Porta-Kamp Manufacturing Co. v. Atlanta Maritime Corp.

753 S.W.2d 699, 1988 Tex. App. LEXIS 969, 1988 WL 82226
CourtCourt of Appeals of Texas
DecidedApril 28, 1988
DocketA14-87-718-CV
StatusPublished
Cited by3 cases

This text of 753 S.W.2d 699 (Porta-Kamp Manufacturing Co. v. Atlanta Maritime Corp.) 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
Porta-Kamp Manufacturing Co. v. Atlanta Maritime Corp., 753 S.W.2d 699, 1988 Tex. App. LEXIS 969, 1988 WL 82226 (Tex. Ct. App. 1988).

Opinions

[700]*700OPINION

ROBERTSON, Justice.

This appeal is from a judgment rendered in favor of appellee, plaintiff in the trial court, in a breach of contract action. Issues concern whether the bankruptcy proceedings of another entity operated as an automatic stay of the instant litigation, whether the evidence is sufficient to support certain issues, whether the failure of the jury to find on a defensive issue is against the great weight of the evidence and whether the court erred in submitting certain issues and denying another. We affirm.

The facts of this case concern a dispute between the parties that arose in 1979 and 1980. Porta-Kamp Manufacturing Company, Inc. (Porta-Kamp) manufactured prefabricated buildings. It had a contract with a Brazilian company to supply housing units which were to be used by that company during the construction of a railroad project in Iraq. Maritime Transport Overseas, Inc. (MTO) was a shipping company that arranged for the shipment of cargo by maritime vessels.1

Porta-Kamp contracted with MTO to transport the housing units from Houston to Iraq and the transfer was to be accomplished through multiple shipments. While MTO was in the process of loading the third shipment, Porta-Kamp terminated the contract and MTO was forced to sail with approximately a half-load. Porta-Kamp filed a lawsuit against MTO and MTO counterclaimed for deadfreight damages.

In January 1980 negotiations to settle the pending lawsuit between Porta-Kamp and MTO began and were concluded with the execution of a formal settlement agreement on July 8,1980. Material to the issue before us, the agreement called for both parties to dismiss their respective claim and counterclaim and the payment by Por-ta-Kamp of the sum of $430,000, interest free, within a period of five years. Pursuant to the agreement, the lawsuits were dismissed but Porta-Kamp never made any payments on the $430,000 obligation and this suit resulted. Porta-Kamp answered and filed a counterclaim claiming fraud and deception on the part of MTO and praying for actual and exemplary damages.

In answer to the first special issue, the jury found that Ricardo Paz, the representative of Porta-Kamp negotiating the settlement agreement, had apparent authority to negotiate and sign the agreement; on the second issue the jury failed to find that Porta-Kamp was fraudulently induced to enter into the agreement. In answer to special issues three and four, the jury found the amounts of damages and set attorney fees.

In its first point of error appellant contends the court erred in rendering judgment for appellee “because 11 U.S.C. § 362 operates as an automatic stay of this litigation.” A very brief factual background is necessary. Appellee, a Texas corporation, acted as shipping agent for Atlanta Shipping Corporation (Atlanta Shipping) a Liberian corporation. There was no corporate relationship between appellee and Atlanta Shipping. After the instant lawsuit was filed, creditors of Atlanta Shipping filed an involuntary petition in bankruptcy against Atlanta Shipping and subsequently Atlanta Shipping filed a voluntary petition for reorganization under Chapter 11 in the Bankruptcy Court for the Southern District of New York. The bankruptcy court authorized the retention of the Haight, Gardner, Poor and Havens law firm to represent the interests of the debtor, Atlanta Shipping, in this lawsuit against Porta-Kamp. In 1985, appellee filed a motion to substitute parties and requested that Atlanta Shipping “the real party in interest and the owner of the claims against ... Porta-Kamp” be named plaintiff in this case. So far as the record reveals, this motion was never acted on. Further, Atlanta Shipping was not a party to the settlement agreement nor was it ever joined in any manner as a party to the original lawsuit (which was dismissed in [701]*701accordance with the settlement agreement) or this lawsuit.

Appellant argues that the automatic stay provisions of Subsection (a)(1) of 11 U.S.C. § 362 apply not only against the debtor (Atlanta Shipping) but also against the real party in interest (appellee), and cites for support of this proposition A.H. Robins Co., Inc. v. Piccinin, 788 F.2d 994 (4th Cir.1986). We believe its interpretation of Robins is erroneous. In Robins the question before the court did not relate to an automatic stay under Subsection (a)(1) of 11 U.S.C. 362 but related instead “to the court’s jurisdiction to grant a stay or injunction of suits in other courts against co-defendants of the debtor or of third parties.” 788 F.2d at 998. It is universally acknowledged that the automatic stay provisions of 11 U.S.C. § 362 operate to stay proceedings only against the debtor. Lynch v. Johns-Manville Sales Corporation, 710 F.2d 1194 (6th Cir.1983); Wedgeworth v. Fibreboard Corporation, 706 F.2d 541 (5th Cir.1983). On the other hand discretionary stays may be granted by the bankruptcy court pursuant to 11 U.S.C. § 105 [Matter of Johns-Manville Corp., 26 B.R. 405 (Bkrtcy.1983) ] and by the district court pursuant to the general discretionary power to stay proceedings in the interest of justice and in control of their dockets [Wedgeworth, 706 F.2d at 544-545]. Had appellant believed it necessary, a request for a discretionary stay should have been made to the bankruptcy court. The automatic stay was not applicable to this lawsuit, and the trial court did not err in proceeding to judgment. Appellant’s first point of error is overruled.

In its second point of error appellant contends the court erred in rendering judgment for appellee because the pleadings do not support special issue one inquiring of whether Ricardo Paz had apparent authority to negotiate and sign the settlement agreement on behalf of appellant. Plaintiffs petition alleged the “Defendant executed a Formal Settlement Agreement attached hereto as Exhibit A and incorporated herein by this reference.” The attached settlement agreement was signed by Paz as “Vice-President — Marketing” and the acknowledgment signed by the notary public recited that Paz had signed the instrument as an act of Porta-Kamp Manufacturing Corporation in his stated capacity. While appellant filed a special exception to the petition concerning attorney’s fees, it did not address an exception to the sufficiency of the pleadings on the basis now asserted. Appellant affirmatively plead lack of authority of Paz to bind the company. On identical procedural facts, we held in Southline Equipment Co. v. National Marine Service, Inc., 598 S.W.2d 340 (Tex.Civ.App.—Houston [14th Dist.] 1980, no writ) that appellant’s failure to specially except to appellee’s petition acted as a waiver of any defect for purposes of appellate review. We adhere to that ruling. Appellant’s second point of error is overruled.

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Porta-Kamp Manufacturing Co. v. Atlanta Maritime Corp.
753 S.W.2d 699 (Court of Appeals of Texas, 1988)

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Bluebook (online)
753 S.W.2d 699, 1988 Tex. App. LEXIS 969, 1988 WL 82226, Counsel Stack Legal Research, https://law.counselstack.com/opinion/porta-kamp-manufacturing-co-v-atlanta-maritime-corp-texapp-1988.