Court Opinion

ID: 9896449
Source: CourtListenerOpinion
Date Created: 2023-11-12 08:12:37.110121+00
Date Added: 2024-06-11T09:15:01.008096
License: Public Domain

Petition for Writ of Mandamus Conditionally Granted and Memorandum
Opinion filed November 9, 2023.

                                     In The

                    Fourteenth Court of Appeals

                               NO. 14-23-00267-CV

  IN RE THE WILLIAMS COMPANIES, INC, JOHN DEARBORN, AND
                  DAVID CHAPPELL, Relator

                         ORIGINAL PROCEEDING
                           WRIT OF MANDAMUS
                              125th District Court
                             Harris County, Texas
                       Trial Court Cause No. 2016-53287

                        MEMORANDUM OPINION

      On April 19, 2023, relators the Williams Companies, Inc, John Dearborn, and
David Chappell (collectively, the “Williams Parties”) filed a petition for writ of
mandamus in this court. See Tex. Gov’t Code Ann. § 22.221; see also Tex. R. App.
P. 52. In the petition, the Williams Parties asks this Court to compel the Honorable
Kyle Carter, presiding judge of the 125th District Court of Harris County, to vacate
his April 6, 2023 order denying their motion for leave to designate responsible third
party and grant the motion. We conditionally grant the petition.

                                   BACKGROUND

      Williams is an energy infrastructure company engaged in the transportation
of natural gas and processing of natural gas liquids and olefins throughout North
America. One of Williams’ affiliates, Williams Energy Canada ULC (“Williams
Canada”), was engaged in the sale of polymer grade propylene and made proposals
to engage in the business of dehydrogenating propane for the manufacture of
polymer grade propylene. Chappell was president of Williams Canada from 2012
to 2016. Dearborn was senior vice president of NGL & Petchem Services for
Williams from 2013 through 2017. North American Polypropylene ULC (“NAPP”)
is an affiliate of a global marketing, distribution, and project development company
that provides products and services to users of petrochemical products.

      In 2013, Williams advised NAPP that it was planning to build and operate a
propane dehydrogenation plant in Canada (the “Williams Plant”). The end-product
was to be a polymer grade propylene—the feedstock for the manufacture of
polypropylene—a thermoplastic used in consumer and industrial applications like
plastics, textiles, and automotive components. Williams sought to convince NAPP
to commit to build and operate a polypropylene facility to be located adjacent to the
Williams Plant, to enter into a long-term agreement to coordinate the construction

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of the two facilities, and to commit, on a take-or-pay basis, to purchase most or all
of the production of the propylene produced at the Williams Plant.

      On August 19, 2015, the propylene purchase and sales agreement was
executed. The following month, in September 2015, Williams announced that it had
signed a merger agreement by which it would be acquired by a natural gas pipeline
operator. Williams subsequently admitted that it had intended to defer development
of the Williams Plant and cut spending.

      On August 11, 2016, NAPP sued the Williams Parties in Harris County,
alleging fraud and negligent representation in connection with the negotiation of the
contract for the construction of petrochemical processing plants in Canada. 1
According to NAPP, Williams represented that it was ready, willing, and able to
proceed with the project and that it was fully committed to the project for the long
term. However, unbeknownst to NAPP, Williams was considering selling its
Canadian assets, including the Williams Plant. According to NAPP, it was important
for Williams to keep NAPP in the project so that Williams could sell its Canadian
assets at an attractive price. NAPP claimed that, but for the misrepresentations and
omissions, NAPP would not have made pre-contractual expenditures or set aside
“millions” for financing the project but instead would have pursued other valuable
opportunities.

      1
          NAPP also sued Williams in Canada on August 11, 2016.
                                              3
       In November 2016, NAPP served requests for disclosure under Rule 194.2.
See Tex. R. Civ. P 194.2. In March 2017, the Williams Parties responded to the
requests for disclosure.

       On December 5, 2016, the Williams Parties moved to dismiss the Texas suit
based on the forum-selection clause in the NAPP contract requiring any suit to be
filed in Canada, the major transaction venue statute, and forum non conveniens. On
June 15, 2018, NAPP filed a fifth amended petition in which several new parties
were joined as plaintiffs2 (the “Goradia Parties”) with a new damages theory. In the
fifth amended petition, NAPP and the Goradia Parties asserted that the Goradia
Parties “are either principals of NAPP or prospective investors in NAPP who set
aside funds on behalf of NAPP for its participation in this project . . . and who would
have pursued alternative projects in lieu of that project.”

       On July 13, 2018, the Williams Parties filed an amended motion to dismiss,
in which they addressed the addition of the Goradia Parties. On August 8, 2018, the
trial court denied the amended motion to dismiss. The Williams Parties sought
mandamus relief in this court. On March 5, 2020, we denied the Williams Parties’
petition for writ of mandamus.

       2
         The additional plaintiffs are: Goradia Family Interests, Ltd.; Vijay Goradia; Marie
Goradia; Sapphira Goradia, as Trustee of Kevin Goradia 2007 Trust No. One (D) and Sapphira
Goradia 2007 Trust No. One (D); Lissen Ney, as Trustee of Kevin Goradia 2007 Trust No. One
(D) and Sapphira Goradia 2007 Trust No. One (D); Hemant Goradia, Individually, and as Trustee
of Kevin Goradia 2007 Trust No. One (D), Sapphira Goradia 2007 Trust No. One (D), and Hemant
Goradia 2003 Gift Trust; KSMV Investments, Ltd.; VMSK Interests, Ltd.; and Indra P. Goradia,
as Trustee of Vishal Hemant Goradia 2012 Trust, Preeya Rani Goradia 2012 Trust, Vishal Hemant
Goradia 2011 Trust, Preeya Rani Goradia 2011 Trust, and Hemant Goradia 2003 Gift Trust.
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      Also, on July 13, 2018, the Williams Parties filed their objection and motion
to strike intervention of the Goradia Parties. The Williams Parties stated that, since
2016, NAPP had amended its pleading five times in an ongoing attempt to maintain
the underlying lawsuit in Texas rather than in Canada where a “duplicative suit” was
pending. The Williams Parties argued that NAPP had engaged in “procedural
maneuvering in the Texas action,” which “involved repeated shuffling of the parties,
relabeling its claims, and recharacterizing its factual allegations and purported
damages in multiple attempts to distinguish them from those already pending in
Canada.”

      The Williams Parties complained that the new parties “intervened” as
plaintiffs, asserting claims that mirror those asserted by NAPP. NAPP and the
Goradia Parties responded that the Goradia Parties were not asserting claims for
corporate injuries suffered by NAPP, but rather for injuries they had personally
suffered when they set aside their family funds because of the Williams Parties’
misrepresentations.   Therefore, the Goradia Parties claimed that they have a
justiciable interest in this case and could have sued on their own. On July 23, 2018,
the trial court denied the motion to strike. The Williams Parties sought mandamus
relief in this court. On March 5, 2020, we denied the Williams Parties’ petition for
writ of mandamus.

      On September 21, 2021, the Goradia Parties served Rule 194.2 requests for
disclosures. On October 21, 2021, the Williams Parties responded to the Goradia
Parties’ requests for disclosures and amended their responses to NAPP’s requests
for disclosures to name possible responsible third parties.
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       On March 16, 2023, the Williams Parties moved to designate Nitin Dalal, who
was a “NAPP Negotiator,” as a responsible third party.3 The Williams Parties
asserted that Dalal was alleged to have been acting in a representative capacity on
behalf of the Goradia Parties in connection with negotiations and conveying
information from those negotiations, upon which the Goradia Parties claimed to have
relied when making investment decisions. In other words, the alleged reliance by
the Goradia Parties was not based on anything the Williams Parties conveyed to
them but on what Dalal did or did not tell them. The Williams Parties set forth a
number of purported misrepresentations and omissions. According to the Williams
Parties, Dalal owed a common law duty and a fiduciary duty, among other legal
duties, to provide full and accurate information to the Goradia Parties, which he did
not do. The Williams Parties contended that Dalal, as a NAPP Negotiator, qualifies
as a responsible third party because he proximately caused or contributed to causing
the harm for which the Goradia Parties seek the recovery of damages.

       NAPP and the Goradia Parties responded that the Williams Parties failed to
timely disclose potentially responsible third parties because they waited more than
five years after suit had been filed, more than four years after the addition of the
Goradia Parties, and more than a year after any applicable limitations had expired to
seek to name a potential responsible third party.

       3
         The Williams Parties also originally sought to designate Hemant Goradia and Vijay
Goradia as responsible third parties, but no longer seek to designate them as responsible third
parties.
                                              6
      The Williams Parties replied that their motion concerned only responsibility
for the Goradia Parties’ damage claims filed on June 15, 2018. More than three
years later, on September 21, 2021, the Goradia Parties served the Williams Parties
with their request for disclosures. Thirty days later, on October 21, 2021, the
Williams Parties responded and identified Dalal as a potentially responsible third
party in connection with the Goradia Parties’ claims. Therefore, with respect to the
Goradia Parties’ claims, the Williams Parties contended that they timely designated
Dalal as a responsible third party. On April 6, 2023, the trial court signed the order
denying the motion for leave to designate.

      The Williams Parties bring this original proceeding, contending that the trial
court abused its discretion by denying their motion for leave to designate Dalal as a
responsible third party and they do not have an adequate remedy by appeal.

                               STANDARD OF REVIEW

      Generally, to be entitled to mandamus relief, relator must establish that (1) the
trial court abused its discretion; and (2) relator has no adequate remedy by appeal.
In re Christianson Air Conditioning & Plumbing, LLC, 639 S.W.3d 671, 681 (Tex.
2022) (orig. proceeding). A trial court clearly abuses its discretion if it reaches a
decision so arbitrary and unreasonable as to amount to a clear and prejudicial error
of law or if it clearly fails to analyze the law correctly or apply the law correctly to
the facts. In re H.E.B. Grocery Co., L.P., 492 S.W.3d 300, 302‒03 (Tex. 2016)
(orig. proceeding) (per curiam); In re Cerberus Capital Mgmt. L.P., 164 S.W.3d 379,
382 (Tex. 2005) (orig. proceeding) (per curiam). Ordinarily, no adequate remedy
by appeal exists from the erroneous denial of a timely filed motion to designate a
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responsible third party. In re YRC, Inc., 646 S.W.3d 805, 810 (Tex. 2022) (orig.
proceeding) (per curiam).

                                       ANALYSIS

      Chapter 33 of the Texas Civil Practices and Remedies Code sets forth the
Texas proportionate responsibility law. Tex. Civ. Prac. & Rem. Code §§ 33.001–
33.017. “These statutes allow a tort defendant to designate as a responsible third
party a person who is alleged to have caused in any way the harm for which the
plaintiff seeks damages.” In re CVR Energy, Inc., 500 S.W.3d 67, 81‒82 (Tex.
App.—Houston [1st Dist.] 2016, orig. proceeding [mand. denied]) (internal
quotation marks & citations omitted); see also Tex. Civ. Prac. & Rem. Code
§ 33.011(6) (defining “responsible third party” as “any person who is alleged to have
caused or contributed to causing in anyway the harm for which recovery of damages
is sought”).

      Section 33.04 permits a tort defendant to designate a person as a responsible
third party by filing a motion “on or before the 60th day before the trial date unless
the court finds good cause to allow the motion to be filed at a later date.” Tex. Civ.
Prac. & Rem. Code § 33.004(a). The trial court “shall grant leave to designate . . . a
responsible third party” unless another party objects within fifteen days after service
of the motion. Id. § 33.004(f). When the defendant’s motion is timely but filed
“after the applicable limitations period on the cause of action has expired with
respect to the responsible third party,” the defendant may not designate the person
as a responsible third party “if the defendant has failed to comply with its obligations,

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if any, to timely disclose that the person may be designated as a responsible third
party under the Texas Rules of Civil Procedure.” Id. § 33.004(d).

      It is undisputed that the Williams Parties filed their motion for leave more
than 60 days before the May 15, 2023 trial setting, but also that the statute of
limitations for claims against Dalal had expired. See id. § 33.004(a). The Williams
Party designated Dalal as a responsible third party in their response to the Goradia
Parties’ September 21, 2021 request for disclosures 30 days after having been
served. The Williams Parties, therefore, assert that their designation of Dalal as a
responsible third party was timely, even though the statute of limitations had run.
See id. § 33.004(d).

      NAPP and the Goradia Parties, on the other hand, argue that the Williams
Parties’ duty to designate Dalal began with NAPP’s November 2016 request for
disclosures. NAPP and the Goradia Parties further contend that, after the Williams
Parties failed to disclose Dalal in response to NAPP’s request for disclosure, the
Williams Parties’ duty to supplement their response began in 2018, when the
Goradia Parties joined the lawsuit. NAPP and the Goradia Parties posit that this
court should “apply the basic principle that later-added parties can rely on earlier
responses to discovery.” See Tex. R. Civ. P. 193.5(a)(2) (“If a party learns that the
party’s response to written discovery was incomplete or incorrect when made, or,
although complete and correct when made, is no longer complete and correct, the
party must amend or supplement the response . . . to the extent that the written
discovery sought other information, unless the additional or corrective information

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has been made known to the other parties in writing, on the record at a deposition,
or through other discovery responses.”).

      The Williams Parties reply that the Goradia Parties’ argument that the
Williams Parties’ disclosure was not timely because of the duty to supplement their
response to NAPP’s request for disclosures was not raised in the trial court. It is
now waived in this proceeding. See In re Cornerstone Healthcare Holding Grp.,
Inc., 348 S.W.3d 538, 542 (Tex. App.—Dallas 2011, orig. proceeding) (refusing to
address real party in interest’s arguments in mandamus proceeding because they
were not raised in trial court); In re MHI P’ship, Ltd., No. 14-07-00851-CV, 2008
WL 2262157, at *8 (Tex. App.—Houston [14th Dist.] May 29, 2008, orig.
proceeding) (mem. op.) (refusing to address real party in interest’s arguments in
mandamus proceeding because it did not raise arguments in trial court.

      Moreover, NAPP and the Goradia Parties never filed the November 2016
request for disclosures or the Williams Parties’ March 2017 response in the trial
court and, therefore, such request and response were not before the court and could
not have been a basis on which to deny the motion for leave to designate responsible
third parties. Instead, the only document attached to the Goradia Parties’ objection
to the motion for leave to designate responsible third parties was the William Parties’
2021 disclosure in response to the Goradia Parties’ request for disclosures. The
Goradia Parties never argued that the responses to their request for disclosures were
untimely.

      The Goradia Parties joined the case “with a new damages theory,” alleging
that they had received the Williams Parties’ misrepresentations and omissions via an
                                           10
intermediary. The fifth amended petition did not name the intermediary as a
defendant. The Goradia Parties requested disclosures in 2021, even though they had
joined the suit as plaintiffs in 2018 and NAPP had requested disclosures from the
Williams Parties in 2016. The Williams Parties moved to designate Dalal as a
responsible third party only in connection with the Goradia Parties’ claims. If a duty
for the Williams Parties to supplement their responses to NAPP’s request for
disclosures had existed, the Goradia Parties would not have needed to make their
own request for disclosures.     Therefore, the Williams Parties had no duty to
supplement the disclosures to NAPP’s request.

      Even though the statute of limitations as to claims against Dalal had expired
in 2019, the Goradia Parties waited until 2021 to serve request for disclosures on the
Williams Parties. The Williams Parties disclosed Dalal within 30 days of service of
the Goradia Parties’ request for disclosures. The Williams Parties also timely filed
their motion for leave to designate more than 60 days before the trial date.

      Because the Williams Parties complied with its obligation to timely disclose
Dalal in response to the Goradia Parties’ request for disclosure and their motion for
leave to designate was timely filed, the Williams Parties could designate Dalal as a
responsible third party, even though the statute of limitations as to claims against
Dalal had expired. See Tex. Civ. Prac. & Rem. Code § 33.004(a), (d).

      We conclude that the trial court abused its discretion by denying the Williams
Parties’ motion for leave to designate Dalal as a responsible third party. Also, the
Williams Parties do not have an adequate remedy by appeal. See YRC, Inc., 646
S.W.3d at 810.
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                                    CONCLUSION

      Having determined that the trial court abused its discretion and the Williams
Parties do not have an adequate remedy by appeal, we conditionally grant the
petition for writ of mandamus. We direct the trial court to vacate its April 6, 2023
order denying the Williams Parties’ motion for leave to designate Dalal as a
responsible third party and grant the motion. We are confident the trial court will
act in accordance with this opinion and a writ will issue only if the trial court fails
to comply.

                                   PER CURIAM

Panel consists of Justices Wise, Zimmerer, and Wilson.

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