Court Opinion

ID: 9367534
Source: CourtListenerOpinion
Date Created: 2023-02-01 07:10:42.904263+00
Date Added: 2024-06-11T17:16:01.033335
License: Public Domain

REVERSE and REMAND and Opinion Filed January 30, 2023

                                     S  In The
                             Court of Appeals
                      Fifth District of Texas at Dallas
                                No. 05-20-00552-CV

                     WWLC INVESTMENT, L.P., Appellant
                                 V.
                        SORAB MIRAKI, Appellee

                On Appeal from the 471st Judicial District Court
                             Collin County, Texas
                    Trial Court Cause No. 471-06552-2019

                         MEMORANDUM OPINION
                 Before Justices Pedersen, III, Goldstein, and Smith
                          Opinion by Justice Pedersen, III
      WWLC Investment, L.P. (WWLC) appeals the trial court’s grant of summary

judgment in favor of appellee Sorab Miraki in this suit involving a commercial lease.

In three issues, WWLC originally challenged both substantive grounds for the

summary judgment—limitations and res judicata— as well as the evidence offered

by Miraki to support his motion. After the parties briefed their positions in this Court,

the Texas Supreme Court decided a case related to the one before us. We conclude

that the Supreme Court’s opinion requires us to reverse the summary judgment and

to remand this case to the trial court for further proceedings.
                                   Background

      These parties have been engaged in litigation rooted in the same lease since

2015. According to the lease, WWLC—the landlord—owned the leased premises;

Miraki—the tenant—planned to operate a specialty grocery business and restaurant

on the premises.

      In November 2015, Miraki sued WWLC, urging claims for breach of contract,

fraud, violation of the Texas Deceptive Trade Practices Act (DTPA), and unlawful

lockout (the Original Lawsuit). Miraki contended that as part of the lease

negotiations, WWLC represented that it would make certain repairs to the premises

to make it suitable for his business. According to Miraki, WWLC failed to make the

promised renovations, causing Miraki significant damage. WWLC did not answer

the Original Lawsuit, and the trial court signed a default judgment awarding Miraki

$382,543.26 in actual damages, $738,771.60 in punitive damages, and $30,000 in

attorney fees.

      In December 2015, WWLC filed suit to evict Miraki from the leased premises

(the Eviction Lawsuit). This time, WWLC received a default judgment, awarding it

possession of the leased premises and back rent.

      In June 2017, WWLC filed suit seeking a bill of review (the Bill of Review

Lawsuit) that would vacate the default judgment taken against it by Miraki. The suit

alleged defective service of the Original Lawsuit. The trial court denied the bill of

review, and, in December 2018, this Court did as well. See WWLC Inv., L.P. v.

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Miraki, No. 05-17-01126-CV, 2018 WL 6818650, at *4 (Tex. App.—Dallas Dec.

28, 2018).

       WWLC filed this lawsuit against Miraki in November, 2019, pleading claims

for breach of contract and fraud (the 2019 Lawsuit). WWLC alleged that Miraki had

never intended to operate a restaurant on the leased premises but had represented

that he did in order to obtain cost-free storage for his equipment. WWLC further

alleged that as part of this plan, Miraki ripped out improvements made by WWLC

and then reported that the work had never been done. Based on this alleged

fraudulent concealment, WWLC pleaded reliance upon the discovery rule in an

attempt to avoid a defense of limitations.

       Miraki did plead the affirmative defense of limitations; he also pleaded that

WWLC’s claims were barred by res judicata. He filed Defendant’s Second Motion

for Summary Judgment (the Motion) based on those two affirmative defenses. The

Motion relied upon the parties’ April 15, 2013 commercial lease, the February 2015

Amendment to Commercial Lease Agreement,1 and documents filed in the Original

Lawsuit, the Eviction Lawsuit, and the Bill of Review Lawsuit. WWLC responded

to the Motion, and the record contains a transcription of the trial court’s hearing on

   1
      Miraki emphasizes that the amendment is signed by WWLC’s president, Wendy Chen, and includes
a handwritten note by Chen, saying the rent would be due starting July 1, 2015.

                                              –3–
the Motion. In the end, the court granted the Motion and entered a take-nothing

judgment in favor of Miraka and against WWLC.

       This appeal followed.

           The Supreme Court’s Opinion in the Bill of Review Lawsuit

       On June 18, 2021, the Texas Supreme Court handed down its opinion in

WWLC Inv., L.P. v. Miraki, 624 S.W.3d 796 (Tex. 2021), which was WWLC’s final

appeal in the Bill of Review Lawsuit. The Supreme Court, in a per curiam opinion,

asserted that service of process on WWLC, a limited partnership, required service

of its general partner or registered agent. Id. at 799 (citing TEX. BUS. ORGS.

CODE §§ 5.201(b)(1), 5.255(2)). HPZ International, Inc. (HPZ) was WWLC’s

registered agent and its general partner. Id. 2 But Miraki did not attempt to serve

HPZ. Instead, Miraki’s process server attempted multiple times to serve Chen,

WWLC’s president. When the attempts were unsuccessful, Miraki obtained an order

for substituted service under Rule 106 by attaching a copy of the petition and citation

to the front door of Chen’s house. Id. at 798. The Supreme Court concluded that

WWLC had proved lack of proper service and was therefore entitled to relief. Id. at

801. Accordingly, the court granted WWLC’s petition for review, reversed this

   2
       The Supreme Court concluded that HPZ was WWLC’s general partner because records showed it
had filed name-change and assumed-name documents with the Secretary of State in 2011, and those
documents must be filed by the general partner. Id. at 799.
                                             –4–
Court’s judgment, and remanded the Bill of Review Lawsuit to the trial court. Id. at

800–01.

                             Effect of Granting the Bill of Review

        Following notice of the Supreme Court’s opinion, we requested that WWLC

and Miraka (a) file a letter brief explaining why this appeal is not now moot or,

alternatively, (b) file a motion to dismiss the appeal.

        WWLC filed its brief, and then a supplemental brief,3 arguing that this appeal

is not moot because there is still a live controversy between the parties, and this

Court can grant relief that affects the rights and interests of those parties. We agree

that a case on appeal becomes moot if there are no live controversies between the

parties and a decision rendered by the appellate court would be an advisory opinion

because it could not have practical, legal effect on an existing controversy. See

Trulock v. City of Duncanville, 277 S.W.3d 920, 924 (Tex. App.—Dallas 2009, no

pet.). The premise of WWLC’s argument is that Miraka’s summary judgment in the

2019 Lawsuit—the basis of this appeal—was based upon the parties’ prior history

of litigation, especially the Original Lawsuit. The Supreme Court has now reversed

the judgment in the Original Lawsuit. Thus, WWLC asks us to employ our de novo

standard of review in this summary judgment case, to reverse the trial court’s

judgment in this case, and to remand the case for further proceedings. It contends

   3
       Miraki did not file a brief on the issue of mootness.

                                                    –5–
that such a reversal would have practical, legal effect on the parties and their now

unresolved disputes over the lease.

        WWLC relies upon the Texas Supreme Court’s opinion in Scurlock Oil Co.

v. Smithwick, 724 S.W.2d 1, 6 (Tex. 1986), where that court first “adopt[ed] the rule

of the Restatement (Second) of Judgments § 13, and [held] that a judgment is final

for the purposes of issue and claim preclusion ‘despite the taking of an appeal . . .’”

Thus, according to Scurlock, it was proper for the trial court in the 2019 Lawsuit to

decide Miraki’s Motion based on the preclusive effect of the parties’ earlier

litigation, even though the Bill of Review Lawsuit—challenging the judgment in the

Original Lawsuit—was still on appeal. Scurlock acknowledged that adopting the rule

embraced certain risks:

        A judgment in a second case based on the preclusive effects of a prior
        judgment should not stand if the first judgment is reversed. Butler v.
        Eaton, 141 U.S. 240, 243, 11 S.Ct. 985, 986–87, 35 L.Ed. 713 (1891);
        18 Federal Practice and Procedure, supra, § 4433 at 311. This
        potentially could create two retrials, although that outcome is not
        automatic. See Restatement (Second) of Judgments § 16.

Id. at 6. WWLC contends that this is the situation in which the parties now find

themselves, and it asks us to reverse the summary judgment in this case and to

remand the case for further proceedings.4

        The trial court granted the Motion below without specifying the grounds for

its summary judgment. We must affirm the summary judgment if either of the

   4
       WWLC volunteers that it “may attempt to consolidate” the cases below.

                                                 –6–
theories presented to the trial court and preserved for appellate review—res judicata

or limitations—is meritorious. See Provident Life & Acc. Ins. Co. v. Knott, 128

S.W.3d 211, 216 (Tex. 2003).

      It is apparent that to the extent the Motion was granted based upon the

preclusive effect of the Original Lawsuit, the summary judgment must be reversed.

To establish res judicata, Miraki was required to show the judgment in that case was

a final judgment. See Engelman Irrigation Dist. v. Shields Bros., Inc., 514 S.W.3d

746, 750 (Tex. 2017) (one element of res judicata is prior final judgment on merits

from court of competent jurisdiction). But the prior judgment upon which Miraki

relied to support his res judicata Motion is no longer a final judgment. WWLC Inv.,

L.P., 624 S.W.3d at 800-01. Accordingly, that basis for the summary judgment

rendered against WWLC cannot stand. See Scurlock, 724 S.W.3d at 6 (“A judgment

in a second case based upon the preclusive effects of a prior judgment should not

stand if the first judgment is reversed.”); see also Schmidt v. Ward, No. 05-13-

01095-CV, 2014 WL 4977422, at *4 (Tex. App.—Dallas Oct. 6, 2014, no pet.)

(mem. op.) (reversing summary judgment because earlier judgment on which party

relied had been reversed).

      The limitations ground for Miraki’s Motion was not directly based upon the

preclusive effect of a judgment from the parties’ earlier litigation. However,

Miraki’s summary judgment evidence on limitations is rooted in the earlier lawsuits,

                                        –7–
including pleadings and transcripts from those proceedings.5 Accordingly, we

reverse the limitations ground of the summary judgment as well so that the trial court

may determine the role, if any, of the statute of limitations given the changed posture

of the case.

                                             Conclusion

        We reverse the trial court’s summary judgment and remand this case for

further proceedings.

                                                      /Bill Pedersen, III/
                                                      BILL PEDERSEN, III
                                                      JUSTICE

200552F.P05

    5
     By way of example, we note Miraki’s particular emphasis on Chen’s testimony in the Bill of Review
Lawsuit concerning the lease amendment, the rent’s starting date, and her knowledge of the accrual date of
WWLC’s claims for breach of contract and fraud.
                                                  –8–
                                    S
                            Court of Appeals
                     Fifth District of Texas at Dallas
                                   JUDGMENT

WWLC INVESTMENT, L.P.,                         On Appeal from the 471st Judicial
Appellant                                      District Court, Collin County, Texas
                                               Trial Court Cause No. NO. 471-
No. 05-20-00552-CV           V.                06552-2019.
                                               Opinion delivered by Justice
SORAB MIRAKI, Appellee                         Pedersen, III. Justices Goldstein and
                                               Smith participating.

       In accordance with this Court’s opinion of this date, the judgment of the trial
court is REVERSED and this cause is REMANDED to the trial court for further
proceedings consistent with this opinion.

      It is ORDERED that each party bear its own costs of this appeal.

Judgment entered January 30, 2023

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