in Re Brothers Oil & Equipment, Inc. Winchester Oil & Gas, LLC And George Burke

TEXAS COURT OF APPEALS, THIRD DISTRICT, AT AUSTIN

NO. 03-17-00349-CV

In re Brothers Oil & Equipment, Inc.; Winchester
Oil & Gas, LLC; and George Burke

ORIGINAL PROCEEDING FROM MILAM COUNTY

M E M O R AN D U M O P I N I O N

Relators Brothers Oil & Equipment, Inc.; Winchester Oil & Gas, LLC; and George

Burke filed a petition for writ of mandamus alleging that the district court abused its discretion by

issuing an order granting summary judgment that purports to be final without disposing of all claims.

We will conditionally grant the writ of mandamus.

BACKGROUND

The challenged order stems from a lawsuit filed by real-party-in-interest Ardent I,

LLC, against Brothers Oil, Winchester Oil, Burke, Kacie Carey, and Texas Bank, N.A.,1 disputing

title to ten oil and gas leases in Milam County, the wells on those leases, and other collateral.2

Ardent’s petition in the underlying suit makes claims for trespass to try title, suit to quiet title,

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Ardent nonsuited Carey and Texas Bank, who are not parties to this original proceeding.
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Ardent’s petition also states that its suit seeks to “remove Winchester as well operator,
remove an inferior lien against chattel, and cause first purchasers to release suspended funds to the
working interest owner—Ardent, and for damages.”
trespass, and conversion, and seeks injunctive and declaratory relief, actual and punitive damages,

and attorney’s fees. Ardent filed a motion for summary judgment against Relators on Ardent’s

trespass-to-try title causes of action and against Texas Bank as to the leases and a pulling unit that

was used for operations on the leases. Ardent’s motion asked the district court to declare that Ardent

had superior title over the leases, that Relators had no title or interest in the leases, and that Texas

Bank had no title or interest in the pulling unit. The motion also sought removal of any cloud on

Ardent’s record title to the leases.

Summary-judgment hearing postponed

Ardent’s motion for summary judgment was scheduled for hearing on

October 20, 2016. After Texas Bank filed a motion contending that it had not been timely served

with Ardent’s motion, the hearing was passed, and the motion for summary judgment was heard on

October 24, 2016. Relators filed counterclaims against Ardent for fraud in a real estate transaction

and fraud in the inducement on October 17, 2016, exactly seven days before the date that the district

court held the summary-judgment hearing.

The district court signed an order on January 5, 2017, granting Ardent’s motion for

summary judgment.3 However, the order did not address Carey and Texas Bank, did not address all

of Ardent’s claims, and did not address any of Relators’ counterclaims. Further, the order does not

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In the summary-judgment order, the district court ruled that Ardent has superior right, title,
and interest in the disputed leases; Ardent is the lawful owner of the leases; Brothers and Winchester
have no interest in the leases; any cloud over Ardent’s title in the public records is to be removed;
Winchester will immediately execute a P4 form changing operations to Ardent or its designee, or
face a daily fine of $1,000; Ardent is entitled to the balance of interpleaded funds; and the first
purchasers of the leases are to make further payment of oil sales to Ardent’s designated operator.

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contain any language suggesting that it is a final judgment. Apparently recognizing the issue of the

summary-judgment order’s finality, Ardent filed a notice of nonsuit of Carey4 and Texas Bank on

January 20, 2017, stating that Ardent desired its nonsuit to make the Order a final judgment against

Brothers Oil, Winchester Oil, and Burke. The nonsuit does not address Ardent’s remaining claims.

Relators subsequently filed a motion to enter order on April 3, 2017, noting that the

summary-judgment order did not contain the district court’s ruling on their objections to Ardent’s

summary-judgment evidence. Ardent filed an objection to the motion to enter, contending that the

district court lost plenary power because the summary-judgment order was signed more than thirty

days before, no plenary-power-extending motion was filed, no appeal was filed, and the order was

now final. Ardent specifically stated that Relators’ counterclaims were untimely and filed without

leave of court, “[t]herefore, defendants’ counterclaims are void and struck as a matter of law.”

Relators filed a reply disputing Ardent’s assertion that their counterclaims were untimely and

alternatively, stating that leave was deemed granted when the record did not show that the district

court denied leave to file the counterclaims. Relators also stated that despite Ardent’s nonsuit, the

summary-judgment order was interlocutory because it did not dispose of all claims—i.e., their

counterclaims and Ardent’s remaining claims against them—which remained pending before the

district court and over which the district court still had jurisdiction.

Finality of summary-judgment order questioned

The district court held a hearing to determine its jurisdiction over the suit, and took

the matter under advisement. The district court then sent a letter to the parties on April 20, 2017,

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Ardent’s notice of nonsuit stated that Carey had never been served.

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advising that it “decided to take no further action with regard to this matter.” Relators wrote a letter

to the district court four days later, copied to opposing counsel, seeking clarification of whether the

case remained pending or whether the court was of the opinion that it had lost jurisdiction. The

district court responded by letter to the parties dated April 27, 2017, that it considered Ardent’s

summary judgment to be final:

In response to [defense counsel]’s letter requesting clarification, I determined that
Defendants’ Counter-Petition was not timely filed. That, coupled with my order
granting Plaintiff’s Motion for Summary Judgment, left the matter with no further
issues before the court.

Afterward, Relators filed a motion for order nunc pro tunc requesting only that the

district court correct a clerical error as to the hearing date referenced in the summary-judgment order.

Relators pointed out that the order stated that Ardent presented its motion for summary judgment

on October 20, 2016—the date that the hearing was originally scheduled—when the order should

state, consistent with the district court’s file, that the hearing occurred on October 24, 2016. The

district court agreed and on May 1, 2017, signed an “Order for Order Nunc Pro Tunc,” stating:

After due consideration and examination of the original order rendered by the Court
on January 5, 2017, the Court finds that the order entered on January 5, 2017 contains
the following clerical errors: The statement that “On October 20, 2016, Plaintiff
Ardent l ,LLC (“Ardent”) presented its motion for summary judgment...” is erroneous
as the Court’s record clearly reflects that the hearing on Plaintiff’s motion for
summary judgment was on October 24, 201[6].

IT IS THEREFORE ORDERED that the motion of Brothers Oil & Equipment, Inc.,
Winchester Oil & Gas, LLC and George Burke, Defendants, for order nunc pro tunc
is granted, and that the clerk will enter [the] court’s signed and dated order nunc pro
tunc, which is attached to this order as Exhibit A in the minutes of the Court.

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Attached to this Order was the “Order Granting Plaintiff’s Motion for Summary Judgment Nunc Pro

Tunc,” also signed on May 1, 2017, correcting the hearing date to October 24, 2016.

Relators filed this petition for writ of mandamus challenging Ardent’s summary

judgment. Ardent filed a response and a supplemental response, stating that after the filing of this

mandamus petition, Brothers Oil and Burke sued Ardent’s owner, H. Hal McKinney, for claims that

appear to mirror their counterclaims against Ardent for fraud in a real estate transaction and fraud

in the inducement in the underlying suit. Ardent contends that the suit filed by Brothers Oil and

Burke moots this original proceeding.

DISCUSSION

In this original proceeding, Relators contend that the district court abused its

discretion by ruling that Ardent’s interlocutory summary-judgment order was a final judgment when

Ardent’s remaining claims and Relators’ counterclaims have not been adjudicated. Ardent responds

that Relators’ counterclaims were not timely filed and that its summary judgment, coupled with its

nonsuit, is now final and unappealable. Alternatively, Ardent asserts that Relators’ ability to file a

separate lawsuit provides them with an adequate legal remedy, and that the suit Brothers Oil and

Burke recently filed against McKinney, as Ardent’s owner, moots this mandamus petition.

To obtain mandamus relief, relator has the burden of showing that an underlying order

is void or that the trial court clearly abused its discretion and that no adequate appellate remedy

exists. In re Nationwide Ins. Co. of Am., 494 S.W.3d 708, 712 (Tex. 2016) (citing In re Prudential

Ins. Co. of Am., 148 S.W.3d 124, 135-36 (Tex. 2004)). A trial court abuses its discretion when its

ruling is arbitrary and unreasonable, made without regard for guiding legal principles or supporting

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evidence. Id. (citing Ford Motor Co. v. Garcia, 363 S.W.3d 573, 578 (Tex. 2012)). A trial court

also abuses its discretion when it fails to correctly analyze or apply the law. Id. (citing In re

Southwestern Bell Tel. Co., 226 S.W.3d 400, 403 (Tex. 2007)).

Summary-judgment order contains no language indicating its finality

An order or judgment is “final” when it disposes of all issues and all parties.

Lehmann v. Har-Con Corp., 39 S.W.3d 191, 195, 200 (Tex. 2001). Unlike a judgment after a

conventional trial on the merits, a summary-judgment order carries no presumption of finality and

is not considered final “unless it actually disposes of every pending claim and party or unless it

clearly and unequivocally states that it finally disposes of all claims and all parties.” Id. at 205; see

Crites v. Collins, 284 S.W.3d 839, 840 (Tex. 2009). “[I]f the record reveals the existence of parties

or claims not mentioned in the order, the order is not final.” Lehmann, 39 S.W.3d at 206. Here, the

summary-judgment order contains no language indicating that it is a final judgment. Further, the

record reveals that the order addresses only three of the five named defendants in the suit and does

not dispose of all pending claims. See id.

Nonsuit did not make Ardent’s interlocutory summary judgment final

Recognizing the issue of the summary-judgment order’s finality, Ardent filed a notice

of nonsuit of Carey and Texas Bank, apparently contemplating that its nonsuit of these two

defendants would make its summary judgment final as to all claims: “Therefore, pursuant [to] TRCP

162 Ardent hereby dismisses without prejudice only Defendants Texas Bank, N.A., and Kacie Carey,

thereby making the [summary-judgment] Order final as to Defendants Brothers Oil & Equipment,

Inc., Winchester Oil & Gas, LLC, and George Burke.” But Ardent’s desire to make the order a final

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judgment did not make it so. A nonsuit may render a previously signed partial summary judgment

final only if it disposes of all remaining parties and claims. See Lehmann, 39 S.W.3d at 200 (noting

that “if a court has dismissed all of the claims in a case but one, an order determining the last claim

is final”); Wasserberg v. RES-TX One, LLC, No. 14-13-00674-CV, 2014 Tex. App. LEXIS 13085,

at *10-11 (Tex. App.—Houston [14th Dist.] Dec. 9, 2014, pet. denied) (mem. op.) (noting that

plaintiff nonsuited its claims against all but one defendant and “[b]ecause [plaintiff’s] nonsuit did

not dispose of all remaining claims, it did not render the interlocutory summary judgment final or

start the clock ticking on the expiration of the trial court’s plenary power”). Ardent’s notice of

nonsuit makes no mention of Ardent’s other claims against Relators—e.g., for conversion, trespass,

actual and punitive damages, and attorney’s fees5—thus, the nonsuit did not make the previously

signed summary judgment final. Rather, the mandamus record shows that the district court never

dismissed or otherwise adjudicated those claims (or Relators’ counterclaims), which remained

pending.

Summary-judgment order does not address Relators’ timely counterclaims

By ruling that it no longer had jurisdiction over the underlying suit after the summary

judgment and nonsuit, the district court necessarily determined that Relators’ counterclaims were

untimely, or that the summary-judgment order disposed of all of Ardent’s claims against Relators,

or that Ardent’s notice of nonsuit of Casey and Texas Bank also dismissed Ardent’s remaining

claims against Relators. But the record reveals precisely the opposite—Relators’ counterclaims were

5
Ardent acknowledges that, “upon further review,” it has determined that attorney’s fees are
inappropriate in trespass-to-try-title cases. However, as we have noted, Ardent’s petition contained
more than just a claim for attorney’s fees on a trespass-to-try-title action.

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timely filed, the summary-judgment order did not adjudicate all of Ardent’s claims against Relators,

and Ardent’s notice of nonsuit did not address its remaining claims against Relators.

Relators filed their counterclaims against Ardent on October 17, 2016, exactly seven

days before the October 24, 2016 hearing on Ardent’s motion for summary judgment. Leave of court

was unnecessary to file those counterclaims, which were timely as a matter of law under the Texas

Rules of Civil Procedure.

Rule 63 governs amendment of pleadings and provides that parties may amend their

pleadings so long as “any pleadings, responses, or pleas offered for filing within seven days of the

date of trial . . . shall be filed only after leave of the judge is obtained, which leave shall be granted

by the judge unless there is a showing that such filing will operate as a surprise to the opposite

party.” Tex. R. Civ. P. 63. A summary-judgment hearing is considered a “trial” within the meaning

of Rule 63. IKB Indus. (Nigeria) Ltd. v. Pro-Line Corp., 938 S.W.2d 440, 441 (Tex. 1997); Thomas

v. Graham Mortg. Corp., 408 S.W.3d 581, 593 (Tex. App.—Austin 2013, pet. denied). Ardent

contends that the seven-day filing period in Rule 63 ran from October 20, 2016, the date that the

summary judgment was originally scheduled for hearing, and not the date that the hearing was

actually held. Thus in Ardent’s view, Relators’ counterclaims filed on October 17, 2016 were

untimely because they were filed just three days before the scheduled hearing.

However, Rule 166a(c) expressly states that the seven-day period for purposes of

summary judgments is the week preceding “the day of hearing”—not the date that a hearing was

scheduled but ultimately did not occur. See Tex. R. Civ. P. 166a(c). Rule 4 provides that in

computing this seven-day period, the date of filing is not counted, but the date of the hearing is. See

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Tex. R. Civ. P. 4 (“In computing any period of time prescribed or allowed by these rules, . . . the day

of the act, event, or default after which the designated period of time begins to run is not to be

included. The last day of the period so computed is to be included.”). The Texas Supreme Court

applied these same rules in holding that an amended pleading filed exactly seven days before a

summary-judgment hearing was timely under Rules 63 and 4 without leave of court. Sosa v. Central

Power & Light, 909 S.W.2d 893, 895 (Tex. 1995); see Haubold v. Medical Carbon Research Inst.,

No. 03-11-00115-CV, 2014 Tex. App. LEXIS 2863, at *13-14 (Tex. App.—Austin Mar. 14, 2014,

no pet.) (mem. op.) (citing Sosa and concluding that defendants’ third amended counterclaim filed

exactly seven days before trial was timely, no leave of court was necessary under Rule 63, and trial

court was required to allow such amendment unless plaintiff showed that it operated to surprise him).

We conclude that Relators’ counterclaims were timely filed and properly before the district court

when it considered Ardent’s motion for summary judgment seven days later.

Forfeited-charter complaint fails

Next, Ardent contends that the counterclaims were not properly before the district

court because Brothers Oil forfeited its corporate charter for nonpayment of taxes on January 29,

2016, and thus, it had no right to file its counterclaims on October 17, 2016. See Tex. Tax Code §

171.252 (providing that if corporation’s privileges are forfeited for nonpayment of franchise taxes

it will be denied its right to sue or defend in Texas court). However, Brothers Oil provided evidence

that its charter was reinstated on November 7, 2016, restoring its ability to defend itself in a cause

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of action arising before or during the time that its charter was forfeited.6 See G. Richard Goins

Constr. Co., Inc. v. S.B. McLaughlin Assocs., Inc., 930 S.W.2d 124, 128 (Tex. App.—Tyler 1996,

writ denied) (stating that when corporation pays its delinquent taxes, its disability is removed and

its right to sue or defend is revived, allowing it to sue or defend all causes of action regardless of

whether such causes arose before or during period of forfeiture) (citing Federal Crude Oil Co. v.

State, 169 S.W.2d 283, 285 (Tex. Civ. App.—Austin, writ ref’d), cert. denied, 320 U.S. 758 (1943)).

Further, any forfeiture of Brothers Oil’s corporate charter would have no effect on the counterclaims

filed on October 17, 2016 by Winchester Oil and Burke, which remained pending and were not

disposed of by the order granting Ardent’s summary judgment.

Suit by Brothers Oil and Burke against McKinney does not moot this mandamus

Ardent finally contends in its supplemental response that this mandamus petition is

moot because after it was filed, Brothers Oil and Burke sued Ardent’s owner, McKinney, for claims

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We note that even if Brothers Oil’s charter had not been reinstated, section 11.356(a)(1)
of the Texas Business Organizations Code provides that an entity that has forfeited its charter—i.e.,
“a terminated entity”—continues in existence for three years from the effective date of its
termination for several purposes, including defending an action brought against it. See Tex. Bus.
Orgs. Code § 11.356(a)(1); Donald v. Rhone, 489 S.W.3d 584, 587 n.5 (Tex. App.—Texarkana
2016, no pet.) (noting that under section 11.356 of Business Organizations Code, corporation
terminated by forfeiture of its charter continues to exist beyond its termination for limited purposes
of prosecuting or defending legal action brought by or against it); see also 19 Elizabeth S. Miller &
Robert A. Ragazzo, Texas Practice Series: Business Organizations § 15:12 (3d ed. 2011) (noting
that under section 11.356(c) terminated entity’s existence may extend even beyond three years for
action pending at end of three-year period).
Here, Brothers Oil filed its counterclaims on October 17, 2016, which was within three years
of January 29, 2016, the date that its charter was forfeited. Thus, under section 11.356(a)(1) of the
Business Organizations Code, despite its forfeited charter, Brothers Oil had the right to file its
counterclaims as part of defending the action that Ardent brought against it.

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that appear to mirror their counterclaims against Ardent in the underlying suit. We disagree. If

Ardent’s summary-judgment order stands, then the claims that Brothers Oil and Burke filed in their

suit against McKinney could be struck on res judicata grounds because Ardent’s summary judgment

purports to dispose of all parties and claims—including Relators’ counterclaims for fraud in a real

estate transaction and fraudulent inducement—which were timely filed as a matter of law against

Ardent. See State & Cty. Mut. Fire Ins. Co. v. Miller, 52 S.W.3d 693, 696 (Tex. 2001) (noting that

res judicata applies to “finally adjudicated claim[s]”). Accordingly, the suit against McKinney did

not render this mandamus petition moot.

On this record, we conclude that the district court’s order granting summary

judgment, even when coupled with Ardent’s nonsuit of two defendants, did not dispose of all claims

in the underlying suit and its ruling that the order was final and left “no further issues before the

court” was an abuse of discretion for which Relators lack an adequate remedy by appeal.

CONCLUSION

We conditionally grant Relators’ petition for writ of mandamus. See Tex. R. App.

P. 52.8(c). The writ will issue only if the district court fails to vacate its May 1, 2017 “Order

Granting Plaintiff’s Motion for Summary Judgment Nunc Pro Tunc.”

__________________________________________
Jeff Rose, Chief Justice

Before Chief Justice Rose, Justices Field and Goodwin

Filed: July 31, 2017

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