Court Opinion

ID: 2775465
Source: CourtListenerOpinion
Date Created: 2015-02-02 09:24:34.454856+00
Date Added: 2024-06-11T12:45:52.363465
License: Public Domain

Order Withdrawn, Motion Denied, Appeal Dismissed, and Opinion filed
January 29, 2015.

                                     In The

                    Fourteenth Court of Appeals

                              NO. 14-13-00991-CV

  GULF COAST ASPHALT COMPANY, L.L.C. AND TRIFINERY, INC.,
                       Appellants
                                        V.

 RUSSELL T. LLOYD, JOHN M. O’QUINN & ASSOCIATES, L.L.P., AND
      JOHN M. O’QUINN & ASSOCIATES, P.L.L.C., Appellees

                    On Appeal from the 80th District Court
                            Harris County, Texas
                      Trial Court Cause No. 2011-61780

                                OPINION
      Appellants Gulf Coast Asphalt Company, L.L.C. and Trifinery, Inc.
(collectively, Gulf Coast) bring this permissive interlocutory appeal of a partial
summary judgment in their legal malpractice action against appellees Russell T.
Lloyd, John M. O’Quinn & Associates, L.L.P., and John M. O’Quinn &
Associates, P.L.L.C. (collectively, the Lawyers). Concluding that the trial court’s
order at issue does not comply with the statute permitting interlocutory appeals, we
withdraw our order granting the motion for permissive appeal, deny the motion,
and dismiss the appeal for want of jurisdiction. See Tex. Civ. Prac. & Rem. Code
§ 51.014(f); Tex. R. App. P. 28.3(j), 43.2(f).

                                    Background

      The Lawyers represented Gulf Coast in two lawsuits—one in California
state court for breach of contract and fraud seeking over $100 million in damages
and one in an Alabama federal court seeking injunctive relief under the Federal
Resource Conservation and Recovery Act (RCRA)—against Chevron U.S.A., Inc.
and a Chevron affiliate. Both lawsuits were dismissed by the respective trial
courts. The allegations in both underlying actions revolved around the 1993 sale
of a tract of land in Mobile, Alabama from Chevron to Trifinery. The land
subsequently was transferred through reorganization to Gulf Coast Asphalt
Company. Chevron had operated a refinery on the tract for over sixty years, and
Gulf Coast planned to construct and operate an asphalt plant on the site.
According to allegations in the underlying lawsuits, Chevron provided an
inaccurate description of a 1976 asphalt residuum spill on the property,
significantly minimizing the extent of the spill and misrepresenting the scope of
remediation efforts. The suits alleged that these inaccuracies induced Trifinery to
buy the property, breached the contract of sale, prevented the construction and
operation of the intended asphalt plant, and violated certain RCRA provisions.

      The California lawsuit was dismissed with prejudice for violation of a
California procedural rule requiring that cases must be tried within five years of
being filed. Cal. Civ. Proc. Code § 583.310 (“An action shall be brought to trial
within five years after the action is commenced against the defendant.”). There are
several ways that the five-year period can be extended, including by agreement of

                                          2
the parties. In this regard, section 583.330 specifically provides that

      The parties may extend the time within which an action must be
      brought to trial pursuant to this article by the following means:
              (a) By written stipulation. The stipulation need not be filed but,
      if it is not filed, the stipulation shall be brought to the attention of the
      court if relevant to a motion for dismissal.
            (b) By oral agreement made in open court, if entered in the
      minutes of the court or a transcript is made.

Id. § 583.330.

      The California lawsuit was filed on June 15, 2004, making the original five-
year deadline June 15, 2009. The parties, however, signed a written stipulation
extending the deadline to December 31, 2009. See id. § 583.330(a). On August 4,
2009, the court held a hearing principally concerning outstanding summary
judgment issues. During the hearing, it became apparent that the trial needed to be
moved from its scheduled date in order to permit more time for presentation of the
summary judgment issues and due to scheduling conflicts. At the conclusion of
the hearing, the trial judge said, “Well, why don’t we select a date after the first of
the year.” It was then agreed that the remaining discussion did not need to be on
the record.      A trial minute order from that date reflects that “COUNSEL
STIPULATE TO A CONTINUANCE OF THE TRIAL TO 2/16/10.”

      On February 5, 2010, Chevron filed a motion to dismiss based on passage of
the five-year deadline and claiming that the only valid extension was the parties’
written stipulation extending the deadline to December 31, 2009. Based on the
August 4 discussion in the courtroom and the minute order, Gulf Coast contended
that the five-year deadline was further extended pursuant to section 583.330(b) to
the new trial date of February 16. The California trial court, however, disagreed
and dismissed Gulf Coast’s case with prejudice in a seventeen-page order that will

                                           3
be discussed in more detail below.

      In the Alabama federal lawsuit, which had been filed in 2009, Chevron
moved for summary judgment on the basis that Gulf Coast Asphalt Company did
not have standing to bring RCRA claims because, at the time suit was filed, the
property was actually owned by GC Realty, Inc. and not Gulf Coast Asphalt
Company.1 The Alabama federal court granted Chevron’s motion on August 30,
2010, dismissing Gulf Coast’s claims. The court also awarded Chevron attorney’s
fees of nearly $1 million on its third-party indemnification claim against Trifinery.
After Gulf Coast filed appeals in both lawsuits, settlement negotiations began.
Chevron intimated it would seek additional attorney’s fees and costs in the
California lawsuit.       After requesting Lloyd’s advice, which included Lloyd’s
estimate that the additional fees and costs could be in the $8-10 million range, Gulf
Coast agreed to settle both lawsuits by paying Chevron $500,000.

      On October 13, 2011, Gulf Coast filed the current malpractice action against
the Lawyers, alleging that Lloyd’s mishandling of the two cases denied Gulf Coast
any recovery against Chevron and further cost them $500,000 in settlement of the
underlying lawsuits. Among other things, Gulf Coast alleged that Lloyd’s failure
in the California lawsuit to obtain a valid extension of the trial deadline or to begin
trial before the deadline fell short of the standard of care. In their motion for
partial summary judgment, the Lawyers argued that the California trial court erred
in its interpretation and application of the trial deadline rules and should not have
dismissed the case. The Lawyers specifically asserted that the parties’ agreement
to reschedule the trial date past the five-year deadline also operated to extend the
deadline. On this basis, they contended that either they complied with the statutory
exception contained in section 583.330(b) or Chevron was estopped from seeking

      1
          Several interlocutory orders previously had dismissed Gulf Coast’s other claims.

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dismissal after agreeing to the continuance.

       Although the Lawyers’ motion sought summary judgment against Gulf
Coast’s legal malpractice claim in its entirety as well as against “all . . . claims and
causes of action . . . relating to the California lawsuit,” the trial court’s order, on
which this request for permissive appeal is based, used significantly narrower
language, granting partial summary judgment “regarding compliance with section
583 of the California Code of Civil Procedure.” The court did not state its reasons.
After the grant of partial summary judgment, Gulf Coast amended its pleadings to
allege an alternative claim for malpractice based on Lloyd’s recommendation of
settlement in lieu of continuing the California and Alabama appeals.2

     Does the appeal involve a controlling issue of law as to which there is a
                 substantial ground for difference of opinion?
       Courts of appeals do not have jurisdiction over appeals from interlocutory
orders—such as the partial summary judgment order in this case—unless a statute
provides for an interlocutory appeal from such orders. See Tex. A & M Univ. Sys.
v. Koseoglu, 233 S.W.3d 835, 840 (Tex. 2007). Under section 51.014(d) of the
Texas Civil Practice and Remedies Code, we may accept a permissive
interlocutory appeal if (1) the order being appealed involves a controlling question
of law as to which there is a substantial ground for difference of opinion, and (2)
an immediate appeal from the order may materially advance the ultimate
termination of the litigation. See Tex. Civ. Prac. & Rem. Code § 51.014(d), (f);
Hebert v. JJT Const., 438 S.W.3d 139, 140 (Tex. App.—Houston [14th Dist.]
2014, no pet.).

       As indicated above, in their motion for summary judgment, the Lawyers
       2
          In its live pleading, Gulf Coast alleges thirteen counts of professional negligence
relating to the California lawsuit and seven counts of professional negligence relating to the
Alabama lawsuit, in addition to other causes of action.

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asserted that the California trial court erred in its interpretation of section 583.330
of the California Code of Civil Procedure.                In its seventeen-page order, the
California trial court repeatedly stated that it was dismissing the case because, in
order to extend the deadline by oral agreement, there must be an agreement made
in open court that expressly extended the deadline itself and that a stipulation or
oral agreement that merely moved the trial to a date beyond the deadline was
insufficient. This statement appears to be in contradiction of California precedent.
See, e.g., Miller & Lux, Inc. v. Superior Court, 219 P. 1006, 1007-08 (Cal. 1923)
(“A [written] stipulation . . . expressly waiving the benefit of the section, or
postponing the case to a time beyond the statutory period, would have the effect of
extending the statutory period to the date to which the trial was postponed.”)
(emphasis added).3 However, even if the California trial court incorrectly stated
the law in its order, it does not necessarily follow that the oral agreement otherwise
complied with the California statute, that the California case ultimately would have
been reinstated, or that Lloyd met the applicable standard of care.4

       3
         In 1984, the trial deadline rules were modified to permit extensions by oral agreement in
open court, where previously extensions by agreement were available only by written stipulation.
See generally Wheeler v. Payless Super Drug Stores, Inc., 238 Cal. App. 3d 1292, 1295-97 (Cal.
Ct. App. 1987) (discussing historical development of California trial deadline rules). The Miller
& Lux opinion predates this change and thus only mentions written stipulations.
       4
         The California trial court did not decide certain issues, including whether there actually
was an oral agreement made in open court that satisfied the requirements of section 583.330(b)
and operated to extend the trial deadline. Moreover, the record before us does not conclusively
establish what happened off-the-record at the conclusion of the August 4, 2009 hearing in the
California trial court. In its judgment, the California trial court mentions that at least some form
of proceeding or discussion occurred after the recording of events ended and that at some point
the judge left the bench, but the court does not state exactly who said what, when, and in whose
presence. Lloyd himself testified at his deposition that he did not clearly recall the events that
transpired off the record on August 4, 2009.
       The California trial court additionally did not address whether the minute order itself
could have been sufficient to establish that such an agreement had occurred. See generally
Meskell v. Culver City Unified School Dist., 12 Cal.App.3d 815, 821 (Cal. Ct. App. 1970)
(explaining that court minutes “import absolute verity unless and until amended”). The court
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       In its statement of permission granting an interlocutory appeal under section
51.014, a trial court must identify the controlling question of law as to which there
is a substantial ground for difference of opinion and must state why an immediate
appeal may materially advance the ultimate termination of the litigation. Tex. R.
Civ. P. 168; Hebert, 438 S.W.3d at 141; see also Tex. Civ. Prac. & Rem. Code §
51.014(d). Here, the court stated the issues undergirding the permissive appeal
were (1) whether compliance with a California statute presents a question of law
and (2) whether its summary judgment ruling is correct. The court did not explain
under section 51.014(d)(2) why an appeal from its order may materially advance
the ultimate termination of the litigation.

       In its petition for permissive appeal, Gulf Coast stated the controlling issue
of law was whether a trial judge could determine “the question of breach” where
the facts are hotly contested.5 Gulf Coast argued that a reversal of the ruling on
partial summary judgment would allow it to prosecute the case on its preferred
theory of liability.6 See id. § 51.014(f). The Lawyers, in their response to the
petition, agreed that the order involved a controlling issue of law, but reframed the
issue: whether Lloyd complied with the California statute. They argued, however,
that without an assurance that the issue is dispositive of all claims related to the
California case, there is no showing by Gulf Coast that the ultimate termination of
the litigation will be advanced.7 Neither side cites any support for the notion that

concluded only that the minute order did not extend the deadline because it mentioned only the
trial date and not the statutory deadline itself.
       5
          In its petition for permission, Gulf Coast presented three issues, but only one
“controlling issue.” In its brief, Gulf Coast added two additional issues. All the new issues
challenge the correctness of the trial court’s ruling.
       6
           “The [ruling] . . . redefines the underlying reality and how this case will be tried.”
       7
          In a post-submission letter, Gulf Coast suggests the controlling issue of law “is whether
it is proper for [the Texas trial judge] to stand in the shoes of the California appellate courts and
speculate about how that court (and presumably the California Supreme Court) would have ruled
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the parties can add to the judge’s description of the controlling issue of law. Tex.
R. Civ. P. 168; Hebert, 438 S.W.3d at 141; see also Tex. Civ. Prac. & Rem. Code
§ 51.014(d).

        The proper scope of a permissive appeal is the determination of controlling
legal issues, about which there are legitimate disagreements, necessary to the
resolution of the case. See Diamond Prods. Int’l v. Handsel, 142 S.W.3d 491, 494
(Tex. App.—Houston [14th Dist.] 2004, no pet.) (construing prior version of the
statute); see also Tex. Farmers Ins. Co. v. Minjarez, No. 08–12–00272–CV, 2012
WL 5359284, at *1 (Tex. App.—El Paso Oct. 31, 2012, no pet.) (mem. op.)
(quoting House Comm. on Civil Practices, Bill Analysis, Tex. H.B. 978, 77th Leg.,
R.S. (2001), which explained that enacting section 51.014 would promote judicial
efficiency by “allowing the trial court to certify a question for appeal” when “the
trial court rules on an issue that is pivotal in a case but about which there is
legitimate disagreement”).

        There has been little development in the case law construing section 51.014
regarding just what constitutes a controlling legal issue about which there is a
difference of opinion and the resolution of which disposes of primary issues in the
case.    At least one Texas commentator suggests looking to federal cases
interpreting similar language in the federal counterpart to section 51.014, contained
at 28 U.S.C. § 1292(b). See Renée Forinash McElhaney, Toward Permissive
Appeal in Texas, 29 St. Mary’s L. J. 729, 747-49 (1998). McElhaney concludes
that

        a controlling question of law is one that deeply affects the ongoing
        process of litigation. If resolution of the question will considerably
        shorten the time, effort, and expense of fully litigating the case, the

had the appeal not been dismissed as part of global settlement recommended and orchestrated by
Lloyd.”

                                              8
      question is controlling. Generally, if the viability of a claim rests
      upon the court’s determination of a question of law, the question is
      controlling . . . . Substantial grounds for disagreement exist when the
      question presented to the court is novel or difficult, when controlling
      circuit law is doubtful, when controlling circuit law is in disagreement
      with other courts of appeals, and when there simply is little authority
      upon which the district court can rely. . . . Generally, a district court
      will make [a finding that the appeal will facilitate final resolution of
      the case] when resolution of the legal question dramatically affects
      recovery in a lawsuit.

Id. (citations and paragraphing omitted).

      While the partial summary judgment at issue may be important to Gulf
Coast’s claims, it does not dispose of controlling issues in the case. See Diamond
Prods., 142 S.W.3d at 495-96; see also In Re Estate of Fisher, 421 S.W.3d 682,
684-5 (Tex. App.—Texarkana 2014, no pet.) (explaining that a grant of partial
summary judgment does not necessarily decide a controlling question of law);
King-A Corp. v. Wehling, No. 13-13-00100-CV, 2013 WL 1092209, at *3 (Tex.
App.—Corpus Christi March 14, 2003, no pet.) (“[W]e disapprove of the notion
that this standard [substantial ground for difference of opinion] is met by default
whenever a trial court rules against a petitioner for permissive review.”).

      In granting partial summary judgment in this case, the Texas trial court ruled
on only one legal question that might possibly affect only one facet of Gulf Coast’s
malpractice claim. It did not rule that Lloyd did not commit malpractice in the
California case prior to settlement or otherwise; it merely granted partial summary
judgment “regarding compliance with section 583 of the California Code of Civil
Procedure.” Even if the ruling impairs Gulf Coast’s presentation of the evidence, it
is no less disruptive than an adverse evidentiary ruling or the striking of an expert.
Gulf Coast’s legal malpractice damages claim survives. Neither party argues that
this appeal will considerably shorten final resolution of the case.

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       Given the limited nature of interlocutory appeals and the requirement we
construe statutes authorizing such appeals strictly, we conclude Gulf Coast has not
satisfied the statutory requirements of section 51.014(d). See State Fair of Tex. v.
Iron Mountain Info. Mgmt., Inc., 299 S.W.3d 261, 264 (Tex. App.—Dallas 2009,
no pet.).8 Specifically, Gulf Coast has failed to demonstrate that this case presents
a controlling question of law about which there is a substantial ground for
difference of opinion or that the appeal may materially advance the ultimate
termination of the litigation. Accordingly, we withdraw our order granting the
motion for permissive appeal, deny the motion, and dismiss the appeal for want of
jurisdiction.

                                           /s/     Martha Hill Jamison
                                                   Justice

Panel consists of Justices Jamison, McCally, and Busby.

       8
          The Lawyers apparently agreed to this permissive appeal; however, we may not
disregard the statutory requirements of section 51.044 to enlarge appellate jurisdiction to any
agreed interlocutory appeal. See State Fair of Tex., 299 S.W.3d at 264.

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