In The
Court of Appeals
Sixth Appellate District of Texas at Texarkana
No. 06-20-00085-CV
MICHAEL C. HOWARD AND VIRGINIA D. HAMILTON, Appellant
V.
MATTERHORN ENERGY, LLC, AND MIKE CHERRY, Appellee
On Appeal from the 71st District Court
Harrison County, Texas
Trial Court No. 19-0998
Before Morriss, C.J., Burgess and Stevens, JJ.
ORDER
Michael C. Howard and Virginia Hamilton have filed a petition for a permissive appeal
from the trial court’s denial of their motion for partial summary judgment against Matterhorn
Energy, LLC, and Mike Cherry. To be entitled to a permissive appeal, a party must establish
that (1) the order subject to appeal involves “a controlling question of law as to which there is a
substantial ground for difference of opinion” and (2) an immediate appeal “may materially
advance the ultimate termination of the litigation.” TEX. R. APP. P. 28.3(e)(4). Because we
conclude that these requirements were not met, we deny the petition for a permissive appeal.
I. Factual and Procedural Background
Michael C. Howard and Virginia Hamilton (Lessors) own approximately 46.75% of the
mineral rights in 1,183.585 acres of land that is considered Tier 1 of the Haynesville Shale Play
located in Harrison County, Texas (Property). On November 28, 2017, Lessors leased the
Property to Matterhorn Energy, LLC, for a three-year term. In September 2019, before the lease
term expired, Lessors sued Matterhorn Energy, LLC, and its president, Mike Cherry (collectively
Matterhorn), for common law fraud, fraud by non-disclosure, negligent misrepresentation, and
breach of contract, among other things, and sought both damages and recission of the lease. The
gravamen of Lessors’ complaints focused on the lack of drilling and development activity by
Matterhorn. Lessors also filed a notice of lis pendens containing notice of the lawsuit, which
said that Lessors were seeking recission of the lease and that the action was “for a declaration
that the Lease[] purporting to encumber the Property [was] void as a matter of law and . . . of no
force and effect on the Property.”
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In response, because the lawsuit was filed before the expiration of the lease term,
Matterhorn counterclaimed for breach of the lease agreement and its notice provisions, for
anticipatory breach, and for equitable estoppel because of Lessors’ alleged representations that
they would give Matterhorn three years to develop and market oil, gas, and other minerals on the
Property. Matterhorn also asserted a claim for wrongful lis pendens pursuant to Chapter 12 of
the Texas Property Code and alleged that Howard had made false misrepresentations to third
parties about Matterhorn before the litigation was filed. As a result of pre-suit
“communication[s] with third parties regarding the leased acreage,” pre-suit “verbal[] . . .
accusations to prospective buyers” of Matterhorn’s interest in the Property, and the alleged
wrongful lis pendens, Matterhorn filed counterclaims for tortious interference with an existing
contract, tortious interference with prospective business relations, and business disparagement.
Lessors filed a traditional motion for summary judgment on all of Matterhorn’s
counterclaims and a no-evidence motion for summary judgment on Matterhorn’s counterclaims
for breach of contract, tortious interference with existing contract, tortious interference with
prospective business relations, and business disparagement claims. Both are the subject of this
permissive appeal. As for its traditional motion, Lessors asserted that Matterhorn’s claims were
absolutely barred by the judicial proceedings privilege.1
1
“Under the judicial-proceedings privilege, ‘[c]ommunications in the due course of a judicial proceeding will not
serve as the basis of a civil action for libel or slander, regardless of the negligence or malice with which they are
made.’” Landry’s, Inc. v. Animal Legal Def. Fund, 566 S.W.3d 41, 57 (Tex. App.—Houston [14th Dist.] 2018, pet.
granted) (quoting James v. Brown, 637 S.W.2d 914, 916–17 (Tex. 1982) (per curiam)). “The judicial-proceedings
privilege is not limited to statements made in pending cases, but applies ‘to any statement that bears some relation to
an existing or proposed judicial proceeding.’” Id. at 58 (quoting Fitzmaurice v. Jones, 417 S.W.3d 627, 633 (Tex.
App.—Houston [14th Dist.] 2013, no pet.), disapproved on other grounds by In re Lipsky, 460 S.W.3d 579, 586
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In its response to the partial summary judgment motion, Matterhorn argued that adequate
time for discovery had not yet passed; that absolute privilege did not apply to Howard’s pre-suit
statements; and that there were genuine issues of material fact provided by Howard’s deposition
of his pre-suit statements to third parties, the terms of the lease agreement, and statements made
in affidavits from Cherry and William D. Farrar, an oil and gas adjunct professor at Baylor Law
School.
After a hearing, the trial court denied Lessors’ traditional and no-evidence motion for
partial summary judgment in a generic order that did not specify the reasons or grounds for
denying the motion. The trial court later amended the order to certify the following questions
urged by Lessors’ permissive appeal:
1. Whether the litigation privilege applies absolutely to plaintiffs’ act of
filing a suit and filing a notice of lis pendens notifying the public of such
suit, as well as plaintiffs’ pre and post suit communications regarding their
claims against both defendants which found their way into the suit they
actually filed.
2. Can defendant Matterhorn’s attempt to prove a prima facie case
supporting each element of their tort and contract claims be supported by
(Tex. 2015)). “[T]he judicial-proceedings privilege applies to counsel, parties, and witnesses, among others.” Id. at
57 (citing James, 637 S.W.2d at 916–17).
“The test for whether a communication is absolutely privileged when it occurs before judicial proceedings
have begun entails both subjective and objective components.” Shell Oil Co. v. Writt, 464 S.W.3d 650, 655 (Tex.
2015) (citing RESTATEMENT (SECOND) OF TORTS § 588 cmt. e (1977) (“As to communications preliminary to a
proposed judicial proceeding, the rule . . . applies only when the communication has some relation to a proceeding
that is actually contemplated in good faith and under serious consideration by the witness or a possible party to the
proceeding.”)). “[T]he possibility of a proceeding must have been a serious consideration at the time the
communication was made.” Id. (citing RESTATEMENT (SECOND) OF TORTS § 588 cmt. e) (“The bare possibility that
the proceeding might be instituted is not to be used as a cloak to provide immunity for defamation when the
possibility is not seriously considered.”)); United States v. Baggot, 463 U.S. 476, 484 (1983) (“The words
‘preliminary to’ necessarily refer to judicial proceedings not yet in existence, where, for example, a claim is under
study.”). In sum, “[o]bjectively, the statement must be related to the proposed litigation; subjectively, the
proceeding must have been actually contemplated in good faith and under serious consideration when the statement
was made.” Landry’s, Inc., 566 S.W.3d at 58 (citing Shell Oil Co., 464 S.W.3d at 654–55)).
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evidence and witnesses who were not identified in discovery prior to the
Court’s consideration of . . . the motion[] for summary judgment.
3. Could defendant Matterhorn carry its burden of proof to show some
evidence of damages when it had disclosed no damages in discovery at the
time of the hearing on the motion for summary judgment.
Lessors petition this Court to allow a permissive appeal from the denial of their traditional and
no-evidence motion for partial summary judgment.2
II. The Requirements for Permissive Appeal Are Not Met
“Generally, ‘[a]n appeal may be taken only from a final judgment, unless a statute
specially authorizes an interlocutory appeal.’” In re Estate of Fisher, 421 S.W.3d 682, 683 (Tex.
App.—Texarkana 2014, no pet.) (quoting Borowski v. Ayers, 432 S.W.3d 344, 347 (Tex. App.—
Waco 2013, no pet.) (citing Lehmann v. Har-Con Corp., 39 S.W.3d 191, 195 (Tex. 2001))). The
trial court’s interlocutory summary judgment order is otherwise unappealable unless jurisdiction
is conferred by Section 51.014(d), which states,
On a party’s motion or on its own initiative, a trial court in a civil action may, by
written order, permit an appeal from an order that is not otherwise appealable if:
(1) the order to be appealed involves a controlling question of law as to which
there is a substantial ground for difference of opinion; and
(2) an immediate appeal from the order may materially advance the ultimate
termination of the litigation.
TEX. CIV. PRAC. & REM. CODE ANN. § 51.014(d); see TEX. R. APP. P. 28.3; TEX. R. CIV. P. 168.
“We strictly construe this section permitting interlocutory appeal.” Fisher, 421 S.W.3d at 684;
2
Lessors also moved to dismiss Matterhorn’s counterclaims under the Texas Citizen’s Participation Act (TCPA), but
the trial court denied the motion. See TEX. CIV. PRAC. & REM. CODE ANN. § 27.003. Lessors have appealed the trial
court’s conclusions that Matterhorn’s counterclaims do not require dismissal under the TCPA. Pursuant to Section
51.014(a)(12) of the Texas Civil Practice and Remedies Code, we have jurisdiction to address the trial court’s
interlocutory order denying Lessors’ TCPA dismissal motion, and briefing on that issue is currently pending.
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see City of Houston v. Estate of Jones, 388 S.W.3d 663, 666 (Tex. 2012) (per curiam); Tex. A &
M Univ. Sys. v. Koseoglu, 233 S.W.3d 835, 841 (Tex. 2007); Bally Total Fitness Corp. v.
Jackson, 53 S.W.3d 352, 355 (Tex. 2001).
A. Nothing Shows That the Trial Court Decided a Controlling Question of Law
Lessors raised two issues in their permissive appeal. The first was whether their actions,
as described by Matterhorn’s counterclaims, were barred by absolute privilege. The second was
whether Matterhorn provided evidence for each element of its counterclaims “including the
common element in all of its claims of damages cause[d] by [Lessors] when it was required to
but failed to disclose any damages resulting from [the] alleged breaches and torts?” Nothing
shows that the trial court actually decided these issues.
“Section 51.014(d) is not intended to relieve the trial court of its role in deciding
substantive issues of law properly presented to it.” Armour Pipe Line Co. v. Sandel Energy, Inc.,
No. 14-16-00010-CV, 2016 WL 514229, at *4 (Tex. App.—Houston [14th Dist.] Feb. 9, 2016,
no pet.) (mem. op.) (quoting Gulley v. State Farm Lloyds, 350 S.W.3d 204, 208 (Tex. App.—San
Antonio 2011, no pet.)). “The legislature’s institution of the procedure authorizing a trial court
to certify an immediate appeal of an interlocutory order was premised on the trial court having
first made a substantive ruling on the controlling legal issue being appealed.” Id. (quoting
Fisher, 421 S.W.3d at 684–85). “A partial summary judgment does not necessarily decide a
controlling question of law.” Id. (citing Fisher, 421 S.W.3d at 684–85). Where, as here, “a trial
court in its order on a motion for summary judgment provides no basis for its denial, the trial
court fails to make [a] substantive ruling on the controlling question of law sought to be
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appealed.” Id. (citing Great Am. E & S Ins. Co. v. Lapolla Indus., Inc., No. 01-14-00372-CV,
2014 WL 2895770, at *2–3 (Tex. App.—Houston [1st Dist.] June 24, 2014, no pet.) (mem. op.));
see De La Torre v. AAG Properties, Inc., No. 14-15-00874-CV, 2015 WL 9308881, at *2 (Tex.
App.—Houston [14th Dist.] Dec. 22, 2015, no pet.) (mem. op.) (“[T]he record does not show
that the trial court ruled on the substantive controlling issues of law that it identified. Instead, the
trial court submitted the issues for this court to decide, which is not a proper use of the
permissive interlocutory appeal procedure.”).
The trial court’s amended partial summary judgment order does not provide the basis for
the trial court’s summary judgment rulings or identify on which grounds the court denied the
motions for summary judgment. The order also fails to expressly state that the trial court has
ruled on a controlling question of law. Given that no discovery deadlines had been set and
depositions were pending at the time of the summary judgment hearing, the trial court could have
simply denied the motion based on Matterhorn’s argument that adequate time for discovery had
not yet passed. Because nothing shows that the trial court addressed the issues raised by the
application for a permissive appeal, the permissive interlocutory appeal is not proper. See id.; De
La Torre, 2015 WL 9308881, at *2.
In any event, as explained below, even had a controlling question of law been presented
and properly ruled on, nothing shows that an immediate appeal would materially advance the
termination of the litigation.
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B. Immediate Appeal Will Not Materially Advance the Termination of the
Litigation
The trial court’s amended order recited that an immediate appeal of its interlocutory
summary judgment order would materially advance the ultimate termination of the litigation
because:
(1) [Lessors] are pursuing an interlocutory appeal of the same issues presented
to this Court in a motion to dismiss pursuant to Chapter 27 of the Texas
Civil Practice & Remedies Code which this Court also denied, which
appeal stays this action in its entirety; and
(2) if defendant Matterhorn’s counterclaims are to be summarily disposed of
by either [Lessors]’ motions for summary judgment or their motion
pursuant to Chapter 27 of the Texas Civil Practice & Remedies Code,
significant discovery in support of the counterclaims will be avoided, as
well as motion practice concerning such discovery, which has already
been filed and heard and has yet to be heard by this Court.
Even so, the fact that this Court will address the trial court’s ruling under the TCPA does not
explain why it is also necessary to address the denial of the partial summary judgment motion,
and the statement that a ruling on immediate appeal will curtail unnecessary discovery “falls
short because it does not identify what claims and issues remain to be decided in the litigation so
that our court may evaluate whether the remaining disputes and issues are substantial and
dependent on the questions of law that appellants seek to appeal.” Armour Pipe Line Co., 2016
WL 514229, at *3.
“[T]he Texas Rules of Appellate Procedure require the petition for permissive appeal to
‘argue clearly and concisely why the order to be appealed involved a controlling question of law
as to which there is a substantial ground for difference of opinion.”’ Fisher, 421 S.W.3d at 685
8
(quoting TEX. R. APP. P. 28.3(e)(4)). This was not done. To show how an immediate appeal will
materially advance the termination of the litigation, Lessors merely argued:
As shown by appellee Matterhorn’s supplemental designation of the clerk’s
record, its counterclaims involve a blizzard of non-party witness depositions,
many of which not surprisingly, resulted in resistance by those third parties to
participation in a lawsuit having nothing to do with them. . . . In addition to the
time, expense and complexity to be encountered in attempting to discover
Matterhorn’s counterclaims through unwilling third party witnesses, trying the
counterclaims which have nothing to do with the gist of appellants’ suit—which is
fraudulent inducement of a lease and failure to perform that lease—will
significantly expand both the time and the cost necessary to try the case.
In this case, Lessors’ many claims against Matterhorn and Matterhorn’s defenses to those claims,
including equitable estoppel, were not impacted by the trial court’s summary judgment order.
Also, while judicial or absolute privilege could potentially apply to some of Matterhorn’s
counterclaims, Lessors have failed to explain how it could apply to Matterhorn’s counterclaims
for breach or its anticipatory breach claims.
Where several other issues are left pending in the litigation, ultimate termination of the
litigation is not advanced by allowing immediate appeal of an otherwise interlocutory order.
Harden Healthcare, LLC v. OLP Wyoming Springs, LLC, No. 03-20-00275-CV, 2020 WL
6811994, at *1 (Tex. App.—Austin Nov. 20, 2020, no pet.) (mem. op.) (citing Trailblazer
Health Enters., 2013 WL 5373271, at *1). The purpose of a permissive appeal is “to provide a
means for expedited appellate disposition of focused and potentially dispositive legal questions.”
Armour Pipe Line Co., 2016 WL 514229, at *4. This purpose is not served if this procedure is
used to obtain piecemeal appellate review of ordinary interlocutory summary judgment orders.
Id.
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Because we conclude that an immediate appeal will not advance the ultimate termination
of the litigation, the permissive appeal is improper.
III. Conclusion
We deny the petition for permissive appeal.
BY THE COURT
Date: December 29, 2020
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