Smith Protective Services v. Martin

711 S.W.2d 675, 1986 Tex. App. LEXIS 7915

• Court: Court of Appeals of Texas
• Decided: April 17, 1986
• Docket: No. 05-86-00054-CV
• Status: Published

Opinions

GUILLOT, Justice.

This is an original proceeding in which relator, Smith Protective Services, requests:

(1) a writ of prohibition against The Honorable Harlan Martin prohibiting him from entering a partial summary judgment in favor of Andrew Smith and from taking any further action to hear any issues in Cause No. 84-3652;

(2) a writ of mandamus against Judge Martin commanding him to vacate his “Order Overruling Plea to Jurisdiction” of March 28, 1985; his “Pre-Trial Order” of April 18, 1985; his “Order on Pleas to the Jurisdiction, Pleas on Abatement, Motions to Consolidate and Scheduling” of December 11, 1985; his “Order Concerning Motions for Summary Judgment”; and “any other order entered by the trial court after July 2, 1984”; and

(3) a writ of prohibition against Judge Martin preventing relitigation of the final judgment of March 19, 1984 in Cause No. 84-3652 against Andrew Smith. For the reasons below, we deny relator’s petition for writs of prohibition and mandamus.

BACKGROUND OF THE PROCEEDINGS

In order to understand the posture of the case, we must outline the history of the proceedings below.

In 1980, relator filed an action in Cause No. 80-4872 in the 162nd District Court of Dallas County, Texas, against John and Janice Cimaglia regarding their alleged misuse of a trade name similar to relator’s. Cause No. 80-4872 will sometimes hereinafter be referred to as the 1980 case.

On October 31, 1983, relator filed its first amended original petition in the 1980 case adding Andrew L. Smith, (hereinafter “Andrew”), as an additional defendant. In the amended petition, relator alleged that Andrew breached fiduciary duties to relator by: (1) conspiring with the Cimaglias to misappropriate the trade name of relator; (2) misappropriating corporate assets and opportunities; and (3) attempting to solicit relator’s employees for other employment. Andrew did not file an answer.

A default judgment hearing was conducted on January 13, 1984. An “Interlocutory Order” signed on that date by the 162nd District Court granted relator damages and permanent injunctive relief against Andrew. The judgment further decreed “ that the claims of Smith Protective Services, Inc. against Andrew L. Smith, III herein be and are hereby severed from the remaining claim.” (We interpret this language to sever all claims of SPS against Andrew from the remaining claim of SPS against the Cimaglias.) Andrew filed a motion for new trial on February 10, 1984, in the 1980 case.

The 162nd District Court conducted a hearing on February 10, 1984, at the request of Andrew’s counsel which hearing was attended by counsel for both relator and Andrew. The trial court on March 19, 1984, entered a “Nunc Pro Tunc Order Granting Interlocutory Default Judgment and of Severance” in the 1980 case in favor of relator against Andrew for damages and injunctive relief. The nunc pro tunc order provides in part:

IT IS FURTHER ORDERED that this default judgment shall be and is interlocutory in character and shall remain so, pending further order of the Court.

IT IS FURTHER ORDERED that the district Clerk of Dallas County, Texas, shall forthwith assign a separate cause number to the case entitled Smith Protective Services, Inc. v. Andrew L. Smith, III, and that all issues referable to such severed claims shall be docketed to appear under the caption of Smith Protective Services, Inc. v. Andrew L. Smith, III.

Also on March 19, 1984, the trial court signed an “Order Concerning Filing of Motion for New Trial” in the 1980 case, which order stated that the motion for new trial filed in the original lawsuit:

... shall be and is hereby considered to have been filed in a timely and diligent fashion in severed Cause 84-3652, styled Smith Protective Services, Inc. v. Andrew L. Smith, III and that the Defendant Andrew L. Smith shall suffer no prejudice nor be considered to have engaged in any delay in this connection.

A new file jacket was prepared for Cause No. 84-3652, styled “Smith Protective Services v. Andrew L. Smith,” and copies of the “Nunc Pro Tunc Order Granting Interlocutory Default Judgment and of Severance” and the “Order Concerning Filing of Motion for New Trial” were filed in the new jacket with the 80-4872 cause number crossed out and Cause No. 84-3652 written in. Andrew never requested a hearing on his motion for new trial in either the 1980 case or the 1984 case.

In March of 1984, Andrew mistakenly appealed Cause No. 80-4872 by filing a cash bond only in the 1980 case. Although Andrew argued that he had perfected appeal of both the “Interlocutory Order” (the 1980 case) and “Nunc Pro Tunc Order” (the 1984 case), the Eastland Court of Appeals dismissed the case holding that the judgment appealed from was interlocutory in the 1980 case, and there was no appeal before them from the severed claims in the 1984 case.

Meanwhile, Andrew still had not filed an answer in the 1980 case, and, after relator reached a settlement with the Cimaglias, there was another default hearing on October 8, 1984, for the remaining causes of action against Andrew that relator claimed were not severed. Respondent, the Honorable Harlan Martin, sitting for the 162nd District Court, presided in the default hearing and granted a final judgment signed on November 26, 1984. The final judgment in Cause No. 80-4872 stated:

Defendant Andrew L. Smith, III, having previously made an appearance in this cause pertaining to the unsevered claims, and, although duly notified of trial setting by and through his attorney of record, wholly failed to appear either in person or through any representative and made default ...

IT IS FURTHER ORDERED, ADJUDGED AND DECREED that Plaintiff SMITH PROTECTIVE SERVICES, INC., have and recover from the Defendant ANDREW L. SMITH, III, actual damages in the amount of ONE HUNDRED AND FIFTY THOUSAND DOLLARS ($150,000.00).

IT IS FURTHER ORDERED, ADJUDGED AND DECREED that this judgment shall bear interest at the rate of 10.84% per annum until paid and further that Plaintiff shall have all costs of Court from the Defendant ANDREW L. SMITH, III, only, and all other such relief not expressly granted herein is denied, all for which let execution issue.

Subsequently, Andrew filed a timely motion for new trial, which was granted, and the 1980 case was nonsuited.

Thereafter, on January 28, 1985, Andrew filed in the 1984 case, Cause No. 84-3652 in the 162nd District Court, Defendant’s “Original Answer and Defendant’s Original Counterclaim for Appointment of a Receiver to Rehabilitate a Corporation.” On February 11, 1985, Relator filed a plea to the jurisdiction of the court stating that the trial court had lost jurisdiction of the cause. On March 26, 1985, the 162nd District Court entered an order overruling the plea to the jurisdiction. On March 29, 1985, Andrew filed a motion to transfer and the court granted the motion, transferring the cause to the 192nd District Court.

On April 4, 1985, Andrew filed Defendant’s “Motion to Set Aside and Vacate Interlocutory Order.” On April 11, 1985, relator filed “Plaintiff’s Response to Defendant’s Motion to Set Aside and Vacate Interlocutory Order,” and a “Motion for Reconsideration of Order Overruling Plaintiff’s Plea to the Jurisdiction and, alternatively, Motion to Abate Proceedings.” On April 18, 1985, the 192nd District Court entered its pre-trial order granting Andrew’s motions and denying relator’s motion for reconsideration. The trial court, however, abated further proceedings pending filing of mandamus proceedings in the court of appeals.

Relator then filed his first “Motion for Leave to File a Petition for a Writ of Mandamus and Writ of Prohibition” in this court. We refused to issue a writ of mandamus or writ of prohibition because relator failed to show both that it had a clear right to relief and that it had no other adequate remedy to rectify the wrong.

While relator’s petition for mandamus was pending before this Court, Andrew filed a new lawsuit, Cause No. 85-7367, styled Andrew L. Smith v. Clayton J. Smith, which was transferred to the 192nd District Court. Andrew sought damages and injunctive relief to prevent Clayton from voting his shares of stock at a meeting for shareholders of relator. As a result of Clayton’s plea in abatement for joinder of necessary parties, the 192nd District Court directed that Andrew sever his damage claims from his injunctive relief claims and join relator, Mark Smith, and Coralie Smith as defendants to the injunc-tive relief claims. The resulting severed cause of action was Cause No. 85-7915, styled Andrew L. Smith v. Clayton J. Smith, et al.

Judge Martin conducted a pre-trial conference for matters in the 1984 case and both of the 1985 causes of action. Judge Martin requested that the parties consolidate both of the 1985 causes of action into the 1984 case and that each party replead to consolidate their pleadings in order to set a schedule for trial in the consolidated cases. In compliance with Judge Martin’s request, Andrew filed in the 1984 case his amended counterclaim, his third-party action against Clayton Smith, and a motion for partial summary judgment which was scheduled for a hearing commencing on January 10, 1986. On January 15, 1986, Judge Martin sent a letter to counsel for the parties informing them that he was going to grant a partial summary judgment to Andrew. The effect of this partial summary judgment is to terminate Clayton’s stock ownership in SPS. On January 17, 1986, relator filed its motion for leave to file the present petitions for writs of prohibition and mandamus.

RELATOR’S CONTENTION

Although the recitation of the procedural background presents a quagmire, when we distill relator’s issues and arguments to their essence, the basic contention is that the nunc pro tunc order in Cause No. 84-3652 (the 1984 case) was a final order which was never appealed. Therefore, relator contends, the trial court has no authority to set it aside, to consolidate other causes into it, to overrule pleas to the jurisdiction or pleas in abatement, to relitigate issues in it, or to grant a partial summary judgment in it. Therefore, relator contends, the writs of prohibition and mandamus should issue. Respondent replies that, because the nunc pro tunc order in Cause No. 84-3652 is not a final judgment, all the proceedings now pending in that cause are proper.

DETERMINATION OF THE FINALITY OF THE NUNC PRO TUNC JUDGMENT

Because the thrust of relator’s requests for extraordinary relief is based on the contention that the nunc pro tunc order of March 19, 1984 is a final judgment, we will first determine the finality of that judgment. To begin to determine the finality of the nunc pro tunc order of March 19, 1984, we must first look at the entire contents of the order and, if the language is plain and unambiguous, we interpret the order as it was written. Bankers Home Bldg. & Loan Association v. Wyatt, 139 Tex. 173, 162 S.W.2d 694, 695 (Tex.Comm'n App.1942, opinion adopted). The heading or title of the order states: “Nunc Pro Tunc Order Granting Interlocutory Default Judgment and of Severance.” That language is clear; it indicates that the order is interlocutory, not final. But examining the body of the order, we find that not only was an interlocutory default judgment for damages rendered, but also a permanent injunction imposed on Andrew. Then, after reciting the terms of the permanent injunction, the order states:

IT IS FURTHER ORDERED that this default judgment shall be and is interlocutory in character and shall remain so, pending further order of the Court. (emphasis added).

IT IS FURTHER ORDERED that the District Clerk of Dallas County, Texas, shall forthwith assign a separate cause number to the case entitled Smith Protective Services, Inc. v. Andrew L. Smith III and that all issues referable to such severed claim shall be docketed to appear under the caption of Smith Protective Services, Inc. v. Andrew L. Smith, III.

SIGNED NUNC PRO TUNC this 19 day of March, 1984.

Dee Brown Walker, Judge

No further order of the court was entered to make the judgment final.

Because the order appears to be both interlocutory and final, it is ambiguous. Consequently, we must look not only to the order but also to the record to determine the question of finality. Cf. Lone Star Cement v. Fair, 467 S.W.2d 402, 404-05 (Tex.1971) (where judgment was held to be ambiguous, court looked to entire contents of judgment and record).

Normally, when one or more issues are severed from a pending cause of action, either new pleadings are filed in the new cause number or former pleadings are copied, renumbered, and filed in the new cause number. Unfortunately, neither was done in this case. We must assume that the judge intended that the pleadings referra-ble to SPS against Andrew in Cause No. 80-4872 be transferred to Cause No. 84-3652 when he ordered that “all issues referable to such severed claims shall be docketed to appear under the caption of Smith Protective Services, Inc. v. Andrew L. Smith, III.” Looking at the pleadings in the 1980 cause number, we find that relator alleged three causes of action against Andrew Smith:

1) Andrew breached fiduciary duties to relator by conspiring to misappropriate a trade name of Smith Protective Services (SPS);

2) Andrew breached fiduciary duties by misappropriating corporate assets and opportunities; and

3) Andrew breached fiduciary duties by attempting to solicit relator’s employees for other employment.

We hold that all the claims of relator against Andrew contained in the pleadings in Cause No. 80-4872 were severed into Cause No. 84-3652.

Relator contends that only two of the issues between Andrew and it were severed because the nunc pro tunc order adjudicated only two of the claims against Andrew. Relator further contends that, because the severed order disposes of those two issues, it is a final order. It cites the court to summary judgment cases involving severance, viz., Cherokee Water Company v. Ross, 698 S.W.2d 363, 364, 365 (Tex.1985); and Teer v. Duddleston, 664 S.W.2d 702, 703 (Tex.1984). But whether a judgment is rendered in summary proceedings, by default, or after trial on the merits, the controlling rule is that, for a judgment to be final, it must dispose of all the issues and parties in order to determine and settle the controversy in that cause. Hunt Oil Company v. Moore, 639 S.W.2d 459, 460 (Tex.1982); and MacNelly v. Cameron County, 590 S.W.2d 182, 184 (Tex.Civ.App.—Corpus Christi 1979, no writ). In the instant case, all three issues between the parties were ordered to be severed by the nunc pro tunc order of March 19, 1984. Relator admits that only two issues were disposed of by the order. Therefore, we hold that the nunc pro tunc order is not a final judgment.

DETERMINATION OF WHETHER TO GRANT EXTRAORDINARY RELIEF

Relator bases its contention that it is entitled to extraordinary relief on the premise that the nunc pro tunc order is a final judgment. We have held that it is not. That is one basis for denying relief.

Relator must satisfy the two-prong test for issuing writs of mandamus and prohibition. It must show that (1) it has a clear right to relief, and (2) it has no adequate legal remedy to rectify the alleged wrong. Fulton v. Finch, 162 Tex. 351, 346 S.W.2d 823, 829 (1961); and King v. Payne, 156 Tex. 105, 292 S.W.2d 331, 336 (1956). The gist of relator’s motions below and of its contentions in this court is that the nunc pro tunc order is res judicata to the proceedings now pending in Cause No. 84-3652. Relator can file a plea of res judica-ta below and appeal an adverse ruling. This Court has no power to issue a writ of prohibition which in effect would sustain a plea of res judicata. H.E. Butt Grocery Company v. Logue, 370 S.W.2d 418, 418-19 (Tex.Civ.App.—Waco 1963, no writ). Nor can this Court issue a writ of mandamus to vacate interlocutory orders when there is an adequate remedy at law. See Smith v. Grievance Committee, State Bar of Texas for Dist. 14-A, 475 S.W.2d 396, 399 (Tex.Civ.App.—Corpus Christi 1972, no writ). For the further reason that relator has not shown that it possesses a clear right to relief and that it has no adequate relief by way of appeal, we decline to issue the writs.

The dissent asserts that our interpretation of the 1984 order robs it of any logical meaning. This is an assertion which is not grounded in the law of conspiracy or of severance. As pointed out, the court must look to the pleadings to see what issues were severed. Because no new pleadings were filed in the 1984 case, we look to pleadings in the 1980 case to determine what claims against Andrew were severed. Pared to their essentials, they were the conspiracy to misappropriate the trade name, the misappropriation of corporate assets, and the breach of fiduciary duty in soliciting SPS’s employees.

The default judgment against Smith entered January 13, 1984 did not adjudicate the conspiracy claim. However, the interlocutory order of March 19, 1984 severed “all issues” referable to the case of SPS v. Andrew Smith III into the 1984 cause number. This would include the conspiracy claim. It is not necessarily illogical for relator’s conspiracy claim against Andrew to be severed from relator’s conspiracy claim against the Cimaglias. The liability of conspirators is joint and several. Mims v. Bohn, 536 S.W.2d 568, 570 (Tex.Civ.App.—Dallas 1976, no writ). Thus, suit may be maintained against one without joining all other conspirators. C. Hayman Construction Co. v. American Indemnity Co., 473 S.W.2d 62, 70 (Tex.Civ.App.—Dallas 1971, no writ).

The dissent also asserts that Philbrook v. Berry, 683 S.W.2d 378 (Tex.1985) is controlling as to whether we should issue a writ of mandamus. But in Philbrook all claims against the defendant were determined before they were severed. Here only two of three claims against Andrew were final before severance. Thus the default judgment against him was interlocutory, not final. Hence, relator has an adequate remedy at law in a plea of res judi-cata to any issues previously determined in that pending suit.

Moreover, the dissent asserts that, because the trial court considered the motion for new trial filed in the 1980 case as if filed in the 1984 case, the 1984 case had to be a final judgment. In Philbrook, the trial judge considered a motion for new trial filed in the original suit as if it had been filed in the severed cause. The supreme court held that a motion for new trial must be filed in the same cause as the judgment it assails. Id., at 379. Hence, the court’s order considering the motion for new trial to be filed in the 1984 case is a nullity and cannot support the dissent’s interpretation that the 1984 order was a final one.

In reviewing the record before us, we have determined that the nunc pro tunc order of March 1984 is interlocutory. Relator has shown no right to extraordinary relief. Therefore, the trial court retains jurisdiction over the 1984 consolidated cause of action.

Writs denied.

HOWELL, J., files a concurring opinion.

AKIN, J., files a dissenting opinion.