331 S.W.2d 910, 917 (1960)). We construe the allegations question of capacity). They also rely on Prostok v.
in the pleadings in favor of the pleader. Tex. Air Control Browning, 112 S.W.3d 876, 921 (Tex.App.-Dallas 2003)
Bd., 852 S.W.2d at 446. (“A challenge to who owns a claim raises the issue of
capacity, not standing.”), aff’d, 165 S.W.3d 336
[6] [7]
When a plaintiff fails to plead facts that establish (Tex.2005). We disagree that the pleadings raise only an
© 2015 Thomson Reuters. No claim to original U.S. Government Works. 8
Nauslar v. Coors Brewing Co., 170 S.W.3d 242 (2005)
issue of capacity, not standing. The case law reveals that, bring about reduced earnings, lower salaries, bonuses,
with respect to Plaintiffs’ individual common-law causes injury to general business reputation, or diminution in the
of action, a fundamental question is raised: Do these value of ownership.” Id. at 881 (quoting Martens v.
claims embody a primary legal right belonging to the Barrett, 245 F.2d 844, 846 (5th Cir.1957)).
Plaintiffs or does the Willow partnership have the primary
[14]
right of action? That raises an issue of standing. A partner has no individual, separate cause of action
for losses suffered by reason of tortious interference with
We note initially that Pledger cannot stand for the a contract between the partnership and a third party:
simplistic proposition that a challenge to a stakeholder’s damages for loss in value of the partnership interest or
bringing a suit to recover personally for corporate wrongs employment losses are subsumed in the partnership’s
*250 raises an issue of capacity only. The Pledger court causes of action. Cates v. Int’l Tel. & Tel. Corp., 756 F.2d
did not, indeed could not, discuss standing because that 1161 (5th Cir.1985) (construing Texas law).
issue was not before it. 762 S.W.2d at 145–46. The case
was decided before the determination that standing is an
component of subject-matter jurisdiction and thus can be
raised first on appeal. See Tex. Air Control Bd., 852 C. Application and Conclusion
[15] [16]
S.W.2d at 446. Nauslar generally argues that he has standing,
because he was “personally aggrieved” by, and suffered
[12]
An individual stakeholder in a legal entity does not “direct injury” from, Defendants’ actions in disapproving
have a right to recover personally for harms done to the the Consolidation. He seeks to recover for loss of benefits
legal entity. Wingate v. Hajdik, 795 S.W.2d 717, 719 of ownership and employment. Nauslar Investments
(Tex.1990). In Wingate, one corporate shareholder sued asserts it has standing to sue, individually, for harms done
another alleging he had appropriated corporate assets. The to the partnership and seeks damages mirroring those
court ruled that individual stockholders have no separate, Willow could recover.
independent right of action for injuries suffered by the
corporation, when the injures merely result in As the case law demonstrates, Plaintiffs do not have a
depreciation of the value of plaintiffs’ stock. Id. at 719. separate, individual right of action for injuries to the
partnership that diminished the value of their ownership
In Fredericksburg Indus., Inc. v. Franklin Int’l, Inc., 911 interest in that entity. Wingate, 795 S.W.2d at 719.
S.W.2d 518, 520 (Tex.App.-San Antonio 1995, writ Willow is the one who suffered the direct injury from the
denied), the president/employee of a furniture alleged *251 harm to the partnership’s worth, and any
manufacturing corporation sued a corporate supplier, loss to Plaintiffs in the sale price is “both indirect to and
asserting he lost wages as a result of the supplier’s duplicative of” the entity’s right of action. Mendenhall,
delivering defective glue. The court held he lacked 504 F.2d at 881. The right of recovery is Willow’s right
standing: the cause of action belonged to the corporation alone, even though the economic impact of the alleged
alone, as the damages were to the corporation’s profits, wrongdoing may bring about reduced earnings, salary or
and any claim the plaintiff had for lost wages was against bonus. Fredericksburg, 911 S.W.2d at 520; Cates, 756
the corporation. Id. at 521. F.2d at 1181; Mendenhall, 504 F.2d at 881.
[13] We note the applicability of the facts in Cates to the
Other cases in the corporate context reaffirm that
where damage is to the business entity’s worth, the instant case. 756 F.2d 1161. The Cates plaintiff, a
individual stakeholder cannot personally recover, whether minority partner, attempted to bring individual claims for
the damages sought are in terms of diminished value of an tortious interference with the partnership’s business, as do
ownership interest or loss of employee benefits. In the Plaintiffs here. The damages sought were similar as
Mendenhall v. Fleming Co., Inc., 504 F.2d 879 (5th well. The court’s holding warrants quotation:
Cir.1974), the plaintiffs sought to recover personally for
damages from anti-trust violations arising from the Accordingly, any claims for
operation of retail stores by a corporation, which they had damages which [plaintiff] suffered
created. Id. at 880. The court noted that the business by reason of diminution in value of
allegedly interfered with was that operated by the his partnership interest, or his share
corporation and the damages sought were direct damage of partnership income, or his salary
to corporate worth. Thus, the plaintiffs lacked standing. or bonus from the partnerships or
Id. at 880–81. The right of recovery was the entity’s right their businesses, by reason of
alone, even though in an economic sense the impact “may breach of such agreements, or
tortious interference with such
© 2015 Thomson Reuters. No claim to original U.S. Government Works. 9
Nauslar v. Coors Brewing Co., 170 S.W.3d 242 (2005)
businesses, or anticompetitive to purchase with Payne turned on whether the third-party
conduct interfering with or limiting contract was properly exercised. Id. at 523–34.
or “taking over” such businesses or
their activities, are in effect *252 Abraham is inapposite, as the analogy fails at the
subsumed within the causes of outset. The plaintiff had a direct contract with the
action of the partnerships and do defendant. Disposition under that contract turned on
not afford [plaintiff] ... a separate, whether the third-party contract was properly exercised.
individual cause of action. In today’s case, there is no direct contract between
Plaintiffs and Defendants Coors and Golden.
Id. at 1181. Accordingly, Plaintiffs lack standing to pursue their
tortious-interference cause of action against Defendants.
Accordingly, Willow possesses the primary legal right Nauslar Investments asserts standing in its roles as former
that was allegedly violated, and thus Willow is the general partner of Willow’s general partner and former
exclusive party with a justiciable interest in redressing limited partner of Willow. To overcome the obstacle that
those alleged injuries. Accordingly, Plaintiffs do not have it is not a general partner of Willow, it relies on the
a standing to pursue and recover personally on the double derivative rule governing corporate derivative
asserted common-law causes of action. suits. To overcome the general rule that a partner cannot
sue individually on a partnership claim, it relies on cases
Plaintiffs’ arguments to the contrary do not alter our applying an exception to that rule. Those cases do not
conclusion. Concerning the tortious-interference cause of apply because, as discussed below, Nauslar Investments
action, Nauslar argues that he has individual standing to sold to Miller the entirety of its interest in Willow. 2 None
pursue the claim under Sturges v. Wal–Mart Stores, Inc., of the cases it cites stands for the proposition that a
39 S.W.3d 608 (Tex.App.-Beaumont 1998), rev’d on partner that has sold its entire interest in the partnership
other grounds, 52 S.W.3d 711 (Tex.2001). In that case, can personally recover on a claim belonging to that
individuals were deemed to have standing where a partnership. The Mendenhall court, discussing the sale of
proposed business entity was never formed due to the corporate stock, captured the effect of the Plaintiffs’ sale
defendant’s interference. The appellate court held that the of the partnership:
individual plaintiffs, who had signed the letter of intent,
were all “interested parties who would have profited from
the prospective lease,” who were directly involved in the When [plaintiffs] sold their corporate stock to a third
building of the proposed structure, and who sustained party, they sold their right to control the very cause of
“direct economic injury” as a result of Wal–Mart’s action they now attempt to assert. This suit cannot
interference. Id. at 614–15. reclaim that corporate cause of action by asserting the
same damage sustained by the corporation also served
Sturges is inapposite. The proposed entity in Sturges was to diminish the value of their individually held estates.
never formed, leaving the principals in that enterprise as Mendenhall, 504 F.2d at 881.
the directly injured parties. In today’s case, the direct
injury from Defendants’ alleged wrongdoing was to
Willow, the operating business entity that would have II. Plaintiffs’ Statutory Causes of Action Asserted in
consolidated with Miller. Their Right
Plaintiffs assert that Coors unreasonably disapproved the
Plaintiffs also rely on Abraham Inv. Co. v. Payne Ranch, Consolidation in violation of the Texas Beer Industry Fair
Inc., 968 S.W.2d 518 (Tex.App.-Amarillo 1998, pet. Dealing Law (BIFDL), which prohibits manufacturers
denied) to overcome the obstacle that they were not party from withholding approval of the transfer of
to the proposed consolidation agreement between Willow distributorship rights if the substituting party meets
and Miller. In that case, plaintiff Abraham had a contract “reasonable standards.” TEX. ALCO. BEV.CODE ANN..
to purchase a ranch from defendant Payne. That contract § 102.71, -.76, -.77, -.79 (Vernon 1995). We examine
was subject to a pre-existing preferential right of purchase whether Plaintiffs have standing, in their own right, to
contained in a contract between Payne and Campbell, bring a claim for the alleged violation of BIFDL.3
which Campbell exercised to purchase the ranch.
Defendants asserted Abraham lacked standing to sue for
tortious interference, as he was not party to the
Payne–Campbell contract. The court disagreed: whether A. Legal Principles Governing Standing Based on
Abraham was entitled to fulfillment of the direct contract Statute
© 2015 Thomson Reuters. No claim to original U.S. Government Works. 10
Nauslar v. Coors Brewing Co., 170 S.W.3d 242 (2005)
[17] [18]
Standing to sue can be predicated upon either Corpus Christi Court of Appeals held that the plaintiff did
statutory or common-law authority. See Williams v. Lara, not have a statutory right to maintain its cause of action
52 S.W.3d 171, 178–79 (Tex.2001). The general rules of against the distributor, because it failed to comply strictly
standing apply unless statutory authority for standing with the statute’s requirements. Ace Sales Co., Inc. v.
exists. Id. at 178. If standing is statutorily conferred, the Cerveceria Modelo, S.A. de C.V., 739 S.W.2d 442, 447
statute granting authority and the case law interpreting it (Tex.App.-Corpus Christi 1987, writ denied). The
serve as the proper framework of analysis. See Hunt v. distributor Ace sought damages for the manufacturer’s
Bass, 664 S.W.2d 323, 324 (Tex.1984). failure to approve a transfer of the distributorship rights to
Ace’s buyer. The court noted that section 102.79 of
[19] [20] [21] [22] [23]
We review matters of statutory BIFDL provides a remedy for parties to an agreement
construction de novo. City of San Antonio *253 v. City of under section 102.51, which in turn requires a written
Boerne, 111 S.W.3d 22, 25 (Tex.2003). In construing a agreement. TEX. ALCO. BEV.CODE ANN.. §§ 102.51,
statute, our objective is to determine and give effect to the 102.79. Because Ace did not produce a written
legislature’s intent. Id. If a statute’s meaning is agreement, it had no remedy under BIFDL. Id. In so
unambiguous, we generally interpret the statute according holding, the court relied on the principle that “if a cause
to its plain meaning. Id. We begin by examining the exact of action and remedy for its enforcement are derived from
wording and apply the tenet that the legislature chooses a statute, the statutory provisions are mandatory and
its words carefully and means what it says. Williams v. exclusive, and must be complied with in all respects or
Vought, 68 S.W.3d 102, 115 (Tex.App.-Dallas 2001, no the action is not maintainable.” Id. (quoting Tex.
pet.) (Morris, J., concurring). We determine legislative Catastrophe Prop. Ins. Ass’n v. Council of Co–Owners of
intent from the entire act and not just its isolated portions. Saida II Towers Condo. Ass’n, 706 S.W.2d 644, 646
City of San Antonio, 111 S.W.3d at 25. (Tex.1986)).
BIFDL provides a judicial remedy for a “manufacturer”
or “distributor,” as defined in the statute,4 who are parties
to a distributorship agreement: B. Analysis and Conclusion
[24]
Nauslar argues that although he is not a “distributor”
under the BIFDL definition, he should be entitled to sue
If a manufacturer or distributor who is a party to an under the statute, based on its text, legislative history, and
agreement pursuant to Section 102.51 of this code fails purpose. Nauslar *254 points to the text of Section
to comply with this Act or otherwise engages in 102.76(a) that protects not just transfers of the
conduct prohibited under this Act ... the aggrieved distributorship itself, but also transfers of “the voting
manufacturer or distributor may maintain a civil action stock of any partner corporation,” as well as the
in a court of competent jurisdiction.... “beneficial ownership” of entities owning the distributor.
TEX. ALCO. BEV.CODE ANN.. § 102.79(a). He argues that persons representing those interests must
BIFDL prohibits a manufacturer from withholding have standing under the statute, to effectuate the broad
approval of a distributor’s transfer of its distributorship protective purpose of the statute. He also points to pieces
interest when the person or persons to be substituted of legislative history to indicate that, in discussing the
“meet reasonable standards.” The full provision reads as pending bill, the legislators did not distinguish between
follows: the business entity that comprises the distributorship and
the individuals who own that entity.
No manufacturer shall unreasonably withhold or delay
its approval of any assignment, sale, or transfer of the We are not persuaded to adopt Plaintiffs’ expansive
stock of a distributor or all or any portion of a reading of the text of BIFDL. Rather, we are persuaded by
distributor’s assets, distributor’s voting stock, the Appellee’s argument that when the legislature intends to
voting stock of any parent corporation, or the beneficial grant a remedy to all persons who might be injured by a
ownership or control of any other entity owning or statutory violation, it plainly grants a remedy to “injured
controlling the distributor, including the distributor’s persons.” See, e.g., TEX. BUS. & COM.CODE ANN. §
rights and obligations under the terms of an agreement 19.02 (Vernon 2002) (granting judicial remedy to “a
whenever the person or persons to be substituted meet person injured” by a violation of the statute regulating
reasonable standards. ... relationship between manufacturers and dealers of
particular equipment); TEX. OCC.CODE ANN. §
Id. § 102.76(a) (emphasis added). 2352.201 (Vernon 2004) (violators of statute are liable to
“an injured party ...”).
In a case construing these two sections of BIFDL, the
© 2015 Thomson Reuters. No claim to original U.S. Government Works. 11
Nauslar v. Coors Brewing Co., 170 S.W.3d 242 (2005)
We apply the tenet that the legislature chooses its words release-with-non-assignment clause, which waives the
carefully and means what it says. Williams, 68 S.W.3d at distributor’s BIFDL claim, should be declared void under
115. The remedies section, Section 102.79(a), plainly the anti-waiver provision, section 102.72(c).
states who may sue for violations of the statute:
“manufacturers” and “distributors,” as defined under the We note that the issue Nauslar raises, whether he
statute, who are party to a distributorship agreement. individually had statutory standing to pursue Willow’s
These plaintiffs do not fall within the statutorily defined claim, turns on the permissibility of the clause in which
class of persons who may sue. Neither are we persuaded Willow warrants it did not assign its claims to a third
to read the statute expansively to go beyond its plainly party. Thus, we need not address whether the release by
stated purpose. The statute states that its purpose is “to Willow of its own BIFDL claims against Coors was
promote the public’s interest in the fair, efficient, and prohibited by the anti-waiver provision in section
competitive distribution of beer within the state....” TEX. 102.76(c). The issue is this: Is a distributor’s
ALCO. BEV.CODE ANN.. § 102.72. As noted, Willow representation that it has not assigned its statutory claims,
itself has standing to redress violations of the statute. This if any, to a third party an agreement that “varies the effect
satisfies the statutory purpose of protecting the general of the BIFDL” so as to be void? As discussed, the plain
public interest in fair competition. We conclude the language of section 102.79 grants a right of action only to
statutory purpose does not extend to protect Plaintiffs’ “distributors or manufacturers” that are party to a
individual interests in obtaining higher compensation distributorship agreement. Nauslar points to no authority
from the transfer of its interest in Willow. Tex. to indicate that BIFDL claims must remain freely
Catastrophe Prop. Ins., 706 S.W.2d at 646 (when cause assignable to those not otherwise entitled to bring such
of action derives from statute, statutory provisions must claims in their own right. And we see no language in the
be complied with in all respects or action not text of the statute requiring the reading urged by
maintainable). Plaintiffs.
Accordingly, we hold that neither Plaintiff has standing to
bring the claims, on their own behalf, seeking redress for
C. Was the No–Assignment Clause Void? violations of BIFDL.
[25]
Nauslar asserts Coors demanded that Willow sign a
mutual release of any claims it had against Coors, which
included Willow’s warranty that it had not assigned any
of its claims to a third party. Nauslar asserts that, but for III. Plaintiffs’ Causes of Action Asserted “On Behalf
Coors’s insistence that he execute the release by Willow, Of” Willow
he would have assigned Willow’s claims to himself. The We turn to Plaintiffs’ assertion of causes of action
release, Nauslar asserts, violated the “anti-waiver” purportedly brought “on behalf of” Willow. Plaintiffs
provision of BIFDL. He argues Coors should not be assert—as the former partners in and owners of
allowed to circumvent the section prohibiting Willow—they are entitled to recover personally on
unreasonable disapproval of a transfer by violating the Willow’s claims for injuries suffered by Willow.
section prohibiting the release of such claims. As a Plaintiffs argue Defendants’ challenges go to the issue of
remedy, Nauslar invokes equity principles, urging the “claim ownership” only. They assert, “An argument about
court to declare an “equitable assignment” of Willow’s whether a current or former owner, as distinct from his
claims to Nauslar, thus enabling him to sue—as company, owns a particular claim is an argument about
constructive assignee of Willow’s claims—under BIFDL. capacity.”
Section 102.72(c) of BIFDL states, “The effect of this Act
may not be varied by agreement. Any agreement
purporting to do so is void and unenforceable to the extent A. Legal Principles
[26] [27]
of such variance only.” Nauslar asserts that this A plaintiff must have both standing and capacity to
“anti-waiver” provision prohibited Coors from bring a lawsuit. Coastal Liquids Transp. L.P. v. Harris
conditioning its approval of the sale of Willow on County Appraisal Dist., 46 S.W.3d 880, 884 (Tex.2001).
Willow’s *255 release of its claims against Coors. A party has capacity to sue when it has legal authority to
Nauslar insists the only permitted reason for disapproving act, regardless of whether it has a justiciable interest in
a transfer under section 102.76 is when the proposed the controversy. Nootsie, Ltd., 925 S.W.2d at 661.
transferee fails to meet “reasonable standards.” Coors is Standing pertains to a person’s justiciable interest in a suit
thus not permitted to disapprove a transfer based on a and is a component of subject-matter jurisdiction. See
failure to sign a release. Thus Nauslar argues, the Tex. Air Control Bd., 852 S.W.2d at 443, 445–46.
© 2015 Thomson Reuters. No claim to original U.S. Government Works. 12
Nauslar v. Coors Brewing Co., 170 S.W.3d 242 (2005)
Capacity is a party’s legal authority to go into court to to bring Willow’s partnership claims. Thus, the suit
prosecute or defend a suit. El T. Mexican Rests., Inc. v. cannot proceed on those causes of action. We decline to
Bacon, 921 S.W.2d 247, 249 (Tex.App.-Houston [1st remand for the trial court to engage in a futile inquiry.
Dist.] 1995, writ denied). Wilson *257 v. Texas Parks and Wildlife Dept., 8 S.W.3d
634, 635 (Tex.1999) (declining to remand for retrial of
issue on which no evidence was offered; such “would be
improper and, it appears, futile”); Sabine Offshore Serv.,
B. Analysis and Conclusion Inc. v. City of Port Arthur, 595 S.W.2d 840, 841
[28] [29]
Plaintiffs allege, and it is undisputed, that Plaintiffs (Tex.1979) (declining to remand when futile and not in
sold their interest in the Willow partnership to Miller. furtherance of judicial economy). We conclude the claims
Willow’s causes of action belong to the partnership, not to asserted “on behalf of” Willow were properly dismissed.
its partners. Absent an agreement otherwise, Willow’s Accordingly, we need not reach the issue whether
assets, including any chose in action it held, would have Plaintiffs also lacked standing to pursue Willow’s claims.
transferred to Miller in the sale.5 In addition, we need not reach other unrelated issues
raised by Plaintiff.
*256 [30] Plaintiffs do not allege that they consensually
acquired legal title to Willow’s causes of action—and
thus possess exclusive authority (capacity) to prosecute
and recover on Willow’s claims. That is, they do not IV. Attorney Fees under BIFDL
allege that, despite the sale to Miller, they retained title to Coors asserts, on cross-appeal, that the trial court erred in
Willow’s causes of action, or otherwise acquired those denying Coors attorney fees under BIFDL. Coors argues
assets by assignment. Indeed, Plaintiffs allege and argue it prevailed on the BIFDL claims and an award of
the opposite: they allege that Coors conditioned its attorney’s fees is mandatory to the prevailing party in an
approval of the sale on Willow’s warranting it had not action brought under BIFDL.
assigned its claims against Coors to a third party. Nauslar
argues, but for that condition, he would have caused Section 102.79(c) of BIFDL states,
Willow to assign its claims to himself.6
The prevailing party to any action
Plaintiffs thus judicially admit they have do not own legal under Subsection (a) of this section
title to Willow’s causes of action. Houston First shall be entitled to actual damages,
American Sav. v. Musick, 650 S.W.2d 764, 767 including the value of the
(Tex.1983) (judicial admissions are assertions of fact, not distributor’s business, as specified
pled in the alternative, in the live pleadings of a party). in Section 102.77 of this code,
Plaintiffs do posit the “constructive assignee” theory by reasonable attorney’s fees, and
which to establish their alleged right to bring Willow’s court costs.
causes of action. As a legal basis, they argue the warranty
of no assignment violates BIFDL and thus should be TEX. ALCO. BEV.CODE ANN.. § 102.79(c) (emphasis
declared void. We concluded above, as a matter of law, added). Subsection (a) provides for a right of action for a
that the non-assignment clause does not violate BIFDL. “manufacturer or distributor” who is party to a
Plaintiffs allege no other legal basis to avoid the effect of distributorship agreement. If the defending manufacturer
their having failed to acquire the legal right to prosecute or distributor fails to comply with the statute, “the
and personally recover on Willow’s causes of action. aggrieved manufacturer or distributor may maintain a
[31] [32]
civil action in a court of competent jurisdiction....” Id. §
To bring suit and recover on a cause of action, a 102.79(a) (emphasis added).
plaintiff must have both standing and capacity. El T.
Mexican Rests., 921 S.W.2d at 250. It is recognized that a Plaintiff’s respond that, if they do not have standing under
party may plead himself out of court, e.g., the plaintiff the statute, then the trial court lacks jurisdiction to award
may plead facts which affirmatively negate his cause of attorney’s fees, relying on Smith v. Tex. Improvement Co.,
action. Tex. Dept. of Corrections v. Herring, 513 S.W.2d 570 S.W.2d 90, 92 n. 3 (Tex.App.-Dallas 1978, no writ)
6, 10 (Tex.1974) (citing Schroeder v. Tex. & Pacific Ry. (when court lacks jurisdiction, court cannot render
Co., 243 S.W.2d 261 (Tex.Civ.App.-Dallas 1951, no judgment j.n.o.v.; only valid order is one of dismissal).
writ)). Plaintiffs affirmatively negate that they own legal
title to Willow’s claims, asserting instead a legal theory to [33] [34]
We have concluded that Plaintiffs lack standing to
overcome that fact, which we have rejected.7 We conclude bring the BIFDL claims, either in their own right or “on
that, on the state of the pleadings, Plaintiffs lack capacity
© 2015 Thomson Reuters. No claim to original U.S. Government Works. 13
Nauslar v. Coors Brewing Co., 170 S.W.3d 242 (2005)
behalf of” Willow. Coors thus qualifies as a “prevailing County Comm’rs Court v. Lohec, 814 S.W.2d 751, 755
party” within the meaning of section 102.79(c). Robbins (Tex.App.-Houston [ (14th Dist.) ] 1991), rev’d on other
v. Capozzi, 100 S.W.3d 18, 27 (Tex.App.-Tyler 2002, no grounds, 841 S.W.2d 361 (Tex.1992) (under
pet.) (“prevailing party” successfully prosecutes or declaratory-judgment statute, trial court could award
defends against an action; prevailing party is one who is attorneys’ fees against party found to have no standing).
vindicated). The BIFDL claims were brought under Further, the statute is worded such that a manufacturer or
subsection (a) as section 102.79(c) requires. Further the distributor may maintain an action and the prevailing
fee award is mandatory, in that subsection (c) explicitly party in that *258 action shall recover reasonable attorney
states the prevailing party “shall” recover reasonable fees. Thus, the statutory text mandates the award of fees
attorney’s fees. See Town East Ford Sales, Inc. v. Gray, even if the action cannot be maintained, whether or not it
730 S.W.2d 796, 812 (Tex.App.-Dallas 1987, no writ) is dismissed for lack of jurisdiction. Accordingly, we
(fees mandatory under statutory provision stating reverse the trial court’s order denying Coors attorney’s
“consumer who prevails shall be awarded court costs and fees and remand that issue for further proceedings.
reasonable and necessary attorney’s fees”).
Accordingly, we AFFIRM the trial court’s dismissal of
The Plaintiffs’ reliance on the broad statements in Smith all of Plaintiffs claims. We REVERSE the trial court’s
is misplaced. That case did not address an issue involving order denying Coors attorney’s fees under BIFDL and
a statutory provision mandating an award of fees. A trial REMAND that issue for further proceedings.
court’s dismissal for lack of subject-matter jurisdiction
does not prevent the concurrent award of attorney’s fees
under the mandatory award provision. See Galveston
Footnotes
1 Plaintiffs sued Coors for breach of contract and sued both Coors and Golden for conspiracy to terminate the Consolidation,
negligence per se, and tortious interference. Nauslar also asserted that he, individually, was a third-party beneficiary to the
Consolidation agreement. We refer to these causes of action collectively as Plaintiffs’ common-law actions.
2 The facts in the cited cases are not analogous: Allied Chemical Co. v. DeHaven, 824 S.W.2d 257 (Tex. App–Houston [14th Dist.]
1992,) (exceptional circumstances made it inequitable to prevent resigning partner from bringing suit on behalf of partnership
during winding-up phase); Tex. Westheimer Corp. v. 5647 Westheimer, 68 S.W.3d 15, 21–22 (Tex.App.-Houston [1st Dist.] 2001,
pet. denied) (dispute over rights to profit participation owed to partnership by third party; suit instituted during winding-up phase
of partnership) In today’s case, the partnership was not wound up, but as discussed below, Plaintiffs sold the partnership in its
entirety.
3 It is undisputed that Willow itself has standing to pursue a BIFDL claim. Willow is not a party to this suit and Plaintiffs disavow
that they are suing derivatively on any claims that belong to Willow.
4 Under section 102.71, “distributor” is defined as a person licensed under Section 64.01 or 65.01 of the Act, which sections in turn
define the activities a licensed distributor is authorized to perform. TEX. ALCO. BEV.CODE ANN.. §§ 64.01, 65.01, 102.71.
5 Under the Texas Revised Limited Partnership Act (TRLPA), the partnership, not the partners, own the partnership’s property.
TEX.REV.CIV. STAT. ANN. art. 6132a–7.01 (Vernon Supp.2004–05). When a business entity is acquired in its entirety by
another, in the absence of specific terms to the contrary, both the liabilities and assets of the acquired company are transferred to
the purchaser. Duke Energy Field Servs. Assets, L.L.C. v. Nat’l Union Fire Ins. Co. of Pittsburgh, PA, 68 S.W.3d 848, 850
(Tex.App.-Texarkana 2002, pet. denied).
6 Plaintiffs plead, in their live pleading:
[A]s a condition for gaining its approval, and in tacit acknowledgement of its past wrongdoing, Coors extracted a purported
release from Willow for claims against Coors arising out of its former, illegal conduct.
...
Coors’ release also contained the following provision requiring Nauslar to represent that he had not assigned Willow’s claim
to any third party ...
If Coors had not conditioned approval of Nauslar’s sale of Willow and DEN to Miller of Dallas on execution of its release in
its original form, and had instead agreed to allow assignments, Nauslar would have assigned to himself all rights possessed by
Willow to sue Coors for the claims alleged in this petition.
7 In addition, at the end of the first hearing, the trial court ordered Plaintiffs to replead with much more specificity so that you make
© 2015 Thomson Reuters. No claim to original U.S. Government Works. 14
Nauslar v. Coors Brewing Co., 170 S.W.3d 242 (2005)
it clear “who is suing for what, what wrong to whom, when, and causing whatever for what period of damages.... I’m probably
going to grant [the pleas to jurisdiction] the next go round if you don’t make it clear....” See Harris County v. Sykes, 136 S.W.3d
635, 639 (Tex.2004) (if plaintiff given opportunity to amend and still fails to allege facts sufficient to withstand plea to jurisdiction,
court should dismiss action).
End of Document © 2015 Thomson Reuters. No claim to original U.S. Government Works.
© 2015 Thomson Reuters. No claim to original U.S. Government Works. 15
Shipley v. Unifund CCR Partners, 331 S.W.3d 27 (2010)
have suffered the same injury as the assignors
331 S.W.3d 27 and have the same ability to pursue the claims.
Court of Appeals of Texas,
Waco.
2 Cases that cite this headnote
Robert D. SHIPLEY, Appellant,
v.
UNIFUND CCR PARTNERS, Appellee.
[3]
No. 10–09–00314–CV. | Oct. 13, 2010. | Rehearing Action
Overruled Dec. 21, 2010. Persons entitled to sue
A court may presume the truth of allegations
made in a party’s pleadings when determining
Synopsis standing.
Background: Assignee of right to collect on credit card
account brought action against card holder. The 87th
District Court, Freestone County, Patrick H. Simmons, J., Cases that cite this headnote
entered judgment against card holder. Card holder
appealed.
[4]
Pleading
[Holding:] The Court of Appeals, Tom Gray, C.J., held Scope of inquiry and matters considered in
that assignee did not have standing to bring action against general
card holder.
A court is not required to look solely to the
pleadings but may consider evidence and must
Reversed. do so when necessary to resolve the
jurisdictional issues raised.
Cases that cite this headnote
West Headnotes (6)
[1]
Assignments
Nature and essentials in general [5]
Consumer Credit
Actions;  injunction
An assignment is simply a transfer of some right
or interest. Assignee of right to collect on credit card
account did not have ownership or title in the
account, and therefore, did not have standing to
2 Cases that cite this headnote bring action against card holder; assignee only
had been assigned right to collect, and assignor
explicitly retained title and ownership.
[2]
Assignments Cases that cite this headnote
Nature and extent of rights of assignee in
general
When an assignee holds a contractually valid
[6]
assignment, that assignee steps into the shoes of Action
the assignor and is considered under the law to Persons entitled to sue
© 2015 Thomson Reuters. No claim to original U.S. Government Works. 1
Shipley v. Unifund CCR Partners, 331 S.W.3d 27 (2010)
presented, we will reverse the judgment, dismiss this
Because standing denotes a party’s justiciable cause for lack of jurisdiction, and withdraw our prior
interest in a controversy, it is only the party opinion and judgment. Id.
whose primary legal right has been breached
that may seek redress for that injury; without a
breach of a legal right belonging to that party,
that party has no standing to litigate. Standing
Shipley contends that Unifund CCR Partners did not own
any interest in the account in question, and therefore, they
Cases that cite this headnote lacked standing to bring the suit against him. Citibank
South Dakota, N.A. sold the account to Unifund Portfolio
A., LLC. Unifund Portfolio A, LLC then assigned its
rights to collect the account to Unifund CCR Partners, but
retained the title and ownership of the account. In his
brief to this Court, Shipley does not complain about the
Attorneys and Law Firms sale of the account from Citibank to Unifund Portfolio A,
but of the assignment from Unifund Portfolio A to
*27 Richard C. Jenkins, Dallas, for Appellant.
Unifund CCR Partners.
Abel Reyna, Jr., McCleskey Harriger & Brazill & Graf
LLP, Lubbock, for Appellee. Standing, a necessary component of subject-matter
jurisdiction, is a constitutional prerequisite to maintaining
Before Chief Justice GRAY, Justice REYNA, and Justice a suit under Texas law. Tex. Ass’n of Bus. v. Tex. Air
DAVIS. Control Bd., 852 S.W.2d 440, 444–45 (Tex.1993).
Whether a party has standing to pursue a claim is a
question of law that we review de novo. Mayhew v. Town
of Sunnyvale, 964 S.W.2d 922, 928 (Tex.1998).
Standing refers to a party’s justiciable interest in a
*28 OPINION ON REHEARING controversy. See Nootsie, Ltd. v. Williamson County
Appraisal Dist., 925 S.W.2d 659, 661–62 (Tex.1996);
Town of Fairview v. Lawler, 252 S.W.3d 853, 855
TOM GRAY, Chief Justice. (Tex.App.-Dallas 2008, no pet.). Only the party whose
primary legal right has been breached may seek redress
Robert Shipley appeals from the entry of a judgment
for an injury. Nauslar v. Coors Brewing Co., 170 S.W.3d
against him for a debt on a credit card account. Shipley
242, 249 (Tex.App.-Dallas 2005, no pet.). Without a
complains that the trial court erred by not dismissing the
breach of a legal right belonging to that party, that party
suit against him because Unifund CCR Partners lacked
standing to bring the suit because the court lacked subject has no standing to litigate. Cadle Co. v. Lobingier, 50
matter jurisdiction in that Unifund CCR Partners did not S.W.3d 662, 669–70 (Tex.App.-Fort Worth 2001, pet.
denied). In reviewing standing on appeal, we construe the
own the debt and therefore did not have standing to bring
petition in favor of the plaintiff, and if necessary, review
the action. Shipley also complains that the evidence was
the entire record to determine if any evidence supports
legally insufficient for the trial court to have granted a
standing. See Tex. Air Control, 852 S.W.2d at 446.
judgment against him and in favor of Unifund CCR
Partners because there was no evidence that Shipley’s [1] [2]
An “assignment” is simply a transfer of some right
debt had been assigned to Unifund CCR Partners.
or interest. See Pagosa Oil & Gas, L.L.C. v. Marrs &
Smith P’ship, 323 S.W.3d 203, 211 (Tex.App.-El Paso
On original submission, this Court affirmed the judgment.
2010, no pet. h.) (citing University of Texas Med. Branch
See Shipley v. Unifund CCR Partners, No.
at Galveston v. Allan, 777 S.W.2d 450, 452
10–09–00314–CV, 2010 Tex.App. LEXIS 4544
(Tex.App.-Waco June 16, 2010). Upon Shipley’s timely (Tex.App.-Houston [14th Dist.] 1989, no writ)). When an
assignee holds a contractually valid assignment, that
motion for rehearing, we requested a response from
assignee steps into the shoes of the assignor and is
Unifund CCR Partners, although Unifund has not done so.
considered *29 under the law to have suffered the same
As authorized by Rule of Appellate Procedure 49.3, we
injury as the assignors and have the same ability to pursue
issue this modified opinion after requesting the response.
TEX.R.APP. P. 49.3. On reconsideration of the issues the claims. Southwestern Bell Tel. Co. v. Mktg. on Hold
Inc., 308 S.W.3d 909 (Tex.2010) (citing Holy Cross
© 2015 Thomson Reuters. No claim to original U.S. Government Works. 2
Shipley v. Unifund CCR Partners, 331 S.W.3d 27 (2010)
Church of God in Christ v. Wolf, 44 S.W.3d 562, 572 (including, without limitation,
(Tex.2001)). warranties pertaining to title,
validity, collectibility (sic),
accuracy or sufficiency of
information, and applicability of
Pleadings and Evidence in the Record any statute of limitations), except
[3] [4]
“It has long been the rule that a plaintiff’s good faith as stated in the Agreement or
allegations are used to determine the trial court’s herein. (emphasis added)
jurisdiction.” Eaves v. Unifund CCR Partners, 301
S.W.3d 402, 404 (Tex.App.-El Paso 2009, no pet.) (citing [6]
Because standing denotes a party’s justiciable interest
Brannon v. Pac. Employers Ins. Co., 148 Tex. 289, 224 in a controversy, it is only the party whose primary legal
S.W.2d 466, 469 (Tex.1949)). A court may presume the right has been breached that may seek redress for that
truth of allegations made in a party’s pleadings when injury. Eaves, 301 S.W.3d at 404. Without a breach of a
determining standing. Id. (citing Tex. Ass’n of Bus., 852 legal right belonging to that party, that party has no
S.W.2d at 446; Brown v. Todd, 53 S.W.3d 297, 305 n. 3 standing to litigate. Id. (citing Cadle Co. v. Lobingier, 50
(Tex.2001) (“Because standing is a component of subject S.W.3d 662, 669–70 (Tex.App.-Fort Worth 2001, pet.
matter jurisdiction, we consider [it] as we would a plea to denied)). Unifund CCR Partners’s right is solely limited
the jurisdiction, construing the pleadings in favor of the to taking whatever steps are necessary to collect a debt
plaintiff.”)). “A court is not required to look solely to the owned entirely by someone else, while holding no title,
pleadings but may consider evidence and must do so interest, or rights in anything else. We do not find that this
when necessary to resolve the jurisdictional issues is sufficient to establish that Unifund CCR Partners has
raised.” State Dep’t of Crim. Justice v. Miller, 51 S.W.3d standing to pursue this claim in its own name.
583, 587 (Tex.2001). However, the petition’s sole
reference to Unifund CCR Partners’s ownership or Cases that have found standing to exist all indicate that a
standing to litigate is the statement that “Plaintiff is finding of ownership of some type was made. Even the
authorized to file this petition.” We do not find that this cases *30 cited to by Unifund CCR Partners demonstrate
constitutes any evidence of standing. that some ownership interest was transferred by the
[5] assignor to the assignee. See Sprint Communications Co.,
The case was solely decided based on business records L.P. v. APCC Services, Inc., 554 U.S. 269, 128 S.Ct.
filed by Unifund CCR Partners. The evidence presented 2531, 2541–43, 171 L. Ed. 2d 424 (2008) (assignee with
in the business records affidavit is likewise unclear as to legal title to debt of a legal claim for money owed has
what interest beyond the right of collection that Unifund standing to pursue the claim even if proceeds are to be
CCR Partners owns. Additionally, the trial court sustained entirely remitted to assignor); see also Eaves, 301 S.W.3d
Shipley’s hearsay objections to the affidavit and struck at 403–04 (pleadings and live testimony sufficiently
the content of the affidavit outside of the questions demonstrated that Unifund owned the account in question
required to authenticate the business record as such. In to establish standing); Cartwright v. MBank Corpus
fact, the assignment from Unifund Portfolio A, LLC to Christi, N.A., 865 S.W.2d 546, 549–50 (Tex.App.-Corpus
Unifund CCR Partners indicates that Unifund CCR Christi 1993, writ denied) (note transferred to MBank
Partners owns nothing. The pertinent language of the making MBank the holder of the note); Schultz v. Aetna
assignment states: Business Credit, Inc., 540 S.W.2d 530, 531
(Tex.Civ.App.-San Antonio 1976, no writ) (assignor
Assignor, for value received and in transferred “all of its rights, title and interests” in the
connection with the Agreement, relevant instrument, any accompanying promissory note
transfers and assigns to Assignee or notes, and all rights and remedies under said instrument
all of Assignor’s rights in the or notes); Kelley v. Bluff Creek Oil Co., 298 S.W.2d 263,
Receivables, for collection 267 (Tex.Civ.App.-Fort Worth 1956) (assignment
purposes only, including transferred all “right, title and interest” in a claim, “with
conducting litigation in Assignee’s full power and authority to collect and receipt therefore”),
name, for those Receivables which aff’d in part, and rev’d in part on other grounds, 158 Tex.
Assignor owns or may acquire 180, 309 S.W.2d 208 (1958).
from time to time. Assignor shall
retain title and ownership of such We find that without evidence of any ownership interest
Receivables. The assignment is or title in the account that Unifund CCR Partners does not
without recourse to Assignor and have standing to bring this suit and that the trial court did
without warranty of any kind
© 2015 Thomson Reuters. No claim to original U.S. Government Works. 3
Shipley v. Unifund CCR Partners, 331 S.W.3d 27 (2010)
not have subject matter jurisdiction over the action. We standing to file suit against Shipley. Therefore, because
sustain issue one. the trial court lacked subject matter jurisdiction, we
reverse the judgment of the trial court and render
judgment dismissing the case.
Conclusion
We conclude that Unifund CCR Partners did not have
End of Document © 2015 Thomson Reuters. No claim to original U.S. Government Works.
© 2015 Thomson Reuters. No claim to original U.S. Government Works. 4