in Re: Truck Insurance Exchange ( 2013 )

NO. 12-12-00183-CV
IN THE COURT OF APPEALS
TWELFTH COURT OF APPEALS DISTRICT
TYLER, TEXAS
IN RE: §
TRUCK INSURANCE EXCHANGE, § ORIGINAL PROCEEDING
RELATOR §
MEMORANDUM OPINION
Relator Truck Insurance Exchange (TIE) seeks mandamus relief from the trial court’s denial
of its plea in abatement.1 TIE contends that the 53rd Judicial District Court of Travis County has
dominant jurisdiction over the 114th Judicial District Court of Smith County because TIE’s suit (the
Travis County suit) was the first filed and involves the same parties and subject matter as the Smith
County suit. We deny the petition.
BACKGROUND
Brown Eyed Girl, LLC d/b/a Leigh Oliver’s (Oliver’s), the real party in interest, creates,
markets, and manufactures all natural food products. In late 2008, Oliver’s entered into a “co-
packer” relationship with Gourmet Resources, LLC, which was owned by Alexandra Weeks.
Gourmet was to produce, package, and ship products manufactured by Oliver’s. Oliver’s soon
became dissatisfied with Gourmet’s performance, and their relationship continued to deteriorate
through 2009. In early 2010, Oliver’s terminated their relationship, and Alexandra Weeks d/b/a
Gourmet Food Resources, LLC filed for bankruptcy.
As required by its contract with Oliver’s, Gourmet had obtained two insurance policies–a
business owner’s liability policy and an excess liability policy. Both were issued by TIE, and the
general liability policy named Oliver’s as an additional insured. Oliver’s sought, and was granted,
1
The respondent is the Honorable Christi J. Kennedy, Judge of the 114th Judicial District Court, Smith
County, Texas.
relief from the automatic stay in Weeks’s bankruptcy. The order authorized Oliver’s to pursue its
claim under the general liability policy and to join “Debtor as a party for insurance policy liability
purposes only.”
Oliver’s sued Gourmet and Weeks for damages resulting from Gourmet’s alleged negligence
in packaging and shipping Oliver’s products and its alleged breach of express and implied
warranties.2 TIE filed an answer on behalf of Gourmet pursuant to a qualified defense under a
reservation of rights, but later withdrew its defense. Ultimately, the trial court signed a postanswer
default judgment against Gourmet and Weeks awarding Oliver’s in excess of $4 million.
On October 18, 2011, TIE filed suit in Travis County seeking a declaratory judgment that no
coverage exists under Gourmet’s general liability policy for the claims Oliver’s alleged against
Gourmet. Oliver’s was the sole defendant in this suit. Also on October 18, Alexandra Weeks,
individually and d/b/a Gourmet Resources, and on behalf of Gourmet Resources, LLC, executed an
assignment of “any and all” of their claims against TIE, its insuring agent, and his insurance agency.
Oliver’s, the only other party to the assignment, executed the document on October 19, 2011–one
day after TIE filed suit in Travis County.
Eight days later, before being served with citation in TIE’s declaratory judgment action,
Oliver’s sued Farmers Insurance Group3 and Jim Boldin, individually and d/b/a Boldin Insurance
Agency. TIE filed a plea in abatement in the Smith County suit, alleging that the Travis County suit
was filed first and requesting that the Smith County suit be abated. After a hearing, the trial court
denied the plea.
PREREQUISITES TO MANDAMUS
A writ of mandamus will issue if the trial court committed a clear abuse of discretion for
which the relator has no adequate remedy at law. In re Frank Motor Co., 361 S.W.3d 628, 630
(Tex. 2012) (orig. proceeding). A trial court abuses its discretion if it reaches a decision so arbitrary
and unreasonable that it amounts to a clear and prejudicial error of law or if it clearly fails to
correctly analyze or apply the law. In re Olshan Found. Repair Co., LLC, 328 S.W.3d 883, 888
(Tex. 2010) (orig. proceeding). Mandamus is available when a trial court refuses to abate based on
the pendency of another action. In re ExxonMobil Prod. Co., 340 S.W.3d 852, 857 (Tex. App.–
2
Oliver’s joined Weeks as a defendant alleging that she had caused Gourmet to be dissolved.
3
It is undisputed that TIE should have been named as the defendant instead of Farmers Insurance Group.
2
San Antonio 2011, orig. proceeding [mand. denied]) (applying In re Prudential Ins. of Am., 148
S.W.3d 124, 135-36 (Tex. 2004) (orig. proceeding)).
DOMINANT JURISDICTION
Generally, when cases involving the same subject matter are brought in different courts in
which venue would be proper, the court with the first-filed case has dominant jurisdiction and
should proceed, and the other case should be abated. Perry v. Del Rio, 66 S.W.3d 239, 252 (Tex.
2001); Wyatt v. Shaw Plumbing Co., 760 S.W.2d 245, 248 (Tex. 1988). The proper means of
contesting a court’s lack of dominant jurisdiction is the filing of a plea in abatement in the court
without dominant jurisdiction. See In re Puig, 351 S.W.3d 301, 303 (Tex. 2011) (original
proceeding) (per curiam). When an inherent interrelation of the subject matter exists in two
pending lawsuits, a plea in abatement in the second action must be granted. Wyatt, 760 S.W.2d at
247. But it is not required that the exact issues and all the parties be included in the first action
before the second is filed, provided that the claim in the first suit may be amended to bring in all
necessary and proper parties and issues. Id.
PLEA IN ABATEMENT
It is well established that the party seeking abatement has the burden of establishing the
allegations in its plea in abatement by a preponderance of the evidence. Flowers v. Steelcraft
Corp., 406 S.W.2d 199, 199 (Tex. 1966); Bernal v. Garrison, 818 S.W.2d 79, 82 (Tex. App.–
Corpus Christi 1991, writ denied). A plea in abatement is sustainable without proof only when the
truth of the matters alleged in the defendant’s plea in abatement appears on the face of the plaintiff’s
pleadings. Bernal, 818 S.W.2d at 83. In all other instances, a defendant who merely presents its
plea in abatement without offering evidence to prove the grounds urged waives the plea unless it
can demonstrate that the plaintiff’s petition establishes the grounds urged in the plea. Id. Even the
verification of a plea does not do away with the requirement that the one urging the plea prove the
grounds by a preponderance of the evidence at the time the plea is presented to the court. Brazos
Elec. Power Co-op., Inc. v. Weatherford Indep. Sch. Dist., 453 S.W.2d 185, 189 (Tex. Civ. App.–
Fort Worth 1970, writ ref’d n.r.e.).
For TIE to have prevailed on its plea in abatement, it had to establish, as it alleged in its
plea, that (1) the Travis County suit was filed first; (2) the Travis County suit was still pending; (3)
the Travis County suit and the Smith County suit involved the same parties; and (4) the Travis
3
County suit and the Smith County suit involved the same issues. See Flowers, 406 S.W.2d at 199;
Bernal, 818 S.W.2d at 82.
In its reply to one of Oliver’s arguments in this proceeding, TIE implicitly characterizes the
hearing on its plea as nonevidentiary. It recognizes that a reporter’s record of the hearing is part of
the record in this proceeding, but states that “[a] reporter’s record of a hearing does not necessarily
make the hearing an evidentiary one.” TIE also emphasizes that “the plea in abatement did not
involve any factual dispute, but was decided on legal issues based on the parties’ filings and
arguments of counsel.” The record supports TIE’s implication that the hearing–at least as to TIE–
was nonevidentiary.
TIE’s presentation to the trial court consisted solely of the arguments of its counsel. TIE
provided the trial court with a file-marked copy of its petition in the Travis County suit and of
Oliver’s petition in the Smith County suit. But neither of these copies was offered or admitted into
evidence. See Flowers, 406 S.W.2d at 199. Moreover, the allegations in Oliver’s petition do not
show the truth of the matters alleged in TIE’s plea in abatement. See Bernal, 818 S.W.2d at 83.
And despite TIE’s contention that no factual dispute existed, there is no agreed stipulation of facts
relieving TIE of its burden to prove the allegations in its plea in abatement by a preponderance of
the evidence.
Because there is no evidence in the record pertaining to TIE’s plea in abatement, and the
allegations in Oliver’s petition in the Smith County suit do not aid TIE, the trial court did not abuse
its discretion in denying the plea. See, e.g., De Los Santos v. Johnson, No. 13-07-00502-CV, 2008
WL 3971455, at *5 (Tex. App.–Corpus Christi Aug. 28, 2008, pet. denied) (mem. op.) (plea in
abatement properly denied where no evidence introduced to support it); Upchurch v. Albear, 5
S.W.3d 274, 277 (Tex. App.–Amarillo 1999, pet. denied) (same).
DISPOSITION
Because TIE has not shown that the trial court abused its discretion in denying the plea in
abatement, TIE’s petition for writ of mandamus is denied.
JAMES T. WORTHEN
Chief Justice
Opinion delivered April 24, 2013.
Panel consisted of Worthen, C.J., Griffith, J., and Hoyle, J.
(PUBLISH)
4
COURT OF APPEALS
TWELFTH COURT OF APPEALS DISTRICT OF TEXAS
JUDGMENT
APRIL 24, 2013
NO. 12-12-00183-CV
TRUCK INSURANCE EXCHANGE,
Relator
v.
HON. CHRISTI J. KENNEDY,
Respondent
ORIGINAL PROCEEDING
ON THIS DAY came to be heard the petition for writ of mandamus filed
by TRUCK INSURANCE EXCHANGE, who is the relator in Cause No.11-3019-B, pending
on the docket of the 114th Judicial District Court of Smith County, Texas. Said petition for writ
of mandamus having been filed herein on May 21, 2012, and the same having been duly
considered, because it is the opinion of this Court that a writ of mandamus should not issue, it is
therefore CONSIDERED, ADJUDGED and ORDERED that the said petition for writ of
mandamus be, and the same is, hereby DENIED.
James T. Worthen, Chief Justice.
Panel consisted of Worthen, C.J., Griffith, J., and Hoyle, J.