in Re Oxbow Calcining LLC ( 2018 )

In The
Court of Appeals
Ninth District of Texas at Beaumont
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NO. 09-18-00273-CV
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IN RE OXBOW CALCINING LLC
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Original Proceeding
172nd District Court of Jefferson County, Texas
Trial Cause No. E-201,894
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MEMORANDUM OPINION
Oxbow Calcining LLC filed a petition for writ of mandamus to compel the
trial court to vacate an order denying relator’s motion to quash a hearing on Port
Arthur Steam Energy, L.P.’s (PASE) Application for Post-Judgment Enforcement
Orders. We entered a stay and requested further briefing.
In 2011, Oxbow and PASE had a dispute concerning certain rights and duties
under a Heat Energy Agreement (Heat Agreement) that resulted in an arbitration
award of $3,409,781.57 to PASE. According to the arbitration award, PASE was
entitled to lost revenue caused by Oxbow’s breach of provisions in the Heat
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Agreement. The arbitration award expressly states further that: “This is not a cash
award requiring Oxbow to write PASE a check. It shall be handled in accordance
with the specific provisions of the Heat Agreement regarding the heat bank as an
offset.”1 The award was confirmed by the 151st District Court of Harris County.
On June 8, 2018, PASE filed a Petition and Application for Post-Judgment
Enforcement Orders in the 172nd District Court of Jefferson County. Oxbow owns
and operates a coke calcining plant located in Port Arthur, Jefferson County, Texas.
PASE owns and operates a steam plant that is adjacent and connected to Oxbow’s
petroleum coke calcining plant in Jefferson County, Texas. PASE requested the
appointment of a receiver under section 31.002 of the Civil Practice and Remedies
Code to monitor and control Oxbow’s coke calcining plant to maximize the delivery
of flue gas energy to PASE. See generally Tex. Civ. Prac. & Rem. Code Ann. §
31.002 (West Supp. 2017).
Oxbow filed a motion to transfer venue to Harris County and subject to its
motion to transfer venue, moved to compel arbitration of the dispute under the Heat
Agreement. Oxbow filed a motion to quash the hearing on PASE’s application for a
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PASE concedes that it was not to recover a monetary payment for damages
directly from Oxbow, and that it was to recover the damages awarded in the
judgment by offsetting “Heat Payments” that the arbitration panel anticipated PASE
would be making to Oxbow under Section 6 of the Heat Agreement over a period of
twelve or more years.
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turnover order and appointment of a receiver, which, in part, argued that the motion
to transfer venue and motion to compel arbitration should be decided first. The trial
court denied Oxbow’s motion to quash.
In its mandamus petition, Oxbow contends the trial court clearly abused its
discretion by denying the motion to quash when a motion to transfer venue and a
motion to compel arbitration based on a mandatory arbitration provision in the Heat
Agreement will not be decided before the scheduled hearing on PASE’s application
for a turnover order. Oxbow contends it lacks an adequate remedy by appeal because
the order effectively deprives Oxbow of its contractual right to arbitration and
severely compromises its ability to present its defense at the hearing on PASE’s
application for a turnover order.
Mandamus Review
A writ of mandamus traditionally has been only to “compel the performance
of a ministerial act or duty.” Walker v. Packer, 827 S.W.2d 833, 839 (Tex. 1992)
(orig. proceeding). The use has been expanded to “correct a ‘clear abuse of
discretion’ committed by the trial court”. Id. A trial court clearly abuses its discretion
if “‘it reaches a decision so arbitrary and unreasonable as to amount to a clear and
prejudicial error of law.’” Id. (quoting Johnson v. Fourth Court of Appeals, 700
S.W.2d 916, 917). The relator must establish that the trial court could reasonably
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have reached only one decision. Id. at 840. “On the other hand, review of a trial
court’s determination of the legal principles controlling its ruling is much less
deferential.” Id. “A trial court has no ‘discretion’ in determining what the law is or
applying the law to the facts.” Id. “Thus, a clear failure by the trial court to analyze
or apply the law correctly will constitute an abuse of discretion[] and may result in
appellate reversal by extraordinary writ.” Id.
Oxbow must also demonstrate that it has no adequate remedy by appeal. See
In re Prudential Ins. Co. of America, 148 S.W.3d 124, 135–36 (Tex. 2004) (orig.
proceeding). Mandamus review of incidental, interlocutory rulings by the trial court
unduly interferes with trial court proceedings and adds to the expense and delay of
civil litigation. Id. at 136. However, mandamus review of significant rulings in
exceptional cases may, at times, be essential to preserve important substantive and
procedural rights from impairment or loss and spare private parties and the public
the time and money utterly wasted enduring eventual reversal of improperly
conducted proceedings. Id. When the benefits to mandamus review outweigh the
detriments, appellate courts must consider whether the appellate remedy is adequate.
Id. “[W]hether an appellate remedy is ‘adequate’ so as to preclude mandamus review
depends heavily on the circumstances presented and is better guided by general
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principles than by simple rules.” Id. at 137. Mandamus review is appropriate if “the
error was clear enough[] and correction simple enough[.]” Id.
In its mandamus petition, Oxbow contends the trial court clearly abused its
discretion by denying the motion to quash when a motion to transfer venue and a
motion to compel arbitration based on a mandatory arbitration provision in the Heat
Agreement will not be decided before the scheduled hearing on PASE’s application
for a turnover order. Oxbow contends it lacks an adequate remedy by appeal because
the order effectively deprives Oxbow of its contractual right to arbitration and
severely compromises its ability to present its defense at the hearing on PASE’s
application for a turnover order.
The hearing that Oxbow seeks to quash is on PASE’s request for turnover of
assets and relates to post-judgment enforcement of a judgment. See generally Tex.
Civ. Prac. & Rem. Code Ann. § 31.002. The turnover statute is purely procedural in
nature. Republic Ins. Co. v. Millard, 825 S.W.2d 780, 783 (Tex. App.—Houston
[14th Dist.] 1992, orig. proceeding). The purpose of a turnover proceeding is merely
to ascertain whether an asset is in the possession of the judgment debtor or subject
to the debtor’s control. Id. The statute does not allow for a determination of the
parties’ substantive rights. Id.
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Whether the arbitration award reduced to judgment allows the real party in
interest to seize control of the relator’s plant or to obtain a turnover order or
receivership, whether the dispute is a “new dispute” or seeks additional substantive
relief, whether venue of this matter is proper in Jefferson County, Texas, and
whether the matter should be arbitrated are issues that have not yet been determined
by the trial court, and such issues are not currently before us. We expressly do not
rule on any of these questions. The only questions before a trial court at a hearing on
an application for turnover are: (1) whether the judgment creditor is entitled to
turnover of nonexempt assets to obtain satisfaction of a judgment; (2) whether the
judgment debtor is in possession of an asset that is not exempt from attachment,
execution, or seizure for the satisfaction of liabilities under the judgment; and (3)
whether the trial court should appoint a receiver with the authority to take possession
of the nonexempt property, sell it, and pay the proceeds to the judgment creditor to
the extent required to satisfy the judgment. See generally Tex. Civ. Prac. & Rem.
Code Ann. § 31.002. Any resulting order that grants the turnover or appoints a
receiver or that functions as a mandatory injunction will be appealable. See
Alexander Dubose Jefferson & Townsend LLP v. Chevron Phillips Chem. Co., 540
S.W.3d 577, 586 (Tex. 2018); see also Tex. Civ. Prac. & Rem. Code Ann. §
51.014(a)(1) (West Supp. 2017).
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The matter that Oxbow seeks to quash is a hearing that is limited to post-
judgment enforcement of an arbitration award. Whether the Judgment in this case
allows the real party in interest to seize control of the relator’s plant is a matter that
has not yet been determined by the trial court. After reviewing the mandamus
petition and record, we conclude that an appeal of a turnover order will provide
adequate relief in this instance. We lift our July 20, 2018 stay order and deny the
petition for a writ of mandamus.
PETITION DENIED.
PER CURIAM
Submitted on July 31, 2018
Opinion Delivered August 9, 2018
Before McKeithen, C.J., Kreger and Johnson, JJ.
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