Peterson, Goldman & Villani, Inc. v. Ancor Holdings, LP, Timothy McKibben, Joseph Randall Keene, and Ancor Capital Partners, Inc. , 420 S.W.3d 281 ( 2013 )

COURT OF APPEALS
EIGHTH DISTRICT OF TEXAS
EL PASO, TEXAS
PETERSON, GOLDMAN & VILLANI,
INC. §
Appellant, § No. 08-12-00135-CV
v. § Appeal from the
ANCOR HOLDINGS, L.P. TIMOTHY § 141st Judicial District Court
MCKIBBEN, JOSEPH RANDALL
KEENE, AND ANCOR CAPITAL § of Tarrant County, Texas
PARTNERS, INC.,1
§ (TC#141-23625709-09)
Appellees.
§
OPINION
This case concerns a guaranty agreement executed by a limited liability company no longer
in existence because of its merger with a similarly-named limited partnership. The issue is
whether Appellant—owner of the guaranty—may hold Appellees—the limited partnership and its
members—liable for satisfaction of a judgment awarded against the limited liability company.
1
We note that one of the Appellees has been inconsistently identified throughout these proceedings. In their
appellate brief, Appellees identify themselves as Ancor Holdings, LP, Timothy McKibben, Joseph Randall Keene,
and Ancor Capital Partners, Inc. But in their first amended answer and in their motions for summary judgment,
Appellees identified themselves as Ancor Holdings, LP, Timothy McKibben, Joseph Randall Keene, and Ancor
Partners, Inc. None of the parties, however, has raised an issue regarding the proper identity of the Appellees.
Accordingly, we need not concern ourselves with the apparent incongruity between Ancor Capital Partners, Inc. and
Ancor Partners, Inc.
The trial court granted a take-nothing summary judgment in favor of Appellees. We affirm, in
part, and reverse and remand, in part.
FACTUAL AND PROCEDURAL BACKGROUND
In March 2000, Ancor Holdings LLC (Ancor LLC) executed a guaranty agreement in favor
of Bank of America. The agreement prohibited Ancor LLC from merging or consolidating with
any other company unless Ancor LLC was the survivor and further provided that Ancor LLC could
not change its legal structure without Bank of America’s permission. When Ancor LLC failed to
pay the guaranty, Peterson, Goldman & Villani, Inc. (PGV)—as successor to Bank of
America—sued Ancor LLC in Dallas County in February 2004. After three years of arbitration,
PGV obtained a judgment in May 2008 confirming the arbitrator’s award against Ancor LLC.
In July 2008, PGV discovered that—unbeknownst to it and Bank of America and in breach
of the guaranty—Ancor LLC had merged with Ancor Holdings L.P. (Ancor LP) approximately
eight years earlier. The Agreement and Plan of Merger between Ancor LLC and Ancor LP
provides that Ancor LP, as the surviving entity, “shall assume all the liabilities of every kind and
description of [Ancor LLC] and [Ancor LP].”
Consequently, PGV moved to modify the judgment to include Ancor LP as the judgment
debtor on grounds of misnomer. Ancor LLC opposed the motion, arguing that a
misidentification, rather than a misnomer had occurred, because Ancor LLC and Ancor LP were
two separate, distinct entities. The trial court denied PGV’s motion but modified the judgment
for reasons not relevant to this appeal. Both Ancor LLC and PGV timely appealed the trial
court’s modified final judgment to the Dallas Court of Appeals.
2
While that judgment was being appealed, PGV sued Ancor LP and Ancor LP’s members,
Timothy McKibben, Joseph Randall Keene, and Ancor Partners, Inc., in September 2008 for
satisfaction of the judgment awarded against Ancor LLC.2 Appellees asserted res judicata and
limitations as defenses. In its third amended petition filed in March 2010, PGV sought a
declaratory judgment that Appellees were liable for the judgment awarded against Ancor LLC and
brought various causes of action sounding in tort and contract. Appellees responded by filing an
amended motion for summary judgment in which they argued that all of PGV’s claims in its third
amended petition were barred by limitations and by res judicata and that PGV’s tort claims, alter
ego claims, and claims for estoppel, conspiracy, and punitive damages failed for other reasons.
After responding to this motion, PGV filed a fourth amended petition. Once more, PGV
sought a declaratory judgment that Appellees were bound by the judgment against Ancor LLC
and, once again, brought causes of action sounding in tort and contract. In conjunction with this
petition, PGV moved for partial summary judgment on its declaratory-judgment and
breach-of-contract claims against Ancor LP. In this motion, PGV asserted Ancor LP was liable
for the judgment awarded against Ancor LLC because Ancor LP had assumed all of Ancor LLC’s
liabilities. Appellees countered by filing a supplement motion for summary judgment in which
they argued that PGV’s declaratory-judgment and breach-of-contract claims premised on the
assumption-of-liability theory were barred by limitations and res judicata.
2
Ancor Capital, Inc. was not initially named a defendant, but was subsequently added as one.
3
The trial court—without stating its reasons for doing so—denied PGV’s motion for partial
summary judgment, granted Appellees’ amended motion for summary judgment and supplemental
motion for summary judgment, and dismissed PGV’s claims with prejudice.
STANDARD OF REVIEW
We review a trial court’s decision to grant summary judgment de novo.3 Mann Frankfort
Stein & Lipp Advisors, Inc. v. Fielding, 289 S.W.3d 844, 848 (Tex. 2009). To prevail on
summary judgment, a movant must prove that there is no genuine issue of material fact and that it
is entitled to judgment as a matter of law. See TEX.R.CIV.P. 166a(c); Little v. Tex. Dep’t of
Criminal Justice, 148 S.W.3d 374, 381 (Tex. 2004). In deciding whether the movant met its
burden, we construe all evidence favorable to the non-movant as true, indulge every reasonable
inference in favor of the non-movant, and resolve any doubts in the non-movant’s favor. Nixon v.
Mr. Prop. Mgmt. Co., Inc., 690 S.W.2d 546, 548-49 (Tex. 1985). Because res judicata and
limitations are affirmative defenses, Appellees were required to establish all of the elements of
these defenses as a matter of law. TEX.R.CIV.P. 94; City of Houston v. Clear Creek Basin Auth.,
589 S.W.2d 671, 679 (Tex. 1979).
RES JUDICATA
In its first issue, PGV argues that “[Appellees] have not met the elements of res judicata.”
Appellees contend that PGV’s claims in its fourth amended petition are barred by res judicata
because the claims “were brought, or could have been brought, in the original Dallas Suit.”
3
PGV complains only of the trial court’s decision granting Appellees’ motions. We thus do not address the trial
court’s denial of PGV’s motion for partial summary judgment. Quantum Chem. Corp. v. Harris County Appraisal
Dist., 962 S.W.2d 50, 51 (Tex.App.--Houston [1st Dist.] 1997, no writ)(“We consider the denial if appellant
complains of both the granting of appellee’s motion and the denial of its own.”).
4
According to Appellees, the issue of which party was liable under the guaranty was settled in the
first action because the trial court’s judgment imposing liability upon Ancor LLC and denying
PGV’s request to substitute Ancor LP as the liable party was affirmed in Ancor Holdings, LLC v.
Peterson, Goldman & Villani, Inc., 294 S.W.3d 818 (Tex.App.--Dallas 2009, no pet.). In
affirming the judgment, the Dallas Court of Appeals overruled PGV’s cross-appeal concerning the
trial court’s failure to include Ancor LP as a judgment debtor. Id. at 834. The court concluded
that Ancor LLC and Ancor LP were two separate, distinct entities and that, because Ancor LP was
not served, it could not be included as a judgment debtor. Id. But whether the second action is
based on the same claims that were raised or could have been raised in the first action does not end
our inquiry. As we noted above, Appellees bore the burden to establish all elements of res
judicata as a matter of law. This they failed to do.
Applicable Law
Res judicata, also known as claim preclusion, prevents re-litigation of a claim that has been
finally adjudicated or that arises from the same subject matter and should have been litigated in a
prior suit. Amstadt v. U.S. Brass Corp., 919 S.W.2d 644, 652 (Tex. 1996). It applies when: (1)
there is a prior final determination on the merits by a court of competent jurisdiction; (2) the parties
in the second action are the same or in privity with those in the first action; and (3) the second
action is based on the same claims as were raised or could have been raised in the first action. Id.
Discussion
In their summary judgment motions, Appellees never addressed whether—much less
established that—the parties in this action are the same or in privity with those in the first action.
5
Indeed, Appellees asserted in their motions for summary judgment that Ancor LP was not a party
to the judgment in the first action. Appellees thus failed to establish that res judicata applied to
the claims brought by PGV in this action. Accordingly, the trial court erred in granting summary
judgment on this basis.
PGV’s first issue is sustained.
LIMITATIONS AND JUDICIAL ESTOPPEL
In its second issue, PGV asserts that Appellees are judicially estopped from asserting
limitations as a defense because their current position—that Ancor LLC did not exist as an
independent entity following its merger with Ancor LP—is inconsistent with their previous
successful one—that Ancor LLC and Ancor LP were separate and distinct entities. We agree.
Applicable Law
“The doctrine of judicial estoppel ‘precludes a party from adopting a position inconsistent
with one that it maintained successfully in an earlier proceeding.’” Pleasant Glade Assembly of
God v. Schubert, 264 S.W.3d 1, 6 (Tex. 2008). As “a rule of procedure based on justice and
sound public policy[,] . . . [i]ts essential function ‘is to prevent the use of intentional
self-contradiction as a means of obtaining unfair advantage.’” Id. [Internal citations omitted].
For the doctrine to apply, the following elements must be present: (1) a sworn, inconsistent
statement made in a previous judicial proceeding; (2) the party who made the statement
successfully maintained the previous position; (3) the previous statement was not made
inadvertently or by mistake, fraud, or duress; and (4) the statement was deliberate, clear, and
unequivocal. In re Estate of Huff, 15 S.W.3d 301, 309 (Tex.App.--Texarkana 2000, no pet.).
6
Discussion
Appellees are judicially estopped from asserting limitation as an affirmative defense in this
case.
Appellees prevailed in the first action by asserting a position contrary to that asserted in
this action. As illustrated by Ancor Holdings, LLC v. Peterson, Goldman & Villani, Inc.,
Appellees argued successfully in the previous litigation that Ancor LP was not liable for
satisfaction of the judgment awarded against Ancor LLC because Ancor LLC and Ancor LP were
two separate, distinct entities. Both Keene and McKibben testified during the arbitration
proceedings that they were serving as Ancor LLC’s president and chairman of the board,
respectively, and that Ancor LLC currently owned and operated six companies. However, during
the course of this litigation, Appellees claimed that when Ancor LLC merged with and into Ancor
LP in September 2000, Ancor LLC ceased to exist as a viable, on-going entity. Appellees thus
moved for summary judgment on the basis that PGV was barred by limitations from re-litigating
the issue of which party was liable under the guaranty because PGV—aware of the merger and its
effects—had the opportunity in the first action to sue the correct party—Ancor LP—but chose
instead to sue the incorrect party—Ancor LLC. Appellees’ position in the first action was
intentional, not inadvertent. Keene and McKibben testified under oath in the first action that, in
essence, Ancor LLC was a viable, on-going entity. “[Appellees] [cannot] . . . be heard now to
maintain a contrary position in the absence of proof that [their] [testimony] was made
inadvertently or by mistake or by fraud or duress.” Long v. Knox, 155 Tex. 581, 585, 291 S.W.2d
292, 295 (1956). Here, there is no such proof. Indeed, Appellees acknowledge in their brief that
7
Keene and McKibben appeared in the first action as witnesses on behalf of Ancor LLC. “There
[is] not only no proof . . . [that Appellees’ position in the first action was inadvertent] but rather the
evidence shows conclusively that [their] [testimony] was made voluntarily, with full knowledge of
all the facts and with the intention to prevent satisfaction of the judgment against [them].” Id.
Appellees do not contend judicial estoppel is inapplicable in this case. Rather, they argue
that PGV, by suing its attorneys for permitting the statute of limitations to expire against Ancor
LP, judicially admitted that its claims against Ancor LP are barred. “However, a judicial
admission constitutes a waiver of proof of the admitted or asserted fact only in the proceeding in
which it is made or, perhaps, in a subsequent proceeding involving the same parties.” Aetna Life
Ins. Co. v. Wells, 557 S.W.2d 144, 147 (Tex.Civ.App.--San Antonio 1977, writ ref’d n.r.e.).
Here, Appellees are strangers to the malpractice suit between PGV and its attorneys. And
Appellees do not content that PGV’s alleged judicial admission was made in a subsequent
proceeding involving the same parties. Appellees have thus failed to establish that PGV
judicially admitted that its claims against Ancor LP are barred by limitations.
Because Appellees impermissibly profited in this action by asserting a position contrary to
that asserted in the first action in support of their argument that Ancor LP is not liable under the
guaranty, they are judicially estopped from asserting limitations as an affirmative defense.
Therefore, Appellees are not entitled to summary judgment on this basis, and the trial court erred
in granting summary judgment on this ground.
8
PGV’s second issue is sustained. Given our conclusion that Appellees are
judicially estopped from raising the defense of limitations, we need not decide PGV’s third issue:
whether Appellees are equitably estopped from asserting limitations.
REMAINING GROUNDS FOR SUMMARY JUDGMENT
Although Appellees were unsuccessful in establishing their right to summary judgment on
the bases of res judicata and limitations, they also moved for summary judgment on other grounds.
Specifically, they claimed that “PGV’s tort claims (for fraud, tortious interference with contract,
and negligent misrepresentation)” were futile because perjured testimony “cannot serve as a basis
for a suit in tort.” Appellees also maintained that PGV could not prevail on its alter ego claims
because these types of claims could not be asserted against an LLC and because there was no
evidence that Keene and McKibben perpetuated a fraud. Appellees further argued that PGV’s
claims for estoppel failed because “estoppel theories are not independent causes of action” and
PGV’s claims for conspiracy and punitive damages failed because these claims were concomitant
with PGV’s underlying tort claims. On appeal, Appellees contend that we should uphold the trial
court’s summary judgment as to these claims because PGV did not challenge the propriety of
summary judgment on these other grounds. We agree.
It is well-settled that if a trial court does not specify the basis on which summary judgment
is granted, the appellant must challenge and negate all possible grounds on which summary
judgment could have been granted; otherwise, we must uphold the judgment on that basis.
Star-Telegram, Inc. v. Doe, 915 S.W.2d 471, 473 (Tex. 1995). Here, PGV did not respond—in
either its summary judgment responses or appellate briefs—to the propriety of summary judgment
9
on grounds other than res judicata and limitations. Rather, PGV appears to presume the trial
court’s summary judgment rested solely on these two grounds. Other than to make passing
references to Appellees’ inconsistent misrepresentations in arguing that limitations and res
judicata were inapplicable because the merger never took place, PGV offers no discussion on the
other grounds for summary judgment raised by Appellees.4 Because PGV failed to negate all
possible grounds on which summary judgment could have been granted as to its tort claims, alter
ego claims, and claims for estoppel, conspiracy, and punitive damages, we conclude the summary
judgment on these claims must stand. See Star-Telegram, 915 S.W.2d at 473.
CONCLUSION
We reverse the trial court’s grant of summary judgment in favor of Appellees on PGV’s
declaratory-judgment and contractual claims. We remand those claims to the trial court for
further proceedings consistent with this opinion. In all other respects, the trial court’s judgment is
affirmed.
December 19, 2013
YVONNE T. RODRIGUEZ, Justice
Before McClure, C.J., Rivera, and Rodriguez, JJ.
4
Indeed, PGV claims in its fourth issue that “fact issues persist as to when the alleged merger became effective.”
However, we need not address this issue because we have already concluded that the trial court erred in granting
summary judgment based on res judicata and limitations.
10