Court Opinion

ID: 4057754
Source: CourtListenerOpinion
Date Created: 2016-09-29 08:48:16.865248+00
Date Added: 2024-06-11T14:33:19.165485
License: Public Domain

ACCEPTED
                                                                               05-15-01159-CV
                                                                    FIFTH COURT OF APPEALS
                                                                               DALLAS, TEXAS
                                                                          11/4/2015 4:26:39 PM
                                                                                    LISA MATZ
                                                                                        CLERK

                       NO. 05-15-01159-CV

                 IN THE COURT OF APPEALS           FILED IN
              FOR THE FIFTH JUDICIAL DISTRICT5th COURT OF APPEALS
                                                 DALLAS, TEXAS
                       DALLAS, TEXAS
                                                     11/4/2015 4:26:39 PM
                                                           LISA MATZ
                                                             Clerk

                 IN RE FORT APACHE ENERGY, INC.,
                      ALLAN P. BLOXSOM, AND
                 DRILLING RISK MANAGEMENT, INC.,

                                         Relators

                  On Petition for Writ of Mandamus
                   from the 162nd District Court
                      of Dallas County, Texas

        REPLY IN SUPPORT OF PETITION FOR WRIT OF MANDAMUS

                               Charles J. Cain
                               State Bar No. 00796292
                               ccain@cstrial.com
                               Zachary H. Bowman
                               State Bar No. 24073944
                               zbowman@cstrial.com
                               CAIN & SKARNULIS PLLC
                               400 W. 15th Street, Suite 900
                               Austin, Texas 78701
                               512-477-5000
                               512-477-5011—Facsimile
                               COUNSEL FOR RELATORS
                               FORT APACHE ENERGY, INC.,
                               ALLAN P. BLOXSOM, AND
                               DRILLING RISK MANAGEMENT, INC.

ORAL ARGUMENT REQUESTED
                                         TABLE OF CONTENTS

                                                                                                                     Page

Table of Contents ....................................................................................................... i

Index of Authorities .................................................................................................. ii

I.       Introduction .................................................................................................... 1

II.      Argument ........................................................................................................ 3

         A.       The claims asserted in Dallas County concern the same
                  contracts that form the basis of Relator’s lawsuit in Kendall
                  County .................................................................................................. 3

                  1.        Huddleston’s response confuses venue and
                            dominant jurisdiction ................................................................. 4

                  2.        Huddleston mischaracterizes the nature of Fort
                            Apache’s lawsuit in Kendall County ......................................... 5

                  3.        The lawsuits are so intertwined that resolving the
                            Dallas County lawsuit will resolve the Kendall
                            County lawsuit and eliminate Fort Apache’s right
                            to choose its venue as Plaintiff ................................................... 6

         B.       The failure to order abatement of a second-filed lawsuit that has
                  ordered a trial date earlier than the first-filed lawsuit is an abuse
                  of discretion for which there is no adequate appellate remedy ............ 8

Conclusion and Prayer ............................................................................................ 10

Certificate of Counsel ............................................................................................. 11

Certificate of Compliance ....................................................................................... 11

Certificate of Service .............................................................................................. 12

                                                             i
                                  INDEX OF AUTHORITIES

CASES                                                                                             PAGE(S)

Curtis v. Gibbs,
      511 S.W.2d 263 (Tex. 1974) .......................................................................... 4

GeoChem Tech Corp. v. Verseckes,
    962 S.W.2d 541 (Tex. 1998) .......................................................................... 4

Gonzalez v. Reliant Energy, Inc.,
     159 S.W.3d 615 (Tex. 2005) .......................................................................... 5

In re ExxonMobil Production Co.,
       340 S.W.3d 852 (Tex. App.—San Antonio 2011,
       orig. proceeding [mand. denied]) ........................................................ 8, 9, 10

In re King,
       No. 05-15-01035-CV, 2015 WL 6334672
       (Tex. App.—Dallas Oct. 22, 2015) (mem. op.) .......................................... 1, 2

In re Prudential Ins. Co. of Am.,
       148 S.W.3d 124 (Tex. 2004) (orig. proceeding) .................................... 2, 8, 9

In re Puig,
       351 S.W.3d 301 (Tex. 2011) .......................................................................... 8

Perry v. Del Rio,
      66 S.W.3d 239 (Tex. 2001) ............................................................................ 8

Team Rocket,
     256 S.W.3d 257 (Tex. 2008) (orig. proceeding) .......................................... 10

Tindle v. Jackson Nat’l Life Ins.,
      837 S.W.2d 795 (Tex. App.—Dallas 1992, no writ) ...................................... 7

Wyatt v. Shaw Plumbing Co.,
      760 S.W.2d 245 (Tex. 1988) .......................................................................... 5

                                                      ii
TO THE HONORABLE COURT OF APPEALS:

      Fort Apache Energy, Inc., Allan P. Bloxsom, and Drilling Risk

Management, Inc. (collectively, Relators) file this Reply in Support of their

Petition for Writ of Mandamus and respectfully ask the Court to issue a writ of

mandamus commanding the 162nd Judicial District Court of Dallas County to

vacate its order of August 7, 2015, and enter an order granting Relators’ motion to

abate the second filed proceeding in favor of a first-filed proceeding in Kendall

County.

                             I.      INTRODUCTION

      This Court recently denied mandamus in the distinguishable case of In re

King, No. 05-15-01035-CV, 2015 WL 6334672 (Tex. App.—Dallas Oct. 22, 2015)

(mem. op.). This Court held in King that the denial of abatement of a second-filed

suit was not an abuse of discretion because the first-filed suit was in a Harris

County justice court and the justice court could not have subject matter jurisdiction

over a counterclaim for more damages than was subsequently filed in Collins

County District Court. Id. at *4.

      That situation does not exist here. Huddleston Exploration Limited Liability

Company (Huddleston), as the real party in interest, can still assert his Dallas

County claims as counterclaims in Kendall County without running afoul of

subject matter jurisdiction, and in fact, is required to under the compulsory

                                         1
counterclaim analysis that courts have used when ordering abatement of

second-filed suits. Despite Huddleston asserting more claims in Dallas County,

those claims still concern the same contracts at issue in Fort Apache’s lawsuit in

Kendall County, and must be brought there.

      In King, this Court also recognized the disparate authority on whether the

denial of abatement warrants mandamus relief, but because the lower court had not

abused its discretion, this Court saved the issue for another day. Id. at 3. That day

is here. The denial of abatement in this case warrants mandamus relief for two

reasons. First, the Dallas County District Court has set the second filed suit for

trial before trial in the first filed suit in Kendall County, thus disturbing the

dominant jurisdiction of the Kendall County Court.         Second, the mandamus

standards announced in In re Prudential Ins. Co. of Am., 148 S.W.3d 124, 135

(Tex. 2004) (orig. proceeding), have led courts of appeal to hold that denial of a

proper abatement is not adequately addressed by appeal due to the waste of time

and resources that occur when proceeding to trial in a case that should have been

abated.

      Huddleston’s lawsuit in Dallas County has been pursued in an effort to avoid

the venue determinations of the Kendall County Court, which has twice denied

Huddleston’s motions to transfer venue and its motion to abate the Kendall County

proceeding. Because the Dallas County District Court abused its discretion in

                                         2
denying Relator’s proper motion to abate, and has set trial prior to the court with

dominant jurisdiction, this Court should issue a writ of mandamus commanding the

162nd Judicial District Court of Dallas County to vacate its order denying a proper

motion for abatement.

                             II.       ARGUMENT

A.    The claims asserted in Dallas County concern the same contracts that
      form the basis of Relator’s lawsuit in Kendall County.

      Both the lawsuit in Kendall County and the lawsuit in Dallas County

concern the contracts regarding the Williams #1 Well in Louisiana and the dispute

over unpaid drilling and completion costs between Huddleston and Fort Apache.

Huddleston has attempted to argue that the Kendall County lawsuit solely concerns

a “stand-alone” agreement and can proceed independently.         This assertion is

contradicted by Huddleston’s own admissions below regarding the intertwined

nature of the two lawsuits.        If the Kendall County claims could proceed

independently, then the question begs asking as to why Huddleston twice pursued a

transfer of venue in Kendall County and argued that the claims there should be

determined with its own lawsuit in Dallas County.

      Fort Apache filed suit in Kendall County after Huddleston defaulted on a

Payment Agreement that was meant to establish certain payment deadlines and

resolve conflicts among the parties over the payment of drilling and completion

costs that Huddleston owed to Fort Apache pursuant to a Participation Agreement

                                         3
and Joint Operating Agreement. App. G, Ex. A [Fort Apache’s Original Petition

(Kendall County)]. That is why Fort Apache attached all three agreements to its

Original Petition in Kendall County. App. G, Ex. A [Original Petition] with

attached Exs. A, B and C. In fact, the remedy Fort Apache sought in its Original

Petition in Kendall County was foreclosure of Huddleston’s interest in the Well

pursuant to a section within the Joint Operating Agreement. App. G, Ex. A, at

¶ 16. Fort Apache has since amended its petition to assert it seeks the unpaid

drilling and completion costs as damages and seeks declarations regarding the

parties’ several contracts. Therefore, while the Payment Agreement may have

formed the primary basis for venue in Kendall County, it was not the only

agreement that formed the basis of Fort Apache’s lawsuit in Kendall County.

      1.    Huddleston’s response confuses venue and dominant jurisdiction.

      Huddleston argues in its Response that venue and dominant jurisdiction are

related concepts. Response, at 10. While the concepts are related, the application

of each concept requires a different analysis. Venue can be proper in multiple

counties, but only one court can have dominant jurisdiction over a dispute.

See GeoChem Tech Corp. v. Verseckes, 962 S.W.2d 541, 544 (Tex. 1998). Once

venue is determined to be proper, that court acquires dominant jurisdiction to the

exclusion of all other counties of equal stature. Curtis v. Gibbs, 511 S.W.2d 263,

267 (Tex. 1974). Therefore, Huddleston’s argument that more of the contracts at

                                        4
issue were negotiated in Dallas County in opposition to Realtors’ motion to abate

that proceeding is irrelevant.      Kendall County properly determined that a

substantial part of the transactions at issue occurred in Kendall County, which is

why it twice denied Huddleston’s motion to transfer venue to Dallas.

      Huddleston’s continued focus on where more of the contracts were executed

ignores the analysis required for abatement and dominant jurisdiction. “The court

in which suit is first filed generally acquires dominant jurisdiction to the exclusion

of other courts if venue is proper in the county in which suit was first filed.”

Gonzalez v. Reliant Energy, Inc., 159 S.W.3d 615, 622 (Tex. 2005) (emphasis in

original). “As long as the forum is a proper one, it is the plaintiff’s privilege to

choose the forum.” Id. (quoting Wyatt, 760 S.W.2d at 248). Plaintiff’s choice of

venue in Kendall County should be honored under long-standing Texas law, and

Huddleston clouds the issue of abatement by arguing which agreements were

executed in Dallas County. Because all of the agreements relate to the Williams #1

Well in Louisiana, the disputes concerning those agreements must be litigated in

the same venue.

      2.     Huddleston mischaracterizes the nature of Fort Apache’s lawsuit
             in Kendall County.

      Huddleston misstates the record by arguing that Fort Apache “sought

adjudication only of the Napkin Agreement, not the three contracts,” and that

                                          5
“Huddleston meanwhile brought suit related to the three contracts, not the Napkin

Agreement.” Response, at 9. This is simply not true.

      As explained above, Fort Apache sought the remedy of forfeiture of

Huddleston’s interest in the Williams #1 Well pursuant to a provision within the

Joint Operating Agreement.      See App. G, Ex. A, at ¶ 16.      At the same time,

Huddleston sought remedies against enforcement of the Kendall County Payment

Agreement in its suit in Dallas County. Therefore, both lawsuits concern the same

series of transactions between the parties.     Huddleston claims below that the

Kendall County Payment Agreement was the product of duress and fraud: defenses

that should clearly be the subject of Fort Apache’s suit to enforce the Payment

Agreement in Kendall County. App. A [Huddleston’s Original Petition]; ¶ 74;

App. B [Huddleston’s Second Amended Petition], ¶¶ 72-81. Huddleston even

states in its Response to this Petition for Writ of Mandamus that “[a]s the cases are

currently postured, after the parties have amended their pleadings in both venues,

the disputed facts are the same in both cases.” Response, at 9. Relators are hard

pressed to find a more conciliatory admission of the necessity of abatement.

      3.     The lawsuits are so intertwined that resolving the Dallas lawsuit
             will resolve the Kendall County lawsuit and eliminate Fort
             Apache’s right to choose its venue as plaintiff.

      Huddleston also mistakenly argues in its Response that “[t]here should be no

concern about the courts reaching inconsistent judgments because the parties’

                                         6
complaints, as originally filed, do not concern the same contracts and do not

involve essential facts that are significantly and logically related.” Response,

at 9-10. However, Huddleston expressed the exact opposite in the Kendall County

Court when seeking a transfer of venue:

      The handwritten document [Payment Agreement] must be read in
      conjunction with both the Participation Agreement and Operating
      Agreement that form the relationship between Huddleston and Fort
      Apache. Both of those contracts were negotiated in Dallas County in
      June 2012, and they were both to be performed in Louisiana.

See App. G [Relator’s Amended Verified Motion to Abate], Ex. B [Huddleston’s

Motion to Transfer Venue], at 2.        Huddleston also admitted the cases were

intertwined at the hearing on Relator’s Plea to the Jurisdiction in Dallas County:

      [Huddleston’s counsel]: Additionally, our case that does involve three
      contracts as well as ongoing fraud and extortion from the defendants in this
      case, does also resolve all of the claims that are in Kendall County.

App. I [Huddleston’s Response to Defendants’ Amended Verified Motion to

Abate], Ex. B [Transcript of May 5, 2015], at p. 11:14-17.

      The lawsuits in Kendall and Dallas Counties involve the same series of

transactions and common nucleus of operative facts, the agreements between Fort

Apache and Huddleston regarding the Williams #1 Well in Louisiana. See Tindle

v. Jackson Nat’l Life Ins., 837 S.W.2d 795, 798 (Tex. App.—Dallas 1992, no writ).

The trial court’s denial of abatement constitutes an abuse of discretion.

                                          7
B.    The failure to order abatement of a second filed suit that has ordered a
      trial date earlier than the first-filed suit is an abuse of discretion for
      which there is no adequate appellate remedy.

      Although courts before In re Prudential Ins. Co. of Am., 148 S.W.3d 124,

135 (Tex. 2004) (orig. proceeding) held that the denial of mandamus relief could

typically be addressed by appeal, courts over the past ten years have assessed the

realities of proceeding to trial in a proceeding that should have been abated as a

waste of time and resources for all parties involved. See, e.g., In re ExxonMobil

Production Co., 340 S.W.3d 852, 859 (Tex. App.—San Antonio, 2011, orig.

proceeding [mand. denied]) (holding that the Texas Supreme Court rejected rigid

application of mandamus principals in Prudential and that the denial of a proper

motion to abate warrants mandamus relief). That is particularly true where the

case that should have been abated will proceed to trial before the court with

dominant jurisdiction, as is the case here. See In re Puig, 351 S.W.3d 301, 306

(Tex. 2011) (“[W]hen a court issues an order which actively interferes with the

exercise of jurisdiction by a court possessing dominant jurisdiction, mandamus

relief is appropriate.”); Perry v. Del Rio, 66 S.W.3d 239, 252 (Tex. 2001) (holding

that the second filed suit having an earlier trial date conflicted with the exclusivity

of the other court’s dominant jurisdiction and warranted mandamus).

      Relators have no adequate appellate remedy if they must proceed to trial in

Dallas County and then potentially deal with Huddleston asserting res judicata in

                                          8
Kendall County. Essentially, Fort Apache’s right to choose venue as a plaintiff in

Kendall County will be rendered moot by being forced to proceed to trial in a

second-filed suit before trial in its own first-filed suit.

       In Prudential, the Texas Supreme Court held that cases warranting

mandamus relief cannot be split into generally accepted categories; the

consideration of whether to grant mandamus relief must depend on the facts of the

case. Prudential, 148 S.W.3d at 136 (“This determination is not an abstract or

formulaic one; it is practical and prudential. It resists categorization . . .”). “Rigid

rules are necessarily inconsistent with the flexibility that is the remedy’s principal

virtue.” Id. The Texas Supreme Court’s prior holding in Abor v. Black, relied

upon by Huddleston, “is an example of the type of rigid rule that Prudential

rejected.” ExxonMobil, 340 S.W.3d at 859 (“Limiting mandamus relief as per

Abor precludes the flexibility of the remedy in plea in abatement cases because

Abor’s holding fails to account for any case-by-case consideration of the benefits

and detriments of mandamus review.”).

       The Texas Supreme Court recently reinforced this view in In re Team

Rocket, when it granted mandamus relief to correct a trial court’s refusal to enforce

a prior venue ruling by another trial court. In Team Rocket, mandamus was proper

because it “spared [the] litigants and [the] public ‘the time and money utterly

wasted enduring eventual reversal of improperly conducted proceedings.’”

                                             9
Team Rocket, 256 S.W.3d 257, 262 (Tex. 2008) (orig. proceeding) (citing

Prudential, 148 S.W.3d at 136). Mandamus is proper here for the same reason. If

the Dallas County lawsuit proceeds to trial before the Kendall County lawsuit, it

will be a waste of time and resources because the judgment cannot stand on appeal.

See ExxonMobil, 340 S.W.3d at 859 (“The appellate remedy for the improper

denial of a plea in abatement is virtually automatic reversal.” (internal quotes

omitted)).

                             CONCLUSION AND PRAYER

      For these reasons, Relators Fort Apache Energy, Inc., Allan P. Bloxsom, and

Drilling Risk Management, Inc. respectfully request this Court grant their Petition

and issue a writ of mandamus directing the Dallas County District Court to vacate

its order signed on August 7, 2015, sign an order abating the Dallas County

litigation, and for such other and further relief to which they may be entitled.

                                        Respectfully submitted,

                                              /s/ Charles J. Cain
                                        Charles J. Cain
                                        State Bar No. 00796292
                                        ccain@cstrial.com
                                        Zachary H. Bowman
                                        State Bar No. 24073944
                                        zbowman@cstrial.com

                                          10
                                     CAIN & SKARNULIS PLLC
                                     400 W. 15th Street, Suite 900
                                     Austin, Texas 78701
                                     512-477-5000
                                     512-477-5011—Facsimile
                                     COUNSEL FOR RELATORS
                                     FORT APACHE ENERGY, INC.,
                                     ALLAN P. BLOXSOM, AND DRILLING
                                     RISK MANAGEMENT, INC.

                        CERTIFICATE OF COUNSEL

      I certify that I have reviewed this Reply in Support of Petition for Writ of

Mandamus and that every factual statement in the Petition is supported by

competent evidence included in the Appendix or Mandamus Record.

                                           /s/ Charles J. Cain
                                     Charles J. Cain

                     CERTIFICATE OF COMPLIANCE

      I certify that this Brief complies with the typeface requirements of Texas

Rule of Appellate Procedure 9.4(e) because it has been prepared in a conventional

typeface no smaller than 14-point for text and 12-point for footnotes.         This

document also complies with the word-count limitations of Texas Rule of

Appellate Procedure 9.4(i), if applicable, because it contains 2285 words,

excluding any parts exempted by Texas Rule of Appellate Procedure 9.4(i)(1).

                                           /s/ Charles J. Cain
                                     Charles J. Cain

                                       11
                         CERTIFICATE OF SERVICE

       I certify that a true and correct copy of the foregoing Reply in Support of
Petition for Writ of Mandamus has been forwarded to all counsel of record in
accordance with the Texas Rules of Appellate Procedure on this 4th day of
November 2015, as follows:

Method of Service       Party(ies)                                Counsel
E-service         Respondent                    The Honorable Phyllis Lister Brown
                                                162nd Judicial District Court
                                                George L. Allen, Sr. Courts Building
                                                600 Commerce Street, Suite 440
                                                Dallas, Texas 75202
                                                Mthomas@dallascourts.org

E-service          Counsel for Real Party in    Jerry D. Bullard
                   Interest                     jdb@all-lawfirm.com
                                                ADAMS, LYNCH & LOFTIN, P.C.
                                                3950 State Highway 360
                                                Grapevine, Texas 76051
                                                817-552-7742
                                                817-328-2942—Facsimile

                                                John Holman Barr
                                                jbarr@bbarr.com
                                                M. Forest Nelson
                                                fnelson@bbarr.com
                                                BURT BARR & ASSOCIATES, L.L.P.
                                                P. O. Box 223667
                                                Dallas, Texas 75222-3667
                                                214-943-0012
                                                214-943-0048—Facsimile

                                              /s/ Charles J. Cain
                                        Charles J. Cain

                                           12