Court Opinion

ID: 4423752
Source: CourtListenerOpinion
Date Created: 2019-08-08 11:52:28.298313+00
Date Added: 2024-06-11T14:36:57.804122
License: Public Domain

Reverse and Remand; Opinion Filed August 5, 2019.

                                              In The
                                Court of Appeals
                         Fifth District of Texas at Dallas
                                      No. 05-18-01227-CV

                    GREG GUTMAN, Appellant
                               V.
  RICHARD WAYNE WELLS AND REAL ESTATE ARBITRAGE PARTNERS, LLC,
                            Appellees

                            On Appeal from the 95th District Court
                                    Dallas County, Texas
                             Trial Court Cause No. DC-18-06158

                             MEMORANDUM OPINION
                  Before Justices Whitehill, Partida-Kipness, and Pedersen, III
                                  Opinion by Justice Whitehill
       This is an appeal from the trial court’s rule 91a dismissal of Greg Gutman’s declaratory

judgment action against Richard Wells and Real Estate Arbitrage Partners, LLC (Arbitrage).

Gutman’s two issues argue that the trial court erred by (i) dismissing the action and, consequently,

(ii) awarding Wells and Arbitrage reasonable attorney’s fees.

       This case asks us to decide whether a petition alleging that a defendant has repeatedly

harassed and threatened the plaintiff because he refuses to accede to the defendant’s unlawful

demands presents a sufficiently concrete dispute to justify a viable action seeking a judgment

declaring that the plaintiff need not accede to those demands.

       As discussed below, the trial court erred by dismissing the case because there was a

justiciable controversy to be determined by declaratory judgment. And because the dismissal was
reversible error, the court also erred by awarding attorney’s fees against Gutman. We thus reverse

the trial court’s judgment and remand the case for further proceedings.

                                        I. BACKGROUND

       We draw the relevant facts from the allegations in Gutman’s petition:

       9. Previously Plaintiff had sued Defendants in Cause No. DC-17-1809 in the 95th District
       Court to set aside a contract between Plaintiff and Arbitrage, which request was premised
       upon both, [sic] deficiencies in the formation of the contract and fraud practiced by the
       Defendants. Defendants counter-claimed against Plaintiff for alleged fraud and
       enforcement of the contract.

       10. Following a trial in the 95th District Court, all of Plaintiffs claims against Arbitrage
       were validated and found to be meritorious and all of Defendant’s claims were found to be
       groundless. No Judgment issued against Defendant Wells.

       11. Based upon the foregoing, on the 7th day of August, 2017, the Judge of the 95th District
       Court issued a Judgment in favor of Plaintiff and as against Defendant Arbitrage,
       cancelling the contract, and awarding Plaintiff attorney’s fees, court costs and interests.
       Defendants were awarded no relief under their counter-claims. The Judgment survived an
       unsuccessful attempt at an appeal.

       12. Weeks following the Judgment, Plaintiff recorded an Abstract of Judgment in the Deed
       Records of Dallas County. The Abstract of Judgment only referenced the Judgment awards
       against Defendant Arbitrage. The Abstract of Judgment did not contain any indication that
       there was any claim referenced in the Abstract of Judgment with respect to Defendant
       Wells.

       13. The Judgment amounts awarded to Plaintiff were paid in full on the 7th day of May,
       2018. Consistent with his duties, Plaintiff agreed to deliver and did deliver to Arbitrage on
       the 9th of May, 2018, a properly composed, executed, acknowledged and notarized release
       of the Judgment and any related liens arising there under.

       14. Despite delivering a fully completed and executed release of Judgment and lien,
       Defendants had [sic] repeatedly demanded that Plaintiff likewise execute and deliver to
       Defendants a release of an Abstract of Judgment against Defendant Wells, despite the fact
       that Defendants know and have been repeatedly advised that Plaintiff never had, nor does
       he now claim to have or hold a Judgment of any type against Defendant Wells.

       Additionally, Gutman’s fifteenth paragraph begins:

       Defendants have repeatedly harassed and threatened Plaintiff for his refusal to
       release a judgment he does not have and rights he does not claim to own. Plaintiff
       believes that there is no obligation under the law to release that which has not been
       claimed. Therefore a justiciable controversy exists about the rights and

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       responsibilities of the parties concerning Defendants’ rights if any, to demand such
       a release or Plaintiff’s obligation, if any, to provide such a release.

Paragraph fifteen further asked the trial court to end the harassment and intimidation by resolving

the controversy and declaring the parties’ rights.

       Wells and Arbitrage moved to dismiss the case pursuant to TEX. R. CIV. P. 91a because

there was no justiciable controversy. The trial court granted the motion and awarded Wells and

Arbitrage $3,605 in attorney’s fees with an additional $7,500 conditioned on the successful defense

of an appeal. This appeal followed.

                                           II. ANALYSIS

A.     Standard of Review and Applicable Law

       Texas Rule of Civil Procedure 91a authorizes a defendant to move for dismissal of a cause

of action that has no basis in law or in fact. TEX. R. CIV. P. 91a; see City of Dallas v. Sanchez, 494
S.W.3d 722, 724–25 (Tex. 2016). “A cause of action has no basis in law if the allegations, taken

as true, together with inferences reasonably drawn from them, do not entitle the claimant to the

relief sought.” TEX. R. CIV. P. 91a.1.

       In deciding a rule 91a motion, the trial court may consider only the live pleading and any

attachments thereto. Id. 91a.6 (“the court may not consider evidence in ruling on the motion and

must decide the motion based solely on the pleading of the cause of action, together with any

pleading exhibits permitted by Rule 59”); AC Interests, L.P. v. Tex. Comm’n on Envt’l Quality,

543 S.W.3d 703, 706 (Tex. 2018).

       The rule further requires the trial court to award the prevailing party all costs and

reasonable and necessary attorney’s fees incurred regarding the challenged cause of action in the

trial court. TEX. R. CIV. P. 91a.7.

       We review de novo a trial court’s decision on a rule 91a motion. City of Dallas, 494 S.W.3d

at 724. In doing so, we apply the fair-notice pleading standard to determine whether the petition’s

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allegations are sufficient to allege a cause of action, and we look solely to the pleading and any

attachments to make this determination. Renate Nixdorf GmbH & Co. KG v. TRA Midland

Properties, LLC, No. 05-17-00577-CV, 2019 WL 92038, at *4 (Tex. App.—Dallas Jan. 30, 2019,

pet. denied) (mem. op).

       Under the declaratory judgments act, a person whose rights, status, or other legal relations

are affected by a deed, will, contract, or other writings constituting a contract may have a court

determine any question of construction or validity arising under the contract and may obtain a

declaration of rights under that instrument. See TEX. CIV. PRAC. & REM. CODE § 37.004(a).

       The critical requirements to obtain a declaratory judgment are the existence of a justiciable

controversy as to the rights and status of the parties that the declaration sought will resolve. See

Bonham State Bank v. Beadle, 907 S.W.2d 465, 467 (Tex. 1995).

       A justiciable controversy involves a real and substantial dispute including a genuine

conflict of tangible interests, rather than merely a theoretical disagreement. See Village of Tiki

Island v. Premier Tierra Holdings, Inc., 555 S.W.3d 738, 744–45 (Tex. App.—Houston [14th

Dist.] 2018, no pet.). There is a real and substantial dispute when the requested declaration will

“serve a useful purpose or will terminate the controversy between the parties.” Bonham State

Bank, 907 S.W.2d at 468 (Tex. 1995).

B.     Application of Law to Facts.

       Here, Gutman’s petition alleges that Wells requested a release, Gutman refused to provide

the release, and Wells and Arbitrage harassed and threatened Gutman because he refused to

provide the release. This sets out a controversy—whether Gutman must provide the requested

release—that is real and not hypothetical. Taking all reasonable inferences in Gutman’s favor

there is a justiciable controversy because Wells is repeatedly harassing and threatening Gutman.

Although these allegations are less than specific, at this early stage they adequately assert that the

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declaratory judgment will serve a useful purpose of terminating the parties’ controversy and ending

the harassment and threats.

       Gutman also argues that the attorney’s fees award was improper because the dismissal was

in error. We agree.

       Because the trial court’s errors resulted in an improper judgment on both issues, we reverse

and remand this case to the trial court for further proceedings

                                                   /Bill Whitehill/
                                                   BILL WHITEHILL
                                                   JUSTICE

Partida-Kipness, J., dissenting.

181227F.P05

                                                –5–
                               Court of Appeals
                        Fifth District of Texas at Dallas
                                       JUDGMENT

 GREG GUTMAN, Appellant                                On Appeal from the 95th District Court,
                                                       Dallas County, Texas
 No. 05-18-01227-CV         V.                         Trial Court Cause No. DC-18-06158.
                                                       Opinion delivered by Justice Whitehill.
 RICHARD WAYNE WELLS AND REAL                          Justices Partida-Kipness and Pedersen, III
 ESTATE ARBITRAGE PARTNERS, LLC,                       participating.
 Appellees

        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 appellant GREG GUTMAN recover his costs of this appeal from
appellees RICHARD WAYNE WELLS AND REAL ESTATE ARBITRAGE PARTNERS,
LLC.

Judgment entered this 5th day of August, 2019.

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