ACCEPTED
06-15-00061-cv
SIXTH COURT OF APPEALS
TEXARKANA, TEXAS
10/26/2015 9:54:40 PM
DEBBIE AUTREY
CLERK
NO. 06-00061-CV
FILED IN
6th COURT OF APPEALS
TEXARKANA, TEXAS
IN THE SIXTH COURT OF APPEALS 10/27/2015 10:13:00 AM
DEBBIE AUTREY
FOR THE STATE OF TEXAS Clerk
A.J.P. OIL COMPANY, LLC, d/b/a GRAPELAND FUEL & BBQ, &
ANDREW J. PATTON
V.
VELVIN OIL COMPANY, INC.
On Appeal From The Fourth Judicial District Court of Rusk County, Texas
BRIEF OF APPELLANTS
ATTORNEY FOR APPELLANTS:
Jaclyn D. Patton
639 Heights Blvd.
Houston, TX 77007
Phone: (713) 730-9946
Fax: (713) 583-4180
SBN: 24085521
jaclyn@txestateplanning.com
IDENTITY OF PARTIES AND COUNSEL
Appellants / Defendants:
A.J.P. Oil Company, LLC, d/b/a Grapeland Fuel & BBQ,
Andrew J. Patton
Counsel for Appellants / Defendants
Jaclyn D. Patton
639 Heights Blvd.
Houston, TX 77007
Phone: (713) 730-9946
Fax: (713) 583-4180
SBN: 24085521
jaclyn@txestateplanning.com
Appellee / Plaintiff
Velvin Oil Company, Inc.
Counsel for Appellee / Plaintiff
Ronnie Horsley
P. O. Box 7017
Tyler, Texas 75711
Phone: (903) 593-7314
Fax: (903) 593-3450
SBN: 10014000
i
TABLE OF CONTENTS
Page
I. STATEMENT OF THE CASE
……………………………………………………………………………1
II. ORAL ARGUMENT UNNECESSARY
……………………………………….…………………………………...1
III. ISSUES PRESENTED
……………………………………………………………………………2
IV. STATEMENT OF FACTS
…………………………… ……………………………………………...3
V. SUMMARY OF ARGUMENT
……………………………………………………………………………7
VI. ARGUMENT
……………………………………………………………………………9
ISSUE 1: THE TRIAL COURT ERRED IN GRANTING THE
MOTION FOR SUMMARY JUDGMENT……………………………...9
Issue 1A: A plaintiff’s sworn account cannot be considered prima facie
evidence to support summary judgment where nonmovant timely filed an
Amended Answer and controverting affidavit satisfying Rule 185 and
93(10)...…………………………………………………………………10
Issue 1B: A genuine issue of material fact exists regarding Appellants’
defense of payment because Appellants instructed Appellee that
payments made after the delivery of disputed diesel by Appellee were not
to be applied to charges for the disputed diesel………………………13
Issue 1C: A genuine issue of material fact exists regarding whether
finance charges made the basis of Appellee’s sworn account are due and
owing because Appellants instructed Appellee that payments made after
the delivery of disputed diesel by Appellee were not to be applied to
charges for the disputed diesel………………………………………….13
ii
Issue 1D: A genuine issue of material fact exists regarding the
reasonableness of Velvin’s attorney’s fees because judicial notice of
properly controverted attorney’s fees under Civil Practice and Remedies
Code § 38.001 and 38.004 is improper on summary judgment……..16
ISSUE 2: THE TRIAL COURT ERRED IN DENYING THE MOTION
FOR NEW TRIAL BECAUSE A SUIT INVOLVING THE SAME
PARTIES AND SUBJECT MATTER WAS PENDING AT THE
FILING OF THIS SUIT, THE PRIOR SUIT WAS TIMELY BROUGHT
TO THE TRIAL COURT’S ATTENTION, AND ABATEMENT OF
THIS SUIT WOULD BE PROPER….………………………………..21
VII. CONCLUSION AND PRAYER……………...………………………..27
CERTIFICATE OF COMPLIANCE………………...………………………..29
CERTIFICATE OF SERVICE……..………………...………………………..30
APPENDIX………….……………………………...………………………..ante
Appendix Tab A: Plaintiff’s Original Petition, CR 5-15
Appendix Tab B: Defendants’ Original Answer and Motion to Transfer
Venue, CR 16-45; Supp. CR 5-6
Appendix Tab C: Plaintiff’s Motion for Summary Judgment, CR 55-58
Appendix Tab D: Defendants’ First Amended Answer and Response to
Motion for Summary Judgment, CR 59-75
Appendix Tab E: Order Granting Summary Judgment, CR 76-77
Appendix Tab F: Defendants’ Motion for New Trial, CR 78-137
Appendix Tab G: Plaintiff’s Response to Motion for New Trial, CR 47-51
Appendix Tab H: Defendants’ Reply to Response to Motion for New Trial,
CR 138-145
iii
Appendix Tab I: Order Denying Motion for New Trial, CR 146
iv
TABLE OF AUTHORITIES
STATE CASES
Arthur Andersen & Co. v. Perry Equipment Corp.,
945 S.W.2d 812 (Tex. 1997).…………………………………………………...6,16
Baubles & Beads v. Louis Vuitton, S.A.,
766 S.W.2d 377, 379 (Tex.App.—Texarkana 1989, no writ)…………………...…9
Beckman v. Beckman,
716 S.W.2d 83 (Tex. App.—Dallas 1986)………………………………………..25
Cayton v. Moore,
224 S.W.3d 440, 445 (Tex. App.—Dallas 2007, no pet.)………………………...21
Champion Int’l Corp. v. Twelfth Court of Appeals,
762 S.W.2d 898, 899 (Tex. 1988)………………………………………………...21
Circle Ridge Production, Inc. v. Kittrell Family Minerals, LLC,
23 WL 3781367, pg. 7 (Tex. App—Texarkana 2009, rev. denied)…………...18-20
City of Houston v. Clear Creek Basin Auth.,
589 S.W.2d 671 (Tex.1979)………………………………………………………..9
City of Laredo v. Montano,
414 S.W.3d 731 (Tex. 2013) ………………………………………………..……17
Cleveland v. Ward,
285 S.W. 1063 (Tex. 1926) …………………………………………...………22-23
Curtis v. Gibbs,
511 S.W.2d 263 (Tex. 1974) ……………………………………………….…....22
Downer v. Aquamarine Operators, Inc.,
701 S.W.2d 238, 241–42 (Tex. 1985)………………………………………….…21
El Apple v. Olivas,
370 S.W.3d 757 (Tex. 2012). …………………………………………………….17
v
Ex Parte Lillard,
314 S.W.2d 800 (Tex. 1958) …………………………………………………22, 25
Falderbaum v. Lowe,
964 S.W.2d 744 (Tex. App.—Austin 1998) ……………………………………...26
Goswami v. Metropolitan Savings and Loan Association,
751 S.W.2d 487, 490 (Tex.1988)…………………………………………………11
Grace v. Duke,
54 S.W.3d 338 (Tex. App.—Austin 2001, pet. denied) ………………………….18
Guity v. C.C.I. Enter. Co.,
54 S.W.3d 256 (Tex. App.—Houston [1st Dis.] 2001, no pet).…………………...18
Limestone Prods. Distrib., Inc. v. McNamara,
71 S.W.3d 308 (Tex.2002)……………………………………………………..…10
Morgan v. Morgan,
406 S.W.2d 347 (Tex. Civ. App.—San Antonio 1966, no writ) …………………14
Nixon v. Mr. Prop. Mgmt. Co.,
690 S.W.2d 546 (Tex.1985)………………..……………………………………..10
Oliver v. Carter & Co. Irr., Inc.,
08-01-00446-CV, 2002 WL 1301568 (Tex. App.—El Paso June 13, 2002, no
pet.)…………………………………………………………………………….10-12
Park Place Hosp. v. Estate of Milo,
909 S.W.2d 508 (Tex. 1995) ………………………………….………………….13
Phillips v. Herndon,
78 Tex. 378, 380, 14 S.W. 857 (1890) …………………………………………...14
Rizk v. Fin. Guardian Ins. Agency, Inc.,
584 S.W.2d 860, 862-63 (Tex. 1979)……………………………………………..10
Rosenblatt v. Freedom Life,
240 S.W.3d 315 (Tex. App.—Houston [1st Dist.] 2007) …………………………18
vi
Sweezy Construction, Inc. v. Murray,
915 S.W.2d 527 (Tex. App.—Corpus Christi 1995)……………………………...22
Vance v. Holloway,
689 S.W.2d 403, 403-04 (Tex. 1985)…………………………………………….10
Walker v. Packer,
827 S.W.2d 833, 840 (Tex. 1992) (orig. proceeding)…………………………….21
Wyatt v. Shaw Plumbing,
760 S.W.2d 245 (Tex 1988) …………………………………………………..22-26
FEDERAL CASE
Hensley v. Eckerhart,
461 U.S. 424, 437, 103 S.Ct. 1933, 76 L.Ed.2d 40 (1983)………………………17
STATUTES AND RULES
TEX. CIV. PRAC. REM. CODE ANN. §§ 38.001, 38.004…………………..16, 20
TEX. R. CIV. P. 39………………………………………………………………..23
TEX. R. CIV. P. 63………………………………………………………………..11
TEX. R. CIV. P. 93(10) …...…………………………………………………..10-12
TEX. R. CIV. P. 97(a) …...……………………………………………………….23
TEX.R. CIV. P. 166a(c) ….………………………………………………..............9
TEX. R. CIV. P. 185 …..…………………………………………..………….11-13
TEX. DISCIPLINARY R. PROF'L CONDUCT 1.04(b)…………………………16
ADDITIONAL AUTHORITY
2 R. McDonald, Texas Civil Practice in District and County Courts § 7.10, at 165
(rev.1982)…............................................................................................................26
vii
NO. 06-00061-CV
IN THE SIXTH COURT OF APPEALS
FOR THE STATE OF TEXAS
A.J.P. OIL COMPANY, LLC, d/b/a GRAPELAND FUEL & BBQ, &
ANDREW J. PATTON
V.
VELVIN OIL COMPANY, INC.
On Appeal From The Fourth Judicial District Court of Rusk County, Texas
Trial Court Cause No. 2014-362
BRIEF OF APPELLANTS
TO THE HONORABLE SIXTH COURT OF APPEALS:
Appellants, A.J.P Oil Company, LLC d/b/a Grapeland Fuel and BBQ, and
Andrew J. Patton, file this, their Brief of Appellants in the above-captioned and
numbered appeal, pursuant to Texas Rule of Appellate Procedure 38.1. Appellants
would respectfully show this Honorable Court as follows:
I. STATEMENT OF THE CASE
This is an appeal of a Summary Judgment of $32,676.71, interest at the rate
of 18% per annum, attorney’s fees, costs of court, and interest on such fees and
1
costs at the rate of 5% per annum, entered against Appellants on June 4, 2015, in
the Fourth Judicial District Court of Rusk County, Texas.
If the Court does not find that the trial court erred in granting Summary
Judgment, Appellants alternatively appeal the denial of Appellants’ Motion for
New Trial, entered on August 17, 2015, in the Fourth Judicial District Court of
Rusk County, Texas.
II. ORAL ARGUMENT UNNECESSARY
The issues presented in this appeal are basic and involve well-established
principles of Texas law. Summary Judgment was clearly erroneous in the lower
court. Accordingly, it is the opinion of Appellants that oral argument is
unnecessary.
III. ISSUES PRESENTED
ISSUE 1: THE TRIAL COURT ERRED IN GRANTING THE MOTION FOR
SUMMARY JUDGMENT, BECAUSE:
A. A plaintiff’s sworn account cannot be considered prima facie
evidence to support summary judgment where nonmovant timely filed
an amended answer and controverting affidavit satisfying Rule 185
and 93(10).
B. A genuine issue of material fact exists regarding Appellants’ defense
of payment because Appellants instructed Appellee that payments
2
made after the delivery of disputed diesel by Appellee were not to be
applied to charges for the disputed diesel.
C. A genuine issue of material fact exists regarding whether finance
charges made the basis of Appellee’s sworn account are due and
owing because Appellants instructed Appellee that payments made
after the delivery of disputed diesel by Appellee were not to be
applied to charges for the disputed diesel.
D. A genuine issue of material fact exists as a matter of law regarding the
reasonableness of Appellee’s attorney’s fees because judicial notice of
attorney’s fees under Civil Practice and Remedies Code § 38.001 and
38.004 is not proper when controverted by the sworn affidavit of
nonmovant’s counsel asserting evidence of their unreasonableness.
ISSUE 2: THE TRIAL COURT ERRED IN DENYING THE MOTION FOR
NEW TRIAL BECAUSE A SUIT INVOLVING THE SAME PARTIES AND
SUBJECT MATTER WAS PENDING AT THE FILING OF THIS SUIT, THE
PRIOR SUIT WAS TIMELY BROUGHT TO THE TRIAL COURT’S
ATTENTION, AND ABATEMENT OF THIS SUIT WOULD BE PROPER.
IV. STATEMENT OF FACTS
Appellants AJP Oil Company, LLC, and Andrew J. Patton (collectively
referred to as “AJP”) and Appellee Velvin Oil Company, Inc. (“Velvin”) entered
into a credit agreement (the “Agreement”) on June 6, 2012, for the delivery of fuel
3
to Appellants’ Grapeland Fuel & BBQ gas station. (CR 14-15). Appellant Andrew
J. Patton executed a personal guarantee for debts incurred by AJP Oil Company,
LLC, under the Agreement. (CR 14-15). Without incident, Velvin regularly sold
and delivered fuel to Grapeland Fuel & BBQ pursuant to the Agreement until
Velvin delivered a shipment of tainted diesel fuel to AJP on December 4, 2013.
(CR 24). Following the delivery of this tainted diesel, AJP continued to do
business with Velvin until April 2014, when their dispute regarding the December
4, 2013 diesel shipment could not be resolved. (CR 36-39).
On August 28, 2014, after extended correspondence with Velvin’s insurance
provider, AJP delivered notice of its intent to assert several claims against Velvin
arising from the Agreement, including a claim under the Texas Deceptive Trade
Practices Act, Texas Business & Commerce Code section 17.41 et seq., alleging
that Velvin delivered tainted and mislabeled diesel on December 4, 2013. (CR 32-
34). On November 7, 2014 AJP filed its Petition in the Third Judicial District
Court of Houston County, Texas, Cause No. 14-0217 (the “Original Suit”),
alleging economic and lost profit damages against Velvin, including damages of
$31,760.45 for “worthless diesel fuel delivered.” (CR 28). Velvin timely responded
to the Original Suit without complaint regarding jurisdiction and continues to
actively participate. (CR 49).
4
Roughly six weeks after being served with the Original Suit, Velvin filed its
Petition in this suit in the Fourth Judicial District Court of Rusk County, Texas,
alleging that AJP did not pay for the disputed diesel fuel under the Agreement. (CR
5-9). AJP filed its Answer and Motion to Transfer Venue, pointing out the
pendency of the Original Suit and requesting that the second-filed suit be
transferred to Houston County because it was in the interest of all parties and
required by justice to proceed in a single suit as the subject matter of the Rusk
County Suit was identical to the subject matter of the Original Suit. (2 RR 4-5, CR
22). After a hearing on March 2, 2015, the trial court denied AJP’s Motion,
resulting in two separate suits regarding the same disputed diesel fuel. (2 RR 1-7,
CR 54).
Velvin filed its Motion for Summary Judgment on March 30, 2015,
attaching an affidavit regarding attorney’s fees sworn to by Ronnie Horsley,
counsel for Velvin. (CR 55-57). Velvin’s Motion for Summary Judgment asserts as
its only grounds that “Defendant entered an appearance and filed an answer herein
which is insufficient in law as provided in RULES 185 and 93, TEXAS RULES
OF CIVIL PROCEDURE to constitute a defense to Plaintiff’s cause of action . . .”
(CR 55-57). The affidavit of Velvin’s counsel stated that “In accordance with
[counsel’s] experience in handling numerous cases and based upon the usual
5
contingent fee arrangements of attorneys similarly engaged, $10,892.24 is a
reasonable and customary fee…” (CR 57).
Seven days later, AJP filed its First Amended Answer and Response to
Motion for Summary Judgment in the Rusk County Suit. (CR 16; Supp. CR 5).
AJP’s First Amended Answer was verified by Appellant Andrew J. Patton and
contained a general and specific denials, including the affirmative defense that
“[Appellants] have paid in full the account” forming the basis of Velvin’s claim
“with check number 2902, dated April 29, 2014, in the amount of [$54,480.52].”
(CR 59-62, 63, 67). Appellants attached bank records showing the check deposited
by Velvin. (CR 63,67). AJP’s Response to Velvin’s Motion for Summary
Judgment, argued that: 1) “the invoices the subject of [Velvin’s] petition were
paid,”; and 2) the affidavit sworn by Velvin’s counsel regarding attorney fees
failed to set forth sufficient evidence under Arthur Andersen & Co. v. Perry
Equipment Corp. for the award of attorney fees as a matter of law. (CR 63-65, 67-
69, 72-73.). Velvin did not file a Reply to AJP’s arguments nor request a hearing
on the Motion for Summary Judgment. (CR 4, 55).
Two months later, on June 4, 2015, the District Court granted Velvin’s
Motion for Summary Judgment. (CR 76-77). The District Court did not explain its
ruling. (CR 76-77). AJP filed its Motion for New Trial on July 2, 2015; it was
6
denied on August 20, 2015. (3 RR 1-6; CR 78-86, 146). AJP filed its Notice of
Appeal on August 28, 2015. (CR 147).
V. SUMMARY OF ARGUMENT
Motion for Summary Judgment
AJP’s first issue challenges the trial court’s granting of Velvin’s Motion for
Summary Judgment in four ways. Because Summary Judgment in this suit was
improper, Appellants respectfully ask the Court to reverse and remand this matter
for new trial.
The most blatant error in the record is addressed first: the sole basis for
Velvin’s Motion for Summary Judgment was that AJP’s Original Answer did not
meet the verification requirements to deny a sworn account under Texas Rules of
Civil Procedure 185 and 93(10). AJP candidly admits that its Original Answer was
not properly verified. However, AJP timely filed an Amended Answer with a
controverting affidavit which satisfied the rules. Because a properly controverted
sworn account cannot be considered prima facie evidence to support Summary
Judgment, the trial court erred in granting Summary Judgment.
AJP’s second and third arguments challenge the Summary Judgment
because a genuine issue of material fact exists regarding AJP’s defense of
payment. AJP clearly communicated to Velvin that the five payments made to
Velvin for fuel delivered to AJP following the disputed diesel delivery in
7
December 2013 were to be applied only to the subsequent, non-disputed deliveries.
Because AJP had the right to direct application of its payments, and did so with
multiple written and verbal communications to Velvin, a disputed fact issue exists
regarding AJP’s defense of payment of the invoices sued for and their related
finances charges.
Finally, a genuine issue of material fact exists as a matter of law regarding
the reasonableness of attorney’s fees awarded to Velvin under the Summary
Judgment. By Velvin’s own admission, the Motion for Summary Judgment and
attached affidavit required the trial court to take judicial notice of Velvin’s
attorney’s fees. AJP timely contested Velvin’s attorney’s fees, listing deficiencies
in their supporting evidence within the affidavit of AJP’s counsel. Because AJP
properly controverted the reasonableness of Velvin’s attorney’s fees by the sworn
statement of AJP’s counsel, judicial notice of Velvin’s attorney’s fees was not
proper and the trial court erred in granting Summary Judgment.
Motion for New Trial
In the alternative, AJP’s second issue challenges the trial court’s denial of
AJP’s Motion for New Trial. This suit arises from a disputed transaction between
the parties in December 2013, where Velvin sold AJP tainted diesel fuel. Despite
AJP’s amicable attempts, the dispute over the diesel could not be resolved and
resulted in AJP filing suit for damages stemming from the disputed diesel. After
8
being served with AJP’s suit, Velvin circumvented the rules of orderly justice and
filed this suit demanding payment on the disputed diesel.
The trial court was immediately alerted to the prior-pending suit in AJP’s
initial pleadings. Although AJP’s initial pleadings request that the suit be
transferred rather than abated, abatement is seasonably raised—even after
judgment—when the pendency of the prior-filed suit is shown in the pleadings.
Because a suit involving the same parties and subject matter was pending when
Velvin filed this suit, and AJP’s initial pleadings clearly brought the prior suit to
the trial court’s attention, Appellants respectfully ask the Court to reverse and
remand this matter for new trial so that it may be properly abated.
VI. ARGUMENT
ISSUE 1: THE TRIAL COURT ERRED IN GRANTING THE MOTION
FOR SUMMARY JUDGMENT
Standard of Review
To prevail on a traditional motion for summary judgment, a movant must
establish that there is no genuine issue as to any material fact and that the movant
is entitled to judgment as a matter of law. TEX.R. CIV. P. 166a(c); City of Houston
v. Clear Creek Basin Auth., 589 S.W.2d 671 (Tex.1979); Baubles & Beads v. Louis
Vuitton, S.A., 766 S.W.2d 377, 379 (Tex.App.—Texarkana 1989, no writ). In
deciding whether a disputed material fact issue exists that would preclude
9
summary judgment, evidence favorable to the nonmovant will be taken as true.
Nixon v. Mr. Prop. Mgmt. Co., 690 S.W.2d 546, 548–49 (Tex.1985). Because the
movant bears the burden of proof, all conflicts in the evidence are disregarded and
all doubts as to the genuine issues of material fact are resolved in favor of the
nonmovant. Id.; see Limestone Prods. Distrib., Inc. v. McNamara, 71 S.W.3d 308,
311 (Tex.2002). A motion for summary judgment must stand on its own merits.
City of Houston v. Clear Creek Basin Auth., 589 S.W.2d 671, 678 (Tex. 1979).
Discussion
Issue 1A: A plaintiff’s sworn account cannot be considered prima facie
evidence to support summary judgment where nonmovant timely filed an
Amended Answer and controverting affidavit satisfying Rule 185 and 93(10).
Under Texas law, a properly pled suit on a plaintiff’s sworn account
constitutes prima facie evidence of the underlying debt. Rizk v. Fin. Guardian Ins.
Agency, Inc., 584 S.W.2d 860, 862-63 (Tex. 1979); Vance v. Holloway, 689
S.W.2d 403, 403-04 (Tex. 1985); Oliver v. Carter & Co. Irr., Inc., 08-01-00446-
CV, 2002 WL 1301568, at *6 (Tex. App.—El Paso June 13, 2002, no pet.).
However, a defendant’s properly pled and verified answer and denial will destroy
the prima facie effect of the verified claim, forcing the plaintiff to prove his claim.
Id. If not properly pled, defendants may amend their answers, “as they may desire”
and without leave of court, provided that they are filed seven days before trial and
10
there is no showing that they “will operate as a surprise to the opposite party.” Tex.
R. Civ. P. 63; see Goswami v. Metropolitan Savings and Loan Association, 751
S.W.2d 487, 490 (Tex.1988). A hearing or submission on a Motion for Summary
Judgment is a “trial” for purposes of Rule 63. Goswami at 490.
The law in this area is so well-established that there appear to be no
controlling cases on point reported in the recent past. In Oliver v. Carter, a similar
suit on sworn account from the Eighth Court of Appeals, the plaintiff filed a
verified pleading alleging that the defendant defaulted on its account with the
plaintiff. Oliver v. Carter & Co. Irr., Inc., 08-01-00446-CV, 2002 WL 1301568, at
*6 (Tex. App.—El Paso June 13, 2002, no pet.) (not designated for publication).
The defendant’s responding answer failed to satisfy Rules 185 and 93(10) for
controverting a suit on sworn account. Id. The plaintiff moved for summary
judgment asserting that the answer was “defective and insufficient in law to
constitute or raise a defense” to the sworn account made the basis of the suit.
Correcting his error, the defendant filed an amended answer and affidavit which
satisfied the requirements of Rules 185 and 93(10). Id. at *2. However, the trial
court granted the plaintiff’s motion for summary judgment. Id. The court of
appeals reversed, holding that even if the original answer to a suit on sworn
account failed to satisfy Rules 185 and 93(10), amended pleadings must also be
considered when ruling on a motion for summary judgment. Id. at *7. The court of
11
appeals found that the amended answer contained both a general and specific
denial, was supported by the affidavit of the defendant, and “easily satisf[ied] the
requirements of Rule 185 and 93(10).” Id. Because the amended answer satisfied
the requirements of Rule 185 and 93(10), the court held that the plaintiff’s petition
could not “be considered prima facie evidence to support summary judgment” and
the trial court erred in granting summary judgment. Id.
Here, AJP initially filed an Original Answer that failed to meet the
verification requirements of Rules 185 and 93(10). Like the plaintiff in Oliver,
Velvin filed a Motion for Summary Judgment asserting as its only grounds that
“Defendant entered an appearance and filed an answer herein which is insufficient
in law as provided in RULES 185 and 93, TEXAS RULES OF CIVIL
PROCEDURE to constitute a defense to Plaintiff’s cause of action…” (CR 55-57).
In response, AJP filed its First Amended Answer, which contained a general
denial, specific denials regarding the affirmative defense of payment and whether
finance charges included in the account were due and owing, and a verification by
the sworn affidavit of Appellant Andrew Patton. (CR 59-75). Like the Amended
Answer in Oliver, AJP’s Amended Answer easily satisfied the requirements of
Rules 185 and 93(10). Accordingly, Velvin’s petition was not prima facie evidence
to support summary judgment.
12
The trial court erred in granting the Motion for Summary Judgment because
Velvin’s sworn account cannot be considered prima facie evidence when AJP
timely filed an Amended Answer and controverting affidavit satisfying Rule 185
and 93(10).
Issue 1B: A genuine issue of material fact exists regarding Appellants’ defense
of payment because Appellants instructed Appellee that payments made after
the delivery of disputed diesel by Appellee were not to be applied to charges
for the disputed diesel.
The trial court erred in granting the Motion for Summary Judgment because
a disputed fact issue exists regarding whether payment was made on the invoices in
question, which must be submitted to a jury. See Park Place Hosp. v. Estate of
Milo, 909 S.W.2d 508, 510-11 (Tex. 1995). Because of the interrelation of Issue
1B and Issue 1C, these issues will be discussed together below.
Issue 1C: A genuine issue of material fact exists regarding whether finance
charges made the basis of Appellee’s sworn account are due and owing
because Appellants instructed Appellee that payments made after the delivery
of disputed diesel by Appellee were not to be applied to charges for the
disputed diesel.
The trial court erred in granting the Motion for Summary Judgment because
disputed fact issues exist regarding (1) AJP’s defense of payment of the invoices in
question, and (2) if related finance charges made the basis of Velvin’s sworn
account are due and owing, which must be submitted to the jury. See Park Place
Hosp. v. Estate of Milo, 909 S.W.2d 508, 510-11 (Tex. 1995).
13
The general rule is that where a debtor makes payment to his creditor
without directing the manner of application of the payment, the creditor is
privileged to apply the payment to any one of the various debts owed him by the
debtor. Morgan v. Morgan, 406 S.W.2d 347 (Tex.Civ.App.—San Antonio 1966,
no writ). However, when the debtor has directed the application of payment by
written or verbal communication, the “true rule seems to be, first, the debtor has
the absolute right to direct appropriation at the time of payment.” Phillips v.
Herndon, 78 Tex. 378, 14 S. W. 857, 859.
Here, AJP communicated its intention for application of payment early and
often. It is evident from the record that AJP intended for payments made following
delivery of the worthless and tainted diesel on December 4, 2013 not to be applied
to the tainted delivery. AJP made multiple written communications to Velvin
instructing that subsequent payments were not to be applied to the disputed diesel.
The first payment made by AJP following the delivery of the disputed diesel
clearly instructed that it was to be applied toward “gasoline only,” and not toward
the tainted diesel. (CR 127). A subsequent payment noted that it was to be applied
only to specific, non-disputed invoices. (CR 129).
AJP also made multiple verbal communications to Velvin instructing that
subsequent payments were not to be applied to the disputed diesel. Following the
delivery of tainted diesel by Velvin in December 2013, Appellant immediately
14
contacted Jim Jordan, Vice President of Velvin Oil, who assured AJP that Velvin
would handle any resulting problems. (CR 103). Jim Jordan followed up on this
assurance by sending two free “fix shipments” of what Jim Jordan stated was
“super clean #1 diesel”, and having an Velvin employee administer a “shock
treatment” to the disputed diesel. (CR 103, 107). After further amicable
discussions with Jim Jordan, and with the communicated understanding that Velvin
would act in good faith, take responsibility for damages resulting from the tainted
diesel, and not require payment on the disputed diesel, AJP continued to do
business with Velvin for four months following the tainted delivery. (CR 103).
Acting in good faith, AJP ultimately bought and timely paid for an additional
$194,801.30 of fuel from Velvin, despite the abundance of competitive alternate
fuel retailers available to AJP in East Texas. (CR 136).
AJP’s written and verbal communications to Velvin clearly show AJP’s
intention that payments made after the December 4, 2013 disputed diesel shipment
were to be applied only to subsequent, non-disputed fuel shipments. Case law
establishes that AJP had the absolute right to direct appropriation of payments
made to Velvin. AJP exercised that right by including language on checks paid to
Velvin, and by making consistent and repeated verbal directions to Velvin.
The credit terms of Velvin’s Charge Account Applicant on which this suit is
based state that finance charges are due if the balance is not paid by the end of the
15
month following the statement date. (CR 59-60; 70-72). The invoices made the
basis of Velvin’s suit were paid by AJP with check number 2902, dated April 29,
2014, in the amount of $54,480.52. (CR 59, 67, 69). As payment was timely made
on the invoices made the basis of Velvin’s suit, both the underlying debt and the
finance charges included in Velvin’s suit were not due and owing.
The trial court erred in granting the Motion for Summary Judgment because
disputed fact issues exist regarding AJP’s defense of payment and whether finance
charges were due and owing as AJP instructed Velvin that payments made after the
delivery of disputed diesel were not to be applied to charges for the disputed diesel.
Issue 1D: A genuine issue of material fact exists regarding the reasonableness
of Velvin’s attorney’s fees because judicial notice of properly controverted
attorney’s fees under Civil Practice and Remedies Code § 38.001 and 38.004 is
improper on summary judgment.
In Velvin’s Motion for Summary Judgment and affidavit attached thereto,
counsel for Velvin requests attorney’s fees unsupported by the proof required in
the Texas Disciplinary Rules of Professional Conduct. TEX. DISCIPLINARY R.
PROF'L CONDUCT 1.04(b); see also Arthur Andersen & Co. v. Perry Equip.
Corp., 945 S.W.2d 812, 818 (Tex.1997) (quoting the eight-factor test for
determining attorney's fees); (CR 55-57). That proof must include the basic facts
supporting the fees, which are: “(1) the time and labor required, the novelty and
difficulty of the questions involved, and the skill requisite to perform the legal
service properly; (2) the likelihood, if apparent to the client, that the acceptance of
16
the particular employment will preclude other employment by the lawyer; (3) the
fee customarily charged in the locality for similar legal services; (4) the amount
involved and the results obtained; (5) the time limitations imposed by the client or
by the circumstances; (6) the nature and length of the professional relationship
with the client; (7) the experience, reputation, and ability of the lawyer or lawyers
performing the services; and (8) whether the fee is fixed or contingent on results
obtained or uncertainty of collection before the legal services have been rendered.”
Id.
The party applying for an award of attorney’s fees bears the burden of
documenting the hours expended on litigation and the value of those hours.
Hensley v. Eckerhart, 461 U.S. 424, 437, 103 S.Ct. 1933, 76 L.Ed.2d 40 (1983); El
Apple v Olivas, 370 S.W.3d 757 (Tex. 2012). When attorney’s fees are claimed
under fee shifting statutes, the Texas Supreme Court urges that courts be skeptical
of “broad, unspecific claims” regarding fees, as “hours not properly billed to one’s
client are also not properly billed to one’s adversary under a fee-shifting statute.”
City of Lardeo v. Montano, 414 S.W.3d 731, 736 (Tex. 2013). Rather, the attorney
should provide contemporaneous billing records or other documentation recorded
reasonably close to the time when the work is performed. Id.
The affidavit of Velvin’s counsel offered as proof of attorney’s fees clearly
does not meet the requirements of the Texas Disciplinary Rules of Professional
17
Conduct and established case law. (CR 57). Instead, Velvin’s proof fits soundly
into the category of non-contemporaneous, “broad, unspecified claims” of which
courts are warned to be skeptical. Further, the affidavit of Velvin’s counsel
includes false claims of time spent on matters such as appearing in court in support
of Plaintiff’s Motion for Summary Judgment—a hearing that did not occur. (CR
57).
Although Texas Civil Practice and Remedies Code §38.004 does allow
judicial notice to be taken of attorney’s fees in a suit on sworn account, it is well-
established that judicial notice of attorney’s fees cannot be taken when the
summary judgment record contains evidence controverting the reasonableness of
attorney’s fees. See, e.g. Guity v. C.C.I. Enter. Co., 54 S.W.3d 526, 528 (Tex.
App.—Houston [1st Dist.] 2001, no pet.); Rosenblatt v. Freedom Life, 240 S.W.3d
315, at 321(Tex. App.—Houston [1st Dist.] 2007, no pet.); Grace v. Duke, 54
S.W.3d 338, 344 (Tex. App—Austin 2001, pet. denied) (holding that attorney fee
award in summary judgment proceeding not proper if amount disputed). This
Court has specifically found that summary judgment is improper when the moving
party’s affidavit in support of attorney’s fees is contested by an affidavit of
opposing counsel. Circle Ridge Production, Inc. v. Kittrell Family Minerals, LLC,
23 WL 3781367, pg. 7 (Tex. App—Texarkana 2009, rev. denied) (holding that
summary judgment award of attorney’s fees is improper where the nonmovant
18
produces a controverting affidavit and asserts evidence that fees are unreasonable
or unnecessary).
In Circle Ridge, the appellants sought relief from a summary judgment
awarded in the trial court against them. Id. The appellants urged that attorney’s
fees awarded in the summary judgment were improper because they were
supported by broad, conclusory evidence that did not include time records. Id. The
attorney’s fees awarded in the Circle Ridge summary judgment were supported
solely by an affidavit of the appellee’s counsel. Id. at 7. However, the appellants
had previously been provided with time records supporting appellee’s counsel’s
fees in discovery. (Appellee’s Brief at 28, Circle Ridge Production, Inc. v. Kittrell
Family Minerals, LLC, 23 WL 3781367 (Tex. App—Texarkana 2009, rev. denied).
In addition, the appellants had not preserved error by raising this issue with the
trial court. (Id. at 7). Finding that summary judgment is available on the testimony
of an interested witness if the testimony could have been easily controverted, this
Court held in Circle Ridge that an uncontroverted affidavit regarding attorney’s
fees constitutes sufficient evidence for summary judgment. Id.
The case at hand shares similar facts with Circle Ridge, but is
distinguishable by several key facts. Here, by Velvin’s own admission its proof
regarding attorney’s fees was inadequate under the rules and required the trial
court to take judicial notice. (CR 48). Unlike the defendants in Circle Ridge, AJP
19
controverted the reasonableness of Velvin’s attorney’s fees multiple times,
including in an affidavit of AJP’s counsel. (CR 64-65; 72-73).The affidavit of
AJP’s counsel asserts five particular deficiencies in the evidence supporting the
attorney’s fees sought by Velvin, and is bolstered by the resume of AJP’s counsel
showing his familiarity with fee calculations in similar cases. (CR 72-75). The case
at hand is further distinguished from Circle Ridge in that Velvin has produced no
additional evidence supporting its attorney’s fees at any point, wherein the plaintiff
in the precedent case had already produced detailed time records to the defendant
during discovery.
The trial court erred in granting the Motion for Summary Judgment because
disputed fact issues exist regarding the reasonableness and supporting evidence of
Velvin’s attorney’s fees because judicial notice of properly controverted attorney’s
fees under Civil Practice and Remedies Code § 38.001 and 38.004 is improper on
summary judgment.
20
ISSUE 2: THE TRIAL COURT ERRED IN DENYING THE MOTION FOR
NEW TRIAL BECAUSE A SUIT INVOLVING THE SAME PARTIES AND
SUBJECT MATTER WAS PENDING AT THE FILING OF THIS SUIT,
THE PRIOR SUIT WAS TIMELY BROUGHT TO THE TRIAL COURT’S
ATTENTION, AND ABATEMENT OF THIS SUIT WOULD BE PROPER.
Standard of Review
A trial court’s denial of a motion for new trial is reviewed for abuse of
discretion. In re RR, 209 S.W.3d 112, 114 (Tex. 2006); Champion Int’l Corp. v.
Twelfth Court of Appeals, 762 S.W.2d 898, 899 (Tex. 1988). A trial court abuses
its discretion when it acts in an arbitrary or unreasonable manner, or if it acts
without reference to any guiding rules or principles. Downer v. Aquamarine
Operators, Inc., 701 S.W.2d 238, 241–42 (Tex. 1985). A trial court’s clear failure
to analyze or apply the law correctly constitutes an abuse of discretion. See Walker
v. Packer, 827 S.W.2d 833, 840 (Tex. 1992) (orig. proceeding); Cayton v. Moore,
224 S.W.3d 440, 445 (Tex. App.—Dallas 2007, no pet.).
Discussion
The trial court erred in denying the Motion for New Trial because a suit
involving the same parties and subject-matter was pending prior to the filing of this
suit. The claim brought here is a compulsory counterclaim to the claims brought in
21
the prior suit. The Motion for New Trial should have been granted so that this suit
could be properly abated pending the outcome of the prior suit.
Abatement is seasonably raised, even after the rendering of judgment, when
the pendency of the prior suit is shown in the pleadings. The pendency of the prior
suit was timely brought to the trial court’s attention within 35 days of this suit’s
filing.
A suit involving the same parties and subject matter was pending at the filing
of this suit and Velvin’s claim brought here is a compulsory counterclaim to
AJP’s claims brought in the first-filed suit.
When two pending cases are between identically the same parties, involve
the same subject-matter, and relief in one suit would be res judicata as to the relief
prayed for in the other suit, it is well settled that the first-filed suit has dominant
jurisdiction. See, e.g. Cleveland v. Ward, 285 S.W. 1063 (Tex. 1926) (holding that
when original suit regarding cancellation of loan would be res judicata against
second suit regarding recovery on that loan, the second suit must be abated); Wyatt
v. Shaw Plumbing, 760 S.W.2d 245, 247 (Tex. 1988). Once dominant jurisdiction
has attached in a first-filed suit, the rule is elementary that it cannot be taken away
by subsequent proceedings in another court. Ex Parte Lillard, 314 S.W.2d 800, 805
(Tex. 1958). The court where the second suit was filed must grant a motion to
abate. Wyatt 760 S.W.2d at 247; Curtis v. Gibbs, 511 S.W.2d 263, 267 (Tex.
1974); Sweezy Construction, Inc. v. Murray, 915 S.W.2d 527, 531 (Tex. App.—
22
Corpus Christi 1995). Abatement does not prejudice the plaintiff of the second-
filed suit, as any claims or defenses raised by the plaintiff may be asserted in the
original suit if the plaintiff so chooses. Cleveland, 285 S.W. at 1070.
Velvin did not dispute that this suit is a second-filed, non-dominant suit and
that the first-filed suit in Houston County (“Original Suit”) was brought to the trial
court’s attention in a timely manner. Rather, Velvin asserted that this suit and the
Original Suit are not substantially interrelated. (CR 49-50). “In determining
whether an inherent interrelationship exists, courts should be guided by the rule
governing persons to be joined if feasible and the compulsory counterclaim rule.”
Wyatt v. Shaw Plumbing, 760 S.W.2d 245, 247 (Tex. 1988); Tex.R.Civ.P. 39,
97(a).
The facts in Wyatt v. Shaw closely track those at hand. In Wyatt, Wyatt and
Shaw entered into a contract regarding plumbing services. When Wyatt refused to
pay for worthless and faulty services provided by Shaw, “Shaw made a written
demand for payment. Following Shaw’s demand letter, Wyatt filed suit against
Shaw in [Wyatt’s county of choice] alleging fraud and violation of the Deceptive
Trade Practices Act.” Wyatt, 760 S.W.2d 245 at 246. Shortly thereafter Shaw filed
a breach of contract suit in Shaw’s county of choice to recover for the disputed
services it provided. Finding that Wyatt’s claim would be res judicata against
Shaw’s claim, the court held that the two suits were inherently interrelated. The
23
court further explained, “Shaw Plumbing should have brought its compulsory
counterclaim on the contract in Wyatt's tort and DTPA suit in Duval County …
since Wyatt filed suit first, he chose Duval County.” Id at 248.
The facts of this case are almost identical to Wyatt. Here, AJP purchased
goods from Velvin. Velvin’s goods turned out to be worthless and faulty. AJP
verbally communicated to Velvin that it would not pay for the worthless goods,
and further refused to pay by directing that payments made by AJP to Velvin for
subsequently delivered goods were not to be applied to the worthless goods. (CR
103, 127, 129). As is evidenced by the record and correspondence between the
parties and their counsel, AJP clearly communicated to Velvin that AJP was only
continuing to do business with Velvin because of Velvin’s representations that
AJP’Ss damages from the worthless fuel would be “made right.” (CR 103).
Velvin’s Counsel’s own letter of September 2014 shows that all parties involved
understand both suits to concern the exact same subject-matter. (CR 108). Like in
Wyatt, when Velvin did not make good on its promises, AJP sued Velvin for the
worthless goods provided. AJP’s Petition in the Original Suit lists as damages the
exact amount in worthless diesel as is complained of by Velvin in this matter. (CR
28; 94 - Original Petition of First-Filed Suit listing “$31,760.45 in out-of-pocket
damages for the worthless diesel fuel delivered”). The fact that the amount sued
for in the matter at hand differs slightly results only from the three months of
24
interest charged on AJP’s account between the time AJP’s DTPA notice letter was
sent to Velvin (July 30, 2014) and when Velvin filed this suit (November 19,
2014).
Rationally, this suit should be abated pending determination of whether the
disputed diesel was, in fact, tainted and worthless. If the diesel is determined to be
tainted and worthless, the debt complained of in the present suit is not owed. If the
diesel is determined not to be tainted and worthless, the debt complained of is
owed and a full adjudication of this suit is unnecessary.
Abatement is seasonably raised, even after the rendering of summary
judgment, where AJP’s initial pleadings brought pendency of the prior suit to
the trial court’s attention.
The pendency of a prior suit between the same parties and involving the
same subject-matter must be seasonably raised by a plea in abatement. Wyatt, 760
S.W.2d 245 at 248. Courts have found that a plea in abatement is seasonably
raised, even after the rendering of judgment, when the pendency of a prior suit is
shown in the pleadings. See, e.g. Ex Parte Lillard, 314 S.W.2d 800, 805 (Tex.
1958); Beckman v. Beckman, 716 S.W.2d 83 (Tex.App.—Dallas 1986). Once the
necessary facts showing the pendency of a prior suit are plead and admitted, or
shown by the undisputed record, the subsequent suit must be abated. Lillard, 314
S.W.2d at 806. This rule holds true even when the party who filed the original suit
fails to subsequently participate in that suit. Id. However, when parties do not
25
inform the court of the pendency of a prior suit until after judgment, courts have
discretion to determine if a plea in abatement is seasonable. Falderbaum v. Lowe,
964 S.W.2d 744 (Tex.App.—Austin 1998).
AJP brought the Original Suit to the attention of the Court multiple times in
its initial pleadings. AJP’s Answer and Motion to Transfer Venue alerted the trial
court to the prior suit, and included as evidence the affidavit of Appellant Andrew
J. Patton stating that litigation over the same facts was already pending. (CR 21-
45). Velvin has filed multiple motions, attended hearings, retained experts, and
produced and requested thousands of pages of discovery in the Original Suit—at
no point making any objection to the dominant jurisdiction of that suit. At the
request of Velvin, trial has been set in the Original Suit for October 2016. Further,
Velvin’s designation of a responsible third party in the Original Suit clearly shows
that Velvin considers it to be the dominant and determinative suit; thus, Velvin
would not be prejudiced by abatement of the present suit. Velvin has simply
“declined to do battle in the forum of the original suit” and multiplied the
controversies at hand, rather than settling them in the interest of orderly justice. See
2 R. McDonald, Texas Civil Practice in District and County Courts § 7.10, at 165
(rev.1982); Wyatt v. Shaw Plumbing Co., 760 S.W.2d 245, 247 (Tex. 1988).
The trial court erred in denying the Motion for New Trial because a suit
involving the same parties and subject matter was pending at the filing of this suit,
26
the prior suit was timely brought to the trial court’s attention, and abatement of this
suit would be proper.
VII. CONCLUSION AND PRAYER
The trial court erred in granting the Motion for Summary Judgment because
(1) a sworn account cannot be considered prima facie evidence to support
summary judgment when timely controverted by an affidavit of nonmovant’s
counsel, and (2) genuine disputed issues clearly exist regarding multiple material
facts.
Velvin’s sole basis in moving for Summary Judgment was that AJP’s
Original Answer did not meet the verification requirements to deny a suit on sworn
account. In reply, AJP timely filed an Amended Answer and controverting
affidavit, satisfying Rules 185 and 93(10) and destroying the prima facie evidence
of Velvin’s sworn account supporting Summary Judgment.
Further, genuine issues of material fact clearly exist regarding AJP’s defense
of payment. AJP made multiple, consistent directions to Velvin that payments
made to Velvin following the disputed fuel delivery were to be applied exclusively
to the subsequent, undisputed deliveries. Because AJP had the right to direct
application of its payments, disputed fact issues exist regarding AJP’s defense of
payment of the invoices sued for and their related finances charges.
27
Lastly, a genuine issue of material fact exists as a matter of law regarding
the reasonableness of attorney’s fees awarded to Velvin. By Velvin’s own
admission, the Motion for Summary Judgment and attached affidavit required the
trial court to take judicial notice of Velvin’s attorney’s fees. Because AJP properly
controverted the reasonableness of Velvin’s attorney’s fees by the sworn statement
of AJP’s counsel, judicial notice of Velvin’s attorney’s fees was not proper and the
trial court erred in granting Summary Judgment.
In the alternative, AJP argues that the trial court erred in denying the Motion
for New Trial because a suit involving the same parties and subject matter was
pending at the filing of this suit, the prior suit was timely brought to the attention
of the trial court, and abatement of this suit would be proper. This suit arises from
a disputed transaction between the parties in December 2013, where Velvin sold
AJP tainted diesel fuel. After being served with AJP’s first-filed suit concerning
the disputed diesel, Velvin circumvented the rules of orderly justice and filed this
suit demanding payment on the same disputed diesel.
Based on the foregoing, Appellants A.J.P. Oil Company, LLC, d/b/a
Grapeland Fuel and BBQ, and Andrew J. Patton pray that the Court reverse and
remand this matter to the trial court for further proceedings consistent with this
Court’s Opinion.
28
Respectfully submitted,
_/s/ Jaclyn D. Patton
JACLYN D. PATTON
TX Bar No. 24085521
639 Heights Boulevard
Houston, Texas 77007
PH: (713) 730-9446
FX: (713) 583-4180
jaclyn@txestateplanning.com
ATTORNEY FOR APPELLANTS
CERTIFICATE OF COMPLIANCE
I certify that this document was produced on a computer using Microsoft Word
and contains 5,926 words, as determined by the computer software's word-count
function, excluding the sections of the document listed in Texas Rule of Appellate
Procedure 9.4(i)(1).
_/s/ Jaclyn D. Patton
JACLYN D. PATTON
29
CERTIFICATE OF SERVICE
I hereby certify that a true and correct copy of the above and foregoing
instrument was served upon the following counsel of record by first-class mail and
electronic service on October 26, 2015.
_/s/ Jaclyn D. Patton
JACLYN D. PATTON
Mr. Ronnie Horsley
P.O. Box 7017
Tyler, Texas 75711
Via Email: horsleylaw@tyler.net
30
VELVIN OIL COMPANY, INC. §
§
VS. §
§
A.J.P. OIL COMPANY, LLC d/b/ a §
GRAPELAND FUEL & BBQ; and §
ANDREW J. PATTON § RUSK COUNTY, TEXAS
PLAINTIFF'S ORIGINAL PETITION
TO THE HONORABLE JUDGE OF SAID COURT:
COMES NOW, Velvin Oil Company, Inc., a corporation, P.O. Box 993
Henderson, TX 75653, hereinafter referred to as "Plaintiff", and makes and files this its
Original Petition complaining of AlP Oil Company, LLC, a limited liability company,
doing business as Gr~peland Fuel & BBQ; Andrew J. Patton, also known as and. being
" ' " "" ,
the same person as Andrew Jack Patton, Andrew Patton, Andrew J. Patton, III, Jack
Patton and Jack Patton, III, jointly, severally, individually, hereinafter referred to as
"Defendants"; AlP. Oil Company, LLC, may be served by serving its registered agent,
Jack Patton, or any Manager at the address of 1279 E. Loop 304, Crockett, TX 75835, and
Andrew J. Patton may be served at the same above address or 714 E. Houston Ave.,
Crockett, TX 75835 and for cause of action your Plaintiff would show unto this
Honorable Court as follows:
1.
THIS CASE IS FILED AS A LEVEL 1 PROCEEDING UNDER RULE 190.2 TEXAS
RULES OF CIVIL PROCEDURE.
5
The damages sought in this matter are within the jurisdictional limits of this
court. Only monetary relief of $100,000.00 or less, including damages of any kind,
penalties, costs, expenses, pre-judgment interest, and attorney fees.
II.
Plaintiff would show that "All invoices due and payable in Rusk County,
Henderson, Texas" therefore venue is proper in Rusk County, Texas.
III.
That, on the dates as shown in the itemized and verified account attached hereto
as Plaintiff's Exhibit "A", and made a part hereof for all purposes as if set out herein·
verbatim, Plaintiff, at the special instance and request of Defendants, did deliver to
Defendants the services described in said Exhibit "A", at the prices therein charged, the
same being the agreed pr:ice therefor.·
IV.
For valuable consideration, the Defendant, Andrew J. Patton, also known as Jack
Patton, executed a Personal Guaranty, a copy of which is attached hereto as Exhibit "B"
and made a part hereof for all purposes as if set out herein verbatim, wherein he
guaranteed performance and payment of the indebtedness of A.J.P. Oil Company, LLC.
A.J.P. Oil Company, LLC defaulted under the terms of said agreement and the
Defendant, Andrew J. Patton, also known as Jack Patton, failed to perform and pay
under the said Personal Guaranty.
v.
That Defendants did promise to pay Plaintiff for same, but though often
6
requested to do so, the Defendants have failed and refused, and still fail and refuse to
pay the said account, all to Plaintiff's damages in the sum of $32,676.71 together with
interest and attorney's fees as hereinafter alleged.
VI.
That Plaintiff has made written demand upon the Defendants for payment of
said account, more than thirty (30) days prior to the filing of this Petition, and that
Plaintiff would show the Court that the recovery of attorney's fees is authorized, made
and provided, under and according to Chapter 38 of the CIVIL PRACTICE AND
REMEDIES CODE, that this case is ,being handled on a contingent fee basis, and
Plaintiff further sues Defendants for reasonable attorney's fees, inasmuch as Plaintiff
has been required to employ the undersigned attorney to file this suit and has,agreed to
pay hlma reasonable fee for his serVices, :i:tU.of which Plaintiff.~lleges to be in a~ le~st .. :"
the sum of $10,892.24. All conditions precedent to Plaintiff's recovery herein have been
performed or have occurred.
WHEREFORE, premises considered, your Plaintiff prays unto this Honorable
Court, that the Defendants be cited to appear and answer herein, and that upon a final
hearing hereof, Plaintiff do have and recover Judgment from and against the
Defendants in the sum and amount of $32,676.71 together with interest at the rate of
eighteen percent (18%) per annum from the 17th day of November, 2014, until paid,
costs of court, reasonable attorney's fees as hereinabove alleged, and interest on such
fees and costs at the rate of five percent (5%) per annum, and for such further and other
relief, general or special, in law or in equity, to which Plaintiff may be entitled.
7
Respectfully submitted,
LAW OFFICES OF RONNIE HORSLEY, P.e.
Attorney for Plaintiff
Tyler, Texas 75711
Telephone: (903) 593-7314
Texas Bar Card No. 10014000
'.; .
8
. Te:;c.tA..S
STATE OF ........................................ .
COUNTY OF .... :8~S..K ............ ..
BEFORE ME, the undersigned authority, on this day person'illy appeared ...................................... ..
............................................................. P..~y(D......C:t.~...V.~~v..tn ................................................................ .
(Name of person making affidavit)
who, being by me duly sworn, states on oath that ....... he is
1. An individual trading as .....................................................................................................................................
(Trade style if used - otherwise owner's name)
2. Agent of .......... ,...............................................................................................................................................:,
(Name of Firm)
a co-partnership, composed of............................................................... , ......... ; ................................................... .
(Name of Partners)
and that, _he is duly qualified and authorized to make this affidavit.
3. Agent' of ............ v..~.~~.~.O.....O.i.k ..... CO.......... ~.0.~.. ~.......................................................................... ,
(Name of Corporation)
a corporation, duly incorporated and existing under and by virtue of the laws of the State of
T ~)<''' <. ....................... ,
........................':':'..rt'! WI'th't . , I 0 ff'Ice an d domici
IS pnnclpa Hu0U".S'a..n
"1 e .In the C'Ity 0 f ................................... ,
County of ....... R..Y:(.?:~.......... and State of ...........T~.X.~2 ..................... and is duly qualified and
authorized to make this affidavit.
4. That the foregoing and annexed account, claim, and cause of action in favor of ....................................... ..
..................................................y.~.~Y..!.b ......Q.(~.....(P,.~.: ...J.;",0..~... i ......................................... ....... ·.and
.
against··~ ...... :.~.; ... ;............A.J..P:. ...,..O'{1-.: ... r~ t~ •• .'..~~.•~•...••• , •... ~•..• : ••.••.••••••••••• ; ••.••••••••.•••••.•..••••••••...•••••.• ~ •.
. ·•.
. 'in the sur1i9~ .... ;.... ,... ~, .. :......... :~ ..... 3..g.,.jp..1.~....7...L .. :::.'... :.. ·.: ........ :...... DoliarSi~ within the. knowledge of
affiant just and true, and that it is due and that all just and lawful offsets, payments and creditshave been
. . . ?2J~. . . . . . . . . . . . ..
allowed.
tif/~ Affiant
SWORN TO AND SUBSCRIBED BEFORE ME, this ........ ./.9. ...... day of ..... QQ.y.~0..~ 20.Jtj
.......... :pR/I?::.C-:. ;... /2.~ . . . .
NOTARY PUBLIC IN AND FOR COUNTY OF
~T
............................... ..Q,t~·v,
-:
:'i" ., >. " o~ • '.~".: .'
32,676.71
10 Days . 30 Days 60 Days 90 Days
Current 32,676.7ffotal:
305.42 305.42 305.42 31,760.45
0.00
*** THIS IS LINE ONE OF THE STANDARD MESSAGE ***
*** THIS IS LINE TWO OFTHE STANDARD,. MESSAGE ***
Your accountwith us is seriously past due.
Remit today so that we ma~.9QnJi,nue to serve you .
. ~ ...~•. '-''',' ,.~_::::'::-~.,~-:~:'~"::':j~:;;:;':':':';"'::'v:.,.;.;;.:.:.'1 ~
;",,,:,~":r" ii,I'''~'\ir; ?F~ll"'-
i\: I \i,...... 9~ ~'. it Ii
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~~
10
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tk;:;;:-I~:;.;. ~~;r:;-;:7;;;;;":;~,:;"~'·-;;'~J..~.;ei~;:;,:.:::;~·~r~~~;;..;.-;;;;
IN Oil CO" ~NC.
PETROLEUM PRODUCTS
EMERGENCY CONTACT: (512) 463-7727
P.O. BOX 993
HENDERSON, TEXAS 75653
903/657 -2108
SOLD TO SHIPPED TO
AJP Oil Company, LLC Grapeland
dba Grapeland Fuel & BBQ dba Grapeland Fuel & BBQ
1277 East Loop 304 1277 East Loop 304
Crockett, TX 75835 Crockett, TX 75835
0.0 F-N
No Lead Gasoline UN-1203
)1.0 . 5,501.0 0.0 F-TFG EACH 0.1840 1,012.18
Federal Gasoline Tax
11.0 5,501.0 0.0 F-TSG EACH 0.2000 .1;100.20
State Gasoline Tax
5.0 2,495.0 0.0 .. F-DL .EACH 3.0390 .. 7,582.31
Diesel15~PPM Ultra Low: Sulfer.
5.0 2,495.0· 0.0 . F-TFD EACH 0.2440 608.78
Federal Diesel Tax
5.0 2,495.0 0.0 F-TSD2 EACH 0.1960 489.02
State Tax Biodiesel
ULTRA LOW SULFER DIESEL FUEL(15-PPM SULFER MAXIMUM) REQUIRED FOR USE IN ALL 2007 MODEL
YEAR AND LATER HIGHWAY DIESEL VEHICLES AND ENGINES. RECOMMENDED FOR USE IN ALL DIESEL
VEHICLES AND ENGINES. II THIS FUEL MAY CONTAIN UP TO 5.0% BIODIESEL"
Net Invoice: 27,102.96
Less Discount: 0.00
.-.._ .. -._ .. , i Sales Tax: 0.00
, Invoice Total:
~~
31 ~t1,fg
Minimum Octane Rating of this fuel: (R+M) I 2 Method NIL 87, MG 89, SNL 92
I are due net 1ath from invoice date. Anance charge after 30 days of 1'1.0% per monltl (minimum charge of 50¢) which Is en annual percentage rate of 1B%. Failure to pay the full·
11
lis inllOlce within .the time set forth In the first senlence shall constitute an acceptance of the terms at this Invoice. In the event aU or any part of the amount or amounts due pursuant
.Iull.ofthls Invoice. and such amount or amounts is turnod over 10 an attorney for collection. Customer agrees to pay in addillon to all other sums due hereunder, all costs of collection.
:houtlimitation court Costs and reasonablo subject to tho provisions of the Texas Consumar Credit Law. All invoir-"[JI< .1"" ,,,,,, nc... Ah '_;_ •.
< .• ' ••
EMERGENCY CONTACT: (512) 463-77:
75653
903/657 -2108
SOLD TO SHIPPED TO
AJP Oil Company, LLC Grapel?lnd
dba Grapeland Fuel & BBQ dba Grapeland Fuel & BBQ
1277 Ea~t Loop 304 1277 East Loop 304
Crockett, TX 75835 Crockett, TX 75835
0.0
No Lead Gasoline UN-1203
4,003.0 4,003.0 0.0 F-TFG EACH 0.1840 736.55
Federal Gasoline Tax
4,003.0 4,003.0 0.0 F-TSG EACH 0.2000 800.60
State Gasoline Tax
3,993.0 3,993.0 0.0 F-DL EACH 3.0590 12,214',59
, DieseI15~PPMUhraLo'l/Sulfei' '.': '
. ,
3,9~3;O " '3;993.0 0.0 F~TFD· " t'
EACH ,,0:2440 '974.29 ' ~
Federal, Diesel Tax
3,993.0 ,,3;993.0 0.0 F-TSD2 EACH 0.1960 782.63
State Tax Biodiesel
ULTRA LOW SULFER DIESEL FUEL(15-PPM SULFER MAXIMUM) REQUIRED FOR USE IN ALL 2007 MODEL
YEAR AND LATER HIGHWAY DIESEL VEHICLES AND ENGINES. RECOMMENDED FOR USE IN ALL DIESEL
VEHICLES AND ENGINES. "THIS FUEL MAY CONTAIN UP TO 5.0% BIODIESEL"
Net Invoice:,... 27,377.5(
Less Discount: 0.9(
Sales Tax: 0.00
Invoice Total: 27,377.59
All accounts are due net 10th from invoice date. Flnance charge after 30 days of 1~% par month (minimum charge of SO¢) which Is an annual percentage rate of 18%. Failure to pay the 11
amount of this Invoice within the time set forth in the first sentence shall constitute an acceptance of the terms of this InvOice. In the event all Of any part of the amount or amounts,duEipuiSua
12
to or as a result of this Invoice, and such amount o(amounts Is turned over to an attorney for colleCtJon, Custilmer agreesfo pay in addition to all other sums due hereunder, aU Costs of CoIiEK:tio
including Without Bmllallon court costs and reasonable subject to the provisions of the Texas ConsumarCredlt Law. All Invoices due and Payable In Rusk County,He~derson, Texas. '
CO., INC. DELIVERY TICKET
P. O. Box 993
HEND!=RSON, TEXAS 75653
903-657-2108
RNO. YOUR OROeRliio. SALes PERSON; ITERMS
"
I SHIPPEDVI~,' " .".
IFLAMMABLELiChJIO";:':;: ;,dc6~tEdT;:
J 0: PREPAID, '
ITY QUANTITY DESCRIPTION PRICE AMOUNT
:0 " "
ORDERED
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,IVERY TICKET STATE ROAD TAX
FEDERAL ROAD TAX
STATE SALES TAX
~fu\~~~ill,~
:IVED BY
SUBTOTAL
..,
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TOTAL AMOUNT DUE ~ \t\~ () l.-.
"
13
" -,
85/10/2812 19:39 9355445855 CROCKETT ISD PAGE 81/02
" . , ''';' ~. 111,">, )uJ ~ D:1>'P(O,UcJ, '~eJt,
~ ... lur 94Pfl£,l M 1.
403 WebstarOrive
"'rson~Taras 75m Declined
,9Oi'6S7~loa/FIX'9OJ-657-8794
~ PI• • lad tile followlnK In!fGnI c:ampIatIftg this fcmn. Applicant rapteSents IhIttlle Inf,,1'RIIIt!on 8Mm In tJUApplicldon is complete and _=-ate and
lMhmIzes 'AIYI" ail cGmlMny ottl! autIUIfi•• credit ~llftt to check wllll CftlCIIt ~ ..~ end, hlfllf'l!flClB" oiftM IUIftlIISo Indudliwbulb. 5I!IIer claims
, lPPftIIII'''te'''COfIIIderInI'''''apflllMtloRlIId ..lnequemirrotany,q.I~, ReADTHliAn'ACHEDMREfMENTAND$lGN'IHE"SIGNATUIIl"S£CTIDNBl!RlAE
SU8..n1 THIS APPU~ ON. '
1'"Corponttlon. please list thrae_Jor SlocIc" Name/!!tte
Hold81'S and offIan fJlttllr c:oJi,cntron.
If a PlllMfShlp cr I'rDIIrIetol'lldp. pJuse Rft
the _ _••clClrtIft .... SOdII StaIrIty NUmber
of .. 0IIIftCIII.
timIe voa . . . tlIl!d b.~ "es~(coriIplett belowt ," .
What YaIr? " WhlIt Typo?' " , "
,..Purd\iI&!lOrdet ~u~..; ·OU" . . . . . .et. '
'j ':;L. ".' '. :::< ·jJO:.". , ". \..' ~".
TliEumpW' . rAX~U'CONTINUETO BE CHARGED ON'ALL !NVOIC£$ UNTILTHE'
. " APPRoPRIATE "TAX EXEMPT CERTIFICATE" IS RECEIVED. CUSTOMER
3- :JD,7Q - ,gjb7-6 WILL BE RESPONSIBLE FOR ALL TAX UN1lLCERTIFICATE ~S RECEIVED.
2,'-_ _ _ _ _ _ _ _ _ _ _ _ _ _ _ 5._ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ __
1. . Go
14
05/10/2012 19:39 9355445855 CROCKETT ISD PAGE 02/02
".
'".
! -, ~ Velvin Oil Company Credit Terms and Conditions
. Our tannl; ate DUE UPON RECEIPT OF STATEMENT. On the last business dIy of each month a statement will be Plrepal'8d and mailed to you listing all
unpaldln~_ 8S oftheC:foM of business for tII,t month. THE ENTlRE BAlANCE SHOWN ON THE STATEMENT, IS DIlJE UPON RECEIPT and accounts will
be CUT OFF I'"avmant Is not recehied by the TENTH. Any part of a'statement balance not paid by the end of the ,,~onth followllllthe statment date
will be considered PAST DUE and will bo assessed a 1.S " rate char8t that VIlli ~ added to the unpaid balance.
Your accollllt will ,be asslgtlecf an OPEN CREDIT UMIT, subject to review at any time and VeMft 011 Company IlIseM!S the rlJht to d\Scx)ntinue anv
QtARG! priv)h!ps should yQur aa:ount become past due; II than! Is: In ownership or name changeJ If there Is ill bllnJcruptcy; or at anv time Veil/in 011
Co.. for food QUStt/ deems Itself ll'$eQJfe.
The applicant lIereby authottzes a fuD and complete eredlt Investlptlon by VeMn 011 Co. and understands thel1 VeMn 011 Co•• wRl not process a
'"CHARGE- order ,,"til a &Isned and completed credit application has been submitted and approved. All Infortnaticln will be VERifiED. The applicant
further authorizes die banlc listed on the application to release Inrormatlon to Velvfn 011 Co .. as neceSsary for VEtil/In 011 Co., to approve credit and
subSequently for any lepl purpose. Should It become neceSary to pface the account In the haM,ls of an attomev or collectJon agency, I/we asree to
pay an -ddItlonaI2Sr. of the amount due lind owing. tfVetvln OIl Co•• finds It necessary to refer this aa:ount to an IIttarney for Inidatlon Clf a LAWSUIT,
II fee of as 1/3% oftheoutstandln. balance plus any and all court COS1S shllll be added to the acxount balance.
ThI! CONFIDENnAL CREDIT APPLICATION tontalns ell bltnn! ftIIIDtlattd between the parties and may be modified onlv upOn written aareamant
between VeMn on Co., and the Appflcant.
I/WE HAVE READ THE TERMS OF THIS AGREEMENT AND A,GREE
TO BE BOUND BY THEM IN ALL RESPECTS.
This ____...,..-..".:~'~ .~~~~~w; e ______________ 20 l·;t ~
Signature: _":::;=~~~~~::"":::~......,-_ _ _ _ _ _ _ _ _ __
Name: 'Cl'a..dL. '. Title:t2wn!?C .
PERSONAL GUARANTY
IIl . . . . .UE . . . . TlIIIIDllIUUIJRY....
UNDERSIGNED GUARANlY MUST BE ONE OF THE FOU.OWING (Orel!!! on!!) Owner/SOle Proprietor I General Partner I Corporate OffIcer
PERSONAL GUARANTVt In con,lderatlon of Saller, f1nanclna purchases by Applicant. the undersigned Guarantor hllllreby epees unconditional Iv.
absolutely .rid In'ewICably, to petSonaOy IUIntfttee payment of aU amounts, hereafter due under, and the performan.ce under the terms of the
attached Commercial Charge Account Agn!ament ,"Agcornent"), and further agrees to pay the total balanc.due on I:he Aczount opened pursuant to
thI! ApJemont upon demand, without requiring Seller to maka demand and/ar proceed first to enforce paym~nt 8811\\nst the Applicant also ffllble on
thb; acaounr.ln the MIlt of any default under me Agreement that govemlt the Atcount. The unde~gned herebv wa~ any notl~ regardlne tha
~ol\t or this Guarapty, and agrees that this Guarnncy sm.1I be appncable until the AGreement ha~ terminated anlttall amounts due thet@ under
shaD be paid In fuft. The undersllned IISreesthat In ttte lI!Yent the ~unt Is not paId as aareed, Seller may report the, underslgned"s liability fer and
t~ status of the Account to the credit bumaus and others: who may lawfullv rKell/e SUch Information. '
15
IN THE DISTRICT COURT OF RUSK COUNTY, TEXAS FILED
4 TH JUDICIAL DISTRICT
VELVIN OIL COMPANY, INC. * C '!:: ~ .', "/
* NO. 2014 -362 RUSKC'~Y~",,\iCf CLER~
VS. *
* BY ~D:?UTY
A.J.P. OIL COMPANY, LLC *
d/b/a GRAPELAND FUEL & BBQ; *
AND ANDREW J. PATTON *
DEFENDANTS' MOTION TO TRANSFER VENUE
TO THE HONORABLE COURT:
A.J.P. Oil Company, LLC, d/b/a Grapeland Fuel & BBQ, and
Andrew J. Patton, also known and being the same person as Andrew
Jack Patton, Andrew Patton, Andrew J. Patton, III, Jack Patton and
Jack Patton, III, Defendants, move the Court to transfer venue and
in support of the motion show:
1. Defendants obj ect to venue in Rusk County, Texas, the
county in which this action was instituted, on the ground that Rusk
County is not a county of proper venue in this case.
2. No basis exists for permitting venue in Rusk County as
alleged in Plaintiff's Original Petition under any of the venue
rules provided by the Civil Practice and Remedies Code of Texas or
otherwise. Defendants specifically deny the venue facts pleaded in
Plaintiff's Original Petition. Defendants specifically deny that
any Defendant contracted in writing to perform an obligation in
Rusk County, Texas, expressly naming Rusk County or definite place
in that county by the writing. Defendants specifically deny that
any invoice the subject of this suit constituted a contract in
16
writing by which they agreed to pay for the goods the subject of
this suit in Rusk County, Texas. Defendants further specifically
deny that any such invoice was furnished prior to the time the kind
and quantity of goods to be purchased, the price to be paid
therefor, the place of delivery and other contractual terms had
been agreed upon. Defendants specifically deny that any invoice
the subject of this suit was sent to any of them prior to the
shipment of the goods the subj ect of this suit. Defendants
specifically deny that any invoice by Plaintiff was intended to
modify the terms of any original contract.
Defendants specifically deny that the individual Defendant was
ever a resident of Rusk County, Texas. The individual Defendant is
not a resident of Rusk County, Texas and was not. a resident of Rusk
County, Texas when the cause of action alleged in Plaintiff's
Original Petition allegedly accrued.
Defendant A.J.P. Oil Company, LLC specifically denies that
Rusk County is the county of Defendant's principal office in this
state.
Defendants also specifically deny that all or a substantial
part of the events or omissions giving rise to Plaintiff's cause of
action occurred in Rusk County, Texas.
3. Defendants further object to venue in Rusk County, Texas,
the county in which this action was instituted, on the grounds that
Rusk County is an inconvenient venue, and the action should be
transferred to Houston County, Texas in accordance with TEX. CIV.
17
PRAC. & REM. CODE ANN. § 1S.002(b) (2014). More specifically, as
shown in the attached Affidavit of Andrew J. Patton, for the
convenience of the parties and witnesses and in the interest of
justice, maintenance of this action in Rusk County would work an
injustice to Defendants considering:
(1) The Defendants' economic personal hardship;
(2) The balance of the interest of all parties
predominates in favor of the action being brought
in Houston County, Texas; and
(3) The transfer of the action to Houston County, Texas
would not work an injustice to any other party.
4. Defendants request that this action be transferred to a
District Court of Houston County, Texas, where proper venue lies in
this case.
S. Venue lS proper in Houston County, Texas, because the
individual Defendant resided in Houston County, Texas at the time
the alleged cause of action accrued, and Houston County, Texas is
the county of the principal office of Defendant A.J.P. Oil Company,
LLC.
WHEREFORE, Defendants request that this matter be set for
hearing, and that on completion of the hearing the Court grant
Defendants' Motion to Transfer Venue in this cause to Houston
County, Texas, taxing costs against the Plaintiff, and granting the
Defendants any further relief to which they may be justly entitled.
18
Respectfully submitted,
BY:
WIL
WIL
P.
CROCKETT, TEXAS 75835
936-544-4111
936-544-5023 (FAX)
TEXAS BAR I.D. NO. 15735500
bill@pembertontriallaw.net
JACLYN D. PATTON
3730 Kirby Drive, Suite 1200
Houston, Texas 77098
ATTORNEYS FOR DEFENDANTS
19
CERTIFICATE OF SERVICE
A true and correct copy of the above and foregoing Defendants'
Motion to Transfer Venue has been served upon:
Mr. Ronnie Horsley
Attorney at Law
P. O. Box 7017
Tyler, Texas 75711
by depositing same, enclosed in a post paid, properly addressed
wrapper, in a Post Office or official depository, under the care
and custody of the United States Postal Service, Certified Mail,
Return Receipt Requested, this the 23rd day of
20
AFFIDAVIT
THE STATE OF TEXAS *
COUNTY OF HOUSTON *
BEFORE ME, the undersigned notary public, on this day
personally appeared Andrew J. Patton, individually and as agent for
A.J.P. Oil Company, LLC, who, after being duly sworn, stated that
he is a Defendant in this Cause, that he is over the age of 18
years, of sound mind, and is competent to make this affidavit, and
tha t every statement contained In this Affidavit is true and
correct.
"Andrew J. Patton, also known and being the same person as
Andrew Jack Patton, Andrew Patton, Andrew J. Patton, III, Jack
Patton and Jack Patton, III, is a resident of Houston County,
Texas, and he was a resident of Houston County, Texas at the time
the alleged cause of action plead in Plaintiff's Original Petition
accrued. The principal office in Texas of A.J.P. Oil Company, LLC,
is in Houston County, Texas. Houston County, Texas is the county
in which the decision makers for the organization within the State
of Texas conduct the daily affairs of the organization.
"The invoices attached to Plaintiff's Original Petition as
Exhibit "AU were delivered to Defendants after the kind and quality
of goods to be purchased, the price to be paid therefor, the place
of delivery and the other terms of contract between Plaintiff and
Defendants had been agreed upon. The goods the subject of this
suit had already been delivered prior to the time the invoices were
21
delivered.
"Litigation between the Plaintiff in this case and Defendant
A.J.P. Oil Company, LLC, d/b/a Grapeland Fuel & BBQ, is pending In
the Third Judicial District Court of Houston County, Texas, in
Cause No. 14-0217, wherein A.J.P. Oil Company, LLC, d/b/a Grapeland
Fuel & BBQ, sued Velvin Oil Company, Inc. for damages for delivery
of tainted fuel. A true and correct copy of Plaintiff's Original
Petition filed on November 7, 2014 in Cause No. 14-0217 is attached
hereto, marked "Exhibit A" andi~
/(/
(
ANDREW
S
_ NO /'
SUBSCRIBED AND SWORN TO BEFORE MEt'"his ~·d-y of December,
2014. ,)
22
No.
AlP OIL COMPANY, LLC D/B/A § IN THE ..s ~ DJ.%
GRAPELAND FUEL AND BBQ, §
Plaintiff §
§
V. §
§
VELVIN OIL COMPANY, INC. § HOUSTON COUNTY, TEXAS
Defendant §
PLAINTJFF'S
, ORIGINAL PETITION
TO THE HONORABLE JUDGE OF SAID COURT:
COMES NOW AJP OIL COMPANY, LLC d/b/a GRAPELAND FUEJL AND BBQ
(hereinafter "Plaintiff') complaining ofVELVIN OIL COMPANY, INC. (hereinafter "Defendant),
and states the following:
I. DISCOVERY LEVEL
Plaintiff intends to conduct discovery in this suit under Level 2 of Texas Rule of Civil
Procedure 190.3 and affirmatively pleads that this suit is not governed by the expedited-actions
process in Texas Rule of Civil Procedure 169 because Plaintiff seeks monetary relief over
$100,000.
II. RELIEF
Plaintiff seeks monetary relief over $1,000,000. Tex. R. Civ. P. 47(c)(5).
III. PARTIES
Plaintiff, AlP OIL COMPANY,
,. LLC is a limited liability company organized and
existing under the laws of the State of Texas and may be served with citation in this cause by
serving its registered agent for service, Andrew Patton, at 1277 East Loop 304, Crockett, Texas
75835, or wherever he may be found.
23
Defendant, VELVIN OIL COMPANY, INC. is a corporation organized and existing
under the laws of the State of Texas and may be served with citation in this cause by serving its
registered agent for service, David Velvin, at 403 Webster Drive, Henderson Texas 75653, or
wherever he may be found. .
IV. JURISDICTION
Jurisdiction is proper in this Court because the damages suffered by the Plaintiffs are in
excess of the minimum jurisdictional limits of this Court.
Venue is proper in Houston County, Texas because the acts and/or omissions complained
of herein occurred in Houston County, Texas.
V. VENUE
Venue for this suit is proper in Houston County under Texas Civil Practice & Remedies
Code section 15.002(a)(1) because all or a substantial part of the events or omissions giving rise
to this cause of action occurred in Houston County. TEX. CIV. PRAC. & REM. CODE §
lS.002(a).
Venue for this suit is also proper in Houston County under Texas Business & Commerce
Code section 17.56 because Defendants have conducted business in Houston County, and the
transactions that form the basis of this cause of action occurred in Houston County. TEX.BUS. &
COM. CODE §17.56.
VI. BACKGROUND FACTS
Plaintiff, Grapeland Fuel and BBQ, is a convenience store and gas station located in
Grapeland, Texas. Plaintiffhas been in operation and regularly selling gasoline and diesel fuels
since 2006.
On or about December 4, 2013, Defendant Velvin Oil made a fuel delivery to Plaintiff
24
that included 2,478 gallons of defective and hannful diesel fuel. In turn Plaintiff, in its ordinary
and expected course of business, sold this defective fuel to customers. The diesel fuel actively
hanned vital engine parts and rendered customers' vehicles inoperable, or in a diminished
functional capacity. Plaintiff was ultimately forced to fix these disabled vehicles out of pocket at
a cost exceeding $20,000.
Further, in the weeks following Defendant's diesel delivery to Plaintiff, Defendant's
agents continuously and fraudulently misrepresented to Plaintiff that the diesel fuel was untainted
and met regulatory requirements, inhibiting Plaintiff from taking timely remedial action and
resulting in further damages to Plaintiff.
As a result of the tainted diesel sold by Defendant and the resulting hann to Plaintiffs
customers, Plaintiff has suffered serious financial hann including repair costs, loss of profit and
severely diminished goodwill1Nithin the community.
VII. VIOLA nONS OF THE DECEPTIVE TRADE PRACTICES ACT
Plaintiff is a consumer under the DTP A because plaintiff is a Limited Liability Company
who acquired goods by purchase. Defendant is a corporation that can be sued under the DTPA.
Based on the conduct alleged above, Defendant Velvin Oil Company has engaged in
false, misleading, or deceptive acts or practices in the conduct of trade or commerce in violation
ofTEX. BUS. & COM. CODE §17.46(a) and (b), to wit Defendant:
(A) engaged in false, misleading, or deceptive acts or practices that plaintiff relied on
to plaintiffs detriment. Specifically, Defendant represented that the diesel fuel it
sold to Plaintiff was of a particular standard, quality or grade when it was not.
TEX. BUS. & COM. CODE § 17.46(b)(7). Defendant also failed to disclose
infonnation known at the time of the transaction to Plaintiff, with the intention that
25
withholding this information would induce Plaintiff to enter into a transaction that
Plaintiff would not have entered had the information been disclosed. TEX. BUS. &
COM. CODE §17.46(b)(24).
(B) breached an implied warranty. Specifically, Defendant breached the implied warranty
of merchantability as discussed in detail below.
(C) engaged in false, misleading, or deceptive acts or practices that, to plaintiffs
detriment, violated a "tie-in" consumer statute. Specifically, Defendant breached
Texas Agriculture Code Section 17.055 by selling motor fuel with an inaccurate
automotive fuel rating. TEX. AGRIC. CODE § 17.055.
Plaintiff gave Defendant notice as required by Texas Business & Commerce Code section
17.505(a). Attached as Exhibit A is a copy of the notice letter sent to Defendant, which is
incorporated by reference.
VIII. BREACH OF IMPLIED WARRANTY OF MERCHANTABILITY
Plaintiffre-alleges and incorporates by reference all other paragraphs of this Petition
as if fully set forth herein.
At all times relevant to this Petition, Defendant is and was in the business of selling
motor fuel without substantial change in the condition in which such fuel was manufactured and
sold to consumers, knowing that its fuel products would be sold to persons whose vehicles
required a specific quality of fuel to operate.
Defendant is a merchant as to motor fuels, and as such impliedly warranted that
the diesel fuel advertised as meeting state and federal regulations and purchased by Plaintiff and
was merchantable and fit for the ordinary purposes for which it was to be used. Plaintiff
accordingly relied on Defendant's implied warranties in purchasing and reselling the diesel fuel.
26
On or around December 4,2013, Defendant sold and delivered to Plaintiff tainted diesel
fuel that Defendant warranted met regulatory standards. Defendant sold and delivered this fuel to
Plaintiff with knowledge that such fuel was to be sold to the general public for specific use in
vehicles that operate only on fuel meeting regulatory standards.
Plaintiff was unable to inspect or test the fuel it received from Defendant prior to
purchase.
After Plaintiff purchased the diesel fuel from Defendant, Plaintiffresold such fuel in the
course of its business to customers. Plaintiff relied on Defendant's implied warranty of
merchantability in selling the fuel to its customers.
Plaintiffs customers immediately began to experience problems with their vehicles,
including engine stalling and failure, resulting in expenses incurred for towing and repair.
Defendant breached its implied warranty of merchantability in that the diesel fuel it sold
contained water and other contaminants, making the fuel unwholesome, unfit for consumers to
use in their vehicles and unreasonably dangerous to consumers.
The injuries to Plaintiff, described above, proximately resulted from Defendant's breach
of the implied warranty of merchantability.
IX. NEGLIGENCE
Plaintiffre-alleges and incorporates by reference all other paragraphs of this Petition
as if fully set forth herein.
Plaintiff purchased diesel fuel distributed and sold by Defendant.
Defendant owed Plaintiff a duty of care to offer goods free from harmful defect.
Defendant should have reasonably foreseen that Plaintiff would be subject to the harm
caused by the damaging and defective fuel sold.
27
The defective fuel was intended to, and did, reach Plaintiff without material alteration.
Plaintiff used the defective fuel in the manner that Defendant expected.
The defects in the fuel could not be anticipated or detected by Plaintifftluough any
reasonable method. The defective fuel was unreasonably dangerous when used in its customary
manner.
The fuel was defective and unsafe for its intended use because it harmed the vehicles it
was intended to fuel, rendering them inoperable.
The fuel failed to perform its intended function of safely and efficiently powering
engines.
Defendant should have foreseen, detected, and prevented the defective condition of the
fuel.
Defendant should have prevented distribution of the defective fuel.
Defendant breached their duty of care by seIling products that were harmful and
deleterious:
a. without adequate quality control and testing; and
b. without using proper "clean out" and distribution practices.
Defendant's conduct was at a minimum negligent and likely careless or reckless.
Plaintiff has suffered economic damages through no fault of its own as a direct and
proximate result of Defendant's defective fuel.
X. DAMAGES
Economic and Actual pamages. Defendant's wrongful conduct was a producing cause of
Plaintiff's injury, which resulted in the following damages:
a. $31,760.45 in out-of-pocket damages for the worthless diesel fuel delivered.
28
b. $1,146,616.17 for lost profits.
c. $17,232.02 in mitigation costs.
d. $6,000 in lost time.
Mental-Anguish Damages. Defendant acted knowingly, which entitles Plaintiffto recover
mental-anguish damages under Texas Business & Commerce Code section 17.50(b)(I).
Defend8;nt's wrongful conduct resulted in mental-anguish damages totaling $15,000.
Additional damages. Defendant acted knowingly, which entitles plaintiff to recover treble
economic damages under Texas Business & Commerce Code section 17.50(b)(l). Specifically,
Defendant and its agents knowingly sold tainted, substandard diesel fuel to Plaintiff because
Defendants were switching over to a "Winter Blend" of diesel and were in short supply of diesel.
This is commonly referred to "clean out" diesel, which is substandard. See Exhibit B.
Attorney fees. Plaintiff is entitled to recover reasonable and necessary attorney fees for
prosecuting this suit under Texas Business & Commerce Code section 17.50(d).
XI. JURY DEMAND
Plaintiffs hereby request a trial by jury and have tendered the appropriate Jury Fee.
XII. CONDITIONS PRECEDENT
All conditions precedent to plaintiff's claim for relief have been perfonned or have
occurred.
XIII. REQUEST FOR DISCLOSURE
Under Texas Rule of Civil Procedure 194, plaintiff requests that defendant disclose, within
50 days of the service of this request, the information or material described in Rule 194.2.
29
XIV. PRAYER
As a result of the foregoing, Plaintiff asks that the Court issue citation for Defendant to
appear and answer, and respectfully prays for each of the following:
a. Economic damages ..
b. Actual damages.
c. Mental-anguish damages.
d. Treble damages.
e. Pre-judgment and post-judgment interest.
f. Attorneys' fees and costs of Court.
g. All other relief to which Plaintiff may be entitled.
Respectfully submitted,
~
J~ON
TX Bar No. 24085521
3730 Kirby Drive, Suite 1200
,Houston, Texas 77098
(713) 730-9446
(713) 364-6992 (Fax)
jaclyn@txestateplanning.com
DATED: t\ -1-- tLf
30
EXHIBIT A
31
NOTICE OF CLAlM
August 28, 2014
Re: Tainted diesel delivered to Grapeland Fuel and BBQ
Mr. David Velvin
Velvin Oil Company, Inc.
P.O. Box 993
Henderson, TX 75653
Dear Mr. Velvin:
1 represent Grapeland Fuel and BBQ in the above-referenced matter. You will recall that
in December 2013, Jack Patton of Grapeland Fuel and BBQ placed a fuel order with Velvin Oil,
which was delivered on December 4th. Two days later, on December 6th, Mr. Patton became
aware that three of his customers had experienced issues with diesel purchased from Grapeland
Fuel, resulting in extensive damage to their vehicles. Your Vice President, Jim Jordan, was
immediately advised of the problem and reassured my client that it would be looked into. Over
the next two weeks, Mr. Jordan was regularly contacted by my client about the ongoing issue.
During this time Mr. Jordan sent two super clean diesel shipments and one employee to add a
shock treatment to the fuel tank, all in hopes affixing the tainted diesel. After each "fix" made
by your company, Mr. Jordan insisted that the diesel was now safe to sell to the general public. It
was not. The problem was not ultimately resolved until my client emptied every ounce of diesel
from your company's December 4th shipment from his tank.
In reliance on your representation that the diesel delivered on December 41h was of a
standard quality and on your continuous assurances that the diesel had been "fixed" and was safe
for resale, my client has suffered severe and continuing damages which have not been remedied
by Velvin Oil. Grapeland Fuel and BBQ has made numerous attempts to resolve this matter
amicably, but has been rebuffed. After months of being assured by Mr. Jordan that Ve}vin Oil
32
would "do the right thing" in relation to the tainted diesel, my client's concerns are now being
ignored.
Undoubtedly, you are aware of your liability to my client for violation of the implied
warranty of merchantability arising from the principles of common law and, more specifically,
Section 17.46(7) of the Texas Deceptive Trade Practices Act (DTPA), Texas Business &
Commerce Code section 17.41 et seq.
Because of your violation of the DTPA, my client has incurred economic damages of
$1,072,439.11. These damages represent the $31,760.45 you have charged to my client for the
tainted diesel delivered, $ t 5,000 in business interruption while my client was forced to shut
down his diesel pumps, $19,678.66 in out-of-pocket and mitigation costs to repair the customers'
vehicles damaged by the tainted diesel, $6,000 in lost time Mr. Patton spent attending to this
issue, and $1,015,000 representing the loss in sales that have already been experienced by
Grapeland Fuel and will continue to be experienced over the next two years. In the event of
litigation, these amounts will be adjusted upward to reflect any additional damages.
In the event oflitigation, my client will also seek recovery of mental-anguish damages in
the amount 0[$15,000 and trebled economic damages on the grounds that your conduct was
committed knowingly. Specifically, we will show that your company acted with actual awareness
that the diesel was tainted when attempting to remedy the problem with shipments of super clean
diesel and shock treatment, yet reassuring my client that the diesel wa.<; safe for resale.
Please understand that this demand is made in the spirit of compromise. According to our
analysis, the demand presents a tremendous savings to you given your potential exposure to
Grapeland Fuel and BBQ. We hope you view this demand as a good faith, conservative effort on
our part to resolve this potential litigation on amicable terms.
My client is anxious to resolve this matter immediately. Therefore, I suggest that you or
your attorney contact me as soon as possible. From this point forward, alI contact concerning this
matter should be made to my office.
If this matter is not resolved, my client has authorized me to bring a lawsuit against you
for all appropriate remedies under the Texas Deceptive Trade Practices-Consumer Protection
Act. We would expect to recover not only our damages, but also mental anguish damages,
prejudgment interest, attorney's fees, and perhaps additional punitive damages.
Please forward this letter to your insurance carrier to ensure that the carrier receives
timely notice of the claim and will provide you with representation and coverage.
We trust that you will immediately respond, in writing, to this formal demand letter and
schedule a mutually convenient time and date for the requested relief within the time specified in
33
this letter. 1£ you have any questions regarding this matter or need additional informal ion, please
contact my office.
Sincerely,
Jaclyn D. Patton
34
EXHIBITB.
35
No. _ _ __
AJP OIL COMPANY, LLC D/B/A § IN THE DISTRICT COURT OF
GRAPELAND FUEL AND BBQ, §
Plaintiff §
§
V. §
§
VELVIN OIL COMPANY, INC. § HOUSTON COUNTY, TEXAS
Defendant §
AFFIDAVIT OF ANDREW PATTON
STATE OF TEXAS §
§
COUNTY OF HOUSTON §
ANDREW PA TfON appeared in person before me today and stated under oath:
"My name is ANDREW PATTON. I am above the age of eighteen years, and I am
fully competent to make this affidavit. The. facts stated in this affidavit are within my personal
knowledge and are true and correct."
"1 am the owner of Grapeland Fuel and BBQ. On December 3, 2013 I placed a gasoline
and diesel order with Jim Jordan of Velvin Oil by phone. When I made the order, Mr. Jordan
told me that there was currently a shortage of diesel because the refinery was switching to a
winter blend and doing maintenance, but that he "would pull some diesel from somewhere."
This order was delivered to Grapeland Fuel on December 4th.
Two days later on December 6th, 1 was told by my store manager Marsha Kosechata
that Joe Graves of Joe's Automotive had called saying that three of my customers had to bring
their trucks into his shop after purchasing diesel from my store. These customers were Tommy
Smith, Charlie Casky and Chris Byrn and they started having problems with their trucks almost
36
Il
immediately after filling up with us-one truck broke down before it could even make the half
block from Grapeland Fuel to Joe's Automotive. I verified via credit card records that these
customers had purchased diesel from diesel tank four at my store on December 4th , 5th and 6th ,.
I immediately shut down both diesel pumps and called Mr. Jordan of Velvin Oil to advise him
of the problem. Mr. Jordan said he would look into the matter and get back to me. Meanwhile I
inspected all of my pumps and fuel delivery paperwork and checked the veeder root readings
that my manager Ms. Kosechata prints out every night. I discovered that eighteen gallons of
water was dropped with the diesel delivery in diesel tank four. I pulled a fuel sample and found
that the diesel had a strange milky tea-like color and smelled somewhat like cleaning solvent.
Normally diesel has a greenish tint and ranges from clear to yellow in color-in my ten years
in the gas station business I have never seen diesel the color of tea.
On December 9th , I spoke to Mr. Jordan again. He agreed there was a problem with the
diesel and said that he had a solution. Velvin Oil shipped 2,183 gallons of super clean diesel,
which seemed to change the color of the fuel to a more normal color. Mr. Jordan assured me
that this super clean diesel would fix the problem. Because of Velvin Oil's assurances, we
began to sell diesel again on December 10th . The next day our fuel filters started stopping up
again and we had to change out six filters in diesel tank four in just one day. r called Mr.
Jordan again about the problems we were still having and he sent another 3,718 gallons of
super clean diesel on December 11th. By December 13 th the filters in diesel tank four were
clogging yet again and I hired a technician to change all filters and inspect the pumps.
On December 19th , I called Mr. Jordan about the ongoing problems with diesel tank
four. He sent an employee of Velvin Oil to add a shock treatment additive to the diesel in that
tank and again assured me that any problems we were having would be fixed by this. The
-------~-----~-----------~,-
37 - -- ----------------
filters in diesel tank four clogged within a few days, forcing me to stop selling all diesel until
we could pump the diesel tanks empty and dispose of 435 gallons worth of worthless diesel-
about $1,500 worth of diesel wasted.
During this time, four additional trucks that had filled up at our diesel tank four were
towed to auto shops in Grapeland, Crockett and Huntsville. These customers were Gator
Matthews, Eric Grueziecke, Richard Wagner and Tom Gates. I again verified by credit card
receipt that these customers had indeed filled up with diesel from tank four at Grapeland Fuel.
Between December 6th , 2013 and January 7th , 2014, seven total trucks were damaged
after filling up at our diesel tank four. Repairs to their trucks included changing fuel filters,
flushing fuel systems, dropping fuel tanks, cleaning fuel tanks, fuel injector replacement and
fuel pump replacement. Tom Gates' truck required a total fuel system overhaul. I paid
$17,233.02 out of pocket to repair my customers' trucks. In addition, because Grapeland and
Houston County is such a small and close community, word quickly spread that our diesel was
damaging customers' trucks. During the first eight months of 2014, my business has been
down almost $250,000 compared to this same period last year and it continues to suffer. Even
now, almost an entire year since the incident, customers ask me almost daily if our fuel is safe
to buy.
Grapeland Fuel purchased diesel exclusively from Velvin Oil between October 2013
and February 2014. We have never had any issues with diesel before Velvin Oil delivered
contaminated fuel on December 4, 2013 and we have not had any issues since we pumped that
fuel out of our tanks in January 2014.
We continued to do business with Velvin Oil because we were repeatedly assured by
Jim Jordan that Velvin Oil would make their mistake right. After trying to amicably resolve
38
this matter several times and being ignored by Velvin Oil, it has become apparent we must
---_.
resort to the legal system to get any relief."
AFFIANT FURTHER SA YETH NOT.
SWORN TO AND SUBSCRIBED BEFORE ME on this 1L day of f',Jo V.
2014, to certify which witness my hand and sea~LJ....-"~~~
,:.·t~':.!'~::::,. JULIE RHONE.
!~~{..\ Notary Public, State 01 Texas
\~~}~i My Commission Expires
...,:,t,:.:~~~'.:l' December 02. 2016
39
EXHIBITC
40
No. _ _ __
AJP OIL COMPANY, LLC D/B/A § IN _ _THE DISTRICT COURT OF
GRAPELAND FUEL AND BBQ, §
Plaintiff §
§
V. §
§
VELVIN OIL COMPANY, INC. § HOUSTON COUNTY, TEXAS
Defendant §
AFFIDAVIT OF MARLENE SANDERS
STATE OF TEXAS §
§
COUNTY OF HOUSTON §
MARLENE SANDERS appeared in person before me today and stated under oath:
"My name is MARLENE SANDERS. I am above the age of eighteen years, and I am
fully competent to make this affidavit. The facts stated in this affidavit are within my personal
knowledge and are true and correct."
"I am a shift manager at Grapeland Fuel and BBQ. On December 4th, 2013, I was
working when an employee of Velvin Oil came and dropped off diesel and gasoline into our
tanks. I signed the delivery ticket for that fuel.
About the next day we began to have problems with tank four at our store. We had
never had any problems with diesel before Velvin Oil made the fuel delivery that I signed for
on December 4th , 2013.
I was working again around December 18 th or 19th when a Velvin Oil employee came
to Grapeland Fuel and treated tank four with a shock treatment he said was for water in the
diesel. The employee left another bottle of shock treatment with us for use later on. We kept
41
having problems until we pumped out tank four. We have not had any problems since but I still
hear customers say they are worried about buying diesel and gasoline from us."
AFFIANT FURTHER SA YETH NOT.
1Y\fIll 0j\ Q 9anJ.w:J
ARLENE SANDERS
SWORN TO AND SUBSCRIBED BEFORE ME on this
2014, to certify which witness my hand and seal~o~.u..L.<~_ __
k day of l\JOV.
\"''''''
"t~!~nr.~;~ JULIE RHONE
{"i~:"\ Notary Public. State of Texas
.lJ.,~,.~..J MV Commission Expires
~i.M~~~"ol' December 02. 2016
42
EXHIBITD
43
-
No. _ _ __
AJP OIL COMPANY, LLC D/B/A § IN _ _THE DISTRICT COURT OF
GRAPELAND FUEL AND BBQ, §
Plaintiff §
§
V. §
§
VELVIN OIL COMPANY, INC. § HOUSTON COUNTY, TEXAS
Defendant §
AFFIDAVIT OF MARSHA KOSECHATA
STATE OF TEXAS §
§
COUNTY OF HOUSTON §
MARSHA KOSECHATA appeared in person before me today and stated under oath:
"My name is MARSHA KOSECHATA. I am above the age of eighteen years, and I am
fully competent to make this affidavit. The facts stated in this affidavit are within my personal
knowledge and are true and correct."
"I have been the manager at Grapeland Fuel and BBQ for over three years. One of my
regular duties as manager is to print out and check the veeder root reading every day
immediately after closing. On December 3rd and 4th of 2013, I printed out the veeder root
readings like I do each and every night at approximately 6:05pm. I did notice at this time that
the time stamp was off due to a power outage.
When I checked the veeder root readings on December 3rd, 2013, there was no water in
tank four. After the fuel delivery by Velvin Oil on December 4th, the veeder root readings
showed that there were eighteen gallons of water in tank four. Our fuel tanks are always kept
locked and are not accessible.
44
On December 18 th or 19th , an employee from Velvin Oil came to Grapeland Fuel and
treated our tank four. The employee said it was a shock treatment for the water in the diesel.
They also left some shock treatment for us to treat at a later date. We used the treatment the
following week as we were still having trouble.
During my entire time working for Grapeland Fuel and BBQ, we've never had any
problems with bad diesel except for the period between December 4th 2013 when Velvin Oil
delivered bad diesel to tank four and when Mr. Patton pumped tank four empty in January
2014."
AFFIANT FURTHER SA YETH NOT.
jYl{l.w;ha" ~(J0haJ:cD
MARSHA K SECHATA
SWORN TO AND SUBSCRIBED BEFORE ME on this ~ day of NOV.
2014, to certify which witness my hand and seal of O,!J.!l........-_~
,""ft"
$....~~~~~.;J."f, JULIE RHONE
r:·~t\ Notary Public. State 01 Texas
\ ..J..~~.~.."i My Commission Expires
"'~,f.~!~~~.f December 02, 2016
.---- ._-------
45
IN THE DISTRICT COURT OF RUSK COUNTY, TEXAS
Fll ED
4rH JUDICIAL DISTRICT 201~ DEC 29 A;1 fO: 45
VELVIN OIL COMPANY, INC. *
*
vs. * NO.
*
A. J.P. OIL COMPANY, LLC *
d/b/a GRAPELAND FUEL & BBQ; *
AND ANDREW J. PATTON *
DEFENDANTS' ORIGINAL ANSWER
TO THE HONORABLE COURT:
A.J.P. Oil Company, LLC, d/b/a Grapeland Fuel & BBQ, and
Andrew J. Patton, also known and being the same person as Andrew
Jack Patton, Andrew Patton, Andrew J. Patton, III, Jack Patton and
Jack Patton, III, hereinafter sometimes referred to as
"Defendants," SUBJECT TO DEFENDANTS' MOTION TO TRANSFER VENUE, file
this, their Original Answer to Plaintiff's Original Petition
herein, and, for such Answer, would respectfully show unto the
Court the following:
1. Defendants have paid in full the account the subject of
Plaintiff's suit, more specifically with check number 2902, dated
April 29, 2014.
2. Defendants deny, each and every, all and singular, the
allegations contained in Plaintiff's Original Petition and demand
strict proof thereof; and, of this, Defendants put themselves upon
the country.
WHEREFORE, premises considered, Defendants pray that Plaintiff
take nothing by its suit, that Defendants go hence with their costs
5
without day, and for such other and further relief, both general
and special, at law and in equity, to which Defendants may be
justly entitled.
BY:
WILLIAM R. PEMBERTON
WILLIAM R. PEMBERTON, P.C.
P. 0. BOX 1112
CROCKETT, TEXAS 75835
936-544-4111
936-544-5023 (FAX)
TEXAS BAR I.D. NO. 15735500
bill@pembertontriallaw.net
JACLYN D. PATTON
3730 Kirby Drive, Suite 1200
Houston, Texas 77098
ATTORNEYS FOR DEFENDANTS
CERTIFICATE OF SERVICE
A true and correct copy of the above and foregoing Defendants'
Original Answer has been served upon:
Mr. Ronnie Horsley
Attorney at Law
P. 0. Box 7017
Tyler, Texas 75711
by depositing same, enclosed in a post paid, properly addressed
wrapper, in a Post Office or official depository, under the care
and custody of the United States Postal Service, Certified Mail,
Return Receipt Requested, this the 23rd 2014.
6
Filed 7/29/20154:40:21 PM
Terri Pirtle Willard
District Clerk
Rusk County, Texas
Courtney Terry
No: 2014-362
VELVIN OIL COMPANY, INC. § IN THE DISTRICT COURT
§
VS. § 4TH JUDICIAL DISTRICT
§
A.J.P. OIL COMPANY, LLC d/b/ a §
GRAPELAND FUEL & BBQ; and §
ANDREWJ. PATTON § RUSK COUNTY, TEXAS
RESPONSE TO MOTION FOR NEW TRIAL
TO TFIE HONORABLE JUDGE OF SAID COURT:
COMES NOW, Velvin Oil Company, Inc., Plaintiff in the above entitled and
numbered cause and in response to the Motion for New Trial filed herein by the
Defendants would show the court the following:
1.
A.J.P. Oil Company, LLC and Andrew J. Patton (hereinafter referred to as
"Defendants") did not file a plea to abate this case. The allegation that the pending cases
are "identically the same parties, involve the same subject matter II is contrary to the
evidence already before this court. In this cOIUlection, the undisputed evidence shows
that the sworn account upon which Plaintiff's claim has already been adjudicated, shows
a series of payments on account made by the Defendants. Those payments applied to
discharge the invoice which Defendants now claim to be in dispute in another county.
Essentially, Defendants have filed a suit for damages arising out of customer complaints
regarding fuel provided by them in Houston County.
II.
Plaintiff would show that the Defendant filed its Original Answer in this cause
47
setting forth a claim of payment by its check #2902 in April, 2014. Thereafter the
Defendants filed a Motion to Transfer Venue and many other pleadings in this cause but
never requested this cause be abated in any direction to the court. A plea in abatement
can be waived as this plea was never raised.
III.
Defendants request a new trial for the reason that the attorney's fee proof was
within counsel's estimation inadequate. Your Plaintiff would show that the court does
not need to hear any evidence in connection with attorney's fees as Plaintiff's cause was
brought as a suit on a sworn account and on a contract and is provided in the TEXAS
CIVIL PRACTICE AND REMEDIES CODE §38.004
"The court may take judicial notice of the usual and customary attorney's fees and
of the contents of the case file without receiving further evidence in:
(1) a proceeding before the court; or
(2) a jury case in which the amount of attorney's fees is submitted to the court by
agreelnent. "
IV.
The Defendants request a new trial claiming there is a defense of payment, while
the documentary evidence attached to the Motion for New Trial shows that the check
#3018 attached to Exhibit "D" to Defendant's Motion for New Trial is an um" ;c '.,;;' 'n
I 1 ~f\D
b t . l , •• 'L ..... 1" t!
§ RUSK COUNTY Disrhlt;"t CLERK
VS. § 4th JUDICIAL DISTRICT BY~(). I"IAf'
§ ~~ DEPUTY
A.J.P. OIL COMPANY, LLC d/b/a §
GRAPELAND FUEL & BBQ; and §
ANDREWJ.PATTON § RUSK COUNTY, TEXAS
PLAINTIFF'S MOTION FOR SUMMARY JUDGMENT '. '~'.'-
" .
'.-< "
.~:>/:, i,,~,",;'~',{ 'TP THE,HONORABLE JUDGE 'OF SAID COURT:
COMES NOW, the above entitled Plaintiff and respectfully shows to the Court that
,
....... ".'
. " , ~,,;
'.:. aHer'suitwas filed the Defendant.entered,an,appearance and filedan.answer hereinwhich-~' '
is insufficient in law as provided'in' RU,EES 185 ::and 93.' TEXAS RULES OF CIVIL
.'
PROCEDURE to constitute a defense to Plaintiff's cause of action; that as shown by the
pleadings, together with depositions, admissions and affidavit, if any, on file herein, there
is no genuine issue as to any material fact between the parties herein, and by reason thereof
the Plaintiff is entitled to a Judgment as a matter of law as prayed for by Plaintiff.
Plaintiff would further show that in accordance with the attorney's fee affidavit
annexed hereto, it incurred the attorney's fees as set forth in the affidavit of Plaintiff's
.......
',
" ::. 0", ."
,
'"
..,;".
, .-'. ~ "
. .~ '" .' '. : .~ ~ - "
"
.." ' :,~ Wf1EREFORE; pre~is~sconsidered; Plaintiff now moves the Court to enter a
Judgment in favor of Plaintiff, and against Defendant, for Plaintiff's debt together with
interest, a reasonable attorney's fees for Plaintiff's attorney, RONNIE HORSLEY, costs of
Court and all other relief, both general and special to which Plaintiff may be justly entitled.
55
. .,~ .
: :' ....~ "'.. .' .. Respectfully submitted,
LAW OFFICES OF RONNIE HORSLEY, P.c.
Attorney for Plaintiff
Tyler, Texas 75711 ..
.Telephone: (903) 593-7314 . ,"~" .
. ...
" :
Facsimile: (903) 593-3450
Texas Bar Card No. 10014000
~ ..... '. .-,.. ".
"
.-,
• I'.•
,.',
56
_~.F
. '
AFFIDAVIT
THE STATE OF TEXAS *
*
COUNTY OF SMITH *
BEFORE ME, the undersigned authority, on this day personally appeared the
undersigned Affiant, who, being first duly sworn, did depose and say as follows:
"I, the Affiant, am the attorney for the Plaintiff in the above numbered and captioned
cause now pending in said Court. I am duly licensed to practice law in the Courts of the',
"" . State. of .Ie"as cmd am familiar with the fees customarily charged qy the practic:ing,.'·
~.".";;' ;:·attqrneys: inthls county and area, having practiced generally in many cbunties/acrossthe
. State of Texas since 1970. The Affiant was retained by the Plaintiff on a contingent fee
based upon the amount of the debt to be collected. In accordance with the Affian.t's
experience in handling numerous cases and based upon the usual contingent fee· .
:, . '1,--,.'~ ~' .. :
k' '..
arrap.gements of attorneys similarly.engaged, $10,892.24.is a reasonable and customary fee. :., ..
. • . for . inve~tigating the above. c~ptioned cause, ;attempting to secure ~ollection of the
in
iildebtedness by amicable means, preparing cmd' fili1i.g the Petition said 'cause, filing a
Motion for Summary Judgment therein, appearing in Court to argue same, preparing the
Judgment in this cause, and filing same. Demand for payment of Plaintiff's claim was
made upon the Defendant more than thirty (30) days prior to the date of this affidavit. The
affidavit is made upon personal knowledge of the Affiant, and all facts stated therein are
true and correct".
-.,.-;,-. !
." r: i :.
:.,' ,
. ~ ;....,.. :- ' \. F ':.'
-' ~ ... ;
"':. _.
--_......-_,
BRANDY RENEE GLOVER
...
MY COMMISSION EXPIRES
August 9, 2015
57
. ,,' . '
THE STATE OF TEXAS *
*
COUNTY OF SMITH *
BEFORE ME, the undersigned authority, on this day personally appeared the
undersigned Affiant, who being by me first duly sworn, did say and depose that he is the
attorney for the Plaintiff in the above entitled and numbered cause; that he has prepared
the above and foregoing motion; that he is personally cognizant of the facts set forth in said
motion; and that said facts ,are, within his knowledge, true and correct.
------
','
.
. :/~.
'
SUBSCRIBED. AND SWQRN TO, beforeme,this~5th:dayof March,.2Q15.
I~,~i·:l~~~!A~·'fi:.~?;-<
:;~.
:*~
..~$
.",:z...... ;.;;....
BRANDY RENEE GLOVER
MY COMMISSIO~ EXPIRES 1
August 9,2015
~ ""\'Fo,,., •
CERTIFICATE OF SERVICE
I, the undersigned attorney, certify that a true and complete copy of the foregoing
Motion for Summary Judgment and following Order, was duly served upon the
Defendant's attorney of record, by fax on this the 25th day of March, 2015 at his last known
address, to-wit: .. ', :' ",0":'' "" . ". ."
, ~ :~ '\
"
" .. ~ " . ,
"
"\
" "'~':''''~'~.'' "'. '. , .~ .' ... . . '. ',: . '. ~ .. • .' o· , ...... : .,::' •
,'., .
"':,>' ',~;Willia'm'R:Peinberton<'" Fax: 936':'51:4-5023
::'." 'Atf6tney' ~t .~w ' ..
P.O. Box 1112
Crockett, Texas 75835
58
IN THE DISTRICT COURT OF RUSK COUNTY, TEXAS !'F' L~E'D
4 TH JUDICIAL DISTRICT
2DI5 APR -6 Ari": 10
VELVIN OIL COMPANY, INC. *
*
VS. * NO. 2014-362
*
A.J.P. OIL COMPANY, LLC *
d/b/a GRAPELAND FUEL & BBQi *
AND ANDREW J. PATTON *
DEFENDANTS' FIRST AMENDED ORIGINAL ANSWER
TO THE HONORABLE COURT:
A.J.P. Oil Company, LLC, d/b/a Grapeland Fuel & BBQ, and
Andrew J. Patton, also known and being the same person as Andrew
Jack Patton, Andrew Patton, Andrew J. Patton, III, Jack Patton and
Jack Patton, III, hereinafter sometimes referred to as
"Defendants," SUBJECT TO DEFENDANTS' MOTION TO TRANSFER VENUE, file
this, their First Amended Original Answer to Plaintiff's Original
Petition herein, and, for such Answer, would respectfully show unto
the Court the following:
1. Defendants have paid in full the account the subject of
Plaintiff's suit, more specifically with check number 2902, dated
April 29, 2014, in the amount of Fifty Four Thousand Four Hundred
Eighty and 52/100 Dollars ($54,480.52).
2. Defendants specially deny that the finance charges listed
in Plaintiff's sworn account are due and owing. More specifically,
the Charge Account Application credit terms and conditions on which
Plaintiff's claim is based state that finance charges are due if
the balance is not paid by the end of the month following the
59
.
•
.
.
statement date. Defendant paid the charges made the basis of this
suit prior to the end of the month following the statement dates.
3. Defendants deny, each and every, all and singular, the
allegat~ons contained in Plaintiff's Original Petition and demand
.
,
strict proof thereof; and, of this, Defendants put themselves upon
the country.
WHEREFORE, premises considered, Defendants pray that Plaintiff
take nothing by its suit, that Defendants go hence with their costs
without day, and for such other and further relief, both general
and special, at law and in equity, to which Defendants may be
justly entitled.
BY:
WILLIAM R. PEMBERTON
WILLIAM R. PEMBERTON, P.C.
P. O. BOX 1112
CROCKETT, TEXAS 75835
936-544-4111
936-544-5023 (FAX)
TEXAS BAR 1.0. NO. 15735500
bill@pembertontriallaw.net
JACLYN D. PATTON
3730 Kirby Drive, Suite 1200
Houston, Texas 77098
ATTORNEYS FOR DEFENDANTS
60
CERTIFICATE OF SERVICE
A true and correct copy of the above and foregoing Defendants'
\
Original Answer has been served upon:
Mr. Ronnie Horsley
Attorney at Law
P. O. Box 7017
Tyler, Texas 75711
by depositing same, enclosed in a post paid, properly addressed
wrapper, in a Post Office or official depository, under the care
and custody of the United States Postal Service, Certified Mail,
Return Receipt Requested, this the 1st day
61
AFFIDAVIT
THE STATE OF TEXAS *
COUNTY OF HOUSTON *
BEFORE ME, the undersigned notary public, on this day
personally appeared Andrew J. Patton, individually and as agent for
A.J.P. Oil Company, LLC, who, after being duly sworn, stated that
he is a Defendant and agent for the other Defendant in this Cause,
that he is over the age of 18 years, of sound mind, and is
competent to make this affidavit, and has personal knowledge of the
facts set forth in this affidavit.
"Every statement contained in paragraphs 1 and 2 of
Defendants' First Amended Original correct."
J. PAT ON, INDIVIDUALLY AND
~-R~~.J.P. OIL COMPANY, LLC
SUBSCRIBED AND SWORN TO BEFORE ME this 1st day of April, 2015.
62
i \ '
- .'
r
o o
IN THE DISTRICT COURT OF RUSK COUNTY, TEXAS FILED
4TH JUDICIAL DISTRICT
VELVIN OIL COMPANY, INC. * I' :. )).lJJ;D
T( U;ST:~:CT CLERri
*
8Y_~W _.D£?UTY
VS. * NO. 2014-362
*
A.J.P. OIL COMPANY, LLC *
d/b/a GRAPELAND FUEL & BBQ; *
AND ANDREW J. PATTON *
DEFENDANTS' RESPONSE TO PLAINTIFF'S
MOTION FOR SUMMARY JUDGMENT
TO THE HONORABLE COURT:
A.J.P. Oil Company, LLC, d/b/a Grapeland Fuel & BBQ, and
Andrew J. Patton, also known as and being the same person as Andrew
Jack Patton, Andrew Patton, Andrew J. Patton, III, Jack Patton and
Jack Patton, III, Defendants, file this Response to the Motion for
Summary Judgment of Plaintiff, Vel vin Oil Company, Inc., and
respectfully show unto the Court the following:
1. The evidence is sufficient to raise a genuine issue of
material fact regarding Defendant's defense of payment. As shown
by the at~ached affidavit of Andrew J. Patton, which is attached
hereto, marked Exhibit "A", and incorporated by reference, the
invoices the subject of Plaintiff's cause of action were paid by
Defendant's check number 2902, dated April 29, 2014, in the amount
of Fifty Four Thousand Four Hundred Eighty and 52/100 Dollars
($54,480.52) .
2. Further, as shown by the attached affidavit of Andrew J.
Patton, the evidence is sufficient to raise a genuine issue of
63
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material fact as to whether the finance charges made the basis of
Plaintiff's sworn account are due and owing. The finance charges
made the basis of Plaintiff's Original Petition are not due,
because the Charge Account Application credit terms and conditions
made the basis of Plaintiff's claim provide that finance charges
are due if the balance is not paid by the end of the month
following the statement date. The affidavit of Andrew J. Patton
shows that payment of the invoices the subj ect of Plaintiff's
Original Petition was made prior to the end of the month following
the statement dates.
3. Defendants obj ect to the summary j udgment affidavit of
Ronnie Horsley in support of Plaintiff's claim for attorney's fees,
on the ground that it is conclusory. More specifically, the
summary j udgment affidavit does not fully discuss the factors
required by Rule 1.04 of the Texas Disciplinary Rule of
Professional Conduct, Arthur Andersen & Co. v. Perry Equipment
Corp., 945 S.W.2d 812 (Tex. 1997):
(1) The time and labor required, the novelty and
difficulty of the questions involved, and the skill
requisite to perform the legal service properly;
(2) The likelihood, if apparent to the client, that the
acceptance of the particular employment will
preclude other employment by the lawyer;
(3) The fee customarily charged in the locality for
similar services;
64
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(4) The amount involved and the results obtained;
(5) The time limitations imposed by the client or by
the circumstances;
(6) The nature and length of the professional
relationship with the client;
(7) The experience, reputation and ability of the
lawyer performing the services; and
(8) Whether the fee is fixed or contingent on results
obtained or certainty of collection before the
legal services have been rendered.
Factors (1), (2), (5), (6) and the reputation and ability of the
lawyer performing the services are not mentioned in the summary
judgment affidavit. Evidence of Plaintiff's contingent fee
agreement, without evidence of the factors identified in
Disciplinary Rule 1.04, gives the court no meaningful way to
determine if the fees were in fact reasonable and necessary and
will not support a judgment of their reasonableness and necessity
as a matter of law, Arthur Andersen & Co. v. Perry Equipment Corp.,
945 S.W.2d 812, 818 (Tex. 1997)
3. The evidence is sufficient to raise a general issue of
material fact regarding the unreasonableness of the attorney's fees
sought by Plaintiff. To demonstrate there is evidence raising an
issue of fact on the element of unreasonableness of the amount of
attorney's fees sought by Plaintiff, the affidavit of William R.
Pemberton is attached as Exhibit "B".
65
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WHEREFORE, Defendants request this Court deny the Motion for
Summary Judgment.
Respectfully submitted,
BY:
LIAM R. PEMBERTON, P.C.
P. O. BOX 1112
CROCKETT, TEXAS 75835
936-544-4111
936-544-5023 (FAX)
TEXAS BAR I.D. NO. 15735500
bill@pembertontriallaw.net
JACLYN D. PATTON
3730 Kirby Drive, Suite 1200
Houston, Texas 77098
ATTORNEYS FOR DEFENDANTS
CERTIFICATE OF SERVICE
A true and correct copy of the above and foregoing Defendants'
Response to Plaintiff's Motion for Summary Judgment has been served
upon:
Mr. Ronnie Horsley
Attorney at Law
P. O. Box 7017
Tyler, Texas 75711
by depositing same, enclosed in a post paid, properly addressed
wrapper, in a Post Office or official depository, under the care
and custody of the United States Postal Service, Certified Mail,
Return Receipt Requested, this the 1st da
66
0 0
EXHIBIT "A"
AFFIDAVIT
THE STATE OF TEXAS *
COUNTY OF HOUSTON *
BEFORE ME, the undersigned notary public, on this day
personally appeared Andrew J. Patton, individually and as agent for
A.J.P. Oil Company, LLC, who, after being duly sworn, stated that
he is a Defendant and the agent for the other Defendant in this
Cause, that he is over the age of 18 years, of sound mind, and is
competent to make this affidavit, and that every statement
contained in this Affidavit is true and correct to his personal
knowledge.
"The invoices the subj ect of Plaintiff's Original Petition
were paid by Defendant's check number 2902, dated April 29, 2014,
in the amount of Fifty Four Thousand Four Hundred Eighty and 52/100
Dollars ($ 54,480.52). Attached hereto as Exhibit" 1" is a true and
correct copy of check number 2902, dated April 29, 2014, in the
amount of Fifty Four Thousand Four Hundred Eighty and 52/100
Do 11 a r s ( $ 5 4 , 4 8 0 . 52) .
"Further, the finance charges made the basis of Plaintiff's
Original Petition are not due, because the Charge Account
Application credit terms and conditions made the basis of
Plaintiff's claim provide that finance charges are due if the
balance is not paid by the end of the month following the statement
date. Attached hereto as Exhibit "2" is a true and correct copy of
67
o
the Charge Account Application. The invoices the subj ect of
the end of the
PATTON, INDIVIDUALLY AND
OR A.J.P. OIL COMPANY, LLC
SUBSCRIBED AND SWORN TO BEFORE ME this pt day of April, 2015.
68
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o
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Grapeland State 8a.Q
PrInt Date and Time: 1212212014 -- 01:53:52PM
.... ,
AdP OIL CO:' LLC
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EXHIBIT
I 69
1
I H',~Il- rJ _,,' J.. '_'
---- -"'~
Mg_ -Q,5/'le7213i2 19:39 '33554'::5856 CROC} mab dllmitnd and/or prO-ef:ed flrn 1;0 etlforce pavm~hl' 91t-1~ the Appllcan\;I($O rtqble on
lhlJ accrunt, {n the event of anycSct'-aulll.ll'der the Ag~mertl that U'll'Ierns tna AccoUllt 'l'~ under£lg"ed hereby Wg,\yes arty l'1ot1l:H ragtardlng the
AgrHm,ilnt Clr this GUlIrnnty, -a(ld Qg(Qe$ that this GUlirilllf.Y shall be.IlPpllcable until t111~ Agreement har. ttrmlnated and ai' atnol.mhl due thlH'4 tl"Od,l!f
sheft b& p.\ld In M. Tht U/llJers!gnatl tlSretS that '1'1 the f:Yent the At:t'6vnl Is not FIle! as a8l'~-d, Sell!r may n!~rt tM' Ill'r.delli&ne the credit bUn!al.lll .."d (ltIl~rs w\1e may lawl'uUv tlM:l!tve touch lllformatlon.
EXHIBIT
11. 71
o o
EXHIBIT "B"
AFFIDAVIT
THE STATE OF TEXAS *
COUNTY OF HOUSTON *
BEFORE ME, the undersigned notary public, on this day
personally appeared William R. Pemberton, who, after being duly
sworn, stated that he is the attorney for Plaintiffs in this Cause,
that he is over the age of 18 years, of sound mind, and is
competent to make this affidavit, and that every statement
contained in this Affidavit is true and correct to his personal
knowledge.
1. I am an attorney licensed to practice by the Supreme Court
of Texas and in good standing. I am qualified to make this
affidavit, as shown by my Curriculum Vitae attached hereto as
Exhibit "1". The information on Exhibit "1" is true and correct.
2. The summary judgment affidavit of Ronnie Horsley in
support of Plaintiff's claim for attorney's fees does not set forth
a reasonable amount of attorney's fees, because it does not contain
all of the elements required by Rule 1.04 of the Texas Disciplinary
Rule of Professional Conduct, Arthur Andersen & Co. v. Perry
Equipment Corp., 945 S.W.2d 812 (Tex. 1997). The affidavit does
not state:
(1) The time and labor required, the novelty and
difficulty of the questions involved, or the skill
requisite to perform the legal service properly;
72
. -.
o o
(2) The likelihood, if apparent to the client, that the
acceptance of the particular employment will
preclude other employment by the lawyer; ...
(5) The time limitations imposed by the client or by
the circumstances;
(6) The nature and length of the professional
relationship with the client;
(7 ) The ... , reputation and ability of the lawyer
performing the services."
"In the absence of evidence of the factors above listed,
the Court has no meaningful way to determine if the fees were in
fact reasonable and necessary."
WIL~~'
SUBSCRIBED AND SWORN TO 2015.
73
-. o o
WILLIAM R. PEMBERTON
Attorney at Law
Home Office
1000 Mimosa 306 N. Seventh Street
Crockett, Texas 75835 Crockett, Texas 75835
936-544-4971 936-544-4111
EDUCATION
• University ofArkansas, Fayetteville, Arkansas
BSBA with honors, 1970
• University of Texas, Austin, Texas
JD,1972
EXPERIENCE
• Morrill and Patton, 305 N. St. Mary's Street, P. O. Box 610, Beeville, Texas 78104-
0819; September 1972 through June 1978
• County Attorney, Bee County, Texas, Bee County Courthouse, 105 W Corpus
Christi Street, Beeville, Texas 78102; January 1974 through June 1978
1/1 Sallas, Meriwether & Pemberton, 604 E. Goliad, P. 0. Box 1087, Crockett, Texas
75835; July 1978 through January 1985
" Pemberton & Garner, 306 N. Seventh Street, P. 0. Box 1112, Crockett, Texas
75835; February 1985 through May 1989
" William R. Pemberton, P. C, 306 N. Seventh Street, P. 0. Box 1112, Crockett, Texas
75835; June 1989 to present
COURTS ADMITTED TO PRACTICE BEFORE
• SUPREME COURT OF TEXAS
Admitted September 1972
• U.S. COURT OF APPEALS, FIFTH CIRCUIT
Admitted December 17, 1973
• U.S. SUPREME COURT
Admitted December 15, 1975
• U.S. DISTRICT COURT, EASTERN DISTRICT OF TEXAS
Admitted August 12, 1983
OTHER EXPERIENCE
• STATE BAR OF TEXAS DISTRICT 2-C GRIEVANCE COMMITTEE
Member August 1985 through 1990
• BOARD CERTIFIED, TEXAS BOARD OF LEGAL SPECIALIZATION
Civil Trial Law since December J991
EXHIBIT
74
o
II COLLEGE OF THE STATE BAR OF TEXAS
Admitted November 1992
• BOARD CERTIFIED CIVIL TRIAL AD VOCATE - NATIONAL
BOARD OF TRIAL ADVOCACY
1994 to date
• BOARD CERTIFIED CIVIL PRETRIAL ADVOCATE -NATIONAL
BOARD OF CIVIL PRETRIAL AD VOCACY
2012 to date
" CITY ATTORNEY, CITY OF CROCKETT, TEXAS
October 1988 to Present
,. PRESIDENT, HOUSTON COUNTY BAR ASSOCIATION
May 1992 to Present
EXHIBIT
I .,-175
-
• • Or- .,
FILED
No: 2014-362 2015 JUN -4 AiilO: 54
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129
03/19/2015 15:39 9355457743 DOCS : CKT PAGE 01 /05
-. VElVIN Oil CO., INC.
PETROLEUM PRODUCTS
EMERGENCYOONTACT: (512) 463-7727
P,O. BOX 993
HENDERSON, TEXAS 75653
903/657·2108
$OlDTO SHIPf'EDTO
, AJP Oil Company, LLC grapeland IX
dba Grapeland Fuel & BBQ dba Grapeland Fuel & BBQ
1277 East Loop 304 1277 East Loop 304
Crockett, TX 75835 Crockett, TX 75835
0.0 " F-N
NoLe,ad Gasoline UN-1203
4,977.0 4,977:0., ' ' 0.0 ', F-TFG .. EACH" 91'5,,77,
," .
Federal Gasoline Tax
4,977,0 4,977.0 : 0.0 F-TSG EACt-ti ,Ct2gqO 995..40 ',' '
slate'Gasoline Tax , ' _;; ' '''. "..:._, . ."'; ::/;): G. ' ::' "
2,478.0 2,478,0 " 0,0. ' , F-DL , ,,"
Die,s~I,: 15-PPM UI\ra LowSulfer -" , '
EACH;: -::3,,1;<\19:
' ,' . .';: , ::: :}~:
" ':L 7.753i~
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~
2,478;0 2,478:0 , 0.0" ,' ,F~TFD :,,' EAd{ ' ;-, 0,j~#p: ,::-VV~.V~
FEodernl Diesel Tax " i ' >,;'f:--.-,,; "
,2,478.0 2,478.0 - 0.0 ' " F·TSD2 ' ' EACHO:t'9~6: ; ;i:
SiaieTax Blodlesel ;'i "'_;:~'--
ULTRA ,LOWSULFER DI~SEl.,:FUEL(15-PP~SlJLFEIl MAXlM~M)iREi9VIREOfO.R USE IN~~.tJ~i;MODEL • >;,;;,
.~:~'1;r~'~r:"?~!~i~ ]~J{I \~~ll.
, YEAR AI!(}I:!I:rER,HIGI-\I'.'A'(DIESEL VEHICLES AND I:Ng!f:;I~S,;:8~<::0MMl;l:Il;lgD FORlJ$St,*6.W J IE$EL .' it;,:,: ::::
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loorOBBr800~·~thlslnvoklG.:~~amotmtt.::'~.~Is1lJmedover~.sOmi~y,ftw)#ieCtl~:~~#.~ .~·, 4(io·payfn~~~~~_·~.~\3ICOtl~~~i.;
including Yrltl1out·irritaion oourt·etistiI and raaoooable .SlJtli&d to the prOYi$orlIi ottho Texas "Cof1.~ Cr~t LaW:.~,.~ invoices C!Ue ~~in Rusk ~ntIJ\~~J Te)CB;s.: . '.
130
DOCS:CKT PAGE 02/06
03/19/2015 15:39 9365467743
~.
VE·LVI:N Oll CO.,. INC. . DELIVERVTlCKET
PETROLEUM PRODUCTS
P. O. Box 993
HENDERSON" TEXAS75653 ...
903-657..2108
TO tiS' 0)6ii1 DATE I;) - Ji -J.J.
SHIPPED
TO G'bffit!-r~
!tJ d
~ j.J. fv.J i- Jj~(i
I~~NO. YOUR 0RtlER NO. SAU;S~
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"FLAMMABLE UQUID"
Q PREPAID
o COLLECT
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SHIPPED DF\OERED
Wt:fJZ
. ~..,../o CLnk. A~;/
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• .1
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DELIVERY TICKET STATE ROAD TAX
fEDERAL ROAD TAX
STATE SAleS TAX
X fUo,JD1U-
RECEIVED BY
&> d2lA ·
f(
'.
SUBTOTAL
TOTAL AMOUNT DUE 123,, _J~O ~£
131
03/19/21315 15: 39 9365467743 DOCS:CKT PAGE 133/06
VEI.,VIN Oil CO., INC.
PETROLEUM PROPUCTS
EMERGENCY CONTACT: {512}4Ga.n27
P.O. SOX 993
HENDERSON, TEXAS 15653
903/667 ·21 OS
SOLD TO SfllPPEDTO
AJP 011 Company, LLC grapeland lX
elba Grapelalld Fuel 8. SBO dlia Grapeland Fuel & SSQ
1277 East Loop 304 1277 EaSllOap 304
Crock.II, TX 75835 Crock9!!. TX 75835
. lil:ad
5,549.0 5,;;49,0 0(1 F-TFG 1,021.02
F~~reil
5.549;0 . 5,549.0 M ,. \"-TSG 1,109.80.
Stale
2.183.0 . 2,183.0 0.0.. F·OL
O!eooI15-PPM LOWSulier
2,183.0 2.183.0 (1.0.
2,183.0 2.183.0 .• 427.a7
132
DOCS:CKT PAGE 04/06
03/19/2015 15:39 9365467743
r "
,,: . ., ~
...
VELVlN OIL CO., ,N'C. DELIVERVTICKET
PETROLEUM PRODUCTS
P. O. Box 993
HE~DERSONHTEXAS l~653, "~' ,
SOa.S57~2108
70 )::)
~
:c P Oje/ f tvlJ I
DATE LJ- 9-/.3
,L .s~c.. ...
~
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<:iciP(k~
SHIPPED
TO
OUR OROSI NO. YOUR ORDER NO.
8AJSAb_ HERMS n~ tSHIPPED VIA
°FLAMMABLE UQUID-
Cl PREPAID
Q COLLECT
:
QUANTITY QUANTlTY DESCRIPTION PRICE
SHIPPED ORDERED AMOUNT
~.s~ £-/0 :,J!lL_GA..c.-L}L~Ll
- - ~ ~~
~
~
p
.1?.,L2I <1 ilL 7.£ p~
-~ #
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~ 7
DELIVERY TICKET STATE ROAD TAX
I
FEDERAL RPAD TAX
SiATE SAl.!.S TAX
. oK 111a.Ju:u &!a:l.2h.! ~
AECEIVEOBY
SUBTOTAL
TOTAL AMOUNT DUE l;t4,- ,S%7 .13
133
03/19/2015 15:39 9355457743 DOCS:CKT PAGE 05/0&
VEL,VIN OIL CO., INC.
PeTROLEUM PRODUCTS
p,O, BOX 993 EMERGENCY CONTACT: (512) 463-7727
HENDERSON, TEXAS 75653
9031657·2108
souno SHIPPED TO
AJP Oil Company, LtC grapeland IX
dba Grapeland Fuel & BBQ dba Grapeland FUBI 8< BBQ
1m East loop 304 1277 East Loop 304
Crockett, TX 75835 Croakett, TX 76835
F·N
N6,l~cI Gs,.Olill£i'lUIN'120.,:,'.,
!,022.0 " 2.022;0;0,0: 'F·TFG 372.05
Federal Gasoline Tax; :
2,022.0' 0.0' F·TSG,
Slate Gasoline Ta~
3,718.0 3,718.0 O.G: , F·Dl. , 11,618.75
DteseI15·PPM Ult\-a Low,:S,ulfer
3,718.0 '" 3,718:0 0.0, F·TFO i" 907.19
Federsl Diesel Tax ' ,:
I S,71S.{) 3,718,0 0,0; F.TSD i '
I S!l:!reOlesei Tax: ' ";,,,
ULTRA lQW:sOLI'!!!R DIESEL FUEL(l S.PPMi~LFERMI\liIMUM) !11'!;9MIIREb
YEAAAN!;lL,/l;1:E, i " "/,:
.!
19,171:1.6
0,00
0.00 '
134
DOCS:CKT PAGE !l6/El6
03/19/2015 15:39 9365467743
VELVIN OIL CO., INC~ O.EU
PETROLEUM PRODUCTS
P.O. Box 993
•" HENDERSON, TEXAS 75653
903-657-2108
DATE I~' 1/1,- J.3
SHIPPEe
TO
- rttd-
6 ~4 ~
.- IOUHOIIDER NO. YOUnORD!;R NO.
SAtESit",c ITaIMS·OIU!-- ISHlflPED VIA
"FLAMMABLE UQUID' .
QUIINTITY QUANTITY DeSCRIPTION PRICE
SHIPPED OAOERED
dn:l:l. ~:'7 ~ -If) ~< .... J.M-lI ~, 9J 'I
137J1r / -. j -~/j.ltr f),Is <:J) 7 ·1.3.$6' ~
.' . I")l ~ 1. /.A/A...V u-Se--," .. -
\..:.7"'-' J
•
DEUVERYTICKET .
STATEROADTAX
FEDEiRAL ROAD TAX
STATESALES TAl(
.JC~, '~t.alJ,:..:i.q.
.
, SUBTOTAl.
. RECEIVED BY
TOTAL AMOU"T DUE ""1 ~
135
A J P Oil Company LLC
Vendor QuIckReport
December 2013 through December 2014
Type Date Num Memo Account Clr Split Amount
Velvln Oil Co., Inc.
Check 1210412013 2977 1002' Cash·GSB ... 5130' CGS-... -71,208.98
Check 01/17/2014 3003 1002 . Cash-GSB ... 5130· CGS-... -62,245.00
Check 02110/2014 3018 1002' Cash-GSB ... 5130' CGS-... -64,656.63
Check 03/05/2014 1465 1003 • Cash-GSB ... 5130· CGS-... -51,805.26
Check 04/1012014 3063 1002 . Cash-GSB ... 5130' CGS-... -75,664.15
Check 04/2912014 2902 1002 ' Cash-GSB ... 5130· CGS-... -54,480.52
136
No. 2014-362
VELVIN OIL COMPANY, INC, § IN THE DISTRICT COURT OF
Plaintiff §
§
v. § RUSK COUNTY, TEXAS
§
A.J.P. OIL COMPANY, LLC §
d/b/a! GRAPELAND FUEL & BBQ §
and ANDREW J. PATTON, § 4th JUDICIAL DISTRICT
Defendants §
ORDER GRANTING NEW TRIAL
After considering Defendants' Motion for New Trial, the response, the pleadings and
arguments of counsel, the Court GRANTS the motion and orders a new trial.
It is therefore ORDERED that the trial herein is set for _ _ _ _ _ _ _ _ _ _'
2015.
SIGNED on _ _ _ _ _ _ _, 2015.
PRESIDING JUDGE
137
Filed 81312015 9:23: 19 AM
Terri Pirtle Willard
District Clerk
Rusk County, Texas
Terri Willard
No. 2014-362
VELVIN OIL COMPANY, INC, § IN THE DISTRICT COURT OF
Plaintiff §
§
v. § RUSK COUNTY, TEXAS
§
AJ.P. OIL COMPANY, LLC §
d/b/a! GRAPELAND FUEL & BBQ §
and ANDREW J. PATTON, § 4th JUDICIAL DISTRICT
Defendants §
DEFENDANTS' REPLY TO PLAINTIFF'S RESPONSE
TO MOTION FOR NEW TRIAL
Defendants, AJ.P. OIL COMPANY, LLC, d/b/a! GRAPELAND FUEL & BBQ, and
ANDREW J. PATTON, ask the Court to grant a new trial in the interest of justice and fairness.
In reply to PlaintiffVelvin Oil Company, Inc.'s Response to Motion for New Trial
("Response"), Defendants would show as follows:
ARGUMENTS & AUTHORITIES
1. New trial must be granted because a suit involving the same parties and subject
matter was pending at the filing of this suit, Plaintiff's claim brought here is a
compulsory counterclaim to Defendants' claims brought in the first-filed suit,
and abatement of this suit is proper.
In it's Response, Plaintiff asserts that the Motion for New Trial should be denied because
this matter and the first-filed suit do not involve the same parties and subject matter. Plaintiff
fails to produce any law supporting this assertion.
Plaintiff does not dispute that this suit is a second-filed, non-dominant suit and that the
first-filed suit in Houston County was brought to the Court's attention in a timely manner.
138
Rather, Plaintiff is contending these suits are not substantially interrelated. "In detennining
whether an inherent interrelationship exists. courts should be guided by the rule governing
persons to be joined if feasible and the compulsory counterclaim rule." Wyatt v. Shaw Plumbing,
760 S.W.2d 245, 247 (Tex. 1988); Tex.R.Civ.P. 39, 97(a).
The facts in Wyatt v. Shaw closely track those at hand. In Wyatt. Wyatt and Shaw entered
into a contract regarding plumbing services. When Wyatt refused to pay for worthless and faulty
services provided by Shaw, "Shaw made a written demand for payment. Following Shaw's
demand letter, Wyatt filed suit against Shaw in [Wyatt's county of choice] alleging fraud and
violation of the Deceptive Trade Practices Act." Wyatt at 246. Shortly thereafter Shaw filed a
breach of contract suit in Shaw's county of choice to recover for the disputed services it
provided. Finding that Wyatt's claim would be res judicata against Shaw's claim, the court held
that the two suits were inherently interrelated. The court further explained, "Shaw Plumbing
should have brought its compulsory counterclaim on the contract in Wyatt's tort and DTPA suit
in Duval County ... since Wyatt filed suit first, he chose Duval County." Id at 248.
The facts at hand are identical to Wyatt. Here, Defendants purchased goods from
Plaintiff. Plaintiff's goods turned out to be worthless and faulty. Defendants verbally
communicated to Plaintiff that it would not pay for the worthless goods, and further refused to
pay by directing that payments made by Defendants to Plaintiff for subsequently delivered goods
were not to be applied to the worthless goods. See Exhibit D to Motion/or New Trial. As is
evidenced by the record and correspondence between the parties and their counsel, Defendants
clearly communicated to Plaintiff that Defendants were only continuing to do business with
Plaintiff because of Plaintiffs representations that Defendants' damages from the worthless fuel
would be "made right". See Exhibit A to Motion/or New Trial. Plaintiff's Counsel's own letter of
2
139
September 2014 shows that all parties involved understand both suits to concern the exact same
subject-matter. Like in Wyatt, when Plaintiff did not make good on its promises, Defendants
sued Plaintiff for the worthless goods provided. Defendants' Original Petition in the first-filed
suit lists as damages the exact amount in worthless fuel as is complained of in this matter. See
Exhibit A to Motionfor New Trial- Original Petition of First-Filed Suit listing "$31,760.45 in
out-of-pocket damages for the worthless diesel fuel delivered ". The fact that the amount sued for
in the matter at hand differs slightly only results from the three months of interest charged on
Defendants' account between the time Defendants' DTPA notice letter was sent to Plaintiff (July
30,2014) and when Plaintiff filed this suit (November 19, 2014). This is further evidenced by
Plaintiff's own documentation produced during discovery.
Because the record clearly shows that the subject matter of this matter and the first-filed
suit are inherently interrelated, the Court must grant a new trial so that this suit may be properly
abated pending litigation of the first-filed suit.
2. New trial must be granted because the first-filed suit was timely brought to the
Court's attention, and abatement of this suit is proper.
In it's Response, Plaintiff asserts that the Motion for New Trial should be denied because
Defendants have not yet raised a plea in abatement. Plaintiff fails to produce any law supporting
this assertion.
Case law makes clear that a plea in abatement raised following judgment is seasonable
when the pendency of a prior suit has been shown in the pleadings. See, e.g. Ex Parte Lillard,
314 S.W.2d 800, 805 (Tex. 1958); Beckman v. Beckman, 716 S.W.2d 83 (Tex.App.-Dallas
1986). Defendants timely brought the first-filed suit to the attention of this Court in their initial
pleading and Motion to Transfer Venue, attaching as evidence a file-stamped copy of the prior
3
140
Original Petition and an affidavit of Defendant Andrew J. Patton stating that litigation over the
same facts was already pending.
Because Plaintiff has not and cannot refute these facts or provide case law showing a
contrary rule, new trial must be granted because notice of the first-filed suit was timely brought
to the Court's attention and abatement of this matter is proper.
3. New trial must be granted because judicial notice of controverted attorney's fees
under Civil Practice and Remedies Code § 38.001 and 38.004 is improper on
summary judgment.
In it's Response, Plaintiff asserts that the Motion for New Trial should be denied
because there is no fact question regarding the reasonableness of Plaintiff's attorney fees.
Plaintiff contends that "the court does not need to hear any evidence in connection with
attorney's fees as Plaintiffs cause was brought as a suit on sworn account and on a contract"
under Texas Civil Practice and Remedies Code §38.004. However, the law produced by Plaintiff
in supPOrt of this assertion is incomplete and incorrect.
Although Texas Civil Practice and Remedies Code §38.004 does allow judicial notice to
be taken of attorney's fees in a suit on sworn account, judicial notice of attorney's fees
CANNOT be taken when the summruy judgment record contains evidence controverting the
reasonableness of attorney's fees. See, e.g. Guily v. CCI. Enter. Co., 54 S.W.3d 526, 528 (Tex.
App.-Houston [1st Dist.] 2001, no pet.); Rosenblatt v. Freedom Life, 240 S.W.3d 315, at
321(Tex. App. 2007); MeGlown v. Ashford Park (Tex.App.- Houston [1st Dis!.] Jun. 11,2009);
Graee v. Duke, 54 S.W.3d 338, 344 (Tex. App-Austin 2001, pet. denied) (holding that attorney
fee award in summary judgment proceeding not proper if amount disputed). Courts have more
4
141
specifically found that summary judgment is improper when the moving party's affidavit in
support of attorney's fees is contested by an affidavit of opposing counsel. Cammock the Cook,
LLC v. Eastburn, 296 S.W.3d 884,894 (Tex. App-Texarkana 2009, pet. denied) (holding that
"summary judgment award of attorney's fees is improper where the nonmovant produces a
controverting affidavit regarding fees").
Here. by Plaintiffs own admission its proof regarding attorney's fees is inadequate under
the rules and requires the Court to take judicial notice. Case law clearly shows that summary
judgment is improper when attorney's fees are controverted. Because Defendants have contested
the reasonableness of Plaintiffs attorney's fees multiple times, including in an affidavit of
Defendants' counsel, judicial notice cannot be taken in this matter and summary judgment is
improper. See D's Response to Motion/or Summary Judgment and attached Affidavit o/William
Pemberton, Counsel/or Defendants.
Accordingly, the Court must grant a new trial because it erred by granting Plaintiffs
Motion for Summary Judgment. There is a disputed fact issue regarding the unreasonableness of
attorney's fees sought by Plaintiff, which must be submitted to the jury.
4. New trial must be granted because there are disputed fact issues regarding
Defendants' defense of payment and the validity of finance charges included in
Plaintiff's alleged damages, which must be submitted to a jury.
In it's Response, Plaintiff asserts that the Motion for New Trial should be denied because
Plaintiff had a right to direct appropriation of Defendants' payments. Plaintiff fails to produce
any law supporting this assertion, and incorrectly quotes the law rested on by Defendants.
5
142
When a debtor has directed the application of payment by written or verbal
communication. the "true rule seems to be. first. the debtor has the absolute right to direct
ap,propriation of payment." Phillips v. Herndon, 78 Tex. 378, 14 S. W. 857, 859 (Tex. 1890).
Plaintiff misapplies this quote and rule to Park Place Hosp. v. Estate ofMilo, 909 S.W.2d 508,
510-11 (Tex. 1995), a medical malpractice case not relied on by Defendants. Further case law
shows that a creditor is not bound by a debtor's uncommunicated intentions as to the application
of payment. Carey v. Ellis, 46 S.W.2d 1012 (Tex.Civ. App.-San Antonio 1932, no writ).
Here. Defendants communicated their intention early and often. It is evident from the
record that Defendants intended for payments made following delivery of the worthless and
disputed diesel fuel on December 4, 2013 not to be applied to said disputed diesel fuel. The first
payment made by Defendants following the delivery of the disputed fuel noted that it was to be
made towards "gasoline only". A subsequent payment noted that it was to be applied only to
specific non-disputed invoices. Further, Defendants verbally made known to Plaintiff on many
occasions that payment was not to be applied to the disputed fuel, as is sworn to in multiple
affidavits of Defendant in the Court's record. See Defendants' Original Answer and Motionfor
New Trial. That Plaintiff was aware of Defendants' intention that payment not be applied to the
disputed fuel is obvious-payments were not applied to the disputed fuel until Defendants made
clear they intended to pursue the DTPA claim of the filed-first suit.
Defendants' written and verbal communications to Plaintiff clearly show Defendants'
intention that payments made after December 4, 2013 were to be applied only to subsequent,
non-disputed fuel shipments. Defendants had the absolute right to direct appropriation of
payments made to Plaintiff. and exercised that right by including language on checks paid to
Plaintiff. and by making verbal directions to Plaintiff. Accordingly, the Court must grant a new
6
143
trial because there are disputed fact issues about whether payment was made on the invoices
sued for, and whether finance charges made the basis of Plaintiff's sworn account are due and
owing, which must be submitted to the jury.
PRAYER
For these reasons, and in the interest of justice and fairness, Defendants respectfully ask
the Court to grant a new trial.
Houston, Texas 77007
PH: (713) 730-9446
FX: (713) 583-4180
jaclyn@txestateplanning.com
WILLIAM R. PEMBERTON
William R. Pemberton, P.C.
P. O. BOX 1112
Crockett, Texas 75835
ATTORNEYS FOR DEFENDANTS
7
144
CERTIFICATE OF SERVICE
I hereby certifY that a true and correct copy of the above and foregoing instrument was
served upon the following counsel of record by electronic service and facsimile on August 3,
2015.
Mr. Ronnie Horsley
P.O. Box 7017
Tyler, Texas 75711
Via Email: horsleylaw@tyler.net
Via Facsimile: (903) 593-3450
8
145
FILE[~
No: 2014-362 2115 AUG 20 PH 3:"2
IN THE DISTRICT COURT i';~i~Hj p:FnL£ ~!LLARD '-,'
r\ DISTRICT eLL"
VELVIN OIL CaMPANY, INC. §
§ i:USK COUr
VS. § 4TH JUDICIAL DISTRICT BY &'rrv DEPUTY
§
A.J.P. OIL COMPANY, LLC d/b/a §
GRAPELAND FUEL & BEQ; and §
ANDREW J. PATTON § RUSK COUNTY, TEXAS
ORDER
The Court having heard the Defendanes Motion for New Trial on this day finds
same should be denied and it is
ORDERED, ADJUDGED, and DECREED that the Motion for New Trial filed
herein be in all things DENIED.
SIGNED this 20 day of ¥ ,2015.
APPROVED AS TO FORM AND SUBSTANCE
P. O. Box 7017
Tyler,~. as 75·
Telephone: (903) 593-7314
Facsimile: (903) 593-3450
Email: hOl.sleylaw@tyler.net
Texas Bar Card No. 10014000
146
Filed 812812015 9:24:50 AM
Terri Pirtle Willard
District Clerk
Rusk County. Texas
Laurey Martin
No. 2014-362
VELVIN OlL COMPANY, INC, § IN THE DISTRICT COURT OF
Plaintiff §
§
v. § RUSK COUNTY, TEXAS
§
A.J.P. OlL COMPANY, LLC §
d/b/a! GRAPELAND FUEL & BBQ §
aodANDREW J. PATTON, § 4th JUDICIAL DISTRICT
Defendaots §
NOTICE OF APPEAL
TO THE HONORABLE COURT:
A.J.P. Oil Compaoy, LLC d/b/a Grapelaod Fuel & BBQ, aod Andrew J. Patton,
Defendaots, give notice of their intent to appeal the trial court's Judgment rendered on June 4,
2015, in Cause No. 2014-362 entitled Velvin Oil Compaoy, Inc. vs. A.J.P. Oil Compaoy, LLC
d/b/a Grapelaod Fuel & BBQ, aod Andrew J. Patton, in the 4th Judicial District of Rusk County,
Texas.
This appeal is taken to the Sixth Court of Appeals in Texarkaoa, Texas. This is not a
parental termination or child protection case as defmed in Appellate Rule 28.4.
Respectfully submitted,
/s/ Jaclvn D. Patton
JACLYN D. PATTON
TX BarNo. 24085521
639 Heights Boulevard
Houston, Texas 77007
PH: (713) 730-9446
FX: (713) 583-4180
jaclyn@txestateplanning.com
147
Schultz, William 10/26/2015
For Educational Use Only
Arthur Andersen & Co. v. Perry Equipment Corp., 945 S.W.2d 812 (1997)
40 Tex. Sup. Ct. J. 591
corporation, and accounting firm was aware that
purchasing corporation had required audit and
KeyCite Yellow Flag - Negative Treatment would rely on its accuracy and knew specific
Declined to Extend by McGee v. Deere & Co., Tex.App.-Austin,
purpose for which it was conducted. V.T.C.A.,
March 24, 2005
Bus. & C. § 17.45(4).
945 S.W.2d 812
Supreme Court of Texas. 23 Cases that cite this headnote
ARTHUR ANDERSEN & CO., Petitioner, [2] Antitrust and Trade Regulation
v. Consumers, purchasers, and buyers;
PERRY EQUIPMENT CORPORATION, Respondent. consumer transactions
In determining whether plaintiff is consumer
No. 95–0444. | Argued March
under Deceptive Trade Practices Act (DTPA),
19, 1997. | Decided May 16, 1997.
focus is on plaintiff's relationship to transaction.
Purchasing corporation sued accounting firm, alleging V.T.C.A., Bus. & C. § 17.45(4).
violations of Deceptive Trade Practices Act (DTPA) in
19 Cases that cite this headnote
connection with firm's preparation of audited financial
statements of acquired corporation. The 55th District Court,
Harris County, Kathleen S. Stone, J., entered judgment for [3] Antitrust and Trade Regulation
purchasing corporation, and the Houston Court of Appeals, Measure and amount
First District, 898 S.W.2d 914, affirmed. On writ of error, Under Deceptive Trade Practice Act (DTPA),
the Supreme Court, Cornyn, J., held that: (1) purchasing amount of actual damages recoverable is total
corporation was “consumer” under DTPA although it did not loss sustained as result of deceptive trade
pay for audit; (2) failure to instruct jury on proper measure of practice. V.T.C.A., Bus. & C. § 17.50(b)(1).
direct damages was reversible error; and (3) award of attorney
fees under DTPA had to be dollar amount, not percentage of 2 Cases that cite this headnote
judgment.
[4] Antitrust and Trade Regulation
Reversed and remanded.
Grounds and Subjects
Under Deceptive Trade Practices Act (DTPA),
actual damages are those damages recoverable
West Headnotes (19) under common law, either direct or
consequential. V.T.C.A., Bus. & C. § 17.50(b)
(1).
[1] Antitrust and Trade Regulation
Accountants and tax preparers 13 Cases that cite this headnote
For purposes of Deceptive Trade Practices
Act (DTPA) claim against accounting firm,
[5] Damages
purchasing corporation was a “consumer,”
Direct or indirect consequences
although it did not pay for audit, where
purchasing corporation insisted as condition of Direct damages are necessary and usual result of
sale that acquired corporation provide audited defendant's wrongful act; they flow naturally and
financial statements, acquired corporation hired necessarily from the wrong.
accounting firm for that purpose, purchasing
49 Cases that cite this headnote
corporation then relied on those statements
in reaching its decision to purchase acquired
© 2015 Thomson Reuters. No claim to original U.S. Government Works. 1
Schultz, William 10/26/2015
For Educational Use Only
Arthur Andersen & Co. v. Perry Equipment Corp., 945 S.W.2d 812 (1997)
40 Tex. Sup. Ct. J. 591
of-pocket damages, which measure difference
[6] Damages between value buyer has paid and value of what
Direct or indirect consequences he has received, or by benefit-of-the-bargain
Direct damages compensate plaintiff for loss that damages, which measure difference between
is conclusively presumed to have been foreseen value as represented and value received.
by defendant from his wrongful act.
42 Cases that cite this headnote
22 Cases that cite this headnote
[11] Antitrust and Trade Regulation
[7] Damages Measure and amount
Proximate or Remote Consequences Under Deceptive Trade Practices Act (DTPA),
Consequential damages result naturally, but not plaintiff may recover under damage theory that
necessarily, from defendant's wrongful acts; provides greater recovery, either out-of-pocket
under common law, they need not be usual result damages or benefit-of-the-bargain damages.
of the wrong, but they must be foreseeable, and V.T.C.A., Bus. & C. § 17.50(b)(1).
must be directly traceable to wrongful act and
result from it. 24 Cases that cite this headnote
67 Cases that cite this headnote
[12] Antitrust and Trade Regulation
Measure and amount
[8] Antitrust and Trade Regulation Under Deceptive Trade Practices Act(DTPA),
Reliance; causation; injury, loss, or both out-of-pocket and benefit-of-the-bargain
damage measure of damages are determined at time of
Foreseeability is not an element of producing sale. V.T.C.A., Bus. & C. § 17.50(b)(1).
cause under Deceptive Trade Practices Act
(DTPA). V.T.C.A., Bus. & C. § 17.50(b)(1). 29 Cases that cite this headnote
1 Cases that cite this headnote
[13] Antitrust and Trade Regulation
Instructions
[9] Antitrust and Trade Regulation Appeal and Error
Grounds and Subjects Failure or refusal to charge
Under Deceptive Trade Practices Act, if damages Failure to instruct jury on proper measure
are too remote, too uncertain, or purely of direct damages on purchasing corporation's
conjectural, they cannot be recovered. V.T.C.A., claim under Deceptive Trade Practices Act
Bus. & C. § 17.50(b)(1). (DTPA) regarding accounting firm's audit of
acquired corporation was reversible error, where
10 Cases that cite this headnote
jury was not asked to find direct damages
at time of sale as well as consequential
[10] Fraud damages attributable to accounting firm's
Difference between actual and represented misrepresentations, but was simply asked to
value consider purchase price as part of overall
Fraud damages, and purchasing corporation did not
Difference between value and price paid establish how much of its loss was attributable to
Under common law, direct damages for accounting firm. V.T.C.A., Bus. & C. § 17.50(b)
misrepresentation are measured either by out- (1).
© 2015 Thomson Reuters. No claim to original U.S. Government Works. 2
Schultz, William 10/26/2015
For Educational Use Only
Arthur Andersen & Co. v. Perry Equipment Corp., 945 S.W.2d 812 (1997)
40 Tex. Sup. Ct. J. 591
17 Cases that cite this headnote [18] Antitrust and Trade Regulation
Proceedings to impose; evidence
[14] Antitrust and Trade Regulation Party's contingent fee agreement should be
Grounds and Subjects considered by fact finder, and is therefore
admissible in evidence, but that agreement
Under Deceptive Trade Practice Act, losses
cannot alone support award of attorney's fees
subsequent to time of sale are recoverable only
under Deceptive Trade Practices Act (DTPA).
if misrepresentation is producing cause of loss.
V.T.C.A., Bus. & C. § 17.50(d); State Bar Rules,
V.T.C.A., Bus. & C. § 17.50(b)(1).
V.T.C.A., Government Code Title 2, Subtitle G
Cases that cite this headnote App., Art. 10, § 9, Rules of Prof.Conduct, Rule
1.04(b)(8).
[15] Fraud 135 Cases that cite this headnote
Reliance on Representations and
Inducement to Act
[19] Antitrust and Trade Regulation
Basis of a misrepresentation claim is that Attorney fees
defendant's false statement induced plaintiff to
Antitrust and Trade Regulation
assume risk he would not have taken had truth
Proceedings to impose; evidence
been known.
To recover attorney's fees under Deceptive Trade
1 Cases that cite this headnote Practices Act (DTPA), plaintiff must prove that
amount of fees was both reasonably incurred
and necessary to prosecution of case, and must
[16] Antitrust and Trade Regulation
ask jury to award fees in specific dollar amount,
Grounds and Subjects
not as percentage of judgment. V.T.C.A., Bus.
Plaintiff's recovery of damages under Deceptive
& C. § 17.50(d); State Bar Rules, V.T.C.A.,
Trade Practices Act (DTPA) is limited not only
Government Code Title 2, Subtitle G App., Art.
by his own evidence, but also by defendant's 10, § 9, Rules of Prof.Conduct, Rule 1.04.
evidence of plaintiff's failure to reasonably
mitigate losses or evidence of intervening 227 Cases that cite this headnote
causes.
4 Cases that cite this headnote
Attorneys and Law Firms
[17] Attorney and Client
Construction and Operation of Contract *813 Ben Taylor, Dallas, Thomas C. Godbold, Houston, for
Petitioner.
Attorney contingency fee contracts allow
plaintiffs who cannot afford to pay a lawyer up- Christopher B. Allen, Michael P. Cash, James W. Paulsen,
front to pay lawyer out of any recovery, and, Houston, for Respondent.
because they offer potential of greater fee than
might be earned under hourly billing method, Opinion
compensate attorney for risk that attorney will
receive no fee whatsoever if case is lost. CORNYN, Justice.
149 Cases that cite this headnote We withdraw our opinion of January 10, 1997, and substitute
the following in its place. The parties' motions for rehearing
are overruled.
© 2015 Thomson Reuters. No claim to original U.S. Government Works. 3
Schultz, William 10/26/2015
For Educational Use Only
Arthur Andersen & Co. v. Perry Equipment Corp., 945 S.W.2d 812 (1997)
40 Tex. Sup. Ct. J. 591
after the sale, Maloney ran out of cash and required a
*814 In this accounting malpractice case, Perry Equipment $400,000 advance from PECO to continue operating. PECO
Corporation (PECO) sued the accounting firm of Arthur also attempted other emergency financial measures, but to
Andersen for a faulty audit, which PECO relied on to no avail. Fourteen months after the sale, Maloney filed
purchase another company, Maloney Pipeline Systems. bankruptcy. PECO presented uncontradicted evidence at trial
The audit favorably reported Maloney's financial condition that the purchase price for Maloney was a total loss from
when, in fact, the company was suffering substantial losses. which PECO realized no return and which PECO wrote off.
Fourteen months after the sale, Maloney filed for bankruptcy.
PECO sued for violations of the Deceptive Trade Practice PECO's experts testified that Arthur Andersen's audit
Act, fraud, negligence, negligent misrepresentation, gross contained serious errors and otherwise failed to follow
negligence, and breach of implied warranty. Based on the acceptable auditing procedures. One of the most significant
jury's verdict, the trial court rendered judgment for PECO. errors, the evidence showed, was the failure to verify that
The court of appeals affirmed. 898 S.W.2d 914. contracts Maloney reported as complete were in fact complete
or that Maloney's estimates of costs and percentage of
We address three issues presented by Arthur Anderson's completion for ongoing contracts were accurate. Maloney
application for writ of error. First, Arthur Andersen later incurred substantial losses on these contracts. One expert
challenges PECO's consumer status because Maloney, rather testified that the audit was one of the worst he had ever seen.
than PECO, actually paid for the audit. Second, Arthur Another expert, an auditing professor, stated that if a student
Andersen claims that the trial court failed to instruct the jury submitted the work, he would have given the student a failing
on the correct measure of damages. Third, Arthur Andersen grade.
contests the attorney's fees award, arguing that the percentage
of recovery method is not a proper measure of attorney's fees The jury found Arthur Andersen 51 percent at fault and
under the DTPA, and that even if such fees were recoverable, PECO 49 percent at fault. The jury also found that Arthur
no evidence supports the award. For the reasons discussed Andersen had committed fraud, DTPA violations, and
below, we reverse the judgment of the court of appeals and breach of warranty, but that it was not liable for negligent
remand this case to the trial court for further proceedings. misrepresentation or gross negligence. The jury assessed
damages of $5,449,468, including the $4,088,237 PECO paid
for Maloney and $1,361,231 for other expenses incurred by
PECO in its attempt to salvage the company. PECO elected
I
to recover under the DTPA. The trial court credited Arthur
When PECO, a successful manufacturer of oil filters used in Andersen with the two million dollars that Ramteck II had
compressors for gas pipelines, decided to expand its business already paid PECO in settlement, and then awarded PECO
into the gas metering field, it looked into acquiring Maloney a total of $9,297,601.20, including damages, prejudgment
Pipeline Systems, one of three United States companies in interest, DTPA additional damages, attorney's fees, and costs.
the liquid metering market. In the mid–1980s, PECO began
negotiating with Maloney's owner, Ramteck II. As a condition
of the sale, PECO required an audit of Maloney's financial *815 II
statements. Maloney retained Arthur Andersen to conduct
the audit. Maloney eventually provided PECO financial [1] [2] Arthur Andersen first contends that PECO is not
statements audited by Arthur Andersen. The statements a “consumer,” a prerequisite to recovery under the DTPA.
showed Maloney to be a profitable business. Relying upon The DTPA defines a consumer as one “who seeks or acquires
this information, on August 23, 1985, PECO purchased the by purchase or lease, any goods or services.” TEX. BUS. &
Maloney stock from Ramteck II, Inc. for $4,088,237. COM.CODE § 17.45(4). In determining whether a plaintiff
is a consumer, our focus is on the plaintiff's relationship to
Soon after the purchase, Maloney began to show signs the transaction. Amstadt v. United States Brass Corp., 919
of serious financial decline. For example, three months S.W.2d 644, 650 (Tex.1996). As a condition of sale, PECO
© 2015 Thomson Reuters. No claim to original U.S. Government Works. 4
Schultz, William 10/26/2015
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Arthur Andersen & Co. v. Perry Equipment Corp., 945 S.W.2d 812 (1997)
40 Tex. Sup. Ct. J. 591
insisted that Maloney provide audited financial statements. is whether the purchased goods or services are an objective
Maloney hired Arthur Andersen for this specific purpose. of the transaction or merely incidental to it.” Id. at 500.
PECO then relied on those statements in reaching its decision
to purchase Maloney. Under these circumstances, we hold We believe that Hand confirms, rather than defeats, PECO's
that PECO sought and acquired Arthur Andersen's services. consumer status. Arthur Andersen's audit was not merely
incidental to the sale of Maloney to PECO; it was required
The next question is whether PECO sought and acquired these by PECO and was central to PECO's decision to consummate
services by purchase or lease, inasmuch as it did not pay for the purchase. Determining Maloney's financial condition was
the audit. Our decision in Kennedy v. Sale, 689 S.W.2d 890 PECO's primary objective in acquiring Arthur Andersen's
(Tex.1985), controls this issue. There, we held that the DTPA services. We therefore reject Arthur Andersen's contention
does not require the consumer to be an actual purchaser or that Hand defeats PECO's status as a consumer under the
lessor of the goods or services, as long as the consumer is the DTPA.
beneficiary of those goods or services. Id.
The Texas Society of Certified Public Accountants, as amicus
III
curiae, argues that a stock purchaser should not be considered
a consumer simply because the corporation paid for an audit Arthur Andersen next complains that the jury charge allowed
for the purchaser's benefit because virtually every external the jury to award PECO the entire purchase price of Maloney,
audit benefits third parties. Thus, any stock purchaser who without instructing the jury to subtract the value of Maloney
reviews audited financial statements could bring a DTPA
stock at the time of the sale. 2 Arthur *816 Andersen also
1
claim against the auditor. Our holding is not so broad. In contends that even if the court had properly instructed the
this case, the audit was rendered in connection with the sale of jury, PECO failed to introduce any evidence that the stock
Maloney and was specifically required by PECO and intended was valueless at the time of sale, and thus failed to establish
to benefit PECO. Arthur Andersen was aware that PECO had that it was entitled to the entire purchase price under either the
required the audit and would rely on its accuracy and knew the “benefit-of-the-bargain” or the “out-of-pocket” measure of
specific purpose for which it was conducted. We accordingly damages. PECO responds that in addition to direct damages,
hold that PECO is a consumer under the DTPA. consequential damages are also recoverable under the DTPA.
PECO thus argues that it is entitled to recover the purchase
Arthur Andersen also urges us to reject PECO's consumer price as consequential damages.
status based on the decision in Hand v. Dean Witter Reynolds
Inc., 889 S.W.2d 483 (Tex.App.—Houston [14th Dist.] 1994, [3] Under the version of the DTPA in effect at the
writ denied). In Hand, the plaintiff alleged that her stock time PECO brought this action, a consumer could recover
broker failed to purchase certain commodity option contracts “the amount of actual damages” caused by the defendant's
after she requested that he do so. Id. at 487–88. After deciding false, misleading, or deceptive conduct. TEX. BUS. &
that a commodity option contract is a right, not a “good,”
COM.CODE § 17.50(b)(1). 3 The amount of actual damages
under the DTPA, id. at 498, the court next considered whether
recoverable is “the total loss sustained as a result of the
the plaintiff was a consumer by virtue of her purchase of
deceptive trade practice.” Kish v. Van Note, 692 S.W.2d 463,
“services.” The DTPA defines services as including “services
466 (Tex.1985)(citing Smith v. Baldwin, 611 S.W.2d 611, 617
furnished in connection with the sale or repair of goods.”
(Tex.1980)).
TEX. BUS. & COM.CODE § 17.45(2). The court reasoned
that the omission of any reference in the definition to services
[4] [5] [6] Actual damages are those damages recoverable
in connection with the sale of something other than a good
under common law. Brown v. American Transfer & Storage
indicated that services furnished in connection with the sale
Co., 601 S.W.2d 931, 939 (Tex.), cert. denied, 449 U.S.
of intangibles did not fall within the definition of services
1015, 101 S.Ct. 575, 66 L.Ed.2d 474 (1980). At common
under the DTPA. Hand, 889 S.W.2d at 498. The court then
law, actual damages are either “direct” or “consequential.”
concluded: “The key to the [consumer status] determination
Henry S. Miller Co. v. Bynum, 836 S.W.2d 160, 163
© 2015 Thomson Reuters. No claim to original U.S. Government Works. 5
Schultz, William 10/26/2015
For Educational Use Only
Arthur Andersen & Co. v. Perry Equipment Corp., 945 S.W.2d 812 (1997)
40 Tex. Sup. Ct. J. 591
(Tex.1992) (Phillips, C.J., concurring); see RESTATEMENT damage theory that provides the greater recovery. Id. Both
(SECOND) OF TORTS § 549 (1977) (outlining measure of measures of damages are determined at the time of sale. See
damages for fraudulent misrepresentation). Direct damages id. at 373 (out-of-pocket damages are measured at the time
are the necessary and usual result of the defendant's wrongful of sale); see also Bullion, An Understanding of Damages
act; they flow naturally and necessarily from the wrong. Recoverable Under the DTPA, 20 ST. MARY'S L.J. 667,
See Southwind Aviation, Inc. v. Avendano, 776 S.W.2d 734, 670–72 (1989).
736 (Tex.App.—Corpus Christi 1989, writ denied); Anderson
Dev. Corp. v. Coastal States Crude Gathering Co., 543 [13] In this case, the jury was not asked to find
S.W.2d 402, 405 (Tex.Civ.App.—Houston [14th Dist.] 1976, direct damages at the time of the sale as well as
writ ref'd n.r.e.). Direct damages compensate the plaintiff for consequential damages attributable to Arthur Anderson's
the loss that is conclusively presumed to have been foreseen misrepresentations. Rather, the jury was simply asked to
by the defendant from his wrongful act. See Bynum, 836 consider the purchase price as part of the overall damages.
S.W.2d at 163 (Phillips, C.J., concurring); Coastal States, PECO did present evidence that the purchase price was
543 S.W.2d at 405; Anderson, Incidental and Consequential eventually a total loss. There was also evidence that Maloney
Damages, 7 J.L. & COM. 327, 328 (1987). was losing money at the time of the sale and continued
to do so until it declared bankruptcy. What PECO did not
[7] [8] [9] Consequential damages, on the other hand, establish, however, was how much of its loss occurred at
result naturally, but not necessarily, from the defendant's the time of the sale and how much was attributable to
wrongful acts. Haynes & Boone v. Bowser Bouldin, Ltd., subsequent events for which Arthur Anderson should bear
896 S.W.2d 179, 182 (Tex.1995); Moore v. Anderson, 30 legal responsibility. If subsequent losses were caused by
Tex. 224, 230 (1867). Under the common law, consequential Arthur Andersen's wrongful conduct and were not simply part
damages need not be the usual result of the wrong, but must of the risk a buyer of the business would have assumed, they
be foreseeable, see Mead v. Johnson Group, Inc., 615 S.W.2d may be part of PECO's consequential damages.
685, 687 (Tex.1981), and must be directly traceable to the
wrongful act and result from it. Airborne Freight Corp., Inc. [14] [15] Subsequent losses, however, are recoverable
v. C.R. Lee Enters., Inc., 847 S.W.2d 289, 295 (Tex.App. only if the misrepresentation is a producing cause of the
—El Paso 1992, writ denied); El Paso Dev. Co. v. Ravel, loss. See Haynes & Boone, 896 S.W.2d at 182. Without
339 S.W.2d 360, 363 (Tex.Civ.App.—El Paso 1960, writ this limitation, an investor could shift the entire risk of an
ref'd n.r.e.). Of course, foreseeability is not an element of investment to a defendant who made a misrepresentation,
producing cause under the DTPA. See Haynes & Boone, even if the loss were unrelated to the misrepresentation. The
896 S.W.2d at 182; Prudential Ins. v. Jefferson Assocs., 896 basis of a misrepresentation claim is that the defendant's false
S.W.2d 156, 161 (Tex.1995). Still, if damages are too remote, statement induced the plaintiff to assume a risk he would
too uncertain, or purely conjectural, they cannot be recovered. not have taken had the truth been known. But to allow the
See White v. Southwestern Bell Tel. Co., Inc., 651 S.W.2d plaintiff to transfer the entire risk of loss associated with his
260, 262 (Tex.1983); see also Bynum, 836 S.W.2d at 164 investment, even risks that the plaintiff accepted knowingly
(Phillips, C.J., concurring). or losses that occurred through no fault of the defendant,
would unfairly transform the defendant into an insurer of the
*817 [10] [11] [12] Under Texas common law, direct plaintiff's entire investment.
damages for misrepresentation are measured in two ways.
W.O. Bankston Nissan, Inc. v. Walters, 754 S.W.2d 127, Because the charge failed to instruct the jury on the proper
128 (Tex.1988); Leyendecker & Assocs., Inc. v. Wechter, measure of direct damages, the submission was reversible
683 S.W.2d 369, 373 (Tex.1984). Out-of-pocket damages error. But, because we find some evidence that Arthur
measure the difference between the value the buyer has Andersen's misrepresentation was a producing cause of
paid and the value of what he has received; benefit-of-the- PECO's loss, we remand this case for a new trial. See Spencer
bargain damages measure the difference between the value as v. Eagle Star Ins. Co., 876 S.W.2d 154, 157 (Tex.1994)
represented and the value received. Leyendecker, 683 S.W.2d (holding that remand is proper when defective liability
at 373. Under the DTPA, a plaintiff may recover under the question is submitted); Jackson v. Fontaine's Clinics, Inc.,
© 2015 Thomson Reuters. No claim to original U.S. Government Works. 6
Schultz, William 10/26/2015
For Educational Use Only
Arthur Andersen & Co. v. Perry Equipment Corp., 945 S.W.2d 812 (1997)
40 Tex. Sup. Ct. J. 591
499 S.W.2d 87, 90 (Tex.1973) (remanding for new trial when this is not always true, shifting these fees to the defendant
defective damages question submitted); Moulton v. Alamo presents two problems.
Ambulance Serv., Inc., 414 S.W.2d 444, 449–50 (Tex.1967)
(affirming remand for new trial when defective damages First, a contingent fee award based solely on evidence of
question submitted). a percentage fee agreement between a lawyer and client
may be determined without regard to many of the factors
[16] We emphasize that a plaintiff's recovery of damages that should be considered when determining reasonableness.
is limited not only by his own evidence, but also by the The DTPA allows recovery of “reasonable and necessary
defendant's evidence of the plaintiff's failure to reasonably attorneys' fees.” TEX. BUS. & COM.CODE § 17.50(d).
mitigate losses or evidence of intervening causes. See Dubow Factors that a factfinder should consider when determining
v. Dragon, 746 S.W.2d 857, 860 (Tex.App.—Dallas 1988, no the reasonableness of a fee include:
writ); EDGAR & SALES, TEXAS TORTS & REMEDIES §
43.04[1][b]; Tschoepe et al., Aspects of Defending A Texas (1) the time and labor required, the novelty and difficulty
Deceptive Trade Practices–Consumer Protection Act Claim, of the questions involved, and the skill required to perform
20 ST. MARY'S L.J. 527, 561 (1989). If a plaintiff's losses the legal service properly;
are attributable to his own mistakes or factors outside either
(2) the likelihood ... that the acceptance of the particular
of the parties' control, the defendant may be entitled to an
employment will preclude other employment by the
appropriate limiting instruction to the jury.
lawyer;
(3) the fee customarily charged in the locality for similar
IV legal services;
Because we are remanding this case for a new trial, we (4) the amount involved and the results obtained;
turn now to Arthur Andersen's complaint that the trial court
(5) the time limitations imposed by the client or by the
improperly awarded PECO attorney's fees calculated as a
circumstances;
percentage of recovery. 4
(6) the nature and length of the professional relationship
*818 [17] Attorney contingency fee contracts serve two with the client;
main purposes. First, they allow plaintiffs who cannot afford
to pay a lawyer up-front to pay the lawyer out of any recovery. (7) the experience, reputation, and ability of the lawyer or
See See, An Alternative to the Contingent Fee, 1984 UTAH lawyers performing the services; and
L.REV. 485, 490 n. 14. Second, such contracts, because they
(8) whether the fee is fixed or contingent on results
offer the potential of a greater fee than might be earned under
obtained or uncertainty of collection before the legal
an hourly billing method, compensate the attorney for the
services have been rendered.
risk that the attorney will receive no fee whatsoever if the
case is lost. Id. The lawyer in effect lends the value of his TEX. DISCIPLINARY R. PROF. CONDUCT 1.04,
services, which is secured by a share in the client's potential reprinted in TEX. GOV'T CODE, tit. 2, subtit. G app.
recovery. POSNER, ECONOMIC ANALYSIS OF LAW § (STATE BAR RULES, art. X, § 9); see also Ragsdale v.
21.9 (4th ed.1992). Under some contingency fee contracts, Progressive Voters League, 801 S.W.2d 880, 881 (Tex.1990);
the attorney also agrees to advance the out-of-pocket costs of cf. General Motors Corp. v. Bloyed, 916 S.W.2d 949,
the litigation. In such cases, the attorney not only risks loss of 960–961 (Tex.1996) (discussing the relative strengths and
the fee, but also risks loss of actual expenditures. weaknesses of the contingent fee and lodestar methods of
awarding attorneys fees in the context of a court-approved
Arthur Andersen complains that an award of contingency fees class action settlement). While we do not doubt that many
under a fee-shifting statute like the DTPA forces defendants plaintiffs must contract for a contingent fee to secure the
to pay fees unrelated to the amount of work performed. While services of a lawyer, we do not believe that the DTPA
© 2015 Thomson Reuters. No claim to original U.S. Government Works. 7
Schultz, William 10/26/2015
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Arthur Andersen & Co. v. Perry Equipment Corp., 945 S.W.2d 812 (1997)
40 Tex. Sup. Ct. J. 591
Second, because the jury is not informed what the total
authorizes the shifting of the plaintiff's entire contingent fee
amount of the judgment will be, the jury can only speculate
to the defendant without consideration of the factors required
about whether a percentage of that unknown recovery will
by the Rules of Professional Conduct. A contingent fee may
represent a reasonable and necessary fee in that particular
indeed be a reasonable fee from the standpoint of the parties
case. Rather than leave this question to speculation, the jury
to the contract. But, we cannot agree that the mere fact that a
must decide the question of attorney's fees specifically in light
party and a lawyer have agreed to a contingent fee means that
of the work performed in the very case for which the fee is
the fee arrangement is in and of itself reasonable for purposes
sought.
of shifting that fee to the defendant.
[19] In light of these concerns, we hold that to recover
[18] A party's contingent fee agreement should be
attorney's fees under the DTPA, the plaintiff must prove
considered by the factfinder, see TEX. DISCIPLINARY R.
that the amount of fees was both reasonably incurred and
PROF. CONDUCT 1.04(b)(8), and is therefore admissible in
necessary to the prosecution of the case at bar, and must ask
evidence, but that agreement cannot alone support an award
the jury to award the fees in a specific dollar amount, not as
of attorney's fees under Texas Business and Commerce Code
a percentage of the judgment.
section 17.50(d). See Brister, Proof of Attorney's Fees in
Texas, 24 ST. MARY'S L.J. 313, 324 (1993). In other words,
For the foregoing reasons, we reverse the judgment of the
the plaintiff cannot simply ask the jury to award a percentage
court of appeals and remand this cause to the trial court for
of *819 the recovery as a fee because without evidence
further proceedings consistent with this opinion.
of the factors identified in Disciplinary Rule 1.04, the jury
has no meaningful way to determine if the fees were in fact
reasonable and necessary.
All Citations
945 S.W.2d 812, 40 Tex. Sup. Ct. J. 591
Footnotes
1 After PECO brought this action, the Legislature amended the DTPA to preclude consumers from suing under the DTPA
for professional negligence or for claims arising from transactions involving consideration of more than $500,000. TEX.
BUS. & COM.CODE § 17.49(c) & (g).
2 The charge asked the jury:
What sum of money, if any, if paid now in cash, would fairly and reasonably compensate PECO for its losses which
resulted from such conduct?
Do not increase or reduce the amount in one answer because of your answer to any other question about damages.
....
....
Consider the elements of damages listed below and none other. Consider each element separately. Do not include
damages for one element in any other element. Do not include interest on any amount of damages you find.
....
a. Purchase price of MPSI [Maloney] _______________
b. Costs and expenses incurred by PECO as a result of its purchase and ownership of MPSI [listing 13 categories
of costs and expenses]
3 In 1995, the Legislature amended § 17.50(b)(1) to permit recovery of “economic damages” and, if the defendant acted
knowingly, “damages for mental anguish,” instead of “actual damages.” Act of May 17, 1995, 74th Leg., R.S., ch. 414,
1995 Tex.Gen. Laws 2992.
4 The jury charge requested the jury to calculate attorney's fees three ways: in dollars and cents, as a percentage of
PECO's recovery, and as a combination of dollars and cents and percentage of recovery.
End of Document © 2015 Thomson Reuters. No claim to original U.S. Government Works.
© 2015 Thomson Reuters. No claim to original U.S. Government Works. 8
Schultz, William 10/26/2015
For Educational Use Only
Circle Ridge Production, Inc. v. Kittrell Family Minerals, LLC, Not Reported in S.W.3d...
According to Circle Ridge, genuine issues of material fact
exist concerning the date of forfeiture and whether Circle
2013 WL 3781367
Ridge was entitled to receive reimbursement for good-faith
Only the Westlaw citation is currently available.
improvements. Finally, Circle Ridge argues the trial court
SEE TX R RAP RULE 47.2 FOR erred in awarding Kittrell attorney's fees.
DESIGNATION AND SIGNING OF OPINIONS.
We affirm in part and reverse in part concluding (1) the
Court of Appeals of Texas, trial court rendered judgment on grounds that were supported
Texarkana. by the summary judgment motions, (2) strict compliance
occurred, (3) the untimely tender of overriding royalties did
CIRCLE RIDGE PRODUCTION, INC., Appellant
not excuse Circle Ridge's breach, (4) the untimely request
v. for a division order did not excuse Circle Ridge's breach,
KITTRELL FAMILY MINERALS, LLC, Appellee. (5) the trial court did not err in awarding attorney's fees, (6)
genuine issues of material fact exist concerning the date of
No. 06–13–00009–CV. | Submitted
forfeiture, (7) the trial court erred in concluding Circle Ridge
May 15, 2013. | Decided July 17, 2013. committed trespass, and (8) the trial court erred in failing
to effectuate Kittrell's concession that Circle Ridge could
On Appeal from the 241st District Court, Smith County,
recover the personal property at the well site.
Texas, Trial Court No. 12–0107–C. Jack Skeen Jr., Judge.
Attorneys and Law Firms
I. Background Facts
Roger W. Anderson, Gillen & Anderson, PC, Tyler, TX, for On May 15, 2009, Kittrell, then the owner of the mineral
appellant. lease, assigned the lease to Circle Ridge. The assignment
reserved an overriding royalty interest as follows:
Clark C. Hampe Jr., James S. Robertson, Jr., Wilson,
Robertson & Cornelius, PC, Tyler, TX, for appellee. Commencement of overriding royalty
payments shall not be delayed beyond
Before MORRISS, C.J., CARTER and MOSELEY, JJ. ninety (90) days after the last day of
the month during which production
commences from any well. After
MEMORANDUM OPINION the commencement of overriding
royalty payments from any well, all
Memorandum Opinion by Justice CARTER. overriding royalty payable in money
on account of hydrocarbons and
*1 Kittrell Family Minerals, LLC, 1 brought a declaratory products associated with hydrocarbons
judgment 2 and conversion suit against Circle Ridge produced from such well during
Production, Inc., alleging that Circle Ridge failed to pay the each calendar month shall be paid
prescribed overriding royalties even after receiving notice of by Assignee's check mailed to the
its failure. Kittrell claimed the failure resulted in a forfeiture Assignor on or before the last day
of the assignment of an oil and gas lease. The trial court of the second succeeding calendar
granted Kittrell's motion for summary judgment. 3 month. Such payment shall be
accompanied by a statement showing
Circle Ridge argues that the trial court erred in granting the gross amount of oil produced
summary judgment on grounds not addressed in Kittrell's since the last report and the gross
motion, Kittrell failed to provide notice in strict compliance production of all dry gas, residue gas,
with the assignment, and the lack of a signed division casinghead gas and other products
order excused the nonpayment of the overriding royalty. produced from the Leased Premises,
© 2015 Thomson Reuters. No claim to original U.S. Government Works. 1
Schultz, William 10/26/2015
For Educational Use Only
Circle Ridge Production, Inc. v. Kittrell Family Minerals, LLC, Not Reported in S.W.3d...
or lands pooled therewith, and that On August 30, 2011, Kittrell sent Circle Ridge a letter stating,
which was sold or used for the “You are hereby advised that the Assignment is terminated
manufacture of gasoline and other and Circle Ridge has been evicted effective immediately.”
products, and the market value of Circle Ridge continued production and, on September 30,
oil, dry gas, residue gas, casinghead 2011, sent Kittrell a letter and a check for $11,241.05. In
gas and each other product produced a letter dated October 4, 2011, Kittrell's attorney returned
from the Leased Premises. Overriding the check stating, Kittrell “remains undecided in its intended
royalties not paid when due shall bear course of action with regard to the unpaid royalties....”
interest at the rate of twelve percent On November 21, 2011, Kittrell sent Circle Ridge a letter
(12%) from their due date until paid. advising that Kittrell had “terminated the Assignment” and
If royalty is not paid by such due date, “locked the gates to the lease” and that continued production
Assignor may give Assignee written would be considered trespassing.
notice of nonpayment of the overriding
royalty (via certified mail to addressed
Assignee at the address shown herein), II. Standards of Review
and if Assignor's overriding royalty To prevail on a traditional motion for summary judgment,
is not paid on or before expiration a movant must establish that there is no genuine issue
of sixty (60) days from Assignee's as to any material fact and that the movant is entitled to
receipt of such notice, Assignor may judgment as a matter of law. TEX.R. CIV. P. 166a(c); City
terminate this agreement and evict of Houston v. Clear Creek Basin Auth., 589 S.W.2d 671
Assignee forthwith. (Tex.1979); Baubles & Beads v. Louis Vuitton, S.A., 766
S.W.2d 377, 379 (Tex.App.-Texarkana 1989, no writ). The
*2 The assignment specified that Circle Ridge's address was defendant must conclusively negate at least one element
“300 East Northside Dr., Fort Worth, Texas 76106.” The of each of the plaintiff's theories of recovery or plead
assignment was filed with the County Clerk of Smith County and conclusively establish each element of an affirmative
on June 11, 2009. defense. Sci. Spectrum, Inc. v. Martinez, 941 S.W.2d 910,
911 (Tex.1997). Because the movant bears the burden of
The lease was pooled on September 22, 2009, and production proof, all conflicts in the evidence are disregarded, evidence
began on the pooled unit in February 2010. Having received favorable to the nonmovant is taken as true, and all doubts as
no payments for its overriding royalty interest, Kittrell sent to the genuine issues of material fact are resolved in favor of
a letter to Circle Ridge on April 27, 2011, to “300 East the nonmovant. Nixon v. Mr. Prop. Mgmt. Co., 690 S.W.2d
Northside Dr., Fort Worth, Texas 76164–9234” demanding 546, 548–49 (Tex.1985); see Limestone Prods. Distrib., Inc.
payment within sixty days. Despite having a different zip v. McNamara, 71 S.W.3d 308, 311 (Tex.2002); Rhone–
code than the one listed in the assignment, the letter was Poulenc, Inc. v. Steel, 997 S.W.2d 217, 223 (Tex.1999). A
received by Circle Ridge at 300 East Northside Drive in motion for summary judgment must stand on its own merits,
Fort Worth, Texas, on April 29, 2011. On July 14, 2011, and the nonmovant may argue on appeal that the movant's
Kittrell sent a second letter demanding payment to “300 East summary judgment proof is insufficient as a matter of law,
Northside Dr., Fort Worth, Texas 76106[,]” but this letter only even if the nonmovant filed no response to the motion. See
provided five days for payment. M.D. Anderson Hosp. & Tumor Inst. v. Willrich, 28 S.W.3d
22, 23 (Tex.2000).
Circle Ridge's first response was a letter dated August 9,
2011. Shortly thereafter, Circle Ridge sent Kittrell a division
order dated August 11, 2011. In his summary judgment III. The Trial Court Rendered Judgment on Grounds
affidavit, Scott Kittrell, manager for Kittrell Family Minerals, Supported by the Summary Judgment Motions
LLC, stated he refused to sign the division order because the *3 As noted above, Circle Ridge argues the trial court
royalties had not been paid within sixty days of the notice and granted summary judgment on grounds not addressed by
the division order contained an incorrect ownership interest. Kittrell's motion. 4 Circle Ridge alleges the motion for
© 2015 Thomson Reuters. No claim to original U.S. Government Works. 2
Schultz, William 10/26/2015
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Circle Ridge Production, Inc. v. Kittrell Family Minerals, LLC, Not Reported in S.W.3d...
summary judgment failed to address its counterclaims for
mitigation of damages, breach of warranty of title, breach of
IV. Strict Compliance Occurred
contract, and conversion. 5
Circle Ridge argues strict compliance with the terms of
the assignment did not occur because the first notice
Kittrell's summary judgment motion addressed the breach
contained an incorrect zip code. Kittrell responds that strict
of contract and conversion claims. Circle Ridge's breach of
compliance occurred because the notice was received at the
contract claims were resolved when the trial court found,
correct location. Kittrell alternatively argues only substantial
as addressed below, strict compliance with the forfeiture
compliance was required or actual notice with lack of
provision had occurred. The conversion claim concerned the
prejudice is sufficient.
personal property left at the well site 6 and is also discussed
below. Texas cases have consistently required strict compliance for
the termination or forfeiture of an interest in a mineral estate.
Breach of warranty of title was not asserted as a counterclaim “[I]f the lease contains a provision giving the lessee a right of
or mentioned in Circle Ridge's amended answer. It was notice of any breach or default before declaring any forfeiture,
first mentioned in Circle Ridge's motion for new trial. In it must be ‘literally complied with.’ ” Vinson Minerals, Ltd.
its response to Circle Ridge's motion for new trial, Kittrell v. XTO Energy, Inc., 335 S.W.3d 344, 354 (Tex.App.-Fort
objected to the lack of any pleading on the breach of Worth 2010, pet. denied) (quoting Coastal Oil & Gas Corp. v.
warranty of title. Because Circle Ridge failed to plead this Roberts, 28 S.W.3d 759, 763 (Tex.App.-Corpus Christi 2000,
counterclaim, the motion for summary judgment was not pet. granted, judgm't vacated w.r.m.)).
required to address it.
*4 Several cases illustrate the literal compliance
Although Circle Ridge pled in its first amended answer that requirement. When the lease required a thirty-day written
“KITTRELL has failed to mitigate its damages,” Circle Ridge notice of breach but only a twenty-five-day notice was
failed to allege any facts supporting this bare allegation. given, literal compliance was not shown. Deace v. Stribling,
Assuming, without deciding, that this minimal allegation was 142 S.W.2d 564, 567 (Tex.Civ.App.-Austin 1940, no writ).
sufficient to give fair notice and assuming, without deciding, Likewise, when a lease required the notice to “fully describe”
Kittrell waived any defect by failing to specially except, 7 the breach or default, literal compliance was not demonstrated
Circle Ridge failed to assert this affirmative defense 8 by a demand for “an unspecified amount to be paid by
in its summary judgment response. Because mitigation of an unspecified time for unspecified claims or charges.”
damages is an affirmative defense, Circle Ridge had the Vinson Minerals, Ltd., 335 S.W.3d at 357; see XTO Inc. v.
obligation to raise it in its summary judgment response and to Pennebaker, No. 07–10–00396–CV, 2011 Tex.App. LEXIS
present summary judgment evidence. KPMG Peat Marwick 10194, at *9, 2011 WL 6846196 (Tex.App.-Amarillo Dec.29,
v. Harrison Cnty. Hous. Fin. Corp., 988 S.W.2d 746, 749 2011, no pet.) (mem.op.) (failure to file affidavit as required
(Tex.1999). “A mere pleading does not satisfy either burden.” by forfeiture clause). These cases involve the question of
Id. at 749–50. Circle Ridge's response does not raise the issue whether the content of the notice was timely and specific and
of mitigation of damages. Thus, Circle Ridge failed to carry properly complied with the lease requirements.
its burden to both assert the affirmative defense of mitigation
of damages and support it with summary judgment evidence. This lease, undisputedly, contains a forfeiture clause. Circle
See id. Ridge does not argue that it did not receive notice of the
default from Kittrell. Further, there is no argument that the
The summary judgment motions addressed the contract and content of the notice did not give fair or proper warning
conversion claims. Circle Ridge failed to plead warranty of the breach. Instead, the only argument is that the notice
of title and failed to assert mitigation of damages in was not addressed with the proper mailing zip code. Circle
its response. Circle Ridge's complaint that the trial court Ridge has cited no authority that an error in a zip code
rendered summary judgment on grounds not alleged in the prevented strict compliance. The Tyler Court of Appeals has
summary judgment motion is overruled. suggested strict compliance, albeit in a different context, can
© 2015 Thomson Reuters. No claim to original U.S. Government Works. 3
Schultz, William 10/26/2015
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Circle Ridge Production, Inc. v. Kittrell Family Minerals, LLC, Not Reported in S.W.3d...
be established despite the absence of a zip code. See Reese Assignee at the address shown herein.” Strict compliance was
v. Commissioners' Court of Cherokee Cnty., 861 S.W.2d required with the forfeiture clause, not the entire assignment.
281, 284 (Tex.App.-Tyler 1993, no pet.). The Tyler court The forfeiture clause required actual notice at the address
rejected the argument that the absence of the proper zip code specified in the lease, and the record conclusively establishes
prevented strict compliance. The court reasoned, because Circle Ridge received actual notice at the exact address,
the zip code's absence did not interfere with any possible including zip code, specified in the Assignment.
verification efforts, the absence did not invalidate a petition
signature under the Texas Election Code. Id. We conclude that strict compliance has been shown. We
affirm the portion of the summary judgment finding strict
Circle Ridge argues that Reese is distinguishable because it compliance occurred.
concerns statutory compliance. Except for certain statutory
exceptions, 9 strict compliance is required under the Election
V. The Untimely Tender of Overriding Royalties Did
Code. See In re Triantaphyllis, 68 S.W.3d 861, 868
Not Cure Circle Ridge's Breach
(Tex.App.-Houston [14th Dist.] 2002, orig. proceeding).
Circle Ridge alternatively argues the forfeiture clause was not
breached because it tendered the royalties on September 30,
Similar to Reese, the zip code in this case was superfluous.
2011. Because the lease had not been terminated, Circle Ridge
Circle Ridge does not contend there are two physical locations
argues the tender of payment prevented any breach.
in Fort Worth, Texas, with an address of 300 East Northside
Drive. The notice was delivered to the exact physical location
The assignment required the royalties to be tendered within
specified in the contract including delivery to the specified
sixty days—not 154 days. We note Circle Ridge has not
zip code. Although the zip code on the envelope may have
pled or argued waiver, ratification, or accord and satisfaction.
been erroneous, the letter was not misdirected to a different
Although the re-entry occurred after the royalty payment
location or to an incorrect zip code. The letter was delivered to
was tendered, the forfeiture clause was breached when the
Circle Ridge's physical location at 300 East Northside Drive,
royalties were not paid sixty days after the first notice. We
Fort Worth, Texas. 10 are bound by the language of the Assignment and cannot find
the Assignment has implied terms that do not exist in the
By its nature, a zip code is more of an aid to the post office agreement. See Rogers, 772 S.W.2d at 79. The Assignment
than a part of an address. Indeed, in the not so distant past, does not place any time limitations or other conditions on
zip codes did not even exist. The zip code of a particular exercising the right to terminate. Once the breach of the
street address may change over time. Further, we note the post forfeiture clause occurred, Kittrell had the right to terminate
office has added an additional four numbers (referred to as the lease.
ZIP+4) to the traditional five-digit zip codes. The zip code in
the assignment does not contain the additional four numbers, Because the royalties were not tendered within sixty days of
whereas, the zip code to which the notice was addressed does. the notice, Kittrell's right to terminate the Assignment was not
affected. The parties could have contracted for the right of
*5 The zip code's superfluous nature is reinforced by the reversion to be relinquished if the royalties were paid prior to
language of the forfeiture clause. While the assignment the Assignor exercising his right, under the forfeiture clause,
requires the notice to be mailed to the specified address, to terminate the assignment. The Assignment, though, does
the forfeiture clause is focused on actual notice. The not provide for such a relinquishment, and we are prohibited
forfeiture clause provides, “[I]f Assignor's overriding royalty from inferring such a term. Circle Ridge's argument is
is not paid on or before expiration of sixty (60) days overruled.
from Assignee's receipt of such notice, Assignor may
terminate....” (Emphasis added.) By focusing on the receipt
of actual notice as the event that establishes the sixty-day VI. The Untimely Request for a Division Order Did Not
deadline, the forfeiture clause decreases the importance of Excuse Circle Ridge's Breach
the earlier requirement that the notice be sent “to addressed
© 2015 Thomson Reuters. No claim to original U.S. Government Works. 4
Schultz, William 10/26/2015
For Educational Use Only
Circle Ridge Production, Inc. v. Kittrell Family Minerals, LLC, Not Reported in S.W.3d...
Additionally, Circle Ridge argues its request for a division has agreed in a memorandum opinion. See Jones v. Clem,
order on August 11, 2011, excused the breach of the forfeiture No. 11–10–00123–CV, 2012 Tex.App. LEXIS 2473, 2012
clause on June 28, 2011. Circle Ridge claims that because WL 1069168 (Tex.App.-Eastland Mar. 29, 2012, no pet.)
it had a right to suspend payments of royalties pending (per curiam) (mem.op.) (“[I]n order to rely upon a division
the execution of a division order 11 and a division order order, Jones had the obligation to submit it to the payees for
was requested before the termination of the Assignment, the signature.”). We agree with the San Antonio and Eastland
lease did not terminate. Kittrell responds that Circle Ridge's Courts of Appeals. Circle Ridge had the burden to draft the
argument is incorrect because the division order was not division order and submit it to Kittrell. Because Circle Ridge
requested until after the forfeiture clause had been breached failed to submit any division order to Kittrell until after the
and the division order contained incorrect terms. We agree forfeiture clause had been breached, the lack of a division
that a division order, submitted after the breach of a forfeiture order did not excuse the non-payment.
clause, does not excuse the breach. 12
VII. Circle Ridge Has Not Established the Attorney's
*6 A division order is “merely the mechanism for payment Fees Award Was Error
to a payee of its share of oil and gas proceeds.” Prize Circle Ridge challenges the award of attorney's fees to Kittrell
Energy Res., L.P. v. Cliff Hoskins, Inc., 345 S.W.3d 537, in four ways: (1) the fees were not supported by a designated
560 (Tex.App.-San Antonio 2011, no pet.). Division orders expert, (2) the fees were not substantiated with hourly time
are viewed as agreements between the parties. See Cabot records, (3) the fees were not segregated, and (4) the evidence
Corp. v. Brown, 754 S.W.2d 104, 107–08 (Tex.1987); see to support an award of attorney's fees is conclusory.
also TEX. NAT. RES.CODE ANN. § 91.401(3) (West 2011)
(“ ‘Division order’ means an agreement signed by the payee Circle Ridge argues that “[a] party may not recover attorneys'
directing the distribution of proceeds....”). “Although division fees when they have failed to designate an expert witness
orders do not supplant the lease contract,” division orders with regard to such claim [,]” citing E.F. Hutton & Co. v.
are binding until revocation. Cabot Corp., 754 S.W.2d at Youngblood, 741 S.W.2d 363, 364 (Tex.1987). Youngblood
107–08; cf. Heritage Res. v. Nationsbank, 939 S.W.2d 118, merely held that an expert witness on attorney's fees must
123 (Tex.1996) (under unjust enrichment theory, operator is be designated as an expert witness similar to other expert
liable, if division order differs from lease, for amount it retains witnesses. Id. The Texas Supreme Court has approved of the
but not for any amounts paid to others). procedure of using affidavits of the party's attorney to prove
attorney's fees. See Tex. Commerce Bank v. New, 3 S.W.3d
As noted above, the division order was not requested until 515, 517 (Tex.1999).
after the forfeiture clause had been breached. The overriding
royalty payments were due on or before June 28, 2011, but *7 Further, the failure to designate a testifying expert is
the division order contains an effective date of July 1, 2011, a defect of form about which an appellant must object and
and was dated August 11, 2011. Thus, the division order did on which he must obtain a ruling to preserve error. Expro
not exist until 104 days after receipt of notice and did not Ams., LLC v. Sanguine Gas Exploration, LLC, 351 S.W.3d
even attempt to govern royalty payments during the sixty days 915, 919–20 (Tex.App.-Houston [14th Dist.] 2011, pet.
following receipt of notice. Circle Ridge does not specify how denied); Duncan–Hubert v. Mitchell, 310 S.W.3d 92, 102,
its breach is excused by the issuance of a division order after 105 (Tex.App.-Dallas 2010, pet. denied). Although Circle
the relevant time period. Ridge objected in its response, Circle Ridge has directed us to
no trial court ruling and our own review has located no such
The San Antonio Court of Appeals has held the Texas Natural ruling on the objection.
Resources Code “places the burden on the payor to submit
a division order to the payee for its signature; it is not the Additionally, Kittrell notes it filed an amended discovery
royalty owner or mineral interest owner's burden to draft its response designating its expert and thereby eliminated any
own division order, sign it, and submit it to the payor.” Prize surprise or prejudice. This amended discovery response was
Energy Res., L.P., 345 S.W.3d at 560. The Eastland Court filed on August 10, 2012, twenty-five days before the hearing
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and two months prior to the entry of summary judgment. readily controverted. New Times, Inc. v. Isaacks, 146 S.W.3d
Circle Ridge directs us to no evidence of surprise or prejudice. 144, 163 (Tex.2004); Casso v. Brand, 776 S.W.2d 551, 558
(Tex.1989). Following the Texas Supreme Court's opinion
Circle Ridge argues the evidence is insufficient because it in Garcia, we conclude Kittrell's uncontroverted affidavit
did not include “any time records supporting the hours the constitutes sufficient evidence.
attorneys claim to have spent on the case.” Circle Ridge did
not make this objection in its response, and error has not been *8 We overrule all of Circle Ridge's complaints concerning
preserved. See TEX.R.APP. P. 33.1. Even if error had been attorney's fees.
preserved, we disagree that time records were required. In
El Apple I, Ltd. v. Olivas, 370 S.W.3d 757, 760 (Tex.2012),
cited by Circle Ridge, the Texas Supreme Court discussed VIII. Genuine Issues of Material Fact Exist Concerning
in detail the lodestar method for calculating attorney's fees the Date of Termination
based on hourly time records. Id. While the Texas Supreme Kittrell argues that because its August 30, 2011, letter
Court recognized the lodestar method as the required method unambiguously communicated an intent to terminate the
for claims under Section 21.259(a) of the Texas Commission Assignment, the Assignment terminated on August 30, 2011.
on Human Rights Act and in class-action lawsuits, the Circle Ridge claims the “remains undecided” language of the
opinion does not require the lodestar method in other types October 4, 2011, letter is some evidence that the Assignment
of lawsuits. See id. The Dallas Court of Appeals has held that was not terminated on August 30 but on November 21, 2011,
“there is no rigid requirement” of hourly time records and has and argues, “[A]n effective notice simply gave Kittrell the
affirmed attorney's fees awards without hourly time records. right to evict Circle Ridge at some later date.”
See Brockie v. Webb, 244 S.W.3d 905, 909 (Tex.App.-Dallas
2008, pet. denied). We agree with the Dallas Court of Appeals The first step in the analysis is to determine whether
that time records are not an indispensible element in the the disputed contract provision is a condition subsequent,
calculation of reasonable attorney's fees. a special limitation, or a covenant. 16 Vinson Minerals,
Ltd., 335 S.W.3d at 354 n. 12; see W.T. Waggoner Estate
Circle Ridge also complains about the failure to segregate v. Sigler Oil Co., 118 Tex. 509, 19 S.W.2d 27, 31
attorney's fees. 13 This objection was made in its response, (Tex.1929); Blackmon v. XTO Energy, Inc., 276 S.W.3d
but we have not been directed to where Circle Ridge obtained 600, 605 (Tex.App.-Waco 2008, no pet.). In making this
determination, we cannot add terms, and “doubts should be
a ruling to preserve error on this issue. 14 Cont'l Dredging,
resolved in favor of a covenant instead of a condition.” Rogers
Inc. v. De–Kaizered, Inc., 120 S.W.3d 380, 397 (Tex.App.-
v. Ricane Enters., Inc., 772 S.W.2d 76, 79 (Tex.1989). A
Texarkana 2003, pet. denied); see Dulong v. Citibank (S.D.),
special limitation divests the grantee automatically. Field v.
N.A., 261 S.W.3d 890, 893 (Tex.App.-Dallas 2008, no pet.)
Shaw, 535 S.W.2d 3, 5 (Tex.App.-Amarillo 1976, no writ).
(“[T]o preserve error on objections to summary judgment
A condition subsequent gives grantor the right to terminate
evidence, the complainant must secure a ruling on her
the leasehold estate upon the occurrence of an event but must
objection.”). Further, Kittrell filed an amended affidavit in
be exercised by re-entry. Id.; Eyssen v. Zeppa, 100 S.W.2d
response to this objection claiming seventy-five percent of the
417 (Tex.Civ.App.-Texarkana 1936, writ ref'd); Gutierrez v.
attorney's fees concerned the declaratory judgment. 15 Rodriguez, 30 S.W.3d 558, 560 (Tex.App.-Texarkana 2000,
no pet.). Except in extraordinary circumstances, a covenant
Finally, Circle Ridge argues, “Kittrell's summary judgment only subjects the breaching party to monetary damages. See
evidence consisted only of broad conclusory statements.” Anadarko Petroleum Corp. v. Thompson, 94 S.W.3d 550, 560
The Texas Supreme Court, though, has recently held an (Tex.2003); Rogers, 772 S.W.2d at 79.
affidavit is not conclusory merely because it lacks specifics
and, if uncontroverted, can be sufficient evidence. Garcia As argued by Circle Ridge, an overriding royalty is normally
v. Gomez, 319 S.W.3d 638, 641 (Tex.2010). As held in considered a covenant and does not result in forfeiture. See
Garcia, summary judgment can be granted on the testimony Vinson Minerals, 335 S.W.3d at 354. “ ‘[F]ew leases are
of an interested witness if the testimony could have been found in which the nonpayment of royalty is a condition
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subsequent and rarer still is the lease in which it operates as a to the possibility of reverter in the lessor/grantor. The
special limitation.’ ” Blackmon, 276 S.W.3d at 606 (quoting lessee's/grantee's interest is “determinable” because it may
Linton E. Barbee, The Lessor's Remedies for Nonpayment of terminate and revert entirely to the lessor/grantor upon the
Royalty, 45 TEX. L.REV. 132, 159 (1966)). occurrence of events that the lease specifies will cause
termination of the estate.
The assignment of the lease in this case, though, contains a Natural Gas Pipeline Co. of Am. v. Pool, 124 S.W.3d
clause not contained in most leases. The clause provides: 188, 192 (Tex.2003) (citations omitted). As noted above,
a condition subsequent only terminates an oil and gas
Assignor may give Assignee written lease upon re-entry or the filing of a lawsuit seeking re-
notice of nonpayment of the entry. Vinson Minerals, Ltd., 335 S.W.3d at 354; see W.T.
overriding royalty (via certified mail Waggoner Estate, 19 S.W.2d at 31.
to addressed Assignee at the address Kittrell has failed to establish as a matter of law that the lease
shown herein.), and if Assignor's terminated on August 30, 2011, because at that time, there had
overriding royalty is not paid on
been no re-entry. 19 “Under Texas summary judgment law,
or before expiration of sixty (60)
the party moving for summary judgment carries the burden
days from Assignee's receipt of
of establishing that no material fact issue exists and that it is
such notice, Assignor may terminate
entitled to judgment as a matter of law.” Willrich, 28 S.W.3d
this agreement and evict Assignee
at 23 (noting “the nonmovant need not respond to the motion
forthwith.
to contend on appeal that the movant's summary judgment
Because this term provides for termination, the clause must proof is insufficient as a matter of law to support summary
be either a condition subsequent or a special limitation judgment.”). While Kittrell had declared the assignment
rather than a covenant. The clause makes the termination terminated, no re-entry had yet occurred and no lawsuit had
discretionary with the Assignor. The use of the word “may” been filed. Re-entry did not occur until Kittrell locked the
indicates the Assignor has discretion to either exercise the gates and prevented Circle Ridge from continuing to produce.
right or not to exercise the right. Because the Assignor
must exercise the right to effectuate a termination, the plain The trial court erred in finding that the forfeiture occurred
language of the clause establishes that it is a condition on August 30, 2011. Kittrell's November 21, 2011, letter
subsequent. Although “[c]ourts will not declare a forfeiture confirms the re-entry had recently occurred, but does not
unless they are compelled to do so by language which can be specify the exact date of re-entry. We agree with Circle Ridge
that genuine issues of material fact exist concerning the date
construed in no other way,” 17 the clause in this lease is clear
of termination.
and precise and can be construed in no other way than to be
a condition subsequent.
IX. The Record Conclusively Establishes that Circle
*9 The termination of the Assignment in this case is not just Ridge Did Not Trespass
a contract dispute but rather a reversion of an interest in real Circle Ridge also contends the trial court erred in concluding
property. 18 As explained by the Texas Supreme Court: as a matter of law that Circle Ridge was a bad-faith
trespasser 20 and in awarding Kittrell trespass damages. We
agree. As discussed above, the Assignment terminated upon
In Texas it has long been recognized that an oil and
Kittrell's re-entry. The record conclusively establishes that
gas lease is not a “lease” in the traditional sense of
Circle Ridge did not conduct activities on the lease after
a lease of the surface of real property. In a typical
Kittrell's re-entry. The trial court erred in awarding Kittrell
oil or gas lease, the lessor is a grantor and grants
trespass damages. Although entitled to recover its overriding
a fee simple determinable interest to the lessee, who
royalty interest from August 30, 2011, until the date of re-
is actually a grantee. Consequently, the lessee/grantee
entry, Kittrell is not entitled to recover trespass damages.
acquires ownership of all the minerals in place that
the lessor/grantor owned and purported to lease, subject
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tendering of royalty payments more than sixty days after
X. The Trial Court's Failure to Recognize Kittrell's
Concession on Personal Property and Well Casing Was notice did not excuse the non-payment. 22 We reject Circle
Error Ridge's argument that the summary judgment was rendered
*10 Circle Ridge claims the trial court committed reversible on grounds not contained in the summary judgment motion
error by refusing to permit the removal of its personal and that the award of attorney's fees to Kittrell was improper.
property from the well site. In its motion for summary We affirm the trial court's award of $7,576.75 in overriding
judgment, Kittrell agreed that Circle Ridge had the right royalty proceeds and $8,166.00 in attorney's fees.
to remove its equipment other than the well casing and
agreed to pay salvage value for the well casing. Circle Ridge The trial court, though, erred in determining that the forfeiture
complained in its response that it had been denied access “to occurred on August 30, 2011. The forfeiture occurred when
its personal property and equipment on the lease. The value of Kittrell re-entered the property on or about November 21,
such personal property and equipment exceeds $100,000.00.” 2011. Genuine issues of material fact exist concerning the
exact date of re-entry. The record, however, conclusively
We agree with Circle Ridge that the trial court erred in establishes that Circle Ridge did not continue activities on the
failing to award Circle Ridge the right to recover its personal lease after Kittrell's re-entry. Therefore, the trial court erred
in awarding damages for trespass. We reverse the trial court's
property remaining at the well site 21 and, if the well casing
award to Kittrell as trespass damages of $45,960.62 in lease
cannot be removed without damaging the well, damages in
proceeds and $9,380.00 for the value of the oil in the tanks.
the amount of the market value of the well casing minus
We remand the case to the trial court for the limited purpose
the cost of removal. See Moore, 261 S.W.3d at 428; Fike v.
of determining the exact date of re-entry and calculating the
Riddle, 677 S.W.2d 722, 727 (Tex.App.-Tyler 1984, no writ).
amount of the overriding royalty owed Kittrell from August
On remand, the trial court should order return of the personal
30, 2011, until the date of re-entry. On remand, the trial court
property belonging to Circle Ridge at the well site and, if
should give effect to Kittrell's concession that Circle Ridge
removal would damage the well, damages for the well casing.
is entitled to the personal property located at the well site,
including the 113 barrels of oil, and, if the well casing cannot
XI. Conclusion be removed without damaging the well, should determine the
We affirm the judgment of the trial court in part and reverse value Kittrell owes Circle Ridge for the well casing.
in part. We affirm the summary judgment determining that
(1) Circle Ridge breached the forfeiture clause, (2) Kittrell
provided notice in strict compliance with the Assignment, All Citations
(3) the lease was forfeited, (4) the lack of a division order Not Reported in S.W.3d, 2013 WL 3781367
did not excuse Circle Ridge's non-payment, and (5) the
Footnotes
1 Originally appealed to the Tyler Court of Appeals, this case was transferred to this Court by the Texas Supreme Court
pursuant to its docket equalization efforts. See TEX. GOV'T CODE ANN. § 73.001 (West 2013). As a transfer case, we
are required to apply the precedent of the Tyler Court of Appeals to the extent it may differ from our precedent. See
TEX.R.APP. P. 41.3.
2 Except for boundary line disputes, a trespass to try title claim is the exclusive method in Texas for adjudicating disputed
claims of title to real property, and, such claims cannot be brought as declaratory judgments. See Tex. Parks & Wildlife
Dep't v. Sawyer Trust, 354 S.W.3d 384 (Tex.2011). The Tyler Court of Appeals has held that when no objections or
special exceptions are made to a lawsuit being brought as a declaratory judgment, the error, if any, in failing to bring
the action as a trespass to try title has been waived. See Cabot Oil & Gas Corp. v. Healey, L.P., No. 12–11–00236–CV,
2013 Tex.App. LEXIS 3934, 2013 WL 1282007 (Tex.App.-Tyler Mar.28, 2013, no pet. h.) (mem.op.) (failure to specially
except waived any error in bringing lawsuit as declaratory judgment instead of trespass to try title).
3 We note Kittrell's motion fails to specify whether it is a traditional or no-evidence motion for summary judgment. Circle
Ridge treated the motion as a traditional motion for summary judgment. Because Kittrell had the burden of proof, we have
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also treated the motion as a traditional motion for summary judgment. Although the Texas Supreme Court has approved of
filing combination summary judgment motions, the better practice is to clearly delineate which type of summary judgment
is being sought. Binur v. Jacobo, 135 S.W.3d 646, 650–51 (Tex.2004); Holloway v. Tex. Elec. Util. Constr., Ltd., 282
S.W.3d 207, 213 n. 3 (Tex.App.-Tyler 2009, no pet.) (“[T]the better practice is to file two separate motions.”).
4 A summary judgment can only be affirmed on grounds specifically presented to the trial court in the summary judgment
motion. TEX.R.APP. P. 33.1; TEX.R. CIV. P. 166a(c); see Clear Creek Basin Auth., 589 S.W.2d at 677; Driskill v. Ford
Motor Co., 269 S.W.3d 199, 206 (Tex.App.-Texarkana 2008, no pet.).
5 In its brief, Circle Ridge implies the judgment is not “final and appealable.” At oral argument, counsel clarified that the
argument was that the trial court erred in granting a judgment without disposing of all issues and causes of action, not
that the judgment was not final. We find the judgment is final and appealable, and this opinion will address Circle Ridge's
claims that the trial court committed error in entering this judgment.
6 Circle Ridge's amended answer and counterclaim merely contains a single sentence under the heading XVI which
provides, “The conduct of KITTRELL constitutes conversion.” Other than the request for return of personal property left
at the well site, Circle Ridge failed to allege any facts in support of its conversion counterclaim. The sufficiency of the
pleadings is judged based on whether they provide the opponent with fair and adequate notice. Roark v. Allen, 633
S.W.2d 804, 809–10 (Tex.1982); Burke v. Union Pac. Res. Co., 138 S.W.3d 46, 66–67 (Tex.App.-Texarkana 2004, pet.
denied). “Fair notice” requires that an opposing attorney of reasonable competence can ascertain the nature and basic
issues of the controversy. Marin v. IESI TX Corp., 317 S.W.3d 314, 332 (Tex.App.-Houston [1st Dist.] 2010, pet. denied);
Burke, 138 S.W.3d at 67. Kittrell only had fair notice of the request to return personal property. “A party is not required to
specially except to a pleading defect if it lacks notice of the other party's intent.” Italian Cowboy Partners, Ltd. v. Prudential
Ins. Co. of Am., 341 S.W.3d 323, 345 (Tex.2011); Taylor v. Taylor, 337 S.W.3d 398, 401 (Tex.App.-Fort Worth 2011, no
pet.) (failure to specially except did not waive challenge to lack of fair notice retroactive child support was being sought).
7 See TEX.R. CIV. P. 90 (failure to specially except waives any defect of form or substance).
8 Mitigation of damages is an affirmative defense which the breaching party must plead and prove. S & G Associated
Developers, LLC v. Covington Oaks Condo. Owners Ass'n, 361 S.W.3d 210, 217 (Tex.App.-El Paso 2012, no pet.).
9 The Fourteenth District Court of Appeals noted the Texas Legislature has exempted certain requirements from strict
compliance including the zip code. We note that in 1997, the Texas Legislature amended the Election Code to provide
that “[t]he omission of the zip code from the address does not invalidate a signature.” See Act of May 23, 1997, 75th Leg.,
R.S., ch. 1349, § 52, 1997 Tex. Gen. Laws 5080, 5092 (amended 2005) (current version at TEX. ELEC.CODE ANN. §
141.063 (West 2010)). The Election Code in effect at the time Reese was decided did not include this exemption. See
Act of May 9, 1985, 69th Leg., R.S., ch. 211, § 1, 1985 Tex. Gen. Laws 802, 956 (amended 1997) (current version at
TEX. ELEC.CODE ANN. § 141.063).
10 Circle Ridge argues that the letter was sent to an “incorrect” zip code address. We note that several documents from
Circle Ridge contain either the 76164 or the 76164–9234 zip code. For instance, the printed check Circle Ridge sent
to Kittrell on September 29, 2011, has the address listed as 300 East Northside Dr., Fort Worth, TX 76164–9234. In
addition, the 76164 zip code was used on an August 9, 2011, letter from Circle Ridge to Kittrell, including certain royalty
check detail statements and billing statements from the law firm of Gillen & Anderson. While it is accurate to state that
the demand from Kittrell was sent to a different zip code than listed in the assignment, these documents demonstrate
that zip code number 76164–9234 is not an incorrect zip code for Circle Ridge.
11 The Texas Natural Resources Code permits, under certain circumstances, a payor to condition payment of royalty upon
receipt of a signed division order. See TEX. NAT. RES.CODE ANN. § 91.402(c)(1) (West 2011).
12 Because Circle Ridge failed to timely request the division order, it is not necessary for us to decide Kittrell's alternative
argument that an incorrect division order does not excuse nonpayment.
13 A party seeking to recover attorney's fees must segregate those fees attributable to different parties or causes, except
“when the attorney's fees rendered are in connection with claims arising out of the same transaction and are so interrelated
that their ‘prosecution or defense entails proof or denial of essentially the same facts.’ ” Stewart Title Guar. Co. v. Sterling,
822 S.W.2d 1, 11 (Tex.1991) (quoting Flint & Assoc. v. Intercontinental Pipe & Steel, Inc., 739 S.W.2d 622, 624–25
(Tex.App.-Dallas 1987, writ denied)).
14 Kittrell raised this issue at the summary judgment hearing, but Circle Ridge did not respond and no ruling was obtained.
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15 Kittrell also filed a motion for leave to file the amended affidavit. In its reply brief, Circle Ridge argues that because there
is no explicit granting of leave, we must ignore the amended affidavit. The amended affidavit was filed more than twenty-
one days before the hearing, and, therefore, was not late under Rule 166a(c) of the Texas Rules of Civil Procedure.
See TEX.R. CIV. P. 166a(c). Because the affidavit was not late, Kittrell did not need leave of the court to file it, and it is
unnecessary for us to determine whether leave was implicitly granted by the award of attorney's fees consistent with the
amended affidavit. See Benchmark Bank v. Crowder, 919 S.W.2d 657, 663 (Tex.1996) (presumption leave not granted
when nothing in record indicates trial court considered late-filed evidence).
16 We recognize neither Kittrell nor Circle Ridge briefs the issue of the type of contract provision in dispute. Both parties,
though, cite caselaw concerning covenants, special limitations, and conditions subsequent. Some of the differences
between these cases depend on the type of contract provision in dispute. We are required to address this issue because
it is necessary to reconcile the various cases cited by the parties. We further note both parties cited Coastal Oil & Gas
Corp. v. Roberts, 28 S.W.3d 759, 763 (Tex.App.-Corpus Christi 2000, pet. granted, judgm't vacated w.r.m.), in their
briefs, and Coastal Oil was extensively discussed during oral argument. Coastal Oil has been vacated and is merely
persuasive authority. See State ex rel. Dishman v. Gary, 163 Tex. 565, 359 S.W.2d 456 (Tex.1962) (orig.proceeding)
(vacated opinion lacks any precedential value). Because the parties have provided us with other precedents, it is not
necessary for us to rely on Coastal Oil as persuasive authority.
17 Reilly v. Rangers Mgmt., Inc., 727 S.W.2d 527, 530 (Tex.1987); Vinson Minerals, Ltd., 335 S.W.3d at 354; see Fox v.
Thoreson, 398 S.W.2d 88, 92 (Tex.1966) (special limitation must be “clear and precise and so unequivocal in nature that
it can reasonably be given no other meaning”).
18 Kittrell argues that Blackmon is distinguishable from this case because it involved the termination of a lease instead of
the termination of an assignment. See Blackmon, 276 S.W.3d at 605. An assignment of an oil and gas lease is still a
transfer of an interest in real property, and we do not believe Blackmon is distinguishable on this basis.
19 The parties have not argued the date of termination depends on when re-entry occurred. Both sides, though, have cited
cases to this Court and to the trial court which explain the re-entry requirement. Both Circle Ridge and Kittrell cite Rogers,
772 S.W.2d at 79 on appeal. Circle Ridge also cites Vinson Minerals, 335 S.W.3d at 354, and Blackmon, 276 S.W.3d at
605. Further, Circle Ridge argued to both the trial court and this Court that the termination did not occur until November
21, 2011, and also cited Vinson Minerals, 335 S.W.3d at 353, to the trial court.
20 Kittrell argues Circle Ridge was a bad-faith trespasser as a matter of law because Circle Ridge continued to produce
after receiving its August 30, 2011, letter announcing the lease was terminated. This Court and the San Antonio Court
of Appeals have held that a producer who continues activities on the property after the filing of a lawsuit is a bad-faith
trespasser as a matter of law. See Moore v. Jet Stream Invs., Ltd., 261 S.W.3d 412, 428 (Tex.App.-Texarkana 2008,
pet. denied); Mayfield v. De Benavides, 693 S.W.2d 500, 504 (Tex.App.-San Antonio 1985, writ ref'd n.r.e.). There was
no lawsuit pending at any time Circle Ridge conducted activities on the lease. Further, since our decision in Moore, the
Texas Supreme Court has held that the ultimate issue is one of equity which should be decided by the trial court using a
case-by-case equity analysis. Wagner & Brown, Ltd. v. Sheppard, 282 S.W.3d 419, 428 (Tex.2008) (noting examples of
relevant considerations, including whether termination was intentional, whether there was offer to immediately reinstate
lease, length of time lease in effect, and whether “denying reimbursement would work a substantial forfeiture”).
21 Although we have deleted the $9,380.00 award for the 113 barrels of oil remaining at the well site as trespass damages,
we note this oil was the personal property of Circle Ridge. Both parties agree these 113 barrels had been extracted by
November 21, 2011, and, once removed from the ground, oil is personal property. Since Circle Ridge did not trespass,
Circle Ridge is entitled to recover possession of the 113 barrels of oil or the value of the 113 barrels of oil. We further
note Kittrell is entitled to an award of its overriding royalty interest on these barrels.
22 These issues have been fully litigated and determined on appeal. Consequently, the law of the case doctrine prohibits
re-litigation of these issues on remand. See Briscoe v. Goodmark Corp., 102 S.W.3d 714, 716 (Tex.2003).
End of Document © 2015 Thomson Reuters. No claim to original U.S. Government Works.
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El Apple I, Ltd. v. Olivas, 370 S.W.3d 757 (2012)
115 Fair Empl.Prac.Cas. (BNA) 510, 55 Tex. Sup. Ct. J. 954
KeyCite Yellow Flag - Negative Treatment West Headnotes (7)
Declined to Extend by Ferrant v. Graham Associates, Inc., Tex.App.-
Fort Worth, May 8, 2014
[1] Costs
370 S.W.3d 757 Items and amount; hours; rate
Supreme Court of Texas. The determination of what constitutes a
reasonable attorney's fee under lodestar method
EL APPLE I, LTD., Petitioner,
of determining amount of fee award involves
v.
two steps: first, the court must determine the
Myriam OLIVAS, Respondent. reasonable hours spent by counsel in the case and
a reasonable hourly rate for such work, and the
No. 10–0490. | Argued Sept.
court then multiplies the number of such hours
15, 2011. | Decided June 22, 2012.
by the applicable rate, the product of which is the
Synopsis base fee or lodestar.
Background: Employee brought action against employer
35 Cases that cite this headnote
under Texas Commission on Human Rights Act (TCHRA),
alleging sex discrimination and retaliation. Following jury
trial, the County Court at Law No. 3 of El Paso County, Javier [2] Costs
Alvarez, J., entered judgment for employee and awarded Items and amount; hours; rate
attorney fees. Employer appealed. The El Paso Court of When using lodestar method to determine
Appeals, 324 S.W.3d 181, affirmed as reformed. Review was reasonable attorney fee award, court may adjust
granted. the base lodestar figure up or down if relevant
factors indicate an adjustment is necessary to
reach a reasonable fee in the case.
Holdings: The Supreme Court, Medina, J., held that:
23 Cases that cite this headnote
[1] affidavits of plaintiff's attorneys were insufficient to
support lodestar determination of attorney fee award, and [3] Costs
Discretion of court
[2] as a matter of first impression, application and record The award of attorney's fees generally rests in the
for attorney fee award under lodestar method must include sound discretion of the trial court.
proof documenting the performance of specific tasks, the time
required for those tasks, the person who performed the work, 7 Cases that cite this headnote
and his or her specific rate.
[4] Costs
Evidence as to items
Reversed and remanded.
A party applying for an award of attorney's
Hecht, J., filed concurring opinion in which Wainwright, J., fees under the lodestar method bears the burden
and Willett, J., joined. of documenting the hours expended on the
litigation and the value of those hours.
31 Cases that cite this headnote
[5] Civil Rights
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El Apple I, Ltd. v. Olivas, 370 S.W.3d 757 (2012)
115 Fair Empl.Prac.Cas. (BNA) 510, 55 Tex. Sup. Ct. J. 954
Employment practices
Attorneys and Law Firms
Affidavits of plaintiff employee's attorneys were
insufficient to support lodestar determination of *758 David R. Pierce, The Law Office of David Pierce,
attorney fee award in sex discrimination and Joseph L. Hood Jr., Windle Hood Alley Norton Brittain & Jay
retaliation action under Texas Commission on LLP, El Paso, TX, for El Apple I, Ltd.
Human Rights Act; affidavits did not indicate
how many hours that attorneys spent on case Francisco X. Dominguez, Dominguez & Coyle PLLC, Daniel
were devoted to any particular task or category Salvador Gonzalez, John P. Mobbs, Attorneys at Law, El
of tasks, and attorneys' time estimates were not Paso, TX, for Myriam Olivas.
based on time records or other documentary
evidence that would allow for meaningful review Clara B. Burns, Kemp Smith LLP, El Paso, TX, for Amicus
of claim for fees. V.T.C.A., Labor Code § Curiae Texas Association of Business.
21.259(a).
Opinion
19 Cases that cite this headnote
Justice MEDINA delivered the opinion of the Court.
[6] Costs In this appeal, we consider the calculation of an attorney's
Evidence as to items fee award in an employment discrimination and retaliation
suit brought pursuant to the Texas Commission on Human
When applying for a fee under the lodestar
Rights Act (TCHRA). The TCHRA includes a fee-shifting
method, the applicant must provide sufficient
provision that allows a prevailing party to recover reasonable
details of the work performed before the court
attorney's fees as part of *759 the costs of pursuing the
can make a meaningful review of the fee request;
claim. To calculate attorney's fees under the TCHRA, Texas
for the purposes of lodestar calculations, this
courts utilize the lodestar method, that is, the number of
evidence includes, at a minimum, documentation
hours worked multiplied by the prevailing hourly rates. If
of the services performed, who performed
the lodestar does not reflect a reasonable fee, a multiplier
them and at what hourly rate, when they
may be applied. In this case, the court of appeals affirmed
were performed, and how much time the work
an attorney's fee award, applying a multiplier that doubled
required.
the base lodestar amount. 324 S.W.3d 181 (Tex.App.-El Paso
20 Cases that cite this headnote 2010).
The employer presents two issues. First, it claims that the
[7] Costs affidavits used to support the fee application were not legally
Items and amount; hours; rate sufficient to support the trial court's determination of the
Courts hours expended or a reasonable hourly rate. Second, the
Decisions of United States Courts as employer argues that the trial court abused its discretion by
Authority in State Courts enhancing the lodestar with a 2.0 multiplier. Because we
Though not bound to adopt federal standards agree that the evidence in the trial court was insufficient to
for lodestar determination of attorney fee award, make a lodestar calculation, we reverse the court of appeals'
state court may appropriately consider them judgment and remand to the trial court for further proceedings
when making lodestar determinations under state consistent with this opinion.
law.
3 Cases that cite this headnote
I
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El Apple I, Ltd. v. Olivas, 370 S.W.3d 757 (2012)
115 Fair Empl.Prac.Cas. (BNA) 510, 55 Tex. Sup. Ct. J. 954
Myriam Olivas, an Applebee's restaurant manager in El Paso, On appeal, El Apple argued that the attorney's fees awarded
filed suit against her employer, El Apple I, Ltd., alleging through trial was an abuse of discretion because the court
sex discrimination and retaliation under the TCHRA. TEX. did not have sufficient evidence on which *760 to make a
LAB. CODE §§ 21.001–.55. A jury determined that Olivas reasonable assessment. The company also complained that no
was not the target of sex discrimination, but that her decision basis existed for the trial court's enhancement of the lodestar.
to file discrimination complaints against her employer was The court of appeals vacated the award of Olivas's back-
a motivating factor in El Apple's creation of a hostile work pay damages but otherwise affirmed Olivas's compensatory
environment. Thus, Olivas prevailed on only the retaliation damages and attorney's fees. 324 S.W.3d at 195. The court
claim. The trial court rendered judgment awarding Olivas held that the affidavits were legally sufficient to support the
compensatory damages of $1,700 for back pay, $75,000 trial court's determination of hours spent and a reasonable
for past compensatory damages, and $28,000 for future hourly rate, and that more detailed billing records were
compensatory losses. unnecessary. Id. at 193. The court also determined that the
trial court had not erred in enhancing the lodestar because it
As the prevailing party, Olivas also submitted an application considered separate factors from those it used to determine
for attorney's fees. In affidavits, her attorneys estimated the lodestar. Id. at 193–94.
that they collectively spent 850 hours on the case. Olivas's
lead counsel, Daniel Gonzalez, averred that he spent
approximately 700 hours on the case. Her other attorney,
II
Francisco Dominguez, averred that he spent 150 hours in
preparing and trying the case. At a hearing on the fee The remedies provided under the TCHRA mirror those
application, Dominguez subsequently testified that he spent available under Title VII of the Civil Rights Act of 1964,
190 hours, but that he was not seeking compensation for some as amended by the Civil Rights Act of 1991. Compare Tex.
of that time because it was duplicative of work performed by Lab.Code §§ 21.258, 21.2585, 21.259(a) with 42 U.S.C.
his co-counsel. §§ 1981a, 2000e–5(g), 2000e–5(k). One of the TCHRA's
purposes is to harmonize state and federal employment
Gonzalez testified that both attorneys' time was reasonable discrimination law. TEX. LAB.CODE § 21.001(1). Although
and necessary given the nature of the case and the results state procedural rules govern the determination of attorney's
obtained. Counsel attributed the number of hours on the case fees in a suit brought under state law, Texas courts have
to the number of discovery instruments and pleadings, the looked to federal law in applying our own statute, including
number of depositions and witness interviews, as well as section 21.259(a) of the TCHRA, which provides for an
the quality of representation. Both Dominguez and Gonzalez award of attorney's fees to the prevailing party as part of the
testified that they refrained from taking additional clients costs. See, e.g., Sw. Bell Mobile Sys., Inc. v. Franco, 971
because of the case. S.W.2d 52, 55–56 (Tex.1998); Burgmann Seals Am., Inc.
v. Cadenhead, 135 S.W.3d 854, 860–61 (Tex.App.-Houston
Following the fee-application hearing, the trial court used [1st Dist.] 2004, pet. denied); Elgaghil v. Tarrant Cnty. Junior
the lodestar method to calculate attorney's fees. The court Coll., 45 S.W.3d 133, 144–45 (Tex.App.-Fort Worth 2000,
determined that Gonzalez should be compensated at a rate of pet. denied). Because federal courts use the lodestar method
$250 per hour for 700 hours for a total of $175,000, and that in awarding attorney's fees in Title VII cases, Texas courts
his co-counsel Dominguez should be compensated at a rate have likewise used lodestar in awarding fees under Section
of $300 per hour for 190 hours for a total of $57,000. The 21.259(a) of the TCHRA. See, e.g., Dillard Dep't Stores,
court then enhanced the lodestar by applying a 2.0 multiplier, Inc. v. Gonzales, 72 S.W.3d 398, 412 (Tex.App.-El Paso
resulting in $464,000 in attorney's fees for the trial of the 2002, pet. denied); W. Telemarketing Corp. Outbound v.
case. Legal assistant fees for 100 hours were also added to McClure, 225 S.W.3d 658, 675–76 (Tex.App.-El Paso 2006,
the award at a rate of $65 per hour for a total of $6,500. The pet. granted, judgm't vacated w.r.m.).
court further awarded $99,000 in conditional attorney's fees
for defending post-judgment motions and appeals.
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El Apple I, Ltd. v. Olivas, 370 S.W.3d 757 (2012)
115 Fair Empl.Prac.Cas. (BNA) 510, 55 Tex. Sup. Ct. J. 954
The lodestar method of calculating attorney's fees first
“achieved dominance” in federal class actions. Gisbrecht v. (7) the experience, reputation, and ability of the lawyer or
Barnhart, 535 U.S. 789, 801, 122 S.Ct. 1817, 152 L.Ed.2d lawyers performing the services; and
996 (2002). Texas courts similarly adopted lodestar initially
(8) whether the fee is fixed or contingent on results
for fee setting in class actions, and the Texas Legislature
obtained or uncertainty of collection before the legal
subsequently mandated the method's use in such cases. See
services have been rendered.
TEX. CIV. PRAC. & REM.CODE § 26.003(a) (providing
that “the trial court shall use the Lodestar method to calculate TEX. DISCIPLINARY R. PROF'L CONDUCT 1.04(b); see
the amount of attorney's fees to be awarded class counsel”). also Arthur Andersen & Co. v. Perry Equip. Corp., 945
S.W.2d 812, 818 (Tex.1997) (quoting the eight-factor test for
[1] [2] Under the lodestar method, the determination of
determining attorney's fees). 1 Our class action rule further
what constitutes a reasonable attorney's fee involves two
provides that any adjustment to the base lodestar “must be
steps. First, the court must determine the reasonable hours
in the range of 25% to 400% of the lodestar figure.” TEX.R.
spent by counsel in the case and a reasonable hourly rate
CIV. P. 42(i)(1).
for such work. Gonzales, 72 S.W.3d at 412. The court then
multiplies the number of such hours by the applicable rate,
the product of which is the base fee or lodestar. La. Power &
Light Co. v. Kellstrom, 50 F.3d 319, 323–24 (5th Cir.1995). III
The court may then adjust the base lodestar up or down (apply
[3] [4] The award of attorney's fees generally rests in the
a multiplier), if relevant factors indicate an adjustment is
sound discretion of the trial court. Ragsdale v. Progressive
necessary to reach a reasonable fee in the case. Gonzales, 72
Voters League, 801 S.W.2d 880, 881 (Tex.1990) (per
S.W.3d at 412.
curiam). But a party applying for an award of attorney's fees
under the lodestar method bears the burden of documenting
Our class action rule identifies the relevant factors when
the hours expended on the litigation and the value of those
making a lodestar determination by reference to Rule 1.04(b),
hours. Hensley v. Eckerhart, 461 U.S. 424, 437, 103 S.Ct.
Texas Disciplinary Rules of Professional Conduct. See
1933, 76 L.Ed.2d 40 (1983). El Apple submits that a
TEX.R. CIV. P. 42(i)(1) (providing for attorney's fees award
court cannot calculate the base fee or lodestar without such
in class *761 actions). The disciplinary rule enumerates the
information and that the trial court here abused its discretion
following non-exclusive list of factors:
by not requiring the plaintiff to provide these details. El Apple
(1) the time and labor required, the novelty and difficulty further submits that the prevailing party's documentation
of the questions involved, and the skill requisite to perform should preferably be in the form of contemporaneous time
the legal service properly; sheets, which evidence the performance of specific tasks,
such that the trial court can make a reasoned determination of
(2) the likelihood, if apparent to the client, that the how much time was reasonably spent pursuing the litigation.
acceptance of the particular employment will preclude
other employment by the lawyer; Olivas responds that Texas law has not required detailed
billing records or other documentation as a predicate to
(3) the fee customarily charged in the locality for similar
an attorney's fees award. See, e.g., Tex. Commerce Bank,
legal services;
Nat'l Ass'n v. New, 3 S.W.3d 515, 517–18 (Tex.1999) (per
(4) the amount involved and the results obtained; curiam) (recognizing attorney's affidavit to be sufficient
support for award of fees in default judgment); Save Our
(5) the time limitations imposed by the client or by the Springs Alliance, Inc. v. City of Dripping Springs, 304 S.W.3d
circumstances; 871, 892–93 (Tex.App.-Austin 2010, pet. denied) (accepting
affidavit testimony detailing legal work and rates); In re
(6) the nature and length of the professional relationship A.B.P., 291 S.W.3d 91, 99 (Tex.App.-Dallas 2009, no pet.)
with the client; (noting that documentary evidence is not a prerequisite to
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El Apple I, Ltd. v. Olivas, 370 S.W.3d 757 (2012)
115 Fair Empl.Prac.Cas. (BNA) 510, 55 Tex. Sup. Ct. J. 954
an award of attorney's fees); Schlager v. Clements, 939 evaluation of the application for attorney's fees. Charges
S.W.2d 183, 191–93 (Tex.App.-Houston [14th Dist.] 1996, for duplicative, excessive, or inadequately documented work
writ denied) (holding that the failure to produce documentary should be excluded. Watkins v. Fordice, 7 F.3d 453, 457
evidence would affect the weight of an attorney's testimony (5th Cir.1993). A meaningful review of the hours claimed is
regarding fees rather than its admissibility). Olivas submits particularly important because the usual incentive to charge
that our recent decision in Garcia v. Gomez is consistent only reasonable attorney's fees is absent when fees are paid by
*762 with this line of authority. 319 S.W.3d 638 (Tex.2010). the opposing party. As the U.S. Supreme Court has observed:
Garcia, however, is not on point. It involved a statute Counsel for the prevailing party should make a good faith
that required a trial court to dismiss a health-care liability effort to exclude from a fee request hours that are excessive,
claim and award attorney's fees to the defendant health-care redundant, or otherwise unnecessary, just as a lawyer in
provider, on motion, if the claimant did not timely serve an private practice ethically is obligated to exclude such hours
expert report. The claimant did not provide the report, and from his fee submission. “In the private sector, ‘billing
the trial court dismissed the claim. The court, however, did judgment’ is an important component in fee setting. It is
not award attorney's fees as the statute required. The health- no less important here. Hours that are not properly billed to
care provider appealed, but the court of appeals affirmed one's client also are not properly billed to one's adversary
the judgment, concluding that there was no evidence of pursuant to statutory authority.”
the reasonable attorney's fees incurred by the health-care
Hensley, 461 U.S. at 434, 103 S.Ct. 1933 (quoting Copeland
provider. Id. at 641.
v. Marshall, 641 F.2d 880, 891 (D.C.Cir.1980) (en banc)).
While Texas courts have not routinely required billing records
Although the provider's attorney testified in the trial court
or other documentary evidence to substantiate a claim for
about attorney's fees, appeared on his client's behalf, and
attorney's fees, the requirement has merit in contested cases
filed pleadings in the case, the court of appeals concluded no
under the lodestar approach.
evidence showed that the health-care provider had actually
incurred attorney's fees. Id. We disagreed. We concluded that
The starting point for determining a lodestar fee award is the
the statute mandated the award of attorney's fees, on motion,
number of hours “reasonably expended on the litigation.” Id.
and that the attorney's uncontested, albeit cursory, testimony
at 433, 103 S.Ct. 1933. The party applying for the award bears
about his fee, along with the other circumstances, was enough
the burden of *763 proof. Id. at 437, 103 S.Ct. 1933. That
to present the issue to the court. Id.
proof should include the basic facts underlying the lodestar,
which are: (1) the nature of the work, (2) who performed the
The present case, of course, involves a different statute and a
services and their rate, (3) approximately when the services
different issue. Unlike Garcia, the question is not whether the
were performed, and (4) the number of hours worked. An
trial court erred in failing to make an award of fees required
attorney could, of course, testify to these details, but in all
by statute, but rather whether the court properly applied the
but the simplest cases, the attorney would probably have to
lodestar method in determining contested attorney's fees. As
refer to some type of record or documentation to provide
El Apple points out, this Court has not previously reviewed a
this information. Thus, when there is an expectation that
lodestar award under these circumstances.
the lodestar method will be used to calculate fees, attorneys
should document their time much as they would for their
The lodestar method aims to provide a relatively objective
own clients, that is, contemporaneous billing records or other
measure of attorney's fees. Gonzales, 72 S.W.3d at 412. It has
documentation recorded reasonably close to the time when
been criticized, however, for providing a financial incentive
the work is performed.
for counsel to expend excessive time in unjustified work and
for creating a disincentive to early settlement. Gen. Motors
[5] In this case, neither attorney indicated how the 890 hours
Corp. v. Bloyed, 916 S.W.2d 949, 960 (Tex.1996) (citing
they spent in the aggregate were devoted to any particular task
Court Awarded Attorney Fees, 108 F.R.D. 237, 246–49 (3d
or category of tasks. Neither attorney presented time records
Cir. Task Force 1985)). To avoid these pitfalls, a trial court
or other documentary evidence. Nor did they testify based
should obtain sufficient information to make a meaningful
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El Apple I, Ltd. v. Olivas, 370 S.W.3d 757 (2012)
115 Fair Empl.Prac.Cas. (BNA) 510, 55 Tex. Sup. Ct. J. 954
on their recollection of such records. The attorneys instead
based their time estimates on generalities such as the amount All Seasons Window and Door Mfg., Inc. v. Red Dot Corp.,
of discovery in the case, the number of pleadings filed, the 181 S.W.3d 490, 504 (Tex.App.-Texarkana 2005, no pet.)
number of witnesses questioned, and the length of the trial. (quoting Multi–Moto Corp. v. ITT Commercial Fin. Corp.,
While all this is relevant, it provides none of the specificity 806 S.W.2d 560, 570 (Tex.App.-Dallas 1990, writ denied)).
needed for the trial court to make a meaningful lodestar Paralegal fees have been denied absent such proof. Moody v.
determination. The court could not discern from the evidence EMC Servs., Inc., 828 S.W.2d 237, 248 (Tex.App.-Houston
how many hours each of the tasks required and whether that [14th Dist.] 1992, writ denied).
time was reasonable. Without at least some indication of the
time spent on various parts of the case, a court has little basis [6] We generally accord considerable deference to
upon which to conduct a meaningful review of the fee award. a trial court's findings regarding whether prevailing
counsel's claimed *764 hours are excessive, redundant,
Moreover, if multiple attorneys or other legal professionals or unreasonable. The trial court possesses a superior
are involved in a case, the fee application should indicate understanding of the case and the factual matters involved.
which attorney performed a particular task or category of But when applying for a fee under the lodestar method,
tasks. The application here did not provide this information. the applicant must provide sufficient details of the work
For instance, the fee application details a list of thirty-seven performed before the court can make a meaningful review
pleadings and states that they were prepared or reviewed by of the fee request. For the purposes of lodestar calculations,
either Gonzalez or Dominguez. The two attorneys, however, this evidence includes, at a minimum, documentation of the
bill at different rates. Without specifying who performed services performed, who performed them and at what hourly
a task, the information is incomplete. Such uncertainty rate, when they were performed, and how much time the work
diminishes the objectivity that the lodestar method aims to required.
provide.
Because the affidavits and other evidence in this case did not
Olivas's attorneys also utilized legal assistants in this provide sufficient information for a lodestar calculation, we
litigation and were awarded $6,500 for their services ($65 must reverse and remand. We are mindful, however, that the
per hour for 100 hours of work). While both attorneys stated attorneys in this case may not have contemporaneous billing
in their affidavits that “[l]egal assistant time was necessarily records that document their time as we have not heretofore
expended in the prosecution of [the] case,” no evidence was explained the proof necessary to support a fee application
offered to describe the tasks their legal assistants performed, under the lodestar method. Nevertheless, on remand, they
who performed these services, or their qualifications. When should reconstruct their work in the case to provide the
obtaining payment for work done by paralegals or legal minimum information the trial court requires to perform a
assistants, Texas courts have required more information, such meaningful review of their fee application.
as:
(1) [T]he qualifications of the legal
IV
assistant to perform substantive legal
work; (2) that the legal assistant El Apple further complains that the trial court erred in
performed substantive legal work doubling the lodestar to approximate a reasonable attorney's
under the direction and supervision fee in the case. As previously noted, our class action rule
of an attorney; (3) the nature of the expressly recognizes the multiplier, authorizing the trial court
legal work performed; (4) the legal to make attorney fees awards “in the range of 25% to 400% of
assistant's hourly rate; and (5) the the lodestar figure.” TEX.R. CIV. P. 42(i)(1). Although that
number of hours expended by the legal rule does not apply here, the lodestar method should not vary
assistant. from claim to claim, that is, the formula should be the same
in TCHRA suits as in class actions. When appropriate under
the particular circumstances of the case, a trial court may
© 2015 Thomson Reuters. No claim to original U.S. Government Works. 6
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El Apple I, Ltd. v. Olivas, 370 S.W.3d 757 (2012)
115 Fair Empl.Prac.Cas. (BNA) 510, 55 Tex. Sup. Ct. J. 954
therefore use a multiplier to increase or decrease the lodestar Whether a multiplier is needed, however, cannot be
figure to approximate a reasonable fee. determined until the base lodestar is known. Because we do
not as yet have a legitimate base lodestar in this case, any
El Apple argues, however, that the trial court abused its comment on the need for a multiplier here is premature.
discretion in using a 2.0 multiplier in this case because
no circumstances justify inflating the base figure. El ******
Apple contends instead that a multiplier should have been
used in this case to discount the lodestar because Olivas In summary, we hold that the fee application and proof in this
prevailed only on her retaliation claim, while her fee request case did not provide the trial court legally sufficient evidence
presumably included the time spent on the discrimination to calculate a reasonable fee award using the lodestar method.
claim as well. Thus, El Apple submits the time Olivas's To establish the number of hours reasonably spent on the
attorneys spent preparing and trying the discrimination claim case, the fee application and record must include proof
should be discounted or excluded from the lodestar figure documenting the performance of specific tasks, the time
unless she can show that the time spent pursuing the required for those tasks, the person who performed the work,
unsuccessful claim advanced her successful claim. and his or her specific rate. Because the record in this case
does not provide these details, we reverse the court of appeals'
El Apple further asserts that the lodestar is presumptively judgment affirming the attorney's fee award and remand to
a reasonable fee and that enhancements should be rare and the trial court for a redetermination of fees consistent with
reserved for exceptional cases. Perdue v. Kenny A. ex rel. this opinion.
Winn, ––– U.S. ––––, 130 S.Ct. 1662, 1673, 176 L.Ed.2d
494 (2010). El Apple contends that the trial court based its
decision to enhance the lodestar solely on the contingent
Justice HECHT filed a concurring opinion in which Justice
nature of the fee and not on any exceptional aspect of the case.
WAINWRIGHT and Justice WILLETT joined.
Moreover, El Apple submits that federal law has expressly
rejected the contingent nature of an attorney's representation
as a basis for the lodestar's enhancement. City of Burlington Justice HECHT, joined by Justice WAINWRIGHT and
v. Dague, 505 U.S. 557, 567, 112 S.Ct. 2638, 120 L.Ed.2d Justice WILLETT, concurring.
449 (1992). I join fully in the Court's opinion with the additional
observation that, besides lacking supporting records, Olivas's
[7] State procedural rules generally govern the attorneys' request for fees and the trial court's award were
determination of attorney's fees in a suit brought under a state patently unreasonable.
statute permitting attorney's fees. Although the TCHRA was
enacted to effectuate the policies of Title VII of the Civil After an eight-day trial, the jury failed to find that El
Rights Act of 1964, no indication exists that the Legislature Apple discriminated against Olivas on the basis of gender
intended to incorporate federal procedure *765 for assessing but found that it created a hostile work environment for
attorney's fees. See TEX. LAB.CODE § 21.001; Hoffmann– her because of her complaints of discrimination. The jury
La Roche, Inc. v. Zeltwanger, 144 S.W.3d 438, 445–46 awarded Olivas $1,700 in back pay and $103,000 for past and
(Tex.2004). Nevertheless, in applying our state statute, we future compensatory damages. The trial court awarded Olivas
may draw on the far greater body of federal court experience $464,000 attorney fees and $6,500 paralegal fees through
with lodestar and fee shifting under the similar federal statute. the rendition of judgment, plus $99,000 conditionally for
Though not bound to adopt the federal standards, Texas courts post-judgment proceedings and appeals. The court of appeals
may appropriately consider them. Cf. Williams v. Lara, 52 reversed the back-pay award and affirmed the other damages
S.W.3d 171, 181 (Tex.2001); Bloyed, 916 S.W.2d at 954 n. 1. and attorney fees. 1 The court of appeals held that the award
of attorney fees was reasonable. On its face, it could not have
We accordingly accept the premise that lodestar been.
presumptively produces a reasonable fee, but that exceptional
circumstances may justify enhancements to the base lodestar.
© 2015 Thomson Reuters. No claim to original U.S. Government Works. 7
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El Apple I, Ltd. v. Olivas, 370 S.W.3d 757 (2012)
115 Fair Empl.Prac.Cas. (BNA) 510, 55 Tex. Sup. Ct. J. 954
There are two other, surer indicators of a reasonable fee. One
Olivas's lead counsel, Daniel Gonzalez, engaged another
is that El Apple's lawyer, David Pierce, and his associate spent
lawyer, Francisco X. Dominguez, to help him try the case.
266.7 hours at about $200 per hour. The trial court ordered
Dominguez stated that he spent 150 hours total, but later
El Apple to pay Olivas more than 7 times as much as it paid
raised the number to 190. Gonzalez stated that he spent 700
its own lawyers, for 890 hours of attorney time at an average
hours total and about 200 at trial, meaning that Gonzalez spent
of $521 per hour. The other is what contingent fee might be
500 hours for pretrial proceedings. Discovery was minimal.
reasonable had this been, say, a products liability case. A 50%
The parties exchanged requests for disclosure and a set of
contingent fee, taking into account the difficulty of the case
interrogatories. Olivas sent El Apple a request for admissions
and the reality that many cases are lost, would have been
and two requests for production. Gonzalez estimated that
$51,500. Instead, the trial court awarded Olivas's attorneys
1,200–2,500 pages of documents were produced. Three
450% of her recovery.
depositions were taken. One motion to compel was heard and
granted.
El Apple's counsel repeatedly stated to the trial court that
Olivas's attorneys had represented her well and should be
*766 I agree with the Court that Gonzalez and Dominguez's
fully compensated, objecting only to their exorbitant request.
failure to produce any records supporting the hours they
Statutory fee-shifting is not a bonanza. It should take into
claimed to have spent on the case is fatal to their fee
account what the market should. Olivas's attorneys' request
application. Even if they had, their request would not be
did not do so.
reasonable. Even if the time they claimed to have spent for
trial were considered reasonable, and it is not at all clear that
it should be, 500 hours on the pretrial proceedings could not
All Citations
possibly be reasonable.
370 S.W.3d 757, 115 Fair Empl.Prac.Cas. (BNA) 510, 55
Tex. Sup. Ct. J. 954
Footnotes
1 Arthur Andersen 's eight-factor test is similar to the test used by the Fifth Circuit in Johnson v. Georgia Highway Express,
Inc., 488 F.2d 714, 717–19 (5th Cir.1974), overruled on other grounds by Blanchard v. Bergeron, 489 U.S. 87, 109 S.Ct.
939, 103 L.Ed.2d 67 (1989).
1 324 S.W.3d 181 (Tex.App.-El Paso 2010).
End of Document © 2015 Thomson Reuters. No claim to original U.S. Government Works.
© 2015 Thomson Reuters. No claim to original U.S. Government Works. 8
Schultz, William 10/26/2015
For Educational Use Only
Ex parte Lillard, 159 Tex. 18 (1958)
314 S.W.2d 800
3 Cases that cite this headnote
KeyCite Yellow Flag - Negative Treatment
Distinguished by Clark v. Bres, Tex.App.-Hous. (14 Dist.),
September 5, 2006
[2] Contempt
Validity of Mandate, Order, or Judgment
159 Tex. 18 Party could not be legally held in contempt of
Supreme Court of Texas. court for violating a void decree thereof.
Ex parte Lee LILLARD. 9 Cases that cite this headnote
No. A-6835. | June 18, 1958.
| Rehearing Denied July 23, 1958. [3] Courts
Suits for Divorce
Original proceedings respecting application for writ of habeas
Child Custody
corpus by relator who had been held in contempt of court.
Jurisdiction
The Supreme Court, Norvell, J., held that where former
Where former wife instituted action in Dallas
wife instituted action in Dallas County District Court for
County District Court for modification of
modification of divorce decree awarding custody of child
divorce decree rendered therein and which
to her so long as it remained in a certain home, and then
awarded custody of child to mother so long
instituted separate proceedings in Tarrant County District
as it remained in a certain home, and then
Court to obtain complete custody of child, Dallas County
wife instituted separate proceedings in Tarrant
District Court acquired exclusive jurisdiction over matter of
County District Court to obtain custody of child,
child's custody and order of Tarrant County District Court
Dallas County District Court acquired exclusive
granting custody of child to wife was void and relator could
jurisdiction over matter of child custody and
not be held in contempt of court for violation of such order.
order of Tarrant County District Court granting
custody of child to wife was void and person
Relator discharged.
failing to obey such order by refusing to give up
child could not be held in contempt of court.
Calvert and Walker, JJ., dissented on motion for rehearing.
9 Cases that cite this headnote
West Headnotes (5) [4] Abatement and Revival
Ground of Abatement in General
[1] Child Custody Where suit is filed in a court of competent
Pleading jurisdiction and that jurisdiction has attached,
Where divorce decree granted custody of child subsequent suit in a court of concurrent
on certain conditions and subsequently ex-wife jurisdiction is abated by reason of the first suit,
filed pleading designated as a motion for change since when the first suit is brought it is thereby
of her residence of minor child and amendment segregated from the general class to which it
of judgment under the same docket number as belonged and withdrawn from the authority and
given original divorce suit, subsequent motion jurisdiction of all other courts of co-ordinate
must be considered as the institution of a new suit power.
which had for its purpose the changing of order
11 Cases that cite this headnote
relating to custody of minor.
[5] Courts
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Schultz, William 10/26/2015
For Educational Use Only
Ex parte Lillard, 159 Tex. 18 (1958)
314 S.W.2d 800
Vacating or Annulling Decisions
The judicial history of the present controversy is somewhat
Ordinarily, remedy for erroneous overruling of
complicated and may be best understood by setting forth the
a plea of another suit pending is by appeal but
pertinent events in chronological order.
this is not the exclusive remedy in all situations
particularly when conflicting judgments are On February 15, 1956, plaintiff Imagene Lillard was granted
issued by courts of co-ordinate jurisdiction. a divorce from John S. Lillard in Cause No. 6304-G/J on the
docket of the Juvenile District Court of Dallas County, Texas,
Cases that cite this headnote
hereafter referred to as the Dallas Court. That part of the
decree relating to the custody of the minor son of the parties
was as follows:
‘It is further ordered, adjudged and
Attorneys and Law Firms
decreed that Plaintiff be granted custody
*18 **801 Harris & Reeves, Arlington, Ft. Worth, for of the child, John S. Lillard, Jr., as long
relator. as the child is left in the home of Mr. and
Mrs. Lee Lillard of Arlington, Texas. It is
Alfred M. Clyde and Eva Barnes, Ft. Worth, for respondent. ordered by this Court that the said child
remain in the home of Mr. and Mrs. Lee
Opinion Lillard under their guidance until further
orders from this Court.’
NORVELL, Justice.
On the 25th of April, 1958, the Judge of the District Court of
Tarrant County, 153rd Judicial District, entered an order in On June 3, 1956, the Dallas Court entered an order directing
Cause No. 4965-C on the docket of said court, styled Imagene the Sheriff of Dallas County to take possession of the child
Lillard v. Lee Lillard and wife, Jean Lillard, in which he found and turn him over to Mr. and Mrs. Lee Lillard. Evidently at
that Lee Lillard had violated a prior order of said court dated this time some controversy had developed between Imagene
June 7, 1957, relating to the custody of John S. Lillard, Jr., the Lillard and Lee Lillard concerning the infant and Imagene
five-year-old minor son of Imagene Lillard and a nephew of Lillard had taken the child from the home of Mr. and Mrs.
*19 Lee Lillard. It was accordingly ordered that said Lillard Lee Lillard.
be held in contempt of court and committed to the county *20 **802 [1] On September 25, 1956, Imagene Lillard
jail of Tarrant County for a period of three days and ‘as long filed a pleading in the Dallas Court which she designated as
thereafter and until such time thereafter as the said Lee Lillard a ‘Motion for the change of residence of the minor child,
will fully and completely purge himself from contempt of John S. Lillard, Jr., and/or amendment of judgment.’ While
court * * *.’ the pleading was filed under the same docket number as that
given the original divorce suit, we think it must be considered
This Court granted the application for writ of habeas corpus, as the institution of a new suit which had for its purpose the
and admitted Lillard to bail pending a hearing of the cause. changing of the order relating to the custody of the minor,
John S. Lillard, Jr. Lakey v. McCarroll, 134 Tex. 191, 134
The relator will be ordered discharged form the custody of S.W.2d 1016; Ex parte Webb, 153 Tex. 234, 266 S.W.2d 855;
the Sheriff of Tarrant County, Texas as we are of the opinion Black v. Black, Tex.Civ.App., 2 S.W.2d 331, no writ history.
that the District Court of Tarrant County, Texas, was without In this pleading Imagene Lillard alleged that a change of
jurisdiction to render the order of June 7, 1957, because of conditions affecting the custody of the child had taken place
a prior attaching and exclusive jurisdiction of the Juvenile since the rendition of the original divorce decree and that
District Court of Dallas County, Texas, to fix and determine she should be given ‘full custody of said minor child without
the custodial status of the minor John S. Lillard, Jr. Ex parte any qualifications or conditions whatsoever.’ She prayed that
Eaton, 151 Tex. 581, 252 S.W.2d 557 John S. Lillard be cited to appear and show cause, if any there
be, why such child should not be placed in her custody.
© 2015 Thomson Reuters. No claim to original U.S. Government Works. 2
Schultz, William 10/26/2015
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Ex parte Lillard, 159 Tex. 18 (1958)
314 S.W.2d 800
the Court in Dallas County, Texas, gave leave to plaintiff to
amend in that cause to bring in Mr. and Mrs. Lee Lillard.’
(The motion mentioned was evidently an amended motion.
The designation ‘Amendment to Motion for Change of **803 On May 24, 1957, John S. Lillard, the defendant in
Residence’ appears at the top of the first page thereof. A copy the case pending in the Dallas Court (Cause No. 6304 G/
of the docket entries of the Judge of the Dallas Court filed J) filed an application for a temporary restraining order to
among the papers of the case discloses the following: prevent Imagene Lillard from taking the child from the home
9-11-56 File Motion change residence of Mr. and Mrs. Lee Lillard. This restraining order was issued
as prayed for and the application for temporary injunction set
9-19-56 File Plea of Privilege for June 14, 1957.
9-20-56 Non-suit as to Lee Lillard On June 7, 1957, the Tarrant Court, after a hearing which
took place on May 24, 1957 (according to the recitations of
the judgment), rendered a decree in Cause No. 4965-C which
9-25-56 File Amended Motion awarded full and complete care, custody and control of the
minor to Imagene Lillard and ordered Lee Lillard and wife to
9-27-56 Plaintiff movant granted leave to amend and make deliver possession of the child to Imagene Lillard forthwith.
new parties. Notice of appeal from this judgment was given but no appeal
was perfected.
*22 On June 10, 1957, the Tarrant Court issued an order to
None of the pleadings or orders mentioned in the above the Sheriff of Tarrant County in which it was recited that Lee
docket entries are before us. It may be that Lee Lillard was a Lillard and wife Jean Lillard were forcibly holding the minor
party to the original ‘motion,’ filed a plea of privilege to be child, John S. Lillard, Jr., despite the Court's order of June 7,
sued in Tarrant County, the place of his residence and was 1957, that the child be forthwith delivered to Imagene Lillard.
thereafter dismissed from the suit. He was not a party to the The sheriff was ordered to take physical custody of the child
‘motion’ of September 25, 1956, although the purpose thereof and turn him over to Imagene Lillard.
was to abrogate the requirement of the original decree that the
On June 14, 1957, an additional application for a restraining
*21 minor child remain in the residence of Mr. and Mrs. Lee
order against Imagene Lillard was filed in the Dallas Court by
Lillard.)
an attorney for John S. Lillard, alleging that she intended to
take the child out of the state and thus defeat the jurisdiction
On February 26, 1957, 1 Imagene Lillard, without dismissing
of the court. This application, in addition to a prayer for
her suit or motion filed in the Dallas Court on September 25,
injunctive relief, requested ‘that on final hearing hereof, that
1956, 2 filed suit against Lee Lillard and wife Jean Lillard, in the custody of said child be permanently placed with Mr. and
the District Court of Tarrant County, 153rd Judicial District, Mrs. Lee Lillard or, in the alternative, that the legal custody
hereinafter referred to as the Tarrant Court, wherein she of said child be placed with the Dallas County Juvenile
sought full custodial rights in and to the minor child, John authorities, and physical custody be placed with Mr. and Mrs.
S. Lillard, Jr., as against the named defendants. Her husband, Lee Lillard, with specific and reasonable visitation privileges
John S. Lillard, was not named as a defendant in this suit. This to plaintiff (Imagene Lillard) herein.’ The restraining order
cause was docketed as Cause No. 4965-C. was issued as prayed for and the hearing upon the application
for a temporary injunction was set for June 28, 1957.
In their answer 3 filed in Cause No. 4965-C, defendants Lee
Lillard and wife pleaded in abatement that there was a suit Also on June 14, 1957, John S. Lillard filed an amended
pending in the Dallas Court ‘for identically the same cause original answer 4 in reply to the pleading filed by Imagene
of action; the same subject matter is in dispute, the custody Lillard on September 25, 1956, in the Dallas Court wherein
of John S. Lillard, Jr. That the case is still pending; that the she sought a modification of the child custody provision
plaintiff in that suit is the same plaintiff as in this suit and contained in the original divorce decree. This amended
© 2015 Thomson Reuters. No claim to original U.S. Government Works. 3
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Ex parte Lillard, 159 Tex. 18 (1958)
314 S.W.2d 800
answer alleged that the child was suffering from cerebral
palsy and required constant medical attention. By way of On April 24, 1958, the Tarrant Court rendered its contempt
cross-action, John S. Lillard sought to have the custodial judgment as heretofore mentioned.
rights in and to the child placed with Mr. and Mrs. Lee Lillard
permanently or ‘in the alternative, that the legal custody On May 5, 1958, the Dallas Court 5 refused an application
be placed with the Dallas County Juvenile authorities and for writ of habeas corpus filed by Imagene Lillard to change
that the physical custody of said child be placed with Mr. the custody award which had theretofore been made to Sam
and Mrs. Lee Lillard.’ This answer was signed by the same Davis, Chief Probation Officer of Dallas County. This order
attorney who filed the application for injunctive relief above was entered by the Juvenile District Court of Dallas County
mentioned. in a proceeding styled Imagene Lillard v. John S. Lillard, but
given a cause number (58720-Juv.) different from that of the
On June 28, 1957, the Dallas Court entered an order reciting original divorce case.
the appearance of John S. Lillard in person and by attorney, *24 [2] [3] The record presents a case of two district
service of notice of hearing upon Imagene Lillard and default courts of coordinate power issuing conflicting orders as to
on her part. The court found that Imagene Lillard had violated an identical subject matter. The Dallas Court has awarded
a previous order of the court by removing the child from custody of the child to Sam Davis, Chief Probation Officer
the custody of Mr. and Mrs. Lee Lillard; that the child *23 of Dallas County. The Tarrant Court has awarded custody to
was in need of immediate medical attention and decreed that Imagene Lillard, the mother of the child. One or the other of
Sam Davis, Dallas County Chief Probation Officer, have legal these decrees is void for lack of jurisdiction of the subject
custody of the child until further order of the court. matter. As the Dallas Court first acquired jurisdiction of the
subject matter it follows that the Tarrant decree is void, Texas
On July 2, 1957, John S. Lillard filed a motion which resulted Trunk Ry. Co. v. Lewis, 81 Tex. 1, 16 S.W. 647; O'Neil
in the Dallas Court's issuing an order directing the sheriff v. Norton, Tex.Com.App., 29 S.W.2d 1060, and Lee Lillard
of any county in the State of Texas, wherein the child may cannot be legally held in contempt for violating a void decree.
be found, to forthwith take the physical possession of such Ex parte Eaton, 151 Tex. 581, 252 S.W.2d 557. ‘One cannot
child and deliver him to ‘the Chief Probation Officer, Dallas (as Imagene Lillard did in this case) invoke the jurisdiction
County, Texas, or whomever the Chief Probation Officer's of the court to deal with the personal status or the person of
Office designates should have custody of said child.’ a child and at the same time deny the power of the court, in
that proceeding, to do with the child's person or his status
**804 Sometime after the rendition of the Tarrant Court
whatever appears to the court to be for the best interest of the
judgment on June 7, 1957, Imagene Lillard gained possession
child.’ Knollhoff v. Norris, 152 Tex. 231, 256 S.W.2d 79, 82.
of the child and took him from Texas to the State of
California. Sam Davis, the Chief Probation Officer of Dallas
[4] Some quoting and paraphrasing of the language
County, to whom custody of the child had been awarded by
contained in this Court's opinion in the leading case of
the Dallas Court, attempted without success to gain physical
Cleveland v. Ward, 116 Tex. 1, 285 S.W. 1063, 1071, will
possession of the child by legal means through the California
dispose of the case now before us. When Imagene Lillard
authorities.
filed her so-called ‘motion for change of residence of minor
On April 16, 1958, John S. Lillard and Lee Lillard, apparently child’ in the Dallas Court, she invoked the jurisdiction of that
acting under some supposed claim of right arising from the court to change the status of the minor child from that fixed
orders of the Dallas Court, gained possession of the child and by the divorce decree. This occurred on September 25, 1956,
took him from the residence of Imagene Lillard in Antioch, long before any proceedings were had in the Tarrant Court.
California and returned him to Texas. They then delivered The filing of this motion must be considered as the institution
the child to Sam Davis, the Chief Probation Officer of Dallas of a new action which had for its purpose the modification
County. This action by Lee Lillard undoubtedly constituted a of the custody provisions contained in the original judgment.
violation of the decree of the Tarrant Court of June 7, 1957, Undoubtedly from and after the filing of this motion the
which awarded full and complete custody of the child to Dallas Court was authorized to grant the prayer of the petition
Imagene Lillard. or motion or make such other disposition of the custody
© 2015 Thomson Reuters. No claim to original U.S. Government Works. 4
Schultz, William 10/26/2015
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Ex parte Lillard, 159 Tex. 18 (1958)
314 S.W.2d 800
matter as might be justified under the pleadings and the facts
disclosed upon a hearing. Imagene Lillard at no time sought
a discontinuance **805 of the Dallas Court proceedings That Court then continued:
which she had instituted, although perhaps unfortunately she ‘This extract from Freeman we believe states the sound rule,
ignored the court action which she placed in motion and failed and the only rule which will prevent races from court to
to appear at the time set for a hearing as to the custody of her court by vigilant counsel, such as this record discloses, and
minor child. Since jurisdiction attached upon her institution that conflict in the exercise of judicial power in evidence
of the proceedings in Dallas County the rule is elementary here, which we believe was never contemplated under our
that it could not be taken away or arrested by subsequent judicial system. Courts are erected to settle controversies, not
proceedings in another court. The Dallas Court having first to multiply them. At any rate, the rule announced by Freeman
acquired jurisdiction could exercise it to dispose of the whole is the one we adopt, and is consistent with that declared by
subject matter of the litigation (the custodial status of the Justice Lipscomb in 1852 in the Burdett case, cited above
minor child) and adjust all *25 equities between the parties. (Burdett v. State, 9 Tex. 43).
The causes of action asserted in the Dallas Court and the
Tarrant Court arise out of the same facts and involve the same ‘What has been said is not in conflict with the doctrine
subject matter. It follows that the proceedings in the Tarrant of various cases that the pendency of a suit in another
Court were abated by the Dallas Court suit. ‘The reason of jurisdiction must be seasonably pleaded in abatement, that
the abatement of the subsequent suit by the first, where the the plea may be waived, and that final judgment by default,
latter is filed in a court of competent jurisdiction and that or, in the *26 absence of pleading and proof of the
jurisdiction has attached, is that when the suit is brought, it is pendency of a prior suit will be sustained. See the cases
thereby segregated as it were from the general class to which it of Cook v. Burnley, 11 Wall. 659, 20 L.Ed. 29; Cook
belonged, and withdrawn from the authority and jurisdiction v. Burnley, 45 Tex. 97; Blassingame v. Cattlemen's Trust
of all other courts of co-ordinate power.’ Since the Tarrant Co., Tex.Civ.App., 174 S.W. 900; Cattlemen's Trust Co.
Court ‘had no jurisdiction of this particular case, what was v. Blasingame, Tex.Civ.App., 184 S.W. 574; McCoy v.
done therein was necessarily void, for judicial action without Bankers' Trust Co., Tex.Civ.App., 200 S.W. 1138. See, also,
jurisdiction is void.’ 1 Ruling Case Law, pp. 19, 20.
‘These opinions are authority for the proposition that, since
In Cleveland v. Ward the following excerpt from Freeman on the pendency of a prior suit is predicated upon a state of facts,
Judgments (Vol. 1, s 335) was quoted with approval: the facts must be seasonably alleged and proved, and, unless
‘It seems impossible that two courts can, **806 this is done, the judgment of the subsequent court is
at the same time, possess the power conclusive on the fact of jurisdiction as upon any other fact.
to make a final determination of the Freeman on Judgments (5th Ed.) vol. 2, ss 660, 662. This does
same controversy between the same not militate against our conclusion that, once the necessary
parties. If either has authority to act, facts are pleaded and admitted or proven, or shown by the
its action must necessarily be exclusive, undisputed record, as in this case, the subsequent suit is abated
and therefore it is our judgment that and its orders void for want of jurisdiction.’
whenever either the state or the national
courts acquire jurisdiction of an action [5] Ordinarily the remedy for the erroneous overruling of
and the parties thereto, this jurisdiction a plea of another suit pending is by appeal. But this is not
cannot be destroyed, diminished, or the exclusive remedy in all situations, Wheeler v. Williams,
suspended by one of the parties bringing Tex.Sup., 312 S.W.2d 221; 1 Tex.Jur. 125, Abatement
an action in another court, and that any and Revival, s 91, particularly when as here, conflicting
judgment or order of the latter court judgments issued by courts of coordinate jurisdiction
is void so far as it conflicts with any have resulted. In this situation it seems obvious that the
judgment or order of the court first judgment of the court lacking jurisdiction must be considered
acquiring jurisdiction.’ inoperative.
© 2015 Thomson Reuters. No claim to original U.S. Government Works. 5
Schultz, William 10/26/2015
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Ex parte Lillard, 159 Tex. 18 (1958)
314 S.W.2d 800
us at the time of the original submission. Further writing is
deemed unnecessary.
The only possible distinction that can be suggested between
the proceedings in the Dallas Court and those in the The motion for rehearing is overruled.
Tarrant Court rests upon the difference in parties. Here the
documentary record made up of exhibits accompanying the
CALVERT, Justice (dissenting).
application for the writ of habeas corpus and the answer
thereto is not as clear as might be desired. Imagene Lillard's The record now before us shows that Imagene Lillard had
original pleading seeking a change in custody arrangements dismissed her suit against Lee Lillard in Dallas County before
is not before us. It may be that Lee Lillard was made a party fling her suit against Mr. and Mrs. **807 Lee Lillard in
thereto and subsequently dismissed. There is some suggestion Tarrant County on February 26, 1957. It therefore appears
made in Lee Lillard's plea in abatement filed in the Tarrant that at the time of the hearing in the District Court of Tarrant
Court that the Dallas Court granted Imagene Lillard leave to County on May 24, 1957, and at the time of the entry of
bring in new parties so that Lee Lillard could again be made judgment therein on June 7, 1957, there was no suit then
a party to the Dallas proceeding. There is also an entry on pending in Dallas County between the same parties involving
the docket indicating that a plea of privilege was filed by the same subject matter.
someone, presumably Lee Lillard. However that may be, Lee
Lillard was not a party to the original divorce suit in which the *28 Mr. and Mrs. Lee Lillard had physical possession of the
custody of the child as between the parties, Imagene Lillard minor in Tarrant County. The suit filed by Imagene Lillard
and John S. Lillard, *27 was originally fixed. This decree in Tarrant County was the proper method and the Tarrant
gave no custodial rights to Lee Lillard and his wife, but simply County District Court was the proper forum for adjudicating
provided as a condition to the award of custody to Imagene all issues of custody and possession of the minor as between
Lillard that the child should remain in the residence of Mr. Imagene Lillard and Mr. and Mrs. Lee Lillard. Knollhoff v.
and Mrs. Lee Lillard. It was a condition of custody much the Norris, 152 Tex. 231, 256 S.W.2d 79.
same as the more usual provision that the child shall remain
The fact that there was then pending in Dallas County a suit
within the State or within the jurisdiction of the court. It could
between Imagene Lillard and her former husband, John S.
be changed in a proper proceeding in a court of competent
Lillard, in which the District Court of Dallas County had
jurisdiction in a suit between the parties to the original court
jurisdiction to determine rights of custody as between those
decree. The Dallas Court's jurisdiction was invoked to change
parties, in no way militated against the jurisdiction of the
the custody order and such jurisdiction could not be defeated
Tarrant County District Court to determine similar questions
by leaving the Dallas proceeding pending and filing a suit
between Imagene Lillard and Mr. and Mrs. Lee Lillard.
in Tarrant County against Lee Lillard and wife only. The
Dallas Court was the tribunal possessing prior and exclusive It is my opinion that the judgment of the District Court
jurisdiction of the custody controversy, and it follows that of Tarrant County awarding custody of the minor child to
the decree of the Tarrant Court rendered on June 7, 1957, is Imagene Lillard as against any claim of right to possession or
void for want of jurisdiction. Findings of contempt cannot custody of such child by Lee Lillard was a valid judgment and
be predicated upon such judgment. Accordingly relator is that in violating that judgment by removing the child from
ordered discharged. the custody and possession of Imagene Lillard, Lee Lillard
was in contempt of the judgment of the court. He should be
Motion for Rehearing remanded to the custody of the sheriff of Tarrant County for
his contempt.
We have considered the motion for rehearing but adhere to the
holdings expressed in our original opinion. Certified copies Inasmuch as the majority have ordered the release of Lee
of various pleadings filed in the Dallas Court were submitted Lillard, I express no opinion as to whether his punishment
with the motion but these do not disclose a substantially could exceed a fine of $100 and confinement in the county
different factual basis from that presented by the record before jail for a period of three days.
© 2015 Thomson Reuters. No claim to original U.S. Government Works. 6
Schultz, William 10/26/2015
For Educational Use Only
Ex parte Lillard, 159 Tex. 18 (1958)
314 S.W.2d 800
WALKER, J., joins in this dissent.
All Citations
159 Tex. 18, 314 S.W.2d 800
Footnotes
1 The date of filing is not shown by the exhibit attached to the answer of respondent Harlon Wright, Sheriff of Tarrant
County, Texas. The date given is that appearing upon an affidavit attached to the petition which we assume was the
same as the date of filing.
2 Sometime between the dates mentioned, that is September 25, 1956 and February 26, 1957, Imagene Lillard changed
attorneys and secured new counsel to represent her.
3 The date of the filing of this answer is not disclosed by the certified copy thereof.
4 The original answer of John S. Lillard is not before us.
5 Although all judicial proceedings in Dallas County were had in the Juvenile District Court, it appears that at least three
judges signed orders in the cause under a system of rotation of judges in handling the county's juvenile docket.
End of Document © 2015 Thomson Reuters. No claim to original U.S. Government Works.
© 2015 Thomson Reuters. No claim to original U.S. Government Works. 7
Schultz, William 10/26/2015
For Educational Use Only
Oliver v. Carter and Company Irr., Inc., Not Reported in S.W.3d (2002)
verified general denial. Vernon's Ann.Texas
Rules Civ.Proc., Rules 93(10), 185.
2002 WL 1301568
Only the Westlaw citation is currently available. Cases that cite this headnote
NOTICE: NOT DESIGNATED FOR PUBLICATION.
UNDER TX R RAP RULE 47.7, UNPUBLISHED [2] Account Stated
OPINIONS HAVE NO PRECEDENTIAL Vacating and Setting Aside
VALUE BUT MAY BE CITED WITH THE Verification attached to purchasers' original
NOTATION “(not designated for publication).” answer to seller's complaint for sworn account
did not contain an oath that the facts alleged in
Court of Appeals of Texas,
the answer were true, and thus verification did
El Paso.
not satisfy requirement of a supporting affidavit,
Floyd OLIVER and Layton Oliver, Appellants, although it was signed by purchasers and sworn
v. to before two notaries. Vernon's Ann.Texas
Rules Civ.Proc., Rules 93(10), 185.
CARTER AND COMPANY IRR., INC., Appellee.
Cases that cite this headnote
No. 08-01-00446-CV. | June 13, 2002.
Seller brought action on a sworn account against purchasers, [3] Pleading
alleging they defaulted in making payment on their account. Sufficiency of Verification
The County Court, Gaines County, granted seller's motion
Purchasers' first amended answer was sufficient
for summary judgment. Purchasers appealed. The Court of
to controvert seller's sworn account claim, where
Appeals, McClure, J., held that: (1) verified pleading attached
answer contained more than a broad denial of
to original answer sufficiently denied the account; (2)
the allegations and specifically referred to the
verification attached to pleading did not constitute required
account, answer denied that the amount alleged
affidavit; (3) amended answer was sufficient to controvert
due and owing was not in accordance with
seller's claim; and (4) purchasers had leave to file amended
any agreement, and supporting affidavit affirmed
answer.
under oath that the statements in the answer
were “true and correct” and contained all other
Reversed and remanded.
recitations required in an affidavit. Vernon's
Ann.Texas Rules Civ.Proc., Rules 93(10), 185.
Cases that cite this headnote
West Headnotes (4)
[4] Appeal and Error
[1] Account Stated
Amendments
Vacating and Setting Aside
Purchasers had presumed leave to file amended
Verified pleading attached to purchasers' original
answer to seller's complaint regarding alleged
answer to seller's complaint on sworn account,
failure to pay account, although there was no
in which purchasers denied the amount due and
express trial court order granting them leave,
“whether such charges were usual, customary
where purchasers filed amended answer prior
and/or reasonable prices for said merchandise
to hearing on seller's motion for summary
and/or services,” sufficiently denied the account
judgment, there was no evidence that seller
on which the claim was stated, although
objected to it or suffered unfair prejudice or
seller alleged it was nothing more than a
surprise, and there was no indication that trial
© 2015 Thomson Reuters. No claim to original U.S. Government Works. 1
Schultz, William 10/26/2015
For Educational Use Only
Oliver v. Carter and Company Irr., Inc., Not Reported in S.W.3d (2002)
court did not consider the amended answer when cause, and files this their verified Original Answer and
ruling on seller's summary judgment motion would show the Court:
or denied leave. Vernon's Ann.Texas Rules
Civ.Proc., Rule 63.
I. GENERAL DENIAL
Cases that cite this headnote
Defendants deny each and every, all and singular, the
allegations of Plaintiff's Original Petition and demand
strict proof thereof as required by the Texas Rules of
Civil Procedure. Said Defendants deny the charges as
Appeal from County Court of Gaines County, Texas, (TC #
reasonable and customary and the amount asserted and/
1765).
or claimed.
Before Panel No. 4 BARAJAS, C.J., LARSEN, and
II. PRAYER
McCLURE, JJ.
Defendants pray the Court, after notice and hearing or trial,
enter judgment in favor of Defendants, award Defendants
OPINION their costs of court, attorney's fees, and such other and
further relief as Defendants may be entitled to in law or in
ANN CRAWFORD McCLURE, Justice. equity. [Emphasis added].
The Olivers verified their original answer by “verification”
*1 Carter and Company Irr., Inc. (Carter & Co.) filed suit
that reads as follows:
on a sworn account against Floyd and Layton Oliver (the
Olivers). Alleging a defect in the Olivers' answer, Carter &
Co. successfully sought summary judgment. We reverse and VERIFICATION
remand.
...
We the undersigned, FLOYD OLIVER and LAYTON
FACTUAL SUMMARY OLIVER, Defendants in the above-numbered and entitled
cause do hereby enter this verification of denial of the said
Carter & Co. filed an original petition in the Gaines County sworn account. We hereby enter said denial, denying each
Court alleging that the Olivers defaulted in making payment and every allegation contained therein and specifically
on their account with the company. Carter & Co. claimed that denying an amount due, the specifics of said amount being
they sold services and/or merchandise to the Olivers which due, and the debt and/or account. A denial is hereby
they accepted and became bound to pay at the designated entered as to the amount charged and as to whether such
price, “which is a reasonable, usual, and customary price charges were usual, customary, and/or reasonable prices
for such merchandise.” The total balance claimed to be due for said merchandise and/or services and denying the
to Carter & Co. was $6,796.01, “exclusive of interest after amount asserted.
all just and lawful offsets, credits, and payments have been
allowed.” Attached to the petition was a statement of account, Signed this the 15th day of June, 2001.
which included a copy of a calculator tape and copies of six
invoices. /s/ Floyd Oliver
/s/ Layton Oliver
The Olivers' original answer contains the following recitation:
SWORN TO AND SUBSCRIBED BEFORE ME, by the
COMES NOW, FLOYD OLIVER and LAYTON
said FLOYD OLIVER, this 15th day of June, 2001.
OLIVER, Defendants in the above-entitled and numbered
/s/ Scarlett Eastteam
© 2015 Thomson Reuters. No claim to original U.S. Government Works. 2
Schultz, William 10/26/2015
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Oliver v. Carter and Company Irr., Inc., Not Reported in S.W.3d (2002)
incorporates the attached verification
Notary Public, State of Texas and Exhibit ‘A’ herein. Further,
Defendants would show that in
SWORN TO AND SUBSCRIBED BEFORE ME, by the
connection with the account in
said LAYTON OLIVER, this 15th day of June, 2001.
question, there was no sale or delivery
/s/ Rhonda Marion Trent of goods and/or services, the amount
alleged due and owing by the Plaintiff
Notary Public, State of Texas was not in accordance with an
agreement, if any, and the amount is
Four days later, Carter & Co. moved for summary judgment
not unpaid.
pursuant to Rule 166a of the Texas Rules of Civil Procedure
on the grounds that the Olivers' answer was The amended answer was supported by an affidavit by Floyd
Oliver. In its summary judgment, the trial court stated:
*2 [D]efective and insufficient in law to constitute or
raise a defense to Plaintiff's cause of action on the account Having considered the Plaintiff's Motion, the Pleadings
referred to in Plaintiff's Original Petition. The pleadings, and Affidavits on file herein as well as the argument of
exhibits, and affidavits filed in this cause show that there is counsel, the Court finds that Plaintiff's suit is founded upon
no genuine issue as to any material fact between the parties a sworn account, but that the Defendant has failed to file
and accordingly plaintiff is entitled to judgment against a Response in compliance with the Texas Rules of Civil
Defendant as a matter of law as requested in the Plaintiff's Procedure, and that no such Response has been timely
original Petition. [Emphasis added]. tendered; it is, therefore, ORDERED that such Response
not be filed in the record of this cause. [Emphasis added].
The Olivers failed to file their objections and response to the
motion within the required time period and asked for leave of The court also ordered that Carter & Co. recover from the
court to file the response. The trial court denied the request. Olivers the sum of $6,796.01 together with pre-judgment and
The Olivers then filed a motion to reconsider which was also post-judgment interest, and attorney's fees and costs. The
denied. Olivers timely filed this appeal. In their sole point of error, the
Olivers claim that the trial court erred in granting summary
The day before the trial court denied the motion to reconsider, judgment because Carter & Co. failed to prove the requisite
the Olivers filed an amended original answer. It included two elements of a suit on a sworn account as a matter of law with
paragraphs, one setting forth a “general denial” and the other sufficient summary judgment evidence. The Olivers claim
a “specific denial.” The general denial was a reassertion of they filed a proper verified denial of Carter & Co.'s claims and
the general denial made in the original answer: amended the verified denial prior to the summary judgment
hearing so as to raise a material fact issue. Consequently,
Defendants deny each and every, Carter & Co.'s prima facie case was rebutted and Carter &
all and singular, the allegations Co. was required to prove each element of its claim on the
of Plaintiff's Original Petition and account, but failed to do so.
demand strict proof thereof as required
by the Texas Rules of Civil Procedure.
Said Defendants deny the charges
as reasonable and customary and the STANDARD OF REVIEW
amount asserted and/or claimed.
*3 The standard of review on appeal is whether the
The specific denial provided: successful movant at the trial level demonstrated that there
are no issues of material fact and that it is entitled to judgment
Defendants enters [sic] a verified as a matter of law. Nixon v. Mr. Property Management
denial pursuant to TEX.R.CIV.P. Co., Inc., 690 S.W.2d 546, 548 (Tex.1985). In resolving
93(10), and for proof thereof, the issue of whether the movant has carried this burden, all
© 2015 Thomson Reuters. No claim to original U.S. Government Works. 3
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Oliver v. Carter and Company Irr., Inc., Not Reported in S.W.3d (2002)
evidence favorable to the non-movant must be taken as true claim is necessary unless the trial
and all reasonable inferences, including any doubts, must court sustains special exceptions to the
be resolved in the non-movant's favor. Id. at 548-49. When pleadings. [Emphasis added].
a trial court's order granting summary judgment does not
articulate the grounds relied on for its ruling, an appellate TEX.R.CIV.P. 185. Rule 93 provides:
court will affirm a summary judgment if any of the theories
A pleading setting up any of the following matters, unless
advanced are meritorious. Carr v. Brasher, 776 S.W.2d 567,
the truth of such matters appear of record, shall be verified
569 (Tex.1989).
by affidavit.
...
SUIT ON A SWORN ACCOUNT
10. A denial of an account which is the foundation of the
Texas Rules of Civil Procedure 185 and 93(10) govern suits plaintiff's action, and supported by affidavit. [Emphasis
for debt on a sworn account. Rule 185 provides: added].
When any action or defense is founded TEX.R.CIV.P. 93(10).
upon an open account or other claim
for goods, wares and merchandise, In order to establish sufficient evidence to support a prima
including any claim for a liquidated facie case in a suit on a sworn account and sufficient evidence
money demand based upon written to support a summary judgment disposition, the movant must
contract or founded on business strictly adhere to the provisions of the Texas Rules of Civil
dealings between the parties, or is Procedure. TEX.R.CIV.P. 185, 93(10), 166a. Andrews v. East
for personal service rendered, or labor Texas Med. Ctr.-Athens, 885 S.W.2d 264, 267 (Tex.App.-
done or labor or materials furnished, Tyler 1994, no writ); Cooper v. Scott Irrigation Constr. Inc.,
on which a systematic record has 838 S.W.2d 743, 746 (Tex.App.-El Paso 1992, no writ). If
been kept, and is supported by the there is a deficiency in the plaintiff's sworn account, the
affidavit of the party, his agent, or account will not constitute prima facie evidence of the debt.
attorney taken before some officer and See Enernational Corp. v. Exploitation Eng'rs, Inc., 705
authorized to administer oaths, to the S.W.2d 749, 750 (Tex.App.-Houston [1st Dist.] 1986, writ
effect that such claim is, within the ref'd n.r.e.). At the same time, the defendant's denial must be
knowledge of affiant, just and true, written and supported by an affidavit denying the account.
that it is due, and that all just and TEX.R.CIV.P. 93(10); Andrews, 885 S.W.2d at 267. A sworn
lawful offsets, payments and credits general denial is insufficient. Huddleston v. Case Power &
have been allowed, the same shall be Equipment Co., 748 S.W.2d 102, 103 (Tex.App.-Dallas 1988,
taken as prima facie evidence thereof, no writ); Cooper, 838 S.W.2d at 746. A proper denial will
unless the party resisting such claim destroy the prima facie effect of the verified claim and will
shall file a written denial, under oath. force the plaintiff to prove his claim. Cooper, 838 S.W.2d at
A party resisting such a sworn claim 746. A party who fails to file a sworn denial as required by
shall comply with the rules of pleading Rules 185 and 93(10) may not dispute the receipt of items
as are required in any other kind or services or the correctness of the stated charges. Canter
of suit, provided, however, that if he v. Easley, 787 S.W.2d 72, 73 (Tex.App-Houston [1st Dist.]
does not timely file a written denial, 1990, writ denied), citing Vance v. Holloway, 689 S.W.2d
under oath, he shall not be permitted to 403 (Tex.1985); Cooper, 838 S.W.2d at 745-46. Should
deny the claim, or any item therein, as the defendant's answer not satisfy the requirements of Rule
the case may be. No particularization 93(10), the plaintiff's affidavit attached to its petition will
or description of the nature of the be considered prima facie evidence to support a summary
component parts of the account or judgment and additional proof of the accuracy of the account
© 2015 Thomson Reuters. No claim to original U.S. Government Works. 4
Schultz, William 10/26/2015
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Oliver v. Carter and Company Irr., Inc., Not Reported in S.W.3d (2002)
is unnecessary. Rizk v. Financial Guardian Ins. Agency, Inc. fails to satisfy the requirements of Rules 185 and 93(10). We
584 S.W.2d 860, 862 (Tex.1979). Consequently, the plaintiff disagree.
may dispose of the case on the pleadings alone. Andrews, 885
S.W.2d at 268. The Olivers denied the account upon which Carter & Co.'s
claim is based with specific facts. They denied the amount
*4 The issue before us is the sufficiency of the Olivers' due and “whether such charges were usual, customary and/
sworn denial in their original answer. Carter & Co.'s motion or reasonable prices for said merchandise and/or services....”
for summary judgment alleged that the Olivers' answer was This denial directly controverts the claim made by Carter &
“defective and insufficient in law to constitute or raise a Co. in their original petition regarding the reasonableness of
defense” to their cause of action. It is unclear from the the prices for the merchandise at issue. While no specific
language of the motion or the trial court's order granting form or words are required, the denial must be directed at the
summary judgment whether the summary judgment was particular account in question.
granted because of an insufficiency of the language used in
the answer to deny Carter & Co.'s claim or because of a defect In Canter, the court held that a defendant's sworn answer
in the form of the purported affidavit supporting the answer. met the requirements of Rules 185 and 93(10) and that it
In either case, we find that the Olivers' original answer did not sufficiently denied the account upon which the plaintiff's
satisfy the requirements of Rules 185 and 93(10) to destroy claim was based when it denied “the allegations contained
the prima facie effect of Carter & Co.'s sworn account claim. in Paragraphs II and III and IV of the Plaintiff's Original
Petition” and where Paragraph II of the plaintiff's original
petition contained the sworn account allegations. Canter, 787
S.W.2d at 73-74. The Olivers' answer is more specific. See
Sufficiency of the Olivers' Original Answer
Worley v. Butler, 809 S.W.2d 242, 245 (Tex.App.-Corpus
[1] Carter & Co.'s original petition and supporting affidavit Christi 1990, no writ)(where plaintiff would have to show
complied with Rule 185 and established a prima facie case that the prices charged in the absence of an agreement are the
on the sworn account claim. At this point, Carter & Co. usual, customary, and reasonable prices for that merchandise
was entitled to summary judgment on the pleadings without or services). The Olivers' answer included a denial that the
additional proof unless the Olivers properly controverted the charges were reasonable and customary. This was sufficient
claim with a written denial. Rule 185 requires that the party to raise a fact issue to overcome the plaintiff's prima facie
resisting a sworn account “file a written denial, under oath” case. However, whether or not the language in the Olivers'
and comply with Rule 93(10) requiring a special verified answer sufficiently denies the sworn account claim, the
denial of the account supported by an affidavit in order to put attached “verification” renders the answer fatally defective.
the plaintiff's claim at issue. Huddleston, 748 S.W.2d at 103.
Neither Rule 185 nor Rule 93(10) specifies a particular form
or mandate magic words to be used in a defendant's sworn The “Verification” as Affidavit
denial. Andrews, 885 S.W.2d at 267. Rule 185 was amended
in 1984 to eliminate the technical pleading requirements of *5 [2] Carter & Co. argues that the Olivers' answer was
the former version and to make suits on account subject to insufficient because it failed to have an affidavit in support
ordinary rules of pleading and practice. Canter, 787 S.W.2d of the answer as required by Rules 185 and 93(10). We
at 74. While no specific form or words are required, the agree. The “verification” attached by the Olivers did not
answer must “sufficiently deny” the account upon which the constitute an affidavit. “Affidavit” is defined as “a statement
plaintiff's claim is founded. Id.; Cooper, 838 S.W.2d at 746. in writing of a fact or facts signed by the party making it,
A defendant need not deny each and every item of a sworn sworn to before an officer authorized to administer oaths, and
account claim, but must deny the account upon which the officially certified to by the officer under his seal of office.”
plaintiff's case is based. Huddleston, 748 S.W.2d at 103-04. TEX.GOV'T CODE ANN. § 312.011(1)(Vernon 1998). No
Carter & Co. argues that the verified pleading attached to the particular terminology is required by Section 312.011 to
Olivers' answer is no more than a verified general denial and render a document an affidavit. Norcross v. Conoco, Inc.,
© 2015 Thomson Reuters. No claim to original U.S. Government Works. 5
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Oliver v. Carter and Company Irr., Inc., Not Reported in S.W.3d (2002)
720 S.W.2d 627, 630 (Tex.App.-San Antonio 1986, no writ). *6 The amended answer and supporting affidavit easily
It is the substance and not the form of an affidavit that is satisfy the requirements of Rules 185 and 93(10). It contained
important. Id., citing Taylor v. Fred Clark Felt Company, 567 more than a broad denial of the allegations against the Olivers
S.W.2d 863 (Tex.Civ.App.-Houston [14th Dist.] 1978, writ and specific reference was made to the account which is the
ref'd n.r.e .). However, the form of a statement is important basis of the plaintiff's petition, stating, “in connection with the
for purposes of determining whether such statement qualifies account in question, there was no sale or delivery of goods
as an affidavit that must accompany a written denial under and/or services....” The Olivers also denied that “the amount
Rules 185 and 93(10). alleged due and owing by the Plaintiff was not in accordance
with any agreement, if any....” The affidavit contained the
In order for the “verification” to satisfy the requirements of essential affirmation under oath that the statements contained
an affidavit under Rules 185 and 93, it must recite under oath in the Olivers' amended answer were “true and correct” as
that the factual statements contained in the defendant's answer well as all other recitations required in an affidavit.
are true. See Brown Foundation Repair and Consulting, Inc.,
v. Friendly Chevrolet Co., 715 S.W.2d 115, 117 (Tex.App.-
Dallas 1986, writ ref'd n.r.e.). Brown involved a sworn
Was the First Amended Answer
account where the defendant's trial pleading read in relevant
Considered by the Trial Court?
part, “SUBSCRIBED AND SWORN TO before me, the
undersigned authority, by Robert L. Brown, known to me [4] The Olivers argue that because they filed the amended
to be the Vice-President of Brown Foundation Repair and answer prior to the hearing on the motion for summary
Consulting, Inc., to certify which witness my hand and seal judgment, because there was no evidence in the record that
of office this 28 day of June, 1985.” Id. The court held Carter & Co. objected to it or suffered unfair prejudice or
that the affidavit did not constitute a verified denial because surprise, and because there was no indication that the trial
“[n]owhere does it appear that Robert L. Brown has sworn or court did not consider it, leave to file the amended answer
affirmed under oath that the facts stated are true.” Id. at 118. should be presumed. We agree. Rule 63 of the Texas Rules
While the verification here was signed by both of the Olivers of Civil Procedure provides:
and was sworn to before two notaries, it does not contain an
oath that the facts alleged in the answer are true and thus does Parties may amend their pleadings ...
not satisfy the requirements for an affidavit under Rules 185 provided, that any pleadings,
and 93(10). responses or pleas offered for filing
within seven days of the date of trial or
thereafter, or after such time as may be
ordered by the judge under Rule 166,
Sufficiency of the Olivers' First Amended Original Answer
shall be filed only after leave of the
[3] Having determined that the Olivers' original answer judge is obtained, which leave shall be
failed to satisfy the requirements of Rules 185 and 93(10) granted by the judge unless there is a
so as to properly controvert Carter & Co.'s sworn account showing that such filing will operate as
claim, we now turn to the Olivers' claim that their first a surprise to the opposite party.
amended answer sufficed. The day before the trial court
TEX.R.CIV.P. 63. Rule 63 has been given a liberal
denied the motion to reconsider the request for the late filing
interpretation. Goswami v. Metropolitan Savings and Loan
of a response to the motion for summary judgment, the
Association, 751 S.W.2d 487 (Tex.1988). In Goswami, the
Olivers filed an amended original answer containing both a
Texas Supreme Court held that since the record in the case
“general” denial reasserting the denials made in the original
was silent of any basis to conclude that the amended petition
answer and a “specific” denial that provided additional facts
was not considered by the trial court and that the opposite
controverting the sworn account claim. The answer was
party did not show surprise or prejudice, leave of court was
supported by an “affidavit” signed by Floyd Oliver.
presumed. Goswami, 751 S.W.2d at 490. Here, the amended
answer was filed within seven days of the summary judgment
© 2015 Thomson Reuters. No claim to original U.S. Government Works. 6
Schultz, William 10/26/2015
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Oliver v. Carter and Company Irr., Inc., Not Reported in S.W.3d (2002)
answer was properly before the trial court when it entered
hearing. The Goswami court determined that a summary
its order on the motion for summary judgment. The amended
judgment proceeding is a “trial” within the meaning of Rule
answer and supporting affidavit satisfied the requirements
63. Id. The trial court's order granting summary judgment
of Rules 185 and 93(10). Consequently, Carter & Co.'s
states that it “considered the Plaintiff's Motion, the Pleadings
petition cannot be considered prima facie evidence to support
and Affidavits on file herein.” The record does not indicate
summary judgment in their favor. We overrule Appellants'
that the trial court refused leave to file the amended answer;
sole issue and reverse and remand for further proceedings.
it indicates only that the trial court denied leave to file an
untimely response to the motion for summary judgment. Nor
does the record contain any indication that Carter & Co.
All Citations
would suffer surprise or prejudice. Thus, we presume that
the trial court granted leave to amend and that the amended Not Reported in S.W.3d, 2002 WL 1301568
End of Document © 2015 Thomson Reuters. No claim to original U.S. Government Works.
© 2015 Thomson Reuters. No claim to original U.S. Government Works. 7
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Phillips v. Herndon, 78 Tex. 378 (1890)
14 S.W. 857, 22 Am.St.Rep. 59
A vendee purchased two tracts of land,
establishing his home on the first purchase. A
78 Tex. 378
general payment was made by him, and money
Supreme Court of Texas.
was collected by the vendor on the order of
PHILLIPS the vendee after his death. It did not appear
v. that the vendor made any applications of the
HERNDON et al. payments, which were sufficient to complete the
first purchase, but not the second. Held that,
Nov. 11, 1890. the vendee being dead, and unable to make the
application when the last payment was received,
Commissioner's decision. Appeal from district court, Smith the law will so apply it for him as will be most to
county; FELIX J. McCORD, Judge. his interest, and such payment should be applied
to the first purchase.
9 Cases that cite this headnote
West Headnotes (6)
[4] Specific Performance
[1] Appeal and Error Averments as to Contract
Contents and Interpretation in General
In a suit for specific performance of a bond to
In a suit for specific performance brought by the make “a good and valid deed in common form”
vendee, the bond for a deed, as shown in the bill the bond is properly declared on in accordance
of exceptions, described a note for the purchase with its legal effect as an obligation to convey “in
money as maturing January 1, 1879, instead of fee-simple by warranty deed.”
January 1, 1876, as alleged in the petition. A
receipt for the cash payment recited that the note 5 Cases that cite this headnote
matured January 1, 1876, and the vendor testified
that it was due at that time. Held, that it would [5] Specific Performance
be presumed that “1879” was written in the bill Items, Measure, and Amount of Damages
of exceptions by a clerical error, and that it was
In a suit by the vendee for specific performance,
error to exclude the bond for variance.
or for compensation, if that cannot be had on
Cases that cite this headnote account of the land having been conveyed to a
bona fide purchaser, where it appears that the
vendor conveyed the land to another after the
[2] Evidence
vendee had fully complied with the terms of
Trustee or Beneficiary
his contract, the latter may recover the value of
When the vendee has died, and suit for specific the land at the time of the conveyance, and is
performance is brought on behalf of his infant not confined to the purchase money paid, with
children by their grandfather, as guardian, his interest.
acts and declarations prior to his appointment
as guardian cannot affect their rights, and are 10 Cases that cite this headnote
irrelevant.
[6] Vendor and Purchaser
1 Cases that cite this headnote
Election to Rescind, and Notice
Where a vendee takes possession of the land,
[3] Payment
and pays part of the purchase money, the vendor
Manner of Application in General
© 2015 Thomson Reuters. No claim to original U.S. Government Works. 1
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Phillips v. Herndon, 78 Tex. 378 (1890)
14 S.W. 857, 22 Am.St.Rep. 59
cannot rescind without notice of his intention 1882, Herndon collected $35 due to Moseley for a pony he
to do so; and, on the vendee's dying, leaving had sold in 1881. When Moseley died, in November, 1881, he
infant children as his sole heirs, who are without left a wife and four minor children living on the land. His wife
a guardian, there is no one to whom notice can died in June, 1882, and her parents, Perry and Polly Phillips,
be given, and there can be no rescission. took charge of the children, and moved them from the land to
their home, to care for them, and took possession of the land.
8 Cases that cite this headnote On October 15, 1883, Herndon made a statement to Phillips
and wife, showing balance of $173.75 due him on the two
sales made to Moseley, and on that day Herndon indorsed
on each of the bonds for title that the sales made to Moseley
Attorneys and Law Firms were canceled and that he had that day sold the lands to Perry
Phillips for the consideration of $173.75, upon which Phillips
*378 **857 White & Edwards, for appellant. then paid him $3.75. On the 10th day of December, 1887,
Herndon sold the lands to F. R. Allen, who took possession
*379 George H. Gould and W. S. Herndon, for appellees.
thereof. Perry Phillips qualified as guardian of the minor
Opinion children of James Moseley, and, as such, brought this suit
on the 27th day of April, 1888, against Herndon and Allen
ACKER, J. for specific performance of the contracts made by Herndon
with Moseley, alleging payment of the purchase money by
On the 15th day of September, 1875, W. S. Herndon sold
Moseley, or to recover the value of the land from Herndon,
to James Moseley five acres of land, for the consideration
if it was found **858 that Allen was a good-faith purchaser
of $100 in gold, for which Moseley executed his promissory
from Herndon, and alleged that the value of the land was
note, bearing interest from that date at 10 per cent. per annum,
$150 per acre at the time Herndon sold to Allen. Plaintiff also
and payable on the 1st day of January, 1876; and also paid
prayed for general relief. The defendants answered, pleading
to Herndon $30 in currency, for which Herndon executed
a general denial and limitation, and also pleaded cancellation
his receipt, to be credited on Moseley's note at its value in
of the sales to Moseley for failure to pay purchase money.
gold. Herndon executed and delivered to Moseley a bond for
Allen pleaded that he was an innocent purchaser. The trial
title in the usual form, and Moseley went into possession,
without a jury resulted in judgment for the defendants, and
built a house *380 upon the land, and resided there with his
plaintiff appealed.
family until his death, in November, 1881. In addition to the
$30, currency paid by Moseley at the time of his purchase, *381 The plaintiff offered in evidence the bonds for title, to
he made the following payments to Herndon: On the 21st which the defendants objected ‘for the reason that the same
day of November, 1877, Herndon receipted him for ‘twenty varied from, and did not correspond with, the allegations of
dollars to be credited on his land note.’ On the 1st day of the petition.’ The objections were sustained, and the first
December, 1877, $30 in currency, which was receipted for and second assignments of error relate to these rulings.
to be credited on the note. On December 17, 1878, Herndon The allegations of the petition descriptive of the bonds are
made a statement showing balance of $46.90 due him by as follows: ‘That on said 15th day of September, 1875,
Moseley, and on that day he credited the statement with the said W. S. Herndon, being desirous of disposing of said
sum of $30, then paid by Moseley, reducing the balance above-described land, entered into an agreement with James
due to $16.90. On the 14th day of January, 1879, Herndon Moseley, the ancestor of plaintiff's said wards, for the sale of
sold to Moseley another tract of 5.8 acres of land for the said lands to him, the said James Moseley, which agreement
consideration of $100 in gold, for which Moseley executed was reduced to writing, and signed by said W. S. Herndon,
his promissory note, due at one day after date, with interest and delivered on the day it bears date, to-wit, on September
from date at 10 per cent. per annum, and Herndon executed 15, 1875, wherein said Herndon stipulated and agreed with
and delivered his bond for title to Moseley, and Moseley took said Moseley to convey to him said above-described tract
possession of this tract, also. On the 4th day of October, 1881, of land in fee-simple, by warranty deed, upon payment of
Moseley paid Herndon $18, and on the 1st day of December, a promissory note, executed on said September 15, 1875,
© 2015 Thomson Reuters. No claim to original U.S. Government Works. 2
Schultz, William 10/26/2015
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Phillips v. Herndon, 78 Tex. 378 (1890)
14 S.W. 857, 22 Am.St.Rep. 59
by said James Moseley, for one hundred gold dollars, with that, in executory contracts of the character involved in this
10% interest from date, due at Tyler, Texas, on January 1, case, adequate compensation for the injury done should be
1876.’ The bond, of date January 14, 1879, was described in recoverable, when the vendor, by his voluntary act, deprives
substantially the same way. The objection does not designate himself of the ability to perform his contract. We are aware
in what the alleged variance consists, and we are unable to that the case of Hall v. York, 22 Tex. 643, following Sutton v.
discover it. It is alleged that Herndon obligated himself to Page, 4 Tex. 142, seems to hold the contrary doctrine, for it is
convey the land ‘in fee-simple, by warranty deed,’ while the there said ‘that where the vendor of land is not able to make
bonds, offered in evidence, are conditioned that he would title the vendee's measure of damages is the purchase money,
convey the lands ‘by a good and valid deed or deeds in and interest, and nothing more.’ But that case, like the case
common form;’ but this constitutes no variance, for an of Sutton v. Page, was not a suit for specific performance,
obligation to make ‘a good and valid deed in common form,’ or to recover damages for breach of trust by the vendor. Hall
binds the obligor to execute a warranty deed, and the petition v. York was a suit to recover the penalty fixed by the bond
correctly declared the legal effect of Herndon's obligations. for title, which was a much larger sum than the money paid,
Vardeman v. Lawson, 17 Tex. 11. It is true that it appears from and, like the case of Sutton v. Page, was simply an action on
the bill of exceptions that the bond of September 15, 1875, the personal covenant in the bond. In both of those cases it
described the note, given by Moseley of that date, as maturing was held that the measure of damages was the money paid,
January 1, 1879, instead of January 1, 1876, as alleged in the with interest, unless other damages are specially alleged and
petition; but the receipt given by Herndon for the $30, paid by proved. We do not think those cases are analogous to this. In
Moseley on the day of the date of both the bond and the note, the case of Hopkins v. Lee, 6 Wheat. 109, the court said: ‘The
recites that the note matured on the 1st day of January, 1876. rule is settled in this court that, in an action by the vendee for a
Herndon testified that it became due on that date, and indeed, breach of contract on the part of the vendor for not delivering
all of the evidence upon that point went to show that the note the article, the measure of damages is its price at the time of
of September 15, 1875, matured January 1, 1876, as alleged the breach. The price, being settled by the contract, which is
in the petition. We therefore conclude that ‘1879,’ written in generally the case, makes no difference, nor ought it to make
the bill of exceptions, is a clerical error, and that there is no any; otherwise, the vendor, if the article has risen in value,
variance between the allegations and evidence offered. We would always have it in his power to discharge himself from
think the first and second assignments of error are well taken, his contract and put the enhanced value in his own pocket. Nor
and that the court erred in excluding the bonds. can it make any difference in principle whether the contract be
for real or personal property, if the lands, as is the case here,
The third assignment of error is: ‘The court erred in excluding have not been improved or built on. In both cases the vendee
the evidence offered by plaintiff to prove the value of the is entitled to have the thing agreed for at the contract price,
land at the time defendant Allen took possession of it; said and to sell it himself at its increased value.’ See, also, **859
evidence being pertinent, and *382 plaintiff having alleged Kirkpatrick v. Downing, 58 Mo. 32. In this case, plaintiff did
the value of said land, and prayed for judgment for said value not seek to recover anything for improvements put upon the
in case he should fail to recover the specific land itself.’ There land, but only the value of it at the time of its appropriation
were two separate and entirely distinct contracts entered into *383 by Herndon, in the event specific performance could
between Herndon and Moseley, either of which Moseley had not be had. The land was sold by Herndon to Moseley at
the right to enforce the specific performance of, as against $20 per acre, and the petition alleged it to be of the value of
Herndon, upon proof of performance by Moseley of his part $150 per acre at the time it was sold by Herndon to Allen. If
of the contract. If, after performance by Moseley, Herndon, Moseley fully performed his part of either of the contracts by
by his voluntary act, placed it beyond his power to make title paying the purchase money, the superior equitable title vested
to the land, as stipulated in his bond, he thereby became liable in him, and Herndon held the legal title in trust for him; and,
to Moseley for such damages as were the direct and natural upon breach of that trust, by voluntary conveyance of the legal
result of his failure to comply with his obligation. There has title to another, Herndon became liable to Moseley for such
been much contrariety in the decisions of the courts as to damages as resulted directly therefrom, we think, certainly
the correct measure of damages in such case, but we believe to the extent of the value of the land at the time it was so
that equity, and the weight of authority, sustain the view
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Phillips v. Herndon, 78 Tex. 378 (1890)
14 S.W. 857, 22 Am.St.Rep. 59
appropriated, and we think the court erred in excluding the the purchase money for the lands, and Moseley having taken
evidence offered to prove such value. possession under his contracts of purchase, Herndon could
not rescind the sales to him without notice of his intention
The fourth assignment of error is: ‘The court erred in to do so; and Herndon having received payments on the
admitting, over objection of plaintiff, the evidence offered purchase money after default by Moseley in failing to pay
by defendants as to transactions and conversations had by the purchase money at maturity, he thereby waived his right
defendant Herndon with Perry Phillips and Polly Phillips in of rescission. Kennedy v. Embry, 72 Tex. 390, 10 S. W.
the year 1883, as shown by plaintiff's bill of exception No. Rep. 88; Moore v. Giesecke, 76 Tex. 548, 13 S. W. Rep.
4.’ The objections to this evidence was upon the ground 290; Tom v. Wollhoefer. 61 Tex. 281. At the time Herndon
that ‘it was immaterial, and could not affect the rights of attempted to rescind the sales to Moseley after the death of
plaintiff's wards.’ We think the objection was good, and both Moseley and his wife, there was no one to whom notice
should have been sustained. When Moseley died, whatever of his intention to rescind could be given, and there was
rights and interest he had in the land descended to and vested therefore no rescission effected. Herndon testified, without
absolutely in his widow and minor children. At the time objection, that ‘about July 23, 1881, Moseley and myself had
of the transactions between Herndon and Perry Phillips and a settlement of all matters between us. He had done work
his wife, in 1883, Moseley's widow was also dead, and the for me, and I had advanced considerable money to pay his
minor children alone owned whatever interest their parents hands, and for supplies, and he fell in my debt $183. This was
had acquired in the land. There was no one authorized to bind then treated by Moseley and myself as balance due me.’ In
them, or affect their interest by any agreement, and their rights regard to the $18 paid by Moseley to Herndon on October
were not affected by the transactions between Herndon and 4th, 1881, Herndon testified ‘that, in the fall of 1881, I think
their grandparents, Perry and Polly Phillips. I let him have some money, but how much I cannot say. He
was to settle it out of his service upon the railroad, but died,
The fifth assignment of error is: ‘The court erred in rendering
and failed to pay anything except the $18, October 4, 1881;
judgment for defendants, and in not rendering judgment for
this may or may not have settled the small amounts I let him
plaintiff, it being shown that at least the five acres of land
have, after July 23, 1881, but I cannot say.’ Herndon also
bargained for by James Moseley on September 15, 1875, had
testified that; ‘Some time before Moseley died, he sent me
been fully paid for, and that F. R. Allen was not a purchaser in
a note that he had sold the pony to Schoof for $35, and to
good faith.’ The court found, as a conclusion of law, that ‘the
please collect the amount, and give him credit on the debts
plaintiff has mistaken his remedy. The land having been sold
he owed me.’ There was no other evidence bearing upon the
to Allen by Herndon without notice, plaintiff cannot recover
question of appropriation of the money received by Herndon
the land, or its value, but his recovery would be the penalty
from Moseley after the second bond for title was executed, at
on the bond, to-wit, one hundred dollars, with interest.’ From
which time, according to the statement made by Herndon on
what we have already said it will be seen that we understand
the 17th of December, 1878, Moseley owed him a balance of
this suit to be upon the bonds for specific performance only,
$16.90 on the first purchase, after having paid him $110, $30
in the first instance, and, secondarily, against Herndon to
of which was paid at the time of the purchase. In respect to the
recover damages for breach of trust in voluntarily transferring
appropriation of payments made by a debtor to a creditor who
the legal title to Allen, and thus placing it beyond his power
holds more than one debt against him, the general rule is that
to perform his contract, after the superior equitable title had
a debtor has the right to appropriate payments, and, if he does
vested in Moseley by payment of the purchase money. We
not, the creditor may do so, and, where neither appropriates
see no reason why the plaintiff cannot maintain the suit in
them, the law will make the application according to the
this way. If Allen *384 was an innocent purchaser, then
justice of the case. Matossy v. Frosh, 9 Tex. 612. In Stanley
specific performance could not be decreed against Herndon;
v. Westrop, 16 Tex. 200, it is said: ‘It is admitted on *385
and, if the superior title had vested in Moseley, the plaintiff
all hands that the debtor has the absolute right to make the
could either sue upon the bond for purchase money paid,
application if he sees proper to exercise it. If he omits to do
and interest, or bring his suit, as we understand him to have
so, and it is left to the law to make it for him, it ought, it would
done, to recover damages against Herndon for breach of trust.
seem, to be made in accordance **860 with the presumed
Herndon, having received from Moseley at least a part of
intention of the debtor.’ And we think it must be presumed
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Phillips v. Herndon, 78 Tex. 378 (1890)
14 S.W. 857, 22 Am.St.Rep. 59
of it, and thereby perfect Moseley's title to the five acres first
that the debtor intended to apply it to the debt that would be
purchased. If the $18 was insufficient to pay the balance of
most beneficial to him. In Taylor v. Coleman, 20 Tex. 776,
$16.90, then so much of the $35, received by Herndon after
it is said: ‘The debtor having, at the time of the sales, made
Moseley's death, as was necessary to pay off the balance of the
no specific designation of the proceeds, the plaintiffs were
$16.90 should be so applied. At the time Herndon received the
left to their election to apply the payment; but this did not
$35, Moseley was dead, and could not direct its application.
vest them with the power to act capriciously, or to make such
The law applied it for him to the liquidation of any balance
designation as would unreasonably operate to the prejudice
that might be due on the purchase money for the five acres
of the defendant. At the civil law, the creditor must regard
first purchased, and upon which he had established the home
himself as standing in the shoes of the debtor, and apply
for himself and family. We are of opinion that the judgment of
the payment to such debts as the debtor himself would have
the court below should be reversed, and the cause remanded.
first discharged; but, without affirming the principle to this
extent, it is the rule of the common law that the creditor cannot STAYTON, C. J.
make such application as would, under the circumstances, be
inequitable and unjust to the debtor.’ See, also, Bray v. Crain, Report of the commission of appeals examined, their opinion
59 Tex. 649. Applying the rules and principles announced in adopted, and the judgment is reversed, and cause remanded.
the foregoing decisions to this case, we think the $18 paid by
Moseley on the 4th day of October, 1881, should have been
All Citations
applied to the payment of the balance of $16.90, claimed by
Herndon to be due on the first contract, especially so as it does 78 Tex. 378, 14 S.W. 857, 22 Am.St.Rep. 59
not appear from the evidence what application Herndon made
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Vance v. Holloway, 689 S.W.2d 403 (1985)
Curry, Curry & Robinson, Donald L. Curry, Lubbock, for
689 S.W.2d 403 respondent.
Supreme Court of Texas.
Opinion
Newton C. VANCE, d/b/a
Vanguard Production, Petitioner, PER CURIAM.
v.
This is an appeal from a suit on a sworn account. The trial
Jim R. HOLLOWAY, Respondent.
court held that Petitioner, Newton C. Vance, d/b/a Vanguard
No. C–3922. | April 3, 1985. Production, was entitled to recover operating costs on the
“Dawn” lease in which Respondent, Jim R. Holloway, owned
| Rehearing Denied May 8, 1985.
a 1 /32 working interest. In an unpublished opinion, the court
Suit on sworn account was brought against owner of working of appeals reversed and remanded, holding that Vance had
interest in oil well. The District Court No. 106, Garza failed to establish his ownership of the account. Pursuant
County, Hansard, J., held that plaintiff was entitled to recover to TEX.R.CIV.P. 483, we grant Newton C. Vance, d/b/
operating costs on lease in which defendant owned working a Vanguard Production's application for writ of error and,
interest, and defendant appealed. The Amarillo Court of without hearing oral argument, reverse the judgment of the
Civil Appeals, Seventh Supreme Judicial District, Reynolds, court of appeals and affirm the judgment of the trial court.
J., reversed and remanded, holding that plaintiff had failed
to establish his ownership of account, and plaintiff filed The record established that Vance originally acquired an
application for writ of error. The Supreme Court held that interest in the “Dawn” lease in 1981. The well was developed
defendant who was sued on sworn account and had failed by and operating costs paid to M.F.B. Oil Company. In 1982,
to file sworn denial waived his right to dispute amount and Vance acquired M.F.B. Oil Company's interest in the “Dawn”
ownership of account.
lease. Holloway owns a 1 /32 working interest in one of
Vance's wells on this lease. Vance sued Holloway on a sworn
Judgment of Court of Appeals reversed and judgment of trial
account to recover the portion of operating expenses that
court affirmed.
Holloway owed to Vance as owner of M.F.B. Oil Company's
interest in the “Dawn” lease.
West Headnotes (1) The petition and affidavit filed by Vance clearly met
the requirements of TEX.R. *404 CIV.P. 185. Holloway
answered by way of an unverified general denial only. He
[1] Account, Action On
failed to meet the requirements of TEX.R.CIV.P. 185 and
Pleading
93(10) which state that a written denial of the plaintiff's
Defendant who was sued on sworn account action must be verified. The language of the rules is clear.
and failed to file sworn denial waived his right TEX.R.CIV.P. 185 states:
to dispute amount and ownership of account.
Vernon's Ann.Texas Rules Civ.Proc., Rules 93, ... A party resisting such a sworn claim
subd. 10, 185. shall comply with the rules of pleading
as are required in any other kind of
33 Cases that cite this headnote suit, provided however, that if he does
not timely file a written denial, under
oath, he shall not be permitted to deny
the claim, or any item therein, as the
Attorneys and Law Firms case may be.... (Emphasis added).
*403 Mitchell Williams, Post, for petitioner. Similarly, TEX.R.CIV.P. 93 provides:
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Vance v. Holloway, 689 S.W.2d 403 (1985)
ownership of the account. These facts, having been accepted
A pleading setting up one of the following matters ... shall
by the trial court as prima facie evidence of the sworn account,
be verified by affidavit.
entitle Vance to recovery.
Accordingly, we conclude that the decision of the court
10. A denial of an account which is the foundation of the of appeals conflicts with the applicable rules of procedure
plaintiff's action, and is supported by affidavit. and law of this court, hereinabove set forth. Without
hearing oral argument, we grant Newton C. Vance, d/b/a
“In the absence of a sworn denial meeting the requirements Vanguard Production's application for writ of error, reverse
of the rule, an account is received as prima facie evidence the judgment of the court of appeals and affirm the judgment
as against a defendant sued thereon, and the defendant of the trial court. TEX.R.CIV.P. 483.
may not dispute the receipt of the items or services, or
the correctness of the stated charges....” Rizk v. Financial
Guardian Insurance Agency, Inc., 584 S.W.2d 860, 862 All Citations
(Tex.1979). Holloway failed to file a sworn denial and he 689 S.W.2d 403
has, therefore, waived his right to dispute the amount and
End of Document © 2015 Thomson Reuters. No claim to original U.S. Government Works.
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Wyatt v. Shaw Plumbing Co., 760 S.W.2d 245 (1988)
rendered in connection with construction of
house was compulsory counterclaim in house
KeyCite Yellow Flag - Negative Treatment builder's suit against plumbing company, arising
Called into Doubt by Commint Technical Services, Inc. v. Quickel,
out of same instance, in which builder alleged
Tex.App.-Hous. (14 Dist.), June 3, 2010
fraud and violation of Deceptive Trade Practices
760 S.W.2d 245 Act. Vernon's Ann.Texas Rules Civ.Proc., Rule
Supreme Court of Texas. 97(a).
Oscar S. WYATT, Jr., Petitioner, 38 Cases that cite this headnote
v.
SHAW PLUMBING COMPANY, Respondent. [2] Pleading
Plea of Other Action Pending
No. C–6801. | Oct. 26, 1988.
If inherent interrelationship of subject matter
| Rehearing Denied Dec. 14, 1988.
exists in two pending lawsuits, plea in abatement
House builder filed an action against plumbing contractor in second action must be granted; it is not
for fraud and violation of the Deceptive Trade Practices required that exact issues and all parties be
Act. Contractor subsequently sued builder and his agent included in first action before second is filed,
in another county for breach of contract in regard to the provided that claim in first suit may be amended
construction of the home. Builder's plea in abatement to to bring in all necessary and proper parties in
contractor's suit was denied by the 214th District Court, issues.
Nueces County, Mike Westergren, J., as was builder's second
102 Cases that cite this headnote
plea in abatement. Judgment was rendered against builder
following a jury trial in Nueces County, and builder appealed.
The Corpus Christi Court of Appeals, Thirteenth Supreme [3] Pleading
Judicial District, Seerden, J., 736 S.W.2d 763, affirmed, and Plea of Other Action Pending
builder brought error. The Supreme Court, Ray, J., held Court had no discretion to deny house builder's
that: (1) contractor's suit against builder was a compulsory plea of abatement in breach of contract action
counterclaim, and (2) the court had no discretion to deny by plumbing contractor due to fact that house
builder's plea in abatement. builder had earlier filed suit in another county
against plumbing contractor for fraud and
Reversed and remanded with instructions. violation of Deceptive Trade Practices Act, even
though house builder's agent was named party
Kilgarlin, J., issued a concurring opinion. in plumbing contractor's action but not in house
builder's action, as agent could have been joined
Gonzalez, J., issued a dissenting opinion in which Phillips, in builder's action, both law suits involved same
C.J., and Mauzy, J., joined. issues as to construction of a home, and venue
was proper in either county, and, thus, court
where suit was first filed acquired dominant
jurisdiction.
West Headnotes (3)
128 Cases that cite this headnote
[1] Set–Off and Counterclaim
Effect of Failure to Assert or Claim;
Compulsory Counterclaim
Plumbing company's claim against house builder
for breach of contract to recover for services
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Wyatt v. Shaw Plumbing Co., 760 S.W.2d 245 (1988)
Duval County suit. The Nueces County district court signed
Attorneys and Law Firms an order denying Wyatt's plea in abatement on June 15, 1984.
On February 13, 1986, Wyatt filed a second plea in abatement
*246 Ken Dahlbert, Wood & Burney, Corpus Christi, Tracy
in Nueces County after he agreed to indemnify Spear for any
DuBose, DuBose & Short, Montgomery, Joe R. Greenhill and
claims against Spear by Shaw Plumbing. The Nueces County
Larry F. York, Baker & Botts, Austin, for petitioner.
district court again denied the plea. Prior to the trial in Nueces
Richard J. Hatch, Prichard, Peeler, Hatch, Cartwright, Hall & County, the trial judge struck Wyatt's pleadings as a sanction
Kratzig, Corpus Christi, for respondent. for alleged discovery abuse. Judgment was rendered against
Wyatt following a jury trial in Nueces County.
[1] It has long been the policy of the courts and the
OPINION
legislature of this state to avoid a multiplicity of lawsuits.
RAY, Justice. The need for judicial economy has recently become more
acute because the dockets of our trial *247 courts are
This case arises out of a dispute over the services provided overburdened, and litigants must wait far too long for their
by a plumbing contractor in the construction of a house in cases to be heard. In keeping with the policy to avoid
Duval County. The issue presented by this appeal involves multiple lawsuits, Texas Rule of Civil Procedure 97(a) was
a plea in abatement filed in a second suit in Nueces County promulgated. This rule regarding compulsory counterclaims
when a prior suit was pending in Duval County. The court dictates that a pleading shall assert a counterclaim if it meets
of appeals affirmed the Nueces County district court, holding six elements. A counterclaim is compulsory if: (1) it is within
that the decision to grant a plea in abatement was within the jurisdiction of the court; (2) it is not at the time of filing the
the discretion of the Nueces County court and there was no answer the subject of a pending action; (3) the action is mature
abuse of that discretion. 736 S.W.2d 763. We hold that the and owned by the pleader at the time of filing the answer;
Nueces County district court was required to grant the plea in (4) it arises out of the transaction or occurrence that is the
abatement because a previously filed suit between the parties subject matter of the opposing party's claim; (5) it is against
was pending. We, therefore, reverse the judgment of the court an opposing party in the same capacity; and (6) it does not
of appeals and remand the cause to the Nueces County district require for its adjudication the presence of third parties over
court with instructions to vacate its judgment and abate all whom the court cannot acquire jurisdiction. See Tex.R.Civ.P.
proceedings pending final disposition of the Duval County 97(a), (d); see also 2 R. McDonald, Texas Civil Practice in
lawsuit, which was previously filed. District and County Courts § 7.49, at 253–54 (rev.1982).
If a claim meets these elements, it must be asserted in the
This controversy involves a suit between the parties in the initial action. A defendant's failure to assert a compulsory
district court of Duval County and another suit subsequently counterclaim precludes its assertion in later actions. Gray
filed in the district court of Nueces County. Oscar Wyatt was v. Kirkland, 550 S.W.2d 410, 411 (Tex.Civ.App.—Corpus
building a house in Duval County. On Wyatt's behalf, Morgan Christi 1977, writ ref'd n.r.e.); see 2 R. McDonald, supra,
Spear entered into an oral agreement with Shaw Plumbing § 7.49, at 254. Shaw Plumbing's suit against Wyatt was
Company for Shaw to perform work on the house. When a compulsory counterclaim under the requirements of Rule
Wyatt did not pay Shaw Plumbing for its services, Shaw made 97(a).
a written demand for payment. Following Shaw Plumbing's
demand letter, Wyatt filed suit against Shaw in Duval County In the case in which Wyatt as plaintiff sued Shaw Plumbing
on February 7, 1983, alleging fraud and violation of the as defendant on tort and DTPA theories, the counties in
Deceptive Trade Practices Act. which venue was proper were: (1) Nueces County, where the
defendant had its principal office situated; (2) Duval County,
On April 4, 1983, Shaw Plumbing filed a breach of contract where the construction and plumbing was done, and thus
suit against Wyatt and Spear in Nueces County to recover for the cause of action arose; or (3) Harris County, where the
its services. Wyatt filed a plea in abatement in the Nueces plaintiff resided at the time the cause of action arose. Act
County suit based upon the pendency of the previously filed of Apr. 29, 1943, ch. 228, 48th Leg., 1943 Tex.Gen.Laws
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Wyatt v. Shaw Plumbing Co., 760 S.W.2d 245 (1988)
350, revised by Act of May 28, 1983, ch. 385, sec. 1, § to decline to do battle in the forum chosen by the plaintiff. 2
3(f), 68th Leg., 1983 Tex.Gen.Laws 2119, 2122, repealed R. McDonald, supra, § 7.49, at 254.
by Civil Practice and Remedies Code, ch. 959, sec. 9,
69th Leg., 1985 Tex.Gen.Laws 3242, 3322 (current venue Abatement of a lawsuit due to the pendency of a prior suit
law codified at Tex.Civ.Prac. & Rem.Code Ann. § 15.036 is based on the principles of comity, convenience, and the
(Vernon Supp.1988)). Wyatt's agent, Morgan Spear, was not necessity for an orderly procedure in the trial of contested
a party to the suit brought by Wyatt. Spear was a party, issues. See McCurdy v. Gage, 123 Tex. 558, 565–66, 69
however, to Shaw Plumbing's suit in Nueces County, which S.W.2d 56, 59, reh'g overruled per curiam and opinion
was based solely on breach of contract. Because there was adopted, 75 S.W.2d 1107 (Tex.Comm'n App.1934). The plea
a difference in both issues and parties, Shaw argues that the in abatement must be raised in a timely manner, however, or
Nueces County district court was not obliged to grant the plea it is waived. Cleveland, 116 Tex. at 21, 285 S.W.2d at 1071–
in abatement. We disagree. 72. There has been no waiver in the present case.
[2] When an inherent interrelation of the subject matter There are three exceptions to the rule of Cleveland v. Ward
exists in two pending lawsuits, a plea in abatement in the that the court where suit is first filed acquires dominant
second action must be granted. It is not required that the jurisdiction: (1) Conduct by a party that estops him from
exact issues and all the parties be included in the first action asserting prior active jurisdiction; (2) lack of persons to be
before the second is filed, provided that the claim in the first joined if feasible, 2 or the power to bring them before the
suit may be amended to bring in all necessary and proper court; and (3) lack of intent to prosecute the first lawsuit.
parties and issues. See 2 R. McDonald, supra, § 7.10, at 165. Young, 128 Tex. at 636–37, 101 S.W.2d at 800–01; see also
In determining whether an inherent interrelationship exists, Curtis, 511 S.W.2d at 267. None of these exceptions applies
courts should be guided by the rule governing persons to be in this case.
joined if feasible and the compulsory counterclaim rule. See
Tex.R.Civ.P. 39, 97(a). Shaw Plumbing relies on our opinion in Dolenz v. Continental
National Bank to support its argument that the trial court's
[3] Shaw Plumbing should have brought its compulsory decision to grant the plea in abatement was discretionary.
counterclaim on the contract in Wyatt's tort and DTPA suit in Dolenz, 620 S.W.2d 572 (Tex.1981). In that case we held
Duval County. If Shaw Plumbing had joined Morgan Spear, that the trial court did not abuse its discretion in denying a
venue would have been proper in the Duval County suit filed plea in abatement. Dolenz must be distinguished, however,
by Wyatt, where the cause of action arose. 1 *248 If Wyatt for two reasons. First, the second lawsuit in Dolenz came
had sued Shaw Plumbing in Nueces County, venue would into being as a result of Continental Bank's plea of privilege.
have also been proper because Shaw's principal office was The court in the second suit properly denied the bank's plea
situated in Nueces County. However, since Wyatt filed suit in abatement because a party may not request that a suit
first, he chose Duval County. against it be severed and transferred to another court, and
subsequently seek to abate the second suit. Second, we held
It is well settled that when suit would be proper in more that a judgment in the first suit would not foreclose all issues
than one county, the court in which suit is first filed acquires between Continental Bank and Dolenz. Dolenz, 620 S.W.2d
dominant jurisdiction to the exclusion of other courts. Curtis at 575.
v. Gibbs, 511 S.W.2d 263, 267 (Tex.1974); V.D. Anderson
Co. v. Young, 128 Tex. 631, 636, 101 S.W.2d 798, 800 We reaffirm that the rule of Cleveland v. Ward is the law
(1937); Cleveland v. Ward, 116 Tex. 1, 19, 285 S.W. 1063, regarding conflicts of jurisdiction between Texas courts of
1070 (1926). As long as the forum is a proper one, it is coordinate jurisdiction. In the case at bar, both lawsuits
the plaintiff's privilege to choose the forum. Mutual Sav. & involve the same issues. Moreover, the parties in the second
Loan Ass'n v. Earnest, 582 S.W.2d 534, 535 (Tex.Civ.App.— suit were either present in the first suit, or parties who should
Texarkana 1979, no writ). Defendants are simply not at liberty have been joined in the first suit. Since venue was proper in
either Duval, Harris, or Nueces County, the court where suit
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Wyatt v. Shaw Plumbing Co., 760 S.W.2d 245 (1988)
was first filed, Duval County, acquired dominant jurisdiction. party calls the court's attention to the pendency of the prior
The Nueces County district court, therefore, had no discretion suit. Curtis v. Gibbs, 511 S.W.2d 263 (Tex.1974), Cleveland
to deny Wyatt's plea in abatement. v. Ward, 116 Tex. 1, 285 S.W. 1063 (1926). I would not in
any way abandon this general rule.
Accordingly, we reverse the judgment of the court of appeals
and remand the cause to the Nueces County district court with However, an exception to this general rule has long been
instructions to vacate its judgment and abate all proceedings recognized. If the court in which suit is first filed cannot
pending final disposition of the Duval County lawsuit. properly dispose of the whole subject matter of the litigation
as to all necessary parties and issues, then the second
court's ruling on any plea in abatement asserted there is a
discretionary matter. See Cleveland v. Ward, 285 S.W. at
KILGARLIN, J., files a concurring opinion.
1070; see also Dolenz v. Continental National Bank of Fort
GONZALEZ, J., files a dissenting opinion in which Worth, 620 S.W.2d 572 (Tex.1981); First State Bank of
PHILLIPS, C.J., and MAUZY, J., join. Bishop, Texas v. Norris, 611 S.W.2d 680 (Tex.Civ.App.—
Tyler 1980, writ ref'd n.r.e.). The court's opinion today still
pays lip service to this exception when it states:
KILGARLIN, Justice, concurring.
While I concur with the court's judgment, I find myself It is not required that the exact issues
favorably disposed to a concern expressed by Justice and all the parties be included in
Gonzalez. I *249 do not favor races to the courthouse, as the first action before the second is
arguably existed in this case, so as to fix venue. I would not, filed, provided that the claim in the
for example, wish to see one claiming a Deceptive Trade first suit may be amended to bring in
Practices Act violation give notice as required by law only to all necessary and proper parties and
find the seller or provider of services preempting venue by issues.
first suing in another county for a small amount still owing
on account. 760 S.W.2d at 247 (emphasis added). The problem is that the
court ignores its own “provided that” language and refuses to
However, Shaw Plumbing Company has failed to brief this recognize that Shaw Plumbing could not have joined Spear in
matter either in this court or the court of appeals. Whether a the Duval County suit.
notice letter for purposes of entitlement to attorney's fees or a
DTPA-mandated notice letter should be sufficient to establish The venue laws effective at the time of this suit protected a
venue prior to filing suit requires considerable consideration party from being brought into a suit as a third-party defendant
by this court, preceded by adequate briefs and oral argument, if venue was not proper as to that party independent of the
before we undertake to decide such a significant issue. main action. 1 See Union Bus Lines v. Byrd, 142 Tex. 257,
177 S.W.2d 774, 776 (1944). Shaw Plumbing's claim against
Accordingly, I concur. Spear is based on an oral contract. As such, the only proper
place of venue for Shaw Plumbing's cause of action against
Spear was Spear's county of residence, Nueces County. See
former Tex.Rev.Civ.Stat. art. 1995 [3 West's Tex.Stats. and
GONZALEZ, Justice, dissenting.
Codes (1974 and 1977 Supp.) ]. Therefore, because venue in
I agree wholeheartedly with the court's articulation of the rule
Duval County was not proper as to Spear independent of the
of dominant jurisdiction. We do not disagree on the law; we
main action, Spear could not have been brought in as a third-
disagree on its application to this cause.
party defendant, and thus the Duval County court would not
have been able to dispose of all necessary parties and issues
Unquestionably, the general rule is that the court in which
in the case.
suit is first filed acquires dominant jurisdiction and that any
subsequent suit involving the same parties and the same
controversy must be dismissed if, by a plea in abatement, a
© 2015 Thomson Reuters. No claim to original U.S. Government Works. 4
Schultz, William 10/26/2015
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Wyatt v. Shaw Plumbing Co., 760 S.W.2d 245 (1988)
The court offers two reasons for its conclusion that Spear Moreover, the court also assumes that the trial judge, on
could have been joined in Duval County. First, it assumes his own, should have figured out the applicability of the
that Spear was Wyatt's agent and suggests that somehow this continuance provision. Wyatt never mentioned anything at all
fact resolves the venue problem. However, the question of about the new venue laws, much less about this continuance
whether Spear was Wyatt's agent or an independent contractor provision, in either his first or second plea in abatement.
was hotly contested. The jury in the Nueces County suit did His position has always been that venue as to Spear was
find that Spear was Wyatt's agent, but this court's decision will immaterial.
result in the lawsuit being tried again in Duval County where
the legal *250 relationship between Spear and Wyatt will be The court strains too hard and thereby betrays the inherent
determined anew. To this date, even in his briefs before this weakness of its position. Under the old venue laws, if Shaw
court, Wyatt has never conceded that Spear is his agent. Thus, Plumbing had attempted to join Spear in Duval County, Spear
in order to conclude that venue as to Spear would be proper could have asserted a plea of privilege which would have been
in Duval County, the court affords Wyatt the benefit of a fact proper. In order to avoid this reality, the court is forced to rely
that Wyatt himself is still refuting. on an attenuated construction of a continuance provision that
was never argued either at trial or on appeal. 2
Second, as if to hedge its bets, the court cites in a footnote to
the continuance provision of the 1983 Act amending article There is still another reason for why the Nueces County trial
1955 and asserts that, because the Nueces County lawsuit judge acted properly in refusing to abate the second suit.
“was not on appeal on the effective date of the new venue Curtis v. Gibbs, 511 S.W.2d at 267, stated the following
law,” the old venue laws are not effective as to the question of exception to the general rule of dominant jurisdiction:
whether Spear could have been joined in Duval County. The
continuance provision of the 1983 Act stated: [T]he plaintiff in the first suit may be
guilty of such inequitable conduct as
This Act takes effect September 1, will estop him from relying on that
1983, and shall not apply to pending suit to abate a subsequent proceeding
appeals on venue questions. For the brought by his adversary.
purpose of appeals on venue questions
pending prior to September 1, 1983, In this case, Wyatt filed his DTPA suit against Shaw
the former law is continued in effect. Plumbing after having already received Shaw Plumbing's
thirty day demand letter, and he did so without giving the
There have been prior disputes concerning the meaning of this thirty day notice required of him under the Deceptive Trade
provision. However, the questions at least arose in the context Practices—Consumer Protection Act. Tex.Bus. & Com.Code
of pleas of privilege and interlocutory appeals from them, the Ann. § 17.505 (Vernon 1987).
statutory language, “appeals on venue questions,” has never
been construed to mean anything other than interlocutory Wyatt's failure to give the required statutory notice enabled
appeals from pleas of privilege. See, e.g., Gonzalez v. H.E. him to beat Shaw Plumbing to the courthouse and fix venue
Butt Grocery Co., 667 S.W.2d 188 (Tex.App.—Corpus in Duval County. The proper remedy for a party's failure to
Christi 1983, writ dism'd w.o.j.); Grubbs v. Mercantile Texas give the required DTPA *251 notice is ordinarily abatement
Corp., 668 S.W.2d 429 (Tex.App.—Eastland 1984, no writ); rather than dismissal. The Moving Company v. Whitten, 717
Graue–Haws, Inc. v. Fuller, 666 S.W.2d 238 (Tex.App.— S.W.2d 117 (Tex.App.—Houston [14th Dist.] 1986, writ
El Paso 1984, orig. proceeding); Boyd v. Raymondville State ref'd n.r.e.); see also Schepps v. Presbyterian Hospital, 652
Bank, 668 S.W.2d 466 (Tex.App.—Corpus Christi 1984, no S.W.2d 934 (Tex.1983). Under the circumstances of this case,
writ). This continuance provision has never previously been I would hold that although a party's failure to comply with
applied to or even discussed in any scenario such as this one the statutory notice requirement will not result in dismissal, it
involving an appeal from a final judgment raising a plea in is nevertheless a type of “inequitable conduct” that cannot be
abatement question. used as a vehicle for fixing venue. Thus, I would further hold
that Wyatt's failure to give the required DTPA notice estops
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Wyatt v. Shaw Plumbing Co., 760 S.W.2d 245 (1988)
him from relying on his first-filed suit to abate the subsequent
suit. 3
PHILLIPS, C.J., and MAUZY, J., join.
Although the court's opinion acknowledges the exceptions to
All Citations
the general rule of dominant jurisdiction, it summarily states
that none apply. Upon analysis, I am unable to reach the same 760 S.W.2d 245
conclusion. Therefore, I dissent from the court's opinion and
would affirm the judgment of the court of appeals.
Footnotes
1 Shaw Plumbing claims that Spear could not have been joined to the Duval County lawsuit under the old venue laws in
effect at the time. This contention is without merit because the old venue laws were continued in effect only for questions
pending on appeal. Act of May 28, 1983, ch. 385, sec. 3, 68th Leg., 1983 Tex.Gen.Laws 2119, 2124; e.g., Graue–Haws,
Inc. v. Fuller, 666 S.W.2d 238, 239 (Tex.App.—El Paso 1984) (orig. proceeding); see Tullos v. Eaton Corp., 695 S.W.2d
568, 568 (Tex.1985) (per curiam). The Nueces County lawsuit was not on appeal on the effective date of the new venue
law, September 1, 1983. See Act of May 28, 1983, ch. 385, sec. 3, 68th Leg., 1983 Tex.Gen.Laws 2119, 2124. There
is no question that venue was proper for Spear in Duval County under the 1983 revision to the venue laws. See Act
of May 28, 1983, ch. 385, sec. 1, § 4(b), 68th Leg., 1983 Tex.Gen.Laws 2119, 2124, repealed by Civil Practice and
Remedies Code, ch. 959, Sec. 9, 69th Leg., 1985 Tex.Gen.Laws 3242, 3322 (current venue law codified at Tex.Civ.Prac.
& Rem.Code Ann. § 15.062 (Vernon 1986)).
2 Original text refers to necessary parties, which is the pre–1971 Rule 39 language.
1 Contrast this with the currently effective law which expressly states that “venue of the main action shall establish venue
of a counterclaim, cross claim, or third party claim....” Tex.Civ.Prac. & Rem.Code Ann. § 15.062 (Vernon 1986).
2 Furthermore, Wyatt did not raise this argument in either of his attempts to obtain mandamus relief against the Nueces
County trial judge. In seeking to compel the trial judge to grant the plea in abatement, Wyatt filed in the Corpus Christi
Court of Appeals a petition for writ of mandamus. That court denied the writ. Wyatt v. Westergren, 704 S.W.2d 148
(Tex.App.—Corpus Christi 1986, orig. proceeding). Wyatt then submitted a petition for writ of mandamus to this court
and we overruled his motion for leave to file. Wyatt v. Westergren, No. C–5008 (Feb. 19, 1986).
3 In a concurring opinion, Justice Kilgarlin also voices his concern about the manner in which Wyatt effectively fixed venue
by failing to give the required DTPA notice. However, he refuses to address the matter because Shaw Plumbing did not
brief it. Of course, Shaw Plumbing had no reason to complain about this matter on appeal because it won at the trial
court and won in the court of appeals. See Boyce Iron Works, Inc. v. Southwestern Bell Telephone Co., 747 S.W.2d 785
(Tex.1988). By contrast, Wyatt as the petitioner here did have the burden of preserving his arguments. Tex.R.App.P. 131.
Wyatt never raised any argument concerning the venue laws, new or old, and certainly never mentioned the continuance
provision to the 1983 amendments; yet the court does not hesitate to reach that matter.
End of Document © 2015 Thomson Reuters. No claim to original U.S. Government Works.
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Rule 93. Certain Pleas to Be Verified, TX R RCP Rule 93
Vernon's Texas Rules Annotated
Texas Rules of Civil Procedure
Part II. Rules of Practice in District and County Courts
Section 4. Pleading
C. Pleadings of Defendant
TX Rules of Civil Procedure, Rule 93
Rule 93. Certain Pleas to Be Verified
Currentness
A pleading setting up any of the following matters, unless the truth of such matters appear of record, shall be verified by affidavit.
1. That the plaintiff has not legal capacity to sue or that the defendant has not legal capacity to be sued.
2. That the plaintiff is not entitled to recover in the capacity in which he sues, or that the defendant is not liable in the capacity
in which he is sued.
3. That there is another suit pending in this State between the same parties involving the same claim.
4. That there is a defect of parties, plaintiff or defendant.
5. A denial of partnership as alleged in any pleading as to any party to the suit.
6. That any party alleged in any pleading to be a corporation is not incorporated as alleged.
7. Denial of the execution by himself or by his authority of any instrument in writing, upon which any pleading is founded, in
whole or in part and charged to have been executed by him or by his authority, and not alleged to be lost or destroyed. Where
such instrument in writing is charged to have been executed by a person then deceased, the affidavit shall be sufficient if it
states that the affiant has reason to believe and does believe that such instrument was not executed by the decedent or by his
authority. In the absence of such a sworn plea, the instrument shall be received in evidence as fully proved.
8. A denial of the genuineness of the indorsement or assignment of a written instrument upon which suit is brought by an
indorsee or assignee and in the absence of such a sworn plea, the indorsement or assignment thereof shall be held as fully
proved. The denial required by this subdivision of the rule may be made upon information and belief.
9. That a written instrument upon which a pleading is founded is without consideration, or that the consideration of the same
has failed in whole or in part.
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Rule 93. Certain Pleas to Be Verified, TX R RCP Rule 93
10. A denial of an account which is the foundation of the plaintiff's action, and supported by affidavit.
11. That a contract sued upon is usurious. Unless such plea is filed, no evidence of usurious interest as a defense shall be received.
12. That notice and proof of loss or claim for damage has not been given as alleged. Unless such plea is filed such notice and
proof shall be presumed and no evidence to the contrary shall be admitted. A denial of such notice or such proof shall be made
specifically and with particularity.
13. In the trial of any case appealed to the court from the Industrial Accident Board 1 the following, if pleaded, shall be presumed
to be true as pleaded and have been done and filed in legal time and manner, unless denied by verified pleadings:
(a) Notice of injury.
(b) Claim for compensation.
(c) Award of the Board.
(d) Notice of intention not to abide by the award of the Board.
(e) Filing of suit to set aside the award.
(f) That the insurance company alleged to have been the carrier of the workers' compensation insurance at the time of the
alleged injury was in fact the carrier thereof.
(g) That there was good cause for not filing claim with the Industrial Accident Board 1 within the one year period provided
by statute.
(h) Wage rate.
A denial of any of the matters set forth in subdivisions (a) or (g) of paragraph 13 may be made on information and belief.
Any such denial may be made in original or amended pleadings; but if in amended pleadings the same must be filed not less
than seven days before the case proceeds to trial. In case of such denial the things so denied shall not be presumed to be true,
and if essential to the case of the party alleging them, must be proved.
14. That a party plaintiff or defendant is not doing business under an assumed name or trade name as alleged.
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Rule 93. Certain Pleas to Be Verified, TX R RCP Rule 93
15. In the trial of any case brought against an automobile insurance company by an insured under the provisions of an insurance
policy in force providing protection against uninsured motorists, an allegation that the insured has complied with all the terms
of the policy as a condition precedent to bringing the suit shall be presumed to be true unless denied by verified pleadings which
may be upon information and belief.
16. Any other matter required by statute to be pleaded under oath.
Credits
Oct. 29, 1940, eff. Sept. 1, 1941. Amended by orders of March 31, 1941, eff. Sept. 1, 1941; Sept. 20, 1941, eff. Dec. 31, 1941;
June 16, 1943, eff. Dec. 31, 1943; Oct. 12, 1949, eff. March 1, 1950; July 21, 1970, eff. Jan. 1, 1971; July 22, 1975, eff. Jan.
1, 1976; June 15, 1983, eff. Sept. 1, 1983; Dec. 5, 1983, eff. April 1, 1984.
Notes of Decisions (798)
Footnotes
1 The name of the Industrial Accident Board was changed to the Texas Workers' Compensation Commission pursuant to Acts 1989,
71st Leg., 2nd C.S., ch. 1, § 17.01. The Texas Workers' Compensation Commission was abolished and the Workers' Compensation
Division of the Texas Department of Insurance was established pursuant to Acts 2005, 79th Leg., ch. 265, § 1.003.
Vernon's Ann. Texas Rules Civ. Proc., Rule 93, TX R RCP Rule 93
Rules of Civil Procedure, Rules of Evidence, and Rules of Appellate Procedure are current with amendments received through
September 1, 2015. Bar Rules, Rules of Disciplinary Procedure, Code of Judicial Conduct, and Rules of Judicial Administration
are current with amendments received through September 1, 2015. Other state court rules and selected county rules are current
with rules verified through June 1, 2015.
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Rule 185. Suit on Account, TX R RCP Rule 185
Vernon's Texas Rules Annotated
Texas Rules of Civil Procedure
Part II. Rules of Practice in District and County Courts
Section 9. Evidence and Discovery (Refs & Annos)
A. Evidence
TX Rules of Civil Procedure, Rule 185
Rule 185. Suit on Account
Currentness
When any action or defense is founded upon an open account or other claim for goods, wares and merchandise, including any
claim for a liquidated money demand based upon written contract or founded on business dealings between the parties, or is
for personal service rendered, or labor done or labor or materials furnished, on which a systematic record has been kept, and
is supported by the affidavit of the party, his agent or attorney taken before some officer authorized to administer oaths, to
the effect that such claim is, within the knowledge of affiant, just and true, that it is due, and that all just and lawful offsets,
payments and credits have been allowed, the same shall be taken as prima facie evidence thereof, unless the party resisting such
claim shall file a written denial, under oath. A party resisting such a sworn claim shall comply with the rules of pleading as are
required in any other kind of suit, provided, however, that if he does not timely file a written denial, under oath, he shall not
be permitted to deny the claim, or any item therein, as the case may be. No particularization or description of the nature of the
component parts of the account or claim is necessary unless the trial court sustains special exceptions to the pleadings.
Credits
Oct. 29, 1940, eff. Sept. 1, 1941. Amended by orders of Oct. 12, 1949, eff. March 1, 1950; July 21, 1970, eff. Jan. 1, 1971;
Dec. 5, 1983, eff. April 1, 1984.
Notes of Decisions (922)
Vernon's Ann. Texas Rules Civ. Proc., Rule 185, TX R RCP Rule 185
Rules of Civil Procedure, Rules of Evidence, and Rules of Appellate Procedure are current with amendments received through
September 1, 2015. Bar Rules, Rules of Disciplinary Procedure, Code of Judicial Conduct, and Rules of Judicial Administration
are current with amendments received through September 1, 2015. Other state court rules and selected county rules are current
with rules verified through June 1, 2015.
End of Document © 2015 Thomson Reuters. No claim to original U.S. Government Works.
© 2015 Thomson Reuters. No claim to original U.S. Government Works. 1
A.J.P. Oil Company, LLC D/B/A Grapeland Fuel & BBQ, and Andrew J. Patton v. Velvin Oil Company, Inc.
Combined Opinion