Court Opinion

ID: 3081378
Source: CourtListenerOpinion
Date Created: 2015-10-16 01:57:21.348391+00
Date Added: 2024-06-11T09:33:06.340841
License: Public Domain

COURT OF APPEALS
                        SECOND DISTRICT OF TEXAS
                             FORT WORTH

                             NO. 02-13-00409-CV

BARBARA LOUISE MORTON D/B/A                                       APPELLANT
TIMARRON COLLEGE PREP

                                      V.

TIMARRON OWNERS                                                    APPELLEE
ASSOCIATION, INC.

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          FROM THE 96TH DISTRICT COURT OF TARRANT COUNTY

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                       MEMORANDUM OPINION1

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                               I. INTRODUCTION

      Appellee Timarron Owners Association, Inc. nonsuited all of its claims

against Appellant Barbara Louise Morton d/b/a Timarron College Prep. The trial

court signed an order, dismissing Timarron’s claims against Morton and Morton’s

      1
      See Tex. R. App. P. 47.4.
counterclaim and claim for attorney’s fees. Morton perfected this appeal from the

trial court’s dismissal order and argues in two issues that the trial court abused its

discretion by dismissing her counterclaim that asserted a declaratory judgment

action and sought attorney’s fees. Because we are constrained to hold that,

under the facts presented here, neither Morton’s declaratory judgment

counterclaim nor her claim for attorney’s fees constituted a claim for affirmative

relief, we will affirm.

                          II. PROCEDURAL BACKGROUND2

       Timarron sued Morton in state court, alleging causes of action for

trademark infringement, unjust enrichment, tortious interference with prospective

business relations, and unfair competition.3 Morton answered, raising several

counterclaims, including a declaratory judgment action, and pleading for

attorney’s fees under chapter 37 of the Texas Civil Practice and Remedies Code.

In due course, Morton filed a combined no-evidence and traditional motion for

summary judgment on all of Timarron’s claims. Morton’s summary judgment

indicated that she waived all of her counterclaims except her declaratory

judgment counterclaim seeking a declaration that “Defendant [Morton] is not

infringing Plaintiff’s [Timarron’s] registered mark” and her claim for attorney’s fees

       2
       Because this case pivots on procedural issues, we omit a recitation of the
underlying factual background.
       3
       The parties also had proceedings pending concurrently in the United
States Patent and Trademark Office (USPTO), but upon Timarron’s motion,
those proceedings were suspended pending resolution of the state court suit.

                                          2
under chapter 37. Timarron responded by amending its petition4 and two days

later filed a notice of nonsuit and dismissal without prejudice as to its entire

lawsuit. Although Morton filed an objection to Timarron’s notice of nonsuit, the

trial court signed an order of dismissal.     The order of dismissal recited that

Timarron, by and through its nonsuit, had dismissed all of its claims against

Morton; that Morton had waived all of her causes of action except her declaratory

judgment counterclaim on which she had sought summary judgment; and that

neither party had any outstanding requests for affirmative relief. Morton then

perfected this appeal.

    III. TRIAL COURT DID NOT ABUSE ITS DISCRETION BY DISMISSING MORTON’S
                    DECLARATORY JUDGMENT COUNTERCLAIM

      In her first issue, Morton argues that the trial court abused its discretion by

dismissing her counterclaim following Timarron’s nonsuit because, essentially,

her declaratory judgment counterclaim constituted a claim for affirmative relief

that survived Timarron’s nonsuit.

      4
        Timarron’s first amended petition alleged the following causes of action
against Morton:       (1) trademark infringement under Texas Business and
Commerce Code section 16.26; (2) injury to business reputation by dilution under
Texas Business and Commerce Code section 16.29; (3) trade dress infringement
under 15 U.S.C. § 1125(a); (4) trade dress dilution under 15 U.S.C. § 1125(c); (5)
common law trademark infringement; (6) unjust enrichment; (7) tortious
interference with prospective business relations; and (8) unfair competition.
Timarron did not plead an action for declaratory judgment.

                                         3
                  A. Applicable Law and Standard of Review

      Texas Rule of Civil Procedure 162 permits a plaintiff to voluntarily dismiss

his claims or nonsuit a party opponent at any time before he has introduced all

his evidence other than rebuttal evidence. Tex. R. Civ. P. 162; In re Bennett, 960
S.W.2d 35, 38 (Tex. 1997) (orig. proceeding), cert. denied, 525 U.S. 823 (1998).

A plaintiff’s nonsuit is effective immediately upon filing. See Travelers Ins. Co. v.

Joachim, 315 S.W.3d 860, 862–63 (Tex. 2010).

      The granting of a nonsuit is a ministerial act. In re Greater Houston

Orthopaedic Specialists, Inc., 295 S.W.3d 323, 324–25 (Tex. 2009) (orig.

proceeding); Greenberg v. Brookshire, 640 S.W.2d 870, 871 (Tex. 1982). A trial

court generally has no discretion to refuse to sign an order for dismissal once

notice of nonsuit has been filed.     See Bennett, 960 S.W.2d at 38; see also

Joachim, 315 S.W.3d at 862–63. However, rule 162 expressly limits the right to

nonsuit an entire cause when the defendant has a claim for affirmative relief

pending. Bennett, 960 S.W.2d at 38; see also Tex. R. Civ. P. 162.

      To qualify as a claim for affirmative relief, a defensive pleading must allege

that the defendant has a cause of action independent of the plaintiff’s claim, on

which the defendant could recover benefits, compensation, or relief, even though

the plaintiff may abandon his cause of action or fail to establish it.          BHP

Petroleum Co. v. Millard, 800 S.W.2d 838, 841 (Tex. 1990); Gen. Land Office v.

OXY U.S.A., Inc., 789 S.W.2d 569, 570 (Tex. 1990). Thus, under rule 162, if a

defendant does no more than resist the plaintiff’s claim, the right to take a nonsuit

                                         4
is absolute.   Gen. Land Office, 789 S.W.2d at 570; see also Digital Imaging

Assocs., Inc. v. State, 176 S.W.3d 851, 854 (Tex. App.—Houston [1st Dist.]

2005, no pet.) (stating that restating a defense in the form of a request for a

declaratory judgment does not defeat a plaintiff’s claims to nonsuit).

       The Uniform Declaratory Judgments Act (UDJA) is not available to settle

disputes already pending before a court. BHP Petroleum Co., 800 S.W.2d at

841.   The Texas Supreme Court has eschewed the use of a declaratory

judgment action to “deprive the real plaintiff of the traditional right to choose the

time and place of suit.” Id. (citing Abor v. Black, 695 S.W.2d 564, 566 (Tex.

1985)). The Texas Supreme Court has also concluded that trial courts should

decline to exercise jurisdiction seeking a declaration of non-liability in a tort

action, holding that “a declaration of non-liability for past conduct is not normally

a function of the declaratory judgment statute because it deprives the potential

plaintiff of the right to determine whether to file, and if so, when and where.” Id.

Moreover, the Texas Supreme Court has cited with approval an opinion from the

Dallas Court of Appeals in which the court held that a declaratory-judgment

counterclaim was not properly brought because the issue raised by the

defendant—that no agency relationship existed—was already before the court as

part of the plaintiff’s case. Id. (citing John Chezik Buick Co. v. Friendly Chevrolet

Co., 749 S.W.2d 591, 594 (Tex. App.—Dallas 1988, writ denied)). The Texas

Supreme Court noted that the Dallas court distinguished counterclaims seeking a

true declaration controlling an ongoing and continuing relationship from

                                         5
counterclaims involving a one-time occurrence that is fully covered by the 2007
WL 4099413plaintiff’s original suit and involves no new controversies. Id. (citing

John Chezik Buick Co., 749 S.W.2d at 595).

      In certain instances, a defensive declaratory judgment may present issues

beyond those raised by the plaintiff.         For instance, a defensive request for

declaratory judgment may be permissible and may survive a plaintiff’s nonsuit

when there is an ongoing and continuing relationship between the parties such

that the request has greater ramifications in determining the parties’ respective

rights and obligations in the relationship than just in the plaintiff’s original suit.

See id. at 841–42; Winslow v. Acker, 781 S.W.2d 322, 328 (Tex. App.—San

Antonio 1989, writ denied); John Chezik Buick Co., 749 S.W.2d at 595.

      We review whether Morton’s declaratory judgment claim and her claim for

attorney’s fees under chapter 37 constitute an independent claim for affirmative

relief or present issues beyond those raised by Timarron under a de novo

standard of review. See Monterey Networks, Inc. v. Alcatel USA, Inc., No. 05-01-

00071-CV, 2002 WL 461550, at *2 (Tex. App.—Dallas Mar. 27, 2002, no pet.)

(not designated for publication) (relying on Natividad v. Alexsis, Inc., 875 S.W.2d
695, 699 (Tex. 1994), and Schuld v. Dembriknski, 12 S.W.3d 485, 488 (Tex.

App.—Dallas 2000, no pet.), and stating that because the granting of a nonsuit is

a ministerial act and because we interpret the pleadings to determine whether

appellant stated a claim for affirmative relief, we review the case under a de novo

standard of review); Hansson v. Time Warner Enter. Advance, No. 03-01-00578-

                                          6
CV, 2002 WL 437297, at *2 (Tex. App.—Austin Mar. 21, 2002) (not designated

for publication) (relying on Butler Weldments Corp. v. Liberty Mut. Ins. Co., 3
S.W.3d 654, 658 (Tex. App.—Austin 1999, no pet.), and stating that appellate

court uses de novo standard of review when reviewing whether appellant’s

counterclaim established an independent claim for affirmative relief).

                                   B. Analysis

      In    analyzing   whether   Morton’s   declaratory    judgment     counterclaim

constituted an independent claim for affirmative relief that survived Timarron’s

nonsuit, we note that Timarron pleaded a cause of action against Morton for

trademark infringement. Morton’s declaratory judgment counterclaim sought a

declaration that “Defendant [Morton] is not infringing Plaintiff’s [Timarron’s]

registered mark.”       Morton’s counterclaim is thus a “defensive mirror” of

Timarron’s trademark infringement claim: Timarron asked the trial court to find

that Morton had infringed Timarron’s trademarks; Morton asked the trial court to

find that she had not infringed Timarron’s trademarks.         See Digital Imaging

Assocs., 176 S.W.3d at 855; Newman Oil Co. v. Alkek, 614 S.W.2d 653, 655

(Tex. Civ. App.—Corpus Christi 1981, writ ref’d n.r.e.).       Morton’s declaratory

judgment counterclaim therefore does not constitute a claim for affirmative relief

because it is not a cause of action independent of Timarron’s cause of action for

trademark    infringement and on      which    Morton      could   recover   benefits,

compensation, or relief. See, e.g., Sanchez v. AmeriCredit Fin. Servs., Inc., 308
S.W.3d 521, 525 (Tex. App.—Dallas 2010, no pet.) (explaining that defendant’s

                                         7
defensive declaratory judgment counterclaim was not a cause of action for

affirmative relief independent of plaintiff’s claims because it asked for no greater

relief than defendant asked for without the declaratory judgment counterclaim).

       Here, Morton’s declaratory judgment counterclaim seeking a declaration

that Morton did not infringe on Timarron’s registered mark seeks no greater relief

than Morton would be entitled to in the absence of the declaratory judgment

counterclaim.     See Digital Imaging Assocs., 176 S.W.3d at 855 (holding that

claim for declaratory judgment that merely mirrors controlling issues in plaintiff’s

case is not a claim for affirmative relief); see also In re Hanby, No. 14-09-00896-

CV, 2010 WL 1492863, at *3 (Tex. App.—Houston [14th Dist.] Apr. 15, 2010,

orig. proceeding) (sub. mem. op.) (holding that counterclaim did not seek a

declaration concerning an ongoing obligation and was therefore not a claim for

affirmative relief).

       Morton nonetheless argues that her declaratory judgment counterclaim is

an independent claim for affirmative relief that survives Timarron’s nonsuit

because of the parties’ trademark registrations and oppositions filed in the

USPTO. Morton argues that the ongoing trademark registrations and oppositions

filed in the USPTO, which were abated during the pendency of the state court

case, constitute an ongoing and continuing relationship such that her declaratory

judgment counterclaim has ramifications in determining the parties’ respective

rights and obligations beyond Timarron’s state court trademark infringement

suit—that being ramifications in the parties’ trademark registrations and

                                         8
oppositions pending in the USPTO.5 But, according to the order issued by the

Trademark Trial and Appeal Board suspending the federal proceedings pending

the outcome of Timarron’s state court suit, the results of the state court

trademark infringement suit “could have a bearing” on the federal proceedings

and “may provide some persuasive insight,” but the Board “may not necessarily

be bound by” any state court decision.6 Based on this language, a declaration of

non-infringement from the state court on Morton’s declaratory judgment

counterclaim might be considered as persuasive authority by the Board but

      5
        Morton concedes in her brief that she made the opposite argument in the
trial court, arguing that the outcome of the state court case did not have any
bearing on the proceedings in the USPTO.
      6
      The order states,

             Following a careful review of the civil action complaint, the
      Board finds that a decision by the state court could have a bearing
      on th[e] issues in this opposition proceeding. The Board notes that
      th[e] opposer and applicant are both parties to the state court action
      and that the state court action and the Board proceeding involve a
      substantial amount of identical questions of law and fact.
      Specifically, opposer has asserted a claim of trademark infringement
      in the state court action and seeks to enjoin applicant from using its
      involved mark herein. Here, opposer has asserted a claim of priority
      and likelihood of confusion as its ground for opposition. While the
      Board may not necessarily be bound by the state court’s decision
      regarding the issue of likelihood of confusion and/or trademark
      infringement, the state court’s determination regarding these issues
      may provide some persuasive insight with regard to opposer’s claim
      of priority and likelihood of confusion asserted in this proceeding.
      [Citation omitted.] Moreover, to the extent the state court grants
      opposer’s request for injunctive relief and enjoins applicant from
      using its involved mark, such a holding may affect the registrability of
      applicant’s subject mark. [Emphasis added.]

                                         9
would not be binding on the Board. Morton has not cited, and we have not

located, authority for the proposition that the effect of a court’s non-liability

decision on other proceedings pending between the parties in a different forum

creates the type of “ongoing and continuing” relationship between the parties or

constitutes the type of ramifications that would enable a defensive declaratory

judgment action to survive a nonsuit. Compare Sanchez, 308 S.W.3d at 525

(holding that defendant’s declaratory judgment counterclaim sought declaration

on affirmative defenses to claims on which the parties had already joined issue

and presented no greater ramifications than original suit), Mustang Secs. &

Investigations, Inc. v. Alpha & Omega Servs., Inc., No. 01-06-00093-CV, 2007
WL 4099413, at *4 (Tex. App.—Houston [1st Dist.] Nov. 15, 2007, no pet.) (mem.

op.) (holding that defendant’s declaratory judgment counterclaim was not the

proper subject of a declaratory judgment action because there was no contract

between defendant and plaintiff and there was no evidence that the parties were

engaged in an ongoing and continuing relationship), and Monterey Networks,

Inc., 2002 WL 461550, at *2–3 (declining to hold that parties had a continuing

relationship simply because they were alleged to be competitors), with BHP

Petroleum Co., 800 S.W.2d at 842 (holding defendant’s declaratory judgment

counterclaim for interpretation of gas purchase contract was claim for affirmative

relief because it would define parties’ obligations under contract in the future),

Hot-Hed, Inc. v. Safehouse Habitats (Scotland), Ltd., 333 S.W.3d 719, 728 (Tex.

App.—Houston [1st Dist.] 2010, pet. denied) (holding that defendant’s

                                       10
declaratory judgment counterclaim seeking declaration of state and federal

eligibility of the term “Habitat” for trademark protection constituted independent

claim for affirmative relief beyond plaintiff’s trademark infringement claim),

Georgiades v. Di Ferrante, 871 S.W.2d 878, 880–81 (Tex. App.—Houston [14th

Dist.] 1994, writ denied) (holding that defendant’s declaratory judgment

counterclaim seeking declaration of no common-law or ceremonial marriage was

claim for affirmative relief beyond plaintiff’s suit for divorce because it would

define parties’ obligations in the future), and Winslow, 781 S.W.2d at 328

(holding that defendant’s declaratory judgment counterclaim was claim for

affirmative relief because it would settle future disputes concerning royalties

owed under partition deed).

       Because     Morton’s     declaratory    judgment   counterclaim   seeking   a

declaration of non-infringement is a defensive mirror that does not seek

affirmative relief beyond the relief Morton would be entitled to upon disposition of

Timarron’s trademark infringement claim, because the existence of the federal

registration and opposition filings in the USPTO does not alone create an

ongoing and continuing relationship between the parties, and because Morton’s

request for a declaration of non-infringement would not necessarily have any

ramifications beyond Timarron’s state court suit, Morton’s declaratory judgment

counterclaim seeking a declaration of non-infringement does not constitute a

claim for affirmative relief.

                                          11
         Because Morton’s counterclaim does not constitute a claim for affirmative

relief, the trial court did not abuse its discretion by dismissing Morton’s

counterclaim in the order granting Timarron’s nonsuit. We overrule Morton’s first

issue.

IV. TRIAL COURT DID NOT ABUSE ITS DISCRETION BY DISMISSING MORTON’S CLAIM
                          FOR ATTORNEY’S FEES

         In her second issue, Morton argues that the trial court erred by granting

Timarron’s nonsuit because Morton had asserted a claim for attorney’s fees.

         Section 37.009 of the UDJA provides that “[i]n any proceeding under this

chapter, the court may award costs and reasonable and necessary attorney’s

fees as are equitable and just.” Tex. Civ. Prac. & Rem. Code Ann. § 37.009

(West 2008). A party bringing a counterclaim under the UDJA may recover its

attorney’s fees “if its counterclaim is more than a mere denial of the plaintiff’s

cause of action.” Warrantech Corp. v. Steadfast Ins. Co., 210 S.W.3d 760, 769

(Tex. App.—Fort Worth 2006, pet. denied).

         Morton relies on several cases from this court to support her argument that

her claim for attorney’s fees survived Timarron’s nonsuit. This court has held

that a defendant’s request for attorney’s fees under chapter 37 will survive a

nonsuit when the plaintiff filed suit for a declaratory judgment under chapter 37.

See Town of Flower Mound v. Upper Trinity Reg’l Water Dist., 178 S.W.3d 841,

842–44 (Tex. App.—Fort Worth 2005, no pet.); Falls Cnty. v. Perkins & Cullum,

798 S.W.2d 868, 871–72 (Tex. App.—Fort Worth 1990, no writ) (distinguishing

                                          12
cases in which a plaintiff filed a declaratory judgment action and the defendant

sought attorney’s fees from cases in which the plaintiff did not file a declaratory

judgment action but the defendant filed a defensive declaratory judgment action

and sought attorney fees under chapter 37).        Here Timarron did not file a

declaratory judgment action pursuant to chapter 37, and thus the preceding

cases are not applicable.

      Morton also points to this court’s decision in Noe v. McLendon, in which

attorney’s fees were upheld under section 37.009. No. 02-06-00062-CV, 2007
WL 2067844, at *3 (Tex. App.—Fort Worth July 19, 2007, no pet.) (mem. op.).

But in Noe, the trial court’s judgment awarded McLendon attorney’s fees based

on sections 38.001 and 37.009 of the civil practice and remedies code after a

trial; Noe did not challenge the propriety of the attorney’s fees award pursuant to

these statutory provisions. Id. (“Noe does not argue that the [attorney’s fee]

award is improper under these statutes”).         Although Noe had previously

nonsuited her claims against McLendon, she repleaded them, and the case

proceeded to a bench trial. Id. at *1. Thus, Noe did not involve the situation

presented here.

      As set forth above, Morton’s declaratory judgment counterclaim for a

declaration of non-infringement is not an independent claim for affirmative relief

and did not survive Timarron’s nonsuit. Because Morton’s declaratory judgment

counterclaim did not survive Timarron’s nonsuit, Morton is not entitled to

attorney’s fees based on chapter 37. See Warrantech Corp., 210 S.W.3d at 770

                                        13
(holding defendant’s declaratory judgment counterclaim for declaration of no duty

to defend pleaded in response to plaintiff’s claim for breach of the duty to defend

would not support an award of attorney’s fees to defendant); Hansson, 2002 WL
437297, at *3 (same); see also Nat’l Enter., Inc. v. E.N.E. Props., 167 S.W.3d 39,

43–44 (Tex. App.—Waco 2005, no pet.) (same); Heritage Life Ins. Co. v.

Heritage Grp. Holding Corp., 751 S.W.2d 229, 235–36 (Tex. App.—Dallas 1988,

writ denied) (same); John Chezik Buick Co., 749 S.W.2d at 594–95 (same).

Accordingly, we hold that the trial court did not err by dismissing Morton’s

counterclaim for attorney’s fees in the order granting Timarron’s nonsuit. We

overrule Morton’s second issue.

                                  V. CONCLUSION

      Having overruled Morton’s two issues, we affirm the trial court’s judgment.

                                                   /s/ Sue Walker
                                                   SUE WALKER
                                                   JUSTICE

PANEL: WALKER, MEIER, and GABRIEL, JJ.

DELIVERED: June 12, 2014

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