Court Opinion

ID: 3108605
Source: CourtListenerOpinion
Date Created: 2015-10-16 06:24:26.157119+00
Date Added: 2024-06-11T11:44:50.088559
License: Public Domain

NO. 07-10-00037-CV

                              IN THE COURT OF APPEALS

                       FOR THE SEVENTH DISTRICT OF TEXAS

                                      AT AMARILLO

                                         PANEL A

                                      MAY 27, 2011

                    JIMMY GLEN RIEMER, INDIVIDUALLY AND AS
               INDEPENDENT EXECUTOR OF THE ESTATE OF HUGO
              A. RIEMER, JR., DECEASED, RICHARD COON, JR., JUNE
                MEETZE COON TRUST, JOHNSON BORGER RANCH
                PARTNERSHIP, AND MONTFORD T. JOHNSON, III ON
                BEHALF OF THEMSELVES AND OTHERS SIMILARLY
                             SITUATED, APPELLANTS

                                             v.

                THE STATE OF TEXAS AND JERRY PATTERSON, AS
                COMMISSIONER OF THE GENERAL LAND OFFICE OF
                       THE STATE OF TEXAS, APPELLEES

           FROM THE 84TH DISTRICT COURT OF HUTCHINSON COUNTY;

                 NO. 30,441; HONORABLE WILLIAM D. SMITH, JUDGE

Before CAMPBELL and HANCOCK and PIRTLE, JJ.

                                         OPINION

      This interlocutory appeal of an order denying certification of a class action1 is

another installment in an ongoing dispute between landowners and the State of Texas

      1
          See Tex. R. Civ. P. 42 (class actions).
over the boundaries of the Canadian River east of the Sanford Dam.2 After a previous

interlocutory appeal in this case,3 we remanded to the trial court the landowners‟ claims

alleging an unconstitutional taking of their property.4 The landowners‟ pleadings

included a class action petition, and after remand they sought certification of a class.

Appellants Jimmy Glen Riemer, Richard Coon, Jr., the June Coon Trust, the Johnson

Borger Ranch Partnership, and Montford Johnson III, are the proposed class

representatives. Appellees are the State of Texas and Jerry Patterson in his capacity

as Commissioner of the General Land Office (jointly, the State).

       Appellants sought certification of a class described as:

       All owners, from 1981 to the present, of any real property interest adjacent
       to the Canadian Riverbed from the Sanford Dam east approximately 12
       miles to the west boundary of Section 13, Block 47, H.&T.C.RR. Co.
       Survey, on the north side of the river, and to the west boundary of Section
       56, Block 46, H.&T.C.RR. Co. Survey, on the south side of the river.

They requested division of the class into two sub-classes:

       Sub-Class 1: From 1981 to present, all owners of any surface interest in
       real property adjacent to the Canadian Riverbed from the Sanford Dam

       2
        State v. Brainard, 968 S.W.2d 403 (Tex.App.--Amarillo 1998), aff'd in part and
rev’d in part, 12 S.W.3d 6 (Tex. 1999)) provides additional facts surrounding the
boundary disputes between the State and adjoining landowners along the Canadian
River east of the Sanford Dam.
       3
           State v. Riemer, 94 S.W.3d 103, 112 (Tex.App.--Amarillo 2002, no pet.).
       4
          The Texas Constitution provides that, “No person‟s property shall be taken,
damaged or destroyed for or applied to public use without adequate compensation
being made, unless by the consent of such person . . . .” Tex. Const. art. I, § 17.
“„Taking,‟ „damaging,‟ and „destruction‟ of one‟s property are three distinct claims arising
under Article I, Section 17. However, the term „taking‟ has become used as shorthand
to refer to all three types of claims.” City of Dallas v. Jennings, 142 S.W.3d 310, 313
n.2 (Tex. 2004) (citations omitted).
                                             2
       east approximately 12 miles to the west boundary of Section 13, Block 47,
       H.&T.RR. Co. Survey, on the north side of the river, and to the west
       boundary of Section 56, Bock 46, H.&T.C.RR. Co. survey, on the south
       side of the river.

       Sub-Class 2: From 1981 to present, all owners of any mineral or leasehold
       interest in real property adjacent to the Canadian Riverbed from the
       Sanford Dam east approximately 12 miles to the west boundary of Section
       13, Block 47, H.&T.RR. Co. Survey, on the north side of the river, and to
       the west boundary of Section 56, Bock 46, H.&T.C.RR. Co. survey, on the
       south side of the river.

       In its order denying class certification, the trial court found the June Coon trust,

the Borger Ranch partnership, and Montford Johnson III lacked standing to bring the

claims alleged. It further found the claims of the proposed class representatives were

not typical of the class claims, the representatives would not adequately represent the

class, and none of the alternative grounds of Rule of Civil Procedure 42(b) were met. 5

Appellants bring an interlocutory appeal of the trial court‟s order.6

       On appeal, appellants assert the trial court erred in its conclusion regarding the

standing of the Coon trust, the Borger Ranch partnership, and Johnson, and assert the

court abused its discretion in denying class certification because they satisfied the four

requirements of Rule 42(a) and satisfied one or more of the Rule 42(b) requirements.

We agree with appellants on the standing issue, but agree with the State that the trial

court did not abuse its discretion in concluding the proposed class representatives

would not fairly and adequately protect the interests of the class. Accordingly, we will

       5
           Tex. R. Civ. P. 42(b).
       6
          See Tex. Civ. Prac. & Rem. Code Ann. § 51.014(a)(3) (Vernon 2008)
(permitting interlocutory appeal of orders refusing to certify a class).
                                              3
reverse in part, affirm in part, and otherwise remand for proceedings consistent with this

opinion.

                                        Analysis

Standing

      Before reaching the requirements for class certification “a named plaintiff must

first satisfy the threshold requirement of individual standing at the time suit is filed,

without regard to the class claims.” M.D. Anderson Cancer Ctr. v. Novak, 52 S.W.3d
704, 710 (Tex. 2001).     “For standing, a plaintiff must be personally aggrieved; his

alleged injury must be concrete and particularized, actual or imminent, not hypothetical.”

DaimlerChrysler Corp. v. Inman, 252 S.W.3d 299, 304-305 (Tex. 2008) (footnotes

omitted). Standing is a necessary component of subject-matter jurisdiction, without

which a court lacks authority to hear a case. Tex. Ass’n of Bus. v. Tex. Air Control Bd.,

852 S.W.2d 440, 444-45 (Tex. 1993).7 Standing is determined at the time suit is filed in

the trial court. Novak, 52 S.W.3d at 708. We review a trial court‟s determination of

standing de novo. See Tex. Dep’t of Parks & Wildlife v. Miranda, 133 S.W.3d 217, 226

(Tex. 2004). In so doing, we take the pleadings as true and construe them in favor of

the pleader.   Id. at 226-28.   “It has long been the rule that a plaintiff‟s good faith

allegations are used to determine the trial court‟s jurisdiction.”   Frost Nat’l Bank v.

Fernandez, 315 S.W.3d 494, 502-03 (Tex. 2010) (citing Brannon v. Pac. Employers Ins.

Co., 148 Tex. 289, 224 S.W.2d 466, 469 (1949)); Brown v. Todd, 53 S.W.3d 297, 305

      7
        But cf. Coastal Oil & Gas Corp. v. Garza Energy Trust, 268 S.W.3d 1, 9 n.16
(Tex. 2008) (“[t]his Court has not indicated whether standing is always a matter of
subject-matter jurisdiction”).
                                            4
n.3 (Tex. 2001) (“[b]ecause standing is a component of subject matter jurisdiction, we

consider [it] as we would a plea to the jurisdiction, construing the pleadings in favor of

the plaintiff”). We also consider evidence relevant to the inquiry when necessary. See

Miranda, 133 S.W.3d at 227.          The standard for resolving a jurisdictional dispute

“generally mirrors that of a [traditional] summary judgment.” Id. at 227-28 (citing Tex. R.

Civ. P. 166a(c)).

         Generally, owning an interest in property at the time of its alleged taking would

confer standing to sue for the taking. See Hollywood Park Humane Soc’y v. Town of

Hollywood Park, 261 S.W.3d 135, 140 (Tex.App.--San Antonio 2008, no pet.) (citing

Tex. S. Univ. v. State St. Bank & Trust Co., 212, S.W.3d 893, 903 (Tex.App.--Houston

[1st Dist.] 2007, pet. denied)). A case the State cites illustrates application of the rule.

In Allodial Limited P’ship v. North Texas Tollway Auth., 176 S.W.3d 680 (Tex.App.—

Dallas 2005, pet. denied), an inverse condemnation case, the court found Allodial

lacked standing to sue for damage to property it had purchased because its takings

claim was not assigned to Allodial by the seller. Generally, the court noted, such a

claim “belongs to the entity who owns the property at the time of the injury.” Id. at 683.

         In its order denying class certification, the trial court concluded only those owning

land adjacent to the river in 1981 possessed standing to assert a takings claim. It found

the Coon trust, the Borger Ranch partnership, and Johnson did not own land adjacent to

the disputed river boundary in 1981, and each thus lacked standing to bring a takings

claim.

                                               5
       In their live pleading, appellants inter alia alleged “they have been owners in fee

simple of the properties [identified in their pleading] and have been and are at all

material times entitled to possession of all of said property. [The State has] unlawfully

entered upon and dispossess (sic) [appellants] of such premises and have continued to

withhold possession.” In a later pleading responding to a motion filed by the State,

appellants alleged, “Through devise, descent, or assignment, the named Plaintiffs here

own interests in the property that were taken by the State.”

       In its response to appellants‟ motion for class certification, the State challenged

those appellants‟ standing to pursue a takings claim. To support its argument, the State

directed the trial court to deposition excerpts. Johnson, appearing individually and as

representative of the Borger Ranch partnership, testified the partnership was formed in

1998 and he individually purchased a surface interest in sections 22 through 26 along

the north side of the river in 2003. Coon, appearing individually and as trustee of the

Coon trust, testified to the effect the trust was created in the “early to mid” 1990s. When

asked in 2008 if the trust still owned interests along the river, Coon responded “I can‟t

answer that. I don‟t know. I don‟t think so.”8

       If, after taking as true a plaintiff‟s allegations of standing and construing its

pleadings in the most favorable light and after considering any evidence of standing

presented, a material issue of fact remains as to the plaintiff‟s standing, the trial court

must not sustain the jurisdictional challenge. See State v. Holland, 221 S.W.3d 639,

       8
         He later clarified his answer, testifying the trust did not own any mineral
interests along the river as those interests were distributed to him and his sister in late
2007.
                                             6
643 (Tex. 2007) (addressing plea to the jurisdiction, and citing Miranda, 133 S.W.3d at

227-28). While the deposition testimony to which the State pointed the trial court to

support its challenge clouds the pleading picture and might give rise to an inference

supporting the court‟s ruling, we do not agree the present state of the record

conclusively demonstrates that the Coon trust, the Borger Ranch partnership, and

Johnson each lacked standing to bring the claims alleged. We conclude that on the

record before us the trial court erred in finding the Coon trust, the Borger Ranch

partnership, and Johnson lack standing.      Our disposition of this issue does not, of

course, preclude its further consideration by the trial court.          See Oakland v.

Travelocity.Com, Inc., No. 02-08-0260-CV, 2009 Tex. App. Lexis 4646, at *16

(Tex.App.--Fort Worth June 18, 2009, pet. denied) (mem. op.) (citing Tex. Ass’n of Bus.,
852 S.W.3d at 445) (standing is a component of subject matter jurisdiction which may

be raised at any time).

Class Certification

       For certification, a class action must meet the four requirements stated in Rule of

Civil Procedure 42(a): (1) numerosity--the class is so numerous that joinder of all

members is impracticable; (2) commonality--there are questions of law or fact common

to the class; (3) typicality--the claims or defenses of the representative parties are

typical of the claims or defenses of the class; and (4) adequacy of representation--the

representative parties will fairly and adequately protect the interests of the class.

Citizens Ins. Co. of America v. Daccach, 217 S.W.3d 430, 438 (Tex. 2007) (citing Tex.

                                            7
Rawle Civ. P. 42(a)). A class action must also satisfy at least one requirement of Rule

42(b). See Tex. R. Civ. P. 42(b).

       A class certification order is reviewed on appeal for abuse of discretion.

Bowden v. Phillips Petroleum Co., 247 S.W.3d 690, 696 (Tex. 2008) (citations omitted).

“Although a trial court generally has broad discretion to determine whether to certify a

class action, it must apply a rigorous analysis to determine whether all certification

requirements have been satisfied.” Id.

       Further, certification is not mandatory, even if the requirements of Rule 42 are

satisfied. Vincent v. Bank of Am., N.A., 109 S.W.3d 856, 864 (Tex.App.--Dallas 2003,

pet. denied). The word “may” in Rule 42(a) is permissive, not mandatory. Denial of

class certification may not amount to an abuse of discretion, even were certification

proper. Id. An appellant “seeking to reverse an order denying class certification faces a

formidable task.” Id. It must demonstrate satisfaction of all the Rule 42 requirements

for certification and that the trial court‟s refusal to certify was legally unreasonable under

the facts and circumstances of the case. Id.; Cyganek v. A.J.’s Wrecker Serv. of Dallas,

Inc., No. 05-08-01346, 2009 Tex. App. Lexis 5216, at *2-*3 (Tex.App.--Dallas July 8,

2009, no pet.) (mem. op.).

       The trial court concluded appellants did not meet the typicality and adequacy of

representation requirements of Rule 42(a). Tex. R. Civ. P. 42(a)(3),(4). Because we

find it dispositive of the remainder of the appeal, we turn first to appellants‟ claim that

the trial court abused its discretion in finding they could not fairly and adequately protect

the interests of the class.

                                              8
       Adequacy of Representation

       In the order denying certification the trial court concluded the class

representatives would not fairly and adequately protect the class interests because (1)

the claims of the representatives conflict with the claims of other proposed class

members who have signed a 2002 agreement with the State, the Canadian River

Mineral Boundary Agreement for Western Hutchinson County, Texas; and (2) the claims

of the representatives conflict with claims of other proposed class members who own

land on opposite sides of the Canadian riverbed.

       The Boundary Agreement recites, among other things, that controversies have

arisen concerning the location of the boundary of the Canadian River. It further recites

its named parties, which include the State and J. M. Huber Corporation, the State‟s oil

and gas lessee, intend to “resolve all disputes among them as to the boundary of their

mineral estates between the bed of the [Canadian River] and the lands adjacent to the

river. [The parties] also wish to establish a framework for settlement so that other State

Lessees and other Riparian Owners may elect to join this Agreement upon the same

terms and conditions.” The agreement defines “Riparian Owners” to include “any other

owner of an oil, gas or mineral interest (including a leasehold interest) in lands adjacent

to the [Canadian River] and who hereinafter joins this Agreement by ratification . . . .” In

the agreement, its parties stipulate to an agreed riverbed, centerline, and banks. It

includes a replacement oil and gas lease and provides for certain additional

“compensatory” mineral royalty payments. Finally, it contains a release purporting to

absolve the State of any liability to the riparian owners for claims pertaining to or relating

                                              9
to the boundary of their mineral estates between the bed of the river and the lands

adjacent to the river.

       The record contains some eighty-five documents, executed by some seventy-one

individuals and entities, purporting to ratify the Boundary Agreement. Needless to say,

none of appellants have ratified the Boundary Agreement. The record does not indicate

if others ratified the agreement.9

       The only witness appearing live at the certification hearing was a putative class

member who signed the Boundary Agreement.              He expressed opposition to his

inclusion in the class and any attempt to invalidate the agreement.

       The trial court also found a conflict in the claims of class representatives and

those of other proposed class members owning land on opposite sides of the river bed.

The essence of this conclusion is a potential conflict between landowners on the north

side of the river and those on the south side.         According to Johnson‟s affidavit

testimony, for a time even predating the Sanford Dam water has not continuously

flowed in the riverbed. Appellants have not yet obtained a survey identifying the lands

they assert were taken by the State. According to the State, the absence of flowing

water in the riverbed creates a likelihood of conflict between landowners on either side

of the river. That is, those on the north will desire placement of the bed as far south as

possible and those on the south will desire the opposite placement. Appellants dismiss

       9
        At oral argument, however, the State indicated others among the proposed
class have ratified the agreement.
                                           10
this argument as a “red herring” interposed to detract from their claim of land taken on

both sides of the riverbed.

       In a class action, class representatives must fairly and adequately protect the

interests of the class.   Tex. R. Civ. P. 42(a)(4).    This requirement means: (1) an

absence of antagonism between the class representatives and the class members, and

(2) an assurance the representatives will vigorously prosecute the class claims and

defenses. E & V Slack, Inc. v. Shell Oil Co., 969 S.W.2d 565, 568 (Tex.App.--Austin

1998, no pet.). The primary consideration is antagonism between the interests of the

representatives and the remaining members of the putative class. Adams v. Reagan,

791 S.W.2d 284, 291 (Tex.App.--Fort Worth 1990, no writ).            In other words, the

adequacy inquiry serves to uncover conflicts of interest between class representatives

and putative class members. Amchem Products v. Windsor, 521 U.S. 591, 625, 117
S. Ct. 2231, 2250, 138 L. Ed. 2d 689 (1997).

       Claims of class conflict must not be speculative but must go to the “very subject

matter of the litigation” to defeat a party‟s claim of representative status. Employers

Cas. Co. v. Texas Ass’n of Sch. Bds. Workers’ Compensation Self-Ins. Fund, 886
S.W.2d 470, 476 (Tex.App.--Austin 1994, writ dism‟d w.o.j.) (claim must not be

speculative); Forsyth v. Lake LBJ Inv. Corp., 903 S.W.2d 146, 151 (Tex.App.--Austin

1995, writ dism‟d w.o.j.) (claim must go to the subject matter of the litigation). Thus, in

Horton v. Goose Creek Independent School District, the court noted class certification

may be denied for lack of adequate representation if there is a possibility of significant

disagreement within the proposed class. 690 F.2d 470, 485-86 (5th Cir. 1982).

                                            11
Likewise, in Swain v. Brinegar, lack of adequate representation was found because of

the possibility some putative class members would not support a class action. 517 F.2d
766, 780 (7th Cir. 1975). And conflict potentially precluding a finding of adequacy of

representation was noted in Stirman v. Exxon. 280 F.3d 554 (5th Cir. 2002). There the

court reversed a certification order finding among other things, the district court erred by

failing to rigorously address a class representative‟s adequacy as she had no incentive

to fully litigate claims not applicable to her and she previously agreed to abide by a

Texas statute of limitations even though this might cause other class members residing

in other jurisdictions with longer statutes of limitations to lose some of their claims. Id.

at 563 & n.7. The inability of putative class representatives to adequately represent a

broad class where conflict appears was shown in Mayfield v. Dalton. 109 F.3d 1423

(9th Cir. 1997).   There, two members of the Marine Corps judicially challenged a

program requiring members of the armed forces provide DNA samples. They sought

certification of a class consisting of all Navy and Marine Corps personnel compelled to

participate in the program. Id. at 1424. Finding a conflict of interests between the

putative representatives and class members, the circuit court noted the two putative

representatives opposed the program but in the broad class they proposed, others

undoubtedly held a contrary position, approving the program and desiring its full

enforcement. Id. at 1427.

       Appellants first point out the January 1, 2002 effective date of the Boundary

Agreement was some six months after appellants filed their original class action petition,

and argue that by settling with some landowners the State thus created an asserted

conflict that did not exist when certification was first requested. Appellants cite Lubin v.
                                            12
Farmers’ Group, Inc., No. 03-03-0374-CV, 2009 Tex. App. Lexis 8584, at *49-*52

(Tex.App.--Austin Nov. 6, 2009, no pet.) (mem. op.) for the proposition that class

certification should not be defeated by a conflict created by wrongdoing on the part of

one opposing certification.    But the timing of the State‟s settlement with some

landowners has not been determined to be “wrongdoing,” and we see no parallel in the

record before us between the State‟s action in entering into the Boundary Agreement

and the insurance code violations described in Lubin. See id. at *51-*52.

      Appellants also argue there is no actual conflict between the class

representatives and proposed class members who have ratified the Boundary

Agreement because the outcome of the present suit will not prohibit those who have

joined the agreement from continuing to honor it.10 In that regard, we cannot ignore the

antagonism toward the Boundary Agreement reflected in the record. Appellants told the

trial court during the certification hearing there is a question whether the agreement is

“even valid,” and expressed a desire to address that question in the present suit. And

on appeal, appellants‟ argument on this point contains the phrase “assuming the

Agreement is not void.” These and other similar statements in the record, together with

the testimony of the landowner who opposed his inclusion in the class, lend support to

the trial court‟s recognition of potential conflict between members of the proposed class

who have settled with the State and those who have not.

      10
            Our consideration of the Boundary Agreement and its impact on class
certification should not be taken as any comment on the validity or effect of the
Boundary Agreement, or a comment on the effect of the relief sought in the present suit
on the rights of those who have ratified the agreement. No such question is before us.
                                           13
       We conclude the potential and actual conflict in the proposed class concerning

ratification of the Boundary Agreement vis-à-vis advancing the claims of the class

representatives, the validity of the agreement, and the location of the north and south

boundaries of the riverbed goes to the very subject matter of the takings claims alleged.

Therefore, on this record we are unable to say the trial court abused its discretion by

finding the class representatives could not fairly and adequately protect the interests of

the class. Because it was for appellants to satisfy each of the requirements of Rule

42(a), and as the trial court did not abuse its discretion by its finding regarding

adequacy of representation, it is unnecessary to our disposition of the appeal to discuss

typicality and the alternative requirements of Rule 42(b).

                                       Conclusion

       Finding the evidence was not conclusive that the June Coon trust, the Johnson

Borger Ranch Partnership, and Montford Johnson III lack standing, we reverse that

portion of the trial court‟s order.     Otherwise, we affirm its order denying class

certification and remand the case for further proceedings consistent with this opinion.

                                                        James T. Campbell
                                                             Justice

                                            14