Court Opinion

ID: 4302194
Source: CourtListenerOpinion
Date Created: 2018-08-09 14:17:52.484951+00
Date Added: 2024-06-11T14:29:40.171870
License: Public Domain

In The

                               Court of Appeals
                    Ninth District of Texas at Beaumont
                             _________________
                              NO. 09-18-00273-CV
                             _________________

                      IN RE OXBOW CALCINING LLC

________________________________________________________________________

                              Original Proceeding
                172nd District Court of Jefferson County, Texas
                          Trial Cause No. E-201,894
________________________________________________________________________

                          MEMORANDUM OPINION

       Oxbow Calcining LLC filed a petition for writ of mandamus to compel the

trial court to vacate an order denying relator’s motion to quash a hearing on Port

Arthur Steam Energy, L.P.’s (PASE) Application for Post-Judgment Enforcement

Orders. We entered a stay and requested further briefing.

      In 2011, Oxbow and PASE had a dispute concerning certain rights and duties

under a Heat Energy Agreement (Heat Agreement) that resulted in an arbitration

award of $3,409,781.57 to PASE. According to the arbitration award, PASE was

entitled to lost revenue caused by Oxbow’s breach of provisions in the Heat

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Agreement. The arbitration award expressly states further that: “This is not a cash

award requiring Oxbow to write PASE a check. It shall be handled in accordance

with the specific provisions of the Heat Agreement regarding the heat bank as an

offset.”1 The award was confirmed by the 151st District Court of Harris County.

      On June 8, 2018, PASE filed a Petition and Application for Post-Judgment

Enforcement Orders in the 172nd District Court of Jefferson County. Oxbow owns

and operates a coke calcining plant located in Port Arthur, Jefferson County, Texas.

PASE owns and operates a steam plant that is adjacent and connected to Oxbow’s

petroleum coke calcining plant in Jefferson County, Texas. PASE requested the

appointment of a receiver under section 31.002 of the Civil Practice and Remedies

Code to monitor and control Oxbow’s coke calcining plant to maximize the delivery

of flue gas energy to PASE. See generally Tex. Civ. Prac. & Rem. Code Ann. §

31.002 (West Supp. 2017).

      Oxbow filed a motion to transfer venue to Harris County and subject to its

motion to transfer venue, moved to compel arbitration of the dispute under the Heat

Agreement. Oxbow filed a motion to quash the hearing on PASE’s application for a

      1
        PASE concedes that it was not to recover a monetary payment for damages
directly from Oxbow, and that it was to recover the damages awarded in the
judgment by offsetting “Heat Payments” that the arbitration panel anticipated PASE
would be making to Oxbow under Section 6 of the Heat Agreement over a period of
twelve or more years.
                                         2
turnover order and appointment of a receiver, which, in part, argued that the motion

to transfer venue and motion to compel arbitration should be decided first. The trial

court denied Oxbow’s motion to quash.

      In its mandamus petition, Oxbow contends the trial court clearly abused its

discretion by denying the motion to quash when a motion to transfer venue and a

motion to compel arbitration based on a mandatory arbitration provision in the Heat

Agreement will not be decided before the scheduled hearing on PASE’s application

for a turnover order. Oxbow contends it lacks an adequate remedy by appeal because

the order effectively deprives Oxbow of its contractual right to arbitration and

severely compromises its ability to present its defense at the hearing on PASE’s

application for a turnover order.

                                 Mandamus Review

      A writ of mandamus traditionally has been only to “compel the performance

of a ministerial act or duty.” Walker v. Packer, 827 S.W.2d 833, 839 (Tex. 1992)

(orig. proceeding). The use has been expanded to “correct a ‘clear abuse of

discretion’ committed by the trial court”. Id. 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.’” Id. (quoting Johnson v. Fourth Court of Appeals, 700
S.W.2d 916, 917). The relator must establish that the trial court could reasonably

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have reached only one decision. Id. at 840. “On the other hand, review of a trial

court’s determination of the legal principles controlling its ruling is much less

deferential.” Id. “A trial court has no ‘discretion’ in determining what the law is or

applying the law to the facts.” Id. “Thus, a clear failure by the trial court to analyze

or apply the law correctly will constitute an abuse of discretion[] and may result in

appellate reversal by extraordinary writ.” Id.

      Oxbow must also demonstrate that it has no adequate remedy by appeal. See

In re Prudential Ins. Co. of America, 148 S.W.3d 124, 135–36 (Tex. 2004) (orig.

proceeding). Mandamus review of incidental, interlocutory rulings by the trial court

unduly interferes with trial court proceedings and adds to the expense and delay of

civil litigation. Id. at 136. However, mandamus review of significant rulings in

exceptional cases may, at times, be essential to preserve important substantive and

procedural rights from impairment or loss and spare private parties and the public

the time and money utterly wasted enduring eventual reversal of improperly

conducted proceedings. Id. When the benefits to mandamus review outweigh the

detriments, appellate courts must consider whether the appellate remedy is adequate.

Id. “[W]hether an appellate remedy is ‘adequate’ so as to preclude mandamus review

depends heavily on the circumstances presented and is better guided by general

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principles than by simple rules.” Id. at 137. Mandamus review is appropriate if “the

error was clear enough[] and correction simple enough[.]” Id.

      In its mandamus petition, Oxbow contends the trial court clearly abused its

discretion by denying the motion to quash when a motion to transfer venue and a

motion to compel arbitration based on a mandatory arbitration provision in the Heat

Agreement will not be decided before the scheduled hearing on PASE’s application

for a turnover order. Oxbow contends it lacks an adequate remedy by appeal because

the order effectively deprives Oxbow of its contractual right to arbitration and

severely compromises its ability to present its defense at the hearing on PASE’s

application for a turnover order.

      The hearing that Oxbow seeks to quash is on PASE’s request for turnover of

assets and relates to post-judgment enforcement of a judgment. See generally Tex.

Civ. Prac. & Rem. Code Ann. § 31.002. The turnover statute is purely procedural in

nature. Republic Ins. Co. v. Millard, 825 S.W.2d 780, 783 (Tex. App.—Houston

[14th Dist.] 1992, orig. proceeding). The purpose of a turnover proceeding is merely

to ascertain whether an asset is in the possession of the judgment debtor or subject

to the debtor’s control. Id. The statute does not allow for a determination of the

parties’ substantive rights. Id.

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      Whether the arbitration award reduced to judgment allows the real party in

interest to seize control of the relator’s plant or to obtain a turnover order or

receivership, whether the dispute is a “new dispute” or seeks additional substantive

relief, whether venue of this matter is proper in Jefferson County, Texas, and

whether the matter should be arbitrated are issues that have not yet been determined

by the trial court, and such issues are not currently before us. We expressly do not

rule on any of these questions. The only questions before a trial court at a hearing on

an application for turnover are: (1) whether the judgment creditor is entitled to

turnover of nonexempt assets to obtain satisfaction of a judgment; (2) whether the

judgment debtor is in possession of an asset that is not exempt from attachment,

execution, or seizure for the satisfaction of liabilities under the judgment; and (3)

whether the trial court should appoint a receiver with the authority to take possession

of the nonexempt property, sell it, and pay the proceeds to the judgment creditor to

the extent required to satisfy the judgment. See generally Tex. Civ. Prac. & Rem.

Code Ann. § 31.002. Any resulting order that grants the turnover or appoints a

receiver or that functions as a mandatory injunction will be appealable. See

Alexander Dubose Jefferson & Townsend LLP v. Chevron Phillips Chem. Co., 540
S.W.3d 577, 586 (Tex. 2018); see also Tex. Civ. Prac. & Rem. Code Ann. §

51.014(a)(1) (West Supp. 2017).

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      The matter that Oxbow seeks to quash is a hearing that is limited to post-

judgment enforcement of an arbitration award. Whether the Judgment in this case

allows the real party in interest to seize control of the relator’s plant is a matter that

has not yet been determined by the trial court. After reviewing the mandamus

petition and record, we conclude that an appeal of a turnover order will provide

adequate relief in this instance. We lift our July 20, 2018 stay order and deny the

petition for a writ of mandamus.

      PETITION DENIED.

                                                              PER CURIAM

Submitted on July 31, 2018
Opinion Delivered August 9, 2018

Before McKeithen, C.J., Kreger and Johnson, JJ.

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