Court Opinion

ID: 4067627
Source: CourtListenerOpinion
Date Created: 2016-09-29 23:25:19.252565+00
Date Added: 2024-06-11T14:32:39.203663
License: Public Domain

ACCEPTED
                                                                                    06-15-00061-cv
                                                                        SIXTH COURT OF APPEALS
                                                                              TEXARKANA, TEXAS
                                                                             10/26/2015 9:54:40 PM
                                                                                  DEBBIE AUTREY
                                                                                            CLERK

                             NO. 06-00061-CV
                                                                   FILED IN
                                                            6th COURT OF APPEALS
                                                              TEXARKANA, TEXAS
                   IN THE SIXTH COURT OF APPEALS           10/27/2015 10:13:00 AM
                                                                DEBBIE AUTREY
                       FOR THE STATE OF TEXAS                       Clerk

   A.J.P. OIL COMPANY, LLC, d/b/a GRAPELAND FUEL & BBQ, &

                          ANDREW J. PATTON

                                     V.

                     VELVIN OIL COMPANY, INC.

   On Appeal From The Fourth Judicial District Court of Rusk County, Texas

                        BRIEF OF APPELLANTS

ATTORNEY FOR APPELLANTS:
Jaclyn D. Patton
639 Heights Blvd.
Houston, TX 77007
Phone: (713) 730-9946
Fax: (713) 583-4180
SBN: 24085521
jaclyn@txestateplanning.com
                  IDENTITY OF PARTIES AND COUNSEL

Appellants / Defendants:

      A.J.P. Oil Company, LLC, d/b/a Grapeland Fuel & BBQ,
      Andrew J. Patton

Counsel for Appellants / Defendants

      Jaclyn D. Patton
      639 Heights Blvd.
      Houston, TX 77007
      Phone: (713) 730-9946
      Fax: (713) 583-4180
      SBN: 24085521
      jaclyn@txestateplanning.com

Appellee / Plaintiff

      Velvin Oil Company, Inc.

Counsel for Appellee / Plaintiff

      Ronnie Horsley
      P. O. Box 7017
      Tyler, Texas 75711
      Phone: (903) 593-7314
      Fax: (903) 593-3450
      SBN: 10014000

                                      i
                         TABLE OF CONTENTS

                                                                         Page

I.     STATEMENT OF THE CASE
       ……………………………………………………………………………1

II.    ORAL ARGUMENT UNNECESSARY
       ……………………………………….…………………………………...1

III.   ISSUES PRESENTED
       ……………………………………………………………………………2

IV.    STATEMENT OF FACTS
       …………………………… ……………………………………………...3

V.     SUMMARY OF ARGUMENT
       ……………………………………………………………………………7

VI.    ARGUMENT
       ……………………………………………………………………………9

       ISSUE 1: THE TRIAL COURT ERRED IN GRANTING THE
       MOTION FOR SUMMARY JUDGMENT……………………………...9

       Issue 1A: A plaintiff’s sworn account cannot be considered prima facie
       evidence to support summary judgment where nonmovant timely filed an
       Amended Answer and controverting affidavit satisfying Rule 185 and
       93(10)...…………………………………………………………………10

       Issue 1B: A genuine issue of material fact exists regarding Appellants’
       defense of payment because Appellants instructed Appellee that
       payments made after the delivery of disputed diesel by Appellee were not
       to be applied to charges for the disputed diesel………………………13

       Issue 1C: A genuine issue of material fact exists regarding whether
       finance charges made the basis of Appellee’s sworn account are due and
       owing because Appellants instructed Appellee that payments made after
       the delivery of disputed diesel by Appellee were not to be applied to
       charges for the disputed diesel………………………………………….13
                                     ii
    Issue 1D: A genuine issue of material fact exists regarding the
    reasonableness of Velvin’s attorney’s fees because judicial notice of
    properly controverted attorney’s fees under Civil Practice and Remedies
    Code § 38.001 and 38.004 is improper on summary judgment……..16

    ISSUE 2: THE TRIAL COURT ERRED IN DENYING THE MOTION
    FOR NEW TRIAL BECAUSE A SUIT INVOLVING THE SAME
    PARTIES AND SUBJECT MATTER WAS PENDING AT THE
    FILING OF THIS SUIT, THE PRIOR SUIT WAS TIMELY BROUGHT
    TO THE TRIAL COURT’S ATTENTION, AND ABATEMENT OF
    THIS SUIT WOULD BE PROPER….………………………………..21

VII. CONCLUSION AND PRAYER……………...………………………..27

CERTIFICATE OF COMPLIANCE………………...………………………..29

CERTIFICATE OF SERVICE……..………………...………………………..30

APPENDIX………….……………………………...………………………..ante

Appendix Tab A:    Plaintiff’s Original Petition, CR 5-15

Appendix Tab B:    Defendants’ Original Answer and Motion to Transfer
                   Venue, CR 16-45; Supp. CR 5-6

Appendix Tab C:    Plaintiff’s Motion for Summary Judgment, CR 55-58

Appendix Tab D:    Defendants’ First Amended Answer and Response to
                   Motion for Summary Judgment, CR 59-75

Appendix Tab E:    Order Granting Summary Judgment, CR 76-77

Appendix Tab F:    Defendants’ Motion for New Trial, CR 78-137

Appendix Tab G:    Plaintiff’s Response to Motion for New Trial, CR 47-51

Appendix Tab H:    Defendants’ Reply to Response to Motion for New Trial,
                   CR 138-145

                                  iii
Appendix Tab I:   Order Denying Motion for New Trial, CR 146

                               iv
                      TABLE OF AUTHORITIES

                            STATE CASES

Arthur Andersen & Co. v. Perry Equipment Corp.,
945 S.W.2d 812 (Tex. 1997).…………………………………………………...6,16

Baubles & Beads v. Louis Vuitton, S.A.,
766 S.W.2d 377, 379 (Tex.App.—Texarkana 1989, no writ)…………………...…9

Beckman v. Beckman,
716 S.W.2d 83 (Tex. App.—Dallas 1986)………………………………………..25

Cayton v. Moore,
224 S.W.3d 440, 445 (Tex. App.—Dallas 2007, no pet.)………………………...21

Champion Int’l Corp. v. Twelfth Court of Appeals,
762 S.W.2d 898, 899 (Tex. 1988)………………………………………………...21

Circle Ridge Production, Inc. v. Kittrell Family Minerals, LLC,
23 WL 3781367, pg. 7 (Tex. App—Texarkana 2009, rev. denied)…………...18-20

City of Houston v. Clear Creek Basin Auth.,
589 S.W.2d 671 (Tex.1979)………………………………………………………..9

City of Laredo v. Montano,
414 S.W.3d 731 (Tex. 2013) ………………………………………………..……17

Cleveland v. Ward,
285 S.W. 1063 (Tex. 1926) …………………………………………...………22-23

Curtis v. Gibbs,
511 S.W.2d 263 (Tex. 1974) ……………………………………………….…....22

Downer v. Aquamarine Operators, Inc.,
701 S.W.2d 238, 241–42 (Tex. 1985)………………………………………….…21

El Apple v. Olivas,
370 S.W.3d 757 (Tex. 2012). …………………………………………………….17

                                   v
Ex Parte Lillard,
314 S.W.2d 800 (Tex. 1958) …………………………………………………22, 25

Falderbaum v. Lowe,
964 S.W.2d 744 (Tex. App.—Austin 1998) ……………………………………...26

Goswami v. Metropolitan Savings and Loan Association,
751 S.W.2d 487, 490 (Tex.1988)…………………………………………………11

Grace v. Duke,
54 S.W.3d 338 (Tex. App.—Austin 2001, pet. denied) ………………………….18

Guity v. C.C.I. Enter. Co.,
54 S.W.3d 256 (Tex. App.—Houston [1st Dis.] 2001, no pet).…………………...18

Limestone Prods. Distrib., Inc. v. McNamara,
71 S.W.3d 308 (Tex.2002)……………………………………………………..…10

Morgan v. Morgan,
406 S.W.2d 347 (Tex. Civ. App.—San Antonio 1966, no writ) …………………14

Nixon v. Mr. Prop. Mgmt. Co.,
690 S.W.2d 546 (Tex.1985)………………..……………………………………..10

Oliver v. Carter & Co. Irr., Inc.,
08-01-00446-CV, 2002 WL 1301568 (Tex. App.—El Paso June 13, 2002, no
pet.)…………………………………………………………………………….10-12

Park Place Hosp. v. Estate of Milo,
909 S.W.2d 508 (Tex. 1995) ………………………………….………………….13

Phillips v. Herndon,
78 Tex. 378, 380, 14 S.W. 857 (1890) …………………………………………...14

Rizk v. Fin. Guardian Ins. Agency, Inc.,
584 S.W.2d 860, 862-63 (Tex. 1979)……………………………………………..10

Rosenblatt v. Freedom Life,
240 S.W.3d 315 (Tex. App.—Houston [1st Dist.] 2007) …………………………18

                                  vi
Sweezy Construction, Inc. v. Murray,
915 S.W.2d 527 (Tex. App.—Corpus Christi 1995)……………………………...22

Vance v. Holloway,
689 S.W.2d 403, 403-04 (Tex. 1985)…………………………………………….10

Walker v. Packer,
827 S.W.2d 833, 840 (Tex. 1992) (orig. proceeding)…………………………….21

Wyatt v. Shaw Plumbing,
760 S.W.2d 245 (Tex 1988) …………………………………………………..22-26

                                              FEDERAL CASE

Hensley v. Eckerhart,
461 U.S. 424, 437, 103 S. Ct. 1933, 76 L. Ed. 2d 40 (1983)………………………17

                                        STATUTES AND RULES

TEX. CIV. PRAC. REM. CODE ANN. §§ 38.001, 38.004…………………..16, 20

TEX. R. CIV. P. 39………………………………………………………………..23

TEX. R. CIV. P. 63………………………………………………………………..11

TEX. R. CIV. P. 93(10) …...…………………………………………………..10-12

TEX. R. CIV. P. 97(a) …...……………………………………………………….23

TEX.R. CIV. P. 166a(c) ….………………………………………………..............9

TEX. R. CIV. P. 185 …..…………………………………………..………….11-13

TEX. DISCIPLINARY R. PROF'L CONDUCT 1.04(b)…………………………16

                                     ADDITIONAL AUTHORITY

2 R. McDonald, Texas Civil Practice in District and County Courts § 7.10, at 165
(rev.1982)…............................................................................................................26

                                                           vii
                               NO. 06-00061-CV

                    IN THE SIXTH COURT OF APPEALS

                           FOR THE STATE OF TEXAS

      A.J.P. OIL COMPANY, LLC, d/b/a GRAPELAND FUEL & BBQ, &

                             ANDREW J. PATTON

                                       V.

                        VELVIN OIL COMPANY, INC.

   On Appeal From The Fourth Judicial District Court of Rusk County, Texas
                     Trial Court Cause No. 2014-362

                            BRIEF OF APPELLANTS

TO THE HONORABLE SIXTH COURT OF APPEALS:
      Appellants, A.J.P Oil Company, LLC d/b/a Grapeland Fuel and BBQ, and

Andrew J. Patton, file this, their Brief of Appellants in the above-captioned and

numbered appeal, pursuant to Texas Rule of Appellate Procedure 38.1. Appellants

would respectfully show this Honorable Court as follows:

                      I.     STATEMENT OF THE CASE
      This is an appeal of a Summary Judgment of $32,676.71, interest at the rate

of 18% per annum, attorney’s fees, costs of court, and interest on such fees and

                                       1
costs at the rate of 5% per annum, entered against Appellants on June 4, 2015, in

the Fourth Judicial District Court of Rusk County, Texas.

      If the Court does not find that the trial court erred in granting Summary

Judgment, Appellants alternatively appeal the denial of Appellants’ Motion for

New Trial, entered on August 17, 2015, in the Fourth Judicial District Court of

Rusk County, Texas.

                    II.      ORAL ARGUMENT UNNECESSARY

      The issues presented in this appeal are basic and involve well-established

principles of Texas law. Summary Judgment was clearly erroneous in the lower

court. Accordingly, it is the opinion of Appellants that oral argument is

unnecessary.

                              III.   ISSUES PRESENTED
ISSUE 1: THE TRIAL COURT ERRED IN GRANTING THE MOTION FOR

SUMMARY JUDGMENT, BECAUSE:

         A. A plaintiff’s sworn account cannot be considered prima facie

               evidence to support summary judgment where nonmovant timely filed

               an amended answer and controverting affidavit satisfying Rule 185

               and 93(10).

         B. A genuine issue of material fact exists regarding Appellants’ defense

               of payment because Appellants instructed Appellee that payments

                                         2
            made after the delivery of disputed diesel by Appellee were not to be

            applied to charges for the disputed diesel.

         C. A genuine issue of material fact exists regarding whether finance

            charges made the basis of Appellee’s sworn account are due and

            owing because Appellants instructed Appellee that payments made

            after the delivery of disputed diesel by Appellee were not to be

            applied to charges for the disputed diesel.

         D. A genuine issue of material fact exists as a matter of law regarding the

            reasonableness of Appellee’s attorney’s fees because judicial notice of

            attorney’s fees under Civil Practice and Remedies Code § 38.001 and

            38.004 is not proper when controverted by the sworn affidavit of

            nonmovant’s counsel asserting evidence of their unreasonableness.

ISSUE 2: THE TRIAL COURT ERRED IN DENYING THE MOTION FOR
NEW TRIAL BECAUSE A SUIT INVOLVING THE SAME PARTIES AND
SUBJECT MATTER WAS PENDING AT THE FILING OF THIS SUIT, THE
PRIOR SUIT WAS TIMELY BROUGHT TO THE TRIAL COURT’S
ATTENTION, AND ABATEMENT OF THIS SUIT WOULD BE PROPER.

                         IV.    STATEMENT OF FACTS

      Appellants AJP Oil Company, LLC, and Andrew J. Patton (collectively

referred to as “AJP”) and Appellee Velvin Oil Company, Inc. (“Velvin”) entered

into a credit agreement (the “Agreement”) on June 6, 2012, for the delivery of fuel

                                         3
to Appellants’ Grapeland Fuel & BBQ gas station. (CR 14-15). Appellant Andrew

J. Patton executed a personal guarantee for debts incurred by AJP Oil Company,

LLC, under the Agreement. (CR 14-15). Without incident, Velvin regularly sold

and delivered fuel to Grapeland Fuel & BBQ pursuant to the Agreement until

Velvin delivered a shipment of tainted diesel fuel to AJP on December 4, 2013.

(CR 24). Following the delivery of this tainted diesel, AJP continued to do

business with Velvin until April 2014, when their dispute regarding the December

4, 2013 diesel shipment could not be resolved. (CR 36-39).

      On August 28, 2014, after extended correspondence with Velvin’s insurance

provider, AJP delivered notice of its intent to assert several claims against Velvin

arising from the Agreement, including a claim under the Texas Deceptive Trade

Practices Act, Texas Business & Commerce Code section 17.41 et seq., alleging

that Velvin delivered tainted and mislabeled diesel on December 4, 2013. (CR 32-

34). On November 7, 2014 AJP filed its Petition in the Third Judicial District

Court of Houston County, Texas, Cause No. 14-0217 (the “Original Suit”),

alleging economic and lost profit damages against Velvin, including damages of

$31,760.45 for “worthless diesel fuel delivered.” (CR 28). Velvin timely responded

to the Original Suit without complaint regarding jurisdiction and continues to

actively participate. (CR 49).

                                         4
      Roughly six weeks after being served with the Original Suit, Velvin filed its

Petition in this suit in the Fourth Judicial District Court of Rusk County, Texas,

alleging that AJP did not pay for the disputed diesel fuel under the Agreement. (CR

5-9). AJP filed its Answer and Motion to Transfer Venue, pointing out the

pendency of the Original Suit and requesting that the second-filed suit be

transferred to Houston County because it was in the interest of all parties and

required by justice to proceed in a single suit as the subject matter of the Rusk

County Suit was identical to the subject matter of the Original Suit. (2 RR 4-5, CR

22). After a hearing on March 2, 2015, the trial court denied AJP’s Motion,

resulting in two separate suits regarding the same disputed diesel fuel. (2 RR 1-7,

CR 54).

      Velvin filed its Motion for Summary Judgment on March 30, 2015,

attaching an affidavit regarding attorney’s fees sworn to by Ronnie Horsley,

counsel for Velvin. (CR 55-57). Velvin’s Motion for Summary Judgment asserts as

its only grounds that “Defendant entered an appearance and filed an answer herein

which is insufficient in law as provided in RULES 185 and 93, TEXAS RULES

OF CIVIL PROCEDURE to constitute a defense to Plaintiff’s cause of action . . .”

(CR 55-57). The affidavit of Velvin’s counsel stated that “In accordance with

[counsel’s] experience in handling numerous cases and based upon the usual

                                        5
contingent fee arrangements of attorneys similarly engaged, $10,892.24 is a

reasonable and customary fee…” (CR 57).

      Seven days later, AJP filed its First Amended Answer and Response to

Motion for Summary Judgment in the Rusk County Suit. (CR 16; Supp. CR 5).

AJP’s First Amended Answer was verified by Appellant Andrew J. Patton and

contained a general and specific denials, including the affirmative defense that

“[Appellants] have paid in full the account” forming the basis of Velvin’s claim

“with check number 2902, dated April 29, 2014, in the amount of [$54,480.52].”

(CR 59-62, 63, 67). Appellants attached bank records showing the check deposited

by Velvin. (CR 63,67). AJP’s Response to Velvin’s Motion for Summary

Judgment, argued that: 1) “the invoices the subject of [Velvin’s] petition were

paid,”; and 2) the affidavit sworn by Velvin’s counsel regarding attorney fees

failed to set forth sufficient evidence under Arthur Andersen & Co. v. Perry

Equipment Corp. for the award of attorney fees as a matter of law. (CR 63-65, 67-

69, 72-73.). Velvin did not file a Reply to AJP’s arguments nor request a hearing

on the Motion for Summary Judgment. (CR 4, 55).

      Two months later, on June 4, 2015, the District Court granted Velvin’s

Motion for Summary Judgment. (CR 76-77). The District Court did not explain its

ruling. (CR 76-77). AJP filed its Motion for New Trial on July 2, 2015; it was

                                       6
denied on August 20, 2015. (3 RR 1-6; CR 78-86, 146). AJP filed its Notice of

Appeal on August 28, 2015. (CR 147).

                       V.    SUMMARY OF ARGUMENT

                        Motion for Summary Judgment

      AJP’s first issue challenges the trial court’s granting of Velvin’s Motion for

Summary Judgment in four ways. Because Summary Judgment in this suit was

improper, Appellants respectfully ask the Court to reverse and remand this matter

for new trial.

      The most blatant error in the record is addressed first: the sole basis for

Velvin’s Motion for Summary Judgment was that AJP’s Original Answer did not

meet the verification requirements to deny a sworn account under Texas Rules of

Civil Procedure 185 and 93(10). AJP candidly admits that its Original Answer was

not properly verified. However, AJP timely filed an Amended Answer with a

controverting affidavit which satisfied the rules. Because a properly controverted

sworn account cannot be considered prima facie evidence to support Summary

Judgment, the trial court erred in granting Summary Judgment.

      AJP’s second and third arguments challenge the Summary Judgment

because a genuine issue of material fact exists regarding AJP’s defense of

payment. AJP clearly communicated to Velvin that the five payments made to

Velvin for fuel delivered to AJP following the disputed diesel delivery in

                                         7
December 2013 were to be applied only to the subsequent, non-disputed deliveries.

Because AJP had the right to direct application of its payments, and did so with

multiple written and verbal communications to Velvin, a disputed fact issue exists

regarding AJP’s defense of payment of the invoices sued for and their related

finances charges.

      Finally, a genuine issue of material fact exists as a matter of law regarding

the reasonableness of attorney’s fees awarded to Velvin under the Summary

Judgment. By Velvin’s own admission, the Motion for Summary Judgment and

attached affidavit required the trial court to take judicial notice of Velvin’s

attorney’s fees. AJP timely contested Velvin’s attorney’s fees, listing deficiencies

in their supporting evidence within the affidavit of AJP’s counsel. Because AJP

properly controverted the reasonableness of Velvin’s attorney’s fees by the sworn

statement of AJP’s counsel, judicial notice of Velvin’s attorney’s fees was not

proper and the trial court erred in granting Summary Judgment.

                              Motion for New Trial

      In the alternative, AJP’s second issue challenges the trial court’s denial of

AJP’s Motion for New Trial. This suit arises from a disputed transaction between

the parties in December 2013, where Velvin sold AJP tainted diesel fuel. Despite

AJP’s amicable attempts, the dispute over the diesel could not be resolved and

resulted in AJP filing suit for damages stemming from the disputed diesel. After

                                         8
being served with AJP’s suit, Velvin circumvented the rules of orderly justice and

filed this suit demanding payment on the disputed diesel.

      The trial court was immediately alerted to the prior-pending suit in AJP’s

initial pleadings. Although AJP’s initial pleadings request that the suit be

transferred rather than abated, abatement is seasonably raised—even after

judgment—when the pendency of the prior-filed suit is shown in the pleadings.

Because a suit involving the same parties and subject matter was pending when

Velvin filed this suit, and AJP’s initial pleadings clearly brought the prior suit to

the trial court’s attention, Appellants respectfully ask the Court to reverse and

remand this matter for new trial so that it may be properly abated.

                                 VI.   ARGUMENT

ISSUE 1: THE TRIAL COURT ERRED IN GRANTING THE MOTION
FOR SUMMARY JUDGMENT

                               Standard of Review
      To prevail on a traditional motion for summary judgment, a movant must

establish that there is no genuine issue as to any material fact and that the movant

is entitled to judgment as a matter of law. TEX.R. CIV. P. 166a(c); City of Houston

v. Clear Creek Basin Auth., 589 S.W.2d 671 (Tex.1979); Baubles & Beads v. Louis

Vuitton, S.A., 766 S.W.2d 377, 379 (Tex.App.—Texarkana 1989, no writ). In

deciding whether a disputed material fact issue exists that would preclude

                                          9
summary judgment, evidence favorable to the nonmovant will be taken as true.

Nixon v. Mr. Prop. Mgmt. Co., 690 S.W.2d 546, 548–49 (Tex.1985). Because the

movant bears the burden of proof, all conflicts in the evidence are disregarded and

all doubts as to the genuine issues of material fact are resolved in favor of the

nonmovant. Id.; see Limestone Prods. Distrib., Inc. v. McNamara, 71 S.W.3d 308,

311 (Tex.2002). A motion for summary judgment must stand on its own merits.

City of Houston v. Clear Creek Basin Auth., 589 S.W.2d 671, 678 (Tex. 1979).

                                     Discussion

Issue 1A: A plaintiff’s sworn account cannot be considered prima facie
evidence to support summary judgment where nonmovant timely filed an
Amended Answer and controverting affidavit satisfying Rule 185 and 93(10).

      Under Texas law, a properly pled suit on a plaintiff’s sworn account

constitutes prima facie evidence of the underlying debt. Rizk v. Fin. Guardian Ins.

Agency, Inc., 584 S.W.2d 860, 862-63 (Tex. 1979); Vance v. Holloway, 689
S.W.2d 403, 403-04 (Tex. 1985); Oliver v. Carter & Co. Irr., Inc., 08-01-00446-

CV, 2002 WL 1301568, at *6 (Tex. App.—El Paso June 13, 2002, no pet.).

However, a defendant’s properly pled and verified answer and denial will destroy

the prima facie effect of the verified claim, forcing the plaintiff to prove his claim.

Id. If not properly pled, defendants may amend their answers, “as they may desire”

and without leave of court, provided that they are filed seven days before trial and

                                          10
there is no showing that they “will operate as a surprise to the opposite party.” Tex.

R. Civ. P. 63; see Goswami v. Metropolitan Savings and Loan Association, 751
S.W.2d 487, 490 (Tex.1988). A hearing or submission on a Motion for Summary

Judgment is a “trial” for purposes of Rule 63. Goswami at 490.

      The law in this area is so well-established that there appear to be no

controlling cases on point reported in the recent past. In Oliver v. Carter, a similar

suit on sworn account from the Eighth Court of Appeals, the plaintiff filed a

verified pleading alleging that the defendant defaulted on its account with the

plaintiff. Oliver v. Carter & Co. Irr., Inc., 08-01-00446-CV, 2002 WL 1301568, at

*6 (Tex. App.—El Paso June 13, 2002, no pet.) (not designated for publication).

The defendant’s responding answer failed to satisfy Rules 185 and 93(10) for

controverting a suit on sworn account. Id. The plaintiff moved for summary

judgment asserting that the answer was “defective and insufficient in law to

constitute or raise a defense” to the sworn account made the basis of the suit.

Correcting his error, the defendant filed an amended answer and affidavit which

satisfied the requirements of Rules 185 and 93(10). Id. at *2. However, the trial

court granted the plaintiff’s motion for summary judgment. Id. The court of

appeals reversed, holding that even if the original answer to a suit on sworn

account failed to satisfy Rules 185 and 93(10), amended pleadings must also be

considered when ruling on a motion for summary judgment. Id. at *7. The court of

                                         11
appeals found that the amended answer contained both a general and specific

denial, was supported by the affidavit of the defendant, and “easily satisf[ied] the

requirements of Rule 185 and 93(10).” Id. Because the amended answer satisfied

the requirements of Rule 185 and 93(10), the court held that the plaintiff’s petition

could not “be considered prima facie evidence to support summary judgment” and

the trial court erred in granting summary judgment. Id.

      Here, AJP initially filed an Original Answer that failed to meet the

verification requirements of Rules 185 and 93(10). Like the plaintiff in Oliver,

Velvin filed a Motion for Summary Judgment asserting as its only grounds that

“Defendant entered an appearance and filed an answer herein which is insufficient

in law as provided in RULES 185 and 93, TEXAS RULES OF CIVIL

PROCEDURE to constitute a defense to Plaintiff’s cause of action…” (CR 55-57).

In response, AJP filed its First Amended Answer, which contained a general

denial, specific denials regarding the affirmative defense of payment and whether

finance charges included in the account were due and owing, and a verification by

the sworn affidavit of Appellant Andrew Patton. (CR 59-75). Like the Amended

Answer in Oliver, AJP’s Amended Answer easily satisfied the requirements of

Rules 185 and 93(10). Accordingly, Velvin’s petition was not prima facie evidence

to support summary judgment.

                                         12
      The trial court erred in granting the Motion for Summary Judgment because

Velvin’s sworn account cannot be considered prima facie evidence when AJP

timely filed an Amended Answer and controverting affidavit satisfying Rule 185

and 93(10).

Issue 1B: A genuine issue of material fact exists regarding Appellants’ defense
of payment because Appellants instructed Appellee that payments made after
the delivery of disputed diesel by Appellee were not to be applied to charges
for the disputed diesel.

      The trial court erred in granting the Motion for Summary Judgment because

a disputed fact issue exists regarding whether payment was made on the invoices in

question, which must be submitted to a jury. See Park Place Hosp. v. Estate of

Milo, 909 S.W.2d 508, 510-11 (Tex. 1995). Because of the interrelation of Issue

1B and Issue 1C, these issues will be discussed together below.

Issue 1C: A genuine issue of material fact exists regarding whether finance
charges made the basis of Appellee’s sworn account are due and owing
because Appellants instructed Appellee that payments made after the delivery
of disputed diesel by Appellee were not to be applied to charges for the
disputed diesel.

      The trial court erred in granting the Motion for Summary Judgment because

disputed fact issues exist regarding (1) AJP’s defense of payment of the invoices in

question, and (2) if related finance charges made the basis of Velvin’s sworn

account are due and owing, which must be submitted to the jury. See Park Place

Hosp. v. Estate of Milo, 909 S.W.2d 508, 510-11 (Tex. 1995).

                                        13
      The general rule is that where a debtor makes payment to his creditor

without directing the manner of application of the payment, the creditor is

privileged to apply the payment to any one of the various debts owed him by the

debtor. Morgan v. Morgan, 406 S.W.2d 347 (Tex.Civ.App.—San Antonio 1966,

no writ). However, when the debtor has directed the application of payment by

written or verbal communication, the “true rule seems to be, first, the debtor has

the absolute right to direct appropriation at the time of payment.” Phillips v.

Herndon, 78 Tex. 378, 14 S.W. 857, 859.

      Here, AJP communicated its intention for application of payment early and

often. It is evident from the record that AJP intended for payments made following

delivery of the worthless and tainted diesel on December 4, 2013 not to be applied

to the tainted delivery. AJP made multiple written communications to Velvin

instructing that subsequent payments were not to be applied to the disputed diesel.

The first payment made by AJP following the delivery of the disputed diesel

clearly instructed that it was to be applied toward “gasoline only,” and not toward

the tainted diesel. (CR 127). A subsequent payment noted that it was to be applied

only to specific, non-disputed invoices. (CR 129).

      AJP also made multiple verbal communications to Velvin instructing that

subsequent payments were not to be applied to the disputed diesel. Following the

delivery of tainted diesel by Velvin in December 2013, Appellant immediately

                                        14
contacted Jim Jordan, Vice President of Velvin Oil, who assured AJP that Velvin

would handle any resulting problems. (CR 103). Jim Jordan followed up on this

assurance by sending two free “fix shipments” of what Jim Jordan stated was

“super clean #1 diesel”, and having an Velvin employee administer a “shock

treatment” to the disputed diesel. (CR 103, 107). After further amicable

discussions with Jim Jordan, and with the communicated understanding that Velvin

would act in good faith, take responsibility for damages resulting from the tainted

diesel, and not require payment on the disputed diesel, AJP continued to do

business with Velvin for four months following the tainted delivery. (CR 103).

Acting in good faith, AJP ultimately bought and timely paid for an additional

$194,801.30 of fuel from Velvin, despite the abundance of competitive alternate

fuel retailers available to AJP in East Texas. (CR 136).

      AJP’s written and verbal communications to Velvin clearly show AJP’s

intention that payments made after the December 4, 2013 disputed diesel shipment

were to be applied only to subsequent, non-disputed fuel shipments. Case law

establishes that AJP had the absolute right to direct appropriation of payments

made to Velvin. AJP exercised that right by including language on checks paid to

Velvin, and by making consistent and repeated verbal directions to Velvin.

      The credit terms of Velvin’s Charge Account Applicant on which this suit is

based state that finance charges are due if the balance is not paid by the end of the

                                         15
month following the statement date. (CR 59-60; 70-72). The invoices made the

basis of Velvin’s suit were paid by AJP with check number 2902, dated April 29,

2014, in the amount of $54,480.52. (CR 59, 67, 69). As payment was timely made

on the invoices made the basis of Velvin’s suit, both the underlying debt and the

finance charges included in Velvin’s suit were not due and owing.

      The trial court erred in granting the Motion for Summary Judgment because

disputed fact issues exist regarding AJP’s defense of payment and whether finance

charges were due and owing as AJP instructed Velvin that payments made after the

delivery of disputed diesel were not to be applied to charges for the disputed diesel.

Issue 1D: A genuine issue of material fact exists regarding the reasonableness
of Velvin’s attorney’s fees because judicial notice of properly controverted
attorney’s fees under Civil Practice and Remedies Code § 38.001 and 38.004 is
improper on summary judgment.

      In Velvin’s Motion for Summary Judgment and affidavit attached thereto,

counsel for Velvin requests attorney’s fees unsupported by the proof required in

the Texas Disciplinary Rules of Professional Conduct. TEX. DISCIPLINARY R.

PROF'L CONDUCT 1.04(b); see also Arthur Andersen & Co. v. Perry Equip.

Corp., 945 S.W.2d 812, 818 (Tex.1997) (quoting the eight-factor test for

determining attorney's fees); (CR 55-57). That proof must include the basic facts

supporting the fees, which are: “(1) the time and labor required, the novelty and

difficulty of the questions involved, and the skill requisite to perform the legal

service properly; (2) the likelihood, if apparent to the client, that the acceptance of
                                          16
the particular employment will preclude other employment by the lawyer; (3) the

fee customarily charged in the locality for similar legal services; (4) the amount

involved and the results obtained; (5) the time limitations imposed by the client or

by the circumstances; (6) the nature and length of the professional relationship

with the client; (7) the experience, reputation, and ability of the lawyer or lawyers

performing the services; and (8) whether the fee is fixed or contingent on results

obtained or uncertainty of collection before the legal services have been rendered.”

Id.

      The party applying for an award of attorney’s fees bears the burden of

documenting the hours expended on litigation and the value of those hours.

Hensley v. Eckerhart, 461 U.S. 424, 437, 103 S. Ct. 1933, 76 L. Ed. 2d 40 (1983); El

Apple v Olivas, 370 S.W.3d 757 (Tex. 2012). When attorney’s fees are claimed

under fee shifting statutes, the Texas Supreme Court urges that courts be skeptical

of “broad, unspecific claims” regarding fees, as “hours not properly billed to one’s

client are also not properly billed to one’s adversary under a fee-shifting statute.”

City of Lardeo v. Montano, 414 S.W.3d 731, 736 (Tex. 2013). Rather, the attorney

should provide contemporaneous billing records or other documentation recorded

reasonably close to the time when the work is performed. Id.

      The affidavit of Velvin’s counsel offered as proof of attorney’s fees clearly

does not meet the requirements of the Texas Disciplinary Rules of Professional

                                         17
Conduct and established case law. (CR 57). Instead, Velvin’s proof fits soundly

into the category of non-contemporaneous, “broad, unspecified claims” of which

courts are warned to be skeptical. Further, the affidavit of Velvin’s counsel

includes false claims of time spent on matters such as appearing in court in support

of Plaintiff’s Motion for Summary Judgment—a hearing that did not occur. (CR

57).

       Although Texas Civil Practice and Remedies Code §38.004 does allow

judicial notice to be taken of attorney’s fees in a suit on sworn account, it is well-

established that judicial notice of attorney’s fees cannot be taken when the

summary judgment record contains evidence controverting the reasonableness of

attorney’s fees. See, e.g. Guity v. C.C.I. Enter. Co., 54 S.W.3d 526, 528 (Tex.

App.—Houston [1st Dist.] 2001, no pet.); Rosenblatt v. Freedom Life, 240 S.W.3d
315, at 321(Tex. App.—Houston [1st Dist.] 2007, no pet.); Grace v. Duke, 54
S.W.3d 338, 344 (Tex. App—Austin 2001, pet. denied) (holding that attorney fee

award in summary judgment proceeding not proper if amount disputed). This

Court has specifically found that summary judgment is improper when the moving

party’s affidavit in support of attorney’s fees is contested by an affidavit of

opposing counsel. Circle Ridge Production, Inc. v. Kittrell Family Minerals, LLC,

23 WL 3781367, pg. 7 (Tex. App—Texarkana 2009, rev. denied) (holding that

summary judgment award of attorney’s fees is improper where the nonmovant

                                         18
produces a controverting affidavit and asserts evidence that fees are unreasonable

or unnecessary).

      In Circle Ridge, the appellants sought relief from a summary judgment

awarded in the trial court against them. Id. The appellants urged that attorney’s

fees awarded in the summary judgment were improper because they were

supported by broad, conclusory evidence that did not include time records. Id. The

attorney’s fees awarded in the Circle Ridge summary judgment were supported

solely by an affidavit of the appellee’s counsel. Id. at 7. However, the appellants

had previously been provided with time records supporting appellee’s counsel’s

fees in discovery. (Appellee’s Brief at 28, Circle Ridge Production, Inc. v. Kittrell

Family Minerals, LLC, 23 WL 3781367 (Tex. App—Texarkana 2009, rev. denied).

In addition, the appellants had not preserved error by raising this issue with the

trial court. (Id. at 7). Finding that summary judgment is available on the testimony

of an interested witness if the testimony could have been easily controverted, this

Court held in Circle Ridge that an uncontroverted affidavit regarding attorney’s

fees constitutes sufficient evidence for summary judgment. Id.

      The case at hand shares similar facts with Circle Ridge, but is

distinguishable by several key facts. Here, by Velvin’s own admission its proof

regarding attorney’s fees was inadequate under the rules and required the trial

court to take judicial notice. (CR 48). Unlike the defendants in Circle Ridge, AJP

                                         19
controverted the reasonableness of Velvin’s attorney’s fees multiple times,

including in an affidavit of AJP’s counsel. (CR 64-65; 72-73).The affidavit of

AJP’s counsel asserts five particular deficiencies in the evidence supporting the

attorney’s fees sought by Velvin, and is bolstered by the resume of AJP’s counsel

showing his familiarity with fee calculations in similar cases. (CR 72-75). The case

at hand is further distinguished from Circle Ridge in that Velvin has produced no

additional evidence supporting its attorney’s fees at any point, wherein the plaintiff

in the precedent case had already produced detailed time records to the defendant

during discovery.

      The trial court erred in granting the Motion for Summary Judgment because

disputed fact issues exist regarding the reasonableness and supporting evidence of

Velvin’s attorney’s fees because judicial notice of properly controverted attorney’s

fees under Civil Practice and Remedies Code § 38.001 and 38.004 is improper on

summary judgment.

                                         20
ISSUE 2: THE TRIAL COURT ERRED IN DENYING THE MOTION FOR
NEW TRIAL BECAUSE A SUIT INVOLVING THE SAME PARTIES AND
SUBJECT MATTER WAS PENDING AT THE FILING OF THIS SUIT,
THE PRIOR SUIT WAS TIMELY BROUGHT TO THE TRIAL COURT’S
ATTENTION, AND ABATEMENT OF THIS SUIT WOULD BE PROPER.

                               Standard of Review
      A trial court’s denial of a motion for new trial is reviewed for abuse of

discretion. In re RR, 209 S.W.3d 112, 114 (Tex. 2006); Champion Int’l Corp. v.

Twelfth Court of Appeals, 762 S.W.2d 898, 899 (Tex. 1988). A trial court abuses

its discretion when it acts in an arbitrary or unreasonable manner, or if it acts

without reference to any guiding rules or principles. Downer v. Aquamarine

Operators, Inc., 701 S.W.2d 238, 241–42 (Tex. 1985). A trial court’s clear failure

to analyze or apply the law correctly constitutes an abuse of discretion. See Walker

v. Packer, 827 S.W.2d 833, 840 (Tex. 1992) (orig. proceeding); Cayton v. Moore,

224 S.W.3d 440, 445 (Tex. App.—Dallas 2007, no pet.).

                                    Discussion

      The trial court erred in denying the Motion for New Trial because a suit

involving the same parties and subject-matter was pending prior to the filing of this

suit. The claim brought here is a compulsory counterclaim to the claims brought in

                                         21
the prior suit. The Motion for New Trial should have been granted so that this suit

could be properly abated pending the outcome of the prior suit.

          Abatement is seasonably raised, even after the rendering of judgment, when

the pendency of the prior suit is shown in the pleadings. The pendency of the prior

suit was timely brought to the trial court’s attention within 35 days of this suit’s

filing.

A suit involving the same parties and subject matter was pending at the filing
of this suit and Velvin’s claim brought here is a compulsory counterclaim to
AJP’s claims brought in the first-filed suit.
          When two pending cases are between identically the same parties, involve

the same subject-matter, and relief in one suit would be res judicata as to the relief

prayed for in the other suit, it is well settled that the first-filed suit has dominant

jurisdiction. See, e.g. Cleveland v. Ward, 285 S.W. 1063 (Tex. 1926) (holding that

when original suit regarding cancellation of loan would be res judicata against

second suit regarding recovery on that loan, the second suit must be abated); Wyatt

v. Shaw Plumbing, 760 S.W.2d 245, 247 (Tex. 1988). Once dominant jurisdiction

has attached in a first-filed suit, the rule is elementary that it cannot be taken away

by subsequent proceedings in another court. Ex Parte Lillard, 314 S.W.2d 800, 805

(Tex. 1958). The court where the second suit was filed must grant a motion to

abate. Wyatt 760 S.W.2d at 247; Curtis v. Gibbs, 511 S.W.2d 263, 267 (Tex.

1974); Sweezy Construction, Inc. v. Murray, 915 S.W.2d 527, 531 (Tex. App.—

                                          22
Corpus Christi 1995). Abatement does not prejudice the plaintiff of the second-

filed suit, as any claims or defenses raised by the plaintiff may be asserted in the

original suit if the plaintiff so chooses. Cleveland, 285 S.W. at 1070.

         Velvin did not dispute that this suit is a second-filed, non-dominant suit and

that the first-filed suit in Houston County (“Original Suit”) was brought to the trial

court’s attention in a timely manner. Rather, Velvin asserted that this suit and the

Original Suit are not substantially interrelated. (CR 49-50). “In determining

whether an inherent interrelationship exists, courts should be guided by the rule

governing persons to be joined if feasible and the compulsory counterclaim rule.”

Wyatt v. Shaw Plumbing, 760 S.W.2d 245, 247 (Tex. 1988); Tex.R.Civ.P. 39,

97(a).

         The facts in Wyatt v. Shaw closely track those at hand. In Wyatt, Wyatt and

Shaw entered into a contract regarding plumbing services. When Wyatt refused to

pay for worthless and faulty services provided by Shaw, “Shaw made a written

demand for payment. Following Shaw’s demand letter, Wyatt filed suit against

Shaw in [Wyatt’s county of choice] alleging fraud and violation of the Deceptive

Trade Practices Act.” Wyatt, 760 S.W.2d 245 at 246. Shortly thereafter Shaw filed

a breach of contract suit in Shaw’s county of choice to recover for the disputed

services it provided. Finding that Wyatt’s claim would be res judicata against

Shaw’s claim, the court held that the two suits were inherently interrelated. The

                                           23
court further explained, “Shaw Plumbing should have brought its compulsory

counterclaim on the contract in Wyatt's tort and DTPA suit in Duval County …

since Wyatt filed suit first, he chose Duval County.” Id at 248.

      The facts of this case are almost identical to Wyatt. Here, AJP purchased

goods from Velvin. Velvin’s goods turned out to be worthless and faulty. AJP

verbally communicated to Velvin that it would not pay for the worthless goods,

and further refused to pay by directing that payments made by AJP to Velvin for

subsequently delivered goods were not to be applied to the worthless goods. (CR

103, 127, 129). As is evidenced by the record and correspondence between the

parties and their counsel, AJP clearly communicated to Velvin that AJP was only

continuing to do business with Velvin because of Velvin’s representations that

AJP’Ss damages from the worthless fuel would be “made right.” (CR 103).

Velvin’s Counsel’s own letter of September 2014 shows that all parties involved

understand both suits to concern the exact same subject-matter. (CR 108). Like in

Wyatt, when Velvin did not make good on its promises, AJP sued Velvin for the

worthless goods provided. AJP’s Petition in the Original Suit lists as damages the

exact amount in worthless diesel as is complained of by Velvin in this matter. (CR

28; 94 - Original Petition of First-Filed Suit listing “$31,760.45 in out-of-pocket

damages for the worthless diesel fuel delivered”). The fact that the amount sued

for in the matter at hand differs slightly results only from the three months of

                                         24
interest charged on AJP’s account between the time AJP’s DTPA notice letter was

sent to Velvin (July 30, 2014) and when Velvin filed this suit (November 19,

2014).

      Rationally, this suit should be abated pending determination of whether the

disputed diesel was, in fact, tainted and worthless. If the diesel is determined to be

tainted and worthless, the debt complained of in the present suit is not owed. If the

diesel is determined not to be tainted and worthless, the debt complained of is

owed and a full adjudication of this suit is unnecessary.

Abatement is seasonably raised, even after the rendering of summary
judgment, where AJP’s initial pleadings brought pendency of the prior suit to
the trial court’s attention.

      The pendency of a prior suit between the same parties and involving the

same subject-matter must be seasonably raised by a plea in abatement. Wyatt, 760
S.W.2d 245 at 248. Courts have found that a plea in abatement is seasonably

raised, even after the rendering of judgment, when the pendency of a prior suit is

shown in the pleadings. See, e.g. Ex Parte Lillard, 314 S.W.2d 800, 805 (Tex.

1958); Beckman v. Beckman, 716 S.W.2d 83 (Tex.App.—Dallas 1986). Once the

necessary facts showing the pendency of a prior suit are plead and admitted, or

shown by the undisputed record, the subsequent suit must be abated. Lillard, 314
S.W.2d at 806. This rule holds true even when the party who filed the original suit

fails to subsequently participate in that suit. Id. However, when parties do not

                                         25
inform the court of the pendency of a prior suit until after judgment, courts have

discretion to determine if a plea in abatement is seasonable. Falderbaum v. Lowe,

964 S.W.2d 744 (Tex.App.—Austin 1998).

      AJP brought the Original Suit to the attention of the Court multiple times in

its initial pleadings. AJP’s Answer and Motion to Transfer Venue alerted the trial

court to the prior suit, and included as evidence the affidavit of Appellant Andrew

J. Patton stating that litigation over the same facts was already pending. (CR 21-

45). Velvin has filed multiple motions, attended hearings, retained experts, and

produced and requested thousands of pages of discovery in the Original Suit—at

no point making any objection to the dominant jurisdiction of that suit. At the

request of Velvin, trial has been set in the Original Suit for October 2016. Further,

Velvin’s designation of a responsible third party in the Original Suit clearly shows

that Velvin considers it to be the dominant and determinative suit; thus, Velvin

would not be prejudiced by abatement of the present suit. Velvin has simply

“declined to do battle in the forum of the original suit” and multiplied the

controversies at hand, rather than settling them in the interest of orderly justice. See

2 R. McDonald, Texas Civil Practice in District and County Courts § 7.10, at 165

(rev.1982); Wyatt v. Shaw Plumbing Co., 760 S.W.2d 245, 247 (Tex. 1988).

      The trial court erred in denying the Motion for New Trial because a suit

involving the same parties and subject matter was pending at the filing of this suit,

                                          26
the prior suit was timely brought to the trial court’s attention, and abatement of this

suit would be proper.

                         VII. CONCLUSION AND PRAYER

         The trial court erred in granting the Motion for Summary Judgment because

(1) a sworn account cannot be considered prima facie evidence to support

summary judgment when timely controverted by an affidavit of nonmovant’s

counsel, and (2) genuine disputed issues clearly exist regarding multiple material

facts.

         Velvin’s sole basis in moving for Summary Judgment was that AJP’s

Original Answer did not meet the verification requirements to deny a suit on sworn

account. In reply, AJP timely filed an Amended Answer and controverting

affidavit, satisfying Rules 185 and 93(10) and destroying the prima facie evidence

of Velvin’s sworn account supporting Summary Judgment.

         Further, genuine issues of material fact clearly exist regarding AJP’s defense

of payment. AJP made multiple, consistent directions to Velvin that payments

made to Velvin following the disputed fuel delivery were to be applied exclusively

to the subsequent, undisputed deliveries. Because AJP had the right to direct

application of its payments, disputed fact issues exist regarding AJP’s defense of

payment of the invoices sued for and their related finances charges.

                                           27
      Lastly, a genuine issue of material fact exists as a matter of law regarding

the reasonableness of attorney’s fees awarded to Velvin. By Velvin’s own

admission, the Motion for Summary Judgment and attached affidavit required the

trial court to take judicial notice of Velvin’s attorney’s fees. Because AJP properly

controverted the reasonableness of Velvin’s attorney’s fees by the sworn statement

of AJP’s counsel, judicial notice of Velvin’s attorney’s fees was not proper and the

trial court erred in granting Summary Judgment.

      In the alternative, AJP argues that the trial court erred in denying the Motion

for New Trial because a suit involving the same parties and subject matter was

pending at the filing of this suit, the prior suit was timely brought to the attention

of the trial court, and abatement of this suit would be proper. This suit arises from

a disputed transaction between the parties in December 2013, where Velvin sold

AJP tainted diesel fuel. After being served with AJP’s first-filed suit concerning

the disputed diesel, Velvin circumvented the rules of orderly justice and filed this

suit demanding payment on the same disputed diesel.

      Based on the foregoing, Appellants A.J.P. Oil Company, LLC, d/b/a

Grapeland Fuel and BBQ, and Andrew J. Patton pray that the Court reverse and

remand this matter to the trial court for further proceedings consistent with this

Court’s Opinion.

                                         28
                                            Respectfully submitted,

                                            _/s/ Jaclyn D. Patton
                                            JACLYN D. PATTON
                                            TX Bar No. 24085521
                                            639 Heights Boulevard
                                            Houston, Texas 77007
                                            PH: (713) 730-9446
                                            FX: (713) 583-4180
                                            jaclyn@txestateplanning.com

                                            ATTORNEY FOR APPELLANTS

                     CERTIFICATE OF COMPLIANCE
  I certify that this document was produced on a computer using Microsoft Word
and contains 5,926 words, as determined by the computer software's word-count
function, excluding the sections of the document listed in Texas Rule of Appellate
Procedure 9.4(i)(1).

                                             _/s/ Jaclyn D. Patton
                                             JACLYN D. PATTON

                                       29
                        CERTIFICATE OF SERVICE

       I hereby certify that a true and correct copy of the above and foregoing
instrument was served upon the following counsel of record by first-class mail and
electronic service on October 26, 2015.

                                            _/s/ Jaclyn D. Patton
                                            JACLYN D. PATTON

Mr. Ronnie Horsley
P.O. Box 7017
Tyler, Texas 75711
Via Email: horsleylaw@tyler.net

                                       30
VELVIN OIL COMPANY, INC.                     §
                                             §
VS.                                          §
                                             §
A.J.P. OIL COMPANY, LLC d/b/ a               §
GRAPELAND FUEL & BBQ; and                    §
ANDREW J. PATTON                             §        RUSK COUNTY, TEXAS

                            PLAINTIFF'S ORIGINAL PETITION

TO THE HONORABLE JUDGE OF SAID COURT:

       COMES NOW, Velvin Oil Company, Inc., a corporation, P.O. Box 993

Henderson, TX 75653, hereinafter referred to as "Plaintiff", and makes and files this its

Original Petition complaining of AlP Oil Company, LLC, a limited liability company,

doing business as Gr~peland Fuel & BBQ; Andrew J. Patton, also known as and. being
   "                    '           "                 ""                               ,

the same person as Andrew Jack Patton, Andrew Patton, Andrew J. Patton, III, Jack

Patton and Jack Patton, III, jointly, severally, individually, hereinafter referred to as

"Defendants"; AlP. Oil Company, LLC, may be served by serving its registered agent,

Jack Patton, or any Manager at the address of 1279 E. Loop 304, Crockett, TX 75835, and

Andrew J. Patton may be served at the same above address or 714 E. Houston Ave.,

Crockett, TX 75835 and for cause of action your Plaintiff would show unto this

Honorable Court as follows:

                                             1.

THIS CASE IS FILED AS A LEVEL 1 PROCEEDING UNDER RULE 190.2 TEXAS

RULES OF CIVIL PROCEDURE.

                                                  5
       The damages sought in this matter are within the jurisdictional limits of this

court. Only monetary relief of $100,000.00 or less, including damages of any kind,

penalties, costs, expenses, pre-judgment interest, and attorney fees.

                                             II.

       Plaintiff would show that "All invoices due and payable in Rusk County,

Henderson, Texas" therefore venue is proper in Rusk County, Texas.

                                            III.

       That, on the dates as shown in the itemized and verified account attached hereto

as Plaintiff's Exhibit "A", and made a part hereof for all purposes as if set out herein·

verbatim, Plaintiff, at the special instance and request of Defendants, did deliver to

Defendants the services described in said Exhibit "A", at the prices therein charged, the

same being the agreed pr:ice therefor.·

                                            IV.

      For valuable consideration, the Defendant, Andrew J. Patton, also known as Jack

Patton, executed a Personal Guaranty, a copy of which is attached hereto as Exhibit "B"

and made a part hereof for all purposes as if set out herein verbatim, wherein he

guaranteed performance and payment of the indebtedness of A.J.P. Oil Company, LLC.

A.J.P. Oil Company, LLC defaulted under the terms of said agreement and the

Defendant, Andrew J. Patton, also known as Jack Patton, failed to perform and pay

under the said Personal Guaranty.

                                            v.
      That Defendants did promise to pay Plaintiff for same, but though often

                                                   6
requested to do so, the Defendants have failed and refused, and still fail and refuse to

pay the said account, all to Plaintiff's damages in the sum of $32,676.71 together with

interest and attorney's fees as hereinafter alleged.

                                               VI.

       That Plaintiff has made written demand upon the Defendants for payment of

said account, more than thirty (30) days prior to the filing of this Petition, and that

Plaintiff would show the Court that the recovery of attorney's fees is authorized, made

and provided, under and according to Chapter 38 of the CIVIL PRACTICE AND

REMEDIES CODE, that this case is ,being handled on a contingent fee basis, and

Plaintiff further sues Defendants for reasonable attorney's fees, inasmuch as Plaintiff

has been required to employ the undersigned attorney to file this suit and has,agreed to

pay hlma reasonable fee for his serVices, :i:tU.of which Plaintiff.~lleges to be in a~ le~st .. :"

the sum of $10,892.24. All conditions precedent to Plaintiff's recovery herein have been

performed or have occurred.

       WHEREFORE, premises considered, your Plaintiff prays unto this Honorable

Court, that the Defendants be cited to appear and answer herein, and that upon a final

hearing hereof, Plaintiff do have and recover Judgment from and against the

Defendants in the sum and amount of $32,676.71 together with interest at the rate of

eighteen percent (18%) per annum from the 17th day of November, 2014, until paid,

costs of court, reasonable attorney's fees as hereinabove alleged, and interest on such

fees and costs at the rate of five percent (5%) per annum, and for such further and other

relief, general or special, in law or in equity, to which Plaintiff may be entitled.

                                                  7
Respectfully submitted,

LAW OFFICES OF RONNIE HORSLEY, P.e.
Attorney for Plaintiff

        Tyler, Texas 75711
        Telephone: (903) 593-7314
        Texas Bar Card No. 10014000

                                      '.;   .

    8
                .               Te:;c.tA..S
        STATE OF ........................................ .
        COUNTY OF ....             :8~S..K ............ ..
                      BEFORE ME, the undersigned authority, on this day person'illy appeared ...................................... ..
        ............................................................. P..~y(D......C:t.~...V.~~v..tn ................................................................ .
                                                                                (Name of person making affidavit)

        who, being by me duly sworn, states on oath that ....... he is

        1. An individual trading as .....................................................................................................................................
                                                                          (Trade style if used - otherwise owner's name)

        2. Agent of .......... ,...............................................................................................................................................:,
                                                                                         (Name of Firm)

        a co-partnership, composed of............................................................... , ......... ; ................................................... .
                                                                                       (Name of Partners)

        and that, _he is duly qualified and authorized to make this affidavit.

        3. Agent' of ............       v..~.~~.~.O.....O.i.k ..... CO.......... ~.0.~.. ~.......................................................................... ,
                                                                                      (Name of Corporation)

        a corporation, duly incorporated and existing under and by virtue of the laws of the State of
                    T ~)<'''           <. ....................... ,
        ........................':':'..rt'!                           WI'th't   . , I 0 ff'Ice an d domici
                                                                           IS pnnclpa                                                           Hu0U".S'a..n
                                                                                                       "1 e .In the C'Ity 0 f ................................... ,

        County of .......       R..Y:(.?:~.......... and State of ...........T~.X.~2 ..................... and                                is duly qualified and
        authorized to make this affidavit.
        4. That the foregoing and annexed account, claim, and cause of action in favor of ....................................... ..
        ..................................................y.~.~Y..!.b ......Q.(~.....(P,.~.: ...J.;",0..~...                 i ......................................... .......   ·.and
                                                                                        .
    against··~ ...... :.~.; ... ;............A.J..P:. ...,..O'{1-.: ... r~ t~ •• .'..~~.•~•...••• , •... ~•..• : ••.••.••••••••••• ; ••.••••••••.•••••.•..••••••••...•••••.• ~ •.
. ·•.
. 'in the sur1i9~ .... ;.... ,... ~, .. :......... :~ ..... 3..g.,.jp..1.~....7...L .. :::.'... :.. ·.: ........ :...... DoliarSi~ within the. knowledge of
        affiant just and true, and that it is due and that all just and lawful offsets, payments and creditshave been

                                                                                            . . . ?2J~. . . . . . . . . . . . ..
        allowed.

                                                                                                 tif/~                            Affiant

                      SWORN TO AND SUBSCRIBED BEFORE ME, this ........                                        ./.9. ......   day of .....    QQ.y.~0..~ 20.Jtj

                                                                                                      .......... :pR/I?::.C-:. ;... /2.~ . . . .
                                                                                                      NOTARY PUBLIC IN AND FOR COUNTY OF

                                                                                                            ~T
                                                                                                      ...............................                     ..Q,t~·v,
                                                                                                                                                                                                                                              -:
                      :'i"     .,                                                                                                                                        >.                             "             o~   •   '.~".:    .'

                                                                                                                                                                                                                               32,676.71

                             10 Days   .                      30 Days                                                             60 Days                                     90 Days
     Current                                                                                                                                                                                                    32,676.7ffotal:
                              305.42                              305.42                                                             305.42                                   31,760.45
        0.00

                                           *** THIS IS LINE ONE OF THE STANDARD MESSAGE ***
                                           *** THIS IS LINE TWO OFTHE STANDARD,. MESSAGE ***

                                              Your accountwith us is seriously past due.
                                           Remit today so that we ma~.9QnJi,nue to serve you .
                                                                             . ~ ...~•. '-''',' ,.~_::::'::-~.,~-:~:'~"::':j~:;;:;':':':';"'::'v:.,.;.;;.:.:.'1 ~

                                                    ;",,,:,~":r" ii,I'''~'\ir; ?F~ll"'-
                                              i\: I \i,......                  9~ ~'.    it Ii
                                                                                                                                         ~ \~.f
                                                    t~~':I.··"'iJt" "\~"....f.a'  ll.r:: ~1 (l                                                               ,'.
                                                                                                                                                             ~~
                                                                                                 10
                                              "     ".                               I,
                                              1'\                                    l:p;   I,i.!   ::l,:..
                                              0.1                      .                                                       .                                f'
                                              tk;:;;:-I~:;.;. ~~;r:;-;:7;;;;;":;~,:;"~'·-;;'~J..~.;ei~;:;,:.:::;~·~r~~~;;..;.-;;;;
                             IN Oil CO"                    ~NC.
                     PETROLEUM PRODUCTS
                                                                                                                                              EMERGENCY CONTACT: (512) 463-7727
                         P.O. BOX 993
                    HENDERSON, TEXAS 75653
                          903/657 -2108

                                            SOLD TO                                                                                               SHIPPED TO

             AJP Oil Company, LLC                                                                                                     Grapeland
             dba Grapeland Fuel & BBQ                                                                                                 dba Grapeland Fuel & BBQ
             1277 East Loop 304                                                                                                       1277 East Loop 304
             Crockett, TX 75835                                                                                                       Crockett, TX 75835

                                         0.0      F-N
                                          No Lead Gasoline UN-1203
)1.0 .           5,501.0                 0.0      F-TFG                                                     EACH                             0.1840                            1,012.18
                                          Federal Gasoline Tax
11.0             5,501.0                 0.0      F-TSG                                                     EACH                            0.2000                           .1;100.20
                                          State Gasoline Tax
5.0               2,495.0                0.0 .. F-DL                                                        .EACH                           3.0390                         .. 7,582.31
                                          Diesel15~PPM Ultra Low: Sulfer.
 5.0             2,495.0·                0.0     . F-TFD                                                    EACH                             0.2440                              608.78
                                          Federal Diesel Tax
 5.0             2,495.0                 0.0       F-TSD2                                                   EACH                             0.1960                              489.02
                                          State Tax Biodiesel
             ULTRA LOW SULFER DIESEL FUEL(15-PPM SULFER MAXIMUM) REQUIRED FOR USE IN ALL 2007 MODEL
             YEAR AND LATER HIGHWAY DIESEL VEHICLES AND ENGINES. RECOMMENDED FOR USE IN ALL DIESEL
             VEHICLES AND ENGINES. II THIS FUEL MAY CONTAIN UP TO 5.0% BIODIESEL"

                                                                                                                                          Net Invoice:                           27,102.96
                                                                                                                                        Less Discount:                                0.00
                                                                                                                  .-.._ .. -._ .. ,   i     Sales Tax:                                   0.00
                                                                                                                                      , Invoice Total:
                                                                                                                                                                                ~~
                                                                                                                                                                               31 ~t1,fg
                                              Minimum Octane Rating of this fuel: (R+M) I 2 Method NIL 87, MG 89, SNL 92
       I  are due net 1ath from invoice date. Anance charge after 30 days of 1'1.0% per monltl (minimum charge of 50¢) which Is en annual percentage rate of 1B%. Failure to pay the full·
                                                                                                      11
        lis inllOlce within .the time set forth In the first senlence shall constitute an acceptance of the terms at this Invoice. In the event aU or any part of the amount or amounts due pursuant
       .Iull.ofthls Invoice. and such amount or amounts is turnod over 10 an attorney for collection. Customer agrees to pay in addillon to all other sums due hereunder, all costs of collection.
         :houtlimitation court Costs and reasonablo subject to tho provisions of the Texas Consumar Credit Law. All invoir-"[JI< .1"" ,,,,,, nc... Ah '_;_ •.
                                                                                                                                                         < .• '   ••
                                                                                                                                               EMERGENCY CONTACT: (512) 463-77:

                                                              75653
                                       903/657 -2108

                                                  SOLD TO                                                                                             SHIPPED TO

                    AJP Oil Company, LLC                                                                                           Grapel?lnd
                    dba Grapeland Fuel & BBQ                                                                                       dba Grapeland Fuel & BBQ
                    1277 Ea~t Loop 304                                                                                             1277 East Loop 304
                    Crockett, TX 75835                                                                                             Crockett, TX 75835

                                               0.0
                                                 No Lead Gasoline UN-1203
 4,003.0                4,003.0                0.0       F-TFG                                                    EACH                        0.1840                                   736.55
                                                 Federal Gasoline Tax
 4,003.0                4,003.0                0.0       F-TSG                                                    EACH                        0.2000                                  800.60
                                                 State Gasoline Tax
 3,993.0                3,993.0                0.0       F-DL                                                     EACH                        3.0590                              12,214',59
                                               , DieseI15~PPMUhraLo'l/Sulfei'                                     '.':    '
                                                                              .   ,
 3,9~3;O "            '3;993.0                 0.0            F~TFD·                                "   t'
                                                                                                                  EACH                      ,,0:2440                                '974.29         '   ~

                                                Federal, Diesel Tax
 3,993.0               ,,3;993.0               0.0       F-TSD2                                                   EACH                        0.1960                                   782.63
                                                State Tax Biodiesel
                   ULTRA LOW SULFER DIESEL FUEL(15-PPM SULFER MAXIMUM) REQUIRED FOR USE IN ALL 2007 MODEL
                   YEAR AND LATER HIGHWAY DIESEL VEHICLES AND ENGINES. RECOMMENDED FOR USE IN ALL DIESEL
                   VEHICLES AND ENGINES. "THIS FUEL MAY CONTAIN UP TO 5.0% BIODIESEL"

                                                                                                                                      Net Invoice:,...                                27,377.5(
                                                                                                                                   Less Discount:                                          0.9(
                                                                                                                                       Sales Tax:                                         0.00
                                                                                                                                     Invoice Total:                                  27,377.59

All accounts are due net 10th from invoice date. Flnance charge after 30 days of 1~% par month (minimum charge of SO¢) which Is an annual percentage rate of 18%. Failure to pay the 11
amount of this Invoice within the time set forth in the first sentence shall constitute an acceptance of the terms of this InvOice. In the event all Of any part of the amount or amounts,duEipuiSua
                                                                                            12
to or as a result of this Invoice, and such amount o(amounts Is turned over to an attorney for colleCtJon, Custilmer agreesfo pay in addition to all other sums due hereunder, aU Costs of CoIiEK:tio
including Without Bmllallon court costs and reasonable subject to the provisions of the Texas ConsumarCredlt Law. All Invoices due and Payable In Rusk County,He~derson, Texas.                     '
                                                   CO., INC.                                                                                                     DELIVERY TICKET

                     P. O. Box 993
               HEND!=RSON, TEXAS 75653
                                    903-657-2108

RNO. YOUR OROeRliio.                   SALes PERSON;       ITERMS
                                                                                                                       "
                                                                                                                           I   SHIPPEDVI~,'    "             .".
                                                                                                                                    IFLAMMABLELiChJIO";:':;: ;,dc6~tEdT;:
                                                                                                                                                                                                 J        0: PREPAID, '

ITY           QUANTITY                                                  DESCRIPTION                                                                          PRICE                                              AMOUNT
:0    "   "
              ORDERED

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,IVERY TICKET                                                                                                  STATE ROAD TAX

                                                                                                          FEDERAL ROAD TAX

                                                                                                               STATE SALES TAX

~fu\~~~ill,~
:IVED BY
                                                                                                                                   SUBTOTAL
                                                                                                                                                                 ..,
                                                                                                                                                                 JL
                                                                                         TOTAL AMOUNT DUE                                                                      ~                      \t\~           () l.-.
                                                                                                                                                                                                                        "

                                                                                                     13
          "                -,
        85/10/2812              19:39         9355445855                                      CROCKETT ISD                                                     PAGE   81/02

"   .    , ''';'      ~.                                                                                          111,">,        )uJ ~ D:1>'P(O,UcJ, '~eJt,
                                                                                                                                          ~     ... lur 94Pfl£,l        M     1.
                                403 WebstarOrive
                           "'rson~Taras 75m                                               Declined
                   ,9Oi'6S7~loa/FIX'9OJ-657-8794
        ~ PI• • lad tile followlnK In!fGnI c:ampIatIftg this fcmn. Applicant rapteSents IhIttlle Inf,,1'RIIIt!on 8Mm In tJUApplicldon is complete and _=-ate and
        lMhmIzes 'AIYI" ail cGmlMny ottl! autIUIfi•• credit ~llftt to check wllll CftlCIIt ~ ..~ end, hlfllf'l!flClB" oiftM IUIftlIISo Indudliwbulb. 5I!IIer claims
    , lPPftIIII'''te'''COfIIIderInI'''''apflllMtloRlIId ..lnequemirrotany,q.I~, ReADTHliAn'ACHEDMREfMENTAND$lGN'IHE"SIGNATUIIl"S£CTIDNBl!RlAE
      SU8..n1 THIS APPU~ ON.                                              '

        1'"Corponttlon. please list thrae_Jor SlocIc"                 Name/!!tte
        Hold81'S and offIan fJlttllr c:oJi,cntron.
        If a PlllMfShlp cr I'rDIIrIetol'lldp. pJuse Rft
        the _ _••clClrtIft .... SOdII StaIrIty NUmber
        of .. 0IIIftCIII.

                                                                       timIe voa . . . tlIl!d b.~ "es~(coriIplett belowt                          ,"       .
                                                                       What YaIr?          "            WhlIt Typo?'    "   ,                          "

                                                          ,..Purd\iI&!lOrdet ~u~..;                         ·OU" . . . . . .et. '
                                                             'j ':;L. ".' '.   :::< ·jJO:.".                                ,   ". \..'   ~".

                                                          TliEumpW' . rAX~U'CONTINUETO BE CHARGED ON'ALL !NVOIC£$ UNTILTHE'
                                                          . "         APPRoPRIATE "TAX EXEMPT CERTIFICATE" IS RECEIVED. CUSTOMER
                                                3- :JD,7Q - ,gjb7-6 WILL BE RESPONSIBLE FOR ALL TAX UN1lLCERTIFICATE ~S RECEIVED.

        2,'-_ _ _ _ _ _ _ _ _ _ _ _ _ _ _ 5._ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ __

        1. .                                                                        Go

                                                                                         14
             05/10/2012          19:39           9355445855                                    CROCKETT ISD                                               PAGE      02/02

                          ".
                    '".
!   -,   ~                               Velvin Oil Company Credit Terms and Conditions
              . Our tannl; ate DUE UPON RECEIPT OF STATEMENT. On the last business dIy of each month a statement will be Plrepal'8d and mailed to you listing all
             unpaldln~_ 8S oftheC:foM of business for tII,t month. THE ENTlRE BAlANCE SHOWN ON THE STATEMENT, IS DIlJE UPON RECEIPT and accounts will
             be CUT OFF I'"avmant Is not recehied by the TENTH. Any part of a'statement balance not paid by the end of the ,,~onth followllllthe statment date
             will be considered PAST DUE and will bo assessed a 1.S " rate char8t that VIlli ~ added to the unpaid balance.

               Your accollllt will ,be asslgtlecf an OPEN CREDIT UMIT, subject to review at any time and VeMft 011 Company IlIseM!S the rlJht to d\Scx)ntinue anv
             QtARG! priv)h!ps should yQur aa:ount become past due; II than! Is: In ownership or name changeJ If there Is ill bllnJcruptcy; or at anv time Veil/in 011
             Co.. for food QUStt/ deems Itself ll'$eQJfe.

               The applicant lIereby authottzes a fuD and complete eredlt Investlptlon by VeMn 011 Co. and understands thel1 VeMn 011 Co•• wRl not process a
             '"CHARGE- order ,,"til a &Isned and completed credit application has been submitted and approved. All Infortnaticln will be VERifiED. The applicant
             further authorizes die banlc listed on the application to release Inrormatlon to Velvfn 011 Co .. as neceSsary for VEtil/In 011 Co., to approve credit and
             subSequently for any lepl purpose. Should It become neceSary to pface the account In the haM,ls of an attomev or collectJon agency, I/we asree to
             pay an -ddItlonaI2Sr. of the amount due lind owing. tfVetvln OIl Co•• finds It necessary to refer this aa:ount to an IIttarney for Inidatlon Clf a LAWSUIT,
             II fee of as 1/3% oftheoutstandln. balance plus any and all court COS1S shllll be added to the acxount balance.

               ThI! CONFIDENnAL CREDIT APPLICATION tontalns ell bltnn! ftIIIDtlattd between the parties and may be modified onlv upOn written aareamant
             between VeMn on Co., and the Appflcant.

                                        I/WE HAVE READ THE TERMS OF THIS AGREEMENT AND A,GREE
                                                 TO BE BOUND BY THEM IN ALL RESPECTS.

             This ____...,..-..".:~'~                       .~~~~~w;         e ______________ 20 l·;t    ~

             Signature: _":::;=~~~~~::"":::~......,-_ _ _ _ _ _ _ _ _ __

             Name:        'Cl'a..dL.                                                           '. Title:t2wn!?C .

                                                                 PERSONAL GUARANTY
                                                            IIl . . . . .UE . . . . TlIIIIDllIUUIJRY....
             UNDERSIGNED GUARANlY MUST BE ONE OF THE FOU.OWING (Orel!!! on!!) Owner/SOle Proprietor I General Partner I Corporate OffIcer

             PERSONAL GUARANTVt          In con,lderatlon of Saller, f1nanclna purchases by Applicant. the undersigned Guarantor hllllreby epees unconditional Iv.
             absolutely .rid In'ewICably, to petSonaOy IUIntfttee payment of aU amounts, hereafter due under, and the performan.ce under the terms of the
             attached Commercial Charge Account Agn!ament ,"Agcornent"), and further agrees to pay the total balanc.due on I:he Aczount opened pursuant to
             thI! ApJemont upon demand, without requiring Seller to maka demand and/ar proceed first to enforce paym~nt 8811\\nst the Applicant also ffllble on
             thb; acaounr.ln the MIlt of any default under me Agreement that govemlt the Atcount. The unde~gned herebv wa~ any notl~ regardlne tha
             ~ol\t or this Guarapty, and agrees that this Guarnncy sm.1I be appncable until the AGreement ha~ terminated anlttall amounts due thet@ under
             shaD be paid In fuft. The undersllned IISreesthat In ttte lI!Yent the ~unt Is not paId as aareed, Seller may report the, underslgned"s liability fer and
             t~ status of the Account to the credit bumaus and others: who may lawfullv rKell/e SUch Information.                                                    '

                                                                                            15
               IN THE DISTRICT COURT OF RUSK COUNTY, TEXAS                  FILED
                          4 TH JUDICIAL DISTRICT

VELVIN OIL COMPANY, INC.                *                                   C '!::   ~         .', "/
                                        *            NO.   2014 -362 RUSKC'~Y~",,\iCf CLER~
VS.                                     *
                                        *                              BY ~D:?UTY
A.J.P. OIL COMPANY, LLC                 *
d/b/a GRAPELAND FUEL & BBQ;             *
AND ANDREW J. PATTON                    *

                  DEFENDANTS' MOTION TO TRANSFER VENUE

TO THE HONORABLE COURT:

      A.J.P.    Oil   Company,   LLC,       d/b/a   Grapeland   Fuel   &    BBQ,         and

Andrew J.    Patton, also known and being the same person as Andrew

Jack Patton, Andrew Patton, Andrew J. Patton, III, Jack Patton and

Jack Patton, III, Defendants, move the Court to transfer venue and

in support of the motion show:

      1.     Defendants obj ect to venue in Rusk County,                Texas,           the

county in which this action was instituted, on the ground that Rusk

County is not a county of proper venue in this case.

      2.    No basis exists for permitting venue in Rusk County as

alleged in Plaintiff's Original Petition under any of the venue

rules provided by the Civil Practice and Remedies Code of Texas or

otherwise.     Defendants specifically deny the venue facts pleaded in

Plaintiff's Original Petition.              Defendants specifically deny that

any Defendant contracted in writing to perform an obligation in

Rusk County, Texas, expressly naming Rusk County or definite place

in that county by the writing.              Defendants specifically deny that

any invoice the subject of this               suit constituted a       contract in

                                        16
writing by which they agreed to pay for the goods the subject of

this suit in Rusk County, Texas.                 Defendants further specifically

deny that any such invoice was furnished prior to the time the kind

and   quantity      of   goods   to    be   purchased,      the   price   to   be   paid

therefor,    the place of delivery and other contractual terms had

been agreed upon.         Defendants specifically deny that any invoice

the subject of this suit was sent to any of them prior to the

shipment    of     the   goods   the    subj ect    of    this    suit.    Defendants

specifically deny that any invoice by Plaintiff was intended to

modify the terms of any original contract.

      Defendants specifically deny that the individual Defendant was

ever a resident of Rusk County, Texas.               The individual Defendant is

not a resident of Rusk County, Texas and was not. a resident of Rusk

County,    Texas    when the     cause      of action      alleged in     Plaintiff's

Original Petition allegedly accrued.

      Defendant A.J.P.       Oil Company,          LLC specifically denies that

Rusk County is the county of Defendant's principal office in this

state.

      Defendants also specifically deny that all or a substantial

part of the events or omissions giving rise to Plaintiff's cause of

action occurred in Rusk County, Texas.

      3.    Defendants further object to venue in Rusk County, Texas,

the county in which this action was instituted, on the grounds that

Rusk County is an inconvenient venue,                    and the action should be

transferred to Houston County, Texas in accordance with TEX. CIV.

                                            17
PRAC. & REM. CODE ANN. § 1S.002(b)                   (2014).       More specifically, as

shown        in   the     attached   Affidavit       of   Andrew    J.     Patton,     for   the

convenience of the parties and witnesses and in the interest of

justice, maintenance of this action in Rusk County would work an

injustice to Defendants considering:

                   (1)    The Defendants' economic personal hardship;

                   (2)    The    balance    of     the    interest        of     all   parties

                          predominates in favor of the action being brought

                          in Houston County,       Texas; and

                   (3)    The transfer of the action to Houston County, Texas

                          would not work an injustice to any other party.

        4.        Defendants request that this action be transferred to a

District Court of Houston County, Texas, where proper venue lies in

this case.

       S.         Venue    lS   proper in Houston County,               Texas,   because the

individual Defendant resided in Houston County, Texas at the time

the alleged cause of action accrued, and Houston County, Texas is

the county of the principal office of Defendant A.J.P. Oil Company,

LLC.

       WHEREFORE,          Defendants      request    that      this matter be         set   for

hearing,          and that      on completion of the hearing the Court grant

Defendants'          Motion     to   Transfer    Venue     in    this    cause    to   Houston

County, Texas, taxing costs against the Plaintiff, and granting the

Defendants any further relief to which they may be justly entitled.

                                              18
      Respectfully submitted,

BY:
      WIL
      WIL
      P.
      CROCKETT, TEXAS 75835
      936-544-4111
      936-544-5023 (FAX)
      TEXAS BAR I.D. NO. 15735500
      bill@pembertontriallaw.net

      JACLYN D. PATTON
      3730 Kirby Drive, Suite 1200
      Houston, Texas 77098

ATTORNEYS FOR DEFENDANTS

19
                       CERTIFICATE OF SERVICE

     A true and correct copy of the above and foregoing Defendants'

Motion to Transfer Venue has been served upon:

                          Mr. Ronnie Horsley
                          Attorney at Law
                          P. O. Box 7017
                          Tyler, Texas 75711

by depositing same,   enclosed in a post paid,   properly addressed

wrapper,   in a Post Office or official depository,   under the care

and custody of the United States Postal Service, Certified Mail,

Return Receipt Requested, this the 23rd day of

                                20
                                      AFFIDAVIT

THE STATE OF TEXAS         *

COUNTY OF HOUSTON          *

        BEFORE   ME,    the      undersigned         notary    public,    on   this    day

personally appeared Andrew J. Patton, individually and as agent for

A.J.P. Oil Company, LLC, who, after being duly sworn, stated that

he is a Defendant in this Cause,                 that he is over the age of 18

years, of sound mind, and is competent to make this affidavit, and

tha t   every    statement     contained        In    this    Affidavit   is   true    and

correct.

        "Andrew J.     Patton,    also known and being the same person as

Andrew Jack Patton,           Andrew Patton,         Andrew J.     Patton,     III,   Jack

Patton and Jack        Patton,     III,    is    a    resident   of   Houston County,

Texas, and he was a resident of Houston County, Texas at the time

the alleged cause of action plead in Plaintiff's Original Petition

accrued.    The principal office in Texas of A.J.P. Oil Company, LLC,

is in Houston County, Texas.              Houston County, Texas is the county

in which the decision makers for the organization within the State

of Texas conduct the daily affairs of the organization.

        "The invoices attached to Plaintiff's Original Petition as

Exhibit "AU were delivered to Defendants after the kind and quality

of goods to be purchased, the price to be paid therefor, the place

of delivery and the other terms of contract between Plaintiff and

Defendants had been agreed upon.                 The goods the subject of this

suit had already been delivered prior to the time the invoices were

                                          21
delivered.

      "Litigation between the Plaintiff in this case and Defendant

A.J.P. Oil Company, LLC, d/b/a Grapeland Fuel & BBQ, is pending In

the   Third Judicial   District Court   of Houston County,   Texas,   in

Cause No. 14-0217, wherein A.J.P. Oil Company, LLC, d/b/a Grapeland

Fuel & BBQ, sued Velvin Oil Company, Inc. for damages for delivery

of tainted fuel.   A true and correct copy of Plaintiff's Original

Petition filed on November 7, 2014 in Cause No. 14-0217 is attached

hereto, marked "Exhibit A" andi~

                               /(/
                              (
                                  ANDREW
                                   S

                                           _      NO /'
      SUBSCRIBED AND SWORN TO BEFORE MEt'"his ~·d-y of December,
2014.                            ,)

                                  22
                                          No.

AlP OIL COMPANY, LLC D/B/A                         §     IN THE ..s ~ DJ.%
GRAPELAND FUEL AND BBQ,                            §
Plaintiff                                          §
                                                   §
 V.                                                §
                                                   §
 VELVIN OIL COMPANY, INC.                          §            HOUSTON COUNTY, TEXAS
 Defendant                                         §

                            PLAINTJFF'S
                             ,          ORIGINAL PETITION

       TO THE HONORABLE JUDGE OF SAID COURT:

       COMES NOW AJP OIL COMPANY, LLC d/b/a GRAPELAND FUEJL AND BBQ

(hereinafter "Plaintiff') complaining ofVELVIN OIL COMPANY, INC. (hereinafter "Defendant),

and states the following:

                                     I.    DISCOVERY LEVEL

       Plaintiff intends to conduct discovery in this suit under Level 2 of Texas Rule of Civil

 Procedure 190.3 and affirmatively pleads that this suit is not governed by the expedited-actions

 process in Texas Rule of Civil Procedure 169 because Plaintiff seeks monetary relief over

 $100,000.

                                                II. RELIEF

         Plaintiff seeks monetary relief over $1,000,000. Tex. R. Civ. P. 47(c)(5).

                                                III. PARTIES

        Plaintiff, AlP OIL COMPANY,
                             ,.     LLC is a limited liability company organized and

existing under the laws of the State of Texas and may be served with citation in this cause by

serving its registered agent for service, Andrew Patton, at 1277 East Loop 304, Crockett, Texas

75835, or wherever he may be found.

                                                    23
       Defendant, VELVIN OIL COMPANY, INC. is a corporation organized and existing

under the laws of the State of Texas and may be served with citation in this cause by serving its

registered agent for service, David Velvin, at 403 Webster Drive, Henderson Texas 75653, or

wherever he may be found. .

                                         IV. JURISDICTION

       Jurisdiction is proper in this Court because the damages suffered by the Plaintiffs are in

excess of the minimum jurisdictional limits of this Court.

       Venue is proper in Houston County, Texas because the acts and/or omissions complained

of herein occurred in Houston County, Texas.

                                             V. VENUE

       Venue for this suit is proper in Houston County under Texas Civil Practice & Remedies

Code section 15.002(a)(1) because all or a substantial part of the events or omissions giving rise

to this cause of action occurred in Houston County. TEX. CIV. PRAC. & REM. CODE §

lS.002(a).

        Venue for this suit is also proper in Houston County under Texas Business & Commerce

Code section 17.56 because Defendants have conducted business in Houston County, and the

transactions that form the basis of this cause of action occurred in Houston County. TEX.BUS. &

COM. CODE §17.56.

                                     VI. BACKGROUND FACTS

        Plaintiff, Grapeland Fuel and BBQ, is a convenience store and gas station located in

Grapeland, Texas. Plaintiffhas been in operation and regularly selling gasoline and diesel fuels

since 2006.

        On or about December 4, 2013, Defendant Velvin Oil made a fuel delivery to Plaintiff

                                                  24
that included 2,478 gallons of defective and hannful diesel fuel. In turn Plaintiff, in its ordinary

and expected course of business, sold this defective fuel to customers. The diesel fuel actively

hanned vital engine parts and rendered customers' vehicles inoperable, or in a diminished

functional capacity. Plaintiff was ultimately forced to fix these disabled vehicles out of pocket at

a cost exceeding $20,000.

        Further, in the weeks following Defendant's diesel delivery to Plaintiff, Defendant's

agents continuously and fraudulently misrepresented to Plaintiff that the diesel fuel was untainted

and met regulatory requirements, inhibiting Plaintiff from taking timely remedial action and

resulting in further damages to Plaintiff.

        As a result of the tainted diesel sold by Defendant and the resulting hann to Plaintiffs

customers, Plaintiff has suffered serious financial hann including repair costs, loss of profit and

severely diminished goodwill1Nithin the community.

            VII.          VIOLA nONS OF THE DECEPTIVE TRADE PRACTICES ACT

          Plaintiff is a consumer under the DTP A because plaintiff is a Limited Liability Company

  who acquired goods by purchase. Defendant is a corporation that can be sued under the DTPA.

          Based on the conduct alleged above, Defendant Velvin Oil Company has engaged in

  false, misleading, or deceptive acts or practices in the conduct of trade or commerce in violation

   ofTEX. BUS. & COM. CODE §17.46(a) and (b), to wit Defendant:

         (A)       engaged in false, misleading, or deceptive acts or practices that plaintiff relied on

                to plaintiffs detriment. Specifically, Defendant represented that the diesel fuel it

                   sold to Plaintiff was of a particular standard, quality or grade when it was not.

                   TEX. BUS. & COM. CODE § 17.46(b)(7). Defendant also failed to disclose

                   infonnation known at the time of the transaction to Plaintiff, with the intention that

                                                     25
                withholding this information would induce Plaintiff to enter into a transaction that

                Plaintiff would not have entered had the information been disclosed. TEX. BUS. &

                COM. CODE §17.46(b)(24).

         (B)    breached an implied warranty. Specifically, Defendant breached the implied warranty

                of merchantability as discussed in detail below.

         (C)    engaged in false, misleading, or deceptive acts or practices that, to plaintiffs

                detriment, violated a "tie-in" consumer statute. Specifically, Defendant breached

                Texas Agriculture Code Section 17.055 by selling motor fuel with an inaccurate

                 automotive fuel rating. TEX. AGRIC. CODE § 17.055.

         Plaintiff gave Defendant notice as required by Texas Business & Commerce Code section

17.505(a). Attached as Exhibit A is a copy of the notice letter sent to Defendant, which is

incorporated by reference.

            VIII.        BREACH OF IMPLIED WARRANTY OF MERCHANTABILITY

        Plaintiffre-alleges and incorporates by reference all other paragraphs of this Petition

as if fully set forth herein.

        At all times relevant to this Petition, Defendant is and was in the business of selling

motor fuel without substantial change in the condition in which such fuel was manufactured and

sold to consumers, knowing that its fuel products would be sold to persons whose vehicles

required a specific quality of fuel to operate.

        Defendant is a merchant as to motor fuels, and as such impliedly warranted that

the diesel fuel advertised as meeting state and federal regulations and purchased by Plaintiff and

was merchantable and fit for the ordinary purposes for which it was to be used. Plaintiff

accordingly relied on Defendant's implied warranties in purchasing and reselling the diesel fuel.

                                                   26
       On or around December 4,2013, Defendant sold and delivered to Plaintiff tainted diesel

fuel that Defendant warranted met regulatory standards. Defendant sold and delivered this fuel to

Plaintiff with knowledge that such fuel was to be sold to the general public for specific use in

vehicles that operate only on fuel meeting regulatory standards.

       Plaintiff was unable to inspect or test the fuel it received from Defendant prior to

purchase.

       After Plaintiff purchased the diesel fuel from Defendant, Plaintiffresold such fuel in the

course of its business to customers. Plaintiff relied on Defendant's implied warranty of

merchantability in selling the fuel to its customers.

       Plaintiffs customers immediately began to experience problems with their vehicles,

including engine stalling and failure, resulting in expenses incurred for towing and repair.

        Defendant breached its implied warranty of merchantability in that the diesel fuel it sold

contained water and other contaminants, making the fuel unwholesome, unfit for consumers to

use in their vehicles and unreasonably dangerous to consumers.

        The injuries to Plaintiff, described above, proximately resulted from Defendant's breach

of the implied warranty of merchantability.

                                           IX. NEGLIGENCE

        Plaintiffre-alleges and incorporates by reference all other paragraphs of this Petition

as if fully set forth herein.

        Plaintiff purchased diesel fuel distributed and sold by Defendant.

        Defendant owed Plaintiff a duty of care to offer goods free from harmful defect.

        Defendant should have reasonably foreseen that Plaintiff would be subject to the harm

 caused by the damaging and defective fuel sold.

                                                   27
        The defective fuel was intended to, and did, reach Plaintiff without material alteration.

        Plaintiff used the defective fuel in the manner that Defendant expected.

        The defects in the fuel could not be anticipated or detected by Plaintifftluough any

reasonable method. The defective fuel was unreasonably dangerous when used in its customary

manner.

        The fuel was defective and unsafe for its intended use because it harmed the vehicles it

was intended to fuel, rendering them inoperable.

        The fuel failed to perform its intended function of safely and efficiently powering

engines.

        Defendant should have foreseen, detected, and prevented the defective condition of the

fuel.

        Defendant should have prevented distribution of the defective fuel.

        Defendant breached their duty of care by seIling products that were harmful and

deleterious:

                 a. without adequate quality control and testing; and

                 b. without using proper "clean out" and distribution practices.

          Defendant's conduct was at a minimum negligent and likely careless or reckless.

          Plaintiff has suffered economic damages through no fault of its own as a direct and

proximate result of Defendant's defective fuel.

                                             X. DAMAGES

           Economic and Actual pamages. Defendant's wrongful conduct was a producing cause of

Plaintiff's injury, which resulted in the following damages:

            a.   $31,760.45 in out-of-pocket damages for the worthless diesel fuel delivered.

                                                   28
        b.    $1,146,616.17 for lost profits.

        c.    $17,232.02 in mitigation costs.

        d.    $6,000 in lost time.

        Mental-Anguish Damages. Defendant acted knowingly, which entitles Plaintiffto recover

 mental-anguish damages under Texas Business & Commerce Code section 17.50(b)(I).

 Defend8;nt's wrongful conduct resulted in mental-anguish damages totaling $15,000.

        Additional damages. Defendant acted knowingly, which entitles plaintiff to recover treble

 economic damages under Texas Business & Commerce Code section 17.50(b)(l). Specifically,

 Defendant and its agents knowingly sold tainted, substandard diesel fuel to Plaintiff because

 Defendants were switching over to a "Winter Blend" of diesel and were in short supply of diesel.

 This is commonly referred to "clean out" diesel, which is substandard. See Exhibit B.

        Attorney fees. Plaintiff is entitled to recover reasonable and necessary attorney fees for

 prosecuting this suit under Texas Business & Commerce Code section 17.50(d).

                                        XI. JURY DEMAND

       Plaintiffs hereby request a trial by jury and have tendered the appropriate Jury Fee.

                               XII. CONDITIONS PRECEDENT

        All conditions precedent to plaintiff's claim for relief have been perfonned or have

 occurred.

                              XIII. REQUEST FOR DISCLOSURE

        Under Texas Rule of Civil Procedure 194, plaintiff requests that defendant disclose, within

50 days of the service of this request, the information or material described in Rule 194.2.

                                                 29
                                          XIV. PRAYER

       As a result of the foregoing, Plaintiff asks that the Court issue citation for Defendant to

appear and answer, and respectfully prays for each of the following:

       a.      Economic damages ..

       b.      Actual damages.

       c.      Mental-anguish damages.

       d.      Treble damages.

       e.      Pre-judgment and post-judgment interest.

       f.      Attorneys' fees and costs of Court.

       g.      All other relief to which Plaintiff may be entitled.

                                              Respectfully submitted,

                                               ~
                                              J~ON
                                              TX Bar No. 24085521
                                              3730 Kirby Drive, Suite 1200
                                             ,Houston, Texas 77098
                                              (713) 730-9446
                                              (713) 364-6992 (Fax)
                                              jaclyn@txestateplanning.com

                                              DATED:       t\ -1-- tLf

                                                     30
EXHIBIT A

    31
                                      NOTICE OF CLAlM

                                                                            August 28, 2014

Re: Tainted diesel delivered to Grapeland Fuel and BBQ

Mr. David Velvin
Velvin Oil Company, Inc.
P.O. Box 993
Henderson, TX 75653

Dear Mr. Velvin:

        1 represent Grapeland Fuel and BBQ in the above-referenced matter. You will recall that
in December 2013, Jack Patton of Grapeland Fuel and BBQ placed a fuel order with Velvin Oil,
which was delivered on December 4th. Two days later, on December 6th, Mr. Patton became
aware that three of his customers had experienced issues with diesel purchased from Grapeland
Fuel, resulting in extensive damage to their vehicles. Your Vice President, Jim Jordan, was
immediately advised of the problem and reassured my client that it would be looked into. Over
the next two weeks, Mr. Jordan was regularly contacted by my client about the ongoing issue.
During this time Mr. Jordan sent two super clean diesel shipments and one employee to add a
shock treatment to the fuel tank, all in hopes affixing the tainted diesel. After each "fix" made
by your company, Mr. Jordan insisted that the diesel was now safe to sell to the general public. It
was not. The problem was not ultimately resolved until my client emptied every ounce of diesel
from your company's December 4th shipment from his tank.

        In reliance on your representation that the diesel delivered on December 41h was of a
standard quality and on your continuous assurances that the diesel had been "fixed" and was safe
for resale, my client has suffered severe and continuing damages which have not been remedied
by Velvin Oil. Grapeland Fuel and BBQ has made numerous attempts to resolve this matter
amicably, but has been rebuffed. After months of being assured by Mr. Jordan that Ve}vin Oil

                                                 32
would "do the right thing" in relation to the tainted diesel, my client's concerns are now being
ignored.

       Undoubtedly, you are aware of your liability to my client for violation of the implied
warranty of merchantability arising from the principles of common law and, more specifically,
Section 17.46(7) of the Texas Deceptive Trade Practices Act (DTPA), Texas Business &
Commerce Code section 17.41 et seq.

         Because of your violation of the DTPA, my client has incurred economic damages of
$1,072,439.11. These damages represent the $31,760.45 you have charged to my client for the
tainted diesel delivered, $ t 5,000 in business interruption while my client was forced to shut
down his diesel pumps, $19,678.66 in out-of-pocket and mitigation costs to repair the customers'
vehicles damaged by the tainted diesel, $6,000 in lost time Mr. Patton spent attending to this
issue, and $1,015,000 representing the loss in sales that have already been experienced by
Grapeland Fuel and will continue to be experienced over the next two years. In the event of
litigation, these amounts will be adjusted upward to reflect any additional damages.

        In the event oflitigation, my client will also seek recovery of mental-anguish damages in
the amount 0[$15,000 and trebled economic damages on the grounds that your conduct was
committed knowingly. Specifically, we will show that your company acted with actual awareness
that the diesel was tainted when attempting to remedy the problem with shipments of super clean
diesel and shock treatment, yet reassuring my client that the diesel wa.<; safe for resale.

        Please understand that this demand is made in the spirit of compromise. According to our
analysis, the demand presents a tremendous savings to you given your potential exposure to
Grapeland Fuel and BBQ. We hope you view this demand as a good faith, conservative effort on
our part to resolve this potential litigation on amicable terms.

        My client is anxious to resolve this matter immediately. Therefore, I suggest that you or
your attorney contact me as soon as possible. From this point forward, alI contact concerning this
matter should be made to my office.

         If this matter is not resolved, my client has authorized me to bring a lawsuit against you
for all appropriate remedies under the Texas Deceptive Trade Practices-Consumer Protection
Act. We would expect to recover not only our damages, but also mental anguish damages,
prejudgment interest, attorney's fees, and perhaps additional punitive damages.

        Please forward this letter to your insurance carrier to ensure that the carrier receives
 timely notice of the claim and will provide you with representation and coverage.

        We trust that you will immediately respond, in writing, to this formal demand letter and
 schedule a mutually convenient time and date for the requested relief within the time specified in

                                                   33
this letter. 1£ you have any questions regarding this matter or need additional informal ion, please
contact my office.

Sincerely,

Jaclyn D. Patton

                                                  34
EXHIBITB.

    35
                                       No. _ _ __

AJP OIL COMPANY, LLC D/B/A                     §       IN THE           DISTRICT COURT OF
GRAPELAND FUEL AND BBQ,                        §
Plaintiff                                      §
                                               §
V.                                             §
                                               §
VELVIN OIL COMPANY, INC.                       §                HOUSTON COUNTY, TEXAS
Defendant                                      §

                           AFFIDAVIT OF ANDREW PATTON

STATE OF TEXAS                                  §
                                                §
COUNTY OF HOUSTON                               §

       ANDREW PA TfON appeared in person before me today and stated under oath:

       "My name is ANDREW PATTON. I am above the age of eighteen years, and I am

fully competent to make this affidavit. The. facts stated in this affidavit are within my personal

knowledge and are true and correct."

       "1 am the owner of Grapeland Fuel and BBQ. On December 3, 2013 I placed a gasoline

and diesel order with Jim Jordan of Velvin Oil by phone. When I made the order, Mr. Jordan

told me that there was currently a shortage of diesel because the refinery was switching to a

winter blend and doing maintenance, but that he "would pull some diesel from somewhere."

This order was delivered to Grapeland Fuel on December 4th.

       Two days later on December 6th, 1 was told by my store manager Marsha Kosechata

that Joe Graves of Joe's Automotive had called saying that three of my customers had to bring

their trucks into his shop after purchasing diesel from my store. These customers were Tommy

Smith, Charlie Casky and Chris Byrn and they started having problems with their trucks almost

                                                36
                            Il
    immediately after filling up with us-one truck broke down before it could even make the half

    block from Grapeland Fuel to Joe's Automotive. I verified via credit card records that these

    customers had purchased diesel from diesel tank four at my store on December 4th , 5th and 6th ,.

    I immediately shut down both diesel pumps and called Mr. Jordan of Velvin Oil to advise him

    of the problem. Mr. Jordan said he would look into the matter and get back to me. Meanwhile I

    inspected all of my pumps and fuel delivery paperwork and checked the veeder root readings

    that my manager Ms. Kosechata prints out every night. I discovered that eighteen gallons of

    water was dropped with the diesel delivery in diesel tank four. I pulled a fuel sample and found

    that the diesel had a strange milky tea-like color and smelled somewhat like cleaning solvent.

    Normally diesel has a greenish tint and ranges from clear to yellow in color-in my ten years

    in the gas station business I have never seen diesel the color of tea.

            On December 9th , I spoke to Mr. Jordan again. He agreed there was a problem with the

    diesel and said that he had a solution. Velvin Oil shipped 2,183 gallons of super clean diesel,

    which seemed to change the color of the fuel to a more normal color. Mr. Jordan assured me

    that this super clean diesel would fix the problem. Because of Velvin Oil's assurances, we

    began to sell diesel again on December 10th . The next day our fuel filters started stopping up

    again and we had to change out six filters in diesel tank four in just one day.       r called   Mr.

    Jordan again about the problems we were still having and he sent another 3,718 gallons of

    super clean diesel on December 11th. By December 13 th the filters in diesel tank four were

     clogging yet again and I hired a technician to change all filters and inspect the pumps.

            On December 19th , I called Mr. Jordan about the ongoing problems with diesel tank

     four. He sent an employee of Velvin Oil to add a shock treatment additive to the diesel in that

     tank and again assured me that any problems we were having would be fixed by this. The

-------~-----~-----------~,-
                                                     37               -   --   ----------------
filters in diesel tank four clogged within a few days, forcing me to stop selling all diesel until

we could pump the diesel tanks empty and dispose of 435 gallons worth of worthless diesel-

about $1,500 worth of diesel wasted.

          During this time, four additional trucks that had filled up at our diesel tank four were

towed to auto shops in Grapeland, Crockett and Huntsville. These customers were Gator

Matthews, Eric Grueziecke, Richard Wagner and Tom Gates. I again verified by credit card

receipt that these customers had indeed filled up with diesel from tank four at Grapeland Fuel.

          Between December 6th , 2013 and January 7th , 2014, seven total trucks were damaged

after filling up at our diesel tank four. Repairs to their trucks included changing fuel filters,

flushing fuel systems, dropping fuel tanks, cleaning fuel tanks, fuel injector replacement and

fuel pump replacement. Tom Gates' truck required a total fuel system overhaul. I paid

$17,233.02 out of pocket to repair my customers' trucks. In addition, because Grapeland and

Houston County is such a small and close community, word quickly spread that our diesel was

damaging customers' trucks. During the first eight months of 2014, my business has been

down almost $250,000 compared to this same period last year and it continues to suffer. Even

now, almost an entire year since the incident, customers ask me almost daily if our fuel is safe

to buy.

          Grapeland Fuel purchased diesel exclusively from Velvin Oil between October 2013

and February 2014. We have never had any issues with diesel before Velvin Oil delivered

contaminated fuel on December 4, 2013 and we have not had any issues since we pumped that

fuel out of our tanks in January 2014.

          We continued to do business with Velvin Oil because we were repeatedly assured by

Jim Jordan that Velvin Oil would make their mistake right. After trying to amicably resolve

                                                 38
this matter several times and being ignored by Velvin Oil, it has become apparent we must
                                                                               ---_.
resort to the legal system to get any relief."

AFFIANT FURTHER SA YETH NOT.

        SWORN TO AND SUBSCRIBED BEFORE ME on this                1L day   of   f',Jo V.
2014, to certify which witness my hand and sea~LJ....-"~~~

     ,:.·t~':.!'~::::,.    JULIE RHONE.
    !~~{..\ Notary Public, State 01 Texas
    \~~}~i My Commission Expires
    ...,:,t,:.:~~~'.:l' December 02. 2016

                                                 39
EXHIBITC

    40
                                          No. _ _ __

AJP OIL COMPANY, LLC D/B/A     §     IN _ _THE DISTRICT COURT OF
GRAPELAND FUEL AND BBQ,        §
Plaintiff                      §
                               §
V.                             §
                               §
VELVIN OIL COMPANY, INC.       §          HOUSTON COUNTY, TEXAS
Defendant                      §
                 AFFIDAVIT OF MARLENE SANDERS

STATE OF TEXAS                                       §
                                                     §
COUNTY OF HOUSTON                                    §

       MARLENE SANDERS appeared in person before me today and stated under oath:

       "My name is MARLENE SANDERS. I am above the age of eighteen years, and I am

fully competent to make this affidavit. The facts stated in this affidavit are within my personal

knowledge and are true and correct."

        "I am a shift manager at Grapeland Fuel and BBQ. On December 4th, 2013, I was

working when an employee of Velvin Oil came and dropped off diesel and gasoline into our

tanks. I signed the delivery ticket for that fuel.

        About the next day we began to have problems with tank four at our store. We had

never had any problems with diesel before Velvin Oil made the fuel delivery that I signed for

on December 4th , 2013.

        I was working again around December 18 th or 19th when a Velvin Oil employee came

to Grapeland Fuel and treated tank four with a shock treatment he said was for water in the

diesel. The employee left another bottle of shock treatment with us for use later on. We kept

                                                     41
having problems until we pumped out tank four. We have not had any problems since but I still

hear customers say they are worried about buying diesel and gasoline from us."

AFFIANT FURTHER SA YETH NOT.

                                                  1Y\fIll 0j\ Q 9anJ.w:J
                                                        ARLENE SANDERS

        SWORN TO AND SUBSCRIBED BEFORE ME on this
2014, to certify which witness my hand and seal~o~.u..L.<~_ __
                                                                    k    day of   l\JOV.

        \"''''''
     "t~!~nr.~;~         JULIE RHONE
     {"i~:"\      Notary Public. State of Texas
      .lJ.,~,.~..J MV Commission Expires
     ~i.M~~~"ol'    December 02. 2016

                                                  42
EXHIBITD

    43
             -

                                       No. _ _ __

AJP OIL COMPANY, LLC D/B/A                      §      IN _ _THE DISTRICT COURT OF
GRAPELAND FUEL AND BBQ,                         §
Plaintiff                                       §
                                                §
V.                                              §
                               §
VELVIN OIL COMPANY, INC.       §         HOUSTON COUNTY, TEXAS
Defendant                      §
                AFFIDAVIT OF MARSHA KOSECHATA

STATE OF TEXAS                                  §
                                                §
COUNTY OF HOUSTON                               §

       MARSHA KOSECHATA appeared in person before me today and stated under oath:

       "My name is MARSHA KOSECHATA. I am above the age of eighteen years, and I am

fully competent to make this affidavit. The facts stated in this affidavit are within my personal

knowledge and are true and correct."

       "I have been the manager at Grapeland Fuel and BBQ for over three years. One of my

regular duties as manager is to print out and check the veeder root reading every day

immediately after closing. On December 3rd and 4th of 2013, I printed out the veeder root

readings like I do each and every night at approximately 6:05pm. I did notice at this time that

the time stamp was off due to a power outage.

       When I checked the veeder root readings on December 3rd, 2013, there was no water in

tank four. After the fuel delivery by Velvin Oil on December 4th, the veeder root readings

showed that there were eighteen gallons of water in tank four. Our fuel tanks are always kept

locked and are not accessible.

                                                44
         On December 18 th or 19th , an employee from Velvin Oil came to Grapeland Fuel and

treated our tank four. The employee said it was a shock treatment for the water in the diesel.

They also left some shock treatment for us to treat at a later date. We used the treatment the

following week as we were still having trouble.

         During my entire time working for Grapeland Fuel and BBQ, we've never had any

problems with bad diesel except for the period between December         4th   2013 when Velvin Oil

delivered bad diesel to tank four and when Mr. Patton pumped tank four empty in January

2014."

AFFIANT FURTHER SA YETH NOT.

                                                        jYl{l.w;ha" ~(J0haJ:cD
                                                            MARSHA K SECHATA

        SWORN TO AND SUBSCRIBED BEFORE ME on this                       ~ day of NOV.
2014, to certify which witness my hand and seal of O,!J.!l........-_~

              ,""ft"
          $....~~~~~.;J."f,      JULIE RHONE
         r:·~t\         Notary Public. State 01 Texas
         \ ..J..~~.~.."i My Commission Expires
          "'~,f.~!~~~.f       December 02, 2016

                              .----   ._-------
                                                        45
                  IN THE DISTRICT COURT OF RUSK COUNTY, TEXAS
                                                                               Fll ED
                                  4rH   JUDICIAL DISTRICT                  201~ DEC 29 A;1 fO: 45
VELVIN OIL COMPANY, INC.                        *
                                                *
vs.                                             *            NO.
                                                *
A. J.P. OIL COMPANY, LLC                        *
d/b/a GRAPELAND FUEL & BBQ;                     *
AND ANDREW J. PATTON                            *
                               DEFENDANTS' ORIGINAL ANSWER

TO THE HONORABLE COURT:

        A.J.P.       Oil     Company,    LLC,       d/b/a   Grapeland   Fuel   &   BBQ,   and

Andrew J.        Patton, also known and being the same person as Andrew

Jack Patton, Andrew Patton, Andrew J. Patton, III, Jack Patton and

Jack         Patton,       III,     hereinafter          sometimes      referred     to    as

"Defendants," SUBJECT TO DEFENDANTS' MOTION TO TRANSFER VENUE, file

this,        their     Original     Answer      to      Plaintiff's   Original     Petition

herein,       and,     for    such Answer,          would respectfully show unto the

Court the following:

        1.     Defendants have paid in full the account the subject of

Plaintiff's suit, more specifically with check number 2902, dated

April 29, 2014.

        2.      Defendants deny,          each and every,          all and singular,      the

allegations contained in Plaintiff's Original Petition and demand

strict proof thereof; and, of this, Defendants put themselves upon

the country.

        WHEREFORE, premises considered, Defendants pray that Plaintiff

take nothing by its suit, that Defendants go hence with their costs

                                                    5
without day,   and for such other and further relief, both general

and special,   at   law and in equity,   to which   Defendants may be

justly entitled.

                                BY:
                                      WILLIAM R. PEMBERTON
                                      WILLIAM R. PEMBERTON, P.C.
                                      P. 0. BOX 1112
                                      CROCKETT, TEXAS 75835
                                      936-544-4111
                                      936-544-5023 (FAX)
                                      TEXAS BAR I.D. NO. 15735500
                                      bill@pembertontriallaw.net

                                      JACLYN D. PATTON
                                      3730 Kirby Drive, Suite 1200
                                      Houston, Texas 77098

                                      ATTORNEYS FOR DEFENDANTS

                        CERTIFICATE OF SERVICE

     A true and correct copy of the above and foregoing Defendants'

Original Answer has been served upon:

                           Mr. Ronnie Horsley
                           Attorney at Law
                           P. 0. Box 7017
                           Tyler, Texas 75711

by depositing same,    enclosed in a post paid,     properly addressed

wrapper,   in a Post Office or official depository,     under the care

and custody of the United States Postal Service, Certified Mail,

Return Receipt Requested, this the 23rd                       2014.

                                  6
                                                                                    Filed 7/29/20154:40:21 PM
                                                                                              Terri Pirtle Willard
                                                                                                    District Clerk
                                                                                            Rusk County, Texas

                                                                                             Courtney Terry

                                      No: 2014-362

VELVIN OIL COMPANY, INC.                    §    IN THE DISTRICT COURT
                                            §
VS.                                         §    4TH JUDICIAL DISTRICT
                                            §
A.J.P. OIL COMPANY, LLC d/b/ a              §
GRAPELAND FUEL & BBQ; and                   §
ANDREWJ. PATTON                             §    RUSK COUNTY, TEXAS

                      RESPONSE TO MOTION FOR NEW TRIAL

TO TFIE HONORABLE JUDGE OF SAID COURT:

       COMES NOW, Velvin Oil Company, Inc., Plaintiff in the above entitled and

numbered cause and in response to the Motion for New Trial filed herein by the

Defendants would show the court the following:

                                            1.

       A.J.P. Oil Company, LLC and Andrew J. Patton (hereinafter referred to as

"Defendants") did not file a plea to abate this case. The allegation that the pending cases

are "identically the same parties, involve the same subject matter II is contrary to the

evidence already before this court. In this cOIUlection, the undisputed evidence shows

that the sworn account upon which Plaintiff's claim has already been adjudicated, shows

a series of payments on account made by the Defendants. Those payments applied to

discharge the invoice which Defendants now claim to be in dispute in another county.

Essentially, Defendants have filed a suit for damages arising out of customer complaints

regarding fuel provided by them in Houston County.

                                           II.

      Plaintiff would show that the Defendant filed its Original Answer in this cause

                                            47
setting forth a claim of payment by its check #2902 in April, 2014. Thereafter the

Defendants filed a Motion to Transfer Venue and many other pleadings in this cause but

never requested this cause be abated in any direction to the court. A plea in abatement

can be waived as this plea was never raised.

                                               III.

       Defendants request a new trial for the reason that the attorney's fee proof was

within counsel's estimation inadequate. Your Plaintiff would show that the court does

not need to hear any evidence in connection with attorney's fees as Plaintiff's cause was

brought as a suit on a sworn account and on a contract and is provided in the TEXAS

CIVIL PRACTICE AND REMEDIES CODE §38.004

       "The court may take judicial notice of the usual and customary attorney's fees and

of the contents of the case file without receiving further evidence in:

       (1) a proceeding before the court; or

       (2) a jury case in which the amount of attorney's fees is submitted to the court by

agreelnent. "

                                               IV.

       The Defendants request a new trial claiming there is a defense of payment, while

the documentary evidence attached to the Motion for New Trial shows that the check

#3018 attached to Exhibit "D" to Defendant's Motion for New Trial is an um909 S.W.2d 508-11 (Tex. 1995) cited by Defendants

for authority appears to be applicable only to a medical malpractice case and does not

appear to mention the "absolute authority II suggested by counsel. Morgan v. Morgan,

406 S.W.2d 347 (Tex.Civ.App.-San Antonio 1966, no writ) cited by Defendants relates to

an agreement regarding application of payment. It also stands for the Plaintiff's

proposition including the general rule at page 350 where the court states liThe general

rules is that where a debtor makes payment to his creditor, without specifying the

mmmer in which such payment is to be applied, the creditor may appropriate the

payment to anyone of the various debts owed them by such debtor (citing case). This

right of the creditor includes the right to apply an unappropriated paym.ent to

satisfaction of a barred debt".

                                             VI.

       The general rule in Texas is that the court in which suit is filed first acquires

dominate jurisdiction to the exclusion of other courts. Clawson v. Millard, 934 S.W.2d 899

(Tex. App.-Houston [1st Dist.] 1996. The court there cites Curtis v. Gibbs, 511 S.W.2d

263,267 (Tex. 1974) there the court states liThe general C0l11l110n law rule in Texas is that

the court in which suit is first filed acquires dominate jurisdiction to the exclusion of

other coordinate courts. (citing cases) "Any subsequent suit involving the same parties

                                             50
THE STATE OF TEXAS                         *
                                           *
COUNTY OF SMITH                            *

        BEFORE ME, the undersigned authority, on this day personally appeared the
undersigned Affiant, who being by me first duly sworn, did say and depose that he is
one of the attorneys for the Plaintiff in the above entitled and numbered cause; that he
has prepared the above and foregoing Response; that he is personally congnizant of the
facts set forth in said Response; and that said facts are, within his knowledge, h'ue and
correct.

      SUBSCRIBED AND SWORN TO, before me, this 29th day of July, 2015,

My commission expires:

                                           51
                                                                                                   ,   '

                                                                                                                                                                      FILED
                                              .''b
                                                                                               No: 2014-362
                                                                                                                                                         2015 MAR 30 AM If: 27
                                                        VELVIN OIL COMPANY, INC.                       §    IN THE DISTRICT COURT    l'l~"::li:';: I.~
                                                                                                                                                   i:>" ;c '.,;;' 'n
                                                                                                                                                       I          1 ~f\D
                                                                                                                                                                 b t . l , ••            'L .....   1"   t!
                                                                                                       §                          RUSK COUNTY Disrhlt;"t CLERK
                                                        VS.                                            §    4th JUDICIAL DISTRICT BY~().      I"IAf'
                                                                                                       §                             ~~                          DEPUTY
                                                        A.J.P. OIL COMPANY, LLC d/b/a                  §
                                                        GRAPELAND FUEL & BBQ; and                      §
                                                        ANDREWJ.PATTON                                 §    RUSK COUNTY, TEXAS

                                                                         PLAINTIFF'S MOTION FOR SUMMARY JUDGMENT                                                                                              '.   '~'.'-
                                                                                                                                                                                                                             "   .

              '.-<           "

     .~:>/:, i,,~,",;'~',{ 'TP THE,HONORABLE JUDGE 'OF SAID COURT:
                                                                COMES NOW, the above entitled Plaintiff and respectfully shows to the Court that
                                                                                                                                                                                                                      ,
                                                                                                                                                                                                                   .......       ".'

                         .       "   , ~,,;
                                                     '.:. aHer'suitwas filed the Defendant.entered,an,appearance and filedan.answer hereinwhich-~' '

                                                        is insufficient in law as provided'in' RU,EES 185 ::and 93.' TEXAS RULES OF CIVIL
                                                                  .'
                                                       PROCEDURE to constitute a defense to Plaintiff's cause of action; that as shown by the

                                                       pleadings, together with depositions, admissions and affidavit, if any, on file herein, there

                                                       is no genuine issue as to any material fact between the parties herein, and by reason thereof

                                                       the Plaintiff is entitled to a Judgment as a matter of law as prayed for by Plaintiff.

                                                               Plaintiff would further show that in accordance with the attorney's fee affidavit

                                                       annexed hereto, it incurred the attorney's fees as set forth in the affidavit of Plaintiff's
                                                                                                                                                                                 .......
                                                                                                                                                                                ',
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           .."           '                                    :,~ Wf1EREFORE; pre~is~sconsidered; Plaintiff now moves the Court to enter a

                                                       Judgment in favor of Plaintiff, and against Defendant, for Plaintiff's debt together with

                                                       interest, a reasonable attorney's fees for Plaintiff's attorney, RONNIE HORSLEY, costs of

                                                       Court and all other relief, both general and special to which Plaintiff may be justly entitled.

                                                                                                       55
.   .,~     .
          : :' ....~   "'..   .'   ..                           Respectfully submitted,

                                                                LAW OFFICES OF RONNIE HORSLEY, P.c.
                                                                Attorney for Plaintiff

                                                                          Tyler, Texas 75711      ..
                                                                         .Telephone: (903) 593-7314 .   ,"~"   .
                                                                                                                   . ...
                                                                                                                    "      :

                                                                          Facsimile: (903) 593-3450
                                                                          Texas Bar Card No. 10014000

                                                   ~ ..... '.                                                                  .-,..   ".
                                               "
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                                                                   56
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                                                                                          .   '

                                                                                       AFFIDAVIT

                                              THE STATE OF TEXAS          *
                                                                          *
                                              COUNTY OF SMITH             *

                                      BEFORE ME, the undersigned authority, on this day personally appeared the
                             undersigned Affiant, who, being first duly sworn, did depose and say as follows:
                                      "I, the Affiant, am the attorney for the Plaintiff in the above numbered and captioned
                             cause now pending in said Court. I am duly licensed to practice law in the Courts of the',
"" .                         State. of .Ie"as cmd am familiar with the fees customarily charged qy the practic:ing,.'·
        ~.".";;' ;:·attqrneys: inthls county and area, having practiced generally in many cbunties/acrossthe
                         . State of Texas since 1970. The Affiant was retained by the Plaintiff on a contingent fee
                             based upon the amount of the debt to be collected. In accordance with the Affian.t's
                             experience in handling numerous cases and based upon the usual contingent fee· .
:, . '1,--,.'~ ~' .. :
k'   '..
                             arrap.gements of attorneys similarly.engaged, $10,892.24.is a reasonable and customary fee. :., ..
                       . • . for . inve~tigating the above. c~ptioned cause, ;attempting to secure ~ollection of the
                                                                                                   in
                             iildebtedness by amicable means, preparing cmd' fili1i.g the Petition said 'cause, filing a
                             Motion for Summary Judgment therein, appearing in Court to argue same, preparing the
                            Judgment in this cause, and filing same. Demand for payment of Plaintiff's claim was
                            made upon the Defendant more than thirty (30) days prior to the date of this affidavit. The
                            affidavit is made upon personal knowledge of the Affiant, and all facts stated therein are
                            true and correct".

                                                                                                                                           -.,.-;,-.   !
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                                                                                                                         :.,' ,
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           -'           ~      ...    ;

                                                              "':. _.

                                                                        --_......-_,
                                                            BRANDY RENEE GLOVER
                                                                                    ...

                                                            MY COMMISSION EXPIRES
                                                                August 9, 2015

                                                                                              57
                                                                           . ,,'                                                        .   '

                                           THE STATE OF TEXAS                                                   *
                                                                                                                *
                                           COUNTY OF SMITH                                                      *

                                                  BEFORE ME, the undersigned authority, on this day personally appeared the
                                           undersigned Affiant, who being by me first duly sworn, did say and depose that he is the
                                           attorney for the Plaintiff in the above entitled and numbered cause; that he has prepared
                                           the above and foregoing motion; that he is personally cognizant of the facts set forth in said
                                           motion; and that said facts ,are, within his knowledge, true and correct.
                                                                                                                                                                                                 ------

             ','
                        .
                   . :/~.
                            '

                                                               SUBSCRIBED. AND SWQRN TO, beforeme,this~5th:dayof March,.2Q15.

                                                                             I~,~i·:l~~~!A~·'fi:.~?;-<
                                                                                   :;~.
                                                                                                  :*~
                                                                                               ..~$
                                                                                  .",:z...... ;.;;....
                                                                                                         BRANDY RENEE GLOVER
                                                                                                         MY   COMMISSIO~ EXPIRES 1
                                                                                                               August 9,2015
                                                                             ~        ""\'Fo,,.,                                    •

                                                                                                                    CERTIFICATE OF SERVICE

                                             I, the undersigned attorney, certify that a true and complete copy of the foregoing
                                       Motion for Summary Judgment and following Order, was duly served upon the
                                       Defendant's attorney of record, by fax on this the 25th day of March, 2015 at his last known
                                       address, to-wit:                                             .. ',     :'            ",0":'' "" . ".                                                                          ."
,   ~   :~                                                                                                                 '\
                                                                                                                                "
                                                                                                                                "                                  ..   ~ "                      .                        ,
                                                                                                                                                                                                                              "
                                                                                                                                                                                                                              "\

        " "'~':''''~'~.''       "'. '. ,   .~   .'   ... . .    '.   ',:      .           '. ~           ..                                          •   .'   o·              ,   ...... :   .,::'   •
                                                                                                                                                                                                          ,'.,   .
             "':,>'                 ',~;Willia'm'R:Peinberton<'"                                                                                 Fax: 936':'51:4-5023
                      ::'."          'Atf6tney' ~t .~w ' ..
                                      P.O. Box 1112
                                      Crockett, Texas 75835

                                                                                                                                            58
                 IN THE DISTRICT COURT OF RUSK COUNTY, TEXAS                      !'F' L~E'D
                                4 TH JUDICIAL DISTRICT
                                                                                2DI5 APR -6 Ari": 10
VELVIN OIL COMPANY,            INC.          *
                                             *
VS.                                          *            NO. 2014-362
                                             *
A.J.P. OIL COMPANY, LLC                      *
d/b/a GRAPELAND FUEL & BBQi                  *
AND ANDREW J. PATTON                         *
                 DEFENDANTS' FIRST AMENDED ORIGINAL ANSWER

TO THE HONORABLE COURT:

       A.J.P.     Oil   Company,      LLC,       d/b/a   Grapeland   Fuel   &   BBQ,   and

Andrew J.       Patton, also known and being the same person as Andrew

Jack Patton, Andrew Patton, Andrew J. Patton, III, Jack Patton and

Jack        Patton,     III,     hereinafter         sometimes       referred     to    as

"Defendants," SUBJECT TO DEFENDANTS' MOTION TO TRANSFER VENUE, file

this, their First Amended Original Answer to Plaintiff's Original

Petition herein, and, for such Answer, would respectfully show unto

the Court the following:

       1.     Defendants have paid in full the account the subject of

Plaintiff's suit, more specifically with check number 2902, dated

April 29, 2014, in the amount of Fifty Four Thousand Four Hundred

Eighty and 52/100 Dollars             ($54,480.52).

       2.     Defendants specially deny that the finance charges listed

in Plaintiff's sworn account are due and owing.                  More specifically,

the Charge Account Application credit terms and conditions on which

Plaintiff's claim is based state that finance charges are due if

the balance is not paid by the end of the month following the

                                             59
    .
•
.
.

        statement date.      Defendant paid the charges made the basis of this

        suit prior to the end of the month following the statement dates.

             3.   Defendants deny,     each and every,   all and singular,    the

        allegat~ons    contained in Plaintiff's Original Petition and demand
.
,
        strict proof thereof; and, of this, Defendants put themselves upon

        the country.

             WHEREFORE, premises considered, Defendants pray that Plaintiff

        take nothing by its suit, that Defendants go hence with their costs

        without day,    and for such other and further relief, both general

        and special,    at   law and in equity,   to which   Defendants may be

        justly entitled.

                                          BY:
                                                WILLIAM R. PEMBERTON
                                                WILLIAM R. PEMBERTON, P.C.
                                                P. O. BOX 1112
                                                CROCKETT, TEXAS 75835
                                                936-544-4111
                                                936-544-5023 (FAX)
                                                TEXAS BAR 1.0. NO. 15735500
                                                bill@pembertontriallaw.net

                                                JACLYN D. PATTON
                                                3730 Kirby Drive, Suite 1200
                                                Houston, Texas 77098

                                                ATTORNEYS FOR DEFENDANTS

                                          60
                           CERTIFICATE OF SERVICE

         A true and correct copy of the above and foregoing Defendants'
\

    Original Answer has been served upon:

                              Mr. Ronnie Horsley
                              Attorney at Law
                              P. O. Box 7017
                              Tyler, Texas 75711

    by depositing same,   enclosed in a post paid,   properly addressed

    wrapper,   in a Post Office or official depository,   under the care

    and custody of the United States Postal Service, Certified Mail,

    Return Receipt Requested, this the 1st day

                                    61
                                    AFFIDAVIT

THE STATE OF TEXAS        *
COUNTY OF HOUSTON         *
       BEFORE    ME,    the   undersigned      notary    public,   on    this       day

personally appeared Andrew J. Patton, individually and as agent for

A.J.P. Oil Company, LLC, who, after being duly sworn, stated that

he is a Defendant and agent for the other Defendant in this Cause,

that   he   is   over   the   age   of   18   years,    of   sound mind,      and    is

competent to make this affidavit, and has personal knowledge of the

facts set forth in this affidavit.

       "Every    statement     contained       in   paragraphs     1    and    2    of

Defendants'      First Amended Original                                  correct."

                                                J. PAT ON, INDIVIDUALLY AND
                                               ~-R~~.J.P.    OIL COMPANY, LLC

       SUBSCRIBED AND SWORN TO BEFORE ME this 1st day of April, 2015.

                                         62
i \   '
          - .'
          r
                                          o                                                o
                                 IN THE DISTRICT COURT OF RUSK COUNTY, TEXAS                                 FILED
                                                  4TH JUDICIAL DISTRICT

                 VELVIN OIL COMPANY,             INC.            *                                                 I'    :.   )).lJJ;D
                                                                                                                   T(   U;ST:~:CT   CLERri
                                                                 *
                                                                                                       8Y_~W _.D£?UTY
                 VS.                                             *                  NO. 2014-362
                                                                 *
                 A.J.P. OIL COMPANY, LLC                         *
                 d/b/a GRAPELAND FUEL & BBQ;                     *
                 AND ANDREW J. PATTON                            *
                                       DEFENDANTS' RESPONSE TO PLAINTIFF'S
                                           MOTION FOR SUMMARY JUDGMENT

                 TO THE HONORABLE COURT:

                        A.J.P.     Oil    Company,        LLC,       d/b/a     Grapeland        Fuel   &    BBQ,        and

                 Andrew J. Patton, also known as and being the same person as Andrew

                 Jack Patton, Andrew Patton, Andrew J. Patton, III, Jack Patton and

                 Jack Patton, III, Defendants, file this Response to the Motion for

                 Summary       Judgment     of     Plaintiff,             Vel vin    Oil   Company,        Inc.,        and

                 respectfully show unto the Court the following:

                        1.     The evidence is sufficient to raise a genuine issue of

                 material fact regarding Defendant's defense of payment.                                    As shown

                 by the      at~ached     affidavit of Andrew J.                    Patton,    which is attached

                 hereto,       marked Exhibit           "A",   and incorporated by reference,                           the

                 invoices the subject of Plaintiff's cause of action were paid by

                 Defendant's check number 2902, dated April 29, 2014, in the amount

                 of    Fifty    Four     Thousand       Four     Hundred Eighty and              52/100      Dollars

                 ($54,480.52) .

                        2.     Further, as shown by the attached affidavit of Andrew J.

                 Patton,      the evidence is sufficient to raise a                            genuine issue of

                                                                     63
                                o                                                  o
material fact as to whether the finance charges made the basis of

Plaintiff's sworn account are due and owing.                                        The finance charges

made     the    basis           of     Plaintiff's             Original      Petition          are       not    due,

because the Charge Account Application credit terms and conditions

made the basis of Plaintiff's claim provide that finance charges

are    due     if        the    balance        is        not    paid    by    the       end    of     the      month

following the statement date.                              The affidavit of Andrew J.                       Patton

shows       that     payment           of    the        invoices      the    subj ect         of    Plaintiff's

Original Petition was made prior to the end of the month following

the statement dates.

        3.      Defendants obj ect to the summary j udgment affidavit of

Ronnie Horsley in support of Plaintiff's claim for attorney's fees,

on    the    ground            that    it     is    conclusory.              More       specifically,            the

summary        j udgment         affidavit              does    not    fully       discuss         the    factors

required        by        Rule        1.04         of     the     Texas       Disciplinary               Rule     of

Professional Conduct,                       Arthur Andersen             &    Co.    v.    Perry Equipment

Corp.,       945 S.W.2d 812                 (Tex. 1997):

                   (1)     The        time     and        labor       required,          the       novelty       and

                           difficulty of the questions involved, and the skill

                           requisite to perform the legal service properly;

                   (2)     The likelihood, if apparent to the client, that the

                           acceptance              of      the     particular            employment             will

                           preclude other employment by the lawyer;

                   (3)     The        fee    customarily charged                   in    the       locality for

                           similar services;

                                                           64
                          o                                           o
             (4)     The amount involved and the results obtained;

             (5)    The time limitations imposed by the client or by

                     the circumstances;

             (6)    The       nature       and      length          of      the     professional

                     relationship with the client;

             (7)    The       experience,        reputation           and    ability     of    the

                    lawyer performing the services; and

             (8)    Whether the fee is fixed or contingent on results

                    obtained         or   certainty           of    collection       before    the

                    legal services have been rendered.

Factors    (1),    (2),   (5),      (6)   and the reputation and ability of the

lawyer performing the services are not mentioned in the summary

judgment     affidavit.           Evidence         of    Plaintiff's          contingent       fee

agreement,        without      evidence       of        the        factors        identified    in

Disciplinary       Rule     1.04,     gives      the    court       no   meaningful      way    to

determine if the fees were in fact reasonable and necessary and

will not support a judgment of their reasonableness and necessity

as a matter of law, Arthur Andersen & Co. v. Perry Equipment Corp.,

945 S.W.2d 812, 818           (Tex. 1997)

     3.     The evidence is sufficient to raise a general issue of

material fact regarding the unreasonableness of the attorney's fees

sought by Plaintiff.             To demonstrate there is evidence raising an

issue of fact on the element of unreasonableness of the amount of

attorney's fees sought by Plaintiff, the affidavit of William R.

Pemberton is attached as Exhibit "B".

                                              65
                    o                             o
        WHEREFORE, Defendants request this Court deny the Motion for

Summary Judgment.

                                        Respectfully submitted,

                                  BY:

                                            LIAM R. PEMBERTON, P.C.
                                        P. O. BOX 1112
                                        CROCKETT, TEXAS 75835
                                        936-544-4111
                                        936-544-5023 (FAX)
                                        TEXAS BAR I.D. NO. 15735500
                                        bill@pembertontriallaw.net

                                        JACLYN D. PATTON
                                        3730 Kirby Drive, Suite 1200
                                        Houston, Texas 77098

                                        ATTORNEYS FOR DEFENDANTS

                         CERTIFICATE OF SERVICE

        A true and correct copy of the above and foregoing Defendants'

Response to Plaintiff's Motion for Summary Judgment has been served

upon:

                            Mr. Ronnie Horsley
                            Attorney at Law
                            P. O. Box 7017
                            Tyler, Texas 75711

by depositing same,     enclosed in a post paid,      properly addressed

wrapper,    in a Post Office or official depository, under the care

and custody of the United States Postal Service, Certified Mail,

Return Receipt Requested, this the 1st da

                                   66
                              0                                               0
                                                 EXHIBIT "A"

                                                     AFFIDAVIT

THE STATE OF TEXAS                  *
COUNTY OF HOUSTON                   *
        BEFORE          ME,    the        undersigned             notary     public,    on     this     day

personally appeared Andrew J. Patton, individually and as agent for

A.J.P. Oil Company, LLC, who, after being duly sworn, stated that

he is a Defendant and the agent for the other Defendant in this

Cause, that he is over the age of 18 years, of sound mind, and is

competent          to     make          this    affidavit,           and     that    every     statement

contained in this Affidavit is true and correct to his personal

knowledge.

        "The invoices the subj ect of Plaintiff's Original Petition

were paid by Defendant's check number 2902, dated April 29, 2014,

in the amount of Fifty Four Thousand Four Hundred Eighty and 52/100

Dollars ($ 54,480.52).                   Attached hereto as Exhibit" 1" is a true and

correct copy of check number 2902,                                 dated April 29,         2014,    in the

amount        of    Fifty      Four       Thousand          Four     Hundred      Eighty     and    52/100

Do 11 a r s   ( $ 5 4 , 4 8 0 . 52) .

        "Further,         the finance charges made the basis of Plaintiff's

Original           Petition        are         not     due,        because    the    Charge        Account

Application             credit          terms        and        conditions    made     the    basis      of

Plaintiff's          claim provide               that       finance     charges      are     due   if   the

balance is not paid by the end of the month following the statement

date.     Attached hereto as Exhibit "2" is a true and correct copy of

                                                           67
                                                  o
the   Charge   Account   Application.   The   invoices   the   subj ect   of

                                                         the end of the

                                              PATTON, INDIVIDUALLY AND
                                              OR A.J.P. OIL COMPANY, LLC

      SUBSCRIBED AND SWORN TO BEFORE ME this pt day of April, 2015.

                                   68
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                                                              PrInt Date and Time: 1212212014 -- 01:53:52PM

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                                                                                   EXHIBIT

                                                                             I    69
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                                                     ----      -"'~

 Mg_       -Q,5/'le7213i2            19:39             '33554'::5856                                      CROC} mab dllmitnd and/or prO-ef:ed flrn 1;0 etlforce pavm~hl' 91t-1~ the Appllcan\;I($O rtqble on
        lhlJ accrunt, {n the event of anycSct'-aulll.ll'der the Ag~mertl that U'll'Ierns tna AccoUllt 'l'~ under£lg"ed hereby Wg,\yes arty l'1ot1l:H ragtardlng the
        AgrHm,ilnt Clr this GUlIrnnty, -a(ld Qg(Qe$ that this GUlirilllf.Y shall be.IlPpllcable until t111~ Agreement har. ttrmlnated and ai' atnol.mhl due thlH'4 tl"Od,l!f
        sheft b& p.\ld In M. Tht U/llJers!gnatl tlSretS that '1'1 the f:Yent the At:t'6vnl Is not FIle! as a8l'~-d, Sell!r may n!~rt tM' Ill'r.delli&ne the credit bUn!al.lll .."d (ltIl~rs w\1e may lawl'uUv tlM:l!tve touch lllformatlon.

                                                                                       EXHIBIT

                                                                             11.          71
                            o                                             o
                                             EXHIBIT "B"

                                              AFFIDAVIT

THE STATE OF TEXAS              *
COUNTY OF HOUSTON               *
       BEFORE         ME,     the     undersigned         notary      public,        on     this        day

personally appeared William R.                     Pemberton,         who,     after being duly

sworn, stated that he is the attorney for Plaintiffs in this Cause,

that   he   is     over       the     age    of   18    years,       of    sound mind,            and    is

competent        to     make        this    affidavit,         and    that      every       statement

contained in this Affidavit is true and correct to his personal

knowledge.

       1.   I am an attorney licensed to practice by the Supreme Court

of Texas     and       in     good     standing.          I   am qualified           to make        this

affidavit,       as     shown by my Curriculum Vitae                       attached hereto as

Exhibit "1".           The information on Exhibit "1" is true and correct.

       2.    The        summary       judgment         affidavit      of      Ronnie       Horsley       in

support of Plaintiff's claim for attorney's fees does not set forth

a reasonable amount of attorney's fees, because it does not contain

all of the elements required by Rule 1.04 of the Texas Disciplinary

Rule   of   Professional              Conduct,     Arthur       Andersen        &    Co.     v.    Perry

Equipment Corp.,            945 S.W.2d 812             (Tex. 1997).           The affidavit does

not state:

             (1)        The     time        and   labor       required,        the     novelty          and

                        difficulty of the questions involved, or the skill

                        requisite to perform the legal service properly;

                                                  72
. -.
                         o                                   o
                 (2)    The likelihood, if apparent to the client, that the

                        acceptance     of   the     particular       employment        will

                        preclude other employment by the lawyer;               ...

                 (5)    The time limitations imposed by the client or by

                        the circumstances;

                 (6)    The   nature     and      length    of   the        professional

                        relationship with the client;

                 (7 )   The   ... ,   reputation    and    ability     of    the     lawyer

                        performing the services."

                 "In the absence of evidence of the factors above listed,

       the Court has no meaningful way to determine if the fees were in

       fact reasonable and necessary."

                                            WIL~~'
           SUBSCRIBED AND SWORN TO                                                   2015.

                                            73
-.                           o                                        o
                                     WILLIAM R. PEMBERTON
                                         Attorney at Law

     Home                                                                                    Office
     1000 Mimosa                                                              306 N. Seventh Street
     Crockett, Texas 75835                                                   Crockett, Texas 75835
     936-544-4971                                                                     936-544-4111

                                            EDUCATION

            •     University ofArkansas, Fayetteville, Arkansas
                  BSBA with honors, 1970
            •     University of Texas, Austin, Texas
                  JD,1972

                                           EXPERIENCE

            •     Morrill and Patton, 305 N. St. Mary's Street, P. O. Box 610, Beeville, Texas 78104-
                  0819; September 1972 through June 1978
            •     County Attorney, Bee County, Texas, Bee County Courthouse, 105 W Corpus
                  Christi Street, Beeville, Texas 78102; January 1974 through June 1978
            1/1   Sallas, Meriwether & Pemberton, 604 E. Goliad, P. 0. Box 1087, Crockett, Texas
                  75835; July 1978 through January 1985
           "      Pemberton & Garner, 306 N. Seventh Street, P. 0. Box 1112, Crockett, Texas
                  75835; February 1985 through May 1989
           "      William R. Pemberton, P. C, 306 N. Seventh Street, P. 0. Box 1112, Crockett, Texas
                  75835; June 1989 to present

                          COURTS ADMITTED TO PRACTICE BEFORE

           •      SUPREME COURT OF TEXAS
                  Admitted September 1972
           •      U.S. COURT OF APPEALS, FIFTH CIRCUIT
                  Admitted December 17, 1973
           •      U.S. SUPREME COURT
                  Admitted December 15, 1975
           •      U.S. DISTRICT COURT, EASTERN DISTRICT OF TEXAS
                  Admitted August 12, 1983

                                       OTHER EXPERIENCE

           •      STATE BAR OF TEXAS DISTRICT 2-C GRIEVANCE COMMITTEE
                  Member August 1985 through 1990
           •      BOARD CERTIFIED, TEXAS BOARD OF LEGAL SPECIALIZATION
                  Civil Trial Law since December J991

                                                    EXHIBIT

                                                 74
                                       o
II   COLLEGE OF THE STATE BAR OF TEXAS
     Admitted November 1992
•    BOARD CERTIFIED CIVIL TRIAL AD VOCATE - NATIONAL
     BOARD OF TRIAL ADVOCACY
     1994 to date
•    BOARD CERTIFIED CIVIL PRETRIAL ADVOCATE -NATIONAL
     BOARD OF CIVIL PRETRIAL AD VOCACY
     2012 to date
"    CITY ATTORNEY, CITY OF CROCKETT, TEXAS
     October 1988 to Present
,.   PRESIDENT, HOUSTON COUNTY BAR ASSOCIATION
     May 1992 to Present

                        EXHIBIT

                    I     .,-175
                             -
•   •   Or-   .,

                                                                                                            FILED
                                                           No: 2014-362                                2015 JUN -4 AiilO: 54
                                                                                                   ~    lt~r-'!';~~ . j~~ .~_ ~~ : :,.,Lt.F285 S.W. 1063 (Tex. 1926) (holding that when original suit regarding cancellation ofloan

would be res adjudicata against second suit regarding recovery on that loan, the second suit must

be abated); Wyatt v. Shaw Plumbing, 760 S.W.2d 245,247 (Tex. 1988). Once dominant

jurisdiction has attached in a first-filed suit, the rule is elementary that it cannot be taken away by

subsequent proceedings in another court. Ex Parte Lillard, 314 S.W.2d 800, 805 (Tex. 1958).

The court where the second suit was filed must grant a motion to abate. Wyatt 760 S.W.2d at

247; Curtis v. Gibbs, 511 S.W.2d 263, 267 (Tex. 1974); Sweezy Construction, Inc. v. Murray,

915 S.W.2d 527, 531 (Tex. App.-Corpus Christi 1995). Abatement does not prejudice the

plaintiff of the second-filed suit, as any claims or defenses raised by the plaintiff may be asserted

in the original suit if the plaintiff so chooses. Cleveland, 285 S.W. at 1070.

         The pendency of a prior suit between the same parties involving the same subject-matter

must be seasonably raised by a plea in abatement. fd. Courts have found that a plea in abatement

is seasonably raised, even after the rendering of judgment, when the pendency of a prior suit is

shown in the pleadings. See, e.g. Ex Parte Lillard, 314 S.W.2d 800, 805 (Tex. 1958); Beckman v.

Beckman, 716 S.W.2d 83 (Tex.App.-Dallas 1986). Once the necessary facts showing the

pendency of a prior suit are plead and admitted, or shown by the undisputed record, the

subsequent suit must be abated. Lillard, 314 S.W.2d at 806. This rule holds true even when the

                                                    3

                                                  80
party who filed the original suit fails to subsequently participate in that suit. ld. However, when

parties do not inform the court of the pendency of a prior suit until after judgment, courts have

discretion to determine if a plea in abatement is seasonable. Falderbaum v. Lowe, 964 S.W.2d

744 (Tex.App.-Austin 1998).

       The Court must grant a new trial so that this lawsuit may be properly abated. This case

must be abated because a suit involving the same parties and arising from the same subject-

matter was first filed in the Original Lawsuit, currently pending in the 3,d District Court for

Houston County, and that court has dominant jurisdiction. Further, relief in the Original Lawsuit

would be res adjudicata as to the relief prayed for by Plaintiff in the suit at hand. Here, Plaintiff

has sued Defendants for the cost of fuel delivered by Plaintiff to Defendants. Plaintiff was

advised by Defendants verbally, by written communications and in the Original Lawsuit that the

fuel delivered by Plaintiff was tainted, harmful and worthless. See Exhibit A (Original Pet. in

Original Lawsuit and communications between Plaintiff and Defendants). The Original Lawsuit

explicitly lists and includes the cost of the fuel complained of by Plaintiff in the present suit as

economic damages. ld. Rationally, this suit must be abated pending determination of whether the

disputed fuel was, in fact, tainted and worthless. If the fuel is determined to be tainted and

worthless, the debt complained of in the present suit is not owed. If the fuel is determined to not

be tainted and worthless, the debt complained of is owed and a full adjudication of this suit is

unnecessary.

        Plaintiff may contend that new trial is not appropriate because a plea in abatement was

not seasonably raised. However, case law makes clear that a plea in abatement raised following

judgment is seasonable when the pendency of a prior suit has been shown in the pleadings.

Defendants brought the Original Lawsuit to the attention of the Court multiple times in its initial

                                                   4

                                                 81
pleadings. See Exhibit A (Original Petition in Original Lawsuit); Exhibit B (Defendants'

Answer, Motion to Transfer Venue and Affidavit of Andrew J. Patton). At no time has Plaintiff

disputed the pendency of the Original Lawsuit or that the fuel made the basis of this suit is also

the basis of the Original Lawsuit. Rather, Plaintiff simply "declined to do battle in the forum of

the original suit" and has multipled the controversies at hand, rather than settling them in the

interest of orderly justice. See 2 R. McDonald, Texas Civil Practice in District and County

Courts § 7.10, at 165 (rev.l982); Wyatt v. Shaw Plumbing Co., 760 S.W.2d 245, 247 (Tex.

1988).

         Plaintiff has filed multiple motions, attending hearings and produced and requested

thousands of pages of discovery in the Original Lawsuit-at no point making any objection to

the dominant jurisdiction of that suit. Further, Plaintiff has recently filed leave to designate a

responsible third party in the Original Lawsuit, clearly showing that Plaintiff considers it to be

the dominant and determinative suit and would not be prejudiced by abatement of the suit at

hand. Accordingly, because a suit involving the same parties and subject-matter was pending

prior to the filing of this suit and that the prior suit has been shown in the pleadings, abatement of

this suit is proper. The Court must grant a new trial so that this suit may be abated as required by

law.

   2.       New trial must be granted because there is a disputed faet issue regarding the

            unreasonableness and supporting proof of attorney's fees, which must be

            submitted to a jury.

         The Court must grant a new trial because it erred by granting Plaintiff's Motion for

Summary Judgment. There is a disputed fact issue regarding the unreasonableness of attorney's

                                                  5

                                                 82
fees sought by Plaintiff, which must be submitted to the jury. See Park Plaee Hosp. v. Estate of

Milo, 909 S.W.2d 508, 510-11 (Tex. 1995). In Plaintiff's Motion for Summary Judgment and

affidavit attached thereto, counsel for Plaintiff requests attorney's fees unsupported by the proof

required in the Texas Disciplinary Rules of Professional Conduct. TEX. DISCIPLINARY R.

PROF'L CONDUCT 1.04(b); see also Arthur Andersen & Co. v. Perry Equip. Corp., 945

S.W.2d 812, 818 (Tex.1997) (quoting the eight-factor test for determining attorney's fees);

Exhibit C, Plaintiff's Motion for Summary Judgment. That proof should include the basic facts

supporting the fees, which are: (I) the nature of the work, (2) who performed the services and

their rate, (3) approximately when the services were performed, and (4) the number of hours

worked. El Apple v Olivas, 370 S.W.3d 757 (Tex. 2012).

       The party applying for an award of attorney's fees bears the burden of documenting the

hours expended on the litigation and the value of those hours. Hensley v. Eckerhart, 461 U.S.

424,437,103 S.C!. 1933,76 L. Ed. 2d 40 (1983). When attorney's fees are claimed under fee

shifting statutes, courts should be skeptical of broad, unspecific claims regarding fees, as "hours

not properly billed to one's client are also not properly billed to one's adversary under a fee-

shifting statute." City ofLardeo v. Montano, 414 S.W.3d 731, 736 (Tex. 2013). Rather, the

attorney should provide contemporaneous billing records or other documentation recorded

reasonably close to the time when the work is performed. /d. When a summary judgment record

contains evidence contesting the reasonableness of attorney's fees, summary judgment is not

appropriate. See Guity v. C.C.l Enter. Co., 54 S.W.3d 526, 528 (Tex. App.-Houston [1st Dist.]

2001, no pet.); Rosenblatt v. Freedom Life, 240 S.W.3d 315, at 321(Tex. App. 2007); MeGlown

v. Ashford Park (Tex.App.- Houston [1st Dist.] Jun. 11,2009) (holding that attorney fee award in

summary judgment proceeding not proper if amount disputed).

                                                  6

                                                83
        The affidavit of Plaintiff's counsel offered as proof of attorney's fees clearly does not

meet the requirements of the Texas Disciplinary Rules of Professional Conduct and established

case law. Rather, Plaintiffs proof fits soundly into the category of non-contemporaneous,

"broad, unspecified claims" courts are warned to be skeptical of. Further, the affidavit of

Plaintiff's counsel includes false claims of time spent on matters such as appearing in court in

support of Plaintiff's Motion for Summary Judgrnent-a hearing that did not occur. Accordingly,

the Court must grant a new trial because there is a disputed fact regarding the unreasonableness

and supporting proof of attorney's fees sought by Plaintiff, which must be submitted to the jury.

When the record contains evidence contesting attorney's fees, summary judgment is not

appropriate.

   3.      New trial must be granted because there are disputed fact issues regarding

           Defendants' defense of payment and the validity of finance charges included in

           Plaintiff's alleged damages, which must be submitted to a jury.

        The Court must grant a new trial because it erred by granting Plaintiff's Motion for

Summary Judgment. There are disputed fact issues about whether payment was made on the

invoices sued for, and whether finance charges made the basis of Plaintiff's sworn account are

due and owing, which must be submitted to the jury. See Park Place Hasp. v. Estate ofMilo, 909

S.W.2d 508, 510-11 (Tex. 1995). Defendants had the absolute right to direct appropriation of

payments made to Plaintiff, and exercised that right by including language on checks paid to

Plaintiff specifying to which debt the payment was to be applied.

        The general rule is that where a debtor makes payment to his creditor without directing

the manner of application of the payment, the creditor is privileged to apply the payment to any

                                                  7

                                                84
one of the various debts owed him by the debtor, Morgan v. Morgan, 406 S.W.2d 347

(Tex.Civ.App.-San Antonio 1966, no writ), and the creditor is not bound by the debtor's

uncommunicated intentions as to the application of the payment. Carey v. Ellis, 46 S.W.2d 1012

(Tex.Civ . App.-San Antonio 1932, no writ). However, when the debtor has directed the

application of payment by written or verbal communication, the "true rule seems to be, first, the

debtor has the absolute right to direct appropriation at the time of payment." Phillips v. Herndon,

78 Tex. 378, 14 S.W. 857, 859. "[If] the debtor pays without exercising his right of

appropriation, the creditor may then appropriate. It is only when neither party has exercised the

right of appropriation that the courts may assume to make the appropriation for the parties." ld

       Here, Defendants clearly communicated their intent that the payments made following

December 4,2013, on which date Plaintiff delivered tainted and worthless fuel to Defendants,

were not to be applied to that disputed fuel. Case law makes clear that a debtor has the absolute

right to direct application of payments, as Defendants have done by making notations on checks

paid to Plaintiff stating "gasoline only" and specifying invoice numbers. See Exhibit D.

Accordingly, the Court must grant a new trial because there are disputed fact issues about

whether payment was made on the invoices sued for, and whether finance charges made the basis

of Plaintiff's sworn account are due and owing, which must be submitted to the jury.

                                         CONCLUSION

       This Court must grant Defendants' Motion for New Trial because a suit involving the

same parties and subject matter was pending prior to the initiation of this suit, as was raised

seasonably in Defendants' initial pleadings. A new trial must be granted so that this suit may be

properly abated.

                                                  8

                                                85
       Further. Defendants Motion for New Trial must be granted because there exist multiple

disputed fact issues that require submission to a jury.

                                             PRAYER

       For these reasons, and in the interest of justice and fairness, Defendants respectfully ask

the Court to grant a new triaL

                                                             Respectfully submitted,

                                                             639 Heights Boulevard
                                                             Houston, Texas 77007
                                                             PH: (713) 730-9446
                                                             FX: (713) 583-4180
                                                             j aclyn@txestateplanning.com

                                                             WILLIAM R. PEMBERTON
                                                             William R. Pemberton, P.C.
                                                             P. O. BOX 1112
                                                             Crockett, Texas 75835

                                                             ATTORNEYS FOR DEFENDANTS

                                                  9

                                                86
                                CERTIFICATE OF SERVICE

       I hereby certify that a true and correct copy of the above and foregoing instrument was
served upon the following counsel of record by electronic service and first-class mail on July 2,
2015.

                                                              w;r-----
Mr. Ronnie Horsley
P.O. Box 7017
Tyler, Texas 75711
Via Email: horsleylaw@tyler.net

                                               10

                                              87
"v,, LIHIHX3

     88
                                       •

                                           No.

 AlP OIL COMPANY, LLC D/B/A                         §
 GRAPELAND FUEL AND.BBQ,                            §
 Plaintiff                                          §
                                                    §
 V.                                                 §
                                                    §
 VELVlN OIL COMPANY, INC.                           §            HOUSTON COUNTY, TEXAS
 Defendant                                          §

                            PLAINTIFF'S ORIGINAL PETITION
                              •
       TO THE HONORABLE JUDGE OF SAID COURT:

       COMES NOW AJP OIL COMPANY, LLC d/b/a GRAPELAND FUElL AND BBQ

(hereinafter "Plaintiff') compJ.aining of VELVIN OIL COMPANY, INC. (hereinafter "Defendant),

and states the following:

                                      I. DISCOVERY LEVEL

       Plaintiff intends to cortduct discovery in this suit under Level 2 of Texas Rule of Civil

 Procedure 190.3 and affinnatively pleads that this suit is not governed by the expedited-actions

 process in Texas Rule of Civil Procedure 169 because Plaintiff seeks monetary relief over

 $100,000.

                                                 II. RELIEF

         Plaintiff seeks monetary relief over $1,000,000. Tex. R. Civ. P. 47(c)(5).
                                             Ill. PARTIES

                            ,
       Plaintiff, AlP OIL COMPANY, LLC is a limited liability company organized and

existing under the laws of the State of Texas and may be served with citation in this cause by

serving its registered agent for service, Andrew Patton, at 1277 East Loop 304, Crockett, Texas

75835, or wherever he may be found.

                                                    89
                                       ,       .

        Defendant, VELVIN OIL COMPANY, INC. is a corporation organized and existing

under the laws oftbe State of Texas and may be served with citation in this cause by serving its

registered agent for service, David Velvin, at 403 Webster Drive, Henderson Texas 75653, or

wherever be may be found. .

                                           IV. JURISDICTION

        Jurisdiction is proper in this Court because the damages suffered by the Plaintiffs are in

excess oftbe minimum jurisdictional limits of this Court.

        Venue is proper in Ho.uston County, Texas because the acts andlor omissiotls complained

of herein occurred in Houston County, Texas.

                                              V. VENUE
        Venue for this suit is proper in Houston County under Texas Civil Practice & Remedies

Code section 15.002(a)(1) bacause aU or a substatltial part of the events or omissions giving rise

to this cause of action occurred in Houston County. TEX. eIV. PRAC. & REM. CODE §

15.002(a).

        Venue for this suit is also proper in Houston County under Texas Business & Commerce

Code section 17.56 because Defendants have conducted business in Houston County, and the

transactions that form the basis of this cause of action occurred in Houston County. TEX.BUS. &

COM. CODE §17.56.

                                    VI. BACKGROUND FACTS

       Plaintiff, Grapeland Fuel and BBQ, is a convenience store and gas station located in

Grapeland, Texas. Plaintiff has been in operation and regularly selling gasoline and diesel fuels

since 2006.

       On or about Dccember4, 2013, Defendant Velvin Oil made a fuel delivery to. Plaintiff

                                                   90
                                               •

that included 2,478 gallons of defective and harmful diesel fuel. In turn Plaintiff, in its ordinary

and expected course of business, sold this defective fuel to customers. The diesel fuel actively

harmed vital engine parts and rendered customers' vehicles inoperable, or in a diminished

functional capacity. Plaintiffwas ultimately forced to fix these disabled vehicles out of pocket at

a cost exceeding $20,000.

       Further, in the weeks following Defendant's diesel delivery to Plaintiff, Defendant's

agents continuously and fraudulently misrepresented to Plaintiff that the diesel fuel was untainted

and met regulatory requirements, inhibiting Plaintiff from taking timely remedial action and

resulting in further damages to Plaintiff.

       As a result of the tainted diesel sold by Defendant and the resulting harm to Plaintiff's

customers, Plaintiff has suffered serious financial harm including repaircosts,loss of profit and

severely diminished goodwill JNitbin the community.

           VII.        VrOLATIONS OF TIlE DECEPTIVE TRADE PRACTICES ACT

         Plaintiffis a consumer undertbe DTPA because plaintiffis a Limited Liability Company

 who acquired goods by purchase. Defendant is a corporation that can be sued under the DTPA.

         Based on the conduct alleged above, Defendant Velvin Oil Company has engaged in

 false, misleading, or deceptive acts or practices in the conduct oftrade or commerce in violation

 of TEX. BUS. & COM. CODE §J7.46(a) and (b), to wit Defendant:

        (A)    engaged in false, misleading, or deceptive acts or pmctices that plaintiff relied on

               to plaintiff's detriment. Specifically, Defendant represented that the diesel fuel it

               sold to Plaintiff was of a particular standard, quality or grade when it was not.

               TEX. BUS. & COM. CODE §17.46(b)(7). Defendant also failed to disclose

              infonnation known at the time of the transaction to Plaintiff, with the intention that

                                                   91
                                                                            (

                 withholding thi.s information would induce Plaintiff to enter into a transaction that

                 Plaintiff would not have entered had the information been disclosed. TEX. BUS. &

                 COM. CODE§17.46(b)(24).

          (B)    breached an implied warranty. Specifically, Defendant breached the implied warranty

                    of merchantability as discussed in detail below.

          (C)    engaged in false, misleading, or deceptive acts or practices that, to plaintifi's

                    detriment, violated a ''tie-in'' consumer statute. Specifically, Defendant breached

                    Texas Agriculture Code Section 17.055 by selling motor fuel with an inaccurate

                 automotive fuel rating. TEX. AORlC. CODE § 17.055.

          Plaintiff gave Defendant notice as required by Texas Business & Commerce Code section

17.505(a). Attached as Exhibit A is a copy of the notice letter sent to Defendant, which is

incorporated by reference.

            VIII.         BREACH OF IMPLmD WARRANTY OF MERCHANTABILITY

        PJaintiffre-alleges and'incorporates by reference all other paragraphs oflhis Petition

as if fully set forth herein.

        At all times relevant to this Petition, Defendant is and was in the business of selling

motor fuel without substantial change in the condition in which such fuel was manufactured and

sold to conswners, knowing that its fuel products would be sold to persons whose vehicles

required a specific quality of fuel to operate.

        Defendant is a merchant as to motor fuels, and as such impliedly warranted that

the diesel fuel advertised as meeting state and federal regulations and purcbssed by Plaintiff and

was merchantable and fit for the ordinary purposes for which it was to be used. Plaintiff
accordingly relied on Defendant's implied warranties in purchasing and reselling the diesel fuel.

                                                     92
         On or around December 4, 2013, Defendant sold and delivered to Plaintiff tainted diesel

fuel that Defendant warranted- met regulatory standards. Defendant sold and delivered this fuel to

 Plaintiff with knowledge that such fuel was to be sold to the general public for specific use in

vehicles that operate only on fuel meeting regulatory standards.

         Plaintiff was unable to inspect Or test the fuel it received from Defendant prior to

puroJ!ase.

         After Plaintiff purchased the diesel fuel from Defendant, Plaintiff resold such fuel in the

course of its business to customers. Plaintiff relied on Defendant's implied warranty of

merchantability in selling the fuel to its customers.

         Plaintiff's customers immediately began to experience problems with their vehicles,

including engine stalling and failure, resulting in expenses incurred for towing and repair.

        Defendant breached its implied warranty of merchantability in that the diesel fuel it sold

contained water and other contaminants, making the fuel unwhOlesome, unfit for consumers to

use in their vehicles and unreasonably dangerous to consumers.

        The injuries to Plaintiff, described above, proximately resulted from Defendant's breach

of the implied warranty of merchantability.

                                          IX. NEGLIGENCE

        Plaintiff re-a1leges and incorporates by reference all other paragraphs ofthis Petition

as if fully set forth herein.

        Plaintiff purchased diesel fuel distributed and sold by Defendant.

        Defendant owed Plaintiff a duty of care to offer goods free from hannful defect.

        Defendant should have reasonably foreseen that PlaintiffwouJd be subject to the harm

caused by the damaging and defective fuel sold.

                                                   93
        The defective fuel was intended to, and did, reach Plaintiff without material alteration.

        Plaintiff used the defective fuel in the manner that Defendant expected.

        The defects in the fuel could not be anticipated or detected by Plaintiff through any

reasonable method. The defective fuel was unreasonably dangerous when used in its customary

manner.

        The fuel was defective and unsafe for its intended use because it harrned the. vehicles it

 was intended to fuel, renderi~g them inoperable.

        The fuel failed to perforrn its intended function of safely and efficiently powering

engines.

        Def'et\dant should have foreseen, detected, and prevented the defective condition of the

fuel.

        Defendant should have prevented distribution of the defective fuel.

        Defendant breached th:eir duty of care by selling products that were hrumfuillild

deleterious:

                a. without adequate quality control and testing; and
                b. without using proper "clean out" and distribution practices.

        Defendant's conduct was at a minimum negligent and likely careless or reckless.

        Plaintiff has suffered economic damages through no fault of its owo as a direct and

proximate result of Defendant's defective fuel.

                                           X. DAMAGES

                            ,
        Economic and Actual Damages. Defendant's wrengfuJ conduct was a producing cause of

Plaintiff's injury, which resulted in the following damages:

           a.   $31,760.45 in out-of-pocket damages for the worthless diesel fuel delivered.

                                                  94
          b.   $1,146,616.17 for lost profits.

          c.   $17,232.02 in mitigation costs.

          d.   $6,000 in lost time.

         Mental-Anguish Damages. Defendant acted knowingly. which entitles PJaintiffto recover

  mental-anguish damages under Texas Business & Commerce Code section 17.50(b)(I).

  Defendlint's wrongful conduct resulted in mental-anguish damages totaling $15,000.

         Additional damages. Defendant acted knowingly. which entitles pIaintiffto recover treble

  economic damages under Texas Business & Commerce Code section 17.S0(b)( 1). Specifically.

  Defendant and its agants knowingly sold tainted, substandard diesel fuel to Plaintiff because

  Defendants were switching over to a "Winter Blend" ofdiesel and were in short supply ofdiesel.

  This is commonly referred to "clean out" diesel, which is substandard. See Exhibit B.

         Attorney fees. Plaintiff is entitled to recover reasonable and necessary attorney fees for

  prosecuting this suit under Texas Business & Commerce Code section 17.50(d).

                                        XI. JURY DEMAND

       PlaintiffS hereby reqlreSt a trial by jury and have tendered the appropriate Jury Fee.

                               xn. CONDmONS PRECEDENT

         All conditions precedent to plaintiff's claim for relief have been perfonned or have

 occurred.

                              XIll. REQUEST FOR DISCLOSURE

         Under Texas Rule of Civil Procedure 194, plaintiffrequests that defendant disclose, within

SO days oftha service of this request, the information or material described in Rule 194.2.

                                                  95
                                          XIV. PRAYER

       As a result of the foregoing, Plaintiff asks that the Court issue citation for Defendant to

appear and answer, and respectfully prays for each of the following:

       a.      Economic damages ..

       b.      Actual damages.

       c.      Mental-anguish damages.

       d.      Treble damages.

       e.      Pre-judgment and post-judgment interest.

       f.      Attorneys' fees and costs of Court.

       g.     All other relief to which Plaintiff may be entitled.

                                             Respectfully submitted,

                                              ~

                                                 96
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                                                                                                                 _       -,   ....   _-_.        -   ..... _---         .•   ----'-.---.---.--.~------------.--.-,-----.-.--.

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                                                                                            V ~IHIHX:I

                                                                                                                                                               )                .        )
                                                                                                                                                      97
                                       NOTICE OF CLAlM
                                                                             August 28, 2014

Re: Tainted diesel delivered to Grapeland Fuel and BBQ
Mr. David Velvin
Vclvin Oil Company, Inc.
P.O. Box 993
Henderson, TX 75653

Dear Mr. Velvin:
        I represent Grapeland fuel and BEQ in the above-referenced matter. You will recall tbat
 in December 2013, Jack Patton of Grapeland Fuel and BBQ placed a fuel order with Velvin Oil,
which was delivered on December 41b. Two days later, On December 6th, Mr. Patton became
aware that three of his customers had experienced issues with diesel purchased from Grapeland
Fuel, resulting in extensive damage to their vehicles. Your Vice President, Jim Jordan, was
immediately advised ofthe problem and reassured my client that it would be looked into. Over
the next two weeks, Mr. Jordan was regularly contacted by my client about the ongoing issue.
During this time Mr. Jordan sent two super clean diesel shipments and one employee to add a
shock treatment to the fuel tank, all in hopes offixing the tainted diesel. After each "fix" made
by your company, Mr. Jordan insisted that the diesel was now safe to sell to the general pUblic. It
was not. The problem was not ultimately resolved until my client emptied every ounce of diesel
from your company's December 41h shipment !Tom his tank.
        In reliance on your representation that the diesel delivered on December 4th wa.~ of a
standard quality and all your continuous assurances that the diesel had been "fix.ed" and was safe
for resale, my client has suffered severe and continuing damages whlch have not been remedied
by Velvin Oil. Grapeland Fuel and BBQ has made numerous attempts to resolve this matter
amicably, but has boen rebuffed. After months of being assured by Mr. Jordan that Velvin Oil

                                                 98
would "do the right thing" in relation to the tainted diesel, my client's concerns are now being
ignored.
       Undoubtedly, you are aware of your liability to my clieDt for violation of tbe implied
warranty of merchantability arising from the principles of common law and, more specifically,
Section 17.46(7) ofthe Texas Deceptive Trade Practices Act (DTPA), Texas Business &
Commerce Code section 17.41 et seq.
         Because of your violation of the DTPA, my client has incurred economic damages of
SI,072,439.11. These damages represent the S3 J, 760.45 you have charged to my client for the
tainted diesel delivered, S15,OOO in business interruption while my client was forced to shut
down his diesel pumps, S19,678.66 in out-of-pocket and mitigation costs to repair the customers'
vehicles damaged by the tainted diesel, $6,000 in lost time Mr. Patton spent attending to this
issue, and $1,0 I 5,000 representing the loss in ssles that have already beeD experienced by
Grapeland Fuel and will continue to be experienced over the next two years. In the event of
litigation, tbese amounts will be adjusted upward to reflect any additional damages.
        In the event oflitigation, my client will also seek recovery of menial-anguish damages in
the amount of S15,OOO and trebled economic damages on the grouDds that your conduct was
committed knowingly. Specifically, we will show that your company acted with actual awareness
that the diesel was tainted when attempting to remedy the problem with shipments of super clean
diesel and shock treatment, yet reassuring my client that tbe diesel was safe for resale.
        Please understand that tbis demand is made in the spirit of compromise. According to our
analysis, the demand presents a tremendous savings to you given your potential exposure to
Grapeland Fuel and BBQ. We hope you view this demand as a good faith, conservative effort on
our pan to resolve this potential litigation on amicable terms.
        My client is anxious to resolve this mailer immediately. Therefore, I suggest that you or
your attorney contact me as soon as possible. From this point forward, all contact concerning this
matter should be made to my office.
         If this matter is not resolved, my client has autborized me to bring a lawsuit against you
for all appropriate remedies under the Texas Deceptive Trade Practices-Consumer Protection
Act. We would expect to recover not only our damages, but also mental anguish damages,
prejudgment interest, attorney's fees, and perhaps additional punitive damages.
       Please forward this letter 10 your insurance carrier to ensure that the carrier receives
timely notice of the claim and will provide you wilh representation and coverage.
       We trust Ihat you will immediately respond, in writing, to this fonnal demand letter and
schedule a mutually convenient time and date for Ihe requested relief within the time specified in

                                                   99
                          (                   ,                          (

this Jetter. If you have any questjons regarding this matter or need additional infonnation, please
contact my office.

Sincerely,

Jaclyn D. Patton

                                                  100
· H LIHIHX:tl

 ,          01'   I   )
 ,)
      101
                                             III

                                        No. _ _ __

 AJP OIL COMPANY, LLC D/B/A                        §     IN THE          DISTRICT COURT OF
 ORAPELAND FUEL AND BBQ,                           §
 Plaintiff                                         §
                                                   §
 V.                                                §
                                                   §
 VELVIN OIL CO:MPANY, INC.                         §              HOUSTON COUNTY, TEXAS
 Defendant                                         §

                              AFFIDAVIT OF ANDREW PATrON

STATE OF TEXAS                                     §
                                                   §
COUNTY OF HOUSTON                                  §

       ANDREW PATION appeared in person before me today and stated under oath:

       "My name is ANDREW PATION. I am above the age of eighteen years, and I am

fully competent to make this affidavit. The. facts stated in this affidavit are within my personal

knowledge and are true and correct."

       "I am the owner of Orapeland Fuel and BBQ. On December 3,2013 I placed a gasoline

and diesel order with Jim Jordan ofVelvin Oil by phone. When I made the order, Mr. Jordan

told me that there was currently a shortage of diesel because the refinery was switching to a

winter blend and doing maintenance, but that he "would pull some diesel from somewhere."

This order was delivered to Grapeland Fuel on December 4th.
       Two days later on December 6th, I was told by my store manager Marsha Kosechata

that Joe Graves of Joe's Automotive had called saying that three of my customers had to bring

their trucks into his shop after purchasing diesel from my store. These customers were Tommy

Smith, Charlie Casky and Chris Byrn and they started having problems with their trucks almost

                          !
                                                   102
                                               .'

 filters In diesel tank four clogged within a few days, forcing me to stop selling all diesel until

we could pump the diesel tanks empty and dispose of 435 gallons worth of worthless diesel-
about $1,500 worth of diesel wasted.

           During this time, four additional trucks that bad filled up at our diesel   t8Ji\c four were
towed to auto shops in Grapeland, Crockett and Huntsville. These customers were Gator

Matthews, Eric Orueziecke, Richard Wagner and Tom Gates. I again verified by credit card

receipt that these customers had indeed filled up with diesel nom tank four at Grapeland Fuel.

          Between December 6 th, 2013 and January 7th, 2014, seven total trucks were damaged

after filling up at our diesel tank four. Repairs to their trucks included cbanging fuel filters,

flushing fuel systems, dropping fuel tanks, cleaning fuel tanks, fuel injector replacement and

fuel pump replacement. Tom Gates' truck required a total fuel syStem overhaul. I paid

$17,233.02 out of pocket to repair my customers' trucks. In addition, because Grapeland and

Houston County is such a small and close community, word quickly spread that our diesel was

damaging customers' trucks. During the first eight months of 2014, my business bas been

down almost $250,000 compared to this same period last year and it continues to suffer. Even

now, almost an entire year since the incident, customers ask me almost daily if our fuel is safe

to buy.

          Grapeland Fuel purchased diesel exclusively from Velvin Oil between October 2013

and February 2014. We have never had any issues with diesel before Velvin Oil delivered

contaminated fuel on December 4, 2013 and we have not had any issues since we pumped that

fuel out of our tanks in January 2014.

          We continued to do business with Velvin Oil because we were repeatedly assW'ed by

Jim Jordan that Velvin Oil would make their mistake right. After trying to amicably resolve

                                                    103
                                     (             I.

this matter several times and being ignored by Velvin Oil, it has beoome apparent we must

resort to the legal system to get any relief."

AFFIANT FURTHER SAYETH NOT.

        SWORN TO AND SUBSCRIBED BEFORE ME on this               11L day of ~
2014, to certify which witness my hand and sealofofflce

    .tt..f.~l~b           JULIE RHONE
   ttr{~'          Notaty Public, State ql Texas
   ,,_~     .~.:    My Commission EKpires
    ~J:t1t~ . .,
              .       December 02. 2016

                                                        104
••• -.- • • • • •   -----.   ..-   •••   '-',   ,.   _.   -.-.   -   ••   -.   -- • • • . •   -    ----.-         ----.   _._.   -   • • + - ______ •• _ _ _ _ ~   • • • • _ _ ~_.~ • • • . . • _ .   _ . ___ •   ____•   _   _   •••   •• • •   --·---_0-

                                                             ,3                ~IHIHX:tl

                                                                                                        "   ,'"   t

                                                                                                  105
                                       t   ...   til

                                           No. _ _ __

AJP OIL COMPANY, LLC DfB/A                             §       IN _ _THE DIS1RICT COURT OF
GRAPELAND FUEL AND BBQ,                                §
Plaintiff                                               §
                                                        §
V.                                                      §
                                                        §
VELVlN OIL COMPANY, lNC.                 HOUSTON COUNTY, TEXAS
                                                        §
Defendant                                              .§
                AFFIDAVIT OF MARSHA KOSECHATA

STATE OF TEXAS                                          §
                                                        §
COUNTY OF HOUSTON                                       §

       MARSHA KOSECHATA appeared in person before me today and stated under oath:

       "My name is MARSHA KOSECHATA. I am above the age of eighteen years, and I am

fully (lompetent to make this affidavit. The facts stated in this affidavit are within my personal

knowledge and are true and correct."

       "I have been the manager at Grapeland Fuel and BBQ for over three years. One of my

regular duties as manager is to print out and check the veeder root reading every day

immediately after ciosing. On December 3rd             ~d    4th of 2013, I printed out the veeder root

readings like I do each and every night at approximately 6:05pm. I did notice al this time that

the time stamp was off due to a power outage.

       When 1 checked the veeder root readings on December 3rd, 2013, there was no water in

tank four. After the fuel delivery by Velvin Oil on December 4th, the veeder root readings

showed that there were eighteen gallons of water in tank four. Our fuel tanks are always kept

locked and are not accessible.

                                                       106
                                               · .....
            On December 18th or 19th, an employee from Velvin Oil came to Grapeland Fuel and

   treated our tank four. The employee said it was a shock treatment for the water in the diesel.

   They also left some shock trea1lnent for us to treat at a later date. We used the treatment the

   following week as we were still having trouble.

            During my entire time working for Grapeland Fuel and BBQ, we've never had any

   problems with bad diesel except for the period between December 4th 2013 when Velvin Oil

   delivered bad diesel to tank four and when Mr. Patton pumped tank four empty in January

   2014."

   AFFIANT FURTHER SAYETH NOT.

           SWORN TO AND SUBSCRIBED BEFORE ME on this                   La.. day of   /\JOY.
   2014, to certifY which witness my hand and seal~~O~fo~==:::=-_

                           JUU~   RHONE
                   Notary PubUo., S.ale 01 Texas
                    MV Commissian Exp~ ••
                         December     2D 16

------_            ...   _ ...... ------
                                                         107
SEP-23-2014 TUE 04:58 PM       Ronnie Horsley, P. C.                  FAX No. 903 593 3450                     p. 001/001

                                                 LAW OFPICES OF
                                      RONNIE HORSLEY P. C.
                                      231 SOUTH COLLEGE. TYI..IlR, TEXAS 75702
                                                   (903)593.'1314
                                                 FAX (903)593-34SIJ

       RONNIE HORSLEY                                                                   MAILING ADDRESS
       horsJeylaw@tyler.not                                                             P.O. BOX 71117
                                                                                        TYI..IlR, 1')( 75711

       September 23,2014

       Jaclyn D. Patton                                       Fax: (713) 364-6992
       Attorney at Law
       River Oaks Tower
       3730 Kirby Drive, Suite 1200
       Houston, TX 77098

       RE:      Velvin Oil Company, Inc. vs. AJP Oil Company. LLC dba Grapeland Fuel & BBQ
                Balance due: $ 31,760.45

       Dear Ms. Patton:

       Thank you for your August communication. My clients had provided me some
       information regarding this matter and I am not sure they were aware of it all when they
       first communicated with me. In this cOIU1ection, I do know there are some questions
       about how the contamination appeared and in the type of ve1ticles. There are some
       other questions as well as to the filtration or lack of same which was being used or
       available. I believe we might benefit from assembling the various aspects of our
       "evidence" and coming to a definitive arrangement. The curiosity I have is that this last
       shipment is not part of the complaint, rather the previous shipments were part of the
       complaint and yet they were paid for. I don't believe there was any dispute over the
       most recent shipment and would be grateful to hear from you regarding that aspect of
       this case.

                                                        108
"H" LIHIHX:I

     109
              IN THE DISTRICT COURT OF RUSK COUNTY, TEXAS
                            4TH JUDICIAL DISTRICT
VELVIN OIL COMPANY, INC.                *
                                        *          NO. 2014-362
VS.                                     *
                                        *
A.J.P. OIL COMPANY, LLC                 *
d/b/a GRAPELAND FUEL & BBQ;             *
AND ANDREW J. PATTON                    *
                        DEFENDANTS' ORIGINAL ANSWER
TO THE HONORABLE COURT:
        A.J. P. Oil Company,     LLC,       d/b/a Grapeland Fuel   &   BBQ, and
Andrew J. Patton, also known and being the same person as Andrew
Jack Patton, Andrew Patton, Andrew J. Patton, III, Jack Patton and
Jack     Patton,     III,    hereinafter        sometimes   referred    to   as
"Defendants," SUBJECT TO DEFENDANTS' MOTION TO TRANSFER VENUE, file
this,    their Original Answer to             Plaintiff's Original     Petition
herein, and,       for such Answer, would respectfully show unto the
Court the following:
        1.   Defendants have paid in full the account the subject of
Plaintiff's suit, more specifically with check number 2902, dated
April 29, 2014.
        2.   Defendants deny, each and every, all and singular, the
allegations contained in Plaintiff's Original Petition and demand
strict proof thereof; and, of this, Defendants put themselves upon

the country.
        WHEREFORE, premises considered, Defendants pray that Plaintiff
take nothing by its suit, that Defendants go hence with their costs

                                     110
without day, and for such other and further relief, both general
and special, at law and in equity, to which Defendants may be
justly entitled.

                                    Respectfully submitted,

                              BY:
                                    wm02::
                                    WILLIAM R. PEMBERTON, P.C.
                                    P. O. BOX 1112
                                    CROCKETT, TEXAS 75835
                                    936-544-4111
                                    936-544-5023 (FAX)
                                    TEXAS BAR I.D. NO. 15735500
                                    bi1l@pembertontriallaw.net

                                    JACLYN D. PATTON
                                    3730 Kirby Drive, Suite 1200
                                    Houston, Texas 77098
                                    ATTORNEYS FOR DEFENDANTS
                      CERTIFICATE OF SERVICE

     A true and correct copy of the above and foregoing Defendants'
Original Answer has been served upon:
                         Mr. Ronnie Horsley
                         Attorney at Law
                         P. O. Box 7017
                         Tyler, Texas 75711

by depositing same, enclosed in a post paid, properly addressed
wrapper, in a Post Office or official depository, under the care
and custody of the United States Postal Service,               Mail,
Return Receipt Requested, this the 23rd

                                    WILLIAM R. PEMBERTON

                              111
"."
                     IN THE DISTRICT COURT OF RUSK COUNTY, TEXAS
                               4TH JUDICIAL DISTRICT
      VELVIN OIL COMPANY, INC.              *

      VS.                                   *          NO. 2014-362
                                            *
      A.J.P. OIL COMPANY, LLC               *
      d/b/a GRAPELAND FUEL & BBQ;           *
      AND ANDREW J. PATTON                  *
                        DEFENDANTS' MOTION TO TRANSFER VENUE

      TO THE HONORABLE COURT:
            A.J.P.    Oil Company,   LLC,       d/b/a Grapeland Fuel   &   BBQ,   and
      Andrew J. Patton, also known and being the same person as Andrew
      Jack Patton, Andrew Patton, Andrew J. Patton, III, Jack Patton and
      Jack Patton, III, Defendants, move the Court to transfer venue and
      in support of the motion show:
            1.   Defendants object to venue in Rusk County, Texas,                the
      county in which this action was instituted, on the ground that Rusk
      County is not a county of proper venue in this case.
            2.   No basis exists for permitting venue in Rusk County as

      alleged in plaintiff's Original Petition under any of the venue
      rules provided by the Civil Practice and Remedies Code of Texas or
      otherwise.      Defendants specifically deny the venue facts pleaded in
      Plaintiff's Original Petition.            Defendants specifically deny that
      any Defendant contracted in writing to perform an obligation in
      Rusk County, Texas, expressly naming Rusk County or definite place
      in that county by the writing.            Defendants specifically deny that
      any invoice the subject of this suit constituted a contract in

                                        112
writing by which they agreed to pay for the goods the subject of
this suit in Rusk County, Texas.     Defendants further specifically
deny that any such invoice was furnished prior to the time the kind
and quantity of goods to be purchased,       the price to be paid
therefor, the place of delivery and other contractual terms had
been agreed upon.   Defendants specifically deny that any invoice
the subject of this suit was sent to any of them prior to the
shipment of the goods the subject of this suit.           Defendants
specifically deny that any invoice by Plaintiff was intended to
modify the terms of any original contract.
     Defendants specifically deny that the individual Defendant was

ever a resident of Rusk County, Texas.   The individual Defendant is
not a resident of Rusk County, Texas and was not a resident of Rusk
County, Texas when the cause of action alleged in Plaintiff's
Original Petition allegedly accrued.
     Defendant A.J.P. Oil Company, LLC specifically denies that
Rusk County is the county of Defendant's principal office in this

state.
     Defendants also specifically deny that all or a substantial
part of the events or omissions giving rise to Plaintiff's cause of

action occurred in Rusk County, Texas.
     3.   Defendants further object to venue in Rusk County, Texas,

the county in which this action was instituted, on the grounds that
Rusk County is an inconvenient venue, and the action should be
transferred to Houston County, Texas in accordance with TEX. CIV.

                               113
PRAC. & REM. CODE ANN.      §   l5.002(b) (2014).    More specifically, as
shown in the attached Affidavit of Andrew J.               Patton,    for the
convenience of the parties and witnesses and in the interest of
justice, maintenance of this action in Rusk County would work an
injustice to Defendants considering:
             (1)    The Defendants' economic personal hardship;
             (2)    The   balance   of    the   interest   of   all   parties
                    predominates in favor of the action being brought
                    in Houston County, Texas; and
             (3)    The transfer of the action to Houston County, Texas
                    would not work an injustice to any other party.
       4.   Defendants request that this action be transferred to a
District Court of Houston County, Texas, where proper venue lies in
this case.
       S.   Venue is proper in Houston County, Texas, because the
individual Defendant resided in Houston County, Texas at the time
the alleged cause of action accrued, and Houston County, Texas is
the county of the principal office of Defendant A.J.P. Oil Company,
LLC.
       WHEREFORE,    Defendants request that this matter be set for
hearing, and that on completion of the hearing the Court grant
Defendants' Motion to Transfer Venue in this cause to Houston
County, Texas, taxing costs against the Plaintiff, and granting the
Defendants any further relief to which they may be justly entitled.

                                    114
      R~
BY:
      WILLIAM R. PEMBERTON
      WILLIAM R. PEMBERTON, P.C.
      P. O. BOX 1112
      CROCKETT, TEXAS 75835
      936-544-4111
      936-544-5023 (FAX)
      TEXAS BAR I.D. NO. 15735500
      bill@pembertontriallaw.net

      JACLYN D. PATTON
      3730 Kirby Drive, Suite 1200
      Houston, Texas 77098
ATTORNEYS FOR DEFENDANTS

115
                     CERTIFICATE OF SERVICE

    A true and correct copy of the above and foregoing Defendants'
Motion to Transfer Venue has been served upon:
                         Mr. Ronnie Horsley
                         Attorney at Law
                         P. O. Box 7017
                         Tyler, Texas 75711
by depositing same, enclosed in a post paid, properly addressed
wrapper, in a Post Office or official depository, under the care
and custody of the United States Postal Service, Certified Mail,
Return Receipt Requested, this the 23rd day of December, 2014.

                              116
                               AFFIDAVIT
THE STATE OF TEXAS    *
COUNTY OF HOUSTON     *
     BEFORE   ME,   the   undersigned     notary   public,   on   this    day
personally appeared Andrew J. Patton, individually and as agent for
A.J.P. Oil Company, LLC, who, after being duly sworn, stated that
he is a Defendant in this Cause, that he is over the age of 18

years, of sound mind, and is competent to make this affidavit, and
that every statement contained in this Affidavit is true and
correct.

     "Andrew J. Patton, also known and being the same person as
Andrew Jack Patton, Andrew Patton, Andrew J.           Patton,    III I   Jack
Patton and Jack Patton,      III,    is a resident of Houston County,
Texas, and he was a resident of Houston County, Texas at the time
the alleged cause of action plead in Plaintiff's Original Petition
accrued.   The principal office in Texas of A.J.P. Oil Company, LLC,

is in Houston County, Texas.        Houston County, Texas is the county
in which the decision makers for the organization within the State
of Texas conduct the daily affairs of the organization.
     "The invoices attached to Plaintiff's Original Petition as
Exhibit "A" were delivered to Defendants after the kind and quality
of goods to be purchased, the price to be paid therefor, the place
of delivery and the other terms of contract between Plaintiff and
Defendants had been agreed upon.          The goods the subject of this
suit had already been delivered prior to the time the invoices were

                                    117
delivered.
        "Litigation between the Plaintiff in this case and Defendant
A.J.P. Oil Company, LLC, d/b/a Grapeland Fuel & BBQ, is pending in
the Third Judicial District Court of Houston County, Texas, in
Cause No. 14-0217, wherein A.J.P. Oil Company, LLC, d/b/a Grapeland
Fuel & BBQ, sued Velvin Oil Company, Inc. for damages for delivery
of tainted fuel.        A true and correct copy of Plaintiff's Original
Petition filed on November 7, 2014 in Cause No. 14-0217 is attached
hereto, marked "Exhibit A" and inc ~~~Kr~~~ference.

                                                              \'110
                                                      this~

            e
        SUBSCRIBED AND SWORN TO BEFO                              day of December,
2014.

                     SANDRAL   HAYNE -
                       NOTARY PUBUC       ",,~~~~~~r.;:;:~~
                       STATE OF TEXAS
              OJ'   MyCcxnm. Elql!!uIll.QW014

                                                118
119
IAAR-25-2015 \'lED 04:30 PIA     Ronnie Honley. P. C.          FAX No. 903 593 3450               P. 002

                                               No: 2014-362

         VELVIN OIL COMPANY, INC.                   §   IN THE DISI'RICT COURT
                                                    §
         VS.                                        §   4th JUDICIAL DISTRICT
                                                    §
         A.J.P. OIL COMPANY, LLC d/b/a              §
         GRAPELAND FUEL & BBQ; and                  §
         ANDREWJ.PATION                             §    RUSK COUNlY, TEXAS

                                        NOTICE OF SUBMISSION

                The annexed and foregoing Motion for Summary Judgment having been presented

         to the Court, itis hereby NOTICED that the same is setforSUBMISSION on the 15th day of

         April, 2015, before the 4th Judicial DistrictCourt, Rusk County, Texas.

                SIGNED this _ _ day of _ _ _ _---'. 2015.

                                                        JUDGE PRESIDING

         A)?PROVED AS TO FORM AND SUBSTANCE:

         LAW OFFICES OF RONNIE HORSLEY, P.c.
         Attorney for Plaintiff

                Tyler, ~~sm:---­
                Telephone: (903) 593-7314
                Facsimile: (903) 593-3450
                Texas Bar Card No. 10014000

                                                    120
MAR-25-2015 WED 04:30 PM         Ronni, Horsley,    p·e.         FAX tlo. 903 593   am                    P. 003

                                                No: 2014-362

       VELVIN OIL COMPANY, INC.                      §     IN THE DISfRICT COURT
                                                     §
       VS.                                           §     4th JUDIOAL DISTRICT
                                                     §
       A.J .P. OIL COMPANY, LLC d/b/a                §
       GRAPELAND FUEL & BBQ; and                     §
       ANDREW J. PATrON                              §     RUSK COUNTY, TEXAS

                         PLAINTIFF'S MOTION FOR SUMMARY JUDGMENT

       TO THE HONORABLE JUDGE OF SAID COURT:

               COMES NOW, the above entitled Plaintiff and respectfully shows to the Court that

       after suit was filed the Defendant entered. an appearance and filed an answer herein which

       is insufficient in law as provided in RULFS 185 and 93, TEXAS RULES OF CIVIL

        PROCEDURE to constitute a defense to Plaintiff's cause of action; that as shown by the

        pleadings, together with depositions, admissions and affidavit, if any, on file herein, there

        is no genuine issue as to any material fact between the parties herein, and by reason thereof

        the Plaintiff is entitled to a Judgment as a matter of law as prayed for by Plaintiff.

               Plaintiff would further show that in accordance with the attorney's fee affidavit

        annexed hereto, it incurred the attorney's fees as set forth in the affidavit of Plaintiff's

        attorney and is entitled to receive same.

               WHEREFORE, premises considered, Plaintiff now moves the Court to enter a

        Judgment in favor of Plaintiff, and against Defendant, for Plaintiff's debt together with

        interest, a reasonable attorney's fees for Plaintiff's attorney, RONNIE HORSLEY, costs of

        Court and all other relief, both general and special to which Plaintiff may be justly entitled.

                                                      121
IAAR-25-2015 WEO 04:30 PIA   Ron" i.   HOI! ley.   P. C.        fAX   w.   903 593 3450   P. 004

                                                   Respectfully submitted,

                                                   LAW OFFICES OF RONNIE HORSLEY, P.e.
                                                   Attorney for Plaintiff

                                                           P.O.        17
                                                           Tyler, Texas 75711
                                                           Telephone: (903) 593-7314
                                                           Facsimile: (903) 593-3450
                                                           Texas Bar Card No. 10014000

                                                     122
NtU\   ,~   LVI ..I   utU l' .... \) I   rr,1

                                                    AFFIDA VIT

             TI{E5rATEOFTEXAS                   *
                                                *
             COUNTY OF SMlTII                   *
                    BEFORE ME, the undersigned authority, on this day personally appeared the
             undersigned Affiant who, being first duly sworn, did depose and say as follows:
                    "L the Affiant, am the attorney for the Plaintiff in the above numbered and captioned
             cause now pending in said Court. I am duly licensed to practice law In the Courts of the
             State of Texas and am familiar with the fees customarily charged by the practicing
             attorneys in this county and area, having practiced generally in many counties across the
             State of Texas since 1970. The Affiant was retained by the Plaintiff on a contingent fee
             based upon the amount of the debt to be collected. In accordance with the Affiant's
             experience in handling numerous cases and based upon the usual contingent fee
             arrangements of attorneys Similarly engaged, $10,892.24 is a reasonable and customary fee
             for investigating the above captioned cause, attempting to secure collection of the
             indebtedness by amicable means, preparing and filing the Petition in said cause, filing a
             Motion for Swrunary Judgment therein, appearing in Court to argue same, preparing the
             Judgment in this cause, and filing same. Demand for payment of Plaintiff's claim was
             made upon the Defendant more than thirty (30) days prior to the date of this affidavit The
             affidavit is made upon personal knowledge of the Affiant, and all facts stated therein are
             true and correct".

                          SUBSCRIBED AND SWORN TO, before In

                                                          123
                             I'\OnnlE nOI!ley,   r.\" .                                            r.   UUD/liUD
•

    THE SfATE OF TEXAS          *
                                *
    COUNTY OF SMITH             •
           BEFORE ME, the undersigned authority, on this day personally appeared the
    undersigned Affiant" who being by me first duly sworn, did say and depose that he is the
    attorney for the Plaintiff In the above entitled and numbered cause; that he has prepared
    the above and foregoing motion; that he is personally cognizant of the facts seHorth in said

                                                                      --------
    motioo; and that said facts are, within his knowledge, true and correct.

                                                                         LEY

           SUBSCRffiED AND SWORN TO, before me, this 25th day of March, 2015.

                                                          Notary Pub c in and for the
                                                          State ofT E    S

                                    CERTIFICATE OF SERVICE

          I, the undersigned attorney, certify that a true and complete copy of the foregoing
    Motion for Summary Judgment and following Order, was duly served upon the
    Defendant's attorney of record, by fax on this the 25th day of March, 2015 at his last known
    address, to-wit:

    William R. Pemberton                                  Fax: 936-544-5023
    Attorney at Law
    P.O. Box 1112
    Crockett, Texas 75835

                                                    124
"([,, LIHIHX3

     125
    09/24/2014      09:29      93&5457743                           DOCS:CKT                              PAGE    01/01

                                                                                                  FAGE;
                 , VElVIN Oil CO., INC.
                    PETROLEUM PRODUCTS
                         PO BOXll93
                     HENDERSON. IX 75853                                            STATeMENTDA11l; 1213112013
                        903ftJ5Nloe

             AJP Ojl Company, LLC
             dba Grapeland Fuel & BBQ
             1277 East LOop 304                                                       CUSTOMER NO,: Oo.oOc/1S98
             Crockett, TX 75835
                                                                                       CAaJIT LIMIT;
                                                                                       OAaJIT AVfJ,Jl;
             CONTACT:

l111t.a013
12il~12013
11/&2013,
1211312013 ,                         Payment Ref: 29V
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1211312013                           Paymei1t Ref: 21m
121412013
121S12013
1211212013
t2l2JIl!013                           "

                                      "

     92.19!)J!2             . 0:00                  '0.(,)0            0;00            "   O~OO

                                             PAYMENT DUE UPON RECEIPT OF STATEMENT.
                                          ACCOUNT IS CUT OFF IF NOT PAID BY JANUARY 1O. 2014

                                                              126
03/19/2015 14:22                      9365467743                                                     OOCS:CKT
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                                              Print Date and Time: 03/19/2015 - 12:36:06PM
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                                                                        129
         03/19/2015         15:39             9355457743                                  DOCS : CKT                                                                          PAGE         01 /05

              -.     VElVIN Oil CO., INC.
                        PETROLEUM PRODUCTS
                                                                                                                                EMERGENCYOONTACT: (512) 463-7727
                            P,O. BOX 993
                        HENDERSON, TEXAS 75653
                                    903/657·2108

                                              $OlDTO                                                                                        SHIPf'EDTO

                   , AJP Oil Company, LLC                                                                            grapeland IX
                     dba Grapeland Fuel & BBQ                                                                        dba Grapeland Fuel & BBQ
                     1277 East Loop 304                                                                              1277 East Loop 304
                     Crockett, TX 75835                                                                              Crockett, TX 75835

                                            0.0 "       F-N
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4,977.0               4,977:0., ' '         0.0 ',      F-TFG                                 .. EACH"                                                                               91'5,,77,
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                                                                                                 EACH;:                 -::3,,1;<\19:
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                                         SiaieTax Blodlesel                                        ;'i "'_;:~'--
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                                                                                                  130
                                                                              DOCS:CKT                                   PAGE    02/06
         03/19/2015       15:39       9365467743

    ~.

            VE·LVI:N Oll CO.,. INC. .                                                                            DELIVERVTlCKET
                           PETROLEUM PRODUCTS
                              P. O. Box 993
                         HENDERSON" TEXAS75653 ...
                              903-657..2108

    TO                                       tiS' 0)6ii1                             DATE        I;) - Ji -J.J.
                                                                                     SHIPPED
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                                                                                                 SUBTOTAL

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                                                                         131
    03/19/21315    15: 39     9365467743                    DOCS:CKT                               PAGE     133/06

              VEI.,VIN Oil CO., INC.
                  PETROLEUM PROPUCTS
                                                                              EMERGENCY CONTACT: {512}4Ga.n27
                     P.O. SOX 993
                HENDERSON, TEXAS 15653
                      903/667 ·21 OS

                               SOLD TO                                            SfllPPEDTO

            AJP 011 Company, LLC                                       grapeland lX
            elba Grapelalld Fuel 8. SBO                                dlia Grapeland Fuel & SSQ
            1277 East Loop 304                                         1277 EaSllOap 304
            Crock.II, TX 75835                                         Crock9!!. TX 75835

                                . lil:ad
5,549.0       5,;;49,0       0(1        F-TFG                                                         1,021.02
                              F~~reil
5.549;0 .     5,549.0        M ,.     \"-TSG                                                          1,109.80.
                              Stale
2.183.0 .     2,183.0        0.0..   F·OL
                              O!eooI15-PPM      LOWSulier
2,183.0       2.183.0        (1.0.

2,183.0       2.183.0 .•                                                                                  427.a7

                                                        132
                                                                                    DOCS:CKT                                       PAGE    04/06
           03/19/2015        15:39       9365467743
                         r   "

,,: . .,         ~
  ...

            VELVlN OIL CO., ,N'C.                                                                                          DELIVERVTICKET
                             PETROLEUM PRODUCTS
                                     P. O. Box 993
                         HE~DERSONHTEXAS l~653, "~' ,
                                     SOa.S57~2108

 70                          )::)
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                                                                                            DATE        LJ- 9-/.3
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                                                                                                                                      Cl PREPAID
                                                                                                                                      Q COLLECT
                                                               :
    QUANTITY            QUANTlTY                                           DESCRIPTION                                     PRICE
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                                                                                               FEDERAL RPAD TAX

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           AECEIVEOBY
                                                                                                            SUBTOTAL

                                                                                        TOTAL AMOUNT DUE                       l;t4,- ,S%7 .13
                                                                               133
         03/19/2015      15:39       9355457743                                 DOCS:CKT                               PAGE     05/0&

                    VEL,VIN OIL CO., INC.
                       PeTROLEUM PRODUCTS
                            p,O, BOX 993                                                           EMERGENCY CONTACT: (512) 463-7727
                       HENDERSON, TEXAS 75653
                               9031657·2108

                                       souno                                                              SHIPPED TO

                  AJP Oil Company, LtC                                                     grapeland IX
                  dba Grapeland Fuel & BBQ                                                 dba Grapeland FUBI 8< BBQ
                  1m   East loop 304                                                       1277 East Loop 304
                  Crockett, TX 75835                                                       Croakett, TX 76835

                                               F·N
                                      N6,l~cI Gs,.Olill£i'lUIN'120.,:,'.,
     !,022.0 "      2.022;0;0,0:              'F·TFG                                                                          372.05
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                    2,022.0'        0.0'    F·TSG,
                                     Slate Gasoline Ta~
     3,718.0        3,718.0         O.G: ,  F·Dl.                           ,                                            11,618.75
                                     DteseI15·PPM Ult\-a Low,:S,ulfer
     3,718.0 '"     3,718:0         0.0,     F·TFO i"                                                                         907.19
                                     Federsl Diesel Tax '           ,:
I S,71S.{)          3,718,0          0,0;      F.TSD i        '
I                                     S!l:!reOlesei Tax:          '   ";,,,
                  ULTRA lQW:sOLI'!!!R DIESEL FUEL(l S.PPMi~LFERMI\liIMUM) !11'!;9MIIREb
                  YEAAAN!;lL,/l;1:E,                      i       "   "/,:

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                                                                                                                              19,171:1.6
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                                                                        134
                                                                         DOCS:CKT                                           PAGE   !l6/El6
    03/19/2015             15:39       9365467743

        VELVIN OIL CO., INC~                                                                                         O.EU
                               PETROLEUM PRODUCTS
                                     P.O. Box 993
             •"            HENDERSON, TEXAS 75653
                                     903-657-2108

                                                                                  DATE        I~' 1/1,- J.3
                                                                                  SHIPPEe
                                                                                  TO
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                                                                                              6 ~4              ~

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    QUIINTITY          QUANTITY                                    DeSCRIPTION                                      PRICE
    SHIPPED            OAOERED

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                                                                                         STATEROADTAX

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                                                                                         STATESALES TAl(

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                    .
                                                      ,                                           SUBTOTAl.
   . RECEIVED BY
                                                                            TOTAL AMOU"T DUE                         ""1 ~
                                                                      135
                                             A J P Oil Company LLC
                                              Vendor QuIckReport
                                       December 2013 through December 2014

          Type            Date       Num       Memo           Account          Clr       Split         Amount
Velvln Oil Co., Inc.
  Check                1210412013   2977                 1002' Cash·GSB ...          5130'   CGS-...    -71,208.98
  Check                01/17/2014   3003                 1002 . Cash-GSB ...         5130·   CGS-...    -62,245.00
  Check                02110/2014   3018                 1002' Cash-GSB ...          5130'   CGS-...    -64,656.63
  Check                03/05/2014   1465                 1003 • Cash-GSB ...         5130·   CGS-...    -51,805.26
  Check                04/1012014   3063                 1002 . Cash-GSB ...         5130'   CGS-...    -75,664.15
  Check                04/2912014   2902                 1002 ' Cash-GSB ...         5130·   CGS-...    -54,480.52

                                                      136
                                         No. 2014-362

 VELVIN OIL COMPANY, INC,                      §             IN THE DISTRICT COURT OF
 Plaintiff                                     §
                                               §
 v.                                            §                    RUSK COUNTY, TEXAS
                                               §
 A.J.P. OIL COMPANY, LLC                       §
 d/b/a! GRAPELAND FUEL & BBQ                   §
 and ANDREW J. PATTON,                         §                    4th   JUDICIAL DISTRICT
 Defendants                                    §

                             ORDER GRANTING NEW TRIAL

        After considering Defendants' Motion for New Trial, the response, the pleadings and

arguments of counsel, the Court GRANTS the motion and orders a new trial.

        It is therefore ORDERED that the trial herein is set for _ _ _ _ _ _ _ _ _ _'
2015.

SIGNED on _ _ _ _ _ _ _, 2015.

                                                   PRESIDING JUDGE

                                             137
                                                                                                  Filed 81312015 9:23: 19 AM
                                                                                                           Terri Pirtle Willard
                                                                                                                 District Clerk
                                                                                                         Rusk County, Texas

                                                                                                             Terri Willard

                                               No. 2014-362

 VELVIN OIL COMPANY, INC,                            §               IN THE DISTRICT COURT OF
 Plaintiff                                           §
                                                     §
 v.                                                  §                     RUSK COUNTY, TEXAS
                                                     §
 AJ.P. OIL COMPANY, LLC                              §
 d/b/a! GRAPELAND FUEL & BBQ                         §
 and ANDREW J. PATTON,                               §                      4th   JUDICIAL DISTRICT
 Defendants                                          §

                      DEFENDANTS' REPLY TO PLAINTIFF'S RESPONSE
                             TO MOTION FOR NEW TRIAL

           Defendants, AJ.P. OIL COMPANY, LLC, d/b/a! GRAPELAND FUEL & BBQ, and

ANDREW J. PATTON, ask the Court to grant a new trial in the interest of justice and fairness.

In reply to PlaintiffVelvin Oil Company, Inc.'s Response to Motion for New Trial

("Response"), Defendants would show as follows:

                                  ARGUMENTS & AUTHORITIES

      1.       New trial must be granted because a suit involving the same parties and subject

               matter was pending at the filing of this suit, Plaintiff's claim brought here is a

               compulsory counterclaim to Defendants' claims brought in the first-filed suit,

               and abatement of this suit is proper.

           In it's Response, Plaintiff asserts that the Motion for New Trial should be denied because

this matter and the first-filed suit do not involve the same parties and subject matter. Plaintiff

fails to produce any law supporting this assertion.

           Plaintiff does not dispute that this suit is a second-filed, non-dominant suit and that the

first-filed suit in Houston County was brought to the Court's attention in a timely manner.

                                                   138
Rather, Plaintiff is contending these suits are not substantially interrelated. "In detennining

whether an inherent interrelationship exists. courts should be guided by the rule governing

persons to be joined if feasible and the compulsory counterclaim rule." Wyatt v. Shaw Plumbing,

760 S.W.2d 245, 247 (Tex. 1988); Tex.R.Civ.P. 39, 97(a).

       The facts in Wyatt v. Shaw closely track those at hand. In Wyatt. Wyatt and Shaw entered

into a contract regarding plumbing services. When Wyatt refused to pay for worthless and faulty

services provided by Shaw, "Shaw made a written demand for payment. Following Shaw's

demand letter, Wyatt filed suit against Shaw in [Wyatt's county of choice] alleging fraud and

violation of the Deceptive Trade Practices Act." Wyatt at 246. Shortly thereafter Shaw filed a

breach of contract suit in Shaw's county of choice to recover for the disputed services it

provided. Finding that Wyatt's claim would be res judicata against Shaw's claim, the court held

that the two suits were inherently interrelated. The court further explained, "Shaw Plumbing

should have brought its compulsory counterclaim on the contract in Wyatt's tort and DTPA suit

in Duval County ... since Wyatt filed suit first, he chose Duval County." Id at 248.

       The facts at hand are identical to Wyatt. Here, Defendants purchased goods from

Plaintiff. Plaintiff's goods turned out to be worthless and faulty. Defendants verbally

communicated to Plaintiff that it would not pay for the worthless goods, and further refused to

pay by directing that payments made by Defendants to Plaintiff for subsequently delivered goods

were not to be applied to the worthless goods. See Exhibit D to Motion/or New Trial. As is

evidenced by the record and correspondence between the parties and their counsel, Defendants

clearly communicated to Plaintiff that Defendants were only continuing to do business with

Plaintiff because of Plaintiffs representations that Defendants' damages from the worthless fuel

would be "made right". See Exhibit A to Motion/or New Trial. Plaintiff's Counsel's own letter of

                                                  2

                                               139
September 2014 shows that all parties involved understand both suits to concern the exact same

subject-matter. Like in Wyatt, when Plaintiff did not make good on its promises, Defendants

sued Plaintiff for the worthless goods provided. Defendants' Original Petition in the first-filed

suit lists as damages the exact amount in worthless fuel as is complained of in this matter. See

Exhibit A to Motionfor New Trial- Original Petition of First-Filed Suit listing "$31,760.45 in

out-of-pocket damages for the worthless diesel fuel delivered ". The fact that the amount sued for

in the matter at hand differs slightly only results from the three months of interest charged on

Defendants' account between the time Defendants' DTPA notice letter was sent to Plaintiff (July

30,2014) and when Plaintiff filed this suit (November 19, 2014). This is further evidenced by

Plaintiff's own documentation produced during discovery.

         Because the record clearly shows that the subject matter of this matter and the first-filed

suit are inherently interrelated, the Court must grant a new trial so that this suit may be properly

abated pending litigation of the first-filed suit.

    2.      New trial must be granted because the first-filed suit was timely brought to the

            Court's attention, and abatement of this suit is proper.

         In it's Response, Plaintiff asserts that the Motion for New Trial should be denied because

Defendants have not yet raised a plea in abatement. Plaintiff fails to produce any law supporting

this assertion.

         Case law makes clear that a plea in abatement raised following judgment is seasonable

when the pendency of a prior suit has been shown in the pleadings. See, e.g. Ex Parte Lillard,

314 S.W.2d 800, 805 (Tex. 1958); Beckman v. Beckman, 716 S.W.2d 83 (Tex.App.-Dallas

1986). Defendants timely brought the first-filed suit to the attention of this Court in their initial

pleading and Motion to Transfer Venue, attaching as evidence a file-stamped copy of the prior

                                                     3

                                                 140
Original Petition and an affidavit of Defendant Andrew J. Patton stating that litigation over the

same facts was already pending.

        Because Plaintiff has not and cannot refute these facts or provide case law showing a

contrary rule, new trial must be granted because notice of the first-filed suit was timely brought

to the Court's attention and abatement of this matter is proper.

   3.      New trial must be granted because judicial notice of controverted attorney's fees

           under Civil Practice and Remedies Code § 38.001 and 38.004 is improper on

           summary judgment.

        In it's Response, Plaintiff asserts that the Motion for New Trial should be denied

because there is no fact question regarding the reasonableness of Plaintiff's attorney fees.

Plaintiff contends that "the court does not need to hear any evidence in connection with

attorney's fees as Plaintiffs cause was brought as a suit on sworn account and on a contract"

under Texas Civil Practice and Remedies Code §38.004. However, the law produced by Plaintiff

in supPOrt of this assertion is incomplete and incorrect.

        Although Texas Civil Practice and Remedies Code §38.004 does allow judicial notice to

be taken of attorney's fees in a suit on sworn account, judicial notice of attorney's fees

CANNOT be taken when the summruy judgment record contains evidence controverting the

reasonableness of attorney's fees. See, e.g. Guily v. CCI. Enter. Co., 54 S.W.3d 526, 528 (Tex.

App.-Houston [1st Dist.] 2001, no pet.); Rosenblatt v. Freedom Life, 240 S.W.3d 315, at

321(Tex. App. 2007); MeGlown v. Ashford Park (Tex.App.- Houston [1st Dis!.] Jun. 11,2009);

Graee v. Duke, 54 S.W.3d 338, 344 (Tex. App-Austin 2001, pet. denied) (holding that attorney

fee award in summary judgment proceeding not proper if amount disputed). Courts have more

                                                  4

                                               141
specifically found that summary judgment is improper when the moving party's affidavit in

support of attorney's fees is contested by an affidavit of opposing counsel. Cammock the Cook,

LLC v. Eastburn, 296 S.W.3d 884,894 (Tex. App-Texarkana 2009, pet. denied) (holding that

"summary judgment award of attorney's fees is improper where the nonmovant produces a

controverting affidavit regarding fees").

        Here. by Plaintiffs own admission its proof regarding attorney's fees is inadequate under

the rules and requires the Court to take judicial notice. Case law clearly shows that summary

judgment is improper when attorney's fees are controverted. Because Defendants have contested

the reasonableness of Plaintiffs attorney's fees multiple times, including in an affidavit of

Defendants' counsel, judicial notice cannot be taken in this matter and summary judgment is

improper. See D's Response to Motion/or Summary Judgment and attached Affidavit o/William

Pemberton, Counsel/or Defendants.

        Accordingly, the Court must grant a new trial because it erred by granting Plaintiffs

Motion for Summary Judgment. There is a disputed fact issue regarding the unreasonableness of

attorney's fees sought by Plaintiff, which must be submitted to the jury.

   4.      New trial must be granted because there are disputed fact issues regarding

           Defendants' defense of payment and the validity of finance charges included in

           Plaintiff's alleged damages, which must be submitted to a jury.

        In it's Response, Plaintiff asserts that the Motion for New Trial should be denied because

Plaintiff had a right to direct appropriation of Defendants' payments. Plaintiff fails to produce

any law supporting this assertion, and incorrectly quotes the law rested on by Defendants.

                                                 5

                                               142
       When a debtor has directed the application of payment by written or verbal

communication. the "true rule seems to be. first. the debtor has the absolute right to direct

ap,propriation of payment." Phillips v. Herndon, 78 Tex. 378, 14 S.W. 857, 859 (Tex. 1890).

Plaintiff misapplies this quote and rule to Park Place Hosp. v. Estate ofMilo, 909 S.W.2d 508,

510-11 (Tex. 1995), a medical malpractice case not relied on by Defendants. Further case law

shows that a creditor is not bound by a debtor's uncommunicated intentions as to the application

of payment. Carey v. Ellis, 46 S.W.2d 1012 (Tex.Civ. App.-San Antonio 1932, no writ).

       Here. Defendants communicated their intention early and often. It is evident from the

record that Defendants intended for payments made following delivery of the worthless and

disputed diesel fuel on December 4, 2013 not to be applied to said disputed diesel fuel. The first

payment made by Defendants following the delivery of the disputed fuel noted that it was to be

made towards "gasoline only". A subsequent payment noted that it was to be applied only to

specific non-disputed invoices. Further, Defendants verbally made known to Plaintiff on many

occasions that payment was not to be applied to the disputed fuel, as is sworn to in multiple

affidavits of Defendant in the Court's record. See Defendants' Original Answer and Motionfor

New Trial. That Plaintiff was aware of Defendants' intention that payment not be applied to the

disputed fuel is obvious-payments were not applied to the disputed fuel until Defendants made

clear they intended to pursue the DTPA claim of the filed-first suit.

       Defendants' written and verbal communications to Plaintiff clearly show Defendants'

intention that payments made after December 4, 2013 were to be applied only to subsequent,

non-disputed fuel shipments. Defendants had the absolute right to direct appropriation of

payments made to Plaintiff. and exercised that right by including language on checks paid to

Plaintiff. and by making verbal directions to Plaintiff. Accordingly, the Court must grant a new

                                                 6

                                               143
trial because there are disputed fact issues about whether payment was made on the invoices

sued for, and whether finance charges made the basis of Plaintiff's sworn account are due and

owing, which must be submitted to the jury.

                                            PRAYER

       For these reasons, and in the interest of justice and fairness, Defendants respectfully ask

the Court to grant a new trial.

                                                             Houston, Texas 77007
                                                             PH: (713) 730-9446
                                                             FX: (713) 583-4180
                                                             jaclyn@txestateplanning.com

                                                             WILLIAM R. PEMBERTON
                                                             William R. Pemberton, P.C.
                                                             P. O. BOX 1112
                                                             Crockett, Texas 75835

                                                             ATTORNEYS FOR DEFENDANTS

                                                 7

                                              144
                               CERTIFICATE OF SERVICE

       I hereby certifY that a true and correct copy of the above and foregoing instrument was
served upon the following counsel of record by electronic service and facsimile on August 3,
2015.

Mr. Ronnie Horsley
P.O. Box 7017
Tyler, Texas 75711
Via Email: horsleylaw@tyler.net
Via Facsimile: (903) 593-3450

                                              8

                                            145
                                                                             FILE[~
                                      No: 2014-362                       2115 AUG 20 PH 3:"2
                                               IN THE DISTRICT COURT i';~i~Hj p:FnL£ ~!LLARD '-,'
                                                                                    r\ DISTRICT eLL"
VELVIN OIL CaMPANY, INC.                  §
                                          §                            i:USK COUr
VS.                                       §    4TH JUDICIAL DISTRICT BY        &'rrv        DEPUTY
                                          §
A.J.P. OIL COMPANY, LLC d/b/a             §
GRAPELAND FUEL & BEQ; and                 §
ANDREW J. PATTON                          §    RUSK COUNTY, TEXAS

                                       ORDER

      The Court having heard the Defendanes Motion for New Trial on this day finds

same should be denied and it is

      ORDERED, ADJUDGED, and DECREED that the Motion for New Trial filed

herein be in all things DENIED.

      SIGNED this      20    day of   ¥          ,2015.

APPROVED AS TO FORM AND SUBSTANCE

      P. O. Box 7017
      Tyler,~.   as 75·
      Telephone: (903) 593-7314
      Facsimile: (903) 593-3450
      Email: hOl.sleylaw@tyler.net
      Texas Bar Card No. 10014000

                                         146
                                                                                           Filed 812812015 9:24:50 AM
                                                                                                     Terri Pirtle Willard
                                                                                                           District Clerk
                                                                                                   Rusk County. Texas

                                                                                                      Laurey Martin

                                           No. 2014-362

VELVIN OlL COMPANY, INC,                         §              IN THE DISTRICT COURT OF
Plaintiff                                        §
                                                 §
v.                                               §                    RUSK COUNTY, TEXAS
                                                 §
A.J.P. OlL COMPANY, LLC                          §
d/b/a! GRAPELAND FUEL & BBQ                      §
aodANDREW J. PATTON,                             §                     4th JUDICIAL DISTRICT
Defendaots                                       §

                                     NOTICE OF APPEAL

TO THE HONORABLE COURT:

         A.J.P. Oil Compaoy, LLC d/b/a Grapelaod Fuel & BBQ, aod Andrew J. Patton,

Defendaots, give notice of their intent to appeal the trial court's Judgment rendered on June 4,

2015, in Cause No. 2014-362 entitled Velvin Oil Compaoy, Inc. vs. A.J.P. Oil Compaoy, LLC

d/b/a Grapelaod Fuel & BBQ, aod Andrew J. Patton, in the 4th Judicial District of Rusk County,

Texas.

         This appeal is taken to the Sixth Court of Appeals in Texarkaoa, Texas. This is not a

parental termination or child protection case as defmed in Appellate Rule 28.4.

                                                             Respectfully submitted,

                                                               /s/ Jaclvn D. Patton
                                                             JACLYN D. PATTON
                                                             TX BarNo. 24085521
                                                             639 Heights Boulevard
                                                             Houston, Texas 77007
                                                             PH: (713) 730-9446
                                                             FX: (713) 583-4180
                                                             jaclyn@txestateplanning.com

                                               147
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Arthur Andersen & Co. v. Perry Equipment Corp., 945 S.W.2d 812 (1997)
40 Tex. Sup. Ct. J. 591
                                                                              corporation, and accounting firm was aware that
                                                                              purchasing corporation had required audit and
     KeyCite Yellow Flag - Negative Treatment                                 would rely on its accuracy and knew specific
Declined to Extend by McGee v. Deere & Co.,     Tex.App.-Austin,
                                                                              purpose for which it was conducted. V.T.C.A.,
 March 24, 2005
                                                                              Bus. & C. § 17.45(4).
                      945 S.W.2d 812
                  Supreme Court of Texas.                                     23 Cases that cite this headnote

     ARTHUR ANDERSEN & CO., Petitioner,                             [2]       Antitrust and Trade Regulation
                   v.                                                             Consumers, purchasers, and buyers;
 PERRY EQUIPMENT CORPORATION, Respondent.                                     consumer transactions
                                                                              In determining whether plaintiff is consumer
            No. 95–0444. | Argued March
                                                                              under Deceptive Trade Practices Act (DTPA),
          19, 1997. | Decided May 16, 1997.
                                                                              focus is on plaintiff's relationship to transaction.
Purchasing corporation sued accounting firm, alleging                         V.T.C.A., Bus. & C. § 17.45(4).
violations of Deceptive Trade Practices Act (DTPA) in
                                                                              19 Cases that cite this headnote
connection with firm's preparation of audited financial
statements of acquired corporation. The 55th District Court,
Harris County, Kathleen S. Stone, J., entered judgment for          [3]       Antitrust and Trade Regulation
purchasing corporation, and the Houston Court of Appeals,                         Measure and amount
First District, 898 S.W.2d 914, affirmed. On writ of error,                   Under Deceptive Trade Practice Act (DTPA),
the Supreme Court, Cornyn, J., held that: (1) purchasing                      amount of actual damages recoverable is total
corporation was “consumer” under DTPA although it did not                     loss sustained as result of deceptive trade
pay for audit; (2) failure to instruct jury on proper measure of              practice. V.T.C.A., Bus. & C. § 17.50(b)(1).
direct damages was reversible error; and (3) award of attorney
fees under DTPA had to be dollar amount, not percentage of                    2 Cases that cite this headnote
judgment.
                                                                    [4]       Antitrust and Trade Regulation
Reversed and remanded.
                                                                                  Grounds and Subjects
                                                                              Under Deceptive Trade Practices Act (DTPA),
                                                                              actual damages are those damages recoverable
 West Headnotes (19)                                                          under common law, either direct or
                                                                              consequential. V.T.C.A., Bus. & C. § 17.50(b)
                                                                              (1).
 [1]     Antitrust and Trade Regulation
             Accountants and tax preparers                                    13 Cases that cite this headnote
         For purposes of Deceptive Trade Practices
         Act (DTPA) claim against accounting firm,
                                                                    [5]       Damages
         purchasing corporation was a “consumer,”
                                                                                 Direct or indirect consequences
         although it did not pay for audit, where
         purchasing corporation insisted as condition of                      Direct damages are necessary and usual result of
         sale that acquired corporation provide audited                       defendant's wrongful act; they flow naturally and
         financial statements, acquired corporation hired                     necessarily from the wrong.
         accounting firm for that purpose, purchasing
                                                                              49 Cases that cite this headnote
         corporation then relied on those statements
         in reaching its decision to purchase acquired

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                                            Schultz, William 10/26/2015
                                             For Educational Use Only

Arthur Andersen & Co. v. Perry Equipment Corp., 945 S.W.2d 812 (1997)
40 Tex. Sup. Ct. J. 591
                                                                          of-pocket damages, which measure difference
 [6]    Damages                                                           between value buyer has paid and value of what
           Direct or indirect consequences                                he has received, or by benefit-of-the-bargain
        Direct damages compensate plaintiff for loss that                 damages, which measure difference between
        is conclusively presumed to have been foreseen                    value as represented and value received.
        by defendant from his wrongful act.
                                                                          42 Cases that cite this headnote
        22 Cases that cite this headnote

                                                                [11]      Antitrust and Trade Regulation
 [7]    Damages                                                               Measure and amount
           Proximate or Remote Consequences                               Under Deceptive Trade Practices Act (DTPA),
        Consequential damages result naturally, but not                   plaintiff may recover under damage theory that
        necessarily, from defendant's wrongful acts;                      provides greater recovery, either out-of-pocket
        under common law, they need not be usual result                   damages or benefit-of-the-bargain damages.
        of the wrong, but they must be foreseeable, and                   V.T.C.A., Bus. & C. § 17.50(b)(1).
        must be directly traceable to wrongful act and
        result from it.                                                   24 Cases that cite this headnote

        67 Cases that cite this headnote
                                                                [12]      Antitrust and Trade Regulation
                                                                              Measure and amount
 [8]    Antitrust and Trade Regulation                                    Under Deceptive Trade Practices Act(DTPA),
            Reliance; causation; injury, loss, or                         both out-of-pocket and benefit-of-the-bargain
        damage                                                            measure of damages are determined at time of
        Foreseeability is not an element of producing                     sale. V.T.C.A., Bus. & C. § 17.50(b)(1).
        cause under Deceptive Trade Practices Act
        (DTPA). V.T.C.A., Bus. & C. § 17.50(b)(1).                        29 Cases that cite this headnote

        1 Cases that cite this headnote
                                                                [13]      Antitrust and Trade Regulation
                                                                              Instructions
 [9]    Antitrust and Trade Regulation                                    Appeal and Error
            Grounds and Subjects                                             Failure or refusal to charge
        Under Deceptive Trade Practices Act, if damages                   Failure to instruct jury on proper measure
        are too remote, too uncertain, or purely                          of direct damages on purchasing corporation's
        conjectural, they cannot be recovered. V.T.C.A.,                  claim under Deceptive Trade Practices Act
        Bus. & C. § 17.50(b)(1).                                          (DTPA) regarding accounting firm's audit of
                                                                          acquired corporation was reversible error, where
        10 Cases that cite this headnote
                                                                          jury was not asked to find direct damages
                                                                          at time of sale as well as consequential
 [10]   Fraud                                                             damages attributable to accounting firm's
             Difference between actual and represented                    misrepresentations, but was simply asked to
        value                                                             consider purchase price as part of overall
        Fraud                                                             damages, and purchasing corporation did not
            Difference between value and price paid                       establish how much of its loss was attributable to
        Under common law, direct damages for                              accounting firm. V.T.C.A., Bus. & C. § 17.50(b)
        misrepresentation are measured either by out-                     (1).

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                                            Schultz, William 10/26/2015
                                             For Educational Use Only

Arthur Andersen & Co. v. Perry Equipment Corp., 945 S.W.2d 812 (1997)
40 Tex. Sup. Ct. J. 591

        17 Cases that cite this headnote                        [18]      Antitrust and Trade Regulation
                                                                              Proceedings to impose; evidence

 [14]   Antitrust and Trade Regulation                                    Party's contingent fee agreement should be
            Grounds and Subjects                                          considered by fact finder, and is therefore
                                                                          admissible in evidence, but that agreement
        Under Deceptive Trade Practice Act, losses
                                                                          cannot alone support award of attorney's fees
        subsequent to time of sale are recoverable only
                                                                          under Deceptive Trade Practices Act (DTPA).
        if misrepresentation is producing cause of loss.
                                                                          V.T.C.A., Bus. & C. § 17.50(d); State Bar Rules,
        V.T.C.A., Bus. & C. § 17.50(b)(1).
                                                                          V.T.C.A., Government Code Title 2, Subtitle G
        Cases that cite this headnote                                     App., Art. 10, § 9, Rules of Prof.Conduct, Rule
                                                                          1.04(b)(8).

 [15]   Fraud                                                             135 Cases that cite this headnote
            Reliance on Representations and
        Inducement to Act
                                                                [19]      Antitrust and Trade Regulation
        Basis of a misrepresentation claim is that                            Attorney fees
        defendant's false statement induced plaintiff to
                                                                          Antitrust and Trade Regulation
        assume risk he would not have taken had truth
                                                                              Proceedings to impose; evidence
        been known.
                                                                          To recover attorney's fees under Deceptive Trade
        1 Cases that cite this headnote                                   Practices Act (DTPA), plaintiff must prove that
                                                                          amount of fees was both reasonably incurred
                                                                          and necessary to prosecution of case, and must
 [16]   Antitrust and Trade Regulation
                                                                          ask jury to award fees in specific dollar amount,
            Grounds and Subjects
                                                                          not as percentage of judgment. V.T.C.A., Bus.
        Plaintiff's recovery of damages under Deceptive
                                                                          & C. § 17.50(d); State Bar Rules, V.T.C.A.,
        Trade Practices Act (DTPA) is limited not only
                                                                          Government Code Title 2, Subtitle G App., Art.
        by his own evidence, but also by defendant's                      10, § 9, Rules of Prof.Conduct, Rule 1.04.
        evidence of plaintiff's failure to reasonably
        mitigate losses or evidence of intervening                        227 Cases that cite this headnote
        causes.

        4 Cases that cite this headnote

                                                               Attorneys and Law Firms
 [17]   Attorney and Client
            Construction and Operation of Contract              *813 Ben Taylor, Dallas, Thomas C. Godbold, Houston, for
                                                               Petitioner.
        Attorney contingency fee contracts allow
        plaintiffs who cannot afford to pay a lawyer up-       Christopher B. Allen, Michael P. Cash, James W. Paulsen,
        front to pay lawyer out of any recovery, and,          Houston, for Respondent.
        because they offer potential of greater fee than
        might be earned under hourly billing method,           Opinion
        compensate attorney for risk that attorney will
        receive no fee whatsoever if case is lost.             CORNYN, Justice.

        149 Cases that cite this headnote                      We withdraw our opinion of January 10, 1997, and substitute
                                                               the following in its place. The parties' motions for rehearing
                                                               are overruled.

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Arthur Andersen & Co. v. Perry Equipment Corp., 945 S.W.2d 812 (1997)
40 Tex. Sup. Ct. J. 591
                                                                   after the sale, Maloney ran out of cash and required a
 *814 In this accounting malpractice case, Perry Equipment         $400,000 advance from PECO to continue operating. PECO
Corporation (PECO) sued the accounting firm of Arthur              also attempted other emergency financial measures, but to
Andersen for a faulty audit, which PECO relied on to               no avail. Fourteen months after the sale, Maloney filed
purchase another company, Maloney Pipeline Systems.                bankruptcy. PECO presented uncontradicted evidence at trial
The audit favorably reported Maloney's financial condition         that the purchase price for Maloney was a total loss from
when, in fact, the company was suffering substantial losses.       which PECO realized no return and which PECO wrote off.
Fourteen months after the sale, Maloney filed for bankruptcy.
PECO sued for violations of the Deceptive Trade Practice           PECO's experts testified that Arthur Andersen's audit
Act, fraud, negligence, negligent misrepresentation, gross         contained serious errors and otherwise failed to follow
negligence, and breach of implied warranty. Based on the           acceptable auditing procedures. One of the most significant
jury's verdict, the trial court rendered judgment for PECO.        errors, the evidence showed, was the failure to verify that
The court of appeals affirmed. 898 S.W.2d 914.                     contracts Maloney reported as complete were in fact complete
                                                                   or that Maloney's estimates of costs and percentage of
We address three issues presented by Arthur Anderson's             completion for ongoing contracts were accurate. Maloney
application for writ of error. First, Arthur Andersen              later incurred substantial losses on these contracts. One expert
challenges PECO's consumer status because Maloney, rather          testified that the audit was one of the worst he had ever seen.
than PECO, actually paid for the audit. Second, Arthur             Another expert, an auditing professor, stated that if a student
Andersen claims that the trial court failed to instruct the jury   submitted the work, he would have given the student a failing
on the correct measure of damages. Third, Arthur Andersen          grade.
contests the attorney's fees award, arguing that the percentage
of recovery method is not a proper measure of attorney's fees      The jury found Arthur Andersen 51 percent at fault and
under the DTPA, and that even if such fees were recoverable,       PECO 49 percent at fault. The jury also found that Arthur
no evidence supports the award. For the reasons discussed          Andersen had committed fraud, DTPA violations, and
below, we reverse the judgment of the court of appeals and         breach of warranty, but that it was not liable for negligent
remand this case to the trial court for further proceedings.       misrepresentation or gross negligence. The jury assessed
                                                                   damages of $5,449,468, including the $4,088,237 PECO paid
                                                                   for Maloney and $1,361,231 for other expenses incurred by
                                                                   PECO in its attempt to salvage the company. PECO elected
                               I
                                                                   to recover under the DTPA. The trial court credited Arthur
When PECO, a successful manufacturer of oil filters used in        Andersen with the two million dollars that Ramteck II had
compressors for gas pipelines, decided to expand its business      already paid PECO in settlement, and then awarded PECO
into the gas metering field, it looked into acquiring Maloney      a total of $9,297,601.20, including damages, prejudgment
Pipeline Systems, one of three United States companies in          interest, DTPA additional damages, attorney's fees, and costs.
the liquid metering market. In the mid–1980s, PECO began
negotiating with Maloney's owner, Ramteck II. As a condition
of the sale, PECO required an audit of Maloney's financial                                     *815 II
statements. Maloney retained Arthur Andersen to conduct
the audit. Maloney eventually provided PECO financial               [1] [2] Arthur Andersen first contends that PECO is not
statements audited by Arthur Andersen. The statements              a “consumer,” a prerequisite to recovery under the DTPA.
showed Maloney to be a profitable business. Relying upon           The DTPA defines a consumer as one “who seeks or acquires
this information, on August 23, 1985, PECO purchased the           by purchase or lease, any goods or services.” TEX. BUS. &
Maloney stock from Ramteck II, Inc. for $4,088,237.                COM.CODE § 17.45(4). In determining whether a plaintiff
                                                                   is a consumer, our focus is on the plaintiff's relationship to
Soon after the purchase, Maloney began to show signs               the transaction. Amstadt v. United States Brass Corp., 919
of serious financial decline. For example, three months            S.W.2d 644, 650 (Tex.1996). As a condition of sale, PECO

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                                              Schultz, William 10/26/2015
                                               For Educational Use Only

Arthur Andersen & Co. v. Perry Equipment Corp., 945 S.W.2d 812 (1997)
40 Tex. Sup. Ct. J. 591
insisted that Maloney provide audited financial statements.        is whether the purchased goods or services are an objective
Maloney hired Arthur Andersen for this specific purpose.           of the transaction or merely incidental to it.” Id. at 500.
PECO then relied on those statements in reaching its decision
to purchase Maloney. Under these circumstances, we hold            We believe that Hand confirms, rather than defeats, PECO's
that PECO sought and acquired Arthur Andersen's services.          consumer status. Arthur Andersen's audit was not merely
                                                                   incidental to the sale of Maloney to PECO; it was required
The next question is whether PECO sought and acquired these        by PECO and was central to PECO's decision to consummate
services by purchase or lease, inasmuch as it did not pay for      the purchase. Determining Maloney's financial condition was
the audit. Our decision in Kennedy v. Sale, 689 S.W.2d 890         PECO's primary objective in acquiring Arthur Andersen's
(Tex.1985), controls this issue. There, we held that the DTPA      services. We therefore reject Arthur Andersen's contention
does not require the consumer to be an actual purchaser or         that Hand defeats PECO's status as a consumer under the
lessor of the goods or services, as long as the consumer is the    DTPA.
beneficiary of those goods or services. Id.

The Texas Society of Certified Public Accountants, as amicus
                                                                                                  III
curiae, argues that a stock purchaser should not be considered
a consumer simply because the corporation paid for an audit        Arthur Andersen next complains that the jury charge allowed
for the purchaser's benefit because virtually every external       the jury to award PECO the entire purchase price of Maloney,
audit benefits third parties. Thus, any stock purchaser who        without instructing the jury to subtract the value of Maloney
reviews audited financial statements could bring a DTPA
                                                                   stock at the time of the sale. 2 Arthur *816 Andersen also
                           1
claim against the auditor. Our holding is not so broad. In         contends that even if the court had properly instructed the
this case, the audit was rendered in connection with the sale of   jury, PECO failed to introduce any evidence that the stock
Maloney and was specifically required by PECO and intended         was valueless at the time of sale, and thus failed to establish
to benefit PECO. Arthur Andersen was aware that PECO had           that it was entitled to the entire purchase price under either the
required the audit and would rely on its accuracy and knew the     “benefit-of-the-bargain” or the “out-of-pocket” measure of
specific purpose for which it was conducted. We accordingly        damages. PECO responds that in addition to direct damages,
hold that PECO is a consumer under the DTPA.                       consequential damages are also recoverable under the DTPA.
                                                                   PECO thus argues that it is entitled to recover the purchase
Arthur Andersen also urges us to reject PECO's consumer            price as consequential damages.
status based on the decision in Hand v. Dean Witter Reynolds
Inc., 889 S.W.2d 483 (Tex.App.—Houston [14th Dist.] 1994,           [3] Under the version of the DTPA in effect at the
writ denied). In Hand, the plaintiff alleged that her stock        time PECO brought this action, a consumer could recover
broker failed to purchase certain commodity option contracts       “the amount of actual damages” caused by the defendant's
after she requested that he do so. Id. at 487–88. After deciding   false, misleading, or deceptive conduct. TEX. BUS. &
that a commodity option contract is a right, not a “good,”
                                                                   COM.CODE § 17.50(b)(1). 3 The amount of actual damages
under the DTPA, id. at 498, the court next considered whether
                                                                   recoverable is “the total loss sustained as a result of the
the plaintiff was a consumer by virtue of her purchase of
                                                                   deceptive trade practice.” Kish v. Van Note, 692 S.W.2d 463,
“services.” The DTPA defines services as including “services
                                                                   466 (Tex.1985)(citing Smith v. Baldwin, 611 S.W.2d 611, 617
furnished in connection with the sale or repair of goods.”
                                                                   (Tex.1980)).
TEX. BUS. & COM.CODE § 17.45(2). The court reasoned
that the omission of any reference in the definition to services
                                                                    [4] [5] [6] Actual damages are those damages recoverable
in connection with the sale of something other than a good
                                                                   under common law. Brown v. American Transfer & Storage
indicated that services furnished in connection with the sale
                                                                   Co., 601 S.W.2d 931, 939 (Tex.), cert. denied, 449 U.S.
of intangibles did not fall within the definition of services
                                                                   1015, 101 S. Ct. 575, 66 L. Ed. 2d 474 (1980). At common
under the DTPA. Hand, 889 S.W.2d at 498. The court then
                                                                   law, actual damages are either “direct” or “consequential.”
concluded: “The key to the [consumer status] determination
                                                                   Henry S. Miller Co. v. Bynum, 836 S.W.2d 160, 163

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                                              For Educational Use Only

Arthur Andersen & Co. v. Perry Equipment Corp., 945 S.W.2d 812 (1997)
40 Tex. Sup. Ct. J. 591
(Tex.1992) (Phillips, C.J., concurring); see RESTATEMENT          damage theory that provides the greater recovery. Id. Both
(SECOND) OF TORTS § 549 (1977) (outlining measure of              measures of damages are determined at the time of sale. See
damages for fraudulent misrepresentation). Direct damages         id. at 373 (out-of-pocket damages are measured at the time
are the necessary and usual result of the defendant's wrongful    of sale); see also Bullion, An Understanding of Damages
act; they flow naturally and necessarily from the wrong.          Recoverable Under the DTPA, 20 ST. MARY'S L.J. 667,
See Southwind Aviation, Inc. v. Avendano, 776 S.W.2d 734,         670–72 (1989).
736 (Tex.App.—Corpus Christi 1989, writ denied); Anderson
Dev. Corp. v. Coastal States Crude Gathering Co., 543            [13]     In this case, the jury was not asked to find
S.W.2d 402, 405 (Tex.Civ.App.—Houston [14th Dist.] 1976,        direct damages at the time of the sale as well as
writ ref'd n.r.e.). Direct damages compensate the plaintiff for consequential damages attributable to Arthur Anderson's
the loss that is conclusively presumed to have been foreseen    misrepresentations. Rather, the jury was simply asked to
by the defendant from his wrongful act. See Bynum, 836          consider the purchase price as part of the overall damages.
S.W.2d at 163 (Phillips, C.J., concurring); Coastal States,     PECO did present evidence that the purchase price was
543 S.W.2d at 405; Anderson, Incidental and Consequential       eventually a total loss. There was also evidence that Maloney
Damages, 7 J.L. & COM. 327, 328 (1987).                         was losing money at the time of the sale and continued
                                                                to do so until it declared bankruptcy. What PECO did not
 [7] [8] [9] Consequential damages, on the other hand, establish, however, was how much of its loss occurred at
result naturally, but not necessarily, from the defendant's     the time of the sale and how much was attributable to
wrongful acts. Haynes & Boone v. Bowser Bouldin, Ltd.,          subsequent events for which Arthur Anderson should bear
896 S.W.2d 179, 182 (Tex.1995); Moore v. Anderson, 30           legal responsibility. If subsequent losses were caused by
Tex. 224, 230 (1867). Under the common law, consequential       Arthur Andersen's wrongful conduct and were not simply part
damages need not be the usual result of the wrong, but must     of the risk a buyer of the business would have assumed, they
be foreseeable, see Mead v. Johnson Group, Inc., 615 S.W.2d     may be part of PECO's consequential damages.
685, 687 (Tex.1981), and must be directly traceable to the
wrongful act and result from it. Airborne Freight Corp., Inc.    [14]     [15] Subsequent losses, however, are recoverable
v. C.R. Lee Enters., Inc., 847 S.W.2d 289, 295 (Tex.App.        only if the misrepresentation is a producing cause of the
—El Paso 1992, writ denied); El Paso Dev. Co. v. Ravel,         loss. See Haynes & Boone, 896 S.W.2d at 182. Without
339 S.W.2d 360, 363 (Tex.Civ.App.—El Paso 1960, writ            this limitation, an investor could shift the entire risk of an
ref'd n.r.e.). Of course, foreseeability is not an element of   investment to a defendant who made a misrepresentation,
producing cause under the DTPA. See Haynes & Boone,             even if the loss were unrelated to the misrepresentation. The
896 S.W.2d at 182; Prudential Ins. v. Jefferson Assocs., 896    basis of a misrepresentation claim is that the defendant's false
S.W.2d 156, 161 (Tex.1995). Still, if damages are too remote,   statement induced the plaintiff to assume a risk he would
too uncertain, or purely conjectural, they cannot be recovered. not have taken had the truth been known. But to allow the
See White v. Southwestern Bell Tel. Co., Inc., 651 S.W.2d       plaintiff to transfer the entire risk of loss associated with his
260, 262 (Tex.1983); see also Bynum, 836 S.W.2d at 164          investment, even risks that the plaintiff accepted knowingly
(Phillips, C.J., concurring).                                   or losses that occurred through no fault of the defendant,
                                                                would unfairly transform the defendant into an insurer of the
 *817 [10] [11] [12] Under Texas common law, direct plaintiff's entire investment.
damages for misrepresentation are measured in two ways.
W.O. Bankston Nissan, Inc. v. Walters, 754 S.W.2d 127,          Because the charge failed to instruct the jury on the proper
128 (Tex.1988); Leyendecker & Assocs., Inc. v. Wechter,         measure of direct damages, the submission was reversible
683 S.W.2d 369, 373 (Tex.1984). Out-of-pocket damages           error. But, because we find some evidence that Arthur
measure the difference between the value the buyer has          Andersen's misrepresentation was a producing cause of
paid and the value of what he has received; benefit-of-the-     PECO's loss, we remand this case for a new trial. See Spencer
bargain damages measure the difference between the value as     v. Eagle Star Ins. Co., 876 S.W.2d 154, 157 (Tex.1994)
represented and the value received. Leyendecker, 683 S.W.2d     (holding that remand is proper when defective liability
at 373. Under the DTPA, a plaintiff may recover under the       question is submitted); Jackson v. Fontaine's Clinics, Inc.,

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                                               For Educational Use Only

Arthur Andersen & Co. v. Perry Equipment Corp., 945 S.W.2d 812 (1997)
40 Tex. Sup. Ct. J. 591
499 S.W.2d 87, 90 (Tex.1973) (remanding for new trial when           this is not always true, shifting these fees to the defendant
defective damages question submitted); Moulton v. Alamo              presents two problems.
Ambulance Serv., Inc., 414 S.W.2d 444, 449–50 (Tex.1967)
(affirming remand for new trial when defective damages               First, a contingent fee award based solely on evidence of
question submitted).                                                 a percentage fee agreement between a lawyer and client
                                                                     may be determined without regard to many of the factors
 [16] We emphasize that a plaintiff's recovery of damages            that should be considered when determining reasonableness.
is limited not only by his own evidence, but also by the             The DTPA allows recovery of “reasonable and necessary
defendant's evidence of the plaintiff's failure to reasonably        attorneys' fees.” TEX. BUS. & COM.CODE § 17.50(d).
mitigate losses or evidence of intervening causes. See Dubow         Factors that a factfinder should consider when determining
v. Dragon, 746 S.W.2d 857, 860 (Tex.App.—Dallas 1988, no             the reasonableness of a fee include:
writ); EDGAR & SALES, TEXAS TORTS & REMEDIES §
43.04[1][b]; Tschoepe et al., Aspects of Defending A Texas             (1) the time and labor required, the novelty and difficulty
Deceptive Trade Practices–Consumer Protection Act Claim,               of the questions involved, and the skill required to perform
20 ST. MARY'S L.J. 527, 561 (1989). If a plaintiff's losses            the legal service properly;
are attributable to his own mistakes or factors outside either
                                                                       (2) the likelihood ... that the acceptance of the particular
of the parties' control, the defendant may be entitled to an
                                                                       employment will preclude other employment by the
appropriate limiting instruction to the jury.
                                                                       lawyer;

                                                                       (3) the fee customarily charged in the locality for similar
                              IV                                       legal services;

Because we are remanding this case for a new trial, we                 (4) the amount involved and the results obtained;
turn now to Arthur Andersen's complaint that the trial court
                                                                       (5) the time limitations imposed by the client or by the
improperly awarded PECO attorney's fees calculated as a
                                                                       circumstances;
percentage of recovery. 4
                                                                       (6) the nature and length of the professional relationship
 *818 [17] Attorney contingency fee contracts serve two                with the client;
main purposes. First, they allow plaintiffs who cannot afford
to pay a lawyer up-front to pay the lawyer out of any recovery.        (7) the experience, reputation, and ability of the lawyer or
See See, An Alternative to the Contingent Fee, 1984 UTAH               lawyers performing the services; and
L.REV. 485, 490 n. 14. Second, such contracts, because they
                                                                       (8) whether the fee is fixed or contingent on results
offer the potential of a greater fee than might be earned under
                                                                       obtained or uncertainty of collection before the legal
an hourly billing method, compensate the attorney for the
                                                                       services have been rendered.
risk that the attorney will receive no fee whatsoever if the
case is lost. Id. The lawyer in effect lends the value of his        TEX. DISCIPLINARY R. PROF. CONDUCT 1.04,
services, which is secured by a share in the client's potential      reprinted in TEX. GOV'T CODE, tit. 2, subtit. G app.
recovery. POSNER, ECONOMIC ANALYSIS OF LAW §                         (STATE BAR RULES, art. X, § 9); see also Ragsdale v.
21.9 (4th ed.1992). Under some contingency fee contracts,            Progressive Voters League, 801 S.W.2d 880, 881 (Tex.1990);
the attorney also agrees to advance the out-of-pocket costs of       cf. General Motors Corp. v. Bloyed, 916 S.W.2d 949,
the litigation. In such cases, the attorney not only risks loss of   960–961 (Tex.1996) (discussing the relative strengths and
the fee, but also risks loss of actual expenditures.                 weaknesses of the contingent fee and lodestar methods of
                                                                     awarding attorneys fees in the context of a court-approved
Arthur Andersen complains that an award of contingency fees          class action settlement). While we do not doubt that many
under a fee-shifting statute like the DTPA forces defendants         plaintiffs must contract for a contingent fee to secure the
to pay fees unrelated to the amount of work performed. While         services of a lawyer, we do not believe that the DTPA

                © 2015 Thomson Reuters. No claim to original U.S. Government Works.                                             7
                                              Schultz, William 10/26/2015
                                               For Educational Use Only

Arthur Andersen & Co. v. Perry Equipment Corp., 945 S.W.2d 812 (1997)
40 Tex. Sup. Ct. J. 591
                                                                       Second, because the jury is not informed what the total
authorizes the shifting of the plaintiff's entire contingent fee
                                                                       amount of the judgment will be, the jury can only speculate
to the defendant without consideration of the factors required
                                                                       about whether a percentage of that unknown recovery will
by the Rules of Professional Conduct. A contingent fee may
                                                                       represent a reasonable and necessary fee in that particular
indeed be a reasonable fee from the standpoint of the parties
                                                                       case. Rather than leave this question to speculation, the jury
to the contract. But, we cannot agree that the mere fact that a
                                                                       must decide the question of attorney's fees specifically in light
party and a lawyer have agreed to a contingent fee means that
                                                                       of the work performed in the very case for which the fee is
the fee arrangement is in and of itself reasonable for purposes
                                                                       sought.
of shifting that fee to the defendant.

                                                                        [19] In light of these concerns, we hold that to recover
 [18]    A party's contingent fee agreement should be
                                                                       attorney's fees under the DTPA, the plaintiff must prove
considered by the factfinder, see TEX. DISCIPLINARY R.
                                                                       that the amount of fees was both reasonably incurred and
PROF. CONDUCT 1.04(b)(8), and is therefore admissible in
                                                                       necessary to the prosecution of the case at bar, and must ask
evidence, but that agreement cannot alone support an award
                                                                       the jury to award the fees in a specific dollar amount, not as
of attorney's fees under Texas Business and Commerce Code
                                                                       a percentage of the judgment.
section 17.50(d). See Brister, Proof of Attorney's Fees in
Texas, 24 ST. MARY'S L.J. 313, 324 (1993). In other words,
                                                                       For the foregoing reasons, we reverse the judgment of the
the plaintiff cannot simply ask the jury to award a percentage
                                                                       court of appeals and remand this cause to the trial court for
of *819 the recovery as a fee because without evidence
                                                                       further proceedings consistent with this opinion.
of the factors identified in Disciplinary Rule 1.04, the jury
has no meaningful way to determine if the fees were in fact
reasonable and necessary.
                                                                       All Citations

                                                                       945 S.W.2d 812, 40 Tex. Sup. Ct. J. 591

Footnotes
1      After PECO brought this action, the Legislature amended the DTPA to preclude consumers from suing under the DTPA
       for professional negligence or for claims arising from transactions involving consideration of more than $500,000. TEX.
       BUS. & COM.CODE § 17.49(c) & (g).
2      The charge asked the jury:
            What sum of money, if any, if paid now in cash, would fairly and reasonably compensate PECO for its losses which
            resulted from such conduct?
               Do not increase or reduce the amount in one answer because of your answer to any other question about damages.
               ....
               ....
               Consider the elements of damages listed below and none other. Consider each element separately. Do not include
               damages for one element in any other element. Do not include interest on any amount of damages you find.
               ....
            a. Purchase price of MPSI [Maloney] _______________
            b. Costs and expenses incurred by PECO as a result of its purchase and ownership of MPSI [listing 13 categories
               of costs and expenses]
3      In 1995, the Legislature amended § 17.50(b)(1) to permit recovery of “economic damages” and, if the defendant acted
       knowingly, “damages for mental anguish,” instead of “actual damages.” Act of May 17, 1995, 74th Leg., R.S., ch. 414,
       1995 Tex.Gen. Laws 2992.
4      The jury charge requested the jury to calculate attorney's fees three ways: in dollars and cents, as a percentage of
       PECO's recovery, and as a combination of dollars and cents and percentage of recovery.

End of Document                                                    © 2015 Thomson Reuters. No claim to original U.S. Government Works.

                © 2015 Thomson Reuters. No claim to original U.S. Government Works.                                                  8
                                               Schultz, William 10/26/2015
                                                For Educational Use Only

Circle Ridge Production, Inc. v. Kittrell Family Minerals, LLC, Not Reported in S.W.3d...

                                                                     According to Circle Ridge, genuine issues of material fact
                                                                     exist concerning the date of forfeiture and whether Circle
                  2013 WL 3781367
                                                                     Ridge was entitled to receive reimbursement for good-faith
    Only the Westlaw citation is currently available.
                                                                     improvements. Finally, Circle Ridge argues the trial court
          SEE TX R RAP RULE 47.2 FOR                                 erred in awarding Kittrell attorney's fees.
    DESIGNATION AND SIGNING OF OPINIONS.
                                                                     We affirm in part and reverse in part concluding (1) the
                 Court of Appeals of Texas,                          trial court rendered judgment on grounds that were supported
                        Texarkana.                                   by the summary judgment motions, (2) strict compliance
                                                                     occurred, (3) the untimely tender of overriding royalties did
   CIRCLE RIDGE PRODUCTION, INC., Appellant
                                                                     not excuse Circle Ridge's breach, (4) the untimely request
                     v.                                              for a division order did not excuse Circle Ridge's breach,
   KITTRELL FAMILY MINERALS, LLC, Appellee.                          (5) the trial court did not err in awarding attorney's fees, (6)
                                                                     genuine issues of material fact exist concerning the date of
        No. 06–13–00009–CV. | Submitted
                                                                     forfeiture, (7) the trial court erred in concluding Circle Ridge
       May 15, 2013. | Decided July 17, 2013.                        committed trespass, and (8) the trial court erred in failing
                                                                     to effectuate Kittrell's concession that Circle Ridge could
On Appeal from the 241st District Court, Smith County,
                                                                     recover the personal property at the well site.
Texas, Trial Court No. 12–0107–C. Jack Skeen Jr., Judge.

Attorneys and Law Firms
                                                                     I. Background Facts
Roger W. Anderson, Gillen & Anderson, PC, Tyler, TX, for             On May 15, 2009, Kittrell, then the owner of the mineral
appellant.                                                           lease, assigned the lease to Circle Ridge. The assignment
                                                                     reserved an overriding royalty interest as follows:
Clark C. Hampe Jr., James S. Robertson, Jr., Wilson,
Robertson & Cornelius, PC, Tyler, TX, for appellee.                               Commencement of overriding royalty
                                                                                  payments shall not be delayed beyond
Before MORRISS, C.J., CARTER and MOSELEY, JJ.                                     ninety (90) days after the last day of
                                                                                  the month during which production
                                                                                  commences from any well. After
               MEMORANDUM OPINION                                                 the commencement of overriding
                                                                                  royalty payments from any well, all
Memorandum Opinion by Justice CARTER.                                             overriding royalty payable in money
                                                                                  on account of hydrocarbons and
*1 Kittrell Family Minerals, LLC, 1 brought a declaratory                         products associated with hydrocarbons
judgment 2 and conversion suit against Circle Ridge                               produced from such well during
Production, Inc., alleging that Circle Ridge failed to pay the                    each calendar month shall be paid
prescribed overriding royalties even after receiving notice of                    by Assignee's check mailed to the
its failure. Kittrell claimed the failure resulted in a forfeiture                Assignor on or before the last day
of the assignment of an oil and gas lease. The trial court                        of the second succeeding calendar
granted Kittrell's motion for summary judgment. 3                                 month. Such payment shall be
                                                                                  accompanied by a statement showing
Circle Ridge argues that the trial court erred in granting                        the gross amount of oil produced
summary judgment on grounds not addressed in Kittrell's                           since the last report and the gross
motion, Kittrell failed to provide notice in strict compliance                    production of all dry gas, residue gas,
with the assignment, and the lack of a signed division                            casinghead gas and other products
order excused the nonpayment of the overriding royalty.                           produced from the Leased Premises,

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                                              Schultz, William 10/26/2015
                                               For Educational Use Only

Circle Ridge Production, Inc. v. Kittrell Family Minerals, LLC, Not Reported in S.W.3d...

             or lands pooled therewith, and that                   On August 30, 2011, Kittrell sent Circle Ridge a letter stating,
             which was sold or used for the                        “You are hereby advised that the Assignment is terminated
             manufacture of gasoline and other                     and Circle Ridge has been evicted effective immediately.”
             products, and the market value of                     Circle Ridge continued production and, on September 30,
             oil, dry gas, residue gas, casinghead                 2011, sent Kittrell a letter and a check for $11,241.05. In
             gas and each other product produced                   a letter dated October 4, 2011, Kittrell's attorney returned
             from the Leased Premises. Overriding                  the check stating, Kittrell “remains undecided in its intended
             royalties not paid when due shall bear                course of action with regard to the unpaid royalties....”
             interest at the rate of twelve percent                On November 21, 2011, Kittrell sent Circle Ridge a letter
             (12%) from their due date until paid.                 advising that Kittrell had “terminated the Assignment” and
             If royalty is not paid by such due date,              “locked the gates to the lease” and that continued production
             Assignor may give Assignee written                    would be considered trespassing.
             notice of nonpayment of the overriding
             royalty (via certified mail to addressed
             Assignee at the address shown herein),                II. Standards of Review
             and if Assignor's overriding royalty                  To prevail on a traditional motion for summary judgment,
             is not paid on or before expiration                   a movant must establish that there is no genuine issue
             of sixty (60) days from Assignee's                    as to any material fact and that the movant is entitled to
             receipt of such notice, Assignor may                  judgment as a matter of law. TEX.R. CIV. P. 166a(c); City
             terminate this agreement and evict                    of Houston v. Clear Creek Basin Auth., 589 S.W.2d 671
             Assignee forthwith.                                   (Tex.1979); Baubles & Beads v. Louis Vuitton, S.A., 766
                                                                   S.W.2d 377, 379 (Tex.App.-Texarkana 1989, no writ). The
 *2 The assignment specified that Circle Ridge's address was       defendant must conclusively negate at least one element
“300 East Northside Dr., Fort Worth, Texas 76106.” The             of each of the plaintiff's theories of recovery or plead
assignment was filed with the County Clerk of Smith County         and conclusively establish each element of an affirmative
on June 11, 2009.                                                  defense. Sci. Spectrum, Inc. v. Martinez, 941 S.W.2d 910,
                                                                   911 (Tex.1997). Because the movant bears the burden of
The lease was pooled on September 22, 2009, and production         proof, all conflicts in the evidence are disregarded, evidence
began on the pooled unit in February 2010. Having received         favorable to the nonmovant is taken as true, and all doubts as
no payments for its overriding royalty interest, Kittrell sent     to the genuine issues of material fact are resolved in favor of
a letter to Circle Ridge on April 27, 2011, to “300 East           the nonmovant. Nixon v. Mr. Prop. Mgmt. Co., 690 S.W.2d
Northside Dr., Fort Worth, Texas 76164–9234” demanding             546, 548–49 (Tex.1985); see Limestone Prods. Distrib., Inc.
payment within sixty days. Despite having a different zip          v. McNamara, 71 S.W.3d 308, 311 (Tex.2002); Rhone–
code than the one listed in the assignment, the letter was         Poulenc, Inc. v. Steel, 997 S.W.2d 217, 223 (Tex.1999). A
received by Circle Ridge at 300 East Northside Drive in            motion for summary judgment must stand on its own merits,
Fort Worth, Texas, on April 29, 2011. On July 14, 2011,            and the nonmovant may argue on appeal that the movant's
Kittrell sent a second letter demanding payment to “300 East       summary judgment proof is insufficient as a matter of law,
Northside Dr., Fort Worth, Texas 76106[,]” but this letter only    even if the nonmovant filed no response to the motion. See
provided five days for payment.                                    M.D. Anderson Hosp. & Tumor Inst. v. Willrich, 28 S.W.3d
                                                                   22, 23 (Tex.2000).
Circle Ridge's first response was a letter dated August 9,
2011. Shortly thereafter, Circle Ridge sent Kittrell a division
order dated August 11, 2011. In his summary judgment               III. The Trial Court Rendered Judgment on Grounds
affidavit, Scott Kittrell, manager for Kittrell Family Minerals,   Supported by the Summary Judgment Motions
LLC, stated he refused to sign the division order because the       *3 As noted above, Circle Ridge argues the trial court
royalties had not been paid within sixty days of the notice and    granted summary judgment on grounds not addressed by
the division order contained an incorrect ownership interest.      Kittrell's motion. 4 Circle Ridge alleges the motion for

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                                             Schultz, William 10/26/2015
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Circle Ridge Production, Inc. v. Kittrell Family Minerals, LLC, Not Reported in S.W.3d...

summary judgment failed to address its counterclaims for
mitigation of damages, breach of warranty of title, breach of
                                                                  IV. Strict Compliance Occurred
contract, and conversion. 5
                                                                  Circle Ridge argues strict compliance with the terms of
                                                                  the assignment did not occur because the first notice
Kittrell's summary judgment motion addressed the breach
                                                                  contained an incorrect zip code. Kittrell responds that strict
of contract and conversion claims. Circle Ridge's breach of
                                                                  compliance occurred because the notice was received at the
contract claims were resolved when the trial court found,
                                                                  correct location. Kittrell alternatively argues only substantial
as addressed below, strict compliance with the forfeiture
                                                                  compliance was required or actual notice with lack of
provision had occurred. The conversion claim concerned the
                                                                  prejudice is sufficient.
personal property left at the well site 6 and is also discussed
below.                                                            Texas cases have consistently required strict compliance for
                                                                  the termination or forfeiture of an interest in a mineral estate.
Breach of warranty of title was not asserted as a counterclaim    “[I]f the lease contains a provision giving the lessee a right of
or mentioned in Circle Ridge's amended answer. It was             notice of any breach or default before declaring any forfeiture,
first mentioned in Circle Ridge's motion for new trial. In        it must be ‘literally complied with.’ ” Vinson Minerals, Ltd.
its response to Circle Ridge's motion for new trial, Kittrell     v. XTO Energy, Inc., 335 S.W.3d 344, 354 (Tex.App.-Fort
objected to the lack of any pleading on the breach of             Worth 2010, pet. denied) (quoting Coastal Oil & Gas Corp. v.
warranty of title. Because Circle Ridge failed to plead this      Roberts, 28 S.W.3d 759, 763 (Tex.App.-Corpus Christi 2000,
counterclaim, the motion for summary judgment was not             pet. granted, judgm't vacated w.r.m.)).
required to address it.
                                                                   *4 Several cases illustrate the literal compliance
Although Circle Ridge pled in its first amended answer that       requirement. When the lease required a thirty-day written
“KITTRELL has failed to mitigate its damages,” Circle Ridge       notice of breach but only a twenty-five-day notice was
failed to allege any facts supporting this bare allegation.       given, literal compliance was not shown. Deace v. Stribling,
Assuming, without deciding, that this minimal allegation was      142 S.W.2d 564, 567 (Tex.Civ.App.-Austin 1940, no writ).
sufficient to give fair notice and assuming, without deciding,    Likewise, when a lease required the notice to “fully describe”
Kittrell waived any defect by failing to specially except, 7      the breach or default, literal compliance was not demonstrated
Circle Ridge failed to assert this affirmative defense 8          by a demand for “an unspecified amount to be paid by
in its summary judgment response. Because mitigation of           an unspecified time for unspecified claims or charges.”
damages is an affirmative defense, Circle Ridge had the           Vinson Minerals, Ltd., 335 S.W.3d at 357; see XTO Inc. v.
obligation to raise it in its summary judgment response and to    Pennebaker, No. 07–10–00396–CV, 2011 Tex.App. LEXIS
present summary judgment evidence. KPMG Peat Marwick              10194, at *9, 2011 WL 6846196 (Tex.App.-Amarillo Dec.29,
v. Harrison Cnty. Hous. Fin. Corp., 988 S.W.2d 746, 749           2011, no pet.) (mem.op.) (failure to file affidavit as required
(Tex.1999). “A mere pleading does not satisfy either burden.”     by forfeiture clause). These cases involve the question of
Id. at 749–50. Circle Ridge's response does not raise the issue   whether the content of the notice was timely and specific and
of mitigation of damages. Thus, Circle Ridge failed to carry      properly complied with the lease requirements.
its burden to both assert the affirmative defense of mitigation
of damages and support it with summary judgment evidence.         This lease, undisputedly, contains a forfeiture clause. Circle
See id.                                                           Ridge does not argue that it did not receive notice of the
                                                                  default from Kittrell. Further, there is no argument that the
The summary judgment motions addressed the contract and           content of the notice did not give fair or proper warning
conversion claims. Circle Ridge failed to plead warranty          of the breach. Instead, the only argument is that the notice
of title and failed to assert mitigation of damages in            was not addressed with the proper mailing zip code. Circle
its response. Circle Ridge's complaint that the trial court       Ridge has cited no authority that an error in a zip code
rendered summary judgment on grounds not alleged in the           prevented strict compliance. The Tyler Court of Appeals has
summary judgment motion is overruled.                             suggested strict compliance, albeit in a different context, can

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                                               Schultz, William 10/26/2015
                                                For Educational Use Only

Circle Ridge Production, Inc. v. Kittrell Family Minerals, LLC, Not Reported in S.W.3d...

be established despite the absence of a zip code. See Reese         Assignee at the address shown herein.” Strict compliance was
v. Commissioners' Court of Cherokee Cnty., 861 S.W.2d               required with the forfeiture clause, not the entire assignment.
281, 284 (Tex.App.-Tyler 1993, no pet.). The Tyler court            The forfeiture clause required actual notice at the address
rejected the argument that the absence of the proper zip code       specified in the lease, and the record conclusively establishes
prevented strict compliance. The court reasoned, because            Circle Ridge received actual notice at the exact address,
the zip code's absence did not interfere with any possible          including zip code, specified in the Assignment.
verification efforts, the absence did not invalidate a petition
signature under the Texas Election Code. Id.                        We conclude that strict compliance has been shown. We
                                                                    affirm the portion of the summary judgment finding strict
Circle Ridge argues that Reese is distinguishable because it        compliance occurred.
concerns statutory compliance. Except for certain statutory
exceptions, 9 strict compliance is required under the Election
                                                                    V. The Untimely Tender of Overriding Royalties Did
Code. See In re Triantaphyllis, 68 S.W.3d 861, 868
                                                                    Not Cure Circle Ridge's Breach
(Tex.App.-Houston [14th Dist.] 2002, orig. proceeding).
                                                                    Circle Ridge alternatively argues the forfeiture clause was not
                                                                    breached because it tendered the royalties on September 30,
Similar to Reese, the zip code in this case was superfluous.
                                                                    2011. Because the lease had not been terminated, Circle Ridge
Circle Ridge does not contend there are two physical locations
                                                                    argues the tender of payment prevented any breach.
in Fort Worth, Texas, with an address of 300 East Northside
Drive. The notice was delivered to the exact physical location
                                                                    The assignment required the royalties to be tendered within
specified in the contract including delivery to the specified
                                                                    sixty days—not 154 days. We note Circle Ridge has not
zip code. Although the zip code on the envelope may have
                                                                    pled or argued waiver, ratification, or accord and satisfaction.
been erroneous, the letter was not misdirected to a different
                                                                    Although the re-entry occurred after the royalty payment
location or to an incorrect zip code. The letter was delivered to
                                                                    was tendered, the forfeiture clause was breached when the
Circle Ridge's physical location at 300 East Northside Drive,
                                                                    royalties were not paid sixty days after the first notice. We
Fort Worth, Texas. 10                                               are bound by the language of the Assignment and cannot find
                                                                    the Assignment has implied terms that do not exist in the
By its nature, a zip code is more of an aid to the post office      agreement. See Rogers, 772 S.W.2d at 79. The Assignment
than a part of an address. Indeed, in the not so distant past,      does not place any time limitations or other conditions on
zip codes did not even exist. The zip code of a particular          exercising the right to terminate. Once the breach of the
street address may change over time. Further, we note the post      forfeiture clause occurred, Kittrell had the right to terminate
office has added an additional four numbers (referred to as         the lease.
ZIP+4) to the traditional five-digit zip codes. The zip code in
the assignment does not contain the additional four numbers,        Because the royalties were not tendered within sixty days of
whereas, the zip code to which the notice was addressed does.       the notice, Kittrell's right to terminate the Assignment was not
                                                                    affected. The parties could have contracted for the right of
 *5 The zip code's superfluous nature is reinforced by the          reversion to be relinquished if the royalties were paid prior to
language of the forfeiture clause. While the assignment             the Assignor exercising his right, under the forfeiture clause,
requires the notice to be mailed to the specified address,          to terminate the assignment. The Assignment, though, does
the forfeiture clause is focused on actual notice. The              not provide for such a relinquishment, and we are prohibited
forfeiture clause provides, “[I]f Assignor's overriding royalty     from inferring such a term. Circle Ridge's argument is
is not paid on or before expiration of sixty (60) days              overruled.
from Assignee's receipt of such notice, Assignor may
terminate....” (Emphasis added.) By focusing on the receipt
of actual notice as the event that establishes the sixty-day        VI. The Untimely Request for a Division Order Did Not
deadline, the forfeiture clause decreases the importance of         Excuse Circle Ridge's Breach
the earlier requirement that the notice be sent “to addressed

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Circle Ridge Production, Inc. v. Kittrell Family Minerals, LLC, Not Reported in S.W.3d...

Additionally, Circle Ridge argues its request for a division          has agreed in a memorandum opinion. See Jones v. Clem,
order on August 11, 2011, excused the breach of the forfeiture        No. 11–10–00123–CV, 2012 Tex.App. LEXIS 2473, 2012
clause on June 28, 2011. Circle Ridge claims that because             WL 1069168 (Tex.App.-Eastland Mar. 29, 2012, no pet.)
it had a right to suspend payments of royalties pending               (per curiam) (mem.op.) (“[I]n order to rely upon a division
the execution of a division order 11 and a division order             order, Jones had the obligation to submit it to the payees for
was requested before the termination of the Assignment, the           signature.”). We agree with the San Antonio and Eastland
lease did not terminate. Kittrell responds that Circle Ridge's        Courts of Appeals. Circle Ridge had the burden to draft the
argument is incorrect because the division order was not              division order and submit it to Kittrell. Because Circle Ridge
requested until after the forfeiture clause had been breached         failed to submit any division order to Kittrell until after the
and the division order contained incorrect terms. We agree            forfeiture clause had been breached, the lack of a division
that a division order, submitted after the breach of a forfeiture     order did not excuse the non-payment.

clause, does not excuse the breach. 12
                                                                      VII. Circle Ridge Has Not Established the Attorney's
 *6 A division order is “merely the mechanism for payment             Fees Award Was Error
to a payee of its share of oil and gas proceeds.” Prize               Circle Ridge challenges the award of attorney's fees to Kittrell
Energy Res., L.P. v. Cliff Hoskins, Inc., 345 S.W.3d 537,             in four ways: (1) the fees were not supported by a designated
560 (Tex.App.-San Antonio 2011, no pet.). Division orders             expert, (2) the fees were not substantiated with hourly time
are viewed as agreements between the parties. See Cabot               records, (3) the fees were not segregated, and (4) the evidence
Corp. v. Brown, 754 S.W.2d 104, 107–08 (Tex.1987); see                to support an award of attorney's fees is conclusory.
also TEX. NAT. RES.CODE ANN. § 91.401(3) (West 2011)
(“ ‘Division order’ means an agreement signed by the payee            Circle Ridge argues that “[a] party may not recover attorneys'
directing the distribution of proceeds....”). “Although division      fees when they have failed to designate an expert witness
orders do not supplant the lease contract,” division orders           with regard to such claim [,]” citing E.F. Hutton & Co. v.
are binding until revocation. Cabot Corp., 754 S.W.2d at              Youngblood, 741 S.W.2d 363, 364 (Tex.1987). Youngblood
107–08; cf. Heritage Res. v. Nationsbank, 939 S.W.2d 118,             merely held that an expert witness on attorney's fees must
123 (Tex.1996) (under unjust enrichment theory, operator is           be designated as an expert witness similar to other expert
liable, if division order differs from lease, for amount it retains   witnesses. Id. The Texas Supreme Court has approved of the
but not for any amounts paid to others).                              procedure of using affidavits of the party's attorney to prove
                                                                      attorney's fees. See Tex. Commerce Bank v. New, 3 S.W.3d
As noted above, the division order was not requested until            515, 517 (Tex.1999).
after the forfeiture clause had been breached. The overriding
royalty payments were due on or before June 28, 2011, but              *7 Further, the failure to designate a testifying expert is
the division order contains an effective date of July 1, 2011,        a defect of form about which an appellant must object and
and was dated August 11, 2011. Thus, the division order did           on which he must obtain a ruling to preserve error. Expro
not exist until 104 days after receipt of notice and did not          Ams., LLC v. Sanguine Gas Exploration, LLC, 351 S.W.3d
even attempt to govern royalty payments during the sixty days         915, 919–20 (Tex.App.-Houston [14th Dist.] 2011, pet.
following receipt of notice. Circle Ridge does not specify how        denied); Duncan–Hubert v. Mitchell, 310 S.W.3d 92, 102,
its breach is excused by the issuance of a division order after       105 (Tex.App.-Dallas 2010, pet. denied). Although Circle
the relevant time period.                                             Ridge objected in its response, Circle Ridge has directed us to
                                                                      no trial court ruling and our own review has located no such
The San Antonio Court of Appeals has held the Texas Natural           ruling on the objection.
Resources Code “places the burden on the payor to submit
a division order to the payee for its signature; it is not the        Additionally, Kittrell notes it filed an amended discovery
royalty owner or mineral interest owner's burden to draft its         response designating its expert and thereby eliminated any
own division order, sign it, and submit it to the payor.” Prize       surprise or prejudice. This amended discovery response was
Energy Res., L.P., 345 S.W.3d at 560. The Eastland Court              filed on August 10, 2012, twenty-five days before the hearing

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                                              Schultz, William 10/26/2015
                                               For Educational Use Only

Circle Ridge Production, Inc. v. Kittrell Family Minerals, LLC, Not Reported in S.W.3d...

and two months prior to the entry of summary judgment.             readily controverted. New Times, Inc. v. Isaacks, 146 S.W.3d
Circle Ridge directs us to no evidence of surprise or prejudice.   144, 163 (Tex.2004); Casso v. Brand, 776 S.W.2d 551, 558
                                                                   (Tex.1989). Following the Texas Supreme Court's opinion
Circle Ridge argues the evidence is insufficient because it        in Garcia, we conclude Kittrell's uncontroverted affidavit
did not include “any time records supporting the hours the         constitutes sufficient evidence.
attorneys claim to have spent on the case.” Circle Ridge did
not make this objection in its response, and error has not been     *8 We overrule all of Circle Ridge's complaints concerning
preserved. See TEX.R.APP. P. 33.1. Even if error had been          attorney's fees.
preserved, we disagree that time records were required. In
El Apple I, Ltd. v. Olivas, 370 S.W.3d 757, 760 (Tex.2012),
cited by Circle Ridge, the Texas Supreme Court discussed           VIII. Genuine Issues of Material Fact Exist Concerning
in detail the lodestar method for calculating attorney's fees      the Date of Termination
based on hourly time records. Id. While the Texas Supreme          Kittrell argues that because its August 30, 2011, letter
Court recognized the lodestar method as the required method        unambiguously communicated an intent to terminate the
for claims under Section 21.259(a) of the Texas Commission         Assignment, the Assignment terminated on August 30, 2011.
on Human Rights Act and in class-action lawsuits, the              Circle Ridge claims the “remains undecided” language of the
opinion does not require the lodestar method in other types        October 4, 2011, letter is some evidence that the Assignment
of lawsuits. See id. The Dallas Court of Appeals has held that     was not terminated on August 30 but on November 21, 2011,
“there is no rigid requirement” of hourly time records and has     and argues, “[A]n effective notice simply gave Kittrell the
affirmed attorney's fees awards without hourly time records.       right to evict Circle Ridge at some later date.”
See Brockie v. Webb, 244 S.W.3d 905, 909 (Tex.App.-Dallas
2008, pet. denied). We agree with the Dallas Court of Appeals      The first step in the analysis is to determine whether
that time records are not an indispensible element in the          the disputed contract provision is a condition subsequent,
calculation of reasonable attorney's fees.                         a special limitation, or a covenant. 16 Vinson Minerals,
                                                                   Ltd., 335 S.W.3d at 354 n. 12; see W.T. Waggoner Estate
Circle Ridge also complains about the failure to segregate         v. Sigler Oil Co., 118 Tex. 509, 19 S.W.2d 27, 31
attorney's fees. 13 This objection was made in its response,       (Tex.1929); Blackmon v. XTO Energy, Inc., 276 S.W.3d
but we have not been directed to where Circle Ridge obtained       600, 605 (Tex.App.-Waco 2008, no pet.). In making this
                                                                   determination, we cannot add terms, and “doubts should be
a ruling to preserve error on this issue. 14 Cont'l Dredging,
                                                                   resolved in favor of a covenant instead of a condition.” Rogers
Inc. v. De–Kaizered, Inc., 120 S.W.3d 380, 397 (Tex.App.-
                                                                   v. Ricane Enters., Inc., 772 S.W.2d 76, 79 (Tex.1989). A
Texarkana 2003, pet. denied); see Dulong v. Citibank (S.D.),
                                                                   special limitation divests the grantee automatically. Field v.
N.A., 261 S.W.3d 890, 893 (Tex.App.-Dallas 2008, no pet.)
                                                                   Shaw, 535 S.W.2d 3, 5 (Tex.App.-Amarillo 1976, no writ).
(“[T]o preserve error on objections to summary judgment
                                                                   A condition subsequent gives grantor the right to terminate
evidence, the complainant must secure a ruling on her
                                                                   the leasehold estate upon the occurrence of an event but must
objection.”). Further, Kittrell filed an amended affidavit in
                                                                   be exercised by re-entry. Id.; Eyssen v. Zeppa, 100 S.W.2d
response to this objection claiming seventy-five percent of the
                                                                   417 (Tex.Civ.App.-Texarkana 1936, writ ref'd); Gutierrez v.
attorney's fees concerned the declaratory judgment. 15             Rodriguez, 30 S.W.3d 558, 560 (Tex.App.-Texarkana 2000,
                                                                   no pet.). Except in extraordinary circumstances, a covenant
Finally, Circle Ridge argues, “Kittrell's summary judgment         only subjects the breaching party to monetary damages. See
evidence consisted only of broad conclusory statements.”           Anadarko Petroleum Corp. v. Thompson, 94 S.W.3d 550, 560
The Texas Supreme Court, though, has recently held an              (Tex.2003); Rogers, 772 S.W.2d at 79.
affidavit is not conclusory merely because it lacks specifics
and, if uncontroverted, can be sufficient evidence. Garcia         As argued by Circle Ridge, an overriding royalty is normally
v. Gomez, 319 S.W.3d 638, 641 (Tex.2010). As held in               considered a covenant and does not result in forfeiture. See
Garcia, summary judgment can be granted on the testimony           Vinson Minerals, 335 S.W.3d at 354. “ ‘[F]ew leases are
of an interested witness if the testimony could have been          found in which the nonpayment of royalty is a condition

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                                               Schultz, William 10/26/2015
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Circle Ridge Production, Inc. v. Kittrell Family Minerals, LLC, Not Reported in S.W.3d...

subsequent and rarer still is the lease in which it operates as a      to the possibility of reverter in the lessor/grantor. The
special limitation.’ ” Blackmon, 276 S.W.3d at 606 (quoting            lessee's/grantee's interest is “determinable” because it may
Linton E. Barbee, The Lessor's Remedies for Nonpayment of              terminate and revert entirely to the lessor/grantor upon the
Royalty, 45 TEX. L.REV. 132, 159 (1966)).                              occurrence of events that the lease specifies will cause
                                                                       termination of the estate.
The assignment of the lease in this case, though, contains a           Natural Gas Pipeline Co. of Am. v. Pool, 124 S.W.3d
clause not contained in most leases. The clause provides:              188, 192 (Tex.2003) (citations omitted). As noted above,
                                                                       a condition subsequent only terminates an oil and gas
             Assignor may give Assignee written                        lease upon re-entry or the filing of a lawsuit seeking re-
             notice of nonpayment of the                               entry. Vinson Minerals, Ltd., 335 S.W.3d at 354; see W.T.
             overriding royalty (via certified mail                    Waggoner Estate, 19 S.W.2d at 31.
             to addressed Assignee at the address                   Kittrell has failed to establish as a matter of law that the lease
             shown herein.), and if Assignor's                      terminated on August 30, 2011, because at that time, there had
             overriding royalty is not paid on
                                                                    been no re-entry. 19 “Under Texas summary judgment law,
             or before expiration of sixty (60)
                                                                    the party moving for summary judgment carries the burden
             days from Assignee's receipt of
                                                                    of establishing that no material fact issue exists and that it is
             such notice, Assignor may terminate
                                                                    entitled to judgment as a matter of law.” Willrich, 28 S.W.3d
             this agreement and evict Assignee
                                                                    at 23 (noting “the nonmovant need not respond to the motion
             forthwith.
                                                                    to contend on appeal that the movant's summary judgment
Because this term provides for termination, the clause must         proof is insufficient as a matter of law to support summary
be either a condition subsequent or a special limitation            judgment.”). While Kittrell had declared the assignment
rather than a covenant. The clause makes the termination            terminated, no re-entry had yet occurred and no lawsuit had
discretionary with the Assignor. The use of the word “may”          been filed. Re-entry did not occur until Kittrell locked the
indicates the Assignor has discretion to either exercise the        gates and prevented Circle Ridge from continuing to produce.
right or not to exercise the right. Because the Assignor
must exercise the right to effectuate a termination, the plain      The trial court erred in finding that the forfeiture occurred
language of the clause establishes that it is a condition           on August 30, 2011. Kittrell's November 21, 2011, letter
subsequent. Although “[c]ourts will not declare a forfeiture        confirms the re-entry had recently occurred, but does not
unless they are compelled to do so by language which can be         specify the exact date of re-entry. We agree with Circle Ridge
                                                                    that genuine issues of material fact exist concerning the date
construed in no other way,” 17 the clause in this lease is clear
                                                                    of termination.
and precise and can be construed in no other way than to be
a condition subsequent.
                                                                    IX. The Record Conclusively Establishes that Circle
 *9 The termination of the Assignment in this case is not just      Ridge Did Not Trespass
a contract dispute but rather a reversion of an interest in real    Circle Ridge also contends the trial court erred in concluding
property. 18 As explained by the Texas Supreme Court:               as a matter of law that Circle Ridge was a bad-faith
                                                                    trespasser 20 and in awarding Kittrell trespass damages. We
                                                                    agree. As discussed above, the Assignment terminated upon
  In Texas it has long been recognized that an oil and
                                                                    Kittrell's re-entry. The record conclusively establishes that
  gas lease is not a “lease” in the traditional sense of
                                                                    Circle Ridge did not conduct activities on the lease after
  a lease of the surface of real property. In a typical
                                                                    Kittrell's re-entry. The trial court erred in awarding Kittrell
  oil or gas lease, the lessor is a grantor and grants
                                                                    trespass damages. Although entitled to recover its overriding
  a fee simple determinable interest to the lessee, who
                                                                    royalty interest from August 30, 2011, until the date of re-
  is actually a grantee. Consequently, the lessee/grantee
                                                                    entry, Kittrell is not entitled to recover trespass damages.
  acquires ownership of all the minerals in place that
  the lessor/grantor owned and purported to lease, subject

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Circle Ridge Production, Inc. v. Kittrell Family Minerals, LLC, Not Reported in S.W.3d...

                                                                  tendering of royalty payments more than sixty days after
X. The Trial Court's Failure to Recognize Kittrell's
Concession on Personal Property and Well Casing Was               notice did not excuse the non-payment. 22 We reject Circle
Error                                                             Ridge's argument that the summary judgment was rendered
 *10 Circle Ridge claims the trial court committed reversible     on grounds not contained in the summary judgment motion
error by refusing to permit the removal of its personal           and that the award of attorney's fees to Kittrell was improper.
property from the well site. In its motion for summary            We affirm the trial court's award of $7,576.75 in overriding
judgment, Kittrell agreed that Circle Ridge had the right         royalty proceeds and $8,166.00 in attorney's fees.
to remove its equipment other than the well casing and
agreed to pay salvage value for the well casing. Circle Ridge     The trial court, though, erred in determining that the forfeiture
complained in its response that it had been denied access “to     occurred on August 30, 2011. The forfeiture occurred when
its personal property and equipment on the lease. The value of    Kittrell re-entered the property on or about November 21,
such personal property and equipment exceeds $100,000.00.”        2011. Genuine issues of material fact exist concerning the
                                                                  exact date of re-entry. The record, however, conclusively
We agree with Circle Ridge that the trial court erred in          establishes that Circle Ridge did not continue activities on the
failing to award Circle Ridge the right to recover its personal   lease after Kittrell's re-entry. Therefore, the trial court erred
                                                                  in awarding damages for trespass. We reverse the trial court's
property remaining at the well site 21 and, if the well casing
                                                                  award to Kittrell as trespass damages of $45,960.62 in lease
cannot be removed without damaging the well, damages in
                                                                  proceeds and $9,380.00 for the value of the oil in the tanks.
the amount of the market value of the well casing minus
                                                                  We remand the case to the trial court for the limited purpose
the cost of removal. See Moore, 261 S.W.3d at 428; Fike v.
                                                                  of determining the exact date of re-entry and calculating the
Riddle, 677 S.W.2d 722, 727 (Tex.App.-Tyler 1984, no writ).
                                                                  amount of the overriding royalty owed Kittrell from August
On remand, the trial court should order return of the personal
                                                                  30, 2011, until the date of re-entry. On remand, the trial court
property belonging to Circle Ridge at the well site and, if
                                                                  should give effect to Kittrell's concession that Circle Ridge
removal would damage the well, damages for the well casing.
                                                                  is entitled to the personal property located at the well site,
                                                                  including the 113 barrels of oil, and, if the well casing cannot
XI. Conclusion                                                    be removed without damaging the well, should determine the
We affirm the judgment of the trial court in part and reverse     value Kittrell owes Circle Ridge for the well casing.
in part. We affirm the summary judgment determining that
(1) Circle Ridge breached the forfeiture clause, (2) Kittrell
provided notice in strict compliance with the Assignment,         All Citations
(3) the lease was forfeited, (4) the lack of a division order     Not Reported in S.W.3d, 2013 WL 3781367
did not excuse Circle Ridge's non-payment, and (5) the

Footnotes
1      Originally appealed to the Tyler Court of Appeals, this case was transferred to this Court by the Texas Supreme Court
       pursuant to its docket equalization efforts. See TEX. GOV'T CODE ANN. § 73.001 (West 2013). As a transfer case, we
       are required to apply the precedent of the Tyler Court of Appeals to the extent it may differ from our precedent. See
       TEX.R.APP. P. 41.3.
2      Except for boundary line disputes, a trespass to try title claim is the exclusive method in Texas for adjudicating disputed
       claims of title to real property, and, such claims cannot be brought as declaratory judgments. See Tex. Parks & Wildlife
       Dep't v. Sawyer Trust, 354 S.W.3d 384 (Tex.2011). The Tyler Court of Appeals has held that when no objections or
       special exceptions are made to a lawsuit being brought as a declaratory judgment, the error, if any, in failing to bring
       the action as a trespass to try title has been waived. See Cabot Oil & Gas Corp. v. Healey, L.P., No. 12–11–00236–CV,
       2013 Tex.App. LEXIS 3934, 2013 WL 1282007 (Tex.App.-Tyler Mar.28, 2013, no pet. h.) (mem.op.) (failure to specially
       except waived any error in bringing lawsuit as declaratory judgment instead of trespass to try title).
3      We note Kittrell's motion fails to specify whether it is a traditional or no-evidence motion for summary judgment. Circle
       Ridge treated the motion as a traditional motion for summary judgment. Because Kittrell had the burden of proof, we have

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Circle Ridge Production, Inc. v. Kittrell Family Minerals, LLC, Not Reported in S.W.3d...

       also treated the motion as a traditional motion for summary judgment. Although the Texas Supreme Court has approved of
       filing combination summary judgment motions, the better practice is to clearly delineate which type of summary judgment
       is being sought. Binur v. Jacobo, 135 S.W.3d 646, 650–51 (Tex.2004); Holloway v. Tex. Elec. Util. Constr., Ltd., 282
       S.W.3d 207, 213 n. 3 (Tex.App.-Tyler 2009, no pet.) (“[T]the better practice is to file two separate motions.”).
4      A summary judgment can only be affirmed on grounds specifically presented to the trial court in the summary judgment
       motion. TEX.R.APP. P. 33.1; TEX.R. CIV. P. 166a(c); see Clear Creek Basin Auth., 589 S.W.2d at 677; Driskill v. Ford
       Motor Co., 269 S.W.3d 199, 206 (Tex.App.-Texarkana 2008, no pet.).
5      In its brief, Circle Ridge implies the judgment is not “final and appealable.” At oral argument, counsel clarified that the
       argument was that the trial court erred in granting a judgment without disposing of all issues and causes of action, not
       that the judgment was not final. We find the judgment is final and appealable, and this opinion will address Circle Ridge's
       claims that the trial court committed error in entering this judgment.
6      Circle Ridge's amended answer and counterclaim merely contains a single sentence under the heading XVI which
       provides, “The conduct of KITTRELL constitutes conversion.” Other than the request for return of personal property left
       at the well site, Circle Ridge failed to allege any facts in support of its conversion counterclaim. The sufficiency of the
       pleadings is judged based on whether they provide the opponent with fair and adequate notice. Roark v. Allen, 633
       S.W.2d 804, 809–10 (Tex.1982); Burke v. Union Pac. Res. Co., 138 S.W.3d 46, 66–67 (Tex.App.-Texarkana 2004, pet.
       denied). “Fair notice” requires that an opposing attorney of reasonable competence can ascertain the nature and basic
       issues of the controversy. Marin v. IESI TX Corp., 317 S.W.3d 314, 332 (Tex.App.-Houston [1st Dist.] 2010, pet. denied);
       Burke, 138 S.W.3d at 67. Kittrell only had fair notice of the request to return personal property. “A party is not required to
       specially except to a pleading defect if it lacks notice of the other party's intent.” Italian Cowboy Partners, Ltd. v. Prudential
       Ins. Co. of Am., 341 S.W.3d 323, 345 (Tex.2011); Taylor v. Taylor, 337 S.W.3d 398, 401 (Tex.App.-Fort Worth 2011, no
       pet.) (failure to specially except did not waive challenge to lack of fair notice retroactive child support was being sought).
7      See TEX.R. CIV. P. 90 (failure to specially except waives any defect of form or substance).
8      Mitigation of damages is an affirmative defense which the breaching party must plead and prove. S & G Associated
       Developers, LLC v. Covington Oaks Condo. Owners Ass'n, 361 S.W.3d 210, 217 (Tex.App.-El Paso 2012, no pet.).
9      The Fourteenth District Court of Appeals noted the Texas Legislature has exempted certain requirements from strict
       compliance including the zip code. We note that in 1997, the Texas Legislature amended the Election Code to provide
       that “[t]he omission of the zip code from the address does not invalidate a signature.” See Act of May 23, 1997, 75th Leg.,
       R.S., ch. 1349, § 52, 1997 Tex. Gen. Laws 5080, 5092 (amended 2005) (current version at TEX. ELEC.CODE ANN. §
       141.063 (West 2010)). The Election Code in effect at the time Reese was decided did not include this exemption. See
       Act of May 9, 1985, 69th Leg., R.S., ch. 211, § 1, 1985 Tex. Gen. Laws 802, 956 (amended 1997) (current version at
       TEX. ELEC.CODE ANN. § 141.063).
10     Circle Ridge argues that the letter was sent to an “incorrect” zip code address. We note that several documents from
       Circle Ridge contain either the 76164 or the 76164–9234 zip code. For instance, the printed check Circle Ridge sent
       to Kittrell on September 29, 2011, has the address listed as 300 East Northside Dr., Fort Worth, TX 76164–9234. In
       addition, the 76164 zip code was used on an August 9, 2011, letter from Circle Ridge to Kittrell, including certain royalty
       check detail statements and billing statements from the law firm of Gillen & Anderson. While it is accurate to state that
       the demand from Kittrell was sent to a different zip code than listed in the assignment, these documents demonstrate
       that zip code number 76164–9234 is not an incorrect zip code for Circle Ridge.
11     The Texas Natural Resources Code permits, under certain circumstances, a payor to condition payment of royalty upon
       receipt of a signed division order. See TEX. NAT. RES.CODE ANN. § 91.402(c)(1) (West 2011).
12     Because Circle Ridge failed to timely request the division order, it is not necessary for us to decide Kittrell's alternative
       argument that an incorrect division order does not excuse nonpayment.
13     A party seeking to recover attorney's fees must segregate those fees attributable to different parties or causes, except
       “when the attorney's fees rendered are in connection with claims arising out of the same transaction and are so interrelated
       that their ‘prosecution or defense entails proof or denial of essentially the same facts.’ ” Stewart Title Guar. Co. v. Sterling,
       822 S.W.2d 1, 11 (Tex.1991) (quoting Flint & Assoc. v. Intercontinental Pipe & Steel, Inc., 739 S.W.2d 622, 624–25
       (Tex.App.-Dallas 1987, writ denied)).
14     Kittrell raised this issue at the summary judgment hearing, but Circle Ridge did not respond and no ruling was obtained.

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Circle Ridge Production, Inc. v. Kittrell Family Minerals, LLC, Not Reported in S.W.3d...

15     Kittrell also filed a motion for leave to file the amended affidavit. In its reply brief, Circle Ridge argues that because there
       is no explicit granting of leave, we must ignore the amended affidavit. The amended affidavit was filed more than twenty-
       one days before the hearing, and, therefore, was not late under Rule 166a(c) of the Texas Rules of Civil Procedure.
       See TEX.R. CIV. P. 166a(c). Because the affidavit was not late, Kittrell did not need leave of the court to file it, and it is
       unnecessary for us to determine whether leave was implicitly granted by the award of attorney's fees consistent with the
       amended affidavit. See Benchmark Bank v. Crowder, 919 S.W.2d 657, 663 (Tex.1996) (presumption leave not granted
       when nothing in record indicates trial court considered late-filed evidence).
16     We recognize neither Kittrell nor Circle Ridge briefs the issue of the type of contract provision in dispute. Both parties,
       though, cite caselaw concerning covenants, special limitations, and conditions subsequent. Some of the differences
       between these cases depend on the type of contract provision in dispute. We are required to address this issue because
       it is necessary to reconcile the various cases cited by the parties. We further note both parties cited Coastal Oil & Gas
       Corp. v. Roberts, 28 S.W.3d 759, 763 (Tex.App.-Corpus Christi 2000, pet. granted, judgm't vacated w.r.m.), in their
       briefs, and Coastal Oil was extensively discussed during oral argument. Coastal Oil has been vacated and is merely
       persuasive authority. See State ex rel. Dishman v. Gary, 163 Tex. 565, 359 S.W.2d 456 (Tex.1962) (orig.proceeding)
       (vacated opinion lacks any precedential value). Because the parties have provided us with other precedents, it is not
       necessary for us to rely on Coastal Oil as persuasive authority.
17     Reilly v. Rangers Mgmt., Inc., 727 S.W.2d 527, 530 (Tex.1987); Vinson Minerals, Ltd., 335 S.W.3d at 354; see Fox v.
       Thoreson, 398 S.W.2d 88, 92 (Tex.1966) (special limitation must be “clear and precise and so unequivocal in nature that
       it can reasonably be given no other meaning”).
18     Kittrell argues that Blackmon is distinguishable from this case because it involved the termination of a lease instead of
       the termination of an assignment. See Blackmon, 276 S.W.3d at 605. An assignment of an oil and gas lease is still a
       transfer of an interest in real property, and we do not believe Blackmon is distinguishable on this basis.
19     The parties have not argued the date of termination depends on when re-entry occurred. Both sides, though, have cited
       cases to this Court and to the trial court which explain the re-entry requirement. Both Circle Ridge and Kittrell cite Rogers,
       772 S.W.2d at 79 on appeal. Circle Ridge also cites Vinson Minerals, 335 S.W.3d at 354, and Blackmon, 276 S.W.3d at
       605. Further, Circle Ridge argued to both the trial court and this Court that the termination did not occur until November
       21, 2011, and also cited Vinson Minerals, 335 S.W.3d at 353, to the trial court.
20     Kittrell argues Circle Ridge was a bad-faith trespasser as a matter of law because Circle Ridge continued to produce
       after receiving its August 30, 2011, letter announcing the lease was terminated. This Court and the San Antonio Court
       of Appeals have held that a producer who continues activities on the property after the filing of a lawsuit is a bad-faith
       trespasser as a matter of law. See Moore v. Jet Stream Invs., Ltd., 261 S.W.3d 412, 428 (Tex.App.-Texarkana 2008,
       pet. denied); Mayfield v. De Benavides, 693 S.W.2d 500, 504 (Tex.App.-San Antonio 1985, writ ref'd n.r.e.). There was
       no lawsuit pending at any time Circle Ridge conducted activities on the lease. Further, since our decision in Moore, the
       Texas Supreme Court has held that the ultimate issue is one of equity which should be decided by the trial court using a
       case-by-case equity analysis. Wagner & Brown, Ltd. v. Sheppard, 282 S.W.3d 419, 428 (Tex.2008) (noting examples of
       relevant considerations, including whether termination was intentional, whether there was offer to immediately reinstate
       lease, length of time lease in effect, and whether “denying reimbursement would work a substantial forfeiture”).
21     Although we have deleted the $9,380.00 award for the 113 barrels of oil remaining at the well site as trespass damages,
       we note this oil was the personal property of Circle Ridge. Both parties agree these 113 barrels had been extracted by
       November 21, 2011, and, once removed from the ground, oil is personal property. Since Circle Ridge did not trespass,
       Circle Ridge is entitled to recover possession of the 113 barrels of oil or the value of the 113 barrels of oil. We further
       note Kittrell is entitled to an award of its overriding royalty interest on these barrels.
22     These issues have been fully litigated and determined on appeal. Consequently, the law of the case doctrine prohibits
       re-litigation of these issues on remand. See Briscoe v. Goodmark Corp., 102 S.W.3d 714, 716 (Tex.2003).

End of Document                                                  © 2015 Thomson Reuters. No claim to original U.S. Government Works.

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                                                  Schultz, William 10/26/2015
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El Apple I, Ltd. v. Olivas, 370 S.W.3d 757 (2012)
115 Fair Empl. Prac. Cas. (BNA) 510, 55 Tex. Sup. Ct. J. 954

     KeyCite Yellow Flag - Negative Treatment                           West Headnotes (7)
Declined to Extend by Ferrant v. Graham Associates, Inc.,   Tex.App.-
Fort Worth,   May 8, 2014
                                                                        [1]     Costs
                       370 S.W.3d 757                                               Items and amount; hours; rate
                   Supreme Court of Texas.                                      The determination of what constitutes a
                                                                                reasonable attorney's fee under lodestar method
               EL APPLE I, LTD., Petitioner,
                                                                                of determining amount of fee award involves
                            v.
                                                                                two steps: first, the court must determine the
               Myriam OLIVAS, Respondent.                                       reasonable hours spent by counsel in the case and
                                                                                a reasonable hourly rate for such work, and the
              No. 10–0490. | Argued Sept.
                                                                                court then multiplies the number of such hours
          15, 2011. | Decided June 22, 2012.
                                                                                by the applicable rate, the product of which is the
Synopsis                                                                        base fee or lodestar.
Background: Employee brought action against employer
                                                                                35 Cases that cite this headnote
under Texas Commission on Human Rights Act (TCHRA),
alleging sex discrimination and retaliation. Following jury
trial, the County Court at Law No. 3 of El Paso County, Javier          [2]     Costs
Alvarez, J., entered judgment for employee and awarded                              Items and amount; hours; rate
attorney fees. Employer appealed. The El Paso Court of                          When using lodestar method to determine
Appeals, 324 S.W.3d 181, affirmed as reformed. Review was                       reasonable attorney fee award, court may adjust
granted.                                                                        the base lodestar figure up or down if relevant
                                                                                factors indicate an adjustment is necessary to
                                                                                reach a reasonable fee in the case.
Holdings: The Supreme Court, Medina, J., held that:
                                                                                23 Cases that cite this headnote

[1] affidavits of plaintiff's attorneys were insufficient to
support lodestar determination of attorney fee award, and               [3]     Costs
                                                                                    Discretion of court
[2] as a matter of first impression, application and record                     The award of attorney's fees generally rests in the
for attorney fee award under lodestar method must include                       sound discretion of the trial court.
proof documenting the performance of specific tasks, the time
required for those tasks, the person who performed the work,                    7 Cases that cite this headnote
and his or her specific rate.
                                                                        [4]     Costs
                                                                                    Evidence as to items
Reversed and remanded.
                                                                                A party applying for an award of attorney's
Hecht, J., filed concurring opinion in which Wainwright, J.,                    fees under the lodestar method bears the burden
and Willett, J., joined.                                                        of documenting the hours expended on the
                                                                                litigation and the value of those hours.

                                                                                31 Cases that cite this headnote

                                                                        [5]     Civil Rights

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                                            Schultz, William 10/26/2015
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El Apple I, Ltd. v. Olivas, 370 S.W.3d 757 (2012)
115 Fair Empl. Prac. Cas. (BNA) 510, 55 Tex. Sup. Ct. J. 954
             Employment practices
                                                               Attorneys and Law Firms
        Affidavits of plaintiff employee's attorneys were
        insufficient to support lodestar determination of       *758 David R. Pierce, The Law Office of David Pierce,
        attorney fee award in sex discrimination and           Joseph L. Hood Jr., Windle Hood Alley Norton Brittain & Jay
        retaliation action under Texas Commission on           LLP, El Paso, TX, for El Apple I, Ltd.
        Human Rights Act; affidavits did not indicate
        how many hours that attorneys spent on case            Francisco X. Dominguez, Dominguez & Coyle PLLC, Daniel
        were devoted to any particular task or category        Salvador Gonzalez, John P. Mobbs, Attorneys at Law, El
        of tasks, and attorneys' time estimates were not       Paso, TX, for Myriam Olivas.
        based on time records or other documentary
        evidence that would allow for meaningful review        Clara B. Burns, Kemp Smith LLP, El Paso, TX, for Amicus
        of claim for fees. V.T.C.A., Labor Code §              Curiae Texas Association of Business.
        21.259(a).
                                                               Opinion
        19 Cases that cite this headnote
                                                               Justice MEDINA delivered the opinion of the Court.

 [6]    Costs                                                  In this appeal, we consider the calculation of an attorney's
            Evidence as to items                               fee award in an employment discrimination and retaliation
                                                               suit brought pursuant to the Texas Commission on Human
        When applying for a fee under the lodestar
                                                               Rights Act (TCHRA). The TCHRA includes a fee-shifting
        method, the applicant must provide sufficient
                                                               provision that allows a prevailing party to recover reasonable
        details of the work performed before the court
                                                               attorney's fees as part of *759 the costs of pursuing the
        can make a meaningful review of the fee request;
                                                               claim. To calculate attorney's fees under the TCHRA, Texas
        for the purposes of lodestar calculations, this
                                                               courts utilize the lodestar method, that is, the number of
        evidence includes, at a minimum, documentation
                                                               hours worked multiplied by the prevailing hourly rates. If
        of the services performed, who performed
                                                               the lodestar does not reflect a reasonable fee, a multiplier
        them and at what hourly rate, when they
                                                               may be applied. In this case, the court of appeals affirmed
        were performed, and how much time the work
                                                               an attorney's fee award, applying a multiplier that doubled
        required.
                                                               the base lodestar amount. 324 S.W.3d 181 (Tex.App.-El Paso
        20 Cases that cite this headnote                       2010).

                                                               The employer presents two issues. First, it claims that the
 [7]    Costs                                                  affidavits used to support the fee application were not legally
            Items and amount; hours; rate                      sufficient to support the trial court's determination of the
        Courts                                                 hours expended or a reasonable hourly rate. Second, the
            Decisions of United States Courts as               employer argues that the trial court abused its discretion by
        Authority in State Courts                              enhancing the lodestar with a 2.0 multiplier. Because we
        Though not bound to adopt federal standards            agree that the evidence in the trial court was insufficient to
        for lodestar determination of attorney fee award,      make a lodestar calculation, we reverse the court of appeals'
        state court may appropriately consider them            judgment and remand to the trial court for further proceedings
        when making lodestar determinations under state        consistent with this opinion.
        law.

        3 Cases that cite this headnote
                                                                                             I

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El Apple I, Ltd. v. Olivas, 370 S.W.3d 757 (2012)
115 Fair Empl. Prac. Cas. (BNA) 510, 55 Tex. Sup. Ct. J. 954
Myriam Olivas, an Applebee's restaurant manager in El Paso,       On appeal, El Apple argued that the attorney's fees awarded
filed suit against her employer, El Apple I, Ltd., alleging       through trial was an abuse of discretion because the court
sex discrimination and retaliation under the TCHRA. TEX.          did not have sufficient evidence on which *760 to make a
LAB. CODE §§ 21.001–.55. A jury determined that Olivas            reasonable assessment. The company also complained that no
was not the target of sex discrimination, but that her decision   basis existed for the trial court's enhancement of the lodestar.
to file discrimination complaints against her employer was        The court of appeals vacated the award of Olivas's back-
a motivating factor in El Apple's creation of a hostile work      pay damages but otherwise affirmed Olivas's compensatory
environment. Thus, Olivas prevailed on only the retaliation       damages and attorney's fees. 324 S.W.3d at 195. The court
claim. The trial court rendered judgment awarding Olivas          held that the affidavits were legally sufficient to support the
compensatory damages of $1,700 for back pay, $75,000              trial court's determination of hours spent and a reasonable
for past compensatory damages, and $28,000 for future             hourly rate, and that more detailed billing records were
compensatory losses.                                              unnecessary. Id. at 193. The court also determined that the
                                                                  trial court had not erred in enhancing the lodestar because it
As the prevailing party, Olivas also submitted an application     considered separate factors from those it used to determine
for attorney's fees. In affidavits, her attorneys estimated       the lodestar. Id. at 193–94.
that they collectively spent 850 hours on the case. Olivas's
lead counsel, Daniel Gonzalez, averred that he spent
approximately 700 hours on the case. Her other attorney,
                                                                                                II
Francisco Dominguez, averred that he spent 150 hours in
preparing and trying the case. At a hearing on the fee            The remedies provided under the TCHRA mirror those
application, Dominguez subsequently testified that he spent       available under Title VII of the Civil Rights Act of 1964,
190 hours, but that he was not seeking compensation for some      as amended by the Civil Rights Act of 1991. Compare Tex.
of that time because it was duplicative of work performed by      Lab.Code §§ 21.258, 21.2585, 21.259(a) with 42 U.S.C.
his co-counsel.                                                   §§ 1981a, 2000e–5(g), 2000e–5(k). One of the TCHRA's
                                                                  purposes is to harmonize state and federal employment
Gonzalez testified that both attorneys' time was reasonable       discrimination law. TEX. LAB.CODE § 21.001(1). Although
and necessary given the nature of the case and the results        state procedural rules govern the determination of attorney's
obtained. Counsel attributed the number of hours on the case      fees in a suit brought under state law, Texas courts have
to the number of discovery instruments and pleadings, the         looked to federal law in applying our own statute, including
number of depositions and witness interviews, as well as          section 21.259(a) of the TCHRA, which provides for an
the quality of representation. Both Dominguez and Gonzalez        award of attorney's fees to the prevailing party as part of the
testified that they refrained from taking additional clients      costs. See, e.g., Sw. Bell Mobile Sys., Inc. v. Franco, 971
because of the case.                                              S.W.2d 52, 55–56 (Tex.1998); Burgmann Seals Am., Inc.
                                                                  v. Cadenhead, 135 S.W.3d 854, 860–61 (Tex.App.-Houston
Following the fee-application hearing, the trial court used       [1st Dist.] 2004, pet. denied); Elgaghil v. Tarrant Cnty. Junior
the lodestar method to calculate attorney's fees. The court       Coll., 45 S.W.3d 133, 144–45 (Tex.App.-Fort Worth 2000,
determined that Gonzalez should be compensated at a rate of       pet. denied). Because federal courts use the lodestar method
$250 per hour for 700 hours for a total of $175,000, and that     in awarding attorney's fees in Title VII cases, Texas courts
his co-counsel Dominguez should be compensated at a rate          have likewise used lodestar in awarding fees under Section
of $300 per hour for 190 hours for a total of $57,000. The        21.259(a) of the TCHRA. See, e.g., Dillard Dep't Stores,
court then enhanced the lodestar by applying a 2.0 multiplier,    Inc. v. Gonzales, 72 S.W.3d 398, 412 (Tex.App.-El Paso
resulting in $464,000 in attorney's fees for the trial of the     2002, pet. denied); W. Telemarketing Corp. Outbound v.
case. Legal assistant fees for 100 hours were also added to       McClure, 225 S.W.3d 658, 675–76 (Tex.App.-El Paso 2006,
the award at a rate of $65 per hour for a total of $6,500. The    pet. granted, judgm't vacated w.r.m.).
court further awarded $99,000 in conditional attorney's fees
for defending post-judgment motions and appeals.

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El Apple I, Ltd. v. Olivas, 370 S.W.3d 757 (2012)
115 Fair Empl. Prac. Cas. (BNA) 510, 55 Tex. Sup. Ct. J. 954
The lodestar method of calculating attorney's fees first
“achieved dominance” in federal class actions. Gisbrecht v.          (7) the experience, reputation, and ability of the lawyer or
Barnhart, 535 U.S. 789, 801, 122 S. Ct. 1817, 152 L.Ed.2d             lawyers performing the services; and
996 (2002). Texas courts similarly adopted lodestar initially
                                                                     (8) whether the fee is fixed or contingent on results
for fee setting in class actions, and the Texas Legislature
                                                                     obtained or uncertainty of collection before the legal
subsequently mandated the method's use in such cases. See
                                                                     services have been rendered.
TEX. CIV. PRAC. & REM.CODE § 26.003(a) (providing
that “the trial court shall use the Lodestar method to calculate   TEX. DISCIPLINARY R. PROF'L CONDUCT 1.04(b); see
the amount of attorney's fees to be awarded class counsel”).       also Arthur Andersen & Co. v. Perry Equip. Corp., 945
                                                                   S.W.2d 812, 818 (Tex.1997) (quoting the eight-factor test for
 [1] [2] Under the lodestar method, the determination of
                                                                   determining attorney's fees). 1 Our class action rule further
what constitutes a reasonable attorney's fee involves two
                                                                   provides that any adjustment to the base lodestar “must be
steps. First, the court must determine the reasonable hours
                                                                   in the range of 25% to 400% of the lodestar figure.” TEX.R.
spent by counsel in the case and a reasonable hourly rate
                                                                   CIV. P. 42(i)(1).
for such work. Gonzales, 72 S.W.3d at 412. The court then
multiplies the number of such hours by the applicable rate,
the product of which is the base fee or lodestar. La. Power &
Light Co. v. Kellstrom, 50 F.3d 319, 323–24 (5th Cir.1995).                                     III
The court may then adjust the base lodestar up or down (apply
                                                                    [3] [4] The award of attorney's fees generally rests in the
a multiplier), if relevant factors indicate an adjustment is
                                                                   sound discretion of the trial court. Ragsdale v. Progressive
necessary to reach a reasonable fee in the case. Gonzales, 72
                                                                   Voters League, 801 S.W.2d 880, 881 (Tex.1990) (per
S.W.3d at 412.
                                                                   curiam). But a party applying for an award of attorney's fees
                                                                   under the lodestar method bears the burden of documenting
Our class action rule identifies the relevant factors when
                                                                   the hours expended on the litigation and the value of those
making a lodestar determination by reference to Rule 1.04(b),
                                                                   hours. Hensley v. Eckerhart, 461 U.S. 424, 437, 103 S.Ct.
Texas Disciplinary Rules of Professional Conduct. See
                                                                   1933, 76 L. Ed. 2d 40 (1983). El Apple submits that a
TEX.R. CIV. P. 42(i)(1) (providing for attorney's fees award
                                                                   court cannot calculate the base fee or lodestar without such
in class *761 actions). The disciplinary rule enumerates the
                                                                   information and that the trial court here abused its discretion
following non-exclusive list of factors:
                                                                   by not requiring the plaintiff to provide these details. El Apple
  (1) the time and labor required, the novelty and difficulty      further submits that the prevailing party's documentation
  of the questions involved, and the skill requisite to perform    should preferably be in the form of contemporaneous time
  the legal service properly;                                      sheets, which evidence the performance of specific tasks,
                                                                   such that the trial court can make a reasoned determination of
  (2) the likelihood, if apparent to the client, that the          how much time was reasonably spent pursuing the litigation.
  acceptance of the particular employment will preclude
  other employment by the lawyer;                                  Olivas responds that Texas law has not required detailed
                                                                   billing records or other documentation as a predicate to
  (3) the fee customarily charged in the locality for similar
                                                                   an attorney's fees award. See, e.g., Tex. Commerce Bank,
  legal services;
                                                                   Nat'l Ass'n v. New, 3 S.W.3d 515, 517–18 (Tex.1999) (per
  (4) the amount involved and the results obtained;                curiam) (recognizing attorney's affidavit to be sufficient
                                                                   support for award of fees in default judgment); Save Our
  (5) the time limitations imposed by the client or by the         Springs Alliance, Inc. v. City of Dripping Springs, 304 S.W.3d
  circumstances;                                                   871, 892–93 (Tex.App.-Austin 2010, pet. denied) (accepting
                                                                   affidavit testimony detailing legal work and rates); In re
  (6) the nature and length of the professional relationship       A.B.P., 291 S.W.3d 91, 99 (Tex.App.-Dallas 2009, no pet.)
  with the client;                                                 (noting that documentary evidence is not a prerequisite to

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El Apple I, Ltd. v. Olivas, 370 S.W.3d 757 (2012)
115 Fair Empl. Prac. Cas. (BNA) 510, 55 Tex. Sup. Ct. J. 954
an award of attorney's fees); Schlager v. Clements, 939           evaluation of the application for attorney's fees. Charges
S.W.2d 183, 191–93 (Tex.App.-Houston [14th Dist.] 1996,           for duplicative, excessive, or inadequately documented work
writ denied) (holding that the failure to produce documentary     should be excluded. Watkins v. Fordice, 7 F.3d 453, 457
evidence would affect the weight of an attorney's testimony       (5th Cir.1993). A meaningful review of the hours claimed is
regarding fees rather than its admissibility). Olivas submits     particularly important because the usual incentive to charge
that our recent decision in Garcia v. Gomez is consistent         only reasonable attorney's fees is absent when fees are paid by
 *762 with this line of authority. 319 S.W.3d 638 (Tex.2010).     the opposing party. As the U.S. Supreme Court has observed:

Garcia, however, is not on point. It involved a statute             Counsel for the prevailing party should make a good faith
that required a trial court to dismiss a health-care liability      effort to exclude from a fee request hours that are excessive,
claim and award attorney's fees to the defendant health-care        redundant, or otherwise unnecessary, just as a lawyer in
provider, on motion, if the claimant did not timely serve an        private practice ethically is obligated to exclude such hours
expert report. The claimant did not provide the report, and         from his fee submission. “In the private sector, ‘billing
the trial court dismissed the claim. The court, however, did        judgment’ is an important component in fee setting. It is
not award attorney's fees as the statute required. The health-      no less important here. Hours that are not properly billed to
care provider appealed, but the court of appeals affirmed           one's client also are not properly billed to one's adversary
the judgment, concluding that there was no evidence of              pursuant to statutory authority.”
the reasonable attorney's fees incurred by the health-care
                                                                  Hensley, 461 U.S. at 434, 103 S. Ct. 1933 (quoting Copeland
provider. Id. at 641.
                                                                  v. Marshall, 641 F.2d 880, 891 (D.C.Cir.1980) (en banc)).
                                                                  While Texas courts have not routinely required billing records
Although the provider's attorney testified in the trial court
                                                                  or other documentary evidence to substantiate a claim for
about attorney's fees, appeared on his client's behalf, and
                                                                  attorney's fees, the requirement has merit in contested cases
filed pleadings in the case, the court of appeals concluded no
                                                                  under the lodestar approach.
evidence showed that the health-care provider had actually
incurred attorney's fees. Id. We disagreed. We concluded that
                                                                  The starting point for determining a lodestar fee award is the
the statute mandated the award of attorney's fees, on motion,
                                                                  number of hours “reasonably expended on the litigation.” Id.
and that the attorney's uncontested, albeit cursory, testimony
                                                                  at 433, 103 S. Ct. 1933. The party applying for the award bears
about his fee, along with the other circumstances, was enough
                                                                  the burden of *763 proof. Id. at 437, 103 S. Ct. 1933. That
to present the issue to the court. Id.
                                                                  proof should include the basic facts underlying the lodestar,
                                                                  which are: (1) the nature of the work, (2) who performed the
The present case, of course, involves a different statute and a
                                                                  services and their rate, (3) approximately when the services
different issue. Unlike Garcia, the question is not whether the
                                                                  were performed, and (4) the number of hours worked. An
trial court erred in failing to make an award of fees required
                                                                  attorney could, of course, testify to these details, but in all
by statute, but rather whether the court properly applied the
                                                                  but the simplest cases, the attorney would probably have to
lodestar method in determining contested attorney's fees. As
                                                                  refer to some type of record or documentation to provide
El Apple points out, this Court has not previously reviewed a
                                                                  this information. Thus, when there is an expectation that
lodestar award under these circumstances.
                                                                  the lodestar method will be used to calculate fees, attorneys
                                                                  should document their time much as they would for their
The lodestar method aims to provide a relatively objective
                                                                  own clients, that is, contemporaneous billing records or other
measure of attorney's fees. Gonzales, 72 S.W.3d at 412. It has
                                                                  documentation recorded reasonably close to the time when
been criticized, however, for providing a financial incentive
                                                                  the work is performed.
for counsel to expend excessive time in unjustified work and
for creating a disincentive to early settlement. Gen. Motors
                                                                   [5] In this case, neither attorney indicated how the 890 hours
Corp. v. Bloyed, 916 S.W.2d 949, 960 (Tex.1996) (citing
                                                                  they spent in the aggregate were devoted to any particular task
Court Awarded Attorney Fees, 108 F.R.D. 237, 246–49 (3d
                                                                  or category of tasks. Neither attorney presented time records
Cir. Task Force 1985)). To avoid these pitfalls, a trial court
                                                                  or other documentary evidence. Nor did they testify based
should obtain sufficient information to make a meaningful

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                                               Schultz, William 10/26/2015
                                                For Educational Use Only

El Apple I, Ltd. v. Olivas, 370 S.W.3d 757 (2012)
115 Fair Empl. Prac. Cas. (BNA) 510, 55 Tex. Sup. Ct. J. 954
on their recollection of such records. The attorneys instead
based their time estimates on generalities such as the amount       All Seasons Window and Door Mfg., Inc. v. Red Dot Corp.,
of discovery in the case, the number of pleadings filed, the        181 S.W.3d 490, 504 (Tex.App.-Texarkana 2005, no pet.)
number of witnesses questioned, and the length of the trial.        (quoting Multi–Moto Corp. v. ITT Commercial Fin. Corp.,
While all this is relevant, it provides none of the specificity     806 S.W.2d 560, 570 (Tex.App.-Dallas 1990, writ denied)).
needed for the trial court to make a meaningful lodestar            Paralegal fees have been denied absent such proof. Moody v.
determination. The court could not discern from the evidence        EMC Servs., Inc., 828 S.W.2d 237, 248 (Tex.App.-Houston
how many hours each of the tasks required and whether that          [14th Dist.] 1992, writ denied).
time was reasonable. Without at least some indication of the
time spent on various parts of the case, a court has little basis    [6]    We generally accord considerable deference to
upon which to conduct a meaningful review of the fee award.         a trial court's findings regarding whether prevailing
                                                                    counsel's claimed *764 hours are excessive, redundant,
Moreover, if multiple attorneys or other legal professionals        or unreasonable. The trial court possesses a superior
are involved in a case, the fee application should indicate         understanding of the case and the factual matters involved.
which attorney performed a particular task or category of           But when applying for a fee under the lodestar method,
tasks. The application here did not provide this information.       the applicant must provide sufficient details of the work
For instance, the fee application details a list of thirty-seven    performed before the court can make a meaningful review
pleadings and states that they were prepared or reviewed by         of the fee request. For the purposes of lodestar calculations,
either Gonzalez or Dominguez. The two attorneys, however,           this evidence includes, at a minimum, documentation of the
bill at different rates. Without specifying who performed           services performed, who performed them and at what hourly
a task, the information is incomplete. Such uncertainty             rate, when they were performed, and how much time the work
diminishes the objectivity that the lodestar method aims to         required.
provide.
                                                                    Because the affidavits and other evidence in this case did not
Olivas's attorneys also utilized legal assistants in this           provide sufficient information for a lodestar calculation, we
litigation and were awarded $6,500 for their services ($65          must reverse and remand. We are mindful, however, that the
per hour for 100 hours of work). While both attorneys stated        attorneys in this case may not have contemporaneous billing
in their affidavits that “[l]egal assistant time was necessarily    records that document their time as we have not heretofore
expended in the prosecution of [the] case,” no evidence was         explained the proof necessary to support a fee application
offered to describe the tasks their legal assistants performed,     under the lodestar method. Nevertheless, on remand, they
who performed these services, or their qualifications. When         should reconstruct their work in the case to provide the
obtaining payment for work done by paralegals or legal              minimum information the trial court requires to perform a
assistants, Texas courts have required more information, such       meaningful review of their fee application.
as:

             (1) [T]he qualifications of the legal
                                                                                                  IV
             assistant to perform substantive legal
             work; (2) that the legal assistant                     El Apple further complains that the trial court erred in
             performed substantive legal work                       doubling the lodestar to approximate a reasonable attorney's
             under the direction and supervision                    fee in the case. As previously noted, our class action rule
             of an attorney; (3) the nature of the                  expressly recognizes the multiplier, authorizing the trial court
             legal work performed; (4) the legal                    to make attorney fees awards “in the range of 25% to 400% of
             assistant's hourly rate; and (5) the                   the lodestar figure.” TEX.R. CIV. P. 42(i)(1). Although that
             number of hours expended by the legal                  rule does not apply here, the lodestar method should not vary
             assistant.                                             from claim to claim, that is, the formula should be the same
                                                                    in TCHRA suits as in class actions. When appropriate under
                                                                    the particular circumstances of the case, a trial court may

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El Apple I, Ltd. v. Olivas, 370 S.W.3d 757 (2012)
115 Fair Empl. Prac. Cas. (BNA) 510, 55 Tex. Sup. Ct. J. 954
therefore use a multiplier to increase or decrease the lodestar     Whether a multiplier is needed, however, cannot be
figure to approximate a reasonable fee.                             determined until the base lodestar is known. Because we do
                                                                    not as yet have a legitimate base lodestar in this case, any
El Apple argues, however, that the trial court abused its           comment on the need for a multiplier here is premature.
discretion in using a 2.0 multiplier in this case because
no circumstances justify inflating the base figure. El              ******
Apple contends instead that a multiplier should have been
used in this case to discount the lodestar because Olivas           In summary, we hold that the fee application and proof in this
prevailed only on her retaliation claim, while her fee request      case did not provide the trial court legally sufficient evidence
presumably included the time spent on the discrimination            to calculate a reasonable fee award using the lodestar method.
claim as well. Thus, El Apple submits the time Olivas's             To establish the number of hours reasonably spent on the
attorneys spent preparing and trying the discrimination claim       case, the fee application and record must include proof
should be discounted or excluded from the lodestar figure           documenting the performance of specific tasks, the time
unless she can show that the time spent pursuing the                required for those tasks, the person who performed the work,
unsuccessful claim advanced her successful claim.                   and his or her specific rate. Because the record in this case
                                                                    does not provide these details, we reverse the court of appeals'
El Apple further asserts that the lodestar is presumptively         judgment affirming the attorney's fee award and remand to
a reasonable fee and that enhancements should be rare and           the trial court for a redetermination of fees consistent with
reserved for exceptional cases. Perdue v. Kenny A. ex rel.          this opinion.
Winn, ––– U.S. ––––, 130 S. Ct. 1662, 1673, 176 L. Ed. 2d
494 (2010). El Apple contends that the trial court based its
decision to enhance the lodestar solely on the contingent
                                                                    Justice HECHT filed a concurring opinion in which Justice
nature of the fee and not on any exceptional aspect of the case.
                                                                    WAINWRIGHT and Justice WILLETT joined.
Moreover, El Apple submits that federal law has expressly
rejected the contingent nature of an attorney's representation
as a basis for the lodestar's enhancement. City of Burlington       Justice HECHT, joined by Justice WAINWRIGHT and
v. Dague, 505 U.S. 557, 567, 112 S. Ct. 2638, 120 L.Ed.2d            Justice WILLETT, concurring.
449 (1992).                                                         I join fully in the Court's opinion with the additional
                                                                    observation that, besides lacking supporting records, Olivas's
 [7]     State procedural rules generally govern the                attorneys' request for fees and the trial court's award were
determination of attorney's fees in a suit brought under a state    patently unreasonable.
statute permitting attorney's fees. Although the TCHRA was
enacted to effectuate the policies of Title VII of the Civil        After an eight-day trial, the jury failed to find that El
Rights Act of 1964, no indication exists that the Legislature       Apple discriminated against Olivas on the basis of gender
intended to incorporate federal procedure *765 for assessing        but found that it created a hostile work environment for
attorney's fees. See TEX. LAB.CODE § 21.001; Hoffmann–              her because of her complaints of discrimination. The jury
La Roche, Inc. v. Zeltwanger, 144 S.W.3d 438, 445–46                awarded Olivas $1,700 in back pay and $103,000 for past and
(Tex.2004). Nevertheless, in applying our state statute, we         future compensatory damages. The trial court awarded Olivas
may draw on the far greater body of federal court experience        $464,000 attorney fees and $6,500 paralegal fees through
with lodestar and fee shifting under the similar federal statute.   the rendition of judgment, plus $99,000 conditionally for
Though not bound to adopt the federal standards, Texas courts       post-judgment proceedings and appeals. The court of appeals
may appropriately consider them. Cf. Williams v. Lara, 52           reversed the back-pay award and affirmed the other damages
S.W.3d 171, 181 (Tex.2001); Bloyed, 916 S.W.2d at 954 n. 1.         and attorney fees. 1 The court of appeals held that the award
                                                                    of attorney fees was reasonable. On its face, it could not have
We accordingly accept the premise that lodestar                     been.
presumptively produces a reasonable fee, but that exceptional
circumstances may justify enhancements to the base lodestar.

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                                               Schultz, William 10/26/2015
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El Apple I, Ltd. v. Olivas, 370 S.W.3d 757 (2012)
115 Fair Empl. Prac. Cas. (BNA) 510, 55 Tex. Sup. Ct. J. 954
                                                                        There are two other, surer indicators of a reasonable fee. One
Olivas's lead counsel, Daniel Gonzalez, engaged another
                                                                        is that El Apple's lawyer, David Pierce, and his associate spent
lawyer, Francisco X. Dominguez, to help him try the case.
                                                                        266.7 hours at about $200 per hour. The trial court ordered
Dominguez stated that he spent 150 hours total, but later
                                                                        El Apple to pay Olivas more than 7 times as much as it paid
raised the number to 190. Gonzalez stated that he spent 700
                                                                        its own lawyers, for 890 hours of attorney time at an average
hours total and about 200 at trial, meaning that Gonzalez spent
                                                                        of $521 per hour. The other is what contingent fee might be
500 hours for pretrial proceedings. Discovery was minimal.
                                                                        reasonable had this been, say, a products liability case. A 50%
The parties exchanged requests for disclosure and a set of
                                                                        contingent fee, taking into account the difficulty of the case
interrogatories. Olivas sent El Apple a request for admissions
                                                                        and the reality that many cases are lost, would have been
and two requests for production. Gonzalez estimated that
                                                                        $51,500. Instead, the trial court awarded Olivas's attorneys
1,200–2,500 pages of documents were produced. Three
                                                                        450% of her recovery.
depositions were taken. One motion to compel was heard and
granted.
                                                                        El Apple's counsel repeatedly stated to the trial court that
                                                                        Olivas's attorneys had represented her well and should be
 *766 I agree with the Court that Gonzalez and Dominguez's
                                                                        fully compensated, objecting only to their exorbitant request.
failure to produce any records supporting the hours they
                                                                        Statutory fee-shifting is not a bonanza. It should take into
claimed to have spent on the case is fatal to their fee
                                                                        account what the market should. Olivas's attorneys' request
application. Even if they had, their request would not be
                                                                        did not do so.
reasonable. Even if the time they claimed to have spent for
trial were considered reasonable, and it is not at all clear that
it should be, 500 hours on the pretrial proceedings could not
                                                                        All Citations
possibly be reasonable.
                                                                        370 S.W.3d 757, 115 Fair Empl. Prac. Cas. (BNA) 510, 55
                                                                        Tex. Sup. Ct. J. 954

Footnotes
1       Arthur Andersen 's eight-factor test is similar to the test used by the Fifth Circuit in Johnson v. Georgia Highway Express,
        Inc., 488 F.2d 714, 717–19 (5th Cir.1974), overruled on other grounds by Blanchard v. Bergeron, 489 U.S. 87, 109 S. Ct.
        939, 103 L. Ed. 2d 67 (1989).
1       324 S.W.3d 181 (Tex.App.-El Paso 2010).

End of Document                                                     © 2015 Thomson Reuters. No claim to original U.S. Government Works.

                © 2015 Thomson Reuters. No claim to original U.S. Government Works.                                                  8
                                                   Schultz, William 10/26/2015
                                                    For Educational Use Only

Ex parte Lillard, 159 Tex. 18 (1958)
314 S.W.2d 800

                                                                                 3 Cases that cite this headnote
     KeyCite Yellow Flag - Negative Treatment
Distinguished by Clark v. Bres,     Tex.App.-Hous. (14 Dist.),
 September 5, 2006
                                                                       [2]       Contempt
                                                                                     Validity of Mandate, Order, or Judgment
                        159 Tex. 18                                              Party could not be legally held in contempt of
                   Supreme Court of Texas.                                       court for violating a void decree thereof.
                    Ex parte Lee LILLARD.                                        9 Cases that cite this headnote

             No. A-6835. | June 18, 1958.
            | Rehearing Denied July 23, 1958.                          [3]       Courts
                                                                                     Suits for Divorce
Original proceedings respecting application for writ of habeas
                                                                                 Child Custody
corpus by relator who had been held in contempt of court.
                                                                                     Jurisdiction
The Supreme Court, Norvell, J., held that where former
                                                                                 Where former wife instituted action in Dallas
wife instituted action in Dallas County District Court for
                                                                                 County District Court for modification of
modification of divorce decree awarding custody of child
                                                                                 divorce decree rendered therein and which
to her so long as it remained in a certain home, and then
                                                                                 awarded custody of child to mother so long
instituted separate proceedings in Tarrant County District
                                                                                 as it remained in a certain home, and then
Court to obtain complete custody of child, Dallas County
                                                                                 wife instituted separate proceedings in Tarrant
District Court acquired exclusive jurisdiction over matter of
                                                                                 County District Court to obtain custody of child,
child's custody and order of Tarrant County District Court
                                                                                 Dallas County District Court acquired exclusive
granting custody of child to wife was void and relator could
                                                                                 jurisdiction over matter of child custody and
not be held in contempt of court for violation of such order.
                                                                                 order of Tarrant County District Court granting
                                                                                 custody of child to wife was void and person
Relator discharged.
                                                                                 failing to obey such order by refusing to give up
                                                                                 child could not be held in contempt of court.
Calvert and Walker, JJ., dissented on motion for rehearing.
                                                                                 9 Cases that cite this headnote

 West Headnotes (5)                                                    [4]       Abatement and Revival
                                                                                     Ground of Abatement in General
 [1]      Child Custody                                                          Where suit is filed in a court of competent
              Pleading                                                           jurisdiction and that jurisdiction has attached,
          Where divorce decree granted custody of child                          subsequent suit in a court of concurrent
          on certain conditions and subsequently ex-wife                         jurisdiction is abated by reason of the first suit,
          filed pleading designated as a motion for change                       since when the first suit is brought it is thereby
          of her residence of minor child and amendment                          segregated from the general class to which it
          of judgment under the same docket number as                            belonged and withdrawn from the authority and
          given original divorce suit, subsequent motion                         jurisdiction of all other courts of co-ordinate
          must be considered as the institution of a new suit                    power.
          which had for its purpose the changing of order
                                                                                 11 Cases that cite this headnote
          relating to custody of minor.

                                                                       [5]       Courts

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Ex parte Lillard, 159 Tex. 18 (1958)
314 S.W.2d 800
              Vacating or Annulling Decisions
                                                                     The judicial history of the present controversy is somewhat
         Ordinarily, remedy for erroneous overruling of
                                                                     complicated and may be best understood by setting forth the
         a plea of another suit pending is by appeal but
                                                                     pertinent events in chronological order.
         this is not the exclusive remedy in all situations
         particularly when conflicting judgments are                 On February 15, 1956, plaintiff Imagene Lillard was granted
         issued by courts of co-ordinate jurisdiction.               a divorce from John S. Lillard in Cause No. 6304-G/J on the
                                                                     docket of the Juvenile District Court of Dallas County, Texas,
         Cases that cite this headnote
                                                                     hereafter referred to as the Dallas Court. That part of the
                                                                     decree relating to the custody of the minor son of the parties
                                                                     was as follows:
                                                                               ‘It is further ordered, adjudged and
Attorneys and Law Firms
                                                                               decreed that Plaintiff be granted custody
 *18 **801 Harris & Reeves, Arlington, Ft. Worth, for                          of the child, John S. Lillard, Jr., as long
relator.                                                                       as the child is left in the home of Mr. and
                                                                               Mrs. Lee Lillard of Arlington, Texas. It is
Alfred M. Clyde and Eva Barnes, Ft. Worth, for respondent.                     ordered by this Court that the said child
                                                                               remain in the home of Mr. and Mrs. Lee
Opinion                                                                        Lillard under their guidance until further
                                                                               orders from this Court.’
NORVELL, Justice.

On the 25th of April, 1958, the Judge of the District Court of
Tarrant County, 153rd Judicial District, entered an order in         On June 3, 1956, the Dallas Court entered an order directing
Cause No. 4965-C on the docket of said court, styled Imagene         the Sheriff of Dallas County to take possession of the child
Lillard v. Lee Lillard and wife, Jean Lillard, in which he found     and turn him over to Mr. and Mrs. Lee Lillard. Evidently at
that Lee Lillard had violated a prior order of said court dated      this time some controversy had developed between Imagene
June 7, 1957, relating to the custody of John S. Lillard, Jr., the   Lillard and Lee Lillard concerning the infant and Imagene
five-year-old minor son of Imagene Lillard and a nephew of           Lillard had taken the child from the home of Mr. and Mrs.
 *19 Lee Lillard. It was accordingly ordered that said Lillard       Lee Lillard.
be held in contempt of court and committed to the county              *20 **802 [1] On September 25, 1956, Imagene Lillard
jail of Tarrant County for a period of three days and ‘as long       filed a pleading in the Dallas Court which she designated as
thereafter and until such time thereafter as the said Lee Lillard    a ‘Motion for the change of residence of the minor child,
will fully and completely purge himself from contempt of             John S. Lillard, Jr., and/or amendment of judgment.’ While
court * * *.’                                                        the pleading was filed under the same docket number as that
                                                                     given the original divorce suit, we think it must be considered
This Court granted the application for writ of habeas corpus,        as the institution of a new suit which had for its purpose the
and admitted Lillard to bail pending a hearing of the cause.         changing of the order relating to the custody of the minor,
                                                                     John S. Lillard, Jr. Lakey v. McCarroll, 134 Tex. 191, 134
The relator will be ordered discharged form the custody of           S.W.2d 1016; Ex parte Webb, 153 Tex. 234, 266 S.W.2d 855;
the Sheriff of Tarrant County, Texas as we are of the opinion        Black v. Black, Tex.Civ.App., 2 S.W.2d 331, no writ history.
that the District Court of Tarrant County, Texas, was without        In this pleading Imagene Lillard alleged that a change of
jurisdiction to render the order of June 7, 1957, because of         conditions affecting the custody of the child had taken place
a prior attaching and exclusive jurisdiction of the Juvenile         since the rendition of the original divorce decree and that
District Court of Dallas County, Texas, to fix and determine         she should be given ‘full custody of said minor child without
the custodial status of the minor John S. Lillard, Jr. Ex parte      any qualifications or conditions whatsoever.’ She prayed that
Eaton, 151 Tex. 581, 252 S.W.2d 557                                  John S. Lillard be cited to appear and show cause, if any there
                                                                     be, why such child should not be placed in her custody.

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Ex parte Lillard, 159 Tex. 18 (1958)
314 S.W.2d 800
                                                                   the Court in Dallas County, Texas, gave leave to plaintiff to
                                                                   amend in that cause to bring in Mr. and Mrs. Lee Lillard.’
(The motion mentioned was evidently an amended motion.
The designation ‘Amendment to Motion for Change of                  **803 On May 24, 1957, John S. Lillard, the defendant in
Residence’ appears at the top of the first page thereof. A copy    the case pending in the Dallas Court (Cause No. 6304 G/
of the docket entries of the Judge of the Dallas Court filed       J) filed an application for a temporary restraining order to
among the papers of the case discloses the following:              prevent Imagene Lillard from taking the child from the home
9-11-56 File Motion change residence                               of Mr. and Mrs. Lee Lillard. This restraining order was issued
                                                                   as prayed for and the application for temporary injunction set
9-19-56 File Plea of Privilege                                     for June 14, 1957.

9-20-56 Non-suit as to Lee Lillard                                 On June 7, 1957, the Tarrant Court, after a hearing which
                                                                   took place on May 24, 1957 (according to the recitations of
                                                                   the judgment), rendered a decree in Cause No. 4965-C which
9-25-56 File Amended Motion                                        awarded full and complete care, custody and control of the
                                                                   minor to Imagene Lillard and ordered Lee Lillard and wife to
9-27-56 Plaintiff movant granted leave to amend and make           deliver possession of the child to Imagene Lillard forthwith.
new parties.                                                       Notice of appeal from this judgment was given but no appeal
                                                                   was perfected.

                                                                    *22 On June 10, 1957, the Tarrant Court issued an order to
None of the pleadings or orders mentioned in the above             the Sheriff of Tarrant County in which it was recited that Lee
docket entries are before us. It may be that Lee Lillard was a     Lillard and wife Jean Lillard were forcibly holding the minor
party to the original ‘motion,’ filed a plea of privilege to be    child, John S. Lillard, Jr., despite the Court's order of June 7,
sued in Tarrant County, the place of his residence and was         1957, that the child be forthwith delivered to Imagene Lillard.
thereafter dismissed from the suit. He was not a party to the      The sheriff was ordered to take physical custody of the child
‘motion’ of September 25, 1956, although the purpose thereof       and turn him over to Imagene Lillard.
was to abrogate the requirement of the original decree that the
                                                                   On June 14, 1957, an additional application for a restraining
 *21 minor child remain in the residence of Mr. and Mrs. Lee
                                                                   order against Imagene Lillard was filed in the Dallas Court by
Lillard.)
                                                                   an attorney for John S. Lillard, alleging that she intended to
                                                                   take the child out of the state and thus defeat the jurisdiction
On February 26, 1957, 1 Imagene Lillard, without dismissing
                                                                   of the court. This application, in addition to a prayer for
her suit or motion filed in the Dallas Court on September 25,
                                                                   injunctive relief, requested ‘that on final hearing hereof, that
1956, 2 filed suit against Lee Lillard and wife Jean Lillard, in   the custody of said child be permanently placed with Mr. and
the District Court of Tarrant County, 153rd Judicial District,     Mrs. Lee Lillard or, in the alternative, that the legal custody
hereinafter referred to as the Tarrant Court, wherein she          of said child be placed with the Dallas County Juvenile
sought full custodial rights in and to the minor child, John       authorities, and physical custody be placed with Mr. and Mrs.
S. Lillard, Jr., as against the named defendants. Her husband,     Lee Lillard, with specific and reasonable visitation privileges
John S. Lillard, was not named as a defendant in this suit. This   to plaintiff (Imagene Lillard) herein.’ The restraining order
cause was docketed as Cause No. 4965-C.                            was issued as prayed for and the hearing upon the application
                                                                   for a temporary injunction was set for June 28, 1957.
In their answer 3 filed in Cause No. 4965-C, defendants Lee
Lillard and wife pleaded in abatement that there was a suit        Also on June 14, 1957, John S. Lillard filed an amended
pending in the Dallas Court ‘for identically the same cause        original answer 4 in reply to the pleading filed by Imagene
of action; the same subject matter is in dispute, the custody      Lillard on September 25, 1956, in the Dallas Court wherein
of John S. Lillard, Jr. That the case is still pending; that the   she sought a modification of the child custody provision
plaintiff in that suit is the same plaintiff as in this suit and   contained in the original divorce decree. This amended

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Ex parte Lillard, 159 Tex. 18 (1958)
314 S.W.2d 800
answer alleged that the child was suffering from cerebral
palsy and required constant medical attention. By way of          On April 24, 1958, the Tarrant Court rendered its contempt
cross-action, John S. Lillard sought to have the custodial        judgment as heretofore mentioned.
rights in and to the child placed with Mr. and Mrs. Lee Lillard
permanently or ‘in the alternative, that the legal custody        On May 5, 1958, the Dallas Court 5 refused an application
be placed with the Dallas County Juvenile authorities and         for writ of habeas corpus filed by Imagene Lillard to change
that the physical custody of said child be placed with Mr.        the custody award which had theretofore been made to Sam
and Mrs. Lee Lillard.’ This answer was signed by the same         Davis, Chief Probation Officer of Dallas County. This order
attorney who filed the application for injunctive relief above    was entered by the Juvenile District Court of Dallas County
mentioned.                                                        in a proceeding styled Imagene Lillard v. John S. Lillard, but
                                                                  given a cause number (58720-Juv.) different from that of the
On June 28, 1957, the Dallas Court entered an order reciting      original divorce case.
the appearance of John S. Lillard in person and by attorney,       *24 [2]      [3] The record presents a case of two district
service of notice of hearing upon Imagene Lillard and default     courts of coordinate power issuing conflicting orders as to
on her part. The court found that Imagene Lillard had violated    an identical subject matter. The Dallas Court has awarded
a previous order of the court by removing the child from          custody of the child to Sam Davis, Chief Probation Officer
the custody of Mr. and Mrs. Lee Lillard; that the child *23       of Dallas County. The Tarrant Court has awarded custody to
was in need of immediate medical attention and decreed that       Imagene Lillard, the mother of the child. One or the other of
Sam Davis, Dallas County Chief Probation Officer, have legal      these decrees is void for lack of jurisdiction of the subject
custody of the child until further order of the court.            matter. As the Dallas Court first acquired jurisdiction of the
                                                                  subject matter it follows that the Tarrant decree is void, Texas
On July 2, 1957, John S. Lillard filed a motion which resulted    Trunk Ry. Co. v. Lewis, 81 Tex. 1, 16 S.W. 647; O'Neil
in the Dallas Court's issuing an order directing the sheriff      v. Norton, Tex.Com.App., 29 S.W.2d 1060, and Lee Lillard
of any county in the State of Texas, wherein the child may        cannot be legally held in contempt for violating a void decree.
be found, to forthwith take the physical possession of such       Ex parte Eaton, 151 Tex. 581, 252 S.W.2d 557. ‘One cannot
child and deliver him to ‘the Chief Probation Officer, Dallas     (as Imagene Lillard did in this case) invoke the jurisdiction
County, Texas, or whomever the Chief Probation Officer's          of the court to deal with the personal status or the person of
Office designates should have custody of said child.’             a child and at the same time deny the power of the court, in
                                                                  that proceeding, to do with the child's person or his status
 **804 Sometime after the rendition of the Tarrant Court
                                                                  whatever appears to the court to be for the best interest of the
judgment on June 7, 1957, Imagene Lillard gained possession
                                                                  child.’ Knollhoff v. Norris, 152 Tex. 231, 256 S.W.2d 79, 82.
of the child and took him from Texas to the State of
California. Sam Davis, the Chief Probation Officer of Dallas
                                                                   [4]    Some quoting and paraphrasing of the language
County, to whom custody of the child had been awarded by
                                                                  contained in this Court's opinion in the leading case of
the Dallas Court, attempted without success to gain physical
                                                                  Cleveland v. Ward, 116 Tex. 1, 285 S.W. 1063, 1071, will
possession of the child by legal means through the California
                                                                  dispose of the case now before us. When Imagene Lillard
authorities.
                                                                  filed her so-called ‘motion for change of residence of minor
On April 16, 1958, John S. Lillard and Lee Lillard, apparently    child’ in the Dallas Court, she invoked the jurisdiction of that
acting under some supposed claim of right arising from the        court to change the status of the minor child from that fixed
orders of the Dallas Court, gained possession of the child and    by the divorce decree. This occurred on September 25, 1956,
took him from the residence of Imagene Lillard in Antioch,        long before any proceedings were had in the Tarrant Court.
California and returned him to Texas. They then delivered         The filing of this motion must be considered as the institution
the child to Sam Davis, the Chief Probation Officer of Dallas     of a new action which had for its purpose the modification
County. This action by Lee Lillard undoubtedly constituted a      of the custody provisions contained in the original judgment.
violation of the decree of the Tarrant Court of June 7, 1957,     Undoubtedly from and after the filing of this motion the
which awarded full and complete custody of the child to           Dallas Court was authorized to grant the prayer of the petition
Imagene Lillard.                                                  or motion or make such other disposition of the custody

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Ex parte Lillard, 159 Tex. 18 (1958)
314 S.W.2d 800
matter as might be justified under the pleadings and the facts
disclosed upon a hearing. Imagene Lillard at no time sought
a discontinuance **805 of the Dallas Court proceedings               That Court then continued:
which she had instituted, although perhaps unfortunately she         ‘This extract from Freeman we believe states the sound rule,
ignored the court action which she placed in motion and failed       and the only rule which will prevent races from court to
to appear at the time set for a hearing as to the custody of her     court by vigilant counsel, such as this record discloses, and
minor child. Since jurisdiction attached upon her institution        that conflict in the exercise of judicial power in evidence
of the proceedings in Dallas County the rule is elementary           here, which we believe was never contemplated under our
that it could not be taken away or arrested by subsequent            judicial system. Courts are erected to settle controversies, not
proceedings in another court. The Dallas Court having first          to multiply them. At any rate, the rule announced by Freeman
acquired jurisdiction could exercise it to dispose of the whole      is the one we adopt, and is consistent with that declared by
subject matter of the litigation (the custodial status of the        Justice Lipscomb in 1852 in the Burdett case, cited above
minor child) and adjust all *25 equities between the parties.        (Burdett v. State, 9 Tex. 43).
The causes of action asserted in the Dallas Court and the
Tarrant Court arise out of the same facts and involve the same       ‘What has been said is not in conflict with the doctrine
subject matter. It follows that the proceedings in the Tarrant       of various cases that the pendency of a suit in another
Court were abated by the Dallas Court suit. ‘The reason of           jurisdiction must be seasonably pleaded in abatement, that
the abatement of the subsequent suit by the first, where the         the plea may be waived, and that final judgment by default,
latter is filed in a court of competent jurisdiction and that        or, in the *26 absence of pleading and proof of the
jurisdiction has attached, is that when the suit is brought, it is   pendency of a prior suit will be sustained. See the cases
thereby segregated as it were from the general class to which it     of Cook v. Burnley, 11 Wall. 659, 20 L. Ed. 29; Cook
belonged, and withdrawn from the authority and jurisdiction          v. Burnley, 45 Tex. 97; Blassingame v. Cattlemen's Trust
of all other courts of co-ordinate power.’ Since the Tarrant         Co., Tex.Civ.App., 174 S.W. 900; Cattlemen's Trust Co.
Court ‘had no jurisdiction of this particular case, what was         v. Blasingame, Tex.Civ.App., 184 S.W. 574; McCoy v.
done therein was necessarily void, for judicial action without       Bankers' Trust Co., Tex.Civ.App., 200 S.W. 1138. See, also,
jurisdiction is void.’                                               1 Ruling Case Law, pp. 19, 20.

                                                                     ‘These opinions are authority for the proposition that, since
In Cleveland v. Ward the following excerpt from Freeman on           the pendency of a prior suit is predicated upon a state of facts,
Judgments (Vol. 1, s 335) was quoted with approval:                  the facts must be seasonably alleged and proved, and, unless
          ‘It seems impossible that two courts can,                   **806 this is done, the judgment of the subsequent court is
          at the same time, possess the power                        conclusive on the fact of jurisdiction as upon any other fact.
          to make a final determination of the                       Freeman on Judgments (5th Ed.) vol. 2, ss 660, 662. This does
          same controversy between the same                          not militate against our conclusion that, once the necessary
          parties. If either has authority to act,                   facts are pleaded and admitted or proven, or shown by the
          its action must necessarily be exclusive,                  undisputed record, as in this case, the subsequent suit is abated
          and therefore it is our judgment that                      and its orders void for want of jurisdiction.’
          whenever either the state or the national
          courts acquire jurisdiction of an action                    [5] Ordinarily the remedy for the erroneous overruling of
          and the parties thereto, this jurisdiction                 a plea of another suit pending is by appeal. But this is not
          cannot be destroyed, diminished, or                        the exclusive remedy in all situations, Wheeler v. Williams,
          suspended by one of the parties bringing                   Tex.Sup., 312 S.W.2d 221; 1 Tex.Jur. 125, Abatement
          an action in another court, and that any                   and Revival, s 91, particularly when as here, conflicting
          judgment or order of the latter court                      judgments issued by courts of coordinate jurisdiction
          is void so far as it conflicts with any                    have resulted. In this situation it seems obvious that the
          judgment or order of the court first                       judgment of the court lacking jurisdiction must be considered
          acquiring jurisdiction.’                                   inoperative.

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Ex parte Lillard, 159 Tex. 18 (1958)
314 S.W.2d 800
                                                                     us at the time of the original submission. Further writing is
                                                                     deemed unnecessary.
The only possible distinction that can be suggested between
the proceedings in the Dallas Court and those in the                 The motion for rehearing is overruled.
Tarrant Court rests upon the difference in parties. Here the
documentary record made up of exhibits accompanying the
                                                                     CALVERT, Justice (dissenting).
application for the writ of habeas corpus and the answer
thereto is not as clear as might be desired. Imagene Lillard's       The record now before us shows that Imagene Lillard had
original pleading seeking a change in custody arrangements           dismissed her suit against Lee Lillard in Dallas County before
is not before us. It may be that Lee Lillard was made a party        fling her suit against Mr. and Mrs. **807 Lee Lillard in
thereto and subsequently dismissed. There is some suggestion         Tarrant County on February 26, 1957. It therefore appears
made in Lee Lillard's plea in abatement filed in the Tarrant         that at the time of the hearing in the District Court of Tarrant
Court that the Dallas Court granted Imagene Lillard leave to         County on May 24, 1957, and at the time of the entry of
bring in new parties so that Lee Lillard could again be made         judgment therein on June 7, 1957, there was no suit then
a party to the Dallas proceeding. There is also an entry on          pending in Dallas County between the same parties involving
the docket indicating that a plea of privilege was filed by          the same subject matter.
someone, presumably Lee Lillard. However that may be, Lee
Lillard was not a party to the original divorce suit in which the     *28 Mr. and Mrs. Lee Lillard had physical possession of the
custody of the child as between the parties, Imagene Lillard         minor in Tarrant County. The suit filed by Imagene Lillard
and John S. Lillard, *27 was originally fixed. This decree           in Tarrant County was the proper method and the Tarrant
gave no custodial rights to Lee Lillard and his wife, but simply     County District Court was the proper forum for adjudicating
provided as a condition to the award of custody to Imagene           all issues of custody and possession of the minor as between
Lillard that the child should remain in the residence of Mr.         Imagene Lillard and Mr. and Mrs. Lee Lillard. Knollhoff v.
and Mrs. Lee Lillard. It was a condition of custody much the         Norris, 152 Tex. 231, 256 S.W.2d 79.
same as the more usual provision that the child shall remain
                                                                     The fact that there was then pending in Dallas County a suit
within the State or within the jurisdiction of the court. It could
                                                                     between Imagene Lillard and her former husband, John S.
be changed in a proper proceeding in a court of competent
                                                                     Lillard, in which the District Court of Dallas County had
jurisdiction in a suit between the parties to the original court
                                                                     jurisdiction to determine rights of custody as between those
decree. The Dallas Court's jurisdiction was invoked to change
                                                                     parties, in no way militated against the jurisdiction of the
the custody order and such jurisdiction could not be defeated
                                                                     Tarrant County District Court to determine similar questions
by leaving the Dallas proceeding pending and filing a suit
                                                                     between Imagene Lillard and Mr. and Mrs. Lee Lillard.
in Tarrant County against Lee Lillard and wife only. The
Dallas Court was the tribunal possessing prior and exclusive         It is my opinion that the judgment of the District Court
jurisdiction of the custody controversy, and it follows that         of Tarrant County awarding custody of the minor child to
the decree of the Tarrant Court rendered on June 7, 1957, is         Imagene Lillard as against any claim of right to possession or
void for want of jurisdiction. Findings of contempt cannot           custody of such child by Lee Lillard was a valid judgment and
be predicated upon such judgment. Accordingly relator is             that in violating that judgment by removing the child from
ordered discharged.                                                  the custody and possession of Imagene Lillard, Lee Lillard
                                                                     was in contempt of the judgment of the court. He should be
                    Motion for Rehearing                             remanded to the custody of the sheriff of Tarrant County for
                                                                     his contempt.
We have considered the motion for rehearing but adhere to the
holdings expressed in our original opinion. Certified copies         Inasmuch as the majority have ordered the release of Lee
of various pleadings filed in the Dallas Court were submitted        Lillard, I express no opinion as to whether his punishment
with the motion but these do not disclose a substantially            could exceed a fine of $100 and confinement in the county
different factual basis from that presented by the record before     jail for a period of three days.

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Ex parte Lillard, 159 Tex. 18 (1958)
314 S.W.2d 800
WALKER, J., joins in this dissent.
                                                                      All Citations

                                                                      159 Tex. 18, 314 S.W.2d 800

Footnotes
1      The date of filing is not shown by the exhibit attached to the answer of respondent Harlon Wright, Sheriff of Tarrant
       County, Texas. The date given is that appearing upon an affidavit attached to the petition which we assume was the
       same as the date of filing.
2      Sometime between the dates mentioned, that is September 25, 1956 and February 26, 1957, Imagene Lillard changed
       attorneys and secured new counsel to represent her.
3      The date of the filing of this answer is not disclosed by the certified copy thereof.
4      The original answer of John S. Lillard is not before us.
5      Although all judicial proceedings in Dallas County were had in the Juvenile District Court, it appears that at least three
       judges signed orders in the cause under a system of rotation of judges in handling the county's juvenile docket.

End of Document                                                   © 2015 Thomson Reuters. No claim to original U.S. Government Works.

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                                               Schultz, William 10/26/2015
                                                For Educational Use Only

Oliver v. Carter and Company Irr., Inc., Not Reported in S.W.3d (2002)

                                                                             verified general denial. Vernon's Ann.Texas
                                                                             Rules Civ.Proc., Rules 93(10), 185.
                     2002 WL 1301568
       Only the Westlaw citation is currently available.                     Cases that cite this headnote
 NOTICE: NOT DESIGNATED FOR PUBLICATION.
  UNDER TX R RAP RULE 47.7, UNPUBLISHED                            [2]       Account Stated
     OPINIONS HAVE NO PRECEDENTIAL                                               Vacating and Setting Aside
    VALUE BUT MAY BE CITED WITH THE                                          Verification attached to purchasers' original
  NOTATION “(not designated for publication).”                               answer to seller's complaint for sworn account
                                                                             did not contain an oath that the facts alleged in
                  Court of Appeals of Texas,
                                                                             the answer were true, and thus verification did
                           El Paso.
                                                                             not satisfy requirement of a supporting affidavit,
     Floyd OLIVER and Layton Oliver, Appellants,                             although it was signed by purchasers and sworn
                        v.                                                   to before two notaries. Vernon's Ann.Texas
                                                                             Rules Civ.Proc., Rules 93(10), 185.
    CARTER AND COMPANY IRR., INC., Appellee.
                                                                             Cases that cite this headnote
          No. 08-01-00446-CV.         |   June 13, 2002.

Seller brought action on a sworn account against purchasers,       [3]       Pleading
alleging they defaulted in making payment on their account.                      Sufficiency of Verification
The County Court, Gaines County, granted seller's motion
                                                                             Purchasers' first amended answer was sufficient
for summary judgment. Purchasers appealed. The Court of
                                                                             to controvert seller's sworn account claim, where
Appeals, McClure, J., held that: (1) verified pleading attached
                                                                             answer contained more than a broad denial of
to original answer sufficiently denied the account; (2)
                                                                             the allegations and specifically referred to the
verification attached to pleading did not constitute required
                                                                             account, answer denied that the amount alleged
affidavit; (3) amended answer was sufficient to controvert
                                                                             due and owing was not in accordance with
seller's claim; and (4) purchasers had leave to file amended
                                                                             any agreement, and supporting affidavit affirmed
answer.
                                                                             under oath that the statements in the answer
                                                                             were “true and correct” and contained all other
Reversed and remanded.
                                                                             recitations required in an affidavit. Vernon's
                                                                             Ann.Texas Rules Civ.Proc., Rules 93(10), 185.

                                                                             Cases that cite this headnote
 West Headnotes (4)

                                                                   [4]       Appeal and Error
 [1]       Account Stated
                                                                                Amendments
               Vacating and Setting Aside
                                                                             Purchasers had presumed leave to file amended
           Verified pleading attached to purchasers' original
                                                                             answer to seller's complaint regarding alleged
           answer to seller's complaint on sworn account,
                                                                             failure to pay account, although there was no
           in which purchasers denied the amount due and
                                                                             express trial court order granting them leave,
           “whether such charges were usual, customary
                                                                             where purchasers filed amended answer prior
           and/or reasonable prices for said merchandise
                                                                             to hearing on seller's motion for summary
           and/or services,” sufficiently denied the account
                                                                             judgment, there was no evidence that seller
           on which the claim was stated, although
                                                                             objected to it or suffered unfair prejudice or
           seller alleged it was nothing more than a
                                                                             surprise, and there was no indication that trial

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                                             Schultz, William 10/26/2015
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Oliver v. Carter and Company Irr., Inc., Not Reported in S.W.3d (2002)

        court did not consider the amended answer when                  cause, and files this their verified Original Answer and
        ruling on seller's summary judgment motion                      would show the Court:
        or denied leave. Vernon's Ann.Texas Rules
        Civ.Proc., Rule 63.
                                                                  I. GENERAL DENIAL
        Cases that cite this headnote
                                                                        Defendants deny each and every, all and singular, the
                                                                        allegations of Plaintiff's Original Petition and demand
                                                                        strict proof thereof as required by the Texas Rules of
                                                                        Civil Procedure. Said Defendants deny the charges as
Appeal from County Court of Gaines County, Texas, (TC #
                                                                        reasonable and customary and the amount asserted and/
1765).
                                                                        or claimed.
Before Panel No. 4 BARAJAS, C.J., LARSEN, and
                                                                  II. PRAYER
McCLURE, JJ.
                                                                        Defendants pray the Court, after notice and hearing or trial,
                                                                        enter judgment in favor of Defendants, award Defendants
                         OPINION                                        their costs of court, attorney's fees, and such other and
                                                                        further relief as Defendants may be entitled to in law or in
ANN CRAWFORD McCLURE, Justice.                                          equity. [Emphasis added].
                                                                        The Olivers verified their original answer by “verification”
 *1 Carter and Company Irr., Inc. (Carter & Co.) filed suit
                                                                        that reads as follows:
on a sworn account against Floyd and Layton Oliver (the
Olivers). Alleging a defect in the Olivers' answer, Carter &
Co. successfully sought summary judgment. We reverse and                                    VERIFICATION
remand.
                                                                  ...

                                                                        We the undersigned, FLOYD OLIVER and LAYTON
                 FACTUAL SUMMARY                                        OLIVER, Defendants in the above-numbered and entitled
                                                                        cause do hereby enter this verification of denial of the said
Carter & Co. filed an original petition in the Gaines County            sworn account. We hereby enter said denial, denying each
Court alleging that the Olivers defaulted in making payment             and every allegation contained therein and specifically
on their account with the company. Carter & Co. claimed that            denying an amount due, the specifics of said amount being
they sold services and/or merchandise to the Olivers which              due, and the debt and/or account. A denial is hereby
they accepted and became bound to pay at the designated                 entered as to the amount charged and as to whether such
price, “which is a reasonable, usual, and customary price               charges were usual, customary, and/or reasonable prices
for such merchandise.” The total balance claimed to be due              for said merchandise and/or services and denying the
to Carter & Co. was $6,796.01, “exclusive of interest after             amount asserted.
all just and lawful offsets, credits, and payments have been
allowed.” Attached to the petition was a statement of account,          Signed this the 15th day of June, 2001.
which included a copy of a calculator tape and copies of six
invoices.                                                               /s/ Floyd Oliver

                                                                        /s/ Layton Oliver
The Olivers' original answer contains the following recitation:
                                                                        SWORN TO AND SUBSCRIBED BEFORE ME, by the
  COMES NOW, FLOYD OLIVER and LAYTON
                                                                        said FLOYD OLIVER, this 15th day of June, 2001.
  OLIVER, Defendants in the above-entitled and numbered
                                                                        /s/ Scarlett Eastteam

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Oliver v. Carter and Company Irr., Inc., Not Reported in S.W.3d (2002)

                                                                                 incorporates the attached verification
  Notary Public, State of Texas                                                  and Exhibit ‘A’ herein. Further,
                                                                                 Defendants would show that in
  SWORN TO AND SUBSCRIBED BEFORE ME, by the
                                                                                 connection with the account in
  said LAYTON OLIVER, this 15th day of June, 2001.
                                                                                 question, there was no sale or delivery
  /s/ Rhonda Marion Trent                                                        of goods and/or services, the amount
                                                                                 alleged due and owing by the Plaintiff
  Notary Public, State of Texas                                                  was not in accordance with an
                                                                                 agreement, if any, and the amount is
Four days later, Carter & Co. moved for summary judgment
                                                                                 not unpaid.
pursuant to Rule 166a of the Texas Rules of Civil Procedure
on the grounds that the Olivers' answer was                         The amended answer was supported by an affidavit by Floyd
                                                                    Oliver. In its summary judgment, the trial court stated:
   *2 [D]efective and insufficient in law to constitute or
  raise a defense to Plaintiff's cause of action on the account       Having considered the Plaintiff's Motion, the Pleadings
  referred to in Plaintiff's Original Petition. The pleadings,        and Affidavits on file herein as well as the argument of
  exhibits, and affidavits filed in this cause show that there is     counsel, the Court finds that Plaintiff's suit is founded upon
  no genuine issue as to any material fact between the parties        a sworn account, but that the Defendant has failed to file
  and accordingly plaintiff is entitled to judgment against           a Response in compliance with the Texas Rules of Civil
  Defendant as a matter of law as requested in the Plaintiff's        Procedure, and that no such Response has been timely
  original Petition. [Emphasis added].                                tendered; it is, therefore, ORDERED that such Response
                                                                      not be filed in the record of this cause. [Emphasis added].
The Olivers failed to file their objections and response to the
motion within the required time period and asked for leave of       The court also ordered that Carter & Co. recover from the
court to file the response. The trial court denied the request.     Olivers the sum of $6,796.01 together with pre-judgment and
The Olivers then filed a motion to reconsider which was also        post-judgment interest, and attorney's fees and costs. The
denied.                                                             Olivers timely filed this appeal. In their sole point of error, the
                                                                    Olivers claim that the trial court erred in granting summary
The day before the trial court denied the motion to reconsider,     judgment because Carter & Co. failed to prove the requisite
the Olivers filed an amended original answer. It included two       elements of a suit on a sworn account as a matter of law with
paragraphs, one setting forth a “general denial” and the other      sufficient summary judgment evidence. The Olivers claim
a “specific denial.” The general denial was a reassertion of        they filed a proper verified denial of Carter & Co.'s claims and
the general denial made in the original answer:                     amended the verified denial prior to the summary judgment
                                                                    hearing so as to raise a material fact issue. Consequently,
            Defendants deny each and every,                         Carter & Co.'s prima facie case was rebutted and Carter &
            all and singular, the allegations                       Co. was required to prove each element of its claim on the
            of Plaintiff's Original Petition and                    account, but failed to do so.
            demand strict proof thereof as required
            by the Texas Rules of Civil Procedure.
            Said Defendants deny the charges
            as reasonable and customary and the                                      STANDARD OF REVIEW
            amount asserted and/or claimed.
                                                                     *3 The standard of review on appeal is whether the
The specific denial provided:                                       successful movant at the trial level demonstrated that there
                                                                    are no issues of material fact and that it is entitled to judgment
            Defendants enters [sic] a verified                      as a matter of law. Nixon v. Mr. Property Management
            denial pursuant to TEX.R.CIV.P.                         Co., Inc., 690 S.W.2d 546, 548 (Tex.1985). In resolving
            93(10), and for proof thereof,                          the issue of whether the movant has carried this burden, all

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Oliver v. Carter and Company Irr., Inc., Not Reported in S.W.3d (2002)

evidence favorable to the non-movant must be taken as true                      claim is necessary unless the trial
and all reasonable inferences, including any doubts, must                       court sustains special exceptions to the
be resolved in the non-movant's favor. Id. at 548-49. When                      pleadings. [Emphasis added].
a trial court's order granting summary judgment does not
articulate the grounds relied on for its ruling, an appellate   TEX.R.CIV.P. 185. Rule 93 provides:
court will affirm a summary judgment if any of the theories
                                                                      A pleading setting up any of the following matters, unless
advanced are meritorious. Carr v. Brasher, 776 S.W.2d 567,
                                                                      the truth of such matters appear of record, shall be verified
569 (Tex.1989).
                                                                      by affidavit.

                                                                ...
            SUIT ON A SWORN ACCOUNT
                                                                      10. A denial of an account which is the foundation of the
Texas Rules of Civil Procedure 185 and 93(10) govern suits            plaintiff's action, and supported by affidavit. [Emphasis
for debt on a sworn account. Rule 185 provides:                       added].

            When any action or defense is founded               TEX.R.CIV.P. 93(10).
            upon an open account or other claim
            for goods, wares and merchandise,                   In order to establish sufficient evidence to support a prima
            including any claim for a liquidated                facie case in a suit on a sworn account and sufficient evidence
            money demand based upon written                     to support a summary judgment disposition, the movant must
            contract or founded on business                     strictly adhere to the provisions of the Texas Rules of Civil
            dealings between the parties, or is                 Procedure. TEX.R.CIV.P. 185, 93(10), 166a. Andrews v. East
            for personal service rendered, or labor             Texas Med. Ctr.-Athens, 885 S.W.2d 264, 267 (Tex.App.-
            done or labor or materials furnished,               Tyler 1994, no writ); Cooper v. Scott Irrigation Constr. Inc.,
            on which a systematic record has                    838 S.W.2d 743, 746 (Tex.App.-El Paso 1992, no writ). If
            been kept, and is supported by the                  there is a deficiency in the plaintiff's sworn account, the
            affidavit of the party, his agent, or               account will not constitute prima facie evidence of the debt.
            attorney taken before some officer and              See Enernational Corp. v. Exploitation Eng'rs, Inc., 705
            authorized to administer oaths, to the              S.W.2d 749, 750 (Tex.App.-Houston [1st Dist.] 1986, writ
            effect that such claim is, within the               ref'd n.r.e.). At the same time, the defendant's denial must be
            knowledge of affiant, just and true,                written and supported by an affidavit denying the account.
            that it is due, and that all just and               TEX.R.CIV.P. 93(10); Andrews, 885 S.W.2d at 267. A sworn
            lawful offsets, payments and credits                general denial is insufficient. Huddleston v. Case Power &
            have been allowed, the same shall be                Equipment Co., 748 S.W.2d 102, 103 (Tex.App.-Dallas 1988,
            taken as prima facie evidence thereof,              no writ); Cooper, 838 S.W.2d at 746. A proper denial will
            unless the party resisting such claim               destroy the prima facie effect of the verified claim and will
            shall file a written denial, under oath.            force the plaintiff to prove his claim. Cooper, 838 S.W.2d at
            A party resisting such a sworn claim                746. A party who fails to file a sworn denial as required by
            shall comply with the rules of pleading             Rules 185 and 93(10) may not dispute the receipt of items
            as are required in any other kind                   or services or the correctness of the stated charges. Canter
            of suit, provided, however, that if he              v. Easley, 787 S.W.2d 72, 73 (Tex.App-Houston [1st Dist.]
            does not timely file a written denial,              1990, writ denied), citing Vance v. Holloway, 689 S.W.2d
            under oath, he shall not be permitted to            403 (Tex.1985); Cooper, 838 S.W.2d at 745-46. Should
            deny the claim, or any item therein, as             the defendant's answer not satisfy the requirements of Rule
            the case may be. No particularization               93(10), the plaintiff's affidavit attached to its petition will
            or description of the nature of the                 be considered prima facie evidence to support a summary
            component parts of the account or                   judgment and additional proof of the accuracy of the account

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Oliver v. Carter and Company Irr., Inc., Not Reported in S.W.3d (2002)

is unnecessary. Rizk v. Financial Guardian Ins. Agency, Inc.        fails to satisfy the requirements of Rules 185 and 93(10). We
584 S.W.2d 860, 862 (Tex.1979). Consequently, the plaintiff         disagree.
may dispose of the case on the pleadings alone. Andrews, 885
S.W.2d at 268.                                                      The Olivers denied the account upon which Carter & Co.'s
                                                                    claim is based with specific facts. They denied the amount
 *4 The issue before us is the sufficiency of the Olivers'          due and “whether such charges were usual, customary and/
sworn denial in their original answer. Carter & Co.'s motion        or reasonable prices for said merchandise and/or services....”
for summary judgment alleged that the Olivers' answer was           This denial directly controverts the claim made by Carter &
“defective and insufficient in law to constitute or raise a         Co. in their original petition regarding the reasonableness of
defense” to their cause of action. It is unclear from the           the prices for the merchandise at issue. While no specific
language of the motion or the trial court's order granting          form or words are required, the denial must be directed at the
summary judgment whether the summary judgment was                   particular account in question.
granted because of an insufficiency of the language used in
the answer to deny Carter & Co.'s claim or because of a defect      In Canter, the court held that a defendant's sworn answer
in the form of the purported affidavit supporting the answer.       met the requirements of Rules 185 and 93(10) and that it
In either case, we find that the Olivers' original answer did not   sufficiently denied the account upon which the plaintiff's
satisfy the requirements of Rules 185 and 93(10) to destroy         claim was based when it denied “the allegations contained
the prima facie effect of Carter & Co.'s sworn account claim.       in Paragraphs II and III and IV of the Plaintiff's Original
                                                                    Petition” and where Paragraph II of the plaintiff's original
                                                                    petition contained the sworn account allegations. Canter, 787
                                                                    S.W.2d at 73-74. The Olivers' answer is more specific. See
        Sufficiency of the Olivers' Original Answer
                                                                    Worley v. Butler, 809 S.W.2d 242, 245 (Tex.App.-Corpus
 [1] Carter & Co.'s original petition and supporting affidavit      Christi 1990, no writ)(where plaintiff would have to show
complied with Rule 185 and established a prima facie case           that the prices charged in the absence of an agreement are the
on the sworn account claim. At this point, Carter & Co.             usual, customary, and reasonable prices for that merchandise
was entitled to summary judgment on the pleadings without           or services). The Olivers' answer included a denial that the
additional proof unless the Olivers properly controverted the       charges were reasonable and customary. This was sufficient
claim with a written denial. Rule 185 requires that the party       to raise a fact issue to overcome the plaintiff's prima facie
resisting a sworn account “file a written denial, under oath”       case. However, whether or not the language in the Olivers'
and comply with Rule 93(10) requiring a special verified            answer sufficiently denies the sworn account claim, the
denial of the account supported by an affidavit in order to put     attached “verification” renders the answer fatally defective.
the plaintiff's claim at issue. Huddleston, 748 S.W.2d at 103.
Neither Rule 185 nor Rule 93(10) specifies a particular form
or mandate magic words to be used in a defendant's sworn                           The “Verification” as Affidavit
denial. Andrews, 885 S.W.2d at 267. Rule 185 was amended
in 1984 to eliminate the technical pleading requirements of          *5 [2] Carter & Co. argues that the Olivers' answer was
the former version and to make suits on account subject to          insufficient because it failed to have an affidavit in support
ordinary rules of pleading and practice. Canter, 787 S.W.2d         of the answer as required by Rules 185 and 93(10). We
at 74. While no specific form or words are required, the            agree. The “verification” attached by the Olivers did not
answer must “sufficiently deny” the account upon which the          constitute an affidavit. “Affidavit” is defined as “a statement
plaintiff's claim is founded. Id.; Cooper, 838 S.W.2d at 746.       in writing of a fact or facts signed by the party making it,
A defendant need not deny each and every item of a sworn            sworn to before an officer authorized to administer oaths, and
account claim, but must deny the account upon which the             officially certified to by the officer under his seal of office.”
plaintiff's case is based. Huddleston, 748 S.W.2d at 103-04.        TEX.GOV'T CODE ANN. § 312.011(1)(Vernon 1998). No
Carter & Co. argues that the verified pleading attached to the      particular terminology is required by Section 312.011 to
Olivers' answer is no more than a verified general denial and       render a document an affidavit. Norcross v. Conoco, Inc.,

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Oliver v. Carter and Company Irr., Inc., Not Reported in S.W.3d (2002)

720 S.W.2d 627, 630 (Tex.App.-San Antonio 1986, no writ).           *6 The amended answer and supporting affidavit easily
It is the substance and not the form of an affidavit that is       satisfy the requirements of Rules 185 and 93(10). It contained
important. Id., citing Taylor v. Fred Clark Felt Company, 567      more than a broad denial of the allegations against the Olivers
S.W.2d 863 (Tex.Civ.App.-Houston [14th Dist.] 1978, writ           and specific reference was made to the account which is the
ref'd n.r.e .). However, the form of a statement is important      basis of the plaintiff's petition, stating, “in connection with the
for purposes of determining whether such statement qualifies       account in question, there was no sale or delivery of goods
as an affidavit that must accompany a written denial under         and/or services....” The Olivers also denied that “the amount
Rules 185 and 93(10).                                              alleged due and owing by the Plaintiff was not in accordance
                                                                   with any agreement, if any....” The affidavit contained the
In order for the “verification” to satisfy the requirements of     essential affirmation under oath that the statements contained
an affidavit under Rules 185 and 93, it must recite under oath     in the Olivers' amended answer were “true and correct” as
that the factual statements contained in the defendant's answer    well as all other recitations required in an affidavit.
are true. See Brown Foundation Repair and Consulting, Inc.,
v. Friendly Chevrolet Co., 715 S.W.2d 115, 117 (Tex.App.-
Dallas 1986, writ ref'd n.r.e.). Brown involved a sworn
                                                                                  Was the First Amended Answer
account where the defendant's trial pleading read in relevant
                                                                                  Considered by the Trial Court?
part, “SUBSCRIBED AND SWORN TO before me, the
undersigned authority, by Robert L. Brown, known to me              [4] The Olivers argue that because they filed the amended
to be the Vice-President of Brown Foundation Repair and            answer prior to the hearing on the motion for summary
Consulting, Inc., to certify which witness my hand and seal        judgment, because there was no evidence in the record that
of office this 28 day of June, 1985.” Id. The court held           Carter & Co. objected to it or suffered unfair prejudice or
that the affidavit did not constitute a verified denial because    surprise, and because there was no indication that the trial
“[n]owhere does it appear that Robert L. Brown has sworn or        court did not consider it, leave to file the amended answer
affirmed under oath that the facts stated are true.” Id. at 118.   should be presumed. We agree. Rule 63 of the Texas Rules
While the verification here was signed by both of the Olivers      of Civil Procedure provides:
and was sworn to before two notaries, it does not contain an
oath that the facts alleged in the answer are true and thus does                Parties may amend their pleadings ...
not satisfy the requirements for an affidavit under Rules 185                   provided, that any pleadings,
and 93(10).                                                                     responses or pleas offered for filing
                                                                                within seven days of the date of trial or
                                                                                thereafter, or after such time as may be
                                                                                ordered by the judge under Rule 166,
Sufficiency of the Olivers' First Amended Original Answer
                                                                                shall be filed only after leave of the
 [3] Having determined that the Olivers' original answer                        judge is obtained, which leave shall be
failed to satisfy the requirements of Rules 185 and 93(10)                      granted by the judge unless there is a
so as to properly controvert Carter & Co.'s sworn account                       showing that such filing will operate as
claim, we now turn to the Olivers' claim that their first                       a surprise to the opposite party.
amended answer sufficed. The day before the trial court
                                                                   TEX.R.CIV.P. 63. Rule 63 has been given a liberal
denied the motion to reconsider the request for the late filing
                                                                   interpretation. Goswami v. Metropolitan Savings and Loan
of a response to the motion for summary judgment, the
                                                                   Association, 751 S.W.2d 487 (Tex.1988). In Goswami, the
Olivers filed an amended original answer containing both a
                                                                   Texas Supreme Court held that since the record in the case
“general” denial reasserting the denials made in the original
                                                                   was silent of any basis to conclude that the amended petition
answer and a “specific” denial that provided additional facts
                                                                   was not considered by the trial court and that the opposite
controverting the sworn account claim. The answer was
                                                                   party did not show surprise or prejudice, leave of court was
supported by an “affidavit” signed by Floyd Oliver.
                                                                   presumed. Goswami, 751 S.W.2d at 490. Here, the amended
                                                                   answer was filed within seven days of the summary judgment

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                                              Schultz, William 10/26/2015
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Oliver v. Carter and Company Irr., Inc., Not Reported in S.W.3d (2002)

                                                                       answer was properly before the trial court when it entered
hearing. The Goswami court determined that a summary
                                                                       its order on the motion for summary judgment. The amended
judgment proceeding is a “trial” within the meaning of Rule
                                                                       answer and supporting affidavit satisfied the requirements
63. Id. The trial court's order granting summary judgment
                                                                       of Rules 185 and 93(10). Consequently, Carter & Co.'s
states that it “considered the Plaintiff's Motion, the Pleadings
                                                                       petition cannot be considered prima facie evidence to support
and Affidavits on file herein.” The record does not indicate
                                                                       summary judgment in their favor. We overrule Appellants'
that the trial court refused leave to file the amended answer;
                                                                       sole issue and reverse and remand for further proceedings.
it indicates only that the trial court denied leave to file an
untimely response to the motion for summary judgment. Nor
does the record contain any indication that Carter & Co.
                                                                       All Citations
would suffer surprise or prejudice. Thus, we presume that
the trial court granted leave to amend and that the amended            Not Reported in S.W.3d, 2002 WL 1301568

End of Document                                                    © 2015 Thomson Reuters. No claim to original U.S. Government Works.

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                                            Schultz, William 10/26/2015
                                             For Educational Use Only

Phillips v. Herndon, 78 Tex. 378 (1890)
14 S.W. 857, 22 Am. St. Rep. 59
                                                                          A vendee purchased two tracts of land,
                                                                          establishing his home on the first purchase. A
                     78 Tex. 378
                                                                          general payment was made by him, and money
                Supreme Court of Texas.
                                                                          was collected by the vendor on the order of
                      PHILLIPS                                            the vendee after his death. It did not appear
                         v.                                               that the vendor made any applications of the
                    HERNDON et al.                                        payments, which were sufficient to complete the
                                                                          first purchase, but not the second. Held that,
                       Nov. 11, 1890.                                     the vendee being dead, and unable to make the
                                                                          application when the last payment was received,
Commissioner's decision. Appeal from district court, Smith                the law will so apply it for him as will be most to
county; FELIX J. McCORD, Judge.                                           his interest, and such payment should be applied
                                                                          to the first purchase.

                                                                          9 Cases that cite this headnote
 West Headnotes (6)

                                                                [4]       Specific Performance
 [1]    Appeal and Error                                                      Averments as to Contract
           Contents and Interpretation in General
                                                                          In a suit for specific performance of a bond to
        In a suit for specific performance brought by the                 make “a good and valid deed in common form”
        vendee, the bond for a deed, as shown in the bill                 the bond is properly declared on in accordance
        of exceptions, described a note for the purchase                  with its legal effect as an obligation to convey “in
        money as maturing January 1, 1879, instead of                     fee-simple by warranty deed.”
        January 1, 1876, as alleged in the petition. A
        receipt for the cash payment recited that the note                5 Cases that cite this headnote
        matured January 1, 1876, and the vendor testified
        that it was due at that time. Held, that it would       [5]       Specific Performance
        be presumed that “1879” was written in the bill                       Items, Measure, and Amount of Damages
        of exceptions by a clerical error, and that it was
                                                                          In a suit by the vendee for specific performance,
        error to exclude the bond for variance.
                                                                          or for compensation, if that cannot be had on
        Cases that cite this headnote                                     account of the land having been conveyed to a
                                                                          bona fide purchaser, where it appears that the
                                                                          vendor conveyed the land to another after the
 [2]    Evidence
                                                                          vendee had fully complied with the terms of
            Trustee or Beneficiary
                                                                          his contract, the latter may recover the value of
        When the vendee has died, and suit for specific                   the land at the time of the conveyance, and is
        performance is brought on behalf of his infant                    not confined to the purchase money paid, with
        children by their grandfather, as guardian, his                   interest.
        acts and declarations prior to his appointment
        as guardian cannot affect their rights, and are                   10 Cases that cite this headnote
        irrelevant.
                                                                [6]       Vendor and Purchaser
        1 Cases that cite this headnote
                                                                              Election to Rescind, and Notice
                                                                          Where a vendee takes possession of the land,
 [3]    Payment
                                                                          and pays part of the purchase money, the vendor
            Manner of Application in General

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Phillips v. Herndon, 78 Tex. 378 (1890)
14 S.W. 857, 22 Am. St. Rep. 59
         cannot rescind without notice of his intention            1882, Herndon collected $35 due to Moseley for a pony he
         to do so; and, on the vendee's dying, leaving             had sold in 1881. When Moseley died, in November, 1881, he
         infant children as his sole heirs, who are without        left a wife and four minor children living on the land. His wife
         a guardian, there is no one to whom notice can            died in June, 1882, and her parents, Perry and Polly Phillips,
         be given, and there can be no rescission.                 took charge of the children, and moved them from the land to
                                                                   their home, to care for them, and took possession of the land.
         8 Cases that cite this headnote                           On October 15, 1883, Herndon made a statement to Phillips
                                                                   and wife, showing balance of $173.75 due him on the two
                                                                   sales made to Moseley, and on that day Herndon indorsed
                                                                   on each of the bonds for title that the sales made to Moseley
Attorneys and Law Firms                                            were canceled and that he had that day sold the lands to Perry
                                                                   Phillips for the consideration of $173.75, upon which Phillips
*378 **857 White & Edwards, for appellant.                         then paid him $3.75. On the 10th day of December, 1887,
                                                                   Herndon sold the lands to F. R. Allen, who took possession
*379 George H. Gould and W. S. Herndon, for appellees.
                                                                   thereof. Perry Phillips qualified as guardian of the minor
Opinion                                                            children of James Moseley, and, as such, brought this suit
                                                                   on the 27th day of April, 1888, against Herndon and Allen
ACKER, J.                                                          for specific performance of the contracts made by Herndon
                                                                   with Moseley, alleging payment of the purchase money by
On the 15th day of September, 1875, W. S. Herndon sold
                                                                   Moseley, or to recover the value of the land from Herndon,
to James Moseley five acres of land, for the consideration
                                                                   if it was found **858 that Allen was a good-faith purchaser
of $100 in gold, for which Moseley executed his promissory
                                                                   from Herndon, and alleged that the value of the land was
note, bearing interest from that date at 10 per cent. per annum,
                                                                   $150 per acre at the time Herndon sold to Allen. Plaintiff also
and payable on the 1st day of January, 1876; and also paid
                                                                   prayed for general relief. The defendants answered, pleading
to Herndon $30 in currency, for which Herndon executed
                                                                   a general denial and limitation, and also pleaded cancellation
his receipt, to be credited on Moseley's note at its value in
                                                                   of the sales to Moseley for failure to pay purchase money.
gold. Herndon executed and delivered to Moseley a bond for
                                                                   Allen pleaded that he was an innocent purchaser. The trial
title in the usual form, and Moseley went into possession,
                                                                   without a jury resulted in judgment for the defendants, and
built a house *380 upon the land, and resided there with his
                                                                   plaintiff appealed.
family until his death, in November, 1881. In addition to the
$30, currency paid by Moseley at the time of his purchase,          *381 The plaintiff offered in evidence the bonds for title, to
he made the following payments to Herndon: On the 21st             which the defendants objected ‘for the reason that the same
day of November, 1877, Herndon receipted him for ‘twenty           varied from, and did not correspond with, the allegations of
dollars to be credited on his land note.’ On the 1st day of        the petition.’ The objections were sustained, and the first
December, 1877, $30 in currency, which was receipted for           and second assignments of error relate to these rulings.
to be credited on the note. On December 17, 1878, Herndon          The allegations of the petition descriptive of the bonds are
made a statement showing balance of $46.90 due him by              as follows: ‘That on said 15th day of September, 1875,
Moseley, and on that day he credited the statement with the        said W. S. Herndon, being desirous of disposing of said
sum of $30, then paid by Moseley, reducing the balance             above-described land, entered into an agreement with James
due to $16.90. On the 14th day of January, 1879, Herndon           Moseley, the ancestor of plaintiff's said wards, for the sale of
sold to Moseley another tract of 5.8 acres of land for the         said lands to him, the said James Moseley, which agreement
consideration of $100 in gold, for which Moseley executed          was reduced to writing, and signed by said W. S. Herndon,
his promissory note, due at one day after date, with interest      and delivered on the day it bears date, to-wit, on September
from date at 10 per cent. per annum, and Herndon executed          15, 1875, wherein said Herndon stipulated and agreed with
and delivered his bond for title to Moseley, and Moseley took      said Moseley to convey to him said above-described tract
possession of this tract, also. On the 4th day of October, 1881,   of land in fee-simple, by warranty deed, upon payment of
Moseley paid Herndon $18, and on the 1st day of December,          a promissory note, executed on said September 15, 1875,

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                                               Schultz, William 10/26/2015
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Phillips v. Herndon, 78 Tex. 378 (1890)
14 S.W. 857, 22 Am. St. Rep. 59
by said James Moseley, for one hundred gold dollars, with            that, in executory contracts of the character involved in this
10% interest from date, due at Tyler, Texas, on January 1,           case, adequate compensation for the injury done should be
1876.’ The bond, of date January 14, 1879, was described in          recoverable, when the vendor, by his voluntary act, deprives
substantially the same way. The objection does not designate         himself of the ability to perform his contract. We are aware
in what the alleged variance consists, and we are unable to          that the case of Hall v. York, 22 Tex. 643, following Sutton v.
discover it. It is alleged that Herndon obligated himself to         Page, 4 Tex. 142, seems to hold the contrary doctrine, for it is
convey the land ‘in fee-simple, by warranty deed,’ while the         there said ‘that where the vendor of land is not able to make
bonds, offered in evidence, are conditioned that he would            title the vendee's measure of damages is the purchase money,
convey the lands ‘by a good and valid deed or deeds in               and interest, and nothing more.’ But that case, like the case
common form;’ but this constitutes no variance, for an               of Sutton v. Page, was not a suit for specific performance,
obligation to make ‘a good and valid deed in common form,’           or to recover damages for breach of trust by the vendor. Hall
binds the obligor to execute a warranty deed, and the petition       v. York was a suit to recover the penalty fixed by the bond
correctly declared the legal effect of Herndon's obligations.        for title, which was a much larger sum than the money paid,
Vardeman v. Lawson, 17 Tex. 11. It is true that it appears from      and, like the case of Sutton v. Page, was simply an action on
the bill of exceptions that the bond of September 15, 1875,          the personal covenant in the bond. In both of those cases it
described the note, given by Moseley of that date, as maturing       was held that the measure of damages was the money paid,
January 1, 1879, instead of January 1, 1876, as alleged in the       with interest, unless other damages are specially alleged and
petition; but the receipt given by Herndon for the $30, paid by      proved. We do not think those cases are analogous to this. In
Moseley on the day of the date of both the bond and the note,        the case of Hopkins v. Lee, 6 Wheat. 109, the court said: ‘The
recites that the note matured on the 1st day of January, 1876.       rule is settled in this court that, in an action by the vendee for a
Herndon testified that it became due on that date, and indeed,       breach of contract on the part of the vendor for not delivering
all of the evidence upon that point went to show that the note       the article, the measure of damages is its price at the time of
of September 15, 1875, matured January 1, 1876, as alleged           the breach. The price, being settled by the contract, which is
in the petition. We therefore conclude that ‘1879,’ written in       generally the case, makes no difference, nor ought it to make
the bill of exceptions, is a clerical error, and that there is no    any; otherwise, the vendor, if the article has risen in value,
variance between the allegations and evidence offered. We            would always have it in his power to discharge himself from
think the first and second assignments of error are well taken,      his contract and put the enhanced value in his own pocket. Nor
and that the court erred in excluding the bonds.                     can it make any difference in principle whether the contract be
                                                                     for real or personal property, if the lands, as is the case here,
The third assignment of error is: ‘The court erred in excluding      have not been improved or built on. In both cases the vendee
the evidence offered by plaintiff to prove the value of the          is entitled to have the thing agreed for at the contract price,
land at the time defendant Allen took possession of it; said         and to sell it himself at its increased value.’ See, also, **859
evidence being pertinent, and *382 plaintiff having alleged          Kirkpatrick v. Downing, 58 Mo. 32. In this case, plaintiff did
the value of said land, and prayed for judgment for said value       not seek to recover anything for improvements put upon the
in case he should fail to recover the specific land itself.’ There   land, but only the value of it at the time of its appropriation
were two separate and entirely distinct contracts entered into        *383 by Herndon, in the event specific performance could
between Herndon and Moseley, either of which Moseley had             not be had. The land was sold by Herndon to Moseley at
the right to enforce the specific performance of, as against         $20 per acre, and the petition alleged it to be of the value of
Herndon, upon proof of performance by Moseley of his part            $150 per acre at the time it was sold by Herndon to Allen. If
of the contract. If, after performance by Moseley, Herndon,          Moseley fully performed his part of either of the contracts by
by his voluntary act, placed it beyond his power to make title       paying the purchase money, the superior equitable title vested
to the land, as stipulated in his bond, he thereby became liable     in him, and Herndon held the legal title in trust for him; and,
to Moseley for such damages as were the direct and natural           upon breach of that trust, by voluntary conveyance of the legal
result of his failure to comply with his obligation. There has       title to another, Herndon became liable to Moseley for such
been much contrariety in the decisions of the courts as to           damages as resulted directly therefrom, we think, certainly
the correct measure of damages in such case, but we believe          to the extent of the value of the land at the time it was so
that equity, and the weight of authority, sustain the view

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                                               Schultz, William 10/26/2015
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Phillips v. Herndon, 78 Tex. 378 (1890)
14 S.W. 857, 22 Am. St. Rep. 59
appropriated, and we think the court erred in excluding the         the purchase money for the lands, and Moseley having taken
evidence offered to prove such value.                               possession under his contracts of purchase, Herndon could
                                                                    not rescind the sales to him without notice of his intention
The fourth assignment of error is: ‘The court erred in              to do so; and Herndon having received payments on the
admitting, over objection of plaintiff, the evidence offered        purchase money after default by Moseley in failing to pay
by defendants as to transactions and conversations had by           the purchase money at maturity, he thereby waived his right
defendant Herndon with Perry Phillips and Polly Phillips in         of rescission. Kennedy v. Embry, 72 Tex. 390, 10 S. W.
the year 1883, as shown by plaintiff's bill of exception No.        Rep. 88; Moore v. Giesecke, 76 Tex. 548, 13 S. W. Rep.
4.’ The objections to this evidence was upon the ground             290; Tom v. Wollhoefer. 61 Tex. 281. At the time Herndon
that ‘it was immaterial, and could not affect the rights of         attempted to rescind the sales to Moseley after the death of
plaintiff's wards.’ We think the objection was good, and            both Moseley and his wife, there was no one to whom notice
should have been sustained. When Moseley died, whatever             of his intention to rescind could be given, and there was
rights and interest he had in the land descended to and vested      therefore no rescission effected. Herndon testified, without
absolutely in his widow and minor children. At the time             objection, that ‘about July 23, 1881, Moseley and myself had
of the transactions between Herndon and Perry Phillips and          a settlement of all matters between us. He had done work
his wife, in 1883, Moseley's widow was also dead, and the           for me, and I had advanced considerable money to pay his
minor children alone owned whatever interest their parents          hands, and for supplies, and he fell in my debt $183. This was
had acquired in the land. There was no one authorized to bind       then treated by Moseley and myself as balance due me.’ In
them, or affect their interest by any agreement, and their rights   regard to the $18 paid by Moseley to Herndon on October
were not affected by the transactions between Herndon and           4th, 1881, Herndon testified ‘that, in the fall of 1881, I think
their grandparents, Perry and Polly Phillips.                       I let him have some money, but how much I cannot say. He
                                                                    was to settle it out of his service upon the railroad, but died,
The fifth assignment of error is: ‘The court erred in rendering
                                                                    and failed to pay anything except the $18, October 4, 1881;
judgment for defendants, and in not rendering judgment for
                                                                    this may or may not have settled the small amounts I let him
plaintiff, it being shown that at least the five acres of land
                                                                    have, after July 23, 1881, but I cannot say.’ Herndon also
bargained for by James Moseley on September 15, 1875, had
                                                                    testified that; ‘Some time before Moseley died, he sent me
been fully paid for, and that F. R. Allen was not a purchaser in
                                                                    a note that he had sold the pony to Schoof for $35, and to
good faith.’ The court found, as a conclusion of law, that ‘the
                                                                    please collect the amount, and give him credit on the debts
plaintiff has mistaken his remedy. The land having been sold
                                                                    he owed me.’ There was no other evidence bearing upon the
to Allen by Herndon without notice, plaintiff cannot recover
                                                                    question of appropriation of the money received by Herndon
the land, or its value, but his recovery would be the penalty
                                                                    from Moseley after the second bond for title was executed, at
on the bond, to-wit, one hundred dollars, with interest.’ From
                                                                    which time, according to the statement made by Herndon on
what we have already said it will be seen that we understand
                                                                    the 17th of December, 1878, Moseley owed him a balance of
this suit to be upon the bonds for specific performance only,
                                                                    $16.90 on the first purchase, after having paid him $110, $30
in the first instance, and, secondarily, against Herndon to
                                                                    of which was paid at the time of the purchase. In respect to the
recover damages for breach of trust in voluntarily transferring
                                                                    appropriation of payments made by a debtor to a creditor who
the legal title to Allen, and thus placing it beyond his power
                                                                    holds more than one debt against him, the general rule is that
to perform his contract, after the superior equitable title had
                                                                    a debtor has the right to appropriate payments, and, if he does
vested in Moseley by payment of the purchase money. We
                                                                    not, the creditor may do so, and, where neither appropriates
see no reason why the plaintiff cannot maintain the suit in
                                                                    them, the law will make the application according to the
this way. If Allen *384 was an innocent purchaser, then
                                                                    justice of the case. Matossy v. Frosh, 9 Tex. 612. In Stanley
specific performance could not be decreed against Herndon;
                                                                    v. Westrop, 16 Tex. 200, it is said: ‘It is admitted on *385
and, if the superior title had vested in Moseley, the plaintiff
                                                                    all hands that the debtor has the absolute right to make the
could either sue upon the bond for purchase money paid,
                                                                    application if he sees proper to exercise it. If he omits to do
and interest, or bring his suit, as we understand him to have
                                                                    so, and it is left to the law to make it for him, it ought, it would
done, to recover damages against Herndon for breach of trust.
                                                                    seem, to be made in accordance **860 with the presumed
Herndon, having received from Moseley at least a part of
                                                                    intention of the debtor.’ And we think it must be presumed

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                                               Schultz, William 10/26/2015
                                                For Educational Use Only

Phillips v. Herndon, 78 Tex. 378 (1890)
14 S.W. 857, 22 Am. St. Rep. 59
                                                                        of it, and thereby perfect Moseley's title to the five acres first
that the debtor intended to apply it to the debt that would be
                                                                        purchased. If the $18 was insufficient to pay the balance of
most beneficial to him. In Taylor v. Coleman, 20 Tex. 776,
                                                                        $16.90, then so much of the $35, received by Herndon after
it is said: ‘The debtor having, at the time of the sales, made
                                                                        Moseley's death, as was necessary to pay off the balance of the
no specific designation of the proceeds, the plaintiffs were
                                                                        $16.90 should be so applied. At the time Herndon received the
left to their election to apply the payment; but this did not
                                                                        $35, Moseley was dead, and could not direct its application.
vest them with the power to act capriciously, or to make such
                                                                        The law applied it for him to the liquidation of any balance
designation as would unreasonably operate to the prejudice
                                                                        that might be due on the purchase money for the five acres
of the defendant. At the civil law, the creditor must regard
                                                                        first purchased, and upon which he had established the home
himself as standing in the shoes of the debtor, and apply
                                                                        for himself and family. We are of opinion that the judgment of
the payment to such debts as the debtor himself would have
                                                                        the court below should be reversed, and the cause remanded.
first discharged; but, without affirming the principle to this
extent, it is the rule of the common law that the creditor cannot       STAYTON, C. J.
make such application as would, under the circumstances, be
inequitable and unjust to the debtor.’ See, also, Bray v. Crain,        Report of the commission of appeals examined, their opinion
59 Tex. 649. Applying the rules and principles announced in             adopted, and the judgment is reversed, and cause remanded.
the foregoing decisions to this case, we think the $18 paid by
Moseley on the 4th day of October, 1881, should have been
                                                                        All Citations
applied to the payment of the balance of $16.90, claimed by
Herndon to be due on the first contract, especially so as it does       78 Tex. 378, 14 S.W. 857, 22 Am. St. Rep. 59
not appear from the evidence what application Herndon made

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                                              Schultz, William 10/26/2015
                                               For Educational Use Only

Vance v. Holloway, 689 S.W.2d 403 (1985)

                                                                   Curry, Curry & Robinson, Donald L. Curry, Lubbock, for
                    689 S.W.2d 403                                 respondent.
                 Supreme Court of Texas.
                                                                   Opinion
                Newton C. VANCE, d/b/a
            Vanguard Production, Petitioner,                       PER CURIAM.
                           v.
                                                                   This is an appeal from a suit on a sworn account. The trial
            Jim R. HOLLOWAY, Respondent.
                                                                   court held that Petitioner, Newton C. Vance, d/b/a Vanguard
            No. C–3922. | April 3, 1985.                           Production, was entitled to recover operating costs on the
                                                                   “Dawn” lease in which Respondent, Jim R. Holloway, owned
           | Rehearing Denied May 8, 1985.
                                                                   a 1 /32 working interest. In an unpublished opinion, the court
Suit on sworn account was brought against owner of working         of appeals reversed and remanded, holding that Vance had
interest in oil well. The District Court No. 106, Garza            failed to establish his ownership of the account. Pursuant
County, Hansard, J., held that plaintiff was entitled to recover   to TEX.R.CIV.P. 483, we grant Newton C. Vance, d/b/
operating costs on lease in which defendant owned working          a Vanguard Production's application for writ of error and,
interest, and defendant appealed. The Amarillo Court of            without hearing oral argument, reverse the judgment of the
Civil Appeals, Seventh Supreme Judicial District, Reynolds,        court of appeals and affirm the judgment of the trial court.
J., reversed and remanded, holding that plaintiff had failed
to establish his ownership of account, and plaintiff filed         The record established that Vance originally acquired an
application for writ of error. The Supreme Court held that         interest in the “Dawn” lease in 1981. The well was developed
defendant who was sued on sworn account and had failed             by and operating costs paid to M.F.B. Oil Company. In 1982,
to file sworn denial waived his right to dispute amount and        Vance acquired M.F.B. Oil Company's interest in the “Dawn”
ownership of account.
                                                                   lease. Holloway owns a 1 /32 working interest in one of
                                                                   Vance's wells on this lease. Vance sued Holloway on a sworn
Judgment of Court of Appeals reversed and judgment of trial
                                                                   account to recover the portion of operating expenses that
court affirmed.
                                                                   Holloway owed to Vance as owner of M.F.B. Oil Company's
                                                                   interest in the “Dawn” lease.

 West Headnotes (1)                                                The petition and affidavit filed by Vance clearly met
                                                                   the requirements of TEX.R. *404 CIV.P. 185. Holloway
                                                                   answered by way of an unverified general denial only. He
 [1]     Account, Action On
                                                                   failed to meet the requirements of TEX.R.CIV.P. 185 and
             Pleading
                                                                   93(10) which state that a written denial of the plaintiff's
         Defendant who was sued on sworn account                   action must be verified. The language of the rules is clear.
         and failed to file sworn denial waived his right          TEX.R.CIV.P. 185 states:
         to dispute amount and ownership of account.
         Vernon's Ann.Texas Rules Civ.Proc., Rules 93,                         ... A party resisting such a sworn claim
         subd. 10, 185.                                                        shall comply with the rules of pleading
                                                                               as are required in any other kind of
         33 Cases that cite this headnote                                      suit, provided however, that if he does
                                                                               not timely file a written denial, under
                                                                               oath, he shall not be permitted to deny
                                                                               the claim, or any item therein, as the
Attorneys and Law Firms                                                        case may be.... (Emphasis added).

*403 Mitchell Williams, Post, for petitioner.                      Similarly, TEX.R.CIV.P. 93 provides:

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                                            Schultz, William 10/26/2015
                                             For Educational Use Only

Vance v. Holloway, 689 S.W.2d 403 (1985)

                                                                     ownership of the account. These facts, having been accepted
  A pleading setting up one of the following matters ... shall
                                                                     by the trial court as prima facie evidence of the sworn account,
  be verified by affidavit.
                                                                     entitle Vance to recovery.

                                                                     Accordingly, we conclude that the decision of the court
  10. A denial of an account which is the foundation of the          of appeals conflicts with the applicable rules of procedure
    plaintiff's action, and is supported by affidavit.               and law of this court, hereinabove set forth. Without
                                                                     hearing oral argument, we grant Newton C. Vance, d/b/a
“In the absence of a sworn denial meeting the requirements           Vanguard Production's application for writ of error, reverse
of the rule, an account is received as prima facie evidence          the judgment of the court of appeals and affirm the judgment
as against a defendant sued thereon, and the defendant               of the trial court. TEX.R.CIV.P. 483.
may not dispute the receipt of the items or services, or
the correctness of the stated charges....” Rizk v. Financial
Guardian Insurance Agency, Inc., 584 S.W.2d 860, 862                 All Citations
(Tex.1979). Holloway failed to file a sworn denial and he            689 S.W.2d 403
has, therefore, waived his right to dispute the amount and

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                                                   Schultz, William 10/26/2015
                                                    For Educational Use Only

Wyatt v. Shaw Plumbing Co., 760 S.W.2d 245 (1988)

                                                                                 rendered in connection with construction of
                                                                                 house was compulsory counterclaim in house
     KeyCite Yellow Flag - Negative Treatment                                    builder's suit against plumbing company, arising
Called into Doubt by   Commint Technical Services, Inc. v. Quickel,
                                                                                 out of same instance, in which builder alleged
 Tex.App.-Hous. (14 Dist.), June 3, 2010
                                                                                 fraud and violation of Deceptive Trade Practices
                       760 S.W.2d 245                                            Act. Vernon's Ann.Texas Rules Civ.Proc., Rule
                   Supreme Court of Texas.                                       97(a).

           Oscar S. WYATT, Jr., Petitioner,                                      38 Cases that cite this headnote
                        v.
       SHAW PLUMBING COMPANY, Respondent.                              [2]       Pleading
                                                                                     Plea of Other Action Pending
             No. C–6801. | Oct. 26, 1988.
                                                                                 If inherent interrelationship of subject matter
            | Rehearing Denied Dec. 14, 1988.
                                                                                 exists in two pending lawsuits, plea in abatement
House builder filed an action against plumbing contractor                        in second action must be granted; it is not
for fraud and violation of the Deceptive Trade Practices                         required that exact issues and all parties be
Act. Contractor subsequently sued builder and his agent                          included in first action before second is filed,
in another county for breach of contract in regard to the                        provided that claim in first suit may be amended
construction of the home. Builder's plea in abatement to                         to bring in all necessary and proper parties in
contractor's suit was denied by the 214th District Court,                        issues.
Nueces County, Mike Westergren, J., as was builder's second
                                                                                 102 Cases that cite this headnote
plea in abatement. Judgment was rendered against builder
following a jury trial in Nueces County, and builder appealed.
The Corpus Christi Court of Appeals, Thirteenth Supreme                [3]       Pleading
Judicial District, Seerden, J., 736 S.W.2d 763, affirmed, and                        Plea of Other Action Pending
builder brought error. The Supreme Court, Ray, J., held                          Court had no discretion to deny house builder's
that: (1) contractor's suit against builder was a compulsory                     plea of abatement in breach of contract action
counterclaim, and (2) the court had no discretion to deny                        by plumbing contractor due to fact that house
builder's plea in abatement.                                                     builder had earlier filed suit in another county
                                                                                 against plumbing contractor for fraud and
Reversed and remanded with instructions.                                         violation of Deceptive Trade Practices Act, even
                                                                                 though house builder's agent was named party
Kilgarlin, J., issued a concurring opinion.                                      in plumbing contractor's action but not in house
                                                                                 builder's action, as agent could have been joined
Gonzalez, J., issued a dissenting opinion in which Phillips,                     in builder's action, both law suits involved same
C.J., and Mauzy, J., joined.                                                     issues as to construction of a home, and venue
                                                                                 was proper in either county, and, thus, court
                                                                                 where suit was first filed acquired dominant
                                                                                 jurisdiction.
 West Headnotes (3)
                                                                                 128 Cases that cite this headnote
 [1]      Set–Off and Counterclaim
              Effect of Failure to Assert or Claim;
          Compulsory Counterclaim
          Plumbing company's claim against house builder
          for breach of contract to recover for services

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                                             Schultz, William 10/26/2015
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Wyatt v. Shaw Plumbing Co., 760 S.W.2d 245 (1988)

                                                                 Duval County suit. The Nueces County district court signed
Attorneys and Law Firms                                          an order denying Wyatt's plea in abatement on June 15, 1984.
                                                                 On February 13, 1986, Wyatt filed a second plea in abatement
*246 Ken Dahlbert, Wood & Burney, Corpus Christi, Tracy
                                                                 in Nueces County after he agreed to indemnify Spear for any
DuBose, DuBose & Short, Montgomery, Joe R. Greenhill and
                                                                 claims against Spear by Shaw Plumbing. The Nueces County
Larry F. York, Baker & Botts, Austin, for petitioner.
                                                                 district court again denied the plea. Prior to the trial in Nueces
Richard J. Hatch, Prichard, Peeler, Hatch, Cartwright, Hall &    County, the trial judge struck Wyatt's pleadings as a sanction
Kratzig, Corpus Christi, for respondent.                         for alleged discovery abuse. Judgment was rendered against
                                                                 Wyatt following a jury trial in Nueces County.

                                                                  [1] It has long been the policy of the courts and the
                         OPINION
                                                                 legislature of this state to avoid a multiplicity of lawsuits.
RAY, Justice.                                                    The need for judicial economy has recently become more
                                                                 acute because the dockets of our trial *247 courts are
This case arises out of a dispute over the services provided     overburdened, and litigants must wait far too long for their
by a plumbing contractor in the construction of a house in       cases to be heard. In keeping with the policy to avoid
Duval County. The issue presented by this appeal involves        multiple lawsuits, Texas Rule of Civil Procedure 97(a) was
a plea in abatement filed in a second suit in Nueces County      promulgated. This rule regarding compulsory counterclaims
when a prior suit was pending in Duval County. The court         dictates that a pleading shall assert a counterclaim if it meets
of appeals affirmed the Nueces County district court, holding    six elements. A counterclaim is compulsory if: (1) it is within
that the decision to grant a plea in abatement was within        the jurisdiction of the court; (2) it is not at the time of filing the
the discretion of the Nueces County court and there was no       answer the subject of a pending action; (3) the action is mature
abuse of that discretion. 736 S.W.2d 763. We hold that the       and owned by the pleader at the time of filing the answer;
Nueces County district court was required to grant the plea in   (4) it arises out of the transaction or occurrence that is the
abatement because a previously filed suit between the parties    subject matter of the opposing party's claim; (5) it is against
was pending. We, therefore, reverse the judgment of the court    an opposing party in the same capacity; and (6) it does not
of appeals and remand the cause to the Nueces County district    require for its adjudication the presence of third parties over
court with instructions to vacate its judgment and abate all     whom the court cannot acquire jurisdiction. See Tex.R.Civ.P.
proceedings pending final disposition of the Duval County        97(a), (d); see also 2 R. McDonald, Texas Civil Practice in
lawsuit, which was previously filed.                             District and County Courts § 7.49, at 253–54 (rev.1982).
                                                                 If a claim meets these elements, it must be asserted in the
This controversy involves a suit between the parties in the      initial action. A defendant's failure to assert a compulsory
district court of Duval County and another suit subsequently     counterclaim precludes its assertion in later actions. Gray
filed in the district court of Nueces County. Oscar Wyatt was    v. Kirkland, 550 S.W.2d 410, 411 (Tex.Civ.App.—Corpus
building a house in Duval County. On Wyatt's behalf, Morgan      Christi 1977, writ ref'd n.r.e.); see 2 R. McDonald, supra,
Spear entered into an oral agreement with Shaw Plumbing          § 7.49, at 254. Shaw Plumbing's suit against Wyatt was
Company for Shaw to perform work on the house. When              a compulsory counterclaim under the requirements of Rule
Wyatt did not pay Shaw Plumbing for its services, Shaw made      97(a).
a written demand for payment. Following Shaw Plumbing's
demand letter, Wyatt filed suit against Shaw in Duval County     In the case in which Wyatt as plaintiff sued Shaw Plumbing
on February 7, 1983, alleging fraud and violation of the         as defendant on tort and DTPA theories, the counties in
Deceptive Trade Practices Act.                                   which venue was proper were: (1) Nueces County, where the
                                                                 defendant had its principal office situated; (2) Duval County,
On April 4, 1983, Shaw Plumbing filed a breach of contract       where the construction and plumbing was done, and thus
suit against Wyatt and Spear in Nueces County to recover for     the cause of action arose; or (3) Harris County, where the
its services. Wyatt filed a plea in abatement in the Nueces      plaintiff resided at the time the cause of action arose. Act
County suit based upon the pendency of the previously filed      of Apr. 29, 1943, ch. 228, 48th Leg., 1943 Tex.Gen.Laws

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Wyatt v. Shaw Plumbing Co., 760 S.W.2d 245 (1988)

350, revised by Act of May 28, 1983, ch. 385, sec. 1, §            to decline to do battle in the forum chosen by the plaintiff. 2
3(f), 68th Leg., 1983 Tex.Gen.Laws 2119, 2122, repealed            R. McDonald, supra, § 7.49, at 254.
by Civil Practice and Remedies Code, ch. 959, sec. 9,
69th Leg., 1985 Tex.Gen.Laws 3242, 3322 (current venue             Abatement of a lawsuit due to the pendency of a prior suit
law codified at Tex.Civ.Prac. & Rem.Code Ann. § 15.036             is based on the principles of comity, convenience, and the
(Vernon Supp.1988)). Wyatt's agent, Morgan Spear, was not          necessity for an orderly procedure in the trial of contested
a party to the suit brought by Wyatt. Spear was a party,           issues. See McCurdy v. Gage, 123 Tex. 558, 565–66, 69
however, to Shaw Plumbing's suit in Nueces County, which           S.W.2d 56, 59, reh'g overruled per curiam and opinion
was based solely on breach of contract. Because there was          adopted, 75 S.W.2d 1107 (Tex.Comm'n App.1934). The plea
a difference in both issues and parties, Shaw argues that the      in abatement must be raised in a timely manner, however, or
Nueces County district court was not obliged to grant the plea     it is waived. Cleveland, 116 Tex. at 21, 285 S.W.2d at 1071–
in abatement. We disagree.                                         72. There has been no waiver in the present case.

 [2] When an inherent interrelation of the subject matter          There are three exceptions to the rule of Cleveland v. Ward
exists in two pending lawsuits, a plea in abatement in the         that the court where suit is first filed acquires dominant
second action must be granted. It is not required that the         jurisdiction: (1) Conduct by a party that estops him from
exact issues and all the parties be included in the first action   asserting prior active jurisdiction; (2) lack of persons to be
before the second is filed, provided that the claim in the first   joined if feasible, 2 or the power to bring them before the
suit may be amended to bring in all necessary and proper           court; and (3) lack of intent to prosecute the first lawsuit.
parties and issues. See 2 R. McDonald, supra, § 7.10, at 165.      Young, 128 Tex. at 636–37, 101 S.W.2d at 800–01; see also
In determining whether an inherent interrelationship exists,       Curtis, 511 S.W.2d at 267. None of these exceptions applies
courts should be guided by the rule governing persons to be        in this case.
joined if feasible and the compulsory counterclaim rule. See
Tex.R.Civ.P. 39, 97(a).                                            Shaw Plumbing relies on our opinion in Dolenz v. Continental
                                                                   National Bank to support its argument that the trial court's
 [3] Shaw Plumbing should have brought its compulsory              decision to grant the plea in abatement was discretionary.
counterclaim on the contract in Wyatt's tort and DTPA suit in      Dolenz, 620 S.W.2d 572 (Tex.1981). In that case we held
Duval County. If Shaw Plumbing had joined Morgan Spear,            that the trial court did not abuse its discretion in denying a
venue would have been proper in the Duval County suit filed        plea in abatement. Dolenz must be distinguished, however,
by Wyatt, where the cause of action arose. 1 *248 If Wyatt         for two reasons. First, the second lawsuit in Dolenz came
had sued Shaw Plumbing in Nueces County, venue would               into being as a result of Continental Bank's plea of privilege.
have also been proper because Shaw's principal office was          The court in the second suit properly denied the bank's plea
situated in Nueces County. However, since Wyatt filed suit         in abatement because a party may not request that a suit
first, he chose Duval County.                                      against it be severed and transferred to another court, and
                                                                   subsequently seek to abate the second suit. Second, we held
It is well settled that when suit would be proper in more          that a judgment in the first suit would not foreclose all issues
than one county, the court in which suit is first filed acquires   between Continental Bank and Dolenz. Dolenz, 620 S.W.2d
dominant jurisdiction to the exclusion of other courts. Curtis     at 575.
v. Gibbs, 511 S.W.2d 263, 267 (Tex.1974); V.D. Anderson
Co. v. Young, 128 Tex. 631, 636, 101 S.W.2d 798, 800               We reaffirm that the rule of Cleveland v. Ward is the law
(1937); Cleveland v. Ward, 116 Tex. 1, 19, 285 S.W. 1063,          regarding conflicts of jurisdiction between Texas courts of
1070 (1926). As long as the forum is a proper one, it is           coordinate jurisdiction. In the case at bar, both lawsuits
the plaintiff's privilege to choose the forum. Mutual Sav. &       involve the same issues. Moreover, the parties in the second
Loan Ass'n v. Earnest, 582 S.W.2d 534, 535 (Tex.Civ.App.—          suit were either present in the first suit, or parties who should
Texarkana 1979, no writ). Defendants are simply not at liberty     have been joined in the first suit. Since venue was proper in
                                                                   either Duval, Harris, or Nueces County, the court where suit

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Wyatt v. Shaw Plumbing Co., 760 S.W.2d 245 (1988)

was first filed, Duval County, acquired dominant jurisdiction.      party calls the court's attention to the pendency of the prior
The Nueces County district court, therefore, had no discretion      suit. Curtis v. Gibbs, 511 S.W.2d 263 (Tex.1974), Cleveland
to deny Wyatt's plea in abatement.                                  v. Ward, 116 Tex. 1, 285 S.W. 1063 (1926). I would not in
                                                                    any way abandon this general rule.
Accordingly, we reverse the judgment of the court of appeals
and remand the cause to the Nueces County district court with       However, an exception to this general rule has long been
instructions to vacate its judgment and abate all proceedings       recognized. If the court in which suit is first filed cannot
pending final disposition of the Duval County lawsuit.              properly dispose of the whole subject matter of the litigation
                                                                    as to all necessary parties and issues, then the second
                                                                    court's ruling on any plea in abatement asserted there is a
                                                                    discretionary matter. See Cleveland v. Ward, 285 S.W. at
KILGARLIN, J., files a concurring opinion.
                                                                    1070; see also Dolenz v. Continental National Bank of Fort
GONZALEZ, J., files a dissenting opinion in which                   Worth, 620 S.W.2d 572 (Tex.1981); First State Bank of
PHILLIPS, C.J., and MAUZY, J., join.                                Bishop, Texas v. Norris, 611 S.W.2d 680 (Tex.Civ.App.—
                                                                    Tyler 1980, writ ref'd n.r.e.). The court's opinion today still
                                                                    pays lip service to this exception when it states:
KILGARLIN, Justice, concurring.
While I concur with the court's judgment, I find myself                         It is not required that the exact issues
favorably disposed to a concern expressed by Justice                            and all the parties be included in
Gonzalez. I *249 do not favor races to the courthouse, as                       the first action before the second is
arguably existed in this case, so as to fix venue. I would not,                 filed, provided that the claim in the
for example, wish to see one claiming a Deceptive Trade                         first suit may be amended to bring in
Practices Act violation give notice as required by law only to                  all necessary and proper parties and
find the seller or provider of services preempting venue by                     issues.
first suing in another county for a small amount still owing
on account.                                                         760 S.W.2d at 247 (emphasis added). The problem is that the
                                                                    court ignores its own “provided that” language and refuses to
However, Shaw Plumbing Company has failed to brief this             recognize that Shaw Plumbing could not have joined Spear in
matter either in this court or the court of appeals. Whether a      the Duval County suit.
notice letter for purposes of entitlement to attorney's fees or a
DTPA-mandated notice letter should be sufficient to establish       The venue laws effective at the time of this suit protected a
venue prior to filing suit requires considerable consideration      party from being brought into a suit as a third-party defendant
by this court, preceded by adequate briefs and oral argument,       if venue was not proper as to that party independent of the
before we undertake to decide such a significant issue.             main action. 1 See Union Bus Lines v. Byrd, 142 Tex. 257,
                                                                    177 S.W.2d 774, 776 (1944). Shaw Plumbing's claim against
Accordingly, I concur.                                              Spear is based on an oral contract. As such, the only proper
                                                                    place of venue for Shaw Plumbing's cause of action against
                                                                    Spear was Spear's county of residence, Nueces County. See
                                                                    former Tex.Rev.Civ.Stat. art. 1995 [3 West's Tex.Stats. and
GONZALEZ, Justice, dissenting.
                                                                    Codes (1974 and 1977 Supp.) ]. Therefore, because venue in
I agree wholeheartedly with the court's articulation of the rule
                                                                    Duval County was not proper as to Spear independent of the
of dominant jurisdiction. We do not disagree on the law; we
                                                                    main action, Spear could not have been brought in as a third-
disagree on its application to this cause.
                                                                    party defendant, and thus the Duval County court would not
                                                                    have been able to dispose of all necessary parties and issues
Unquestionably, the general rule is that the court in which
                                                                    in the case.
suit is first filed acquires dominant jurisdiction and that any
subsequent suit involving the same parties and the same
controversy must be dismissed if, by a plea in abatement, a

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Wyatt v. Shaw Plumbing Co., 760 S.W.2d 245 (1988)

The court offers two reasons for its conclusion that Spear          Moreover, the court also assumes that the trial judge, on
could have been joined in Duval County. First, it assumes           his own, should have figured out the applicability of the
that Spear was Wyatt's agent and suggests that somehow this         continuance provision. Wyatt never mentioned anything at all
fact resolves the venue problem. However, the question of           about the new venue laws, much less about this continuance
whether Spear was Wyatt's agent or an independent contractor        provision, in either his first or second plea in abatement.
was hotly contested. The jury in the Nueces County suit did         His position has always been that venue as to Spear was
find that Spear was Wyatt's agent, but this court's decision will   immaterial.
result in the lawsuit being tried again in Duval County where
the legal *250 relationship between Spear and Wyatt will be         The court strains too hard and thereby betrays the inherent
determined anew. To this date, even in his briefs before this       weakness of its position. Under the old venue laws, if Shaw
court, Wyatt has never conceded that Spear is his agent. Thus,      Plumbing had attempted to join Spear in Duval County, Spear
in order to conclude that venue as to Spear would be proper         could have asserted a plea of privilege which would have been
in Duval County, the court affords Wyatt the benefit of a fact      proper. In order to avoid this reality, the court is forced to rely
that Wyatt himself is still refuting.                               on an attenuated construction of a continuance provision that
                                                                    was never argued either at trial or on appeal. 2
Second, as if to hedge its bets, the court cites in a footnote to
the continuance provision of the 1983 Act amending article          There is still another reason for why the Nueces County trial
1955 and asserts that, because the Nueces County lawsuit            judge acted properly in refusing to abate the second suit.
“was not on appeal on the effective date of the new venue           Curtis v. Gibbs, 511 S.W.2d at 267, stated the following
law,” the old venue laws are not effective as to the question of    exception to the general rule of dominant jurisdiction:
whether Spear could have been joined in Duval County. The
continuance provision of the 1983 Act stated:                                    [T]he plaintiff in the first suit may be
                                                                                 guilty of such inequitable conduct as
             This Act takes effect September 1,                                  will estop him from relying on that
             1983, and shall not apply to pending                                suit to abate a subsequent proceeding
             appeals on venue questions. For the                                 brought by his adversary.
             purpose of appeals on venue questions
             pending prior to September 1, 1983,                    In this case, Wyatt filed his DTPA suit against Shaw
             the former law is continued in effect.                 Plumbing after having already received Shaw Plumbing's
                                                                    thirty day demand letter, and he did so without giving the
There have been prior disputes concerning the meaning of this       thirty day notice required of him under the Deceptive Trade
provision. However, the questions at least arose in the context     Practices—Consumer Protection Act. Tex.Bus. & Com.Code
of pleas of privilege and interlocutory appeals from them, the      Ann. § 17.505 (Vernon 1987).
statutory language, “appeals on venue questions,” has never
been construed to mean anything other than interlocutory            Wyatt's failure to give the required statutory notice enabled
appeals from pleas of privilege. See, e.g., Gonzalez v. H.E.        him to beat Shaw Plumbing to the courthouse and fix venue
Butt Grocery Co., 667 S.W.2d 188 (Tex.App.—Corpus                   in Duval County. The proper remedy for a party's failure to
Christi 1983, writ dism'd w.o.j.); Grubbs v. Mercantile Texas       give the required DTPA *251 notice is ordinarily abatement
Corp., 668 S.W.2d 429 (Tex.App.—Eastland 1984, no writ);            rather than dismissal. The Moving Company v. Whitten, 717
Graue–Haws, Inc. v. Fuller, 666 S.W.2d 238 (Tex.App.—               S.W.2d 117 (Tex.App.—Houston [14th Dist.] 1986, writ
El Paso 1984, orig. proceeding); Boyd v. Raymondville State         ref'd n.r.e.); see also Schepps v. Presbyterian Hospital, 652
Bank, 668 S.W.2d 466 (Tex.App.—Corpus Christi 1984, no              S.W.2d 934 (Tex.1983). Under the circumstances of this case,
writ). This continuance provision has never previously been         I would hold that although a party's failure to comply with
applied to or even discussed in any scenario such as this one       the statutory notice requirement will not result in dismissal, it
involving an appeal from a final judgment raising a plea in         is nevertheless a type of “inequitable conduct” that cannot be
abatement question.                                                 used as a vehicle for fixing venue. Thus, I would further hold
                                                                    that Wyatt's failure to give the required DTPA notice estops

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Wyatt v. Shaw Plumbing Co., 760 S.W.2d 245 (1988)

him from relying on his first-filed suit to abate the subsequent
suit. 3
                                                                       PHILLIPS, C.J., and MAUZY, J., join.
Although the court's opinion acknowledges the exceptions to
                                                                       All Citations
the general rule of dominant jurisdiction, it summarily states
that none apply. Upon analysis, I am unable to reach the same          760 S.W.2d 245
conclusion. Therefore, I dissent from the court's opinion and
would affirm the judgment of the court of appeals.

Footnotes
1         Shaw Plumbing claims that Spear could not have been joined to the Duval County lawsuit under the old venue laws in
          effect at the time. This contention is without merit because the old venue laws were continued in effect only for questions
          pending on appeal. Act of May 28, 1983, ch. 385, sec. 3, 68th Leg., 1983 Tex.Gen.Laws 2119, 2124; e.g., Graue–Haws,
          Inc. v. Fuller, 666 S.W.2d 238, 239 (Tex.App.—El Paso 1984) (orig. proceeding); see Tullos v. Eaton Corp., 695 S.W.2d
          568, 568 (Tex.1985) (per curiam). The Nueces County lawsuit was not on appeal on the effective date of the new venue
          law, September 1, 1983. See Act of May 28, 1983, ch. 385, sec. 3, 68th Leg., 1983 Tex.Gen.Laws 2119, 2124. There
          is no question that venue was proper for Spear in Duval County under the 1983 revision to the venue laws. See Act
          of May 28, 1983, ch. 385, sec. 1, § 4(b), 68th Leg., 1983 Tex.Gen.Laws 2119, 2124, repealed by Civil Practice and
          Remedies Code, ch. 959, Sec. 9, 69th Leg., 1985 Tex.Gen.Laws 3242, 3322 (current venue law codified at Tex.Civ.Prac.
          & Rem.Code Ann. § 15.062 (Vernon 1986)).
2         Original text refers to necessary parties, which is the pre–1971 Rule 39 language.
1         Contrast this with the currently effective law which expressly states that “venue of the main action shall establish venue
          of a counterclaim, cross claim, or third party claim....” Tex.Civ.Prac. & Rem.Code Ann. § 15.062 (Vernon 1986).
2         Furthermore, Wyatt did not raise this argument in either of his attempts to obtain mandamus relief against the Nueces
          County trial judge. In seeking to compel the trial judge to grant the plea in abatement, Wyatt filed in the Corpus Christi
          Court of Appeals a petition for writ of mandamus. That court denied the writ. Wyatt v. Westergren, 704 S.W.2d 148
          (Tex.App.—Corpus Christi 1986, orig. proceeding). Wyatt then submitted a petition for writ of mandamus to this court
          and we overruled his motion for leave to file. Wyatt v. Westergren, No. C–5008 (Feb. 19, 1986).
3         In a concurring opinion, Justice Kilgarlin also voices his concern about the manner in which Wyatt effectively fixed venue
          by failing to give the required DTPA notice. However, he refuses to address the matter because Shaw Plumbing did not
          brief it. Of course, Shaw Plumbing had no reason to complain about this matter on appeal because it won at the trial
          court and won in the court of appeals. See Boyce Iron Works, Inc. v. Southwestern Bell Telephone Co., 747 S.W.2d 785
          (Tex.1988). By contrast, Wyatt as the petitioner here did have the burden of preserving his arguments. Tex.R.App.P. 131.
          Wyatt never raised any argument concerning the venue laws, new or old, and certainly never mentioned the continuance
          provision to the 1983 amendments; yet the court does not hesitate to reach that matter.

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Rule 93. Certain Pleas to Be Verified, TX R RCP Rule 93

  Vernon's Texas Rules Annotated
    Texas Rules of Civil Procedure
      Part II. Rules of Practice in District and County Courts
        Section 4. Pleading
           C. Pleadings of Defendant

                                              TX Rules of Civil Procedure, Rule 93

                                              Rule 93. Certain Pleas to Be Verified

                                                            Currentness

A pleading setting up any of the following matters, unless the truth of such matters appear of record, shall be verified by affidavit.

1. That the plaintiff has not legal capacity to sue or that the defendant has not legal capacity to be sued.

2. That the plaintiff is not entitled to recover in the capacity in which he sues, or that the defendant is not liable in the capacity
in which he is sued.

3. That there is another suit pending in this State between the same parties involving the same claim.

4. That there is a defect of parties, plaintiff or defendant.

5. A denial of partnership as alleged in any pleading as to any party to the suit.

6. That any party alleged in any pleading to be a corporation is not incorporated as alleged.

7. Denial of the execution by himself or by his authority of any instrument in writing, upon which any pleading is founded, in
whole or in part and charged to have been executed by him or by his authority, and not alleged to be lost or destroyed. Where
such instrument in writing is charged to have been executed by a person then deceased, the affidavit shall be sufficient if it
states that the affiant has reason to believe and does believe that such instrument was not executed by the decedent or by his
authority. In the absence of such a sworn plea, the instrument shall be received in evidence as fully proved.

8. A denial of the genuineness of the indorsement or assignment of a written instrument upon which suit is brought by an
indorsee or assignee and in the absence of such a sworn plea, the indorsement or assignment thereof shall be held as fully
proved. The denial required by this subdivision of the rule may be made upon information and belief.

9. That a written instrument upon which a pleading is founded is without consideration, or that the consideration of the same
has failed in whole or in part.

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Rule 93. Certain Pleas to Be Verified, TX R RCP Rule 93

10. A denial of an account which is the foundation of the plaintiff's action, and supported by affidavit.

11. That a contract sued upon is usurious. Unless such plea is filed, no evidence of usurious interest as a defense shall be received.

12. That notice and proof of loss or claim for damage has not been given as alleged. Unless such plea is filed such notice and
proof shall be presumed and no evidence to the contrary shall be admitted. A denial of such notice or such proof shall be made
specifically and with particularity.

13. In the trial of any case appealed to the court from the Industrial Accident Board 1 the following, if pleaded, shall be presumed
to be true as pleaded and have been done and filed in legal time and manner, unless denied by verified pleadings:

  (a) Notice of injury.

  (b) Claim for compensation.

  (c) Award of the Board.

  (d) Notice of intention not to abide by the award of the Board.

  (e) Filing of suit to set aside the award.

  (f) That the insurance company alleged to have been the carrier of the workers' compensation insurance at the time of the
  alleged injury was in fact the carrier thereof.

  (g) That there was good cause for not filing claim with the Industrial Accident Board 1 within the one year period provided
  by statute.

  (h) Wage rate.

A denial of any of the matters set forth in subdivisions (a) or (g) of paragraph 13 may be made on information and belief.

Any such denial may be made in original or amended pleadings; but if in amended pleadings the same must be filed not less
than seven days before the case proceeds to trial. In case of such denial the things so denied shall not be presumed to be true,
and if essential to the case of the party alleging them, must be proved.

14. That a party plaintiff or defendant is not doing business under an assumed name or trade name as alleged.

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Rule 93. Certain Pleas to Be Verified, TX R RCP Rule 93

15. In the trial of any case brought against an automobile insurance company by an insured under the provisions of an insurance
policy in force providing protection against uninsured motorists, an allegation that the insured has complied with all the terms
of the policy as a condition precedent to bringing the suit shall be presumed to be true unless denied by verified pleadings which
may be upon information and belief.

16. Any other matter required by statute to be pleaded under oath.

Credits
Oct. 29, 1940, eff. Sept. 1, 1941. Amended by orders of March 31, 1941, eff. Sept. 1, 1941; Sept. 20, 1941, eff. Dec. 31, 1941;
June 16, 1943, eff. Dec. 31, 1943; Oct. 12, 1949, eff. March 1, 1950; July 21, 1970, eff. Jan. 1, 1971; July 22, 1975, eff. Jan.
1, 1976; June 15, 1983, eff. Sept. 1, 1983; Dec. 5, 1983, eff. April 1, 1984.

Notes of Decisions (798)

Footnotes
1      The name of the Industrial Accident Board was changed to the Texas Workers' Compensation Commission pursuant to Acts 1989,
       71st Leg., 2nd C.S., ch. 1, § 17.01. The Texas Workers' Compensation Commission was abolished and the Workers' Compensation
       Division of the Texas Department of Insurance was established pursuant to Acts 2005, 79th Leg., ch. 265, § 1.003.
Vernon's Ann. Texas Rules Civ. Proc., Rule 93, TX R RCP Rule 93
Rules of Civil Procedure, Rules of Evidence, and Rules of Appellate Procedure are current with amendments received through
September 1, 2015. Bar Rules, Rules of Disciplinary Procedure, Code of Judicial Conduct, and Rules of Judicial Administration
are current with amendments received through September 1, 2015. Other state court rules and selected county rules are current
with rules verified through June 1, 2015.

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                                              Schultz, William 10/26/2015
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Rule 185. Suit on Account, TX R RCP Rule 185

  Vernon's Texas Rules Annotated
    Texas Rules of Civil Procedure
      Part II. Rules of Practice in District and County Courts
        Section 9. Evidence and Discovery (Refs & Annos)
           A. Evidence

                                            TX Rules of Civil Procedure, Rule 185

                                                   Rule 185. Suit on Account

                                                          Currentness

When any action or defense is founded upon an open account or other claim for goods, wares and merchandise, including any
claim for a liquidated money demand based upon written contract or founded on business dealings between the parties, or is
for personal service rendered, or labor done or labor or materials furnished, on which a systematic record has been kept, and
is supported by the affidavit of the party, his agent or attorney taken before some officer authorized to administer oaths, to
the effect that such claim is, within the knowledge of affiant, just and true, that it is due, and that all just and lawful offsets,
payments and credits have been allowed, the same shall be taken as prima facie evidence thereof, unless the party resisting such
claim shall file a written denial, under oath. A party resisting such a sworn claim shall comply with the rules of pleading as are
required in any other kind of suit, provided, however, that if he does not timely file a written denial, under oath, he shall not
be permitted to deny the claim, or any item therein, as the case may be. No particularization or description of the nature of the
component parts of the account or claim is necessary unless the trial court sustains special exceptions to the pleadings.

Credits
Oct. 29, 1940, eff. Sept. 1, 1941. Amended by orders of Oct. 12, 1949, eff. March 1, 1950; July 21, 1970, eff. Jan. 1, 1971;
Dec. 5, 1983, eff. April 1, 1984.

Notes of Decisions (922)

Vernon's Ann. Texas Rules Civ. Proc., Rule 185, TX R RCP Rule 185
Rules of Civil Procedure, Rules of Evidence, and Rules of Appellate Procedure are current with amendments received through
September 1, 2015. Bar Rules, Rules of Disciplinary Procedure, Code of Judicial Conduct, and Rules of Judicial Administration
are current with amendments received through September 1, 2015. Other state court rules and selected county rules are current
with rules verified through June 1, 2015.

End of Document                                                      © 2015 Thomson Reuters. No claim to original U.S. Government Works.

                © 2015 Thomson Reuters. No claim to original U.S. Government Works.                                                   1