Laurel Wendt v. Evalyn Wendt Moore, Amilee Wendt, and Jackie Wendt Martin
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Opinion
Opinion issued July 25, 2024
In The
Court of Appeals For The
First District of Texas ———————————— NO. 01-23-00128-CV ——————————— LAUREL WENDT, Appellant V. EVALYN WENDT MOORE, AMILEE WENDT, AND JACKIE WENDT MARTIN, Appellees
On Appeal from the 11th District Court Harris County, Texas Trial Court Case No. 2022-36772
MEMORANDUM OPINION
This case involves a dispute among four sisters over management of a family
partnership and ownership of land used for farming. Appellant Laurel Wendt sued
her sisters—appellees Evalyn Wendt Moore, Amilee Wendt, and Jackie Wendt Martin—for breach of fiduciary duty, fraud, embezzlement/theft, and breach of
contract.1 Evalyn, Amilee, and Jackie moved for summary judgment, arguing that
Laurel’s claims were barred by res judicata because they were, or could have been,
litigated in a prior suit between the parties in Fort Bend County that is on appeal to
the Fourteenth Court of Appeals. Shortly before the summary judgment hearing,
Laurel amended her petition to raise new factual allegations and claims. The trial
court granted summary judgment and dismissed Laurel’s claims with prejudice.
On appeal, Laurel contends that (1) the trial court’s judgment, which was
based on res judicata, improperly failed to reflect that it was “subservient to any final
decision” made by the Fourteenth Court of Appeals in its review of the Fort Bend
County judgment; (2) the trial court erred by granting summary judgment and
dismissing Laurel’s claims because her amended petition raised factual allegations
and claims that were not addressed by the summary judgment motion; and (3) the
trial court erroneously failed to recognize that Laurel’s breach of contract claim
could not have been litigated in the Fort Bend County suit because that claim was
not ripe until after the Fort Bend County court rendered its judgment against Laurel.
We affirm in part and reverse and remand in part.
1 Because some of the parties share a common last name, this opinion refers to the parties by their first names. 2 Background
A. The Wendt Farming Operations
Evalyn, Amilee, Jackie, and Laurel are the only children of Jack and Billie
Wendt. In 1974, Jack and Billie began conveying real property located in Fort Bend
County to the sisters. Ultimately, Jack and Billie conveyed 15 tracts totaling
approximately 2,900 acres of land to the sisters. The deeds conveying the properties
contained two clauses that later became the subject of a dispute between the sisters:
(1) a “majority rule” clause, in which each sister agreed to join in future conveyances
of the property provided that the owners of a majority of all undivided interests in
the property agreed; and (2) a “right of first refusal” clause that governed procedures
to follow if any sister desired to sell any portion of her interest in the property.
In 1977, the sisters created a partnership called E.A.J.L. Wendt Farms (“the
Partnership”) to manage farming operations on the property. The sisters did not
themselves engage in farming activities on each tract that had been conveyed to them
by their parents. For example, Frank and Nancy Stasney, who are not parties to this
appeal, leased a portion of the land from the Partnership and used the land to engage
in rice farming. Other individuals leased portions of the land for the purpose of
raising cattle. The Partnership also owned a water distribution system, which was
located throughout the property and supplied water for sale to “end users.”
3 B. The Fort Bend County Lawsuit
The Partnership operated for decades without any major issues. Then, in 2018,
Evalyn, Amilee, and Jackie informed Laurel that they wanted to sell the property.
Stasney expressed interest in purchasing Tract 15 of the property, and he made an
offer to the sisters. Laurel and her sisters disagreed over the interpretation of the
majority rule clause and the right of first refusal clause contained in the deeds from
their parents.
The sisters were unable to resolve their disagreements, and Evalyn, Amilee,
and Jackie filed suit against Laurel in the 268th District Court of Fort Bend County
(“the Fort Bend County suit”). They sought declarations concerning ownership of
the property and the sisters’ obligations and remedies under the majority rule clause
and the right of first refusal clause. They also asserted a claim for breach of contract
or anticipatory breach of contract based on Laurel’s alleged rejection of the majority
rule and right of first refusal clauses.
Laurel filed a counter-petition against her sisters and sought to wind up the
Partnership. She also alleged that she had properly exercised her right of first refusal
concerning the potential sale of Tract 15. Laurel sought numerous declarations,
including a declaration that she had complied with the right of first refusal clause.
The sisters agreed to attend mediation in May 2021. At the close of mediation,
the sisters signed a “Rule 11 and Mediation Settlement Agreement” (“the MSA” or
4 “the Agreement”) concerning most of the dispute. The parties agreed that the
majority rule and right of first refusal clauses are “valid and enforceable.” The MSA
specified that it did not settle the portion of the lawsuit relating to Tract 15, which
Stasney had offered to purchase. The parties agreed to partition the remaining tracts
between Laurel and her sisters.
The MSA also contained provisions relating to appraisals of the tracts. The
Partnership agreed to “use its reasonable efforts to operate the Water Distribution
System and sell water to end users,” and the parties agreed to an equal allocation of
income, expenses, profits, and losses from operation of this system.
Laurel agreed to dismiss her cause of action to dissolve the Partnership and
her counterclaim against her sisters, “provided that neither Plaintiffs nor Defendant
[Laurel] have released any future claim for an accounting for past business
operations of [the Partnership].” Evalyn, Amilee, and Jackie agreed to “dismiss their
cause of action against [Laurel] except for any claims concerning Tract 15.” The
MSA contained release language providing that except for issues relating to Tract
15, future claims “for an accounting for past business operations pertaining to [the
Partnership],” and the parties’ cattle operations, the sisters “will sign a mutual
general release.” The MSA stated that the sisters intended to “resolve all claims and
causes of actions that currently exist relating to this dispute.”
5 Additional disputes arose after the sisters signed the MSA. In July 2021,
Laurel filed a separate suit against her sisters seeking declaratory and injunctive
relief primarily relating to ownership and partitioning of a cattle herd devised to the
sisters by their mother. Factual allegations in this suit included an allegation that
Laurel’s sisters agreed to pay their attorney with Partnership funds “over the
objection of Laurel Wendt.” Laurel sought multiple declarations, including a
declaration that “[t]he legal services of [Laurel’s sisters’ attorney] cannot be charged
to [the Partnership] just because three of the four sisters voted to employ him to
perform legal services which directly affected a partition of their personal property
owned independent of said partnership.”2 Laurel also requested that the trial court
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Opinion issued July 25, 2024
In The
Court of Appeals For The
First District of Texas ———————————— NO. 01-23-00128-CV ——————————— LAUREL WENDT, Appellant V. EVALYN WENDT MOORE, AMILEE WENDT, AND JACKIE WENDT MARTIN, Appellees
On Appeal from the 11th District Court Harris County, Texas Trial Court Case No. 2022-36772
MEMORANDUM OPINION
This case involves a dispute among four sisters over management of a family
partnership and ownership of land used for farming. Appellant Laurel Wendt sued
her sisters—appellees Evalyn Wendt Moore, Amilee Wendt, and Jackie Wendt Martin—for breach of fiduciary duty, fraud, embezzlement/theft, and breach of
contract.1 Evalyn, Amilee, and Jackie moved for summary judgment, arguing that
Laurel’s claims were barred by res judicata because they were, or could have been,
litigated in a prior suit between the parties in Fort Bend County that is on appeal to
the Fourteenth Court of Appeals. Shortly before the summary judgment hearing,
Laurel amended her petition to raise new factual allegations and claims. The trial
court granted summary judgment and dismissed Laurel’s claims with prejudice.
On appeal, Laurel contends that (1) the trial court’s judgment, which was
based on res judicata, improperly failed to reflect that it was “subservient to any final
decision” made by the Fourteenth Court of Appeals in its review of the Fort Bend
County judgment; (2) the trial court erred by granting summary judgment and
dismissing Laurel’s claims because her amended petition raised factual allegations
and claims that were not addressed by the summary judgment motion; and (3) the
trial court erroneously failed to recognize that Laurel’s breach of contract claim
could not have been litigated in the Fort Bend County suit because that claim was
not ripe until after the Fort Bend County court rendered its judgment against Laurel.
We affirm in part and reverse and remand in part.
1 Because some of the parties share a common last name, this opinion refers to the parties by their first names. 2 Background
A. The Wendt Farming Operations
Evalyn, Amilee, Jackie, and Laurel are the only children of Jack and Billie
Wendt. In 1974, Jack and Billie began conveying real property located in Fort Bend
County to the sisters. Ultimately, Jack and Billie conveyed 15 tracts totaling
approximately 2,900 acres of land to the sisters. The deeds conveying the properties
contained two clauses that later became the subject of a dispute between the sisters:
(1) a “majority rule” clause, in which each sister agreed to join in future conveyances
of the property provided that the owners of a majority of all undivided interests in
the property agreed; and (2) a “right of first refusal” clause that governed procedures
to follow if any sister desired to sell any portion of her interest in the property.
In 1977, the sisters created a partnership called E.A.J.L. Wendt Farms (“the
Partnership”) to manage farming operations on the property. The sisters did not
themselves engage in farming activities on each tract that had been conveyed to them
by their parents. For example, Frank and Nancy Stasney, who are not parties to this
appeal, leased a portion of the land from the Partnership and used the land to engage
in rice farming. Other individuals leased portions of the land for the purpose of
raising cattle. The Partnership also owned a water distribution system, which was
located throughout the property and supplied water for sale to “end users.”
3 B. The Fort Bend County Lawsuit
The Partnership operated for decades without any major issues. Then, in 2018,
Evalyn, Amilee, and Jackie informed Laurel that they wanted to sell the property.
Stasney expressed interest in purchasing Tract 15 of the property, and he made an
offer to the sisters. Laurel and her sisters disagreed over the interpretation of the
majority rule clause and the right of first refusal clause contained in the deeds from
their parents.
The sisters were unable to resolve their disagreements, and Evalyn, Amilee,
and Jackie filed suit against Laurel in the 268th District Court of Fort Bend County
(“the Fort Bend County suit”). They sought declarations concerning ownership of
the property and the sisters’ obligations and remedies under the majority rule clause
and the right of first refusal clause. They also asserted a claim for breach of contract
or anticipatory breach of contract based on Laurel’s alleged rejection of the majority
rule and right of first refusal clauses.
Laurel filed a counter-petition against her sisters and sought to wind up the
Partnership. She also alleged that she had properly exercised her right of first refusal
concerning the potential sale of Tract 15. Laurel sought numerous declarations,
including a declaration that she had complied with the right of first refusal clause.
The sisters agreed to attend mediation in May 2021. At the close of mediation,
the sisters signed a “Rule 11 and Mediation Settlement Agreement” (“the MSA” or
4 “the Agreement”) concerning most of the dispute. The parties agreed that the
majority rule and right of first refusal clauses are “valid and enforceable.” The MSA
specified that it did not settle the portion of the lawsuit relating to Tract 15, which
Stasney had offered to purchase. The parties agreed to partition the remaining tracts
between Laurel and her sisters.
The MSA also contained provisions relating to appraisals of the tracts. The
Partnership agreed to “use its reasonable efforts to operate the Water Distribution
System and sell water to end users,” and the parties agreed to an equal allocation of
income, expenses, profits, and losses from operation of this system.
Laurel agreed to dismiss her cause of action to dissolve the Partnership and
her counterclaim against her sisters, “provided that neither Plaintiffs nor Defendant
[Laurel] have released any future claim for an accounting for past business
operations of [the Partnership].” Evalyn, Amilee, and Jackie agreed to “dismiss their
cause of action against [Laurel] except for any claims concerning Tract 15.” The
MSA contained release language providing that except for issues relating to Tract
15, future claims “for an accounting for past business operations pertaining to [the
Partnership],” and the parties’ cattle operations, the sisters “will sign a mutual
general release.” The MSA stated that the sisters intended to “resolve all claims and
causes of actions that currently exist relating to this dispute.”
5 Additional disputes arose after the sisters signed the MSA. In July 2021,
Laurel filed a separate suit against her sisters seeking declaratory and injunctive
relief primarily relating to ownership and partitioning of a cattle herd devised to the
sisters by their mother. Factual allegations in this suit included an allegation that
Laurel’s sisters agreed to pay their attorney with Partnership funds “over the
objection of Laurel Wendt.” Laurel sought multiple declarations, including a
declaration that “[t]he legal services of [Laurel’s sisters’ attorney] cannot be charged
to [the Partnership] just because three of the four sisters voted to employ him to
perform legal services which directly affected a partition of their personal property
owned independent of said partnership.”2 Laurel also requested that the trial court
enjoin her sisters from using Partnership funds to pay their attorney. The Fort Bend
County court consolidated this lawsuit with the pending Fort Bend County suit.
Evalyn, Amilee, and Jackie amended their petition in October 2021 to add
additional claims. They requested that the Fort Bend County court order Laurel not
2 Laurel twice amended her petition to request related declarations. In October 2021, Laurel sought a declaration that the Partnership “has no legal right to pay the cost of the legal service incurred by Amilee Wendt, Evalyn Wendt Moore, and Jackie Wendt Martin in the Hay Meadow (tract 15) litigation as an expense of” the Partnership.” She also sought a declaration that the Partnership “is not entitled to deduct from its revenue as personal services the legal fee and cost expenses of any partition litigation of real property not owned by” the Partnership. In December 2021, she requested a declaration that her sisters “could not lawfully require [the Partnership] to pay professional services and real property partition litigation costs as such costs would be applicable to real property not owned by said partnership as tax deductible business expenses of” the Partnership. Laurel later nonsuited these requests for declaratory relief. 6 to interfere with the closing of a contract with Stasney to purchase Tract 15 and find
that Laurel’s attempt to exercise her right of first refusal with respect to this tract
was ineffective. They also asserted a cause of action for enforcement of the MSA,
alleging that Laurel had not complied with provisions relating to obtaining appraisals
of the property.
Trial began in the Fort Bend County suit in January 2022 and lasted seventeen
days during January, February, and March 2022. During trial, Laurel moved to
dismiss her sisters’ claims for attorney’s fees and abate the proceeding, arguing that
her sisters’ counsel “unexpectedly and without notice . . . commenced providing
trial testimony to be award[ed] damages for attorney’s fees on settled claims.” Laurel
contended that the MSA, which had been approved by the trial court, required her to
dismiss her claims against her sisters and the Partnership and required her sisters to
dismiss all claims against her except for claims involving Tract 15. She argued that
this requirement “includes specifically by reference the then pending claims for
attorney’s fees that might be due to either Defendant or Plaintiffs on all matters then
plead[ed] in the above styled cause excluding ‘except for any claims concerning
Tract 15.’” Laurel further argued that the MSA resolved all partition issues, and her
7 sisters therefore sought declaratory relief solely to obtain attorney’s fees, which was
not permissible.3
Following trial, the Fort Bend County court signed a final judgment on March
25, 2022. Among other things, the court declared that Laurel’s failure to join in the
conveyance of Tract 15 to Stasney breached the majority rule and right of first
refusal clauses, and the court ordered Laurel to convey her interest in this tract to
Stasney. The court divided the remaining 14 tracts “in accordance with the Parties’
agreement” in the MSA. The court also ordered that Evalyn, Amilee, and Jackie
recover $251,810.36 in reasonable and necessary attorney’s fees and that, upon
collection of this amount from Laurel, the sisters reimburse the Partnership “in the
amount of $120,577.50.”
Laurel moved for a new trial in April 2022. She raised several arguments with
respect to the trial court’s award of attorney’s fees. Specifically, she argued:
6. The Trial Court [erred] in finding attorney’s fees based upon Declaratory [Judgment] Relief which was asserted by Plaintiffs as a subterfuge to obtain attorney’s fees from Defendant when attorney’s fees are not authorized to be owed Defendants in the partition suit litigation which is the entire “heart” of this court’s [judgment].
....
3 Laurel also submitted a trial brief on various issues relating to attorney’s fees, and she filed a petition for writ of mandamus on, among other issues, whether the Fort Bend County court abused its discretion in allowing her sisters’ attorney to “present evidence regarding the reasonable and necessary attorney’s fees applicable to settled and released claims as approved by the [Fort Bend County court] when it approved the [MSA].” 8 19. The Trial Court [erred] when it Ordered Plaintiffs to pay attorneys’ fees to E.A.J.L. Wendt Farms . . . in order to attempt to “cover up” the breach of fiduciary duty of the Plaintiffs, when they used the funds of the general partnership they managed to pay their individually owed attorney’s fees, when there were no pleading[s] on file asserting such a claim and Defendant had a clear right to assert such a claim in the future at a time of her choosing.
Laurel appealed the Fort Bend County court’s judgment, and the case was assigned
to the Fourteenth Court of Appeals. The Fourteenth Court has not issued an opinion
in that appeal.
C. The Underlying Proceeding
While Laurel’s appeal of the Fort Bend County judgment was pending, Laurel
filed the underlying suit against her sisters in June 2022, and the case was assigned
to the 11th District Court of Harris County. Laurel amended her petition two months
later. She alleged that although the MSA required the sisters to dismiss their pending
claims against each other, her sisters “proceeded to prosecute claims for attorney’s
fees sought in their Declaratory Judgment claims and Anticipatory Breach of
Contract claims with successful results.” The trial court awarded over $250,000 in
attorney’s fees to Evalyn, Amilee, and Jackie, and then ordered them to pay
approximately $120,000 to the Partnership as reimbursement. Laurel alleged that her
sisters had wrongfully used Partnership funds to pay their individual attorney’s fees,
which resulted in Laurel, as a one-fourth owner of the Partnership, effectively being
9 required to pay the legal fees of the attorney who sued her in the Fort Bend County
suit.
Laurel asserted a claim for breach of fiduciary duty, alleging that as general
partners of the Partnership, Evalyn, Amilee, and Jackie owed her duties not to self-
deal and to exercise their powers “with loyalty, care, good faith and judgment.”
Laurel alleged that her sisters breached their fiduciary duties to her by failing to
(1) exercise a high degree of care to preserve Laurel’s money “and to pay it to only
those entitled to receive it”; (2) keep Laurel’s funds “as a separate and identifiable
account”; and (3) make an accurate accounting. Laurel also asserted a cause of action
for common law and statutory fraud, alleging that her sisters’ “acts and/or omissions
previously described above, in whole or in part, amount to a fraud” upon her.
Laurel also asserted a claim against her sisters for embezzlement/theft, based
on her sisters’ use of Partnership funds to pay their attorney in the Fort Bend County
suit. Laurel alleged that her sisters “failed to properly account for funds they held in
a fiduciary capacity and misapplied fiduciary property contrary to the parties’
agreement.” She asserted that these actions constituted self-dealing and civil theft.
Finally, Laurel asserted a cause of action for breach of contract. She alleged:
As a result of Defendants’ breach of contract, Plaintiff has suffered actual damages in the amount of $251,810.36 and additional amounts to be identified as damages in an amount “not less than $100,000.00.” The damages are for repayment of attorney’s fees that were not owed to the Defendants by Plaintiff and resulted from the Defendants
10 proceeding on claims previously asserted in a settled and contractually released cause of action.
The amount that Laurel identified as actual damages—$251,810.36—corresponded
to the amount the Fort Bend County court had ordered her to pay as attorney’s fees.
Evalyn, Amilee, and Jackie moved for traditional summary judgment on
Laurel’s claims. As the sole basis for summary judgment, the sisters argued that
Laurel’s claims were all barred by res judicata because they were, or could have
been, litigated in the Fort Bend County suit, which had been tried to a final judgment
on the merits. They argued that Laurel’s breach of contract claim involved the MSA,
but both Laurel and her sisters had alleged and actively litigated violations of the
MSA in the Fort Bend County suit. They further argued that Laurel’s other claims
were premised on allegations that the sisters had used Partnership funds to pay legal
expenses, an issue that Laurel had raised in the Fort Bend County suit. They argued
that the underlying proceeding was an impermissible collateral attack on the
judgment in the Fort Bend County suit, which Laurel had appealed to the Fourteenth
Court of Appeals. As summary judgment evidence, the sisters attached numerous
documents from the Fort Bend County suit, including various pleadings filed by all
parties, the MSA, orders by the Fort Bend County court, Laurel’s motion to abate,
her trial brief on attorney’s fees, the final judgment, Laurel’s motion for new trial,
and an excerpt from the reporter’s record. A hearing was scheduled on this motion
for January 9, 2023. 11 On January 2, 2023, seven days before the summary judgment hearing, Laurel
filed a second amended petition. This amended petition included new factual
allegations, including allegations relating to the award of attorney’s fees in the Fort
Bend County suit, leases between the Partnership and third parties that had been used
to supply water for rice farming operations, Stasney’s role in acting as the “water
master” for setting prices for water sales, and a potential joint venture between
Stasney and Laurel’s sisters.
Laurel asserted six causes of action in her second amended petition. In
addition to the claims raised in her first amended petition, Laurel asserted two new
claims for breach of fiduciary duty and embezzlement/theft. These claims involved
allegations relating to her sisters’ failure to renew two Partnership leases with third
parties, their decision to allow Stasney to use Partnership equipment and water for
his rice crop, and a joint venture between Stasney and a new entity created by
Laurel’s sisters that engaged in rice growing operations in 2022 and 2023.
Evalyn, Amilee, and Jackie did not file an amended or supplemental motion
for summary judgment in response to Laurel’s second amended petition. The trial
court signed an order granting the sisters’ summary judgment motion. The court
rendered a take-nothing judgment against Laurel and ordered that her claims were
dismissed “in their entirety and with prejudice to the re-filing of same.” This appeal
followed.
12 Appellate Jurisdiction
Laurel filed a motion to dismiss her appeal, noting that she amended her
petition after her sisters moved for summary judgment, but the sisters did not amend
their motion to address Laurel’s new allegations. Laurel argues that the trial court’s
summary judgment order was not clear about whether it addressed the new claims,
and therefore it is an unappealable interlocutory order.
“Appellate jurisdiction is never presumed.” Saleh v. Hollinger, 335 S.W.3d
368, 370 (Tex. App.—Dallas 2011, pet. denied). This Court has appellate
jurisdiction to review appeals from final judgments, as well as appeals from certain
interlocutory orders when expressly authorized by statute. Bonsmara Nat. Beef Co.,
LLC v. Hart of Tex. Cattle Feeders, LLC, 603 S.W.3d 385, 390 (Tex. 2020). A
judgment rendered without a conventional trial on the merits is not final unless (1) it
actually disposes of every pending claim and party, or (2) it clearly and
unequivocally states that it finally disposes of all claims and parties, even if it does
not actually do so. In re Guardianship of Jones, 629 S.W.3d 921, 924 (Tex. 2021)
(per curiam); Lehmann v. Har-Con Corp., 39 S.W.3d 191, 205 (Tex. 2001).
Although “[t]alismanic phrases are not required or dispositive,” a statement
such as “‘This judgment finally disposes of all parties and all claims and is
appealable,’ would leave no doubt about the court’s intention.” In re Guardianship
of Jones, 629 S.W.3d at 924 (quoting Lehmann, 39 S.W.3d at 206). “If the order
13 contains a ‘clear and unequivocal’ finality phrase disposing of the entire case, the
order is final, and the failure to actually dispose of all claims and parties renders the
order erroneous but not interlocutory.” Id.; In re Elizondo, 544 S.W.3d 824, 828
(Tex. 2018) (per curiam) (“[S]ince the original order included a finality phrase, it
was clear and unequivocal.”).
In Lehmann, the Texas Supreme Court addressed the situation potentially
present in this case. The court stated:
[A]n order can be final and appealable when it should not be. For example, an order granting a motion for summary judgment that addressed all of the plaintiff’s claims when it was filed but did not address claims timely added by amendment after the motion was filed may state unequivocally that final judgment is rendered that the plaintiff take nothing by his suit. Granting more relief than the movant is entitled to makes the order reversible, but not interlocutory.
Lehmann, 39 S.W.3d at 204; Mensa-Wilmot v. Smith Int’l, Inc., 312 S.W.3d 771,
777 (Tex. App.—Houston [1st Dist.] 2009, no pet.) (“Although the amended petition
added claims not addressed by [the defendant’s] motion for summary judgment, that
fact does not make the trial court’s judgment interlocutory because the final
judgment plainly resolved the entire case.”).
Here, Laurel filed her first amended petition in August 2022 and asserted
claims for (1) breach of fiduciary duty; (2) fraud; (3) embezzlement/theft; and
(4) breach of contract. In November 2022, Evalyn, Amilee, and Jackie moved for
summary judgment and argued that res judicata barred all Laurel’s claims because
14 these claims either were litigated or could have been litigated in the Fort Bend
County suit.
Days before the summary judgment hearing, on January 2, 2023, Laurel filed
her second amended petition and added new factual allegations. In addition to the
claims that she asserted in her first amended petition, she also asserted claims arising
out of acts purportedly occurring after the Fort Bend County court signed its final
judgment. For example, among other new allegations, she alleged that her sisters
breached their fiduciary duties to her by using Partnership funds to engage in a “rice
growing joint enterprise” with Stasney in 2022 and 2023. Evalyn, Amilee, and Jackie
did not amend their motion for summary judgment.
On January 20, 2023, the trial court signed an order granting the summary
judgment motion. This order stated:
That on this the day [sic] came on to be heard Defendants, EVALYN WENDT MOORE, AMILEE WENDT, and JACKIE WENDT MARTIN’S Motion for Summary Judgment pursuant to TEX. R. CIV. P. 166a(c), and that, upon consideration of the Motion, Plaintiff’s Response (if any), and the arguments of counsel (if any), the Court finds the Motion to be meritorious and GRANTS the requested relief. It is therefore, ORDERED, ADJUDGED, and DECREED that summary judgment is issued that Plaintiff, LAUREL WENDT shall TAKE NOTHING from Defendants, EVALYN WENDT MOORE, AMILEE WENDT, and JACKIE WENDT MARTIN by the claims and causes of action asserted herein, which are hereby DISMISSED in their entirety and with prejudice to the re-filing of same. This summary judgment fully and finally resolves all claims and causes of action asserted herein, and is FINAL upon entry . . . . 15 This order unequivocally states that it disposes of all claims and causes of action and
that it is final. We conclude that this order contains a “‘clear and unequivocal’
finality phrase disposing of the entire case” and is therefore final for the purposes of
appeal. See In re Guardianship of Jones, 629 S.W.3d at 924.
We hold that we have appellate jurisdiction over this appeal, and we therefore
deny Laurel’s motion to dismiss the appeal. See id.; Lehmann, 39 S.W.3d at 204. We
address whether the trial court’s summary judgment order erroneously granted more
relief than was requested when we address Laurel’s second appellate issue below.
Res Judicata
In her first issue, Laurel argues that the trial court erred by not including
language in its judgment specifying that its decision was “subservient to any final
decision made by the [Fourteenth] Court of Appeals in” the appeal of the Fort Bend
County suit and that “any conflict in the provisions of the two decisions would be
resolved in favor of the provisions recited in” the Fourteenth Court’s decision. In her
third issue, she argues that the trial court erred by failing to recognize that her cause
of action for breach of the MSA did not exist until after the Fort Bend County court
rendered its final judgment, and therefore summary judgment on this claim based on
res judicata was improper.
16 A. Standard of Review
We review a trial court’s summary judgment ruling de novo. Helena Chem.
Co. v. Cox, 664 S.W.3d 66, 72 (Tex. 2023). A party moving for traditional summary
judgment must demonstrate that there is no genuine issue of material fact and that
she is entitled to judgment as a matter of law on the issues expressly set out in the
motion, answer, or other response. See TEX. R. CIV. P. 166a(c); JLB Builders, L.L.C.
v. Hernandez, 622 S.W.3d 860, 864 (Tex. 2021). A defendant moving for summary
judgment based on an affirmative defense has the burden to conclusively establish
that defense. Draughon v. Johnson, 631 S.W.3d 81, 88 (Tex. 2021) (quoting Exxon
Mobil Corp. v. Rincones, 520 S.W.3d 572, 593 (Tex. 2017)). If the movant satisfies
this burden, the burden shifts to the nonmovant to raise a fact issue precluding
summary judgment. Lujan v. Navistar, Inc., 555 S.W.3d 79, 84 (Tex. 2018).
A fact issue exists if more than a scintilla of evidence establishes the existence
of the challenged element. Ford Motor Co. v. Ridgway, 135 S.W.3d 598, 600 (Tex.
2004). More than a scintilla of evidence exists when the evidence rises to a level that
would enable reasonable and fair-minded people to differ in their conclusions. Id. at
601 (quoting Merrell Dow Pharms., Inc. v. Havner, 953 S.W.2d 706, 711 (Tex.
1997)). The evidence is less than a scintilla if it is so weak that it does no more than
create a mere surmise or suspicion of the fact’s existence. Id. (quoting Kindred v.
Con/Chem, Inc., 650 S.W.2d 61, 63 (Tex. 1983)).
17 In reviewing a summary judgment ruling, we examine the evidence in the light
most favorable to the non-moving party, indulging reasonable inferences and
resolving doubts against the party seeking summary judgment. Helena Chem. Co.,
664 S.W.3d at 73; Eagle Oil & Gas Co. v. TRO-X, L.P., 619 S.W.3d 699, 705 (Tex.
2021).
B. Governing Law
Res judicata—also known as claim preclusion—bars lawsuits that arise out of
the same subject matter as a prior suit when, “with the use of diligence, that subject
matter could have been litigated in the prior suit.” Eagle Oil & Gas, 619 S.W.3d at
705; Citizens Ins. Co. of Am. v. Daccach, 217 S.W.3d 430, 449 (Tex. 2007)
(“Generally, res judicata prevents a plaintiff from abandoning claims and
subsequently asserting them when the claims could have been litigated in the prior
suit.”). The doctrine of res judicata “seeks to bring an end to litigation, prevent
vexatious litigation, maintain stability of court decisions, promote judicial economy,
and prevent double recovery.” Daccach, 217 S.W.3d at 449; see Engelman
Irrigation Dist. v. Shields Bros., Inc., 514 S.W.3d 746, 750 (Tex. 2017) (“For any
rational and workable judicial system, at some point litigation must come to an end,
so that parties can go on with their lives and the system can move on to other
disputes.”).
18 “[A] final judgment on an action extinguishes the right to bring suit on the
transaction, or series of connected transactions, out of which the action arose.” Eagle
Oil & Gas, 619 S.W.3d at 705 (quoting Barr v. Resol. Tr. Corp., 837 S.W.2d 627,
631 (Tex. 1992)). When deciding whether a set of facts forms a transaction, we make
this determination “pragmatically,” giving weight to considerations such as
“whether the facts are related in time, space, origin, or motivation, whether they form
a convenient trial unit, and whether their treatment as a trial unit conforms to the
parties’ expectations or business understanding or usage.” Id. (quoting Barr, 837
S.W.2d at 631).
The elements of res judicata are: (1) a prior final judgment on the merits by a
court of competent jurisdiction; (2) identity of parties or those in privity with them;
and (3) a second action based on the same claims that were raised or could have been
raised in the first action. Rosetta Res. Operating, LP v. Martin, 645 S.W.3d 212, 225
(Tex. 2022) (quoting Amstadt v. U.S. Brass Corp., 919 S.W.2d 644, 652 (Tex.
1996)); Eagle Oil & Gas, 619 S.W.3d at 705–06 (quoting Daccach, 217 S.W.3d at
449). The party asserting the defense of res judicata bears the burden to prove each
element of the defense. Eagle Oil & Gas, 619 S.W.3d at 706.
A judgment is final for the purposes of res judicata “despite the taking of an
appeal unless what is called an appeal actually consists of a trial de novo.” Scurlock
Oil Co. v. Smithwick, 724 S.W.2d 1, 6 (Tex. 1986) (op. on reh’g) (quotations
19 omitted); see Engelman Irrigation Dist., 514 S.W.3d at 749 (“That the judgment
may have been wrong or premised on a legal principle subsequently overruled does
not affect application of res judicata.”) (quotations omitted). However, an earlier
judgment that has been reversed is not preclusive “because a reversed judgment is
generally nullified, leaving it as if it had never been rendered other than as to further
rights of appeal.” Foussadier v. Triple B Servs., LLP, No. 01-21-00024-CV, 2022
WL 3589497, at *3 (Tex. App.—Houston [1st Dist.] Aug. 23, 2022, pet. denied)
(mem. op.) (quotations omitted).
Res judicata cannot bar a claim that was not ripe at the time the first lawsuit
was filed. Eagle Oil & Gas, 619 S.W.3d at 706. The ripeness doctrine requires a
plaintiff to have a concrete injury before bringing a claim, and it is a “threshold issue
that implicates subject matter jurisdiction.” Id. (quoting Patterson v. Planned
Parenthood of Houston & Se. Tex., Inc., 971 S.W.2d 439, 442 (Tex. 1998)). The
court must consider whether, at the time the suit is filed, “the facts are sufficiently
developed so that an injury has occurred or is likely to occur, rather than being
contingent or remote.” Id. (quoting Waco Indep. Sch. Dist. v. Gibson, 22 S.W.3d
849, 851–52 (Tex. 2000)). Additionally, a judgment in one suit will not bar “a
subsequent suit on the same question between the same parties where, in the interval,
the facts have changed, or new facts have occurred which may alter the legal rights
or relations of the parties.” Hernandez v. Del Ray Chem. Int’l, Inc., 56 S.W.3d 112,
20 116 (Tex. App.—Houston [14th Dist.] 2001, no pet.) (citing Marino v. State Farm
Fire & Cas. Ins. Co., 787 S.W.2d 948, 949–50 (Tex. 1990)).
C. Analysis
1. Effect of Appeal Pending Before Fourteenth Court of Appeals
In her first issue, Laurel argues that because the judgment in the Fort Bend
County suit was on appeal to the Fourteenth Court of Appeals, the Fourteenth Court
had dominant jurisdiction over the case. Rather than dismissing Laurel’s claims with
prejudice in the summary judgment order, the trial court in the underlying case
should have abated the case to allow the Fourteenth Court to exercise its dominant
jurisdiction or should have qualified its dismissal of Laurel’s claims to “reflect that
its language was subservient to any final decision made by the [Fourteenth] Court of
Appeals.”
The doctrine of dominant jurisdiction applies when venue is proper in two or
more Texas counties or courts. Gonzalez v. Reliant Energy, Inc., 159 S.W.3d 615,
622 (Tex. 2005); Gordon v. Jones, 196 S.W.3d 376, 382 (Tex. App.—Houston [1st
Dist.] 2006, no pet.). Generally, the court in which suit is first filed acquires
dominant jurisdiction to the exclusion of “other coordinate courts.”4 In re J.B. Hunt
4 An exception to the general rule of dominant jurisdiction exists when the plaintiff in the first-filed suit is guilty of inequitable conduct that caused the second-filing party to delay filing of the second suit. In re J.B. Hunt Transp., Inc., 492 S.W.3d 287, 294–95 (Tex. 2016) (orig. proceeding). In that circumstance, the inequitable conduct may estop the first-filing party from using that suit to abate a second-filed proceeding. Id. at 294. Laurel has not pointed to any evidence that Evalyn, Amilee, 21 Transp., Inc., 492 S.W.3d 287, 294 (Tex. 2016) (orig. proceeding) (quotations
omitted). Thus, when two suits are “inherently interrelated, a plea in abatement in
the second action must be granted.” Id. (quotations omitted). “The jurisprudential
reason for the rule is that once a matter is before a court of competent jurisdiction,
its action must necessarily be exclusive because it is impossible that two courts can,
at the same time, possess the power to make a final determination of the same
controversy between the same parties.” Perry v. Del Rio, 66 S.W.3d 239, 252 (Tex.
2001) (quotations omitted).
We conclude that this case does not present a question of dominant
jurisdiction. Evalyn, Amilee, and Jackie filed suit against Laurel in Fort Bend
County in 2018. Over the next four years, the parties asserted multiple claims against
each other. Laurel filed a separate suit against her sisters in July 2021, but that case
was assigned to the same district court in Fort Bend County and was consolidated
with her sisters’ pending lawsuit. Ultimately, the trial court in the Fort Bend County
suit rendered judgment on the sisters’ claims in March 2022. Laurel appealed that
and Jackie engaged in any inequitable conduct that caused Laurel to delay filing suit in Harris County. Instead, Laurel’s contention that her sisters improperly paid their attorney’s fees using Partnership funds arose after her sisters had already filed the Fort Bend County suit and it was brought to the attention of that court during the pendency of that suit. After the Fort Bend County court rendered its judgment, Laurel filed the underlying proceeding in Harris County and asserted claims that her sisters had defrauded her, stole her funds, and breached their fiduciary duties to her. 22 judgment to the Fourteenth Court of Appeals. Then, while that case was on appeal,
Laurel filed the underlying proceeding in Harris County in June 2022.
Thus, there was never a time in which multiple suits were pending in trial
courts in multiple counties simultaneously. By the time Laurel filed the underlying
suit in Harris County, the district court in the Fort Bend County suit had rendered a
final judgment, and her appeal of that judgment was pending before the Fourteenth
Court of Appeals. We therefore agree with Evalyn, Amilee, and Jackie that this case
presents a question of res judicata, not dominant jurisdiction.
“[A] judgment is final for the purposes of issue and claim preclusion despite
the taking of an appeal unless what is called an appeal actually consists of a trial de
novo.” Scurlock Oil, 724 S.W.2d at 6 (quotations omitted). This is not a situation in
which Laurel has appealed the Fort Bend County court’s judgment for a trial de
novo. Instead, she is seeking reversal of the Fort Bend County court’s judgment by
the Fourteenth Court of Appeals. The fact that Laurel has appealed the Fort Bend
County court’s judgment to an intermediate appellate court does not prevent that
judgment from having preclusive effect. See id.; Foussadier, 2022 WL 3589497, at
*4 (concluding that even though summary judgment was appealed, “it was final for
the purpose of res judicata as of the date of its issuance”).
We conclude that the Fort Bend County court’s judgment had preclusive
effect as of the date of its issuance, despite Laurel’s later appeal to the Fourteenth
23 Court of Appeals. The trial court did not abuse its discretion by failing to abate the
underlying proceeding or by failing to qualify its dismissal of Laurel’s claims.
We overrule Laurel’s first issue.
2. Whether Res Judicata Bars Laurel’s Breach of Contract Claim
In her third issue, Laurel argues that the trial court erred in dismissing her
breach of contract claim on res judicata grounds because her cause of action did not
exist until the Fort Bend County court rendered judgment requiring Laurel to pay
attorney’s fees to her sisters, and therefore this claim could not have been brought
in the Fort Bend County suit. Evalyn, Amilee, and Jackie argue that summary
judgment based on res judicata grounds was proper because Laurel’s breach of
contract claim became ripe during the pendency of the Fort Bend County suit, and
the parties raised and litigated issues relating to this claim during that suit.
A claim for breach of a settlement agreement is a “separate breach-of-contract
claim, which is subject to the normal rules of pleading and proof.” Mantas v. Fifth
Ct. of Appeals, 925 S.W.2d 656, 658 (Tex. 1996) (orig. proceeding) (per curiam);
Batjet, Inc. v. Jackson, 161 S.W.3d 242, 245 (Tex. App.—Texarkana 2005, no pet.)
(“The settlement agreement alone is insufficient to provide a basis for judgment
because it would deprive a party of the right to be confronted by appropriate
pleadings, assert defenses, conduct discovery, and submit contested fact issues to a
judge or jury.”). When a dispute over a settlement agreement arises while the trial
24 court still has jurisdiction over the underlying action, “a claim to enforce the
settlement agreement should, if possible, be asserted in that court under the original
cause number.” Mantas, 925 S.W.2d at 658; Batjet, 161 S.W.3d at 245 (suggesting
“an amended pleading or counterclaim” as vehicles to raise claim for enforcement
of settlement agreement in original action). If breach of the settlement agreement
occurs after the underlying action has concluded, then the claim could not have been
raised in the prior suit, and res judicata will not bar a subsequent suit for breach of
the settlement agreement. Compania Financiara Libano, S.A. v. Simmons, 53
S.W.3d 365, 367 (Tex. 2001) (per curiam); Mantas, 925 S.W.2d at 658–59 (stating
that if dispute over settlement agreement “arises while the underlying action is on
appeal,” party seeking enforcement “must file a separate breach of contract action”).
It is undisputed that the parties attended mediation and signed the MSA while
the Fort Bend County suit was pending. Among other things, the MSA divided the
tracts of property between the sisters and set out an appraisal process for each tract.
The MSA also contained the following provisions:
13. Defendant [Laurel] will dismiss her cause of action to dissolve EAJL Wendt Farms and Counterclaim against Plaintiffs [Evalyn, Amilee, and Jackie]; provided that neither Plaintiffs nor Defendant have released any future claim for an accounting for past business operations of EAJL. Plaintiffs shall dismiss their cause of action against Defendant except for any claims concerning Tract 15. The parties hereby stipulate that the terms of the Gift Deeds (right of first refusal and majority rule clauses as described in the Lawsuit) are valid and enforceable. The parties have, and will continue to have, access to the
25 books and records of EAJL. No party will interfere with any other parties[’] right to view bank statements and online activities. .... 16. Save and except for the Tract 15 exception, any future claim for an accounting for past business operations pertaining to EAJL, or the cattle operation of the parties, the parties will sign a mutual general release. It is the intention of the parties to resolve all claims and causes of actions that currently exist relating to this dispute. This settlement agreement specifically excludes matters, including cattle operations, if any, arising from or related to the probate of the Billie Wendt Estate.
Evalyn, Amilee, and Jackie presented summary judgment evidence that
disputes arose among the sisters concerning the MSA during the pendency of the
Fort Bend County suit. For example, in October 2021, they amended their petition
to assert a claim against Laurel for enforcement of the MSA, alleging that Laurel
had not complied with the MSA’s appraisal provisions.
Laurel also filed amended counterpetitions in October and December 2021.
Although she did not assert a cause of action for breach of the MSA, she
acknowledged that a dispute had arisen about the appraisal provision, and she sought
declaratory relief interpreting this provision. She also sought declarations that the
Partnership had no legal right to pay the costs of legal services incurred by her sisters
and that her sisters could not require the Partnership to pay their legal expenses.5
Additionally, in both her second and third amended counterpetitions, she expressly
5 Laurel later filed a notice of nonsuit with respect to her request for these declarations. 26 referenced the release provisions of the MSA and “hereby expressly asserted [the
MSA] as a bar and release for any claims asserted by the three sisters that breache[d]
the specific terms” of that agreement.
In January 2022, while trial proceedings were ongoing in the Fort Bend
County suit, Laurel moved to dismiss or abate “all attorney’s fees claims settled and
included in the scope of” the MSA. Laurel argued:
During the trial of this case, Plaintiffs’ counsel unexpectedly and without notice to Defendant, Laurel Wendt, commenced providing trial testimony to be award[ed] damages for attorney’s fees on settled claims. The testimony expressly violated the clear terms of the [MSA]. This breach of the specific terms of the settlement contract and the anticipated terms yet to be signed and recited as the court’s Partial Judgment in this cause prohibits Defendant, Laurel Wendt, to be able to timely assert her claim for damages of this breach of the settlement contract or Partial Judgment. Further, she was not given notice that these settled issues would be litigated.
She further argued that the MSA settled the parties’ dispute with respect to the
validity and enforcement of the right of first refusal and majority rule clauses, and
thus her sisters’ declaratory judgment claims “that had been ‘[s]puriously’ alleged
against [Laurel] in order to solely pave the way to an award of attorney’s fees claims
were concluded.” She argued that the court should resolve the meaning of the MSA’s
requirement that the parties “will sign a mutual general release.” Laurel also
submitted a trial brief concerning various attorney’s fees issues to the Fort Bend
County court. She also sought mandamus relief from this Court, arguing that the Fort
Bend County court abused its discretion by allowing her sisters’ counsel to “present 27 evidence regarding the reasonable and necessary attorney’s fees applicable to settled
and released claims.”6
In its final judgment, the Fort Bend County court ordered that Evalyn, Amilee,
and Jackie recover from Laurel “reasonable and necessary attorney fees in the
amount of $251,810.36.” The court further ordered that, upon collecting this amount,
Evalyn, Amilee, and Jackie were required to reimburse the Partnership in the amount
of $120,577.50.
Laurel moved for a new trial and raised numerous challenges to the final
judgment. Among other contentions, Laurel argued that the trial court erred “when
it did not render judgment when it approved the [MSA]”; when it did not order that
all the parties’ claims—except for claims relating to Tract 15 and Partnership
expenditures—“be dismissed and therefore no affirmative relief for either party for
attorney’s fees could be found owed by Defendant to Plaintiffs on the Dismissed
claims”; and when it “failed to enforce dismissal of all claims between the parties
covered by the general mutual release of all claims.” Laurel also argued that the trial
court erred by awarding attorney’s fees based on the claims for declaratory relief,
claims that her sisters had asserted as “a subterfuge to obtain attorney’s fees,” which
6 Following entry of the Fort Bend County court’s final judgment, a panel of this Court dismissed Laurel’s mandamus petition as moot. See In re Wendt, No. 01-22- 00186-CV, 2022 WL 1787428, at *1 (Tex. App.—Houston [1st Dist.] June 2, 2022, orig. proceeding) (per curiam) (mem. op.). 28 are not allowed in partition suits. She further argued that the trial court erred by
ordering her sisters to pay attorney’s fees to the Partnership “in order to attempt to
‘cover up’ the breach of fiduciary duty of the Plaintiffs, when they used the funds of
the general partnership they managed to pay their individually owed attorney’s fees.”
In the underlying proceeding, Laurel asserted a claim for breach of contract.
In her first amended petition, she alleged as follows:
As a result of Defendants’ breach of contract, Plaintiff has suffered actual damages in the amount of $251,810.36 and additional amounts to be identified as damages in an amount “not less than $100,000.00.” The damages are for repayment of attorney’s fees that were not owed to the Defendants by Plaintiff and resulted from the Defendants proceeding on claims previously asserted in a settled and contractually released cause of action.
In her second amended petition, Laurel added allegations that she fully or
substantially performed her contractual obligations under the MSA “to terminate
litigation claims,” but her sisters “breached their obligation to terminate litigation
claims” as required by MSA section 13. She further alleged that evidence might
establish that some portion of the amount that she was ordered to pay her sisters in
attorney’s fees “was ordered paid as a result of attorneys’ fees claims asserted in
violation of said Section 13 of the recited agreement.”
We agree with Evalyn, Amilee, and Jackie that Laurel’s claim for breach of
the MSA arose during the pendency of the Fort Bend County suit and could have
been—and was—raised during that proceeding. Laurel’s claim is predicated on her
29 sisters’ alleged failure to comply with sections 13 and 16 of the MSA, which required
the parties to dismiss most of the pending claims among them and sign a mutual
general release. Her sisters did not dismiss their claims. Ultimately, the Fort Bend
County court ordered Laurel to pay $251,810.36 in attorney’s fees to her sisters,
attorney’s fees to which, Laurel argues, her sisters would not have been entitled had
they dismissed their claims as promised in the MSA.
The precise amount of Laurel’s alleged damages—the fee award rendered
against her—was not known until the Fort Bend County court signed its final
judgment in March 2022. However, Laurel knew by the early days of trial in January
2022—at the latest—that her sisters intended to seek attorney’s fees for “settled”
declaratory judgment claims. Although the summary judgment record does not
include any evidence that Laurel sought a trial amendment to add a claim for breach
of the MSA, the record does contain evidence that Laurel brought her sisters’ alleged
breach to the attention of the Fort Bend County court via her request that the court
dismiss the claims for attorney’s fees or abate those claims. Laurel also challenged
the Fort Bend County court’s allowance of testimony on this matter in a mandamus
petition, and she challenged the fee award in her motion for new trial following entry
of the Fort Bend County court’s final judgment.
The Texas Supreme Court has held that res judicata cannot bar a claim that
was not ripe at the time the first lawsuit was filed. Eagle Oil & Gas, 619 S.W.3d at
30 706. At the time Evalyn, Amilee, and Jackie filed the first lawsuit in Fort Bend
County, Laurel’s breach of contract claim was not ripe because the contract upon
which that claim is based—the MSA—had not yet been created and signed, let alone
allegedly breached.
However, the Texas Supreme Court has also held that when a dispute over a
settlement agreement arises while the trial court still has jurisdiction over the
underlying action, “a claim to enforce the settlement agreement should, if possible,
be asserted in that court under the original cause number.” Mantas, 925 S.W.2d at
658. If breach of the settlement agreement occurs after the underlying action
concludes, res judicata will not bar a later suit for breach of that agreement.
Compania Financiara Libano, 53 S.W.3d at 367. Here, Laurel’s claim for breach of
the MSA arose during the pendency of the Fort Bend County suit, and she raised her
sisters’ alleged breach of the MSA as an argument against an award of attorney’s
fees in her sisters’ favor.
Because Laurel could have raised her claim that her sisters breached the MSA
by not releasing settled causes of action in an attempt to recover attorney’s fees in
the prior Fort Bend County suit, we conclude that res judicata bars assertion of this
claim in the underlying Harris County suit. See Eagle Oil & Gas, 619 S.W.3d at 705
(stating that res judicata bars lawsuits that arise out of same subject matter as prior
suit when, “with the use of diligence, that subject matter could have been litigated
31 in the prior suit”). We hold that the trial court did not err by granting summary
judgment in favor of Evalyn, Amilee, and Jackie on Laurel’s claim for breach of
contract.
We overrule Laurel’s third issue.
Summary Judgment on Claims Not Challenged in Motion
In her second issue, Laurel argues that the trial court erred by dismissing her
claims of embezzlement/theft and breach of fiduciary duty because these claims
were not challenged in her sisters’ summary judgment motion.
A. Governing Law
A trial court may only grant summary judgment upon grounds expressly
asserted in the summary judgment motion. G&H Towing Co. v. Magee, 347 S.W.3d
293, 297 (Tex. 2011) (per curiam); TEX. R. CIV. P. 166a(c); see Nall v. Plunkett, 404
S.W.3d 552, 555 (Tex. 2013) (per curiam) (“A trial court cannot grant summary
judgment on grounds that were not presented.”). Generally, it is reversible error for
a trial court to grant summary judgment on a claim not addressed in the motion.
G&H Towing, 347 S.W.3d at 297; Cooper v. Litton Loan Servicing, LP, 325 S.W.3d
766, 769 (Tex. App.—Dallas 2010, pet. denied) (“It is well-settled that a summary
judgment disposing of claims not addressed in the motion for summary judgment is
improper.”); see also Lehmann, 39 S.W.3d at 200 (“[F]or example, if a defendant
moves for summary judgment on only one of four claims asserted by the plaintiff,
32 but the trial court renders judgment that the plaintiff take nothing on all claims
asserted, the judgment is final—erroneous, but final.”).
Courts have recognized a limited exception to this rule and affirmed summary
judgments, even when the underlying motion omitted one of multiple causes of
action, “when the omitted ground was intertwined with, and precluded by, a ground
addressed in the motion.” G&H Towing, 347 S.W.3d at 297. With respect to this
exception, this Court has stated:
Although the exception’s application has been expressed in various ways, it can be reduced to two: (1) when the movant has conclusively proved or disproved a matter (usually corresponding to a claim’s element or to an affirmative defense) that would also preclude the unaddressed claim as a matter of law or (2) when the unaddressed claim is derivative of the addressed claim, and the movant proved its entitlement to summary judgment on that addressed claim. For the exception to apply, this Court has always required a very tight fit between what was proved or disproved in the motion and what elements the unaddressed claim, as it was alleged, required: otherwise, the exception could swallow the rule.
Wilson v. Davis, 305 S.W.3d 57, 73 (Tex. App.—Houston [1st Dist.] 2009, no pet.)
(internal citation omitted); see G&H Towing, 347 S.W.3d at 297–98 (quoting Wilson
and stating that while trial court errs in granting summary judgment on cause of
action not expressly presented by written motion, that error “is harmless when the
omitted cause of action is precluded as a matter of law by other grounds raised in the
case”).
33 A party may amend her pleadings, including after a motion for summary
judgment is filed, until seven days before trial. Yeske v. Piazza Del Arte, Inc., 513
S.W.3d 652, 671 (Tex. App.—Houston [14th Dist.] 2016, no pet.); TEX. R. CIV. P.
63. A summary judgment proceeding is a trial within the meaning of Rule 63.
Goswami v. Metro. Sav. & Loan Ass’n, 751 S.W.2d 487, 490 (Tex. 1988); Yeske,
513 S.W.3d at 671. This Court has held that when a plaintiff amends its petition to
add claims against a summary judgment movant, “the movant may not address the
new claims by reply but must instead file an amended or supplemental motion.”
Vertex Servs., LLC v. Oceanwide Houston, Inc., 583 S.W.3d 841, 852 (Tex. App.—
Houston [1st Dist.] 2019, no pet.); Blancett v. Lagniappe Ventures, Inc., 177 S.W.3d
584, 592 (Tex. App.—Houston [1st Dist.] 2005, no pet.) (“[C]laims pleaded after a
summary judgment is filed must be addressed by an amended or supplemental
motion, not by reply brief.”).
When an amended petition raises new theories of liability, “summary
judgment may not be granted as to those theories without a supplemental, amended,
or new motion expressly addressing them.” Silver Gryphon, LLC v. Bank of N.Y.
Mellon, 529 S.W.3d 595, 598 (Tex. App.—Houston [14th Dist.] 2017, no pet.).
Generally, if a party does not address claims asserted in an amended petition, that
party is not entitled to summary judgment “on the entire case because such judgment
would grant more relief than requested.” Id. However, like the situation in which a
34 summary judgment motion addresses some but not all pleaded claims, an amended,
supplemental, or new summary judgment motion is not always necessary in response
to an amended petition when (1) the amended petition essentially reiterates
previously pleaded theories of liability; (2) a ground asserted in a motion for
summary judgment conclusively negates a common element of the newly and
previously pleaded claims; or (3) the original motion is broad enough to encompass
the newly asserted claims. Id. (citations and quotations omitted); Rotating Servs.
Indus., Inc. v. Harris, 245 S.W.3d 476, 487 (Tex. App.—Houston [1st Dist.] 2007,
pet. denied).
B. Whether Laurel’s Second Amended Petition Raised New Factual Allegations or Claims Not Covered by the Summary Judgment Motion
We begin our analysis by comparing Laurel’s first and second amended
petitions. See Silver Gryphon, 529 S.W.3d at 599. We then compare the theories of
liability pleaded by Laurel with the grounds asserted in the summary judgment
motion. See id.
1. Laurel’s First Amended Petition
In her first amended petition, Laurel alleged that she and her sisters
established the Partnership in 1977, and their father managed the Partnership until
his death in 2013. After that point, Laurel managed the partnership with some
assistance from Evalyn. In 2017, however, Evalyn, Amilee, and Jackie removed
Laurel as the manager and decided that they wanted to sell the property gifted by
35 their parents. When Laurel did not agree, the Fort Bend County suit ensued,
eventually leading to the MSA and a final judgment.
During the Fort Bend County suit, Laurel allegedly learned that her sisters
were using Partnership funds to pay their attorney. Laurel consulted with a tax
expert, who notified the Partnership’s accountant that the Partnership could not
deduct the sisters’ individual legal expenses as general partnership expenses.
Additionally, despite the release language in the MSA, Laurel’s sisters did not
dismiss their claims for declaratory relief and ultimately recovered $251,810.36 in
attorney’s fees against Laurel, with a requirement that they reimburse the Partnership
in the amount of $120,577.50.
Laurel raised four causes of action in her first amended petition: (1) breach of
fiduciary duty; (2) fraud; (3) embezzlement/theft; and (4) breach of contract.7 In her
breach of fiduciary duty claim, Laurel alleged that her sisters, as partners of the
Partnership, owed her fiduciary duties which they violated by failing to conserve her
money “and to pay it to only those entitled to receive it”; failing to keep her funds
in a separate and identifiable account; and failing to make an accurate accounting.
7 In her second appellate issue, Laurel argues that the trial court erred by dismissing her claims for breach of fiduciary duty and embezzlement/theft because her sisters’ summary judgment motion did not address the new allegations with respect to these claims contained in her second amended petition. She does not argue that the trial court erred by dismissing her fraud and breach of contract claims on this basis. We therefore do not address Laurel’s fraud and breach of contract claims in this section. 36 She requested over $30,000 in actual damages and over $600,000 in exemplary
damages.
In her embezzlement/theft cause of action, Laurel alleged that her sisters
“failed to properly account for funds they held in a fiduciary capacity and misapplied
fiduciary property contrary to the parties’ agreement and for their self-dealings and
civil theft.” The sisters allegedly continued these actions after receiving the warning
from Laurel’s tax expert. Laurel again sought over $600,000 in actual and exemplary
Laurel’s first amended petition was her live pleading at the time her sisters
moved for summary judgment in November 2022. The sole ground presented in the
summary judgment motion was that all Laurel’s claims should be dismissed based
on res judicata.
2. Laurel’s second amended petition
In her second amended petition, filed seven days before the summary
judgment hearing in January 2023, Laurel restated her allegations from her first
amended petition, but she also included new allegations. Laurel alleged that the
Partnership leased two tracts—the Unitrust Lease and the Darst Lease—to third
parties for rice farming operations. The Partnership owned a water distribution
system that was crucial for providing irrigation for rice farming. Stasney also
37 conducted rice farming operations on Partnership lands, and he eventually “became
the water master operating and pricing the water sales” for Partnership property.
Laurel further alleged that her sisters began the 2022 rice growing season by
using her name “as an owner of the Rice Crops filed with all applicable government
agencies on land that was to be partitioned to” her sisters. Her sisters allegedly used
Partnership funds and employees “to operate and fund their rice growing activities
using Stasney as the farmer and selling him water without pricing the water or
requiring him to pay for the water until after the crop was harvested.” Laurel alleged
that her sisters created a new entity and planned to start a joint venture with Stasney
and other lessees to conduct rice growing operations. She alleged that her sisters had
made an oral agreement with Stasney to “furnish [him] water if he would joint
venture with their own farming partnership [the new entity] rather than” the
Partnership, to Laurel’s exclusion. Her sisters also allegedly failed to renew the
Unitrust and Darst Leases, possibly as part of a scheme for that lessee to join a rice
farming joint venture with the sisters’ new entity.
Laurel asserted six causes of action in her second amended petition: (1) a
claim for “theft/embezzlement of property and/or breach of fiduciary duty”; (2) “first
cause of action for breach of fiduciary duty”; (3) “second cause of action for breach
of fiduciary duty”; (4) fraud; (5) “cause of action for embezzlement/theft”; and
(6) breach of contract. Her claim for “theft/embezzlement of property and/or breach
38 of fiduciary duty” corresponded to the cause of action for embezzlement/theft
alleged in her first amended petition and included no additional allegations.
Her “first cause of action for breach of fiduciary duty” corresponded to the
breach of fiduciary duty claim raised in her first amended petition. Laurel still
alleged that her sisters breached their fiduciary duties to her by failing to conserve
and pay her funds “to only those entitled to receive it,” failing to keep her funds in a
separate and identifiable account, and failing to make an accurate accounting.
However, Laurel also alleged:
The failure of [her sisters] to complete their services in an honest and forthright manner resulted in damage to Plaintiff, Laurel Wendt, for which Plaintiff, Laurel Wendt, is entitled to receive actual damages not subject to actual calculation at this time due to limited discovery but believed to be in excess of $100,000 as actual and exemplary damages for using the funds of [the Partnership] to fund [her sisters’] 2022 rice crop applicable to funds advanced for Wendt Farms LLC [her sisters’ new entity] and the Stasney entity used for a rice growing joint enterprise.
This cause of action in Laurel’s first amended petition had not included any
allegations related to the 2022 rice crop or an alleged joint venture between Laurel’s
sisters and Stasney.
In Laurel’s “second cause of action for breach of fiduciary duty,” she alleged
that her sisters failed to “exercise a high degree of care to conserve and renew” the
Unitrust and Darst Leases. She also alleged that her sisters agreed with Stasney “that
39 they would not withhold water for the rice crop” to facilitate Stasney’s rice farming
operations on the former Darst Lease. She further alleged:
For 2023, Stasney has entered into a joint venture with Wendt Farms LLC (owned by [Laurel’s sisters]) and [the Partnership] has made a lucrative contract with Wendt Farms LLC to furnish water and use its above ground facilities for 2023 and future years. This agreement is self dealing since [Laurel’s sisters] are the managers of [the Partnership] and owners of Wendt Farms LLC.
As damages, Laurel sought over $100,000 in actual and exemplary damages “for
using the funds and assets of [the Partnership] to fund [the sisters’] 2023 and
subsequent rice crops on the former Darst lease property and the former Unitrust
lease property and the Stasney entity used for a rice growing joint enterprise.”
Finally, Laurel asserted a “cause of action for embezzlement/theft.” This
claim was substantially similar to her claim for “theft/embezzlement of property
and/or breach of fiduciary duty,” but it also contained an allegation that Laurel’s
sisters “used the funds of [the Partnership] to finance their 2022 rice crop grown in
a Joint [Venture with] their water master Frank Stasney.” Laurel sought over
$600,000 in actual and exemplary damages. She alleged that exemplary damages
were proper because her sisters had “by theft, embezzled funds as above described
owned by [the Partnership] which they individually jointly managed to the exclusion
of [Laurel] and 20% of such funds owed to [Laurel] as a partnership distribution in
the years in which the funds were wrongfully used.”
40 3. Analysis
We agree with Laurel that her second amended petition raised new factual
allegations and claims that were not raised in her first amended petition and were
not addressed in her sisters’ summary judgment motion.
In their summary judgment motion, Evalyn, Amilee, and Jackie argued that
res judicata barred Laurel’s claims because her claims could have been—and were—
raised in the prior Fort Bend County suit, and her Harris County suit was an improper
collateral attack on the Fort Bend County judgment. The summary judgment motion
included a claim-by-claim comparison of Laurel’s allegations in the first amended
petition to allegations she had made in various filings during the pendency of the
Fort Bend County suit. For example, with respect to her breach of fiduciary duty
claim, she had alleged in a March 2021 counterclaim that her sisters had engaged in
actions that financially benefitted them to Laurel’s disadvantage and that they had
used Partnership funds to pay their attorney’s fees. Evalyn, Amilee, and Jackie also
argued that it was clear that Laurel’s allegations in her theft/embezzlement claim
“referr[ed] to monies paid to [their] counsel out of EAJL’s partnership funds,” an
issue that Laurel knew about during the prior proceeding.
Evalyn, Amilee, and Jackie argued that summary judgment was proper on res
judicata grounds because Laurel’s claims were based on: (1) her argument that her
sisters “should have withdrawn their claims entitling them to attorney’s fees based
41 on the language of the MSA”; or (2) her argument that the Partnership “should not
have paid any of [her sisters’] attorney’s fees or expenses” in the Fort Bend County
suit. Laurel’s second amended petition, however, includes breach of fiduciary duty
and embezzlement/theft claims that have a different factual basis: her sisters’ alleged
partnering with Stasney and other lessees to form a joint venture to conduct rice
growing operations without Laurel’s involvement. These new claims do not
“essentially reiterate” previously pleaded theories of liability, such that a new or
amended summary judgment motion is not necessary to address these claims. See
id. at 598.
Laurel’s new claims were not litigated in the Fort Bend County suit. Nor could
they have been, as they relate to allegations involving the 2022 and 2023 rice crops,
which arose after the Fort Bend County court entered judgment in March 2022.
Evalyn, Amilee, and Jackie therefore have not established that Laurel’s new claims
could have been litigated in the Fort Bend County suit, such that res judicata applies
to bar trial of the claims in the Harris County suit. See Eagle Oil & Gas, 619 S.W.3d
at 705 (stating that res judicata “bars lawsuits that arise out of the same subject matter
as a prior suit when, with the use of diligence, that subject matter could have been
litigated in the prior suit”); see also Silver Gryphon, 529 S.W.3d at 598 (stating that
new, amended, or supplemental summary judgment motion is not necessary in
response to amended petition if original motion is broad enough to encompass newly
42 asserted claims). Because Evalyn, Amilee, and Jackie have not “conclusively proved
or disproved a matter . . . that would also preclude the unaddressed claim[s] as a
matter of law,” we conclude that summary judgment on Laurel’s breach of fiduciary
duty and embezzlement/theft claims—to the extent that these claims concern the
2022 and 2023 rice crops—was improper. See Wilson, 305 S.W.3d at 73; see also
Silver Gryphon, 529 S.W.3d at 598 (stating that new or amended summary judgment
motion is not necessary when ground asserted in motion conclusively negates
common element of previous and newly amended theories of liability).
Evalyn, Amilee, and Jackie argue that even if the trial court erred by granting
summary judgment on Laurel’s new claims, any error was harmless because Laurel
asserted claims for which she is not entitled to recovery. They point out that the
Partnership is not a party to the underlying proceeding. Laurel alleged that she was
owed damages because her sisters allegedly embezzled funds owned by the
Partnership, but Laurel brought her claims in her individual capacity, not “as a
derivative action, or as an interest-holder in” the Partnership. They argue that
because Laurel cannot recover on her claims in the capacity in which she filed suit,
her claims are precluded as a matter of law, and the trial court did not reversibly err
by dismissing these claims.
We disagree. The Texas Supreme Court has stated that error in granting
summary judgment on a cause of action not expressly presented by written motion
43 is harmless “when the omitted cause of action is precluded as a matter of law by
other grounds raised in the case.” See G&H Towing, 347 S.W.3d at 297–98
(emphasis added). G&H Towing involved negligent entrustment claims asserted
directly against an employee’s co-worker and against his employer based on
vicarious liability. Id. at 295. The summary judgment motions addressed the co-
worker’s direct liability but did not address the employer’s vicarious liability. Id.
Ultimately, the Texas Supreme Court concluded that the trial court’s erroneous
granting of summary judgment in favor of the employer was harmless because the
employer’s vicarious liability on the negligent entrustment claim was derivative of
the co-worker’s direct liability, and, as a matter of law, the co-worker was not liable
for negligent entrustment. Id. at 298. Therefore, the employer could not be liable
“because its agent did not commit the tort.” Id.
G&H Towing is distinguishable from this case. Although the company’s
vicarious liability for the co-worker’s alleged negligent entrustment was not raised
in the summary judgment motion, the co-worker’s direct liability for negligent
entrustment was raised, and the summary judgment ruling in favor of the co-worker
on this claim was affirmed and became final. Id. at 296. Evalyn, Amilee, and Jackie
argue that Laurel is not entitled to recover on her breach of fiduciary duty and
embezzlement/theft claims because she did not sue in a derivative capacity, and
therefore her claims are “precluded as a matter of law” and any error by the trial
44 court in granting summary judgment on these claims is harmless. However, even if
Evalyn, Amilee, and Jackie are correct that Laurel cannot recover on those claims in
the capacity in which she sued, they did not raise that argument in the trial court as
a ground for summary judgment. This was, therefore, not an “other ground[] raised
in the case.” See id. at 297–98.
We hold that the trial court erred to the extent that it granted summary
judgment on Laurel’s breach of fiduciary duty and embezzlement/theft claims based
on allegations relating to the 2022 and 2023 rice crops. See id. at 297 (“Granting a
summary judgment on a claim not addressed in the summary judgment motion
therefore is, as a general rule, reversible error.”); Wilson, 305 S.W.3d at 73 (“[T]his
Court has always required a very tight fit between what was proved or disproved in
the motion and what elements the unaddressed claim, as it was alleged, required:
otherwise, the exception could swallow the rule.”).
We sustain Laurel’s second issue.
Conclusion
We reverse the portion of the trial court’s judgment granting summary
judgment in favor of Evalyn, Amilee, and Jackie on Laurel’s breach of fiduciary
duty claims and embezzlement/theft claims to the extent those claims are based on
allegations relating to the 2022 and 2023 rice crops. We remand these claims to the
45 trial court for further proceedings. We affirm the remainder of the trial court’s
judgment.
April L. Farris Justice
Panel consists of Chief Justice Adams and Justices Guerra and Farris.
Related
Cite This Page — Counsel Stack
Laurel Wendt v. Evalyn Wendt Moore, Amilee Wendt, and Jackie Wendt Martin, Counsel Stack Legal Research, https://law.counselstack.com/opinion/laurel-wendt-v-evalyn-wendt-moore-amilee-wendt-and-jackie-wendt-martin-texapp-2024.