James W. Trenz and Terrane Associates, Inc. v. Peter Paul Petroleum Company and Posse Energy, Ltd.

388 S.W.3d 796, 2012 WL 3244230, 2012 Tex. App. LEXIS 6572
CourtCourt of Appeals of Texas
DecidedAugust 9, 2012
Docket01-11-01103-CV
StatusPublished
Cited by27 cases

This text of 388 S.W.3d 796 (James W. Trenz and Terrane Associates, Inc. v. Peter Paul Petroleum Company and Posse Energy, Ltd.) is published on Counsel Stack Legal Research, covering Court of Appeals of Texas primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
James W. Trenz and Terrane Associates, Inc. v. Peter Paul Petroleum Company and Posse Energy, Ltd., 388 S.W.3d 796, 2012 WL 3244230, 2012 Tex. App. LEXIS 6572 (Tex. Ct. App. 2012).

Opinion

OPINION

HARVEY BROWN, Justice.

James W. Trenz and Terrane Associates, Inc. (collectively, Trenz) appeal from the trial court’s denial of a special appearance in this declaratory judgment action brought by Peter Paul Petroleum Company and Posse Energy, Ltd. (collectively, Peter Paul) to resolve disputes over the calculation and payment of a reversionary interest in an Oklahoma oil and gas lease. Trenz argues that the trial court lacks personal jurisdiction over him and, in the alternative, lacks subject-matter jurisdiction over this dispute because it requires the adjudication of interests in real property located in another state. We hold that Trenz has waived any objection to the trial court’s personal jurisdiction and affirm the trial court’s order denying Trenz’s special appearance. We do not reach Trenz’s challenge based on the location of certain real property because he did not raise it in his special appearance in the trial court, and it is outside the scope of this interlocutory appeal under section 51.014(a)(7) of the Civil Practice and Remedies Code. 1

*799 Background

James Trenz, a non-resident of Texas, is the sole owner of Terrane Associates, a Delaware corporation with its principal place of business located outside of Texas. Trenz is in the oil and gas consulting business. In 1990, Trenz and Glen Rupe formed a joint venture (“ROC, et al.”) to operate certain Oklahoma oil and gas wells owned by Peter Paul, a Texas oil and gas company. 2 Through Rupe Oil Company, Inc., 3 Rupe entered into an operating agreement with Peter Paul, under which ROC, et al. would operate the Oklahoma wells. Under the operating agreement, Rupe, individually, agreed to purchase a five percent interest in the wells (with Peter Paul purchasing the remaining ninety-five percent). The agreement also granted ROC, et al. a “ten percent rever-sionary interest at payout of the acquisition price, closing costs, additional drilling and workover costs, and allocated [Peter Paul] overhead not to exceed [ten percent] of net cash flow.” Essentially, ten percent of Peter Paul’s ninety-five percent interest in the wells would pass to ROC, et al. once income from the wells exceeded startup costs.

ROC, et al. operated the Oklahoma wells for approximately one year before Peter Paul notified ROC, et al. that it would replace ROC, et al. with a new operator. ROC, et al. retained its contractual right to the ten percent reversionary interest. Disputes arose between Trenz and Rupe regarding their business arrangement and between Trenz and Peter Paul regarding calculation of the reversionary interest payout. Litigation in Oklahoma resolved the dispute between Trenz and Rupe, resulting in a judgment that Trenz and Rupe were joint venturers, each with a one-half interest in the ten percent reversionary interest from Peter Paul. 4 Peter Paul filed this declaratory judgment action seeking various declarations regarding Trenz’s rights and obligations with respect to the reversionary interest payout and a 1997 agreement between Peter Paul and Rupe regarding calculation of the payout.

Trenz specially appeared, challenging the trial court’s personal jurisdiction over him. The trial court ultimately overruled the special appearance, and this appeal followed.

Personal Jurisdiction

Trenz argues that Peter Paul failed to plead sufficient jurisdictional facts to bring Trenz within the Texas long-arm statute and failed to prove sufficient mini *800 mum contacts to establish Texas courts’ personal jurisdiction over Trenz. Peter Paul responds that Trenz waived any challenge to personal jurisdiction by generally appearing in the case and that it has demonstrated sufficient contacts to establish jurisdiction over Trenz. “Whether a court has personal jurisdiction over a nonresident defendant is a question of law, which we review de novo.” Zinc Nacional, S.A. v. Bouche Trucking, Inc., 308 S.W.3d 395, 397 (Tex.2010) (citing BMC Software Belgium, N.V. v. Marchand, 83 S.W.3d 789, 794 (Tex.2002)).

A. Waiver

Unlike subject-matter jurisdiction, which concerns a court’s jurisdiction to hear a case and cannot be waived, personal jurisdiction concerns a court’s jurisdiction over a particular party and can be waived. Reata Const. Corp. v. City of Dallas, 197 S.W.3d 371, 379 (Tex.2006). A party waives the absence of personal jurisdiction by making a general appearance in the case or by failing to timely object to the court’s jurisdiction. Id. A party enters a general appearance when he (1) invokes the judgment of the court on any question other than the court’s jurisdiction, (2) recognizes by his acts that an action is properly pending, or (3) seeks affirmative action from the court. Exito Elecs. Co. v. Trejo, 142 S.W.3d 302, 304 (Tex.2004) (holding that filing of rule 11 agreement and hearing of jurisdiction-related discovery dispute did not waive special appearance).

Rule 120a of the Texas Rules of Civil Procedure recognizes a procedure for a “special appearance” — a means by which a party may make a limited appearance in the case for the purpose of challenging personal jurisdiction without making a general appearance that will waive the challenge. See Tex.R. Civ. P. 120a; First Oil PLC v. ATP Oil & Gas Corp., 264 S.W.3d 767, 776 (Tex.App.-Houston [1st Dist.] 2008, pet. denied). A party availing himself of rule 120a’s special appearance procedure must strictly comply with the rule’s terms because failure to do so results in waiver. See Tex.R. Civ. P. 120a(l) (“Every appearance, prior to judgment, not in compliance with this rule is a general appearance.”); First Oil PLC, 264 S.W.3d at 776; see also Silbaugh v. Ramirez, 126 S.W.3d 88, 93 (Tex.App.-Houston [1st Dist.] 2002, no pet.) (“Rule 120a requires strict compliance.”); SBG Dev. Servs., L.P. v. NuRock Group, Inc., No. 02-11-00008-CV, 2011 WL 5247873, at *2-4 (Tex.App.-Fort Worth Nov. 3, 2011, no pet.) (mem. op.) (“Strict compliance with rule 120a is required[.]”). Rule 120a dictates the order in which pleadings may be filed with respect to the filing of a special appearance — the due-order-of-pleading requirement; it also dictates the order in which motions may be heard with respect to a special appearance — the due-order-of-hearing requirement. See Tex.R. Civ. P. 120a; First Oil PLC, 264 S.W.3d at 776.

1. The parties’ arguments

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Bluebook (online)
388 S.W.3d 796, 2012 WL 3244230, 2012 Tex. App. LEXIS 6572, Counsel Stack Legal Research, https://law.counselstack.com/opinion/james-w-trenz-and-terrane-associates-inc-v-peter-paul-petroleum-company-texapp-2012.