Republic Petroleum LLC and Republic Petroleum Partners, LP v. Dynamic Offshore Resources NS LLC and W&T Offshore Inc.

Opinion

ACCEPTED 01-14-00370-cv FIRST COURT OF APPEALS HOUSTON, TEXAS 4/13/2015 4:04:08 PM CHRISTOPHER PRINE CLERK

No. 01-14-00370-CV

FILED IN 1st COURT OF APPEALS HOUSTON, TEXAS IN THE COURT OF APPEALS FOR 4/13/2015 4:04:08 PM THE FIRST JUDICIAL DISTRICT CHRISTOPHER A. PRINE HOUSTON, TEXAS Clerk

REPUBLIC PETROLEUM L.L.C. AND REPUBLIC PETROLEUM PARTNERS L.P., Appellants, v. DYNAMIC OFFSHORE RESOURCES NS L.L.C. AND W&T OFFSHORE, INC., SUCCESSOR BY MERGER OF OFFSHORE SHELF L.L.C., Appellees.

Appeal from the 270th Judicial District Court of Harris County, Texas

Oral argument requested

REPLY BRIEF OF CROSS-APPELLANTS DYNAMIC OFFSHORE RESOURCES NS L.L.C. AND W&T OFFSHORE, INC. SUCCESSOR BY MERGER OF OFFSHORE SHELF, L.L.C.

GIEGER, LABORDE & LAPEROUSE, L.L.C. KENNETH H. LABORDE Texas State Bar No. 11786070 klaborde@glllaw.com DANIEL G. RAUH drauh@glllaw.com Louisiana State Bar No. 27280 (Pro Hac Vice)

i CHARLOTTE A. FIELDS cfields@glllaw.com Texas State Bar No. 24032175 Gieger, Laborde & Laperouse, 1177 West Loop South, Suite 750 Houston, Texas 77027 Telephone: (832) 255-6000 Facsimile: (832) 255-6001

COUNSEL FOR DEFENDANT DYNAMIC OFFSHORE RESOURCES NS, L.L.C.

- AND-

JOHNSON DELUCA KURISKY & GOULD A Professional Corporation BRADLEY L. DELUCA bdeluca@jdkglaw.com Texas Bar No. 05653800 BRIGID D. ASHCRAFT bashcraft@jdkglaw.com Texas Bar No. 09193167 4 Houston Center 1221 Lamar, Suite 1000 Houston, Texas 77010 (713) 652-2525 – Telephone (713) 652-5130 – Facsimile

COUNSEL FOR DEFENDANT W&T OFFSHORE, INC., successor by merger of OFFSHORE SHELF, L.L.C.

ii TABLE OF CONTENTS Index of Authorities ........................................................................................iv

Statement of Facts ............................................................................................1

SUMMARY OF ARGUMENT ..............................................................2

I. Republic L.L.C. had no standing and/or capacity to sue or recover damages ..............................................................................................2

A. Privity of contract..............................................................................2

B. Standing and capacity........................................................................2

C. Rule 93 verifications ........................................................................3

D. Republic L.L.C.’s working interest ..................................................3

E. The Charge ........................................................................................4

ARGUMENT ....................................................................................................5

I. Privity of contract does not equate with standing .............................5

II. The HI 115 OOA did not give Republic L.L.C. capacity to sue or recover damages ...............................................................................6

III. Defendants’ rule 93 verifications were sufficient ..........................9

IV. Republic L.L.C.’s working interest ownership is relevant ...........10

V. Defendants did not waive any points of error ...............................12

Prayer ............................................................................................................16

Appendix ........................................................................................................16

Certificate of Compliance .............................................................................18

Certificate of Service ....................................................................................18 iii INDEX OF AUTHORITIES

Cases

Austin Nursing Ctr. Inc. v. Lovato, 171 S.W.3d 845 (Tex. 2005) .....................................................................................................13

Byrd v. Estate of Nelms, 154 S.W.3d 149 (Tex. App. - Waco 2004, pet. denied) ............................................................14

Cecil v. Smith, 804 S.W.2d 509 (Tex. 1991) ..................................................15

Cooper v. Circle Ten Council Boy Scouts of America, 254 S.W.3d 689 (Tex. App. - Dallas 2008, no pet.) ..................................................................10

Damian v. Bell Helicopter Textron, Inc., 352 S.W.3d 124 (Tex. App. - Fort Worth 2011, pet. struck) .....................................................14

Denman v. SND Operating, L.L.C., No. 06-04-00061-CV, 2005 WL 2316177 (Tex. App. - Texarkana Sept. 23, 2005, no pet.) .......................................12,13

Fuqua v. Taylor, 683 S.W.2d 735 (Tex. App. – Dallas 1984, writ ref’d n.r.e.) ....................................................11

Genender v. USA Store Fixtures, LLC, 451 S.W.3d 916 (Tex. App. - Houston [14th Dist.] 2014, no pet.) .............................................1

Harmon v. 1401 Elm Street Condominium Ass'n, 139 S.W.3d 411 (Tex. App. - Dallas 2004, no pet.) ..................................................................16

Interstate Contracting Corp. v. City of Dallas, 135 S.W.3d 605 (Tex. 2004) .......................................................................................................5

John C. Flood of DC, Inc. v. SuperMedia, L.L.C., 408 S.W.3d 645 (Tex. App. - Dallas 2013, pet. denied) ...........................................................13

Mayhew v. Town of Sunnyvale, 964 S.W.2d 922 (Tex. 1998) .....................................................................................................14 iv Mekeel v. U.S. Bank Nat. Ass'n, 355 S.W.3d 349 (Tex. App. - El Paso 2011, pet. dism'd) ..........................................................10

Nauslar v. Coors Brewing Co., 170 S.W.3d 242 (Tex. App. - Dallas 2005, no pet.) ...................................................................6

Republic National Bank of Dallas v. National Bankers Life Ins. Co, 427 S.W.2d 76 (Tex. Civ. App. - Dallas 1968, writ ref’d n.r.e.) ............................5

Rhey v. Redic, 408 S.W.3d 440 (Tex. App. - El Paso 2013, no pet.) ................................................................15

Shipley v. Unifund CCR Partners, 331 S.W.3d 27 (Tex. App. - Waco 2010, no pet.) ...................................................................13

Solares v. Solares, 232 S.W.3d 873 (Tex. App. - Dallas 2007, no pet.) ............................................................15, 16

Star Enterprise v. Marze, 61 S.W.3d 449 (Tex. App. - San Antonio 2001, pet. denied) ..................................................14

State Bar v. Gomez, 891 S.W.2d 243 (Tex. 1994)............................................5

Texas Workers' Compensation Comm'n v. Garcia, 893 S.W.2d 504 (Tex. 1995) ........................................................................................................5

T.O. Stanley Boot Co. v. Bank of El Paso, 847 S.W.2d 218 (Tex. 1992) ................................................................................................14, 15

United Parcel Serv., Inc. v. Tasdemiroglu, 25 S.W.3d 914 (Tex. App. - Houston [14th Dist.] 2000, pet. denied) .....................................15

Webb v. Voga, 316 S.W.3d 809 (Tex. App. - Dallas 2010, no pet.).. ..................................................................6

Rules / Statutes

Tex. R. App. P. 33.1(a) ...................................................................................10

Tex. R. App. P. 38.1(g). ....................................................................................1 v Tex. R. Civ. P. 93 ...........................................................................................10

Tex. Civ. Prac. & Rem. Code §132.001 .........................................................10

Other Authorities

2 McDonald & Carlson Tex. Civ. Prac. § 7:21 (2d. ed.) ................................10

vi STATEMENT OF FACTS Republic L.L.C. did not address or controvert the following statements in

Defendants’ Appellants’ Brief, Statement of Facts:

1. Effective October 15, 2008, Republic L.L.C. assigned 100% of its working interest in HI 115 to Republic L.P., removing Republic L.L.C. from any ownership interest in HI 115. (52 RR Defs.’ Ex. 0915-0079, item F); (52 RR Defs.’ Ex. 926); (4 RR 31); (CR 504).

2. Effective May 11, 2007, by various assignments, Republic L.P. acquired all ownership interest previously held by Republic L.L.C. (52 RR Defs.’ Ex. 927); (52 RR Defs.’ Ex. 0915-0079, item G); (4 RR 44-45, 47, 51-52).

3. The damages sought by Republic L.L.C. did not begin to accrue until July 3, 2008. (9 RR Pls.’ Ex. 39-143).

4. Should Republic L.L.C. be awarded damages through October 15, 2008, the damage award should be rendered in the amount of $32,971.73 (23.75% of $138,828.35, the damages incurred through October 15, 2008). (52 RR Defs.' Exs. 915-0069-0079 and 926); (9 RR Pls.’ Ex. 139-143); (CR 504).

5. Republic L.L.C. presented the case as though it were seeking 100% of the damages. (5 RR 137-138).

Thus, these facts are uncontroverted. See Tex. R. App. P. 38.1(g) (“The

court will accept as true the facts stated unless another party contradicts them.”)

See also, Genender v. USA Store Fixtures, LLC, 451 S.W.3d 916, 923 n.7 (Tex.

App. - Houston [14th Dist.] 2014, no pet.).

1 SUMMARY OF ARGUMENT

I. Republic L.L.C. had no standing and/or capacity to sue or recover damages The undisputed facts establish that Republic L.L.C. did not have standing

and/or capacity to sue or recover damages as it had no ownership in the HI 115

Well effective May 11, 2007, and did not file suit as operator or on behalf of the

other HI 115 owners.1 Republic L.L.C.’s efforts to establish otherwise fail.

A. Privity of contract

Republic L.L.C. argues that it has standing because it was in privity of

contract with the Defendants. Privity of contract, however, does not equate with

standing.

B. Standing and capacity

Republic L.L.C. argues that it had standing and capacity by virtue of the HI

115 OOA and references one portion of the record in support of same. However,

the cited reference actually reflects that effective July 16, 2010, Rooster Petroleum

L.L.C. (“Rooster”) became the operator of the HI 115 Well. (52 RR Defs.’ Ex. 1 Republic L.L.C. argues in point II that this Court should not reverse and render a Final Judgment that Republic L.L.C. be awarded zero damages or, alternatively, $32,971.73, because Defendants did not meet “any of the standards of review available to them.” Brief, p. 36. In support of this argument, Republic L.L.C. sets forth inapplicable standards of review, states that because Defendants filed a motion for new trial, “the filing of a motion to modify judgment was improper”, Id., citing no legal authority for such a proposition, and that it was “inexplicably unfair and fundamentally erroneous for the trial court to grant Defendants’ Motion to Modify Judgment.” Id. Defendants previously addressed each of these arguments in its Appellants’ Brief as well as in their Appellees’ Brief, and incorporate the arguments herein by reference. Defendants note, however, that the uncontroverted facts set forth in the Statement of Facts alone establish that a take-nothing judgment should be entered by this Court. 2 915-0094). Republic L.L.C was not the operator when suit was filed and has no

capacity or standing to sue or recover damages as such.

Republic L.L.C.’s reliance on the testimony of Scott Stanford (“Stanford”)

in support of its standing and capacity arguments is misplaced. The testimony

presented was in a bill of exception which the district court ruled inadmissible.

C. Rule 93 verifications

Republic L.L.C. complains that although Defendants filed verified denials

regarding capacity, such verifications were insufficient because Defendants did not

allege the bases of personal knowledge. While Defendants’ verifications were

sufficient, Defendants could have utilized unsworn declarations in which the bases

of personal knowledge is not required. Moreover, an objection regarding lack of

personal knowledge must be lodged at the district court level and a ruling obtained,

which Republic L.L.C. failed to do and waived the complaint.

D. Republic L.L.C.’s working interest

Republic L.L.C. argues for the first time that the PHA “does not concern the

working interest ownership of the [HI 115 Well]” and thus its working interest

(ownership share) is “irrelevant” to the dispute. Were this new and novel

argument accepted, hundreds of years of case law regarding the need for ownership

to recover damages would be turned on its head.

3 Aside from these issues, Republic L.L.C. entered into the PHA as the

“owner” of the HI 115 Well and the terms of the HI 115 OOA establish that

expenses and revenue (and thus, damages) derived from the production of gas from

the HI 115 Well were allocated based upon the working interest ownership. The

PHA and ownership are relevant and inextricably entwined.

E. The Charge

Lastly, Republic L.L.C. argues that since Defendants “make no claim of

charge error”, Defendants’ “capacity challenge can have no merit.” Brief, p. 25-

26. While Republic L.L.C.’s argument is unclear, Defendants are not required to

allege charge error as they are claiming that the district court erred, inter alia, in

denying Defendants’ JNOV and Motion to Modify Judgment. Even if Defendants

were required to assert charge error, their complaints were not waived as 1)

Defendants’ objected to Republic L.L.C.’s questions, 2) Defendants properly filed

verified denials which shifted the burden to Republic L.L.C. to obtain a jury

finding on the issue, 3) the district court held as a matter of law that Republic

L.L.C. did not file suit as operator or in any representative capacity thus the issue

should not be submitted to the jury, 4) standing and capacity are legal issues which

should not be submitted to the jury, and 5) Defendants properly preserved error by

objecting to the questions, filing a Motion for Directed Verdict, JNOV, Motion for

New Trial and Motion to Modify Judgment.

4 The Modified Final Judgment should be reversed and rendered that Republic

L.L.C. take-nothing, or, alternatively, that Republic L.L.C.’s damages are limited

to $32,971.73 and attorney’s fees through trial of $125,000.

ARGUMENT

I. Privity of contract does not equate with standing

Republic L.L.C. argues that since it was a signatory to the PHA, privity of

contract existed which “provides a party with standing to maintain a suit on the

contract.” Brief, p. 10. However, the case cited by Republic L.L.C. for this

proposition, Interstate Contracting Corp. v. City of Dallas, 135 S.W.3d 605, 618

(Tex. 2004), actually states that “…our recognition of pass-through claims does not

run afoul of our long-held tradition of requiring privity of contract and standing for

a party to maintain suit.” (Emphasis added.) The only other case cited by

Republic L.L.C. for this proposition does not mention standing, only privity of

contract. Republic National Bank of Dallas v. National Bankers Life Ins. Co, 427

S.W.2d 76, 79 (Tex. Civ. App. - Dallas 1968, writ ref’d n.r.e.).

While Republic L.L.C. was in privity of contract with Defendants, it did not

have standing as standing limits subject matter jurisdiction to cases involving a

distinct injury to the plaintiff. See Texas Workers' Compensation Comm'n v.

Garcia, 893 S.W.2d 504, 517–18 (Tex. 1995). See also State Bar v. Gomez, 891

S.W.2d 243, 245 (Tex. 1994). Republic L.L.C. has no distinct injury since it had

5 no working interest ownership in the HI 115 Well.2 Nauslar v. Coors Brewing

Co., 170 S.W.3d 242, 252 (Tex. App. - Dallas 2005, no pet.) (“[Plaintiff] asserts

standing in its roles as former general partner of Willow's general partner and

former limited partner of Willow. […] [Plaintiff] sold…the entirety of its interest

in Willow. None of the cases it cites stands for the proposition that a partner that

has sold its entire interest in the partnership can personally recover on a claim

belonging to that partnership.”) (Emphasis in original); Webb v. Voga, 316 S.W.3d

809, 815 (Tex. App. - Dallas 2010, no pet.) (“The evidence shows Webb was not a

property owner. We conclude that Webb lacked standing for her causes of action

…and, therefore, the trial court lacked subject matter jurisdiction over those causes

of action.”)

II. The HI 115 OOA did not give Republic L.L.C. capacity to sue or recover damages

Republic L.L.C. argues that it had capacity to sue as operator under the HI

115 OOA. Even if this were true, which it is not, the district court ruled that

Republic L.L.C. did not bring suit as the operator. (CR 1055) (5 RR 138)

Moreover, Republic L.L.C.’s request for a trial amendment to remedy its lack of

2 Republic L.L.C. also alleges that it established standing because Defendants did not assert that other parties should be joined to the lawsuit and that Defendants made judicial admissions. Defendants addressed these allegations in their Response to Republic L.L.C’s Appellant’s Brief and incorporate the arguments herein. 6 capacity was denied.3 (CR 1056) (6 RR 119).

Further, Republic L.L.C. was not the operator when the lawsuit was filed,

contrary to its statement to this Court that “[e]ffective July, 16, 2010, the [OOA]

was again amended… However, Republic remained the designated Operator under

the [OOA].” Brief, p. 17. The cite to which Republic L.L.C. refers actually states:

III. The operator for the Lease shall be:

Rooster Petroleum, LLC

(52 RR Defs.’ Ex. 915-0094). When suit was filed on December 9, 2010, Republic

L.L.C. could not have brought claims in the capacity of operator since that position

was held by Rooster. (4 RR 58).

Republic L.L.C. also cites inadmissible testimony for the proposition that

“any recovery in the lawsuit will be split out to the non-operating working interest

partners.” Brief, p. 16. This testimony was obtained while Republic L.L.C. was

making its bill of exception and was ruled as inadmissible by the district court.

(5 RR 113-138). A portion of the objection and bill of exception follows:

Q. Was it the understanding of your partners… that this provision authorized Republic Petroleum, LLC, to prosecute the litigation?

MR. DELUCA: Objection, Your Honor. May we approach.

THE COURT: Okay.

3 Republic L.L.C. does not challenge the district court’s denial of leave to file a trial amendment on appeal. 7 (Bench discussion…)

MR. DELUCA: Republic Petroleum, LLC, and Republic Petroleum Partners, LP, brought this case in their individual capacity. They did not bring it as an operator…. [T]he PHA names Republic Petroleum, LLC, as, quote, Producer, not Operator.

THE COURT: What part am I missing here?

MR. DELUCA: They didn't bring it on behalf of everybody else. They only brought it on behalf of themselves. ……

MR. DELUCA: For their own damages, not all the partners.

THE COURT: Is that what your trying to do?

MR. BATTAGLINI: That's what our pleading says.

BILL OF EXCEPTIONS

BY MR. BATTAGLINI

Q. Mr. Stanford, is it true that the damages that were calculated in this case are 100 percent damages?

A. They are.

Q. Is it true, when you brought this lawsuit, you brought it on behalf of 100 percent of the gas stream owners?

A. Yes, I did. (5 RR 113-138).

The district court ruled the testimony inadmissible, stating, “I don’t see anything in

it [Plaintiffs’ Fourth Amended Petition] that indicates that it was brought in any

kind of representative capacity or was seeking to recover damage on behalf of

8 anybody other than the Republic entities. That’s my ruling.”4 (5 RR 113-138).

No evidence or admissible testimony supports Republic L.L.C.’s contention that

the HI 115 OOA conferred capacity to bring suit.

III. Defendants’ rule 93 verifications were sufficient

Republic L.L.C. admits that Defendants filed verified denials disputing

Republic L.L.C.’s capacity to sue or recover damages, but contends that such

verifications were defective because they did not set forth the bases of personal

knowledge. Brief, p. 19. Republic L.L.C. cites a few cases dealing with the need

for personal knowledge in an affidavit supporting a summary judgment, but no

cases dealing with such a requirement for a verified denial. Nonetheless,

Defendants’ verifications are not deficient. (CR 687) (CR 701). In fact, the

verifications 1) specifically recite personal knowledge, 2) reference the paragraphs

in the Answers to which they refer, and 3) the referenced paragraphs set forth the

public documents which indicate Republic L.L.C.’s lack of capacity including the

fact that Rooster was the operator at the time suit was filed. (CR 650-651) (CR

697-98).

4 Republic L.L.C.’s contention that the language in the OOA permitting the operator to “supervise the handling, conduct and prosecution of all Claims involving activities or operations” somehow “authorized Republic to prosecute the lawsuit” is belied by the fact that Republic L.L.C. was not the operator when suit was filed and by the terms of the OOA itself which require consent of the other working interest owners as fully addressed by Defendants in their Response to Republic L.L.C’s Appellant’s Brief which is incorporated herein.

9 Furthermore, Defendants did not have to file a verification setting forth

personal knowledge inasmuch as an unsworn declaration is sufficient. See Tex.

Civ. Prac. & Rem. Code §132.001. See also, 2 McDonald & Carlson Tex. Civ.

Prac. § 7:21 (2d. ed.) (“Under Rule 93,…[i]n lieu of [a] … verification …a litigant

may use an unsworn declaration.”)

Lastly, “an objection that an affidavit is not based on personal knowledge is

an objection to a defect in form. Cooper v. Circle Ten Council Boy Scouts of

America, 254 S.W.3d 689 (Tex. App. - Dallas 2008, no pet.). As a prerequisite to

presenting a complaint for appellate review, such an objection must be timely and

specifically raised, and a ruling obtained.” Mekeel v. U.S. Bank Nat. Ass'n, 355

S.W.3d 349, 357 (Tex. App. - El Paso 2011, pet. dism'd) (citing Tex. R. App. P.

33.1(a) [other citations omitted]). Republic L.L.C. did not object to the

verifications at the district court level and thus waived any alleged error.

IV. Republic L.L.C.’s working interest ownership is relevant

Republic L.L.C. contends that its lawsuit “does not concern Republic’s

working interest ownership in the Satellite Well, but instead concerns a breach of

the PHA,” thus its working interest ownership is “irrelevant.” Brief, p. 22-23.

Republic L.L.C. does not cite a single case for this proposition, nor does it

distinguish the plethora of authority holding that an ownership interest is necessary

to recover damages.

10 Moreover, the PHA would not exist without the HI 115 Well and the

production there-from. Under the HI 115 OOA, the parties paid expenses and

received revenues (including, logically, any damages) associated with production

according to their participating interest (working interest ownership) as follows:

Basis of Charge to the Parties. Subject to the other provisions of this Agreement, Operator shall pay all costs incurred under this Agreement, and each Party shall reimburse Operator in proportion to its Participating Interest. (18 RR Pls.’ Ex. 190-0008)

Statements and Billings. Operator shall bill Non-Operators … for their proportionate share of the Joint Account…. (42 RR Defs.’ Ex. 756-0286- 0287)

"Joint Account" shall mean the account showing the charges paid and credits received in the conduct of the Joint Operations and which are to be shared by the Parties. (42 RR Defs.’ Ex. 756-0286)

See also (46 RR Defs.’ Ex. 0773-2058 et seq.) (Invoices pertaining to production

under the PHA setting forth charges and credits to the HI 115 working interest

owners based upon their ownership interest).

Contrary to Republic L.L.C.’s position, the case law is clear that without an

ownership interest or suit in a representative capacity, there can be no standing

and/or capacity. See Fuqua v. Taylor, 683 S.W.2d 735, 739 (Tex. App. - Dallas

1984, writ ref’d n.r.e.) (“It would violate equitable principles to allow appellees,

who owned but thirty-one percent of the working interest, to recover one hundred

percent of the trust income…. [W]e remand … for a determination of the amount

of each individual appellee's recovery, to be calculated according to the percentage 11 of the entire working interest … owned by each appellee.”); Denman v. SND

Operating, L.L.C., No. 06-04-00061-CV, 2005 WL 2316177, at *8 (Tex. App. -

Texarkana Sept. 23, 2005, no pet.) (“The Denmans … have standing to sue for

discharges of hydrocarbons and for damages…during their ownership.”)

(Emphasis added.) Republic L.L.C.’s lack of working interest ownership is not

only relevant; it is determinative and establishes that a take-nothing judgment

should be rendered.

V. Defendants did not waive any points of error

Republic L.L.C. alleges that since Defendants “make no claim of charge

error” the Defendants “are bound by the charge on appeal” and “because the jury

was not requested to consider damages in the context of Republic’s working

interest ownership,” Defendants’ “capacity challenge can have no merit.”5 Brief,

p. 25-26. Although Republic L.L.C.’s allegation is unclear, and no cases are cited

that are even peripherally on point, Defendants are not required to claim charge

error as they contend that the district court erred, inter alia, in denying Defendants’

JNOV and Motion to Modify Judgment. Even if Defendants had to claim charge

error, they did not waive any complaints.

5 Republic L.L.C. fails to note that it has no pleading to support a 100% damage award and that if the Modified Judgment is not reversed and rendered, damages will be awarded to non- parties. These issues were preserved for appeal as well and not addressed by Republic L.L.C.

12 To the extent Republic L.L.C. suggests that it was incumbent upon

Defendants to submit a damage question to preserve Defendants’ capacity

complaint on appeal,6 Brief, p. 25-26, Republic L.L.C. is mistaken for many

reasons.7

First, the issue of Republic L.L.C.’s working interest ownership relates to

standing, not capacity. See Shipley v. Unifund CCR Partners, 331 S.W.3d 27, 29

(Tex. App. - Waco 2010, no pet.) (“We find that without evidence of any

ownership interest or title in the account that Unifund CCR Partners does not have

standing to bring this suit and that the trial court did not have subject matter

jurisdiction over the action.”); Denman, No. 06-04-00061-CV, 2005 WL 2316177,

at *8 (Accord). Moreover, “standing is a component of subject matter jurisdiction

and can never be waived.” John C. Flood of DC, Inc. v. SuperMedia, L.L.C., 408

S.W.3d 645, 650-51 (Tex. App. - Dallas 2013, pet. denied) (citing Austin Nursing

Ctr. Inc. v. Lovato, 171 S.W.3d 845, 849 (Tex. 2005)).

Second, even if ownership is a capacity issue, Defendants properly filed

verified denials. As such, the burden shifted to Republic L.L.C. to obtain a jury

6 Incredibly, Republic L.L.C. argues the opposite position on page 26 of its Brief stating that “standing and capacity are legal questions which … should not have been argued to the jury” and on page 34 that “because Defendants do not challenge the jury charge, the sufficiency of the evidence must be reviewed in light of the charge submitted.” 7 Defendants also objected to the submission of the damage question on the bases of 1) no evidence of damages due to the fact that Republic L.L.C. did not own an interest in the HI 115 Well, 2) lack of standing, and 3) lack of capacity. (7 RR 81-83) (7 RR 86-87). All objections were overruled. (7 RR 77-87). 13 finding on the issue as stated in Damian v. Bell Helicopter Textron, Inc., 352

S.W.3d 124, 141 (Tex. App. - Fort Worth 2011, pet. struck):

[I]f a verified denial is filed, the issue of the plaintiff's capacity to sue is controverted, and the plaintiff bears the burden of proving at trial that he is entitled to recover in the capacity in which he has filed suit. As the party with the burden of proof then, it is incumbent upon the plaintiff to obtain a jury finding on this particular issue.

(Emphasis added.)

Third, prior to submission of the case to the jury, the district court held as a

matter of law that Republic L.L.C. did not file suit as operator or in any

representative capacity, and denied the request for leave to file a Fifth Amended

Petition. (5 RR 128); (6 RR 119). As such, the issue of capacity was already

decided and Defendants did not waive any complaint. See Byrd v. Estate of Nelms,

154 S.W.3d 149, 160 (Tex. App. - Waco 2004, pet. denied) (“Any question

concerning the Nelms Partnership's capacity to sue was determined by the trial

court as a matter of law …. Issues of capacity to sue are questions of law. Mayhew

v. Town of Sunnyvale, 964 S.W.2d 922, 928–29 (Tex. 1998). Issues found as a

matter of law should not be submitted to the jury. Star Enterprise v. Marze, 61

S.W.3d 449, 459 (Tex. App. - San Antonio 2001, pet. denied) (citing T.O. Stanley

Boot Co. v. Bank of El Paso, 847 S.W.2d 218, 222–23 (Tex.1992)).”

The lack of Republic L.L.C.’s working interest was also established as a

matter of law and not controverted by Republic L.L.C. either in the district court or

14 on appeal. A fact issue that is established with uncontroverted evidence and is not

in dispute should not be submitted to the jury. Bank of El Paso, 847 S.W.2d at

223.

Fourth, as admitted by Republic L.L.C. in its brief, standing and capacity

should not be submitted to the jury. Rhey v. Redic, 408 S.W.3d 440, 463 (Tex.

App. - El Paso 2013, no pet.) (“To the extent Rhey's argument is related to the

standing and capacity …, both issues are legal questions which would not be

submitted to the jury.”) Brief, p. 26.

Lastly, Defendants properly preserved error by objecting to the damage

question (7 RR 81-83) (7 RR 86-87), filing a Motion for Directed Verdict (CR

841-846) (6 RR 5), JNOV (CR 888-903) and a Motion for New Trial (CR 1122-

1150). See United Parcel Serv., Inc. v. Tasdemiroglu, 25 S.W.3d 914, 916 (Tex.

App. - Houston [14th Dist.] 2000, pet. denied) (citing Cecil v. Smith, 804 S.W.2d

509, 510–11 (Tex. 1991)). (“To preserve a no evidence or matter of law point for

appeal, a party must raise the issue through one of the following: (1) a motion for

directed verdict, (2) a motion for JNOV, (3) an objection to the submission of the

question to the jury, (4) a motion to disregard the jury's answer to a vital fact

question, or (45) a motion for new trial.”) Moreover, Defendants filed a Motion to

Modify Judgment (CR 1050-1070) and “[m]otions to modify preserve error for

appellate review of an erroneous damage award in a judgment.” Solares v.

15 Solares, 232 S.W.3d 873, 881 (Tex. App. - Dallas 2007, no pet.) (citing, Harmon

v. 1401 Elm Street Condominium Ass'n, 139 S.W.3d 411, 416–17 (Tex. App. -

Dallas 2004, no pet.)).

PRAYER

Defendants Dynamic and W&T Offshore pray that the Court of Appeals

reverse and render judgment that Republic L.L.C. takes nothing, or alternatively

that Republic L.L.C. be awarded damages of $32,971.73 and attorney’s fees

through trial of $125,000. Defendants also pray for such other relief to which they

may be justly entitled.

1. Attachment to the HI 115 OOA indicating that the operator for the lease effective July 16, 2010 is Rooster Petroleum, LLC (52 RR Defs.’ Ex. 915-0094)

2. Genender v. USA Store Fixtures, LLC, 451 S.W.3d 916 (2014)

3. Nauslar v. Coors Brewing Co., 170 S.W.3d 242 (2005)

4. Shipley v. Unifund CCR Partners, 331 S.W.3d 27 (2010)

Respectfully submitted,

GIEGER, LABORDE & LAPEROUSE, L.L.C. KENNETH H. LABORDE Texas State Bar No. 11786070 klaborde@glllaw.com DANIEL G. RAUH drauh@glllaw.com Louisiana State Bar No. 27280 16 (Pro Hac Vice) CHARLOTTE A. FIELDS cfields@glllaw.com Texas State Bar No. 24032175 Gieger, Laborde & Laperouse, 1177 West Loop South, Suite 750 Houston, Texas 77027 Telephone: (832) 255-6000 Facsimile: (832) 255-6001

COUNSEL FOR DEFENDANT DYNAMIC OFFSHORE RESOURCES NS,

- AND-

JOHNSON DELUCA KURISKY & GOULD A Professional Corporation BRADLEY L. DELUCA bdeluca@jdkglaw.com Texas Bar No. 05653800 BRIGID D. ASHCRAFT bashcraft@jdkglaw.com Texas Bar No. 09193167 4 Houston Center 1221 Lamar, Suite 1000 Houston, Texas 77010 (713) 652-2525 – Telephone (713) 652-5130 – Facsimile

COUNSEL FOR DEFENDANT W&T OFFSHORE, INC., successor by merger of OFFSHORE SHELF, L.L.C.

17 CERTIFICATE OF COMPLIANCE

As required by Rule 9.4, Texas Rules of Appellate Procedure, the undersigned certifies that this brief contains 3814 words, exclusive of the portions described in Rule 9.4(i)(1).

/s/ Kenneth H. Laborde Kenneth H. Laborde

/s/ Bradley L. DeLuca Bradley L. DeLuca

CERTIFICATE OF SERVICE

I hereby certify that on April 13, 2015, the Reply Brief of Cross-Appellants Dynamic Offshore Resources NS and W&T Offshore, Inc. Successor By Merger of Offshore Shelf was electronically filed with the Clerk of Court for The First Court of Appeals by using the EFSP-EFM System. Participants in this case who are registered EFSP-EFM System users will be served electronically by the EFSP- EFM System. Other participants will be served by e-mail in accordance with TEX. R. APP. P. 9.5(e). KB BATTAGLINI Texas State Bar No. 01918060 kbattaglini@strongpipkin.com JOHN G. BISSELL Texas State Bar No. 02356000 jbissell@strongpipkin.com Strong Pipkin Bissell & Ledyard, L.L.P. 4900 Woodway Drive, Suite 1200 Houston, Texas 77056 Telephone: (713) 651-1900 Facsimile: (713) 651-1920

Counsel for Plaintiffs/Appellants Republic Petroleum, and Republic Petroleum Partners, L.P.

18 KENNETH H. LABORDE Texas State Bar No. 11786070 klaborde@glllaw.com DANIEL G. RAUH Louisiana State Bar No. 27280 (PHV) drauh@glllaw.com CHARLOTTE A. FIELDS Texas State Bar No. 24032175 cfields@glllaw.com Gieger, Laborde & Laperouse, 1177 West Loop South, Suite 750 Houston, Texas 77027 Telephone: (832) 255-6000 Facsimile: (832) 255-6001 Counsel for Defendant/Cross-Appellant Dynamic Offshore Resources NS /s/ Kenneth H. Laborde Kenneth H. Laborde

JOHNSON DELUCA KURISKY & GOULD A Professional Corporation BRADLEY L. DELUCA bdeluca@jdkglaw.com Texas Bar No. 05653800 BRIGID D. ASHCRAFT bashcraft@jdkglaw.com Texas Bar No. 09193167 4 Houston Center 1221 Lamar, Suite 1000 Houston, Texas 77010 (713) 652-2525 – Telephone (713) 652-5130 – Facsimile Counsel for Defendant W&T Offshore, Inc., Successor by Merger of Offshore Shelf, L.L.C. /s/ Bradley L. DeLuca Bradley L. DeLuca

19 L. Pipeline Ownership in Segment#17167 (OC8-G 28359):

WI Rooster Oil & Gas, LLC 23.00000% PROBE HIGH ISLAND ll5 LID. 18.54486% PROBE RESOURCES US LID. 30.95514% Republic Petroleum Partners, LP 19.10000% Sierra Pine Resources International, Inc. 00.62500% DBL Oil & Gas, LLC 00.62500% 100.00000%

ID. The Operator for the Lease shall be:

Rooster Petroleum, LLC

IV. Notification addresses and titles of the designed representatives are as follows:

Republic Petroleum, LLC Blue Dolphin Petroleum Company 2425 West Loop South, Suite. 200 801 Travis, Suite 2100 Houston, Texas 77027 Houston, Texas 77002 Attn: Scott Stanford Attn: Ivar Siem Telephone: (713) 297-9180 Telephone: (713) 568-4730 Fax: (713) 297-8864 Fax: (713) 227-7626 Email: sstanford@•:omcast.net Email: ivar.siem@blue-dolphin.com

Sierra Pine Resou.rces International, Inc. PROBE RESOURCES US LTD. 110 Cypress Station Drive, #155 24 Waterway, Suite 1450 Houston, Texas 77090 · The Woodtimds, Texas 77380 Attn: Bruce Ganer Attn: Roger B. Souders Telephone: (713) :197-8864 Telephone: (281) 210-1173 Fax: (713) 297-8864 Fax: (281) 210-1193 Email: BLGaner@aol.com Email:rsouders@probe-resources.com

PROBEIDGHlSLAND 115 LTD. Republic Petroleum Partners, LP 24 Waterway, Suite 1450 2425 West Loop South, Suite 200 The Woodlands, Texas 77380 Housto~ Texas 77027 Attn: Roger B. Souders Attn: Scott Stanford Telephone: (281) 210- II 73 Telephone: (713) 297-9180 Fax: (281)210-1193 Fax: (713) 297-8864 Email: rsouders@probe-resources.com Email: ssstanford@comca.st.net

Rooster Oil & Gas, LLC Rooster Petroleum, LLC 16285 Park Ten Place, Suite 120 16285 Park Ten Place, Suite 120 Houston, Texas 77084 Houston, Texas 77084 Attn: Kenneth F. Tamp lain, Jr. Attn; Kenneth F. Tamplain, Jr. Telephone: (713) 574-7558 Telephone: (713) 574-7558 Fax: (832) 772-6314 Fax: (832) 772-6314 Email: ktamplain@roosternetroleum.com Email: ktamplain@roostemetroleum.com

DBL Oil & Gas, LLC 8427 E. Copper Village Dr. Houston, Texas 77095 Attn: Tod Dan:ey Telephone: (281) 728-8894 Email: tdarcey@darceyoifandgas.com

V, Permitted Encumbrances:

A. A I% of 8/Sths overriding royalty interest in favor of Leopard Energy and Trading, Inc. (Leopard ORR!), specifically limited to production from the High Island 115, B-1 STI completion in the Lower Cris R Forn1ation found at a depth of !6,862' measured depth, only per the Bonding Support Agreement dated August 11, 2006 by and between Republic Petroleum, LLC and Leopard Energy and Trading, Inc. (This burden affects all parties llllder this Operating Agreement).

ffi 115 Exhibit ,.A" to Second Amendment to OOA Page 4

DEFENDANTS' TRIAL EXHIBIT 0915-0094 Genender v. USA Store Fixtures, LLC, 451 S.W.3d 916 (2014)

[7] settlement negotiations between buyer and seller did 451 S.W.3d 916 not constitute “presentment”; Court of Appeals of Texas, Houston (14th Dist. [8] affidavit of seller’s attorney filed after jury reached verdict was not evidence of presentment; and Jamie Genender and Critter Stuff, LLC, Appellants v. [9] once jury returned verdict on claim for breach of USA Store Fixtures, LLC, Appellee contract, trial court should not have reopened record to allow evidence on disputed issue of presentment. NO. 14–14–00048–CV | Opinion filed December 23, 2014. Affirmed as modified.

Synopsis Background: Seller filed petition against buyer and buyer’s owner, arising out of reversal of charge on West Headnotes (19) buyer’s credit card for payment of used shelving purchased from seller. The Justice Court entered take-nothing judgment against seller, and seller appealed. [1] Justices of the Peace Following trial de novo, the County Court at Law No. 1, Evidence Harris County, awarded seller damages in amount of $2,303.42, and attorney fees in amount of $38,000 for Seller of used shelving was presumed to have trial, $20,000 for appeal to Court of Appeals, and $20,000 orally pleaded claim for breach of contract for appeal to Supreme Court. Buyer and owner appealed. against buyer in justice court and, thus, county court had subject matter jurisdiction over claim in de novo trial; seller filed petitions in justice Holdings: The Court of Appeals, Sharon McCally, J., court against buyer and buyer’s owner asserting held that: that defendants were legally indebted to it and that seller reserved right to plead further orally [1] county court had subject matter jurisdiction over claim upon trial of matter, and buyer did not rebut for breach of contract; presumption of oral pleading. Tex. R. Civ. P. 525 (Repealed). [2] evidence supported jury’s finding that defendants breached contract to purchase shelving; Cases that cite this headnote [3] seller’s written “quote” to buyer was not evidence of seller’s “presentment” to buyer of demand for payment on contract, as prerequisite to seller’s right to recover attorney fees on claim; [2] Justices of the Peace [4] Evidence notification to seller of reversal of charge on buyer’s credit card that was used to purchase shelving was not The presumption that a claim was orally pleaded “presentment”; in the justice court, for the purposes of [5] determining whether the county court has documents from seller’s merchant account provider subject matter jurisdiction over the claim upon a reflecting communications between provider, buyer, and trial de novo, is rebuttable. Tex. R. Civ. P. 525 seller did not include presentment of demand for payment (Repealed). on contract; [6] seller’s discovery responses did not constitute Cases that cite this headnote “presentment” of claim;

© 2015 Thomson Reuters. No claim to original U.S. Government Works. 1 Genender v. USA Store Fixtures, LLC, 451 S.W.3d 916 (2014)

[3] Justices of the Peace Evidence [6] Costs The lack of a notation as to an orally pleaded Contracts claim in the justice court’s docket does not rebut the presumption of oral pleading, for the No particular form of presentment of a demand purposes of determining whether the county for performance or payment of a contract, in court has subject matter jurisdiction over the order to recover attorney fees on a claim for claim upon trial de novo. Tex. R. Civ. P. 525 breach of contract; however, merely filing suit (Repealed). for a breach of contract, by itself, does not constitute “presentment.” Tex. Civ. Prac. & Rem. Code Ann. § 38.001. Cases that cite this headnote

Cases that cite this headnote

[4] Consumer Credit Credit Cards [7] Sales Costs Excuses for default or delay Form and requisites of application in general Costs Evidence supported jury’s finding that buyer Evidence as to items and buyer’s owner failed to comply with agreement to purchase used shelving from seller, The claimant bears the burden of both pleading as required to support seller’s claim for breach and proving presentment of a demand for of contract, arising out of buyer’s submission of performance or payment on a contract, as a dispute with credit card company that resulted in prerequisite to the recovery of attorney fees on a company reversing charge, where buyer agreed claim for breach of contract. Tex. Civ. Prac. & to purchase shelves, accepted shelves, and then Rem. Code Ann. § 38.001. refused to pay for shelves, and fact that credit card company reversed charge had no bearing on buyer’s legal obligation to pay for shelves. Cases that cite this headnote Tex. Bus. & C. Code § 2.607(a).

Cases that cite this headnote [8] Costs Contracts

The purpose of the presentment requirement is [5] to allow the party against whom the claim for Costs Contracts breach of contract is asserted an opportunity to pay it or tender performance within 30 days “Presentment,” as a prerequisite to an award of after they have notice of the claim without attorney fees on a claim for breach of contract, incurring an obligation for attorney’s fees. Tex. is a demand or request for payment or Civ. Prac. & Rem. Code Ann. § 38.001. performance of a contract, whether written or oral. Tex. Civ. Prac. & Rem. Code Ann. § 38.001. Cases that cite this headnote

Cases that cite this headnote

© 2015 Thomson Reuters. No claim to original U.S. Government Works. 2 Genender v. USA Store Fixtures, LLC, 451 S.W.3d 916 (2014)

[9] Costs charge, where quote was prepared several weeks Duties and proceedings of taxing officer before buyer agreed to purchase any shelving, before any contract was formed, and quote did Generally, presentment of a claim for breach of not reflect parties’ actual agreement as to contract, as a prerequisite to the recovery of amount of shelving and cost of shipping. Tex. attorney fees on the claim, is an issue of fact. Civ. Prac. & Rem. Code Ann. § 38.001. Tex. Civ. Prac. & Rem. Code Ann. § 38.001.

Cases that cite this headnote Cases that cite this headnote

[13] Costs [10] Costs Evidence as to items Duties and proceedings of taxing officer Evidence that the plaintiff sent an invoice to the When the issue of the amount of attorney’s fees defendant can satisfy a plaintiff’s burden to is found by the jury without a request for a jury prove presentment of a demand for performance finding on the issue of presentment of demand or payment on a contract, as a prerequisite to an for payment or performance of the contract to award of attorney fees on a claim for breach of the defendant, presentment is deemed found. contract. Tex. Civ. Prac. & Rem. Code Ann. § Tex. Civ. Prac. & Rem. Code Ann. § 38.001; 38.001. Tex. R. Civ. P. 279.

Cases that cite this headnote Cases that cite this headnote

[14] Costs [11] Appeal and Error Vendor and purchaser; sales Allowance or disallowance of costs and fees Notification to seller of reversal of charge on An award of attorney’s fees on a claim for buyer’s credit card that was used to purchase breach of contract must be reversed if there is no used shelves from seller was not “presentment” evidence of presentment of the demand for by seller of demand to buyer for payment on payment or performance of the contract. Tex. contract to purchase shelves, as prerequisite to Civ. Prac. & Rem. Code Ann. § 38.001. seller’s right to recover attorney fees on claim for breach of contract. Tex. Civ. Prac. & Rem. Code Ann. § 38.001. Cases that cite this headnote

Cases that cite this headnote

[12] Costs Vendor and purchaser; sales [15] Costs Seller’s written “quote” to buyer on price for Vendor and purchaser; sales used shelving was not evidence of seller’s “presentment” to buyer of demand for payment Documents from seller’s merchant account on contract, as prerequisite to seller’s right to provider reflecting communications between recover attorney fees on claim after buyer provider, buyer, and seller contained no demand disputed charge for shelves on credit card with by seller for payment on contract to purchase credit card company, resulting in reversal of used shelving, and thus, did not constitute © 2015 Thomson Reuters. No claim to original U.S. Government Works. 3 Genender v. USA Store Fixtures, LLC, 451 S.W.3d 916 (2014)

“presentment” of claim, as prerequisite to the purpose of the presentment requirement to seller’s right to recover attorney fees on claim provide the defendant with the opportunity, by against buyer for breach of contract. Tex. Civ. undertaking specific action, to avoid paying Prac. & Rem. Code Ann. § 38.001. attorney’s fees. Tex. Civ. Prac. & Rem. Code Ann. § 38.001. Cases that cite this headnote Cases that cite this headnote

[16] Costs [19] Vendor and purchaser; sales Judgment Basing motion on records of case Seller’s discovery responses did not constitute demand for payment on contract to purchase On used shelving buyer’s motion to disregard used shelving from seller, and thus, did not jury’s finding on issue of attorney’s fees and constitute “presentment” of claim, as buyer’s amended motion for judgment prerequisite to recovering award of attorney fees notwithstanding verdict (JNOV), in seller’s on a claim for breach of contract against buyer. breach of contract action, trial court improperly Tex. Civ. Prac. & Rem. Code Ann. § 38.001. reopened evidence on a controverted matter when it considered affidavit submitted by seller’s attorney averring that he made demand Cases that cite this headnote for payment of invoice for shelving purchased by buyer to buyer’s counsel, where affidavit was filed after jury reached verdict, and motions and the affidavit concerned parties’ dispute as to [17] whether seller had made presentment of its Costs breach of contract claim, which was prerequisite Vendor and purchaser; sales to recovering attorney fees. Tex. Civ. Prac. & Rem. Code Ann. § 38.001; Tex. R. Civ. P. 270. Settlement negotiations between buyer and seller of used shelving with respect to buyer’s failure to pay for shelving did not constitute Cases that cite this headnote “presentment” of demand for payment on contract, as prerequisite to seller’s right to recover attorney fees on claim for breach of contract. Tex. Civ. Prac. & Rem. Code Ann. § 38.001. *919 On Appeal from the County Civil Court at Law No. 1, Harris County, Texas, Trial Court Cause No. 1016718. Cases that cite this headnote Debra I. Mayfield, Judge.

Attorneys and Law Firms

Cameron Weir, Jan Woodward Fox, Houston, TX, for [18] Costs Appellants. Contracts Jerrad D. Bloome, Houston, TX, for Appellee. Evidence that the parties to a contract participated in settlement negotiations, without Panel consists of Justices McCally, Brown, and Wise. more, is no evidence of “presentment” of a demand for payment or performance on the contract, as a prerequisite to the non-breaching party’s right to recover attorney fees on a claim for breach of contract, because it does not satisfy © 2015 Thomson Reuters. No claim to original U.S. Government Works. 4 Genender v. USA Store Fixtures, LLC, 451 S.W.3d 916 (2014)

OPINION Store Fixtures did not fail to comply with the agreement, Store Fixtures suffered damages of $2,303.42, and Store Fixtures’ reasonable and necessary attorney’s fees were Sharon McCally, Justice $38,000 for preparation and trial, $20,000 for an appeal to the court of appeals, and $20,000 for an appeal to the Appellee USA Store Fixtures, LLC sued appellants Jamie Supreme Court of Texas. The county court signed a final Genender and her business Critter Stuff, LLC in justice judgment consistent with the jury’s verdict. This appeal court after Genender successfully obtained a chargeback followed. on her credit card related to her purchase of $2,303.42 in used shelving from Store Fixtures. Store Fixtures appealed a take-nothing judgment from the justice court to the county court, which held a trial de novo. A jury awarded Store Fixtures damages of $2,303.42 and II. SUBJECT MATTER JURISDICTION attorney’s fees of $38,000 for trial, $20,000 for an appeal to the court of appeals, and $20,000 for an appeal to the In their first issue, appellants contend the county court’s Supreme Court of Texas. In three issues, appellants judgment is void because the county court lacked subject contend the county court lacked jurisdiction over Store matter jurisdiction over the only claim and basis for Fixtures’ breach of contract claim, the evidence is legally attorney’s fees supporting the judgment. Appellants argue insufficient, and Store Fixtures is not entitled to attorney’s that Store Fixtures did not plead a breach of contract fees because it failed to plead and prove presentment of claim in the justice court, and Store Fixtures’ contract its claim. claim was a “new ground of recovery” pleaded for the first time on appeal to the county court. See Tex.R. Civ. P. We hold that the trial court had jurisdiction over Store 574a, 50 Tex. B.J. 868 (1987, repealed 2013) (on appeal Fixtures’ breach of contract claim and the evidence is from justice court, “no new ground of recovery shall be legally sufficient to support the jury’s finding on that set up by the plaintiff”). claim, but Store Fixtures failed to prove presentment. Accordingly, we modify the trial court’s judgment to Store Fixtures contends that it pleaded a breach of delete the award of attorney’s fees and affirm the trial contract claim in the justice court because Store Fixtures court’s judgment as modified. reserved the right to plead orally and, at the justice court trial, Store Fixtures “sought to recover the total invoice amount under the theory that Genender and Critter Stuff had breached the contract by not paying for the shelving.”

I. BACKGROUND First we will review the relevant proceedings and evidence in the record. Then we overrule appellant’s issue Using a credit card, Genender purchased some used because appellants failed to rebut the presumption that shelving from Store Fixtures for Genender’s business. Store Fixtures orally pleaded its breach of contract claim Store Fixtures shipped the shelving to Genender in in the justice court. Wisconsin. But she was disappointed with the quantity and quality of the shelving she received and with Store Fixtures’ response to her concerns, so she filed a dispute with her credit card company that resulted in a A. Background and Evidence chargeback to Store Fixtures. Store Fixtures sued Store Fixtures, acting through its president,1 filed two appellants in justice court; all parties were pro se. After a petitions in justice court. The petition naming Genender bench trial, the justice court signed a take-nothing as a defendant alleged as follows: judgment in appellants’ favor, and Store Fixtures appealed to the county court. The parties hired attorneys That the defendant is legally and ultimately proceeded to a de novo jury trial with each indebted to the plaintiff in the sum side asserting claims for breach of contract and attorney’s of $10,000.00 based upon the fees. following facts: Defendant, Jaimie Michele Genender, purposefully The only issues submitted to the jury were whether any intended to defraud USA Store party failed to comply with the agreement, and if so, the Fixtures LLC from financial gain amounts of damages and attorney’s fees. The jury found by refusing payment on her credit that appellants failed to comply with *920 the agreement, card. Defendant also acted outside

© 2015 Thomson Reuters. No claim to original U.S. Government Works. 5 Genender v. USA Store Fixtures, LLC, 451 S.W.3d 916 (2014)

of her title and personally defamed 2013). Store Fixtures alleged dismissal was the proper and slandered this company in remedy because the county court lacked subject matter writing. Invoice $2,303.42 damages jurisdiction over appellants’ newly pleaded for slander $7,697.58. counterclaims.2 Appellants responded that severance was the proper remedy3 and also requested severance of Store The petition naming Critter Stuff as a defendant alleged Fixtures’ newly pleaded claims of breach of contract, as follows: quantum meruit, fraudulent inducement, and negligent misrepresentation. The county court granted partial relief That the defendant is legally to both sides, ordering severance of Store Fixtures’ indebted to the plaintiff in the sum negligent misrepresentation claim and appellants’ DTPA of $10,000.00 based upon the claim. At the de novo trial, only the contract claims were following facts: Defendant, Jamie tried, along with the amounts of attorney’s fees. Michele Genender, purposefully intended to defraud USA Store Fixtures LLC from financial gain by refusing payment on her credit B. Analysis [1] card. Defendant also slandered and Regardless of whether Store Fixtures alleged a breach defamed this company in writing. of contract claim in its written petitions in justice court, Invoice amount $2,303.42 plus the law recognizes a presumption that Store Fixtures damages for slander and orally pleaded its breach of contract claim in justice court. defamation. See Gordon v. Zoes, 125 S.W.2d 1049, 1049–50 (Tex.Civ.App.—Galveston 1939, no writ) (holding that Both petitions stated, “THAT plaintiff reserves the right the county court’s judgment was not void based on an to plead further orally upon trail [sic] of this matter.” See allegation that the plaintiff brought a new cause of action Tex.R. Civ. P. 525, 3 Tex. B.J. 607 (1940, repealed 2013) not pleaded in justice court; “While plaintiff filed certain (in justice court, “[t]he pleadings shall be oral, except written pleadings in the justice court, he expressly where otherwise specially provided”). reserved the right in said pleadings to plead orally on the trial of the case. It is uniformly held in this State that in After Store Fixtures appealed to the county court and cases originating in the justice court, pleadings may be retained counsel, it filed an amended petition asserting either oral or written, or partly oral and partly written. In claims for *921 breach of contract, negligent the absence of a showing to the contrary, it will be misrepresentation, fraud, fraud in the inducement, and presumed that said written pleadings were supplemented quantum meruit. Store Fixtures also sought attorney’s by such oral amendments as cured any defects therein, fees. Appellants filed counterclaims for breach of contract and that such pleadings as amended supported the and violations of the Deceptive Trade judgment rendered by the trial court.”); Garcia v. Rendon, Practices—Consumer Protection Act (DTPA), Tex. Bus. 59 S.W.2d 881, 881 (Tex.Civ.App.—San Antonio 1933, & Com.Code Ann. subch. E. Appellants also sought no writ) (“If the oral plea made by appellee was not attorney’s fees. pleaded in the justice’s court, appellant should have shown it. The mere fact that the justice of the peace did Store Fixtures filed a plea to the jurisdiction and motion not note the oral pleadings *922 did not prove that they to dismiss all of appellants’ counterclaims under former were not made.”).4 This presumption exists because the Rule 574a. The rule provided, rules specifically require oral pleadings in the justice court. See Tex.R. Civ. P. 525, 3 Tex. B.J. 607 (1940, repealed 2013) (“The pleadings shall be oral ...”).5 Either party may plead any new matter in the county or district [2] The presumption is rebuttable. See Gordon, 125 S.W.2d court which was not presented in at 1049–50; Garcia, 59 S.W.2d at 881. For example, a the court below, but no new ground statement regarding the oral pleadings may be noted on of recovery shall be set up by the the justice court’s docket. See Tex.R. Civ. P. 525, 3 Tex. plaintiff, nor shall any set-off or B.J. 607 (1940, repealed 2013) (“The pleadings shall be counterclaim be set up by the oral ... but a brief statement thereof may be noted on the defendant which was not pleaded in docket ....”); see also Subcomm. on Interpretation of the court below. Rules of Civil Procedure, State Bar of Tex., Op. 27–a, 5 B.J. 287 (1942) (noting that this statement may be Tex. R Civ. P. 574a, 50 Tex. B.J. 868 (1987, repealed necessary because “it may become important to show © 2015 Thomson Reuters. No claim to original U.S. Government Works. 6 Genender v. USA Store Fixtures, LLC, 451 S.W.3d 916 (2014)

what the old pleadings were with ... contentions that a suggest that in general (or under any specific new cause of action has been set up for the first time in circumstances), a buyer has not breached a sale-of-goods the county court”). contract as a matter of law when a credit card company reverses a charge in favor of the buyer at the buyer’s [3] The record here contains no such notation, but the lack request. In fact, there is authority that a party’s obtaining of a notation does not rebut the presumption of oral a credit card chargeback does not erase liability for pleading. See Gordon, 125 S.W.2d at 1049–50; Garcia, obligations owed. See CSL Prop. Mgmt. Co. v. 59 S.W.2d at 881; Amarillo Commercial, 140 S.W. at Thyssenkrupp Elevator Co., No. 01–11–00665–CV, 2013 378. Nor does the record contain any evidence that Store WL 396252, at *2, *6 (Tex.App.—Houston [1st Dist.] Fixtures did not orally plead a breach of contract claim in Jan. 31, 2013, no pet.) (mem.op.) (upholding summary the justice court.6 Because appellants did not rebut the judgment for the plaintiff on its indemnity claim where presumption of oral pleading, we presume that Store the factual basis for part of the claim was the defendant’s Fixtures orally pleaded a breach of contract claim in the failure to indemnify an amount reversed by a third party’s justice court, and therefore, the claim was not a new credit card company). Defendant’s Exhibit No. 3 does not ground of recovery in the county court. conclusively establish that the parties agreed to resolve disputes solely under their credit card companies’ Appellants’ first issue is overruled. chargeback policies. To the extent there was an ambiguity, the jury resolved it in favor of Store Fixtures. See Reilly v. Rangers Mgmt., Inc., 727 S.W.2d 527, 529 (Tex.1987) (ambiguity in contract creates question of fact for jury).9 III. SUFFICIENCY OF THE EVIDENCE [4] Store Fixtures adduced evidence that it sent appellants the Appellants’ second issue is that “there is legally shelving Genender ordered, that appellants accepted the insufficient evidence that Jamie Genender or Critter Stuff shelving, and that Genender initiated a chargeback on her breached any contractual duty to USA Store Fixtures.” credit card, resulting in appellants’ failures to pay for the Appellants argue that there is no evidence to support the goods accepted.10 A buyer’s failure to *924 pay the jury’s “yes” answer for each appellant in Jury Question contract rate for goods accepted constitutes a breach of No. 1, which asked, “Did Jamie Genender and/or Critter contract. See Tex. Bus. & Com.Code Ann. 2.607(a); see Stuff fail to comply with the agreement?” Thus, also Garden Ridge, L.P. v. Advance Int’l, Inc., 403 appellants challenge the “breach” element of Store S.W.3d 432, 445 (Tex.App.—Houston [14th Dist.] 2013, Fixtures’ claim and contend that the claim “must be based pet. denied) (proper to instruct the jury about what entirely upon Genender’s action in submitting a dispute of constitutes acceptance of goods and about “the UCC’s the transaction *923 through the chargeback process provision that the buyer must pay the contract rate for established by her credit card company.” goods it accepts”).11 Accordingly, the evidence is legally sufficient to support the jury’s affirmative answer to Jury Appellants contend that their “promise to pay was Question No. 1. stipulated upon compliance with the Cardholder Agreement” because when Store Fixtures charged Appellants’ second issue is overruled. Genender’s credit card, Store Fixtures sent her an unsigned receipt (Defendant’s Exhibit No. 3), which states, “I agree to pay above total amount according to card issuer agreement. (Merchant Agreement if Credit Voucher).”7 So, because it is undisputed that Store IV. PRESENTMENT Fixtures lost the credit card dispute due to its “failure to comply” with its merchant account agreement, appellants In their third issue, appellants contend “the county court claim they could not possibly have breached the contract erred in submitting to the jury and entering judgment on for the sale of the shelving.8 [Store Fixtures’] attorney’s fee award because there are no pleadings or legally or factually sufficient evidence of Store Fixtures contends that there is evidence of timely presentment.” We agree with appellants that there appellants’ breach because they agreed to purchase goods, is no evidence to support an implied finding that Store accepted the goods, and ultimately did not pay for the Fixtures presented its claim. goods. We agree with Store Fixtures. [5] [6] To recover attorney’s fees for a breach of contract We find no authority, and appellants have cited none, to claim under Section 38.001 of the Texas Civil Practice © 2015 Thomson Reuters. No claim to original U.S. Government Works. 7 Genender v. USA Store Fixtures, LLC, 451 S.W.3d 916 (2014)

and Remedies Code, Texas Rules of Civil Procedure operates so presentment is deemed found. See Adams v. Petrade Int’l, Inc., 754 (1) the claimant must be represented by an attorney; S.W.2d 696, 720 (Tex.App.—Houston [1st Dist.] 1988, writ denied) (deemed finding on presentment); Atkin v. (2) the claimant must present the claim to the opposing Cobb, 663 S.W.2d 48, 53 (Tex.App.—San Antonio 1983, party or to a duly authorized agent of the opposing writ dism’d) (same). Appellants now challenge the party; and sufficiency of the evidence to support the deemed finding. See Serv. Corp. Int’l v. Guerra, 348 S.W.3d 221, 228–29 (3) payment for the just amount owed must not have (Tex.2011) (deemed findings may be reviewed for been tendered before the expiration of the 30th day sufficiency of the evidence); see also Adams, 754 S.W.2d after the claim is presented. at 720 (legally sufficient evidence supported deemed finding on presentment).14 Tex. Civ. Prac. & Rem.Code Ann. § 38.002. Presentment is a “demand or request for payment or performance, Store Fixtures contends that it proved presentment in a whether written or oral.” Gibson v. Cuellar, 440 S.W.3d number of ways: (1) by sending appellants an invoice; (2) 150, 157 (Tex.App.—Houston [14th Dist.] 2013, no pet.) by making a demand for payment during the credit card (citing Jones v. Kelley, 614 S.W.2d 95, 100 (Tex.1981)). dispute; (3) by providing appellants discovery responses No particular form of presentment is required. Id. showing a claim for breach of contract; and (4) by However, merely filing suit for a breach of contract, by engaging in settlement negotiations and orally making a itself, does not constitute presentment. See Huff v. Fid. demand for payment during those negotiations. We Union Life Ins. Co., 158 Tex. 433,312 S.W.2d 493, 500 address each contention in turn. (1958) (addressing predecessor statute).12 [7] [8] The claimant bears the burden of both pleading and proving presentment. See, e.g., Gibson, 440 S.W.3d at A. Invoice 157 (citing Ellis v. Waldrop, 656 S.W.2d 902, 905 [12] [13] Store Fixtures contends that Genender admitted to (Tex.1983)). “The purpose of the presentment receiving an invoice *926 as well as having the credit requirement is to allow the party against whom the claim card charge reversed, “thus constituting non-payment of is asserted an opportunity to pay it or tender performance the invoice.” Evidence that the plaintiff sent an invoice to within 30 days after they have notice of the claim without the defendant can satisfy a plaintiff’s burden to prove incurring an obligation for attorney’s fees.” Id. (citing presentment. See Gordon v. Leasman, 365 S.W.3d 109, Jones, 614 S.W.2d at 100).13 116 (Tex.App.—Houston [1st Dist.] 2011, no pet.); [9] Roylex, Inc., 559 S.W.2d at 838. But Store Fixtures cites Generally, presentment is an issue of fact. See id. at 157 to Plaintiff’s Exhibit No. 1, which is not an “invoice” but n.7 (trial court’s *925 finding of presentment was a rather a “quote” dated April 18, 2011. It is undisputed that finding of fact, not a conclusion of law); see also France this quote was prepared several weeks before appellants v. Am. Indem. Co., 648 S.W.2d 283, 286 (Tex.1983) (trial agreed to purchase any shelving—before any contract was court erred to conclude that the plaintiff was not entitled formed—and it did not reflect the parties’ actual to attorney’s fees when there was some evidence of agreement as to the amount of shelving and cost of presentment; “At the very least, a fact issue was raised shipping. here as to presentment.”); cf. Roylex, Inc. v. Avco Cmty. Developers, Inc., 559 S.W.2d 833, 838 Because no contract then existed, Store Fixtures had no (Tex.Civ.App.—Houston [14th Dist.] 1977, no writ) breach of contract claim against appellants, and there was (“Since the evidence on presentment was conclusive, that no “just amount owed” to Store Fixtures. Accordingly, issue did not have to be submitted to the jury.”); Turner v. Plaintiff’s Exhibit No. 1 is not evidence of presentment as Lubbock Cnty. Hosp. Dist., No. 07–96–0272–CV, 1998 a matter of law. See Brainard v. Trinity Universal Ins. WL 3554, at *5–6 (Tex.App.—Amarillo Jan. 6, 1998, no Co., 216 S.W.3d 809, 817–19 (Tex.2006) (plaintiff’s pet.) (not designated for publication) (finding reversible demand for underinsured motorist benefits made before a jury charge error because the issue of presentment court signed a judgment on the motorist’s liability and “should have been submitted to the jury for damages was not evidence of presentment as a matter of determination” when the evidence was disputed). law because at the time of the alleged presentment there [10] [11] was no contractual duty to pay; when there is no When, as here, the issue of the amount of attorney’s contractual duty to pay, there is no “just amount owed” fees is found by the jury without a request for a jury under Section 38.002; reasoning that a contract claim finding on the issue of presentment, Rule 279 of the requires the existence of a duty or obligation that the © 2015 Thomson Reuters. No claim to original U.S. Government Works. 8 Genender v. USA Store Fixtures, LLC, 451 S.W.3d 916 (2014)

opposing party has failed to meet); cf. McNeil v. BMC Store Fixtures refers to an entry for July 12, 2012: “confer Software Inc., 306 Fed.Appx. 889, 894 (5th Cir.2009) with opposing counsel re: potential to resolve.” Evidence (employee’s request that employer promise to pay a bonus that the parties participated in settlement negotiations, that had not yet accrued was not presentment as a matter without more, is no evidence of presentment. See Border of law; at the time of the request, there was no “just Gateway, L.L.C. v. Gomez, No. 14–10–01266–CV, 2011 amount owed” and no “claim” to present; request for a WL 4361485, at *9 (Tex.App.—Houston [14th Dist.] party to meet its future contractual obligations is not a Sept. 20, 2011, no pet.) (mem.op.). Such evidence is claim for a just amount owed).15 insufficient to prove presentment because it does not satisfy the purpose of the presentment requirement: to provide the defendant with “the opportunity, by undertaking specific action, to avoid paying attorney’s B. During the Credit Card Dispute fees.” Belew v. Rector, 202 S.W.3d 849, 856–57 Store Fixtures contends that it presented its breach of (Tex.App.— Eastland 2006, no pet.) (evidence that contract claim by “inform[ing] the credit card company counsel “had some settlement discussions” was during the credit card dispute that it would seek legal insufficient). action if the charges were reversed,” and by making a demand for payment “during the entire dispute.” Store [19] Next, Store Fixtures refers to an affidavit from its Fixtures cites Defendant’s Exhibits Nos. 26 and 32. counsel, Jerrad Bloome, where he testified that he made a demand for payment of the invoice amount to appellants’ [14] Defendant’s Exhibit No. 26 is a one-page document counsel on July 12, 2012. However, Store Fixtures filed titled “chargeback notification” apparently sent from this affidavit after the jury had reached a verdict, only in “merchant services” to Store Fixtures to notify Store response to appellants’ motion to disregard the jury’s Fixtures of the chargeback and explain what Store answer to Jury Question No. 5 concerning attorney’s fees. Fixtures could do to contest the chargeback. This Appellants objected to the trial court’s consideration of document does not show a demand for payment from the affidavit,17 but the trial court overruled the objection. Store Fixtures. Although a trial court has discretion to permit additional [15] Defendant’s Exhibit No. 32 consists of about ninety evidence to be offered at any time, “in a jury case no pages of documents from Bank of America Merchant evidence on a controversial matter shall be received after Services, Store Fixtures’ merchant account provider. the verdict of the jury.” Tex.R. Civ. P. 270. Here, the Appellants had requested, among other things, any and all issue of presentment was controverted. Appellants had records reflecting “any communications by Chase, pleaded in their answer that Store Fixtures failed to Merchant Services, *927 and/or the parties.” We have present its claim, and appellants objected during trial to reviewed the exhibit. It contains no demand for payment the submission of Jury Question No. 5 because Store from Store Fixtures. Fixtures had failed to offer any evidence of presentment. After the jury’s verdict, appellants filed a motion to disregard the jury’s finding on attorney’s fees and an amended JNOV on the issue because there was no C. Discovery Responses evidence of presentment. At the hearing on the [16] Store Fixtures contends that it presented its claim by post-verdict motions, after the trial court had overruled providing appellants “discovery responses,” which appellants’ objection to the affidavit, the trial court “show[ed] Plaintiff’s claim for breach of contract, the allowed appellants to make a record about the lack of basis of the claim and it[s] claim for damages.” Store presentment. Counsel for appellants, *928 Jan Fox, Fixtures does not cite to the record for this assertion nor testified that she had no records of any July 12 describe in any way how a demand for payment was made conversation with Bloome, that it would have been her through its “discovery response.”16 practice to document such a conversation, and that no such conversation occurred based on her records. 18

Under these circumstances, the trial court abused its D. Settlement Negotiations discretion by reopening the evidence on a controverted [17] [18] Finally, Store Fixtures contends that it orally matter after dismissing the jury, and the trial court should presented its claim to appellants’ counsel during have granted appellants’ motion to disregard the jury’s settlement negotiations. As evidence, Store Fixtures first finding on the issue of attorney’s fees and entered cites to Plaintiff’s Exhibit No. 6, which consists of judgment accordingly. See Helping Hands Home Care, copious billing records from Store Fixtures’ lawyers. © 2015 Thomson Reuters. No claim to original U.S. Government Works. 9 Genender v. USA Store Fixtures, LLC, 451 S.W.3d 916 (2014)

Inc. v. Home Health of Tarrant Cnty., Inc., 393 S.W.3d Appellant’s first and second issues are overruled, but 492, 516–17 (Tex.App.—Dallas 2013, pet. denied) (trial appellants’ third issue is sustained. We modify the trial court correctly granted JNOV on attorney’s fees and court’s judgment to delete the award of attorney’s refused to reopen the case for evidence of presentment fees—in particular, the following paragraph: because “the evidence is insufficient to show Specialties met the procedural requirements for the award”); see also It is hereby ORDERED that Jamie Univ. of Tex. at Austin v. Ables, 914 S.W.2d 712, 718 Michele Genender and Critter (Tex.App.—Austin 1996, no writ) (trial court abused its Stuff, L.L.C., jointly and severally, discretion under Rule 270 by considering evidence about pay to USA Store Fixtures the the amount of attorney’s fees after the jury’s verdict; amount of $38,000, representing rendering take-nothing judgment on attorney’s fees), cited the reasonable and necessary with approval in Hatfield v. Solomon, 316 S.W.3d 50, 67 attorneys’ fees in this case and a (Tex.App.—Houston [14th Dist.] 2010, no pet.). contingent award of attorneys’ fees in the amount of $20,000 if this Because there was no evidence before the jury to support case is appealed to the Court of a deemed finding that Store Fixtures presented its claim to Appeals, and $20,000 if this case is appellants, we sustain appellants’ third issue.19 appealed to the Supreme Court of Texas.

We affirm the trial court’s judgment as modified. V. CONCLUSION

Footnotes 1 See Tex. Gov’t Code Ann. 27.031(d) (“A corporation need not be represented by an attorney injustice court.”).

2 See Hatmaker v. Farmers Tex. Cnty. Mut. Ins. Co., No. 14–98–00552–CV, 1999 WL 459788, at *3 (Tex.App.—Houston [14th Dist.] July 8, 1999, no pet.) (not designated for publication); Kramek v. Stewart, 648 S.W.2d 399, 401–02 (Tex.App.—San Antonio 1983, no writ); Tex. Co. v. Henderson, 154 S.W.2d 911, 911 (Tex.Civ.App.—El Paso 1941, no writ); Racugno v. Hanovia Chem. & Mfg. Co., 110 S.W.2d 249, 250 (Tex.Civ.App.—Fort Worth 1937, no writ); see also Neal v. Beck Funeral Home, 131 S.W.2d 778, 780–81 (Tex.Civ.App.—Fort Worth 1939, writ dism’d). 3 See New Wave Props., Inc. v. Wikoff, No. 13–11–00762–CV, 2012 WL 2929623, at *3 (Tex.App.—Corpus Christi July 19, 2012, no pet.) (mem.op.); Harrill v. A.J.’s Wrecker Servs., Inc., 27 S.W.3d 191, 195 (Tex.App.—Dallas 2000, pet. dism’d w.o.j.); D’Tel Commc’ns v. Roadway Package Serv., Inc., 987 S.W.2d 213, 214 (Tex.App.—Eastland 1999, no pet.). 4 See also Fort Worth & D.C Ry. Co. v. Brewer, 1 S.W.2d 686, 686 (Tex.Civ.App.—Amarillo 1928, no writ) (“If the record does not disclose that the written pleadings constituted the whole pleadings, it will be presumed that there were oral pleadings necessary to support the judgment.”); Amarillo Commercial Co. v. Chicago, R.I. & G. Ry. Co., 140 S.W. 377, 378 (Tex.Civ.App.—Amarillo 1911, no writ) (“[If] no oral pleadings on the part of the plaintiff are noted on the docket, it will be presumed that there was some oral pleading by plaintiff at the time the account was filed, from which the justice received that information, and which he failed to note upon the docket.”). 5 Parties have pleaded orally in justice courts since the early days of the Republic, and the practice continued in early statehood. See, e.g., Act approved Nov. 4, 1837, 2d Cong., R.S., § 1, 1837 Repub. Tex. Laws 14, reprinted in 1 H.P.N. Gammel, The Laws of Texas 1822–1897, at 1356 (Austin, Gammel Book Co. 1898) (“[A]ll civil proceedings before justices of the peace, shall be had in a summary manner, and without the formality of a petition in writing....”); Act approved Aug. 13, 1870, 12th Leg., C.S., ch. 65, § 7, 1870 Tex. Gen. Laws 87, 93, reprinted in 6 H.P.N. Gammel, supra, at 261, 267 (“The pleading in a justice’s court shall be oral....”). 6 In fact, in the first pleading filed in county court—appellants’ answer—appellants pleaded an “affirmative defense of failure of consideration,” thus indicating that Store Fixtures had previously pleaded a breach of contract claim. At the time, the only written pleadings Store Fixtures had filed were its justice court petitions. 7 Although some of these words on Defendants’ Exhibit No. 3 appear illegible, Store Fixtures’ does not contest appellants’ interpretation, so we accept as true this factual allegation. See Tex.R.App. P. 38.1(g) ( “In a civil case, the court will accept as true © 2015 Thomson Reuters. No claim to original U.S. Government Works. 10 Genender v. USA Store Fixtures, LLC, 451 S.W.3d 916 (2014)

the facts stated unless another party contradicts them.”). 8 Appellants suggest this case has enormous implications for consumers in Texas and across the country [because it] addresses an all-too-common occurrence but a novel legal question: whether a consumer who properly and successfully disputes a credit card charge pursuant to a merchant’s agreement with its credit card company may nevertheless be sued by and found liable to that same merchant for the full disputed amount despite the merchant’s failure to comply with such agreement. 9 Appellants also ask this court to consider several excluded exhibits related to the credit card dispute, including Genender’s two-page complaint filed with her credit card company and a notification from Store Fixtures’ credit card company that the dispute was resolved in Genender’s favor. These exhibits do not support appellants’ construction of the contract or remove any ambiguity about the terms of the contract. 10 There was conflicting evidence about whether appellants accepted the shelving and whether the shelving conformed to the contract. But the jury resolved this conflicting evidence in Store Fixtures’ favor, finding that appellants failed to comply with the agreement and Store Fixtures did not fail to comply with the agreement. We must defer to the jury’s resolution of conflicting evidence. See, e.g., City of Keller v. Wilson, 168 S.W.3d 802, 820–21 (Tex.2005). 11 The jury charge here defines “acceptance” and declares, “A buyer must pay at the contract rate for any goods accepted.”

12 See also Gutierrez v. Wright Lawfirm, PLLC, No. 05–10–00725–CV, 2012 WL 1898950, at *6 (Tex.App.—Dallas Apr. 27, 2012, no pet.) (mem.op.); Belew v. Rector, 202 S.W.3d 849, 857 (Tex.App.—Eastland 2006, no pet.); Harrison v. Gemdrill Int’l, Inc., 981 S.W.2d 714, 719 (Tex.App.—Houston [1st Dist.] 1998, pet. denied); Evans Cooperage of Houston, Inc. v. Port Drum Co., No. C14–92–00966–CV, 1994 WL 7243, at *4 (Tex.App.—Houston [14th Dist.] Jan. 13, 1994, writ denied) (not designated for publication); Jim Howe Homes, Inc. v. Rogers, 818 S.W.2d 901, 904 (Tex.App.—Austin 1991, no pet.); Mackey v. Mackey, 721 S.W.2d 575, 579 (Tex.App.—Corpus Christi 1986, no writ). 13 The parties dispute when exactly presentment must be made, and this court appears to have conflicting precedent on the subject. Compare Caldwell & Hurst v. Myers, 714 S.W.2d 63, 65 (Tex.App.—Houston [14th Dist.] 1986, writ ref’d n.r.e.) (“Proper presentment is the assertion of a claim and a request for payment made 30 days before initiation of a suit.”), with Peissel v. Peissel, 620 S.W.2d 796, 800 (Tex.Civ.App.—Houston [14th Dist.] 1981, no writ) (“The rule in Texas is presentment of the claim must be made at least 30 days before trial, even if made after the suit is filed.”), and Cano v. Nino’s Paint & Body Shop, No. 14–08–00033–CV, 2009 WL 1057622, at *7 (Tex.App.—Houston [14th Dist.] Apr. 16, 2009, no pet.) (mem.op.) (“Presentment may be made either before or after filing suit, provided it is made at least 30 days before judgment.”). Because we hold that Store Fixtures failed to prove presentment under the latest timeframe possible—30 days before judgment—we need not resolve when presentment must be made. 14 An award of attorney’s fees must be reversed if there is no evidence of presentment. See Helping Hands Home Care, Inc. v. Home Health of Tarrant Cnty., Inc., 393 S.W.3d 492, 516–17 (Tex.App.—Dallas 2013, pet. denied) (trial court correctly granted JNOV denying attorney’s fees because there was no evidence of presentment); Border Gateway, L.L.C. v. Gomez, No. 14–10–01266–CV, 2011 WL 4361485 (Tex.App.—Houston [14th Dist.] Sept. 20, 2011, no pet.) (mem.op.) (trial court abused its discretion in a bench trial by awarding attorney’s fees because there was “no evidence” of presentment); Edinburg Meat Prods. Co. v. Vernon Co., 535 S.W.2d 432, 437 (Tex.Civ.App.—Corpus Christi 1976, no writ) (sustaining “no evidence” point on presentment issue). 15 Although not cited by Store Fixtures on appeal, Plaintiff’s Exhibit No. 3 is an “invoice” contained in this the record. It is dated May 3, 2011, the date that appellants paid for the shelving on Genender’s credit card. But it shows a “Payments/Credits” of the full amount of the invoice and a “balance due” of $0.00. This does not show a demand for payment on an existing claim for a just amount owed. Further, we note that Store Fixtures contends that nonpayment occurred when the credit card charge was reversed. But Store Fixtures’ president testified that Store Fixtures never demanded payment or contacted Genender about a contract claim before initiating suit in the justice court. There is no evidence that Store Fixtures sent an invoice to appellants showing a balance owing—no demand for payment. 16 We have reviewed Exhibit C to Store Fixtures’ response to appellants’ motion to disregard the jury’s answer to Jury Question No. 5 regarding attorney’s fees, which is Store Fixtures’ response to appellants’ request for disclosures. The document does not demand payment of the claim but rather explains the legal theories and factual bases for the claim. Regardless, the trial court would have abused its discretion by considering the document for the same reasons articulated below in Part IV.D of this opinion regarding the affidavit. 17 Appellants objected because the affidavit was “an improper and untimely attempt to supplement the record before the jury.”

© 2015 Thomson Reuters. No claim to original U.S. Government Works. 11 Genender v. USA Store Fixtures, LLC, 451 S.W.3d 916 (2014)

18 Although Bloome testified before the jury about the amount of his fees, he did not testify about the alleged July 12 demand.

19 Because we conclude Store Fixtures failed to prove presentment, we do not address appellants’ contention that Store Fixtures failed to plead presentment. See Tex.R.App. P. 47.1.

End of Document © 2015 Thomson Reuters. No claim to original U.S. Government Works.

© 2015 Thomson Reuters. No claim to original U.S. Government Works. 12 Nauslar v. Coors Brewing Co., 170 S.W.3d 242 (2005)

170 S.W.3d 242 Court of Appeals of Texas, Affirmed in part, reversed in part, and remanded. Dallas.

Dennis NAUSLAR and Nauslar Investments, L.L.C., Appellant v. West Headnotes (34) COORS BREWING CO. and Golden Distributing Enterprises, L.P., Appellees. [1] Appeal and Error No. 05–04–00704–CV. | Aug. 19, 2005. Cases Triable in Appellate Court

Because the question of standing is a legal question, the appellate court reviews de novo a Synopsis trial court’s ruling on a plea to the jurisdiction. Background: Individual, who was sole owner of limited liability company (LLC) which had been both limited partner in beer distributorship limited partnership and 3 Cases that cite this headnote general partner in limited partnership’s general partner, and the LLC, brought claims, personally and on behalf of limited partnership, against brewery for breach of contract and violation of Texas Beer Industry Fair Dealing Law (BIFDL), and against brewery and its assignee for [2] Action conspiracy, negligence per se, and tortious interference, Persons entitled to sue relating to defendants’ conduct in blocking limited partnership’s proposed joint venture with another Standing is a component of a court’s distributor, with brewery eventually approving of sale of subject-matter jurisdiction. limited partnership to the other distributor. The 193rd District Court, Dallas County, David Evans, J., granted defendants’ plea to the jurisdiction, based on lack of 5 Cases that cite this headnote standing, and denied attorney fee award to brewery under BIFDL. Cross-appeals were taken.

[3] Courts Holdings: The Court of Appeals, Michael J. O’Neill, J., Allegations, pleadings, and affidavits held that: The plaintiff has the burden of alleging facts that [1] individual plaintiff lacked standing to bring affirmatively demonstrate a court’s common-law claims; subject-matter jurisdiction to hear a cause. [2] LLC lacked standing to bring common-law claims; 1 Cases that cite this headnote [3] plaintiffs lacked standing to bring claims under BIFDL; [4] BIFDL does not prohibit a beer distributor from making a warranty of non-assignment of BIFDL claims; [4] Pleading [5] plaintiffs lacked capacity to sue on behalf of limited Plea to the Jurisdiction partnership; and A plea to the jurisdiction challenges a trial [6] brewery was entitled to prevailing-party attorney fees court’s authority to hear a case by alleging that under BIFDL. the factual allegations in the plaintiff’s pleadings, when taken as true, fail to invoke the © 2015 Thomson Reuters. No claim to original U.S. Government Works. 1 Nauslar v. Coors Brewing Co., 170 S.W.3d 242 (2005)

trial court’s subject-matter jurisdiction. personally aggrieved by the alleged wrong.

1 Cases that cite this headnote 3 Cases that cite this headnote

[5] [9] Pleading Action Construction in General Persons entitled to sue

The court construes the allegations in the A person has “standing” to sue if: (1) he has pleadings in favor of the pleader. sustained, or is immediately in danger of sustaining, some direct injury as a result of the wrongful act of which he complains; (2) he has a Cases that cite this headnote direct relationship between the alleged injury and claim sought to be adjudicated; (3) he has a personal stake in the controversy; (4) the challenged action has caused the plaintiff some [6] injury in fact, either economic, recreational, Pleading environmental, or otherwise; or (5) he is an Amendments following sustaining of pleas appropriate party to assert the public’s interest in the matter, as well as his own. When a plaintiff fails to plead facts that establish subject-matter jurisdiction, but the petition does not affirmatively demonstrate 14 Cases that cite this headnote incurable defects in jurisdiction, the issue is one of pleading sufficiency and the plaintiff should be afforded the opportunity to amend after granting of plea to the jurisdiction. [10] Action Persons entitled to sue 1 Cases that cite this headnote Without a breach of a legal right belonging to the plaintiff, the plaintiff has no standing to litigate. [7] Pleading Amendments following sustaining of pleas 5 Cases that cite this headnote

If the pleadings affirmatively negate the existence of subject-matter jurisdiction, then a plea to the jurisdiction may be granted without [11] allowing the plaintiff an opportunity to amend. Action Persons entitled to sue

Cases that cite this headnote Only the person whose primary legal right has been breached may seek redress for an injury.

10 Cases that cite this headnote [8] Action Persons entitled to sue

A person has “standing” to sue when he is [12] Action

© 2015 Thomson Reuters. No claim to original U.S. Government Works. 2 Nauslar v. Coors Brewing Co., 170 S.W.3d 242 (2005)

Persons entitled to sue brewery and its assignee for conspiracy, negligence per se, and tortious interference, so An individual stakeholder in a legal entity does as to recover, on his own behalf, damages for not have a right to recover personally for harms injuries to limited partnership that diminished done to the legal entity. the value of individual’s ownership interest and affected his prospective employment, with such claims relating to brewery’s invocation of its 6 Cases that cite this headnote right under its distributorship agreement with limited partnership to negotiate exclusively to buy limited partnership, brewery’s subsequent assignment of that right, and brewery’s and [13] assignee’s efforts to block the joint venture, with Action brewery eventually approving of outright sale of Persons entitled to sue limited partnership to other distributor; right of recovery for injuries to limited partnership was Where damage is to the business entity’s worth, limited partnership’s alone. the individual stakeholder cannot personally recover, whether the damages sought are in terms of diminished value of an ownership 6 Cases that cite this headnote interest or loss of employee benefits.

1 Cases that cite this headnote [16] Partnership Persons entitled to sue; standing

[14] Limited liability company (LLC), as both former Partnership limited partner in beer distributorship limited Partnership or Partners as Plaintiffs partnership and former general partner in limited partnership’s general partner, lacked standing to A partner has no individual, separate cause of sue brewery for breach of contract, and to sue action for losses suffered by reason of tortious brewery and its assignee for conspiracy, interference with a contract between the negligence per se, and tortious interference, so partnership and a third party; damages for loss as to recover damages, on behalf of LLC, for in value of the partnership interest or the injuries to limited partnership that diminished partner’s employment losses are subsumed in the value of LLC’s ownership interest, with such the partnership’s causes of action. claims relating to brewery’s conduct, in response to proposal for joint venture between 5 Cases that cite this headnote limited partnership and another beer distributor, in invoking its right under its distributorship agreement with limited partnership to negotiate exclusively to buy limited partnership, brewery’s subsequent assignment of that right, [15] Partnership and brewery’s and assignee’s efforts to block the Persons entitled to sue; standing joint venture, with brewery eventually approving of outright sale of limited partnership Individual who was sole owner of limited to other distributor; right of recovery for injuries liability company (LLC) which had been both to limited partnership was limited partnership’s limited partner in beer distributorship limited alone, and LLC no longer held ownership partnership and general partner in limited interest in limited partnership. partnership’s general partner, and who was also prospective company manager for proposed 4 Cases that cite this headnote joint venture between limited partnership and another beer distributor, lacked standing to sue brewery for breach of contract, and to sue © 2015 Thomson Reuters. No claim to original U.S. Government Works. 3 Nauslar v. Coors Brewing Co., 170 S.W.3d 242 (2005)

generally interprets the statute according to its plain meaning. [17] Action Persons entitled to sue Cases that cite this headnote Standing to sue can be predicated upon either statutory or common-law authority.

[22] 3 Cases that cite this headnote Statutes Language

The court begins statutory interpretation by examining the exact wording of the statute and [18] Action applying the tenet that the legislature chooses its Persons entitled to sue words carefully and means what it says.

Common-law rules of standing apply unless statutory authority for standing exists. 2 Cases that cite this headnote

3 Cases that cite this headnote [23] Statutes Statute as a Whole; Relation of Parts to Whole and to One Another [19] Appeal and Error Cases Triable in Appellate Court The court determines legislative intent from the entire act and not just its isolated portions. The appellate court reviews matters of statutory construction de novo. 6 Cases that cite this headnote

Cases that cite this headnote

[24] Intoxicating Liquors Judicial review and enforcement [20] Statutes Intent Neither an individual, who was sole owner of limited liability company (LLC) which had been In construing a statute, the court’s objective is to both limited partner in beer distributorship determine and give effect to the legislature’s limited partnership and general partner in intent. limited partnership’s general partner, nor the LLC, was the distributor under brewery’s distributorship agreement with limited 3 Cases that cite this headnote partnership, and thus, individual and LLC lacked standing to bring action against brewery under Texas Beer Industry Fair Dealing Law (BIFDL) for unreasonably withholding approval [21] of transfer of distributorship interest. V.T.C.A., Statutes Alcoholic Beverage Code §§ 102.76(a), Plain language; plain, ordinary, common, or 102.79(a). literal meaning

If a statute’s meaning is unambiguous, the court Cases that cite this headnote

© 2015 Thomson Reuters. No claim to original U.S. Government Works. 4 Nauslar v. Coors Brewing Co., 170 S.W.3d 242 (2005)

liability company (LLC) which had been both limited partner in beer distributorship limited partnership and general partner in limited partnership’s general partner, and the LLC, after [25] Intoxicating Liquors sale of limited partnership’s assets to another Quantity, and sale at retail or wholesale; distributor, without any pre-sale assignment to regulation of wholesalers in general individual and LLC of limited partnership’s causes of action against brewery and its A beer distributor’s representation, in a release, assignee, lacked capacity to sue brewery and its that it has not assigned its statutory claims under assignee, on behalf of limited partnership, for the Texas Beer Industry Fair Dealing Law breach of contract, and to sue brewery and its (BIFDL), if any, to a third party does not violate assignee, on behalf of limited partnership, for the provision of BIFDL prohibiting agreements conspiracy, negligence per se, and tortious varying the effect of BIFDL, because BIFDL interference, relating to brewery’s conduct, in grants a right of action only to distributors or response to proposal for joint venture between manufacturers who are parties to a limited partnership and other distributor, in distributorship agreement. V.T.C.A., Alcoholic invoking its right under its distributorship Beverage Code §§ 102.72(c), 102.79(a). agreement with limited partnership to negotiate exclusively to buy limited partnership, brewery’s subsequent assignment of that right, 1 Cases that cite this headnote and brewery’s and assignee’s efforts to block the joint venture, with brewery eventually approving of outright sale of limited partnership to other distributor. [26] Action Persons entitled to sue 3 Cases that cite this headnote Parties Capacity and interest in general

A plaintiff must have both standing and capacity to bring a lawsuit. [29] Corporations and Business Organizations Construction, operation, and effect Corporations and Business Organizations 1 Cases that cite this headnote Assumption of or Succession to Transferor’s Debts and Liabilities

When a business entity is acquired in its entirety [27] by another, in the absence of specific terms to Parties the contrary, both the liabilities and assets of the Capacity and interest in general acquired company are transferred to the purchaser. A party has capacity to sue when it has legal authority to act, regardless of whether it has a justiciable interest in the controversy. Cases that cite this headnote

Cases that cite this headnote

[30] Evidence Pleadings [28] Partnership Individual, who was sole owner of limited Persons entitled to sue; standing liability company (LLC) which had been both limited partner in beer distributorship limited Individual, who was sole owner of limited © 2015 Thomson Reuters. No claim to original U.S. Government Works. 5 Nauslar v. Coors Brewing Co., 170 S.W.3d 242 (2005)

partnership and general partner in limited partnership’s general partner, and the LLC, by making assertion of fact, in their petition against brewery, that brewery had conditioned its [33] approval of sale of limited partnership to another Intoxicating Liquors distributor on limited partnership warranting that Judicial review and enforcement it had not assigned its claims against brewery to another party, judicially admitted that individual Prevailing-party attorney fee award is and LLC had not been assigned legal title to mandatory, in provision of Texas Beer Industry limited partnership’s causes of action against Fair Dealing Law (BIFDL) stating that brewery, which admission was relevant to prevailing party “shall” recover reasonable whether individual and LLC had capacity to sue attorney fees in an action for violation of brewery on behalf of limited partnership. BIFDL. V.T.C.A., Alcoholic Beverage Code § 102.79(a), (c).

1 Cases that cite this headnote 3 Cases that cite this headnote

[31] Pleading [34] Statement of cause of action in general Intoxicating Liquors Judicial review and enforcement A party may plead himself out of court, e.g., the plaintiff may plead facts which affirmatively Brewery was “prevailing party,” and therefore negate his cause of action. was entitled to prevailing-party attorney fees under Texas Beer Industry Fair Dealing Law (BIFDL), in action brought under BIFDL by Cases that cite this headnote individual who was sole owner of limited liability company (LLC) which had been both limited partner in beer distributorship limited partnership and general partner in limited [32] partnership’s general partner, and by the LLC, Appeal and Error where the court concluded that individual and Reversal ineffectual or not beneficial LLC lacked standing to sue under BIFDL. V.T.C.A., Alcoholic Beverage Code § Appellate court would not remand to trial court, 102.79(a), (c). so that individual, who was sole owner of limited liability company (LLC) which had been both limited partner in beer distributorship 3 Cases that cite this headnote limited partnership and general partner in limited partnership’s general partner, and the LLC, could plead more specifically a basis for their capacity to sue brewery on behalf of limited partnership, for brewery’s interference with limited partnership’s proposed joint Attorneys and Law Firms venture, where remand would be futile; individual and LLC had already in their *246 Martin J. Siegel, Houston, TX, for Appellant. pleadings affirmatively negated that they owned Jon P. Christiansen, Michael J. Aprahamian, Foley & legal title to the causes of action, asserting Lardner LLP, Milwaukee, WI, Monica Wiseman Latin, J. instead a legal theory to overcome their lack of Michael Hughes, Rodney H. Lawson and John Franklin legal title, which theory the appellate court Guild, Carrington, Coleman, Sloman & Blumenthal, rejected. L.L.P., David Bryant, Diamond, McCarthy, Taylor, Finley, Bryant & Lee, Sean Joseph McCaffity, Dallas, 2 Cases that cite this headnote TX, for Appellee. © 2015 Thomson Reuters. No claim to original U.S. Government Works. 6 Nauslar v. Coors Brewing Co., 170 S.W.3d 242 (2005)

Before Justices BRIDGES, O’NEILL, and MAZZANT. rejected the deal. Instead, Coors invoked its right under the distributorship agreement to negotiate exclusively to buy Willow. It assigned that exclusive right to Golden Distributing Enterprises, L.P. (Golden). Over the next year, according to Plaintiffs, it became clear that Golden could not feasibly consolidate with or purchase Willow. OPINION Subsequently, Nauslar approached Miller again, but this time Miller was interested in only an outright purchase of Opinion by Justice O’NEILL. Willow. Coors approved an outright sale to Miller. Coors, relying on a clause in the distributorship agreement, The trial court granted the Defendants’ pleas to the required Nauslar to sign a “mutual release” on behalf of jurisdiction for lack of standing *247 on all of the Willow. Under that agreement, both Willow and Coors Plaintiffs’ claims and dismissed the case. We conclude released any and all claims each had against the other and that (1) Plaintiff–Appellants lack standing on the statutory also warranted that neither party had assigned any such and common-law causes of action brought on their own claims to a third party. Nauslar signed the release, and behalf. Concerning the causes of action asserted “on Miller bought Willow and DEN L.P. from Nauslar and behalf of” the business entity that they sold, they Nausar Investments for $57.8 million. affirmatively negate having capacity to bring those claims. Accordingly, we affirm the trial court’s dismissal Nauslar and Nauslar Investments sued Coors, alleging it of all of Plaintiffs’ claims. We reverse the trial court’s unreasonably disapproved the proposed Consolidation order denying Coors attorneys’ fees and remand that with Miller, in violation of the Texas Beer Industry Fair issue. Dealing Law. They also brought a number of common-law claims against Coors and Golden, including one for tortious interference with the Consolidation. After two hearings, the trial court granted Coors’s and Golden’s Facts pleas to the jurisdiction and dismissed all of the Plaintiffs’ The crux of this dispute is the disapproval by Coors causes of action for lack of standing. Plaintiffs brought Brewing Co. (“Coors”) of a proposed consolidation in this appeal, challenging the trial courts’ dismissal of their 2001 between Willow Distributors, L.P. (“Willow”), an statutory and common-law causes of action. entity distributing Coors beer in the Dallas area, and the distributor of Miller beer, Miller of Dallas (“Miller”). Plaintiffs alleged that Willow and Miller had agreed to a joint venture that would be operated by a new entity, *248 Summary United LP. Willow and Miller would each own 50% of Plaintiffs seek to bring their claims in their own right, as the new entity, and the cash flow from the new business individual claims brought on their own behalf. They also would be shared equally. In addition, Nauslar asserts the assert—as former partners and owners of Willow—claims new enterprise would employ him as a company manager. “on behalf of” Willow, for alleged injuries to Willow itself, but with recovery going to Plaintiffs, not Willow. At the time of the proposed consolidation (the First, we address the individual claims and conclude that “Consolidation”), neither of the Plaintiffs was party to the Plaintiffs lack standing to bring either the common-law or distributorship agreement with Coors. Rather, Willow was statutory causes of action in their own right. We address the contracting party and the named distributor under the next the claims brought “on behalf of” Willow, i.e., the distributor agreement with Coors. Plaintiff Dennis Willow partnership’s claims. We conclude that Plaintiffs, Nauslar, individually, did not have a direct ownership in their live pleading, affirmatively negate that they have interest in Willow, and Plaintiff Nauslar Investments was capacity to bring claims on behalf of Willow. Having the limited partner in Willow. The structure underpinning rejected their other theory by which to allege capacity, we Willow is as follows: Willow’s general partner was DEN affirm dismissal of the claims asserted on behalf of L.P. and its limited partner was Nauslar Investments LLC. Willow. We conclude that an award of attorney’s fees Nauslar, individually, was 100% owner of Nauslar under the statute is mandatory if one party prevails in an Investments, which in turn was the limited partner in action under that statute, and thus we reverse the trial DEN L.P (general partner in Willow). court’s order denying Coors its attorney’s fees and remand that issue. When, in September 2001, Nauslar presented the proposed Consolidation to Coors for its approval, Coors

© 2015 Thomson Reuters. No claim to original U.S. Government Works. 7 Nauslar v. Coors Brewing Co., 170 S.W.3d 242 (2005)

I. Common–Law Causes of Action Asserted as jurisdiction, but the petition does not affirmatively Individual Right of Action demonstrate incurable defects in jurisdiction, the issue is We address whether the Plaintiffs have standing, in their one of pleading sufficiency and the plaintiff should be own right, to bring and personally recover on the afforded the opportunity to amend. County of Cameron v. common-law causes of action1 they assert against Brown, 80 S.W.3d 549, 555 (Tex.2002). On the other Defendants. We note first the injury asserted. Plaintiffs hand, if the pleadings affirmatively negate the existence allege that Willow was weakened by Coors’s efforts to of jurisdiction, then a plea to the jurisdiction may be force a deal with Golden, and that Willow’s value granted without allowing the plaintiff an opportunity to declined between the time of the disapproval in 2001 and amend. Id. the subsequent sale to Miller in 2003. Specifically, [8] [9] Plaintiffs assert damages as follows: Nauslar, A person has standing to sue when he is personally individually, seeks redress for (1) the distributions, profits aggrieved by the alleged wrong. Nootsie Ltd. v. and other benefits of ownership he would have reaped as Williamson County Appraisal Dist., 925 S.W.2d 659, 661 the sole owner of Willow and other corporate entities, had (Tex.1996). A person has standing if (1) he has sustained, Coors approved the Consolidation; and (2) loss of salary, or is immediately in danger of sustaining, some direct bonuses and other employment compensation he would injury as a result of the wrongful act of which he have been paid by United (the operating entity to be complains; (2) he has a direct relationship between the formed upon Consolidation) as well as alleged injury and claim sought to be adjudicated; (3) he employment-related losses as an employee of Willow. has a personal stake in the controversy; (4) the challenged Nauslar Investments, Inc. asserts that, as the former action has caused the plaintiff some injury in fact, either general partner of DEN LP (the general partner of economic, recreational, environmental, or otherwise; or Willow) and as the former limited partner of Willow, it (5) he is an appropriate party to assert the public’s interest was “injured to the same degree as—and could assert all in the matter, as well as his own. Precision Sheet Metal claims of DEN LP and Willow.” Mfg. Co., Inc. v. Yates, 794 S.W.2d 545, 552 (Tex.App.-Dallas 1990, writ denied). In sum, Nauslar seeks damages for loss of the benefits of [10] [11] ownership and employment-related losses. Nauslar Without a breach of a legal right belonging to a Investments, as former general partner of the general plaintiff, that plaintiff has no standing to litigate. Exxon partner of Willow, seeks damages that mirror those Corp. v. Pluff, 94 S.W.3d 22, 27 (Tex.App.-Tyler 2002, suffered by Willow. pet. denied); Cadle Co. v. Lobingier, 50 S.W.3d 662, 669–70 (Tex.App.-Fort Worth 2001, pet. denied); Brunson v. Woolsey, 63 S.W.3d 583, 587 (Tex.App.-Fort Worth 2001, no pet.). Only the person whose primary A. Standard of Review and Principles Governing legal right has been breached may seek redress for an Standing injury. Nobles v. Marcus, 533 S.W.2d 923, 927 [1] [2] [3] [4] [5] Because the question of standing is a legal (Tex.1976) (defrauded party only can bring suit to set question, we review de novo a trial court’s ruling on a aside deed obtained by fraud). “Without breach of a legal plea to the jurisdiction. Mayhew v. Town of Sunnyvale, right belonging to the plaintiff no cause of action can 964 S.W.2d 922, 928 (Tex.1998). Standing is a accrue to his benefit.” Id. component of a court’s subject-matter jurisdiction. Tex. Ass’n of Bus. v. Tex. Air Control Bd., 852 S.W.2d 440, 446 (Tex.1993). The plaintiff has the burden of alleging facts that affirmatively demonstrate a court’s jurisdiction B. Legal Principles: Whose Primary Legal Right Was to hear a cause. Id. A plea to the jurisdiction challenges a Allegedly Infringed? trial court’s authority to hear a case by alleging that the Plaintiffs’ principle argument is that the issue raised factual allegations *249 in the plaintiff’s pleadings, when concerns who owns the claims, and thus presents a taken as true, fail to invoke the trial court’s jurisdiction. question of capacity, not standing. They rely on Pledger El Paso Cmty. Partners v. B & G/Sunrise Joint Venture, v. Schoellkopf, 762 S.W.2d 145, 146 (Tex.1988) (a 24 S.W.3d 620, 623 (Tex.App.-Austin 2000, no pet.) challenge to a shareholder’s right to bring a cause of (citing Bybee v. Fireman’s Fund Ins. Co., 160 Tex. 429, action for wrongs done to the corporation raises a 331 S.W.2d 910, 917 (1960)). We construe the allegations question of capacity). They also rely on Prostok v. in the pleadings in favor of the pleader. Tex. Air Control Browning, 112 S.W.3d 876, 921 (Tex.App.-Dallas 2003) Bd., 852 S.W.2d at 446. (“A challenge to who owns a claim raises the issue of capacity, not standing.”), aff’d, 165 S.W.3d 336 [6] [7] When a plaintiff fails to plead facts that establish (Tex.2005). We disagree that the pleadings raise only an © 2015 Thomson Reuters. No claim to original U.S. Government Works. 8 Nauslar v. Coors Brewing Co., 170 S.W.3d 242 (2005)

issue of capacity, not standing. The case law reveals that, bring about reduced earnings, lower salaries, bonuses, with respect to Plaintiffs’ individual common-law causes injury to general business reputation, or diminution in the of action, a fundamental question is raised: Do these value of ownership.” Id. at 881 (quoting Martens v. claims embody a primary legal right belonging to the Barrett, 245 F.2d 844, 846 (5th Cir.1957)). Plaintiffs or does the Willow partnership have the primary [14] right of action? That raises an issue of standing. A partner has no individual, separate cause of action for losses suffered by reason of tortious interference with We note initially that Pledger cannot stand for the a contract between the partnership and a third party: simplistic proposition that a challenge to a stakeholder’s damages for loss in value of the partnership interest or bringing a suit to recover personally for corporate wrongs employment losses are subsumed in the partnership’s *250 raises an issue of capacity only. The Pledger court causes of action. Cates v. Int’l Tel. & Tel. Corp., 756 F.2d did not, indeed could not, discuss standing because that 1161 (5th Cir.1985) (construing Texas law). issue was not before it. 762 S.W.2d at 145–46. The case was decided before the determination that standing is an component of subject-matter jurisdiction and thus can be raised first on appeal. See Tex. Air Control Bd., 852 C. Application and Conclusion [15] [16] S.W.2d at 446. Nauslar generally argues that he has standing, because he was “personally aggrieved” by, and suffered [12] An individual stakeholder in a legal entity does not “direct injury” from, Defendants’ actions in disapproving have a right to recover personally for harms done to the the Consolidation. He seeks to recover for loss of benefits legal entity. Wingate v. Hajdik, 795 S.W.2d 717, 719 of ownership and employment. Nauslar Investments (Tex.1990). In Wingate, one corporate shareholder sued asserts it has standing to sue, individually, for harms done another alleging he had appropriated corporate assets. The to the partnership and seeks damages mirroring those court ruled that individual stockholders have no separate, Willow could recover. independent right of action for injuries suffered by the corporation, when the injures merely result in As the case law demonstrates, Plaintiffs do not have a depreciation of the value of plaintiffs’ stock. Id. at 719. separate, individual right of action for injuries to the partnership that diminished the value of their ownership In Fredericksburg Indus., Inc. v. Franklin Int’l, Inc., 911 interest in that entity. Wingate, 795 S.W.2d at 719. S.W.2d 518, 520 (Tex.App.-San Antonio 1995, writ Willow is the one who suffered the direct injury from the denied), the president/employee of a furniture alleged *251 harm to the partnership’s worth, and any manufacturing corporation sued a corporate supplier, loss to Plaintiffs in the sale price is “both indirect to and asserting he lost wages as a result of the supplier’s duplicative of” the entity’s right of action. Mendenhall, delivering defective glue. The court held he lacked 504 F.2d at 881. The right of recovery is Willow’s right standing: the cause of action belonged to the corporation alone, even though the economic impact of the alleged alone, as the damages were to the corporation’s profits, wrongdoing may bring about reduced earnings, salary or and any claim the plaintiff had for lost wages was against bonus. Fredericksburg, 911 S.W.2d at 520; Cates, 756 the corporation. Id. at 521. F.2d at 1181; Mendenhall, 504 F.2d at 881. [13] We note the applicability of the facts in Cates to the Other cases in the corporate context reaffirm that where damage is to the business entity’s worth, the instant case. 756 F.2d 1161. The Cates plaintiff, a individual stakeholder cannot personally recover, whether minority partner, attempted to bring individual claims for the damages sought are in terms of diminished value of an tortious interference with the partnership’s business, as do ownership interest or loss of employee benefits. In the Plaintiffs here. The damages sought were similar as Mendenhall v. Fleming Co., Inc., 504 F.2d 879 (5th well. The court’s holding warrants quotation: Cir.1974), the plaintiffs sought to recover personally for damages from anti-trust violations arising from the Accordingly, any claims for operation of retail stores by a corporation, which they had damages which [plaintiff] suffered created. Id. at 880. The court noted that the business by reason of diminution in value of allegedly interfered with was that operated by the his partnership interest, or his share corporation and the damages sought were direct damage of partnership income, or his salary to corporate worth. Thus, the plaintiffs lacked standing. or bonus from the partnerships or Id. at 880–81. The right of recovery was the entity’s right their businesses, by reason of alone, even though in an economic sense the impact “may breach of such agreements, or tortious interference with such © 2015 Thomson Reuters. No claim to original U.S. Government Works. 9 Nauslar v. Coors Brewing Co., 170 S.W.3d 242 (2005)

businesses, or anticompetitive to purchase with Payne turned on whether the third-party conduct interfering with or limiting contract was properly exercised. Id. at 523–34. or “taking over” such businesses or their activities, are in effect *252 Abraham is inapposite, as the analogy fails at the subsumed within the causes of outset. The plaintiff had a direct contract with the action of the partnerships and do defendant. Disposition under that contract turned on not afford [plaintiff] ... a separate, whether the third-party contract was properly exercised. individual cause of action. In today’s case, there is no direct contract between Plaintiffs and Defendants Coors and Golden. Id. at 1181. Accordingly, Plaintiffs lack standing to pursue their tortious-interference cause of action against Defendants.

Accordingly, Willow possesses the primary legal right Nauslar Investments asserts standing in its roles as former that was allegedly violated, and thus Willow is the general partner of Willow’s general partner and former exclusive party with a justiciable interest in redressing limited partner of Willow. To overcome the obstacle that those alleged injuries. Accordingly, Plaintiffs do not have it is not a general partner of Willow, it relies on the a standing to pursue and recover personally on the double derivative rule governing corporate derivative asserted common-law causes of action. suits. To overcome the general rule that a partner cannot sue individually on a partnership claim, it relies on cases Plaintiffs’ arguments to the contrary do not alter our applying an exception to that rule. Those cases do not conclusion. Concerning the tortious-interference cause of apply because, as discussed below, Nauslar Investments action, Nauslar argues that he has individual standing to sold to Miller the entirety of its interest in Willow. 2 None pursue the claim under Sturges v. Wal–Mart Stores, Inc., of the cases it cites stands for the proposition that a 39 S.W.3d 608 (Tex.App.-Beaumont 1998), rev’d on partner that has sold its entire interest in the partnership other grounds, 52 S.W.3d 711 (Tex.2001). In that case, can personally recover on a claim belonging to that individuals were deemed to have standing where a partnership. The Mendenhall court, discussing the sale of proposed business entity was never formed due to the corporate stock, captured the effect of the Plaintiffs’ sale defendant’s interference. The appellate court held that the of the partnership: individual plaintiffs, who had signed the letter of intent, were all “interested parties who would have profited from the prospective lease,” who were directly involved in the When [plaintiffs] sold their corporate stock to a third building of the proposed structure, and who sustained party, they sold their right to control the very cause of “direct economic injury” as a result of Wal–Mart’s action they now attempt to assert. This suit cannot interference. Id. at 614–15. reclaim that corporate cause of action by asserting the same damage sustained by the corporation also served Sturges is inapposite. The proposed entity in Sturges was to diminish the value of their individually held estates. never formed, leaving the principals in that enterprise as Mendenhall, 504 F.2d at 881. the directly injured parties. In today’s case, the direct injury from Defendants’ alleged wrongdoing was to Willow, the operating business entity that would have II. Plaintiffs’ Statutory Causes of Action Asserted in consolidated with Miller. Their Right Plaintiffs assert that Coors unreasonably disapproved the Plaintiffs also rely on Abraham Inv. Co. v. Payne Ranch, Consolidation in violation of the Texas Beer Industry Fair Inc., 968 S.W.2d 518 (Tex.App.-Amarillo 1998, pet. Dealing Law (BIFDL), which prohibits manufacturers denied) to overcome the obstacle that they were not party from withholding approval of the transfer of to the proposed consolidation agreement between Willow distributorship rights if the substituting party meets and Miller. In that case, plaintiff Abraham had a contract “reasonable standards.” TEX. ALCO. BEV.CODE ANN.. to purchase a ranch from defendant Payne. That contract § 102.71, -.76, -.77, -.79 (Vernon 1995). We examine was subject to a pre-existing preferential right of purchase whether Plaintiffs have standing, in their own right, to contained in a contract between Payne and Campbell, bring a claim for the alleged violation of BIFDL.3 which Campbell exercised to purchase the ranch. Defendants asserted Abraham lacked standing to sue for tortious interference, as he was not party to the Payne–Campbell contract. The court disagreed: whether A. Legal Principles Governing Standing Based on Abraham was entitled to fulfillment of the direct contract Statute © 2015 Thomson Reuters. No claim to original U.S. Government Works. 10 Nauslar v. Coors Brewing Co., 170 S.W.3d 242 (2005)

[17] [18] Standing to sue can be predicated upon either Corpus Christi Court of Appeals held that the plaintiff did statutory or common-law authority. See Williams v. Lara, not have a statutory right to maintain its cause of action 52 S.W.3d 171, 178–79 (Tex.2001). The general rules of against the distributor, because it failed to comply strictly standing apply unless statutory authority for standing with the statute’s requirements. Ace Sales Co., Inc. v. exists. Id. at 178. If standing is statutorily conferred, the Cerveceria Modelo, S.A. de C.V., 739 S.W.2d 442, 447 statute granting authority and the case law interpreting it (Tex.App.-Corpus Christi 1987, writ denied). The serve as the proper framework of analysis. See Hunt v. distributor Ace sought damages for the manufacturer’s Bass, 664 S.W.2d 323, 324 (Tex.1984). failure to approve a transfer of the distributorship rights to Ace’s buyer. The court noted that section 102.79 of [19] [20] [21] [22] [23] We review matters of statutory BIFDL provides a remedy for parties to an agreement construction de novo. City of San Antonio *253 v. City of under section 102.51, which in turn requires a written Boerne, 111 S.W.3d 22, 25 (Tex.2003). In construing a agreement. TEX. ALCO. BEV.CODE ANN.. §§ 102.51, statute, our objective is to determine and give effect to the 102.79. Because Ace did not produce a written legislature’s intent. Id. If a statute’s meaning is agreement, it had no remedy under BIFDL. Id. In so unambiguous, we generally interpret the statute according holding, the court relied on the principle that “if a cause to its plain meaning. Id. We begin by examining the exact of action and remedy for its enforcement are derived from wording and apply the tenet that the legislature chooses a statute, the statutory provisions are mandatory and its words carefully and means what it says. Williams v. exclusive, and must be complied with in all respects or Vought, 68 S.W.3d 102, 115 (Tex.App.-Dallas 2001, no the action is not maintainable.” Id. (quoting Tex. pet.) (Morris, J., concurring). We determine legislative Catastrophe Prop. Ins. Ass’n v. Council of Co–Owners of intent from the entire act and not just its isolated portions. Saida II Towers Condo. Ass’n, 706 S.W.2d 644, 646 City of San Antonio, 111 S.W.3d at 25. (Tex.1986)).

BIFDL provides a judicial remedy for a “manufacturer” or “distributor,” as defined in the statute,4 who are parties to a distributorship agreement: B. Analysis and Conclusion [24] Nauslar argues that although he is not a “distributor” under the BIFDL definition, he should be entitled to sue If a manufacturer or distributor who is a party to an under the statute, based on its text, legislative history, and agreement pursuant to Section 102.51 of this code fails purpose. Nauslar *254 points to the text of Section to comply with this Act or otherwise engages in 102.76(a) that protects not just transfers of the conduct prohibited under this Act ... the aggrieved distributorship itself, but also transfers of “the voting manufacturer or distributor may maintain a civil action stock of any partner corporation,” as well as the in a court of competent jurisdiction.... “beneficial ownership” of entities owning the distributor. TEX. ALCO. BEV.CODE ANN.. § 102.79(a). He argues that persons representing those interests must BIFDL prohibits a manufacturer from withholding have standing under the statute, to effectuate the broad approval of a distributor’s transfer of its distributorship protective purpose of the statute. He also points to pieces interest when the person or persons to be substituted of legislative history to indicate that, in discussing the “meet reasonable standards.” The full provision reads as pending bill, the legislators did not distinguish between follows: the business entity that comprises the distributorship and the individuals who own that entity. No manufacturer shall unreasonably withhold or delay its approval of any assignment, sale, or transfer of the We are not persuaded to adopt Plaintiffs’ expansive stock of a distributor or all or any portion of a reading of the text of BIFDL. Rather, we are persuaded by distributor’s assets, distributor’s voting stock, the Appellee’s argument that when the legislature intends to voting stock of any parent corporation, or the beneficial grant a remedy to all persons who might be injured by a ownership or control of any other entity owning or statutory violation, it plainly grants a remedy to “injured controlling the distributor, including the distributor’s persons.” See, e.g., TEX. BUS. & COM.CODE ANN. § rights and obligations under the terms of an agreement 19.02 (Vernon 2002) (granting judicial remedy to “a whenever the person or persons to be substituted meet person injured” by a violation of the statute regulating reasonable standards. ... relationship between manufacturers and dealers of particular equipment); TEX. OCC.CODE ANN. § Id. § 102.76(a) (emphasis added). 2352.201 (Vernon 2004) (violators of statute are liable to “an injured party ...”). In a case construing these two sections of BIFDL, the © 2015 Thomson Reuters. No claim to original U.S. Government Works. 11 Nauslar v. Coors Brewing Co., 170 S.W.3d 242 (2005)

We apply the tenet that the legislature chooses its words release-with-non-assignment clause, which waives the carefully and means what it says. Williams, 68 S.W.3d at distributor’s BIFDL claim, should be declared void under 115. The remedies section, Section 102.79(a), plainly the anti-waiver provision, section 102.72(c). states who may sue for violations of the statute: “manufacturers” and “distributors,” as defined under the We note that the issue Nauslar raises, whether he statute, who are party to a distributorship agreement. individually had statutory standing to pursue Willow’s These plaintiffs do not fall within the statutorily defined claim, turns on the permissibility of the clause in which class of persons who may sue. Neither are we persuaded Willow warrants it did not assign its claims to a third to read the statute expansively to go beyond its plainly party. Thus, we need not address whether the release by stated purpose. The statute states that its purpose is “to Willow of its own BIFDL claims against Coors was promote the public’s interest in the fair, efficient, and prohibited by the anti-waiver provision in section competitive distribution of beer within the state....” TEX. 102.76(c). The issue is this: Is a distributor’s ALCO. BEV.CODE ANN.. § 102.72. As noted, Willow representation that it has not assigned its statutory claims, itself has standing to redress violations of the statute. This if any, to a third party an agreement that “varies the effect satisfies the statutory purpose of protecting the general of the BIFDL” so as to be void? As discussed, the plain public interest in fair competition. We conclude the language of section 102.79 grants a right of action only to statutory purpose does not extend to protect Plaintiffs’ “distributors or manufacturers” that are party to a individual interests in obtaining higher compensation distributorship agreement. Nauslar points to no authority from the transfer of its interest in Willow. Tex. to indicate that BIFDL claims must remain freely Catastrophe Prop. Ins., 706 S.W.2d at 646 (when cause assignable to those not otherwise entitled to bring such of action derives from statute, statutory provisions must claims in their own right. And we see no language in the be complied with in all respects or action not text of the statute requiring the reading urged by maintainable). Plaintiffs.

Accordingly, we hold that neither Plaintiff has standing to bring the claims, on their own behalf, seeking redress for C. Was the No–Assignment Clause Void? violations of BIFDL. [25] Nauslar asserts Coors demanded that Willow sign a mutual release of any claims it had against Coors, which included Willow’s warranty that it had not assigned any of its claims to a third party. Nauslar asserts that, but for III. Plaintiffs’ Causes of Action Asserted “On Behalf Coors’s insistence that he execute the release by Willow, Of” Willow he would have assigned Willow’s claims to himself. The We turn to Plaintiffs’ assertion of causes of action release, Nauslar asserts, violated the “anti-waiver” purportedly brought “on behalf of” Willow. Plaintiffs provision of BIFDL. He argues Coors should not be assert—as the former partners in and owners of allowed to circumvent the section prohibiting Willow—they are entitled to recover personally on unreasonable disapproval of a transfer by violating the Willow’s claims for injuries suffered by Willow. section prohibiting the release of such claims. As a Plaintiffs argue Defendants’ challenges go to the issue of remedy, Nauslar invokes equity principles, urging the “claim ownership” only. They assert, “An argument about court to declare an “equitable assignment” of Willow’s whether a current or former owner, as distinct from his claims to Nauslar, thus enabling him to sue—as company, owns a particular claim is an argument about constructive assignee of Willow’s claims—under BIFDL. capacity.”

Section 102.72(c) of BIFDL states, “The effect of this Act may not be varied by agreement. Any agreement purporting to do so is void and unenforceable to the extent A. Legal Principles [26] [27] of such variance only.” Nauslar asserts that this A plaintiff must have both standing and capacity to “anti-waiver” provision prohibited Coors from bring a lawsuit. Coastal Liquids Transp. L.P. v. Harris conditioning its approval of the sale of Willow on County Appraisal Dist., 46 S.W.3d 880, 884 (Tex.2001). Willow’s *255 release of its claims against Coors. A party has capacity to sue when it has legal authority to Nauslar insists the only permitted reason for disapproving act, regardless of whether it has a justiciable interest in a transfer under section 102.76 is when the proposed the controversy. Nootsie, Ltd., 925 S.W.2d at 661. transferee fails to meet “reasonable standards.” Coors is Standing pertains to a person’s justiciable interest in a suit thus not permitted to disapprove a transfer based on a and is a component of subject-matter jurisdiction. See failure to sign a release. Thus Nauslar argues, the Tex. Air Control Bd., 852 S.W.2d at 443, 445–46. © 2015 Thomson Reuters. No claim to original U.S. Government Works. 12 Nauslar v. Coors Brewing Co., 170 S.W.3d 242 (2005)

Capacity is a party’s legal authority to go into court to to bring Willow’s partnership claims. Thus, the suit prosecute or defend a suit. El T. Mexican Rests., Inc. v. cannot proceed on those causes of action. We decline to Bacon, 921 S.W.2d 247, 249 (Tex.App.-Houston [1st remand for the trial court to engage in a futile inquiry. Dist.] 1995, writ denied). Wilson *257 v. Texas Parks and Wildlife Dept., 8 S.W.3d 634, 635 (Tex.1999) (declining to remand for retrial of issue on which no evidence was offered; such “would be improper and, it appears, futile”); Sabine Offshore Serv., B. Analysis and Conclusion Inc. v. City of Port Arthur, 595 S.W.2d 840, 841 [28] [29] Plaintiffs allege, and it is undisputed, that Plaintiffs (Tex.1979) (declining to remand when futile and not in sold their interest in the Willow partnership to Miller. furtherance of judicial economy). We conclude the claims Willow’s causes of action belong to the partnership, not to asserted “on behalf of” Willow were properly dismissed. its partners. Absent an agreement otherwise, Willow’s Accordingly, we need not reach the issue whether assets, including any chose in action it held, would have Plaintiffs also lacked standing to pursue Willow’s claims. transferred to Miller in the sale.5 In addition, we need not reach other unrelated issues raised by Plaintiff. *256 [30] Plaintiffs do not allege that they consensually acquired legal title to Willow’s causes of action—and thus possess exclusive authority (capacity) to prosecute and recover on Willow’s claims. That is, they do not IV. Attorney Fees under BIFDL allege that, despite the sale to Miller, they retained title to Coors asserts, on cross-appeal, that the trial court erred in Willow’s causes of action, or otherwise acquired those denying Coors attorney fees under BIFDL. Coors argues assets by assignment. Indeed, Plaintiffs allege and argue it prevailed on the BIFDL claims and an award of the opposite: they allege that Coors conditioned its attorney’s fees is mandatory to the prevailing party in an approval of the sale on Willow’s warranting it had not action brought under BIFDL. assigned its claims against Coors to a third party. Nauslar argues, but for that condition, he would have caused Section 102.79(c) of BIFDL states, Willow to assign its claims to himself.6 The prevailing party to any action Plaintiffs thus judicially admit they have do not own legal under Subsection (a) of this section title to Willow’s causes of action. Houston First shall be entitled to actual damages, American Sav. v. Musick, 650 S.W.2d 764, 767 including the value of the (Tex.1983) (judicial admissions are assertions of fact, not distributor’s business, as specified pled in the alternative, in the live pleadings of a party). in Section 102.77 of this code, Plaintiffs do posit the “constructive assignee” theory by reasonable attorney’s fees, and which to establish their alleged right to bring Willow’s court costs. causes of action. As a legal basis, they argue the warranty of no assignment violates BIFDL and thus should be TEX. ALCO. BEV.CODE ANN.. § 102.79(c) (emphasis declared void. We concluded above, as a matter of law, added). Subsection (a) provides for a right of action for a that the non-assignment clause does not violate BIFDL. “manufacturer or distributor” who is party to a Plaintiffs allege no other legal basis to avoid the effect of distributorship agreement. If the defending manufacturer their having failed to acquire the legal right to prosecute or distributor fails to comply with the statute, “the and personally recover on Willow’s causes of action. aggrieved manufacturer or distributor may maintain a [31] [32] civil action in a court of competent jurisdiction....” Id. § To bring suit and recover on a cause of action, a 102.79(a) (emphasis added). plaintiff must have both standing and capacity. El T. Mexican Rests., 921 S.W.2d at 250. It is recognized that a Plaintiff’s respond that, if they do not have standing under party may plead himself out of court, e.g., the plaintiff the statute, then the trial court lacks jurisdiction to award may plead facts which affirmatively negate his cause of attorney’s fees, relying on Smith v. Tex. Improvement Co., action. Tex. Dept. of Corrections v. Herring, 513 S.W.2d 570 S.W.2d 90, 92 n. 3 (Tex.App.-Dallas 1978, no writ) 6, 10 (Tex.1974) (citing Schroeder v. Tex. & Pacific Ry. (when court lacks jurisdiction, court cannot render Co., 243 S.W.2d 261 (Tex.Civ.App.-Dallas 1951, no judgment j.n.o.v.; only valid order is one of dismissal). writ)). Plaintiffs affirmatively negate that they own legal title to Willow’s claims, asserting instead a legal theory to [33] [34] We have concluded that Plaintiffs lack standing to overcome that fact, which we have rejected.7 We conclude bring the BIFDL claims, either in their own right or “on that, on the state of the pleadings, Plaintiffs lack capacity © 2015 Thomson Reuters. No claim to original U.S. Government Works. 13 Nauslar v. Coors Brewing Co., 170 S.W.3d 242 (2005)

behalf of” Willow. Coors thus qualifies as a “prevailing County Comm’rs Court v. Lohec, 814 S.W.2d 751, 755 party” within the meaning of section 102.79(c). Robbins (Tex.App.-Houston [ (14th Dist.) ] 1991), rev’d on other v. Capozzi, 100 S.W.3d 18, 27 (Tex.App.-Tyler 2002, no grounds, 841 S.W.2d 361 (Tex.1992) (under pet.) (“prevailing party” successfully prosecutes or declaratory-judgment statute, trial court could award defends against an action; prevailing party is one who is attorneys’ fees against party found to have no standing). vindicated). The BIFDL claims were brought under Further, the statute is worded such that a manufacturer or subsection (a) as section 102.79(c) requires. Further the distributor may maintain an action and the prevailing fee award is mandatory, in that subsection (c) explicitly party in that *258 action shall recover reasonable attorney states the prevailing party “shall” recover reasonable fees. Thus, the statutory text mandates the award of fees attorney’s fees. See Town East Ford Sales, Inc. v. Gray, even if the action cannot be maintained, whether or not it 730 S.W.2d 796, 812 (Tex.App.-Dallas 1987, no writ) is dismissed for lack of jurisdiction. Accordingly, we (fees mandatory under statutory provision stating reverse the trial court’s order denying Coors attorney’s “consumer who prevails shall be awarded court costs and fees and remand that issue for further proceedings. reasonable and necessary attorney’s fees”). Accordingly, we AFFIRM the trial court’s dismissal of The Plaintiffs’ reliance on the broad statements in Smith all of Plaintiffs claims. We REVERSE the trial court’s is misplaced. That case did not address an issue involving order denying Coors attorney’s fees under BIFDL and a statutory provision mandating an award of fees. A trial REMAND that issue for further proceedings. court’s dismissal for lack of subject-matter jurisdiction does not prevent the concurrent award of attorney’s fees under the mandatory award provision. See Galveston

Footnotes 1 Plaintiffs sued Coors for breach of contract and sued both Coors and Golden for conspiracy to terminate the Consolidation, negligence per se, and tortious interference. Nauslar also asserted that he, individually, was a third-party beneficiary to the Consolidation agreement. We refer to these causes of action collectively as Plaintiffs’ common-law actions. 2 The facts in the cited cases are not analogous: Allied Chemical Co. v. DeHaven, 824 S.W.2d 257 (Tex. App–Houston [14th Dist.] 1992,) (exceptional circumstances made it inequitable to prevent resigning partner from bringing suit on behalf of partnership during winding-up phase); Tex. Westheimer Corp. v. 5647 Westheimer, 68 S.W.3d 15, 21–22 (Tex.App.-Houston [1st Dist.] 2001, pet. denied) (dispute over rights to profit participation owed to partnership by third party; suit instituted during winding-up phase of partnership) In today’s case, the partnership was not wound up, but as discussed below, Plaintiffs sold the partnership in its entirety. 3 It is undisputed that Willow itself has standing to pursue a BIFDL claim. Willow is not a party to this suit and Plaintiffs disavow that they are suing derivatively on any claims that belong to Willow. 4 Under section 102.71, “distributor” is defined as a person licensed under Section 64.01 or 65.01 of the Act, which sections in turn define the activities a licensed distributor is authorized to perform. TEX. ALCO. BEV.CODE ANN.. §§ 64.01, 65.01, 102.71. 5 Under the Texas Revised Limited Partnership Act (TRLPA), the partnership, not the partners, own the partnership’s property. TEX.REV.CIV. STAT. ANN. art. 6132a–7.01 (Vernon Supp.2004–05). When a business entity is acquired in its entirety by another, in the absence of specific terms to the contrary, both the liabilities and assets of the acquired company are transferred to the purchaser. Duke Energy Field Servs. Assets, L.L.C. v. Nat’l Union Fire Ins. Co. of Pittsburgh, PA, 68 S.W.3d 848, 850 (Tex.App.-Texarkana 2002, pet. denied). 6 Plaintiffs plead, in their live pleading: [A]s a condition for gaining its approval, and in tacit acknowledgement of its past wrongdoing, Coors extracted a purported release from Willow for claims against Coors arising out of its former, illegal conduct. ... Coors’ release also contained the following provision requiring Nauslar to represent that he had not assigned Willow’s claim to any third party ... If Coors had not conditioned approval of Nauslar’s sale of Willow and DEN to Miller of Dallas on execution of its release in its original form, and had instead agreed to allow assignments, Nauslar would have assigned to himself all rights possessed by Willow to sue Coors for the claims alleged in this petition. 7 In addition, at the end of the first hearing, the trial court ordered Plaintiffs to replead with much more specificity so that you make

© 2015 Thomson Reuters. No claim to original U.S. Government Works. 14 Nauslar v. Coors Brewing Co., 170 S.W.3d 242 (2005)

it clear “who is suing for what, what wrong to whom, when, and causing whatever for what period of damages.... I’m probably going to grant [the pleas to jurisdiction] the next go round if you don’t make it clear....” See Harris County v. Sykes, 136 S.W.3d 635, 639 (Tex.2004) (if plaintiff given opportunity to amend and still fails to allege facts sufficient to withstand plea to jurisdiction, court should dismiss action).

End of Document © 2015 Thomson Reuters. No claim to original U.S. Government Works.

© 2015 Thomson Reuters. No claim to original U.S. Government Works. 15 Shipley v. Unifund CCR Partners, 331 S.W.3d 27 (2010)

have suffered the same injury as the assignors 331 S.W.3d 27 and have the same ability to pursue the claims. Court of Appeals of Texas, Waco. 2 Cases that cite this headnote Robert D. SHIPLEY, Appellant, v. UNIFUND CCR PARTNERS, Appellee. [3] No. 10–09–00314–CV. | Oct. 13, 2010. | Rehearing Action Overruled Dec. 21, 2010. Persons entitled to sue

A court may presume the truth of allegations made in a party’s pleadings when determining Synopsis standing. Background: Assignee of right to collect on credit card account brought action against card holder. The 87th District Court, Freestone County, Patrick H. Simmons, J., Cases that cite this headnote entered judgment against card holder. Card holder appealed.

[4] Pleading [Holding:] The Court of Appeals, Tom Gray, C.J., held Scope of inquiry and matters considered in that assignee did not have standing to bring action against general card holder. A court is not required to look solely to the pleadings but may consider evidence and must Reversed. do so when necessary to resolve the jurisdictional issues raised.

Cases that cite this headnote West Headnotes (6)

[1] Assignments Nature and essentials in general [5] Consumer Credit Actions; injunction An assignment is simply a transfer of some right or interest. Assignee of right to collect on credit card account did not have ownership or title in the account, and therefore, did not have standing to 2 Cases that cite this headnote bring action against card holder; assignee only had been assigned right to collect, and assignor explicitly retained title and ownership.

[2] Assignments Cases that cite this headnote Nature and extent of rights of assignee in general

When an assignee holds a contractually valid [6] assignment, that assignee steps into the shoes of Action the assignor and is considered under the law to Persons entitled to sue © 2015 Thomson Reuters. No claim to original U.S. Government Works. 1 Shipley v. Unifund CCR Partners, 331 S.W.3d 27 (2010)

presented, we will reverse the judgment, dismiss this Because standing denotes a party’s justiciable cause for lack of jurisdiction, and withdraw our prior interest in a controversy, it is only the party opinion and judgment. Id. whose primary legal right has been breached that may seek redress for that injury; without a breach of a legal right belonging to that party, that party has no standing to litigate. Standing Shipley contends that Unifund CCR Partners did not own any interest in the account in question, and therefore, they Cases that cite this headnote lacked standing to bring the suit against him. Citibank South Dakota, N.A. sold the account to Unifund Portfolio A., LLC. Unifund Portfolio A, LLC then assigned its rights to collect the account to Unifund CCR Partners, but retained the title and ownership of the account. In his brief to this Court, Shipley does not complain about the Attorneys and Law Firms sale of the account from Citibank to Unifund Portfolio A, but of the assignment from Unifund Portfolio A to *27 Richard C. Jenkins, Dallas, for Appellant. Unifund CCR Partners. Abel Reyna, Jr., McCleskey Harriger & Brazill & Graf LLP, Lubbock, for Appellee. Standing, a necessary component of subject-matter jurisdiction, is a constitutional prerequisite to maintaining Before Chief Justice GRAY, Justice REYNA, and Justice a suit under Texas law. Tex. Ass’n of Bus. v. Tex. Air DAVIS. Control Bd., 852 S.W.2d 440, 444–45 (Tex.1993). Whether a party has standing to pursue a claim is a question of law that we review de novo. Mayhew v. Town of Sunnyvale, 964 S.W.2d 922, 928 (Tex.1998).

Standing refers to a party’s justiciable interest in a *28 OPINION ON REHEARING controversy. See Nootsie, Ltd. v. Williamson County Appraisal Dist., 925 S.W.2d 659, 661–62 (Tex.1996); Town of Fairview v. Lawler, 252 S.W.3d 853, 855 TOM GRAY, Chief Justice. (Tex.App.-Dallas 2008, no pet.). Only the party whose primary legal right has been breached may seek redress Robert Shipley appeals from the entry of a judgment for an injury. Nauslar v. Coors Brewing Co., 170 S.W.3d against him for a debt on a credit card account. Shipley 242, 249 (Tex.App.-Dallas 2005, no pet.). Without a complains that the trial court erred by not dismissing the breach of a legal right belonging to that party, that party suit against him because Unifund CCR Partners lacked standing to bring the suit because the court lacked subject has no standing to litigate. Cadle Co. v. Lobingier, 50 matter jurisdiction in that Unifund CCR Partners did not S.W.3d 662, 669–70 (Tex.App.-Fort Worth 2001, pet. denied). In reviewing standing on appeal, we construe the own the debt and therefore did not have standing to bring petition in favor of the plaintiff, and if necessary, review the action. Shipley also complains that the evidence was the entire record to determine if any evidence supports legally insufficient for the trial court to have granted a standing. See Tex. Air Control, 852 S.W.2d at 446. judgment against him and in favor of Unifund CCR Partners because there was no evidence that Shipley’s [1] [2] An “assignment” is simply a transfer of some right debt had been assigned to Unifund CCR Partners. or interest. See Pagosa Oil & Gas, L.L.C. v. Marrs & Smith P’ship, 323 S.W.3d 203, 211 (Tex.App.-El Paso On original submission, this Court affirmed the judgment. 2010, no pet. h.) (citing University of Texas Med. Branch See Shipley v. Unifund CCR Partners, No. at Galveston v. Allan, 777 S.W.2d 450, 452 10–09–00314–CV, 2010 Tex.App. LEXIS 4544 (Tex.App.-Waco June 16, 2010). Upon Shipley’s timely (Tex.App.-Houston [14th Dist.] 1989, no writ)). When an assignee holds a contractually valid assignment, that motion for rehearing, we requested a response from assignee steps into the shoes of the assignor and is Unifund CCR Partners, although Unifund has not done so. considered *29 under the law to have suffered the same As authorized by Rule of Appellate Procedure 49.3, we injury as the assignors and have the same ability to pursue issue this modified opinion after requesting the response. TEX.R.APP. P. 49.3. On reconsideration of the issues the claims. Southwestern Bell Tel. Co. v. Mktg. on Hold Inc., 308 S.W.3d 909 (Tex.2010) (citing Holy Cross © 2015 Thomson Reuters. No claim to original U.S. Government Works. 2 Shipley v. Unifund CCR Partners, 331 S.W.3d 27 (2010)

Church of God in Christ v. Wolf, 44 S.W.3d 562, 572 (including, without limitation, (Tex.2001)). warranties pertaining to title, validity, collectibility (sic), accuracy or sufficiency of information, and applicability of Pleadings and Evidence in the Record any statute of limitations), except [3] [4] “It has long been the rule that a plaintiff’s good faith as stated in the Agreement or allegations are used to determine the trial court’s herein. (emphasis added) jurisdiction.” Eaves v. Unifund CCR Partners, 301 S.W.3d 402, 404 (Tex.App.-El Paso 2009, no pet.) (citing [6] Because standing denotes a party’s justiciable interest Brannon v. Pac. Employers Ins. Co., 148 Tex. 289, 224 in a controversy, it is only the party whose primary legal S.W.2d 466, 469 (Tex.1949)). A court may presume the right has been breached that may seek redress for that truth of allegations made in a party’s pleadings when injury. Eaves, 301 S.W.3d at 404. Without a breach of a determining standing. Id. (citing Tex. Ass’n of Bus., 852 legal right belonging to that party, that party has no S.W.2d at 446; Brown v. Todd, 53 S.W.3d 297, 305 n. 3 standing to litigate. Id. (citing Cadle Co. v. Lobingier, 50 (Tex.2001) (“Because standing is a component of subject S.W.3d 662, 669–70 (Tex.App.-Fort Worth 2001, pet. matter jurisdiction, we consider [it] as we would a plea to denied)). Unifund CCR Partners’s right is solely limited the jurisdiction, construing the pleadings in favor of the to taking whatever steps are necessary to collect a debt plaintiff.”)). “A court is not required to look solely to the owned entirely by someone else, while holding no title, pleadings but may consider evidence and must do so interest, or rights in anything else. We do not find that this when necessary to resolve the jurisdictional issues is sufficient to establish that Unifund CCR Partners has raised.” State Dep’t of Crim. Justice v. Miller, 51 S.W.3d standing to pursue this claim in its own name. 583, 587 (Tex.2001). However, the petition’s sole reference to Unifund CCR Partners’s ownership or Cases that have found standing to exist all indicate that a standing to litigate is the statement that “Plaintiff is finding of ownership of some type was made. Even the authorized to file this petition.” We do not find that this cases *30 cited to by Unifund CCR Partners demonstrate constitutes any evidence of standing. that some ownership interest was transferred by the [5] assignor to the assignee. See Sprint Communications Co., The case was solely decided based on business records L.P. v. APCC Services, Inc., 554 U.S. 269, 128 S.Ct. filed by Unifund CCR Partners. The evidence presented 2531, 2541–43, 171 L.Ed.2d 424 (2008) (assignee with in the business records affidavit is likewise unclear as to legal title to debt of a legal claim for money owed has what interest beyond the right of collection that Unifund standing to pursue the claim even if proceeds are to be CCR Partners owns. Additionally, the trial court sustained entirely remitted to assignor); see also Eaves, 301 S.W.3d Shipley’s hearsay objections to the affidavit and struck at 403–04 (pleadings and live testimony sufficiently the content of the affidavit outside of the questions demonstrated that Unifund owned the account in question required to authenticate the business record as such. In to establish standing); Cartwright v. MBank Corpus fact, the assignment from Unifund Portfolio A, LLC to Christi, N.A., 865 S.W.2d 546, 549–50 (Tex.App.-Corpus Unifund CCR Partners indicates that Unifund CCR Christi 1993, writ denied) (note transferred to MBank Partners owns nothing. The pertinent language of the making MBank the holder of the note); Schultz v. Aetna assignment states: Business Credit, Inc., 540 S.W.2d 530, 531 (Tex.Civ.App.-San Antonio 1976, no writ) (assignor Assignor, for value received and in transferred “all of its rights, title and interests” in the connection with the Agreement, relevant instrument, any accompanying promissory note transfers and assigns to Assignee or notes, and all rights and remedies under said instrument all of Assignor’s rights in the or notes); Kelley v. Bluff Creek Oil Co., 298 S.W.2d 263, Receivables, for collection 267 (Tex.Civ.App.-Fort Worth 1956) (assignment purposes only, including transferred all “right, title and interest” in a claim, “with conducting litigation in Assignee’s full power and authority to collect and receipt therefore”), name, for those Receivables which aff’d in part, and rev’d in part on other grounds, 158 Tex. Assignor owns or may acquire 180, 309 S.W.2d 208 (1958). from time to time. Assignor shall retain title and ownership of such We find that without evidence of any ownership interest Receivables. The assignment is or title in the account that Unifund CCR Partners does not without recourse to Assignor and have standing to bring this suit and that the trial court did without warranty of any kind © 2015 Thomson Reuters. No claim to original U.S. Government Works. 3 Shipley v. Unifund CCR Partners, 331 S.W.3d 27 (2010)

not have subject matter jurisdiction over the action. We standing to file suit against Shipley. Therefore, because sustain issue one. the trial court lacked subject matter jurisdiction, we reverse the judgment of the trial court and render judgment dismissing the case.

Conclusion We conclude that Unifund CCR Partners did not have End of Document © 2015 Thomson Reuters. No claim to original U.S. Government Works.

© 2015 Thomson Reuters. No claim to original U.S. Government Works. 4