Frances Jane Fuller Jackson Morris v. Margaret Ann Fuller

Court of Appeals of Texas·Decided October 6, 2011·No. 02-09-00442-CV·Published

Opinion

COURT OF APPEALS SECOND DISTRICT OF TEXAS FORT WORTH

NO. 02-09-00442-CV

FRANCES JANE FULLER APPELLANT JACKSON MORRIS

V.

MARGARET ANN FULLER APPELLEE

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FROM THE 67TH DISTRICT COURT OF TARRANT COUNTY

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MEMORANDUM OPINION1

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Appellee Margaret Ann Fuller (Fuller) sued her sister Appellant Frances

Jane Fuller Jackson Morris (Morris) for tortious interference with contract. Morris

countersued for breach of fiduciary duty and for an accounting for the income of

the sisters‘ joint venture. Morris appeals from the trial court‘s take-nothing

judgment on her breach of fiduciary duty claim and its judgment awarding an

1 See Tex. R. App. P. 47.4. accounting to determine the existing indebtedness of the joint venture. In four

issues, Morris argues that the case should have been transferred under a

mandatory venue provision; that the assignment by which the trial court found

she had assigned her interest in the joint venture to her sister was forged; that

the trial court‘s judgment incorrectly calculated her interest under the assignment

and should have ordered that her interest became effective on September 11,

2009; and that the trial court‘s judgment is vague and unenforceable and

improperly awarded Fuller relief not requested in her pleadings. Because we

hold that the mandatory venue provision did not apply and that the trial court‘s

judgment was not erroneous, we affirm.

Robert P. Fuller owned interests in oil, gas, and mineral properties in

Hemphill County, Texas, and in 1972, he conveyed some of these interests to a

joint venture to be owned equally by his two daughters, Morris and Fuller. The

joint venture was originally called the Cope-Jackson Joint Venture (at the time,

Morris was married to Leete Jackson III, and Fuller was married to John Cope).

In 1984, after Fuller had divorced Cope and remarried, the sisters formed a

new joint venture, the Lydick-Jackson Joint Venture (reflecting Fuller‘s new last

name).2 Their father and their brother, Rex Fuller, were appointed as agents to

manage the joint venture.

2 Fuller also at some point went by the name Ann Fuller Clayton.

2 Robert P. Fuller died in 1988, and in 1989, the sisters terminated Rex as

the joint venture‘s agent and hired Gruy Petroleum Management to manage their

interests. A Gruy report dated February 9, 1989, reflected the joint venture‘s

outstanding loans, including $2.6 million owed to First National Bank of Lubbock,

$4.5 million owed to Continental Illinois National Bank, and $7.5 million owed to

two other banks. The report noted that no payments were being made on the

note to Continental and that FDIC intervention was ―probable.‖ The report then

noted that ―[a]lmost all properties are mortgaged to the lending institutions,‖ that

―[i]t will be necessary to continue receiving revenue from the properties pledged

to [Continental] for the [joint venture] to pay interest payments, lease operating

expenses, and receive any revenue,‖ and that if the FDIC intervened, ―additional

monies will be required to service interest on the loan.‖

In February 1992, the FDIC (as successor in interest to Continental)

obtained a judgment of $4,500,096.50 against Morris, Fuller, and Rex

(individually and as executor of their father‘s estate), jointly and severally, and

perfected liens against their oil and gas interests. In May 1992, First National

Bank of Lubbock notified the three siblings that each of them had failed to fulfill

provisions of a 1990 settlement agreement they had made with the bank. Among

other things, Morris had agreed to assign to Rex her interest in the joint venture

but had not done so. The letter states that ―[u]nless the above is completed the

bank will determine the contract breached and continue to hold [Morris]

responsible for the original indebtedness.‖

3 Fuller testified at trial that because of the FDIC judgment, Morris wanted to

assign her interest in the joint venture to Fuller. On May 8, 1992, an assignment

of Morris‘s interest in the joint venture, dated May 7, 1992, (the assignment) was

filed in Lubbock, Texas, by family friend John Walker. The assignment states

that ―[Morris] . . . does hereby transfer and assign unto [Fuller] all of [Morris‘s]

rights, title, and interest‖ in the joint venture, effective as of January 1, 1991. The

assignment also states that ―[a]fter payout of all indebtedness of [the joint

venture] and that specific note of [Fuller] at First National Bank in Lubbock,

Texas, [Morris] whall [sic] be entitled to a 40% net profit interest in the properties

conveyed in this assignment.‖ Because of the assignment, First National Bank

released Morris from her obligation for the debt owed by Fuller, Morris, and Rex.

In 1995, Fuller and Rex negotiated an agreement with the FDIC under

which the FDIC forgave a large portion of the outstanding judgment. The debt

forgiveness caused Fuller to incur tax liability of over $2.5 million. The IRS did

not attempt to collect from Morris any taxes owed by the joint venture interests

for the years after the assignment.

In 2006, Fuller sued Morris and Devon Louisiana Corporation in Tarrant

County, asserting a claim for breach of contract against Devon and a claim for

tortious interference with contract against Morris. She alleged that their father

had conveyed mineral interests to them ―in the nature of a joint venture‖; that

Devon was contractually obligated to pay royalties from oil and gas production on

the subject properties; that Morris had assigned to Fuller her interest in the joint

4 venture; that in June 2005, Morris had contacted Devon and claimed that she

had not executed the assignment and that she was entitled to royalties; and that

as a result, Devon stopped making payments to Fuller. Fuller alleged that venue

was proper in Tarrant County because the contract payments were sent to

Tarrant County and Fuller resided in Tarrant County. Fuller subsequently

dismissed her claims against Devon.

Morris filed a motion to transfer venue to Hemphill County on the ground

that Fuller‘s suit involved title to real property located in Hemphill. The trial court

denied the motion. Morris also countersued Fuller for breach of fiduciary duty

and for an accounting.

At the bench trial, Morris testified that she did not sign the assignment.

John Weldon, a forensic document examiner, testified that in his opinion, the

signature on the assignment was Morris‘s genuine signature. Fuller testified that

Morris had personally given her a copy of the assignment and that she, Morris,

and Morris‘s husband went together to take the assignment to First National

Bank.

After the trial, the trial court made the following findings of fact:

• Morrios had assigned her interest in the joint venture to Fuller in order to

avoid liability under the FDIC judgment and ―possible IRS issues looming.‖

• In 1995, Fuller and Rex reached an agreement with the FDIC in which the

FDIC agreed to forgive a large part of the judgment owed. This forgiven

5 debt was reported to the IRS, increasing Fuller‘s personal tax liability to

over $2.5 million.

• Because of the assignment, the IRS did not attempt to collect from Morris

any of the tax debt owed by the joint venture for the years after the

assignment.

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