Strange v. Estate of Lindemann

408 S.W.3d 658, 2013 WL 4017342, 2013 Tex. App. LEXIS 9904
CourtCourt of Appeals of Texas
DecidedAugust 8, 2013
DocketNo. 02-12-00415-CV
StatusPublished
Cited by3 cases

This text of 408 S.W.3d 658 (Strange v. Estate of Lindemann) is published on Counsel Stack Legal Research, covering Court of Appeals of Texas primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Strange v. Estate of Lindemann, 408 S.W.3d 658, 2013 WL 4017342, 2013 Tex. App. LEXIS 9904 (Tex. Ct. App. 2013).

Opinion

OPINION

TERRIE LIVINGSTON, Chief Justice.

Joyce Strange, individually and as trustee for the Joyce Strange Marital Trust, appeals the trial court’s final summary judgment for appellees, the Estate of W.L. “Rusty” Lindemann and the Estate’s executrix, Geraldine T. Lindemann (collectively, the Estate). We affirm.

Background

Strange sued Rusty and his company, W.L. Lindemann Operating Co. (the company), in 2001 claiming that they had either drained oil from beneath properties upon which she held two oil and gas leases, failed to properly produce her leases, or both. W.L. Lindemann Operating Co. v. Strange, 256 S.W.3d 766, 772 (Tex.App.-Fort Worth 2008, pet. denied). A jury found that

• substantial drainage had occurred from one of the leases;
• the company had failed to act as a reasonably prudent operator by failing to prevent the substantial drainage;
• the company willfully commingled oil production from Strange’s lease and two other leases; and
• the company committed fraud against Strange.

Id. at 772-73. The jury awarded Strange $709,052 for the substantial drainage, $1,627,300 for the willful commingling, $233,300 for the fraud, and $200,000 in exemplary damages. Id. Because Strange elected to proceed on her fraud rather than her drainage claim, the trial court rendered a judgment for $1,860,600 plus $200,000 in exemplary damages against the company. Id. at 773.

Although Strange obtained a verdict and judgment against the company, the jury specifically found that Rusty had not operated the leases and did not commit fraud against Strange. Thus, the trial court rendered a take-nothing judgment in Rusty’s favor. Id. Strange did not appeal that judgment. Id. The company appealed the $2,060,600 judgment against it; we affirmed the fraud findings and related damages but reversed and rendered a take-nothing judgment on the willful commingling claim. Id. at 788.

On May 18, 2009, after this court’s judgment in the company’s appeal was final, Strange sued Rusty, claiming that after the trial court rendered the judgment against the company in Strange’s favor, it became apparent to Strange that the company “had always been undercapitalized ... and had never had sufficient assets to fund its operations.” Strange also alleged that the company “was organized and operated as a mere tool or business conduit of [Rusty] and was [his] alter ego.” Thus, she sought to collect the judgment against the company from Rusty by piercing the corporate veil, alleging (1) that he had used the company as a sham to perpetuate a fraud, (2) that the company was his alter ego, (3) that he used the company to evade legal obligations, (4) that he kept the company inadequately capitalized, and (5) that he committed actual fraud. Rusty filed a general denial and raised as an affirmative defense that the suit is a collateral attack on the take-nothing judgment in his favor and, thus, is barred by res judicata.

Rusty died after the second suit was filed, and the trial court granted a writ of scire facias allowing the suit to go forward against the Estate. The Estate answered and also raised the affirmative defense of res judicata and improper collateral attack on the take-nothing judgment, as well as collateral estoppel, limitations, and laches.

[660]*660Strange filed a traditional motion for summary judgment claiming that she conclusively proved that the company was a sham and merely an alter ego for Rusty. The Estate then filed both traditional and no-evidence motions for summary judgment. The Estate alleged eighteen different elements for which it contended Strange could produce no evidence. The traditional motion claimed that the Estate could conclusively prove its affirmative defense of res judicata.

After granting most of the Estate’s objections to Strange’s summary judgment evidence, and considering only the two traditional motions for summary judgment and responses, the trial court denied Strange’s motion and granted the Estate’s. Strange then appealed to this court.

Propriety of Summary Judgment for the Estate

In two issues, Strange argues that the trial court erred by granting summary judgment for the Estate and by denying her motion for summary judgment.

Standard of Review

We review a summary judgment de novo. Travelers Ins. Co. v. Joachim, 315 S.W.3d 860, 862 (Tex.2010). We consider the evidence presented in the light most favorable to the nonmovant, crediting evidence favorable to the nonmovant if reasonable jurors could, and disregarding evidence contrary to the nonmovant unless reasonable jurors could not. Mann Frankfort Stein & Lipp Advisors, Inc. v. Fielding, 289 S.W.3d 844, 848 (Tex.2009). We indulge every reasonable inference and resolve any doubts in the nonmovant’s favor. 20801, Inc. v. Parker, 249 S.W.3d 392, 399 (Tex.2008). A plaintiff is entitled to summary judgment on a cause of action if it conclusively proves all essential elements of the claim. See Tex.R. Civ. P. 166a(a), (c); MMP, Ltd. v. Jones, 710 S.W.2d 59, 60 (Tex.1986). A defendant is entitled to summary judgment on an affirmative defense if the defendant conclusively proves all the elements of the affirmative defense. Frost Nat’l Bank v. Fernandez, 315 S.W.3d 494, 508-09 (Tex.2010); see Tex.R. Civ. P. 166a(b), (c). To accomplish this, the defendant-movant must present summary judgment evidence that conclusively establishes each element of the affirmative defense. See Chau v. Riddle, 254 S.W.3d 453, 455 (Tex.2008).

Analysis

The Estate argues primarily that of the five veil-piercing theories pled by Strange, only the actual fraud theory is available to her, and because the jury in the first suit found that Rusty had not committed fraud, her attempt to enforce the judgment against the company is, in effect, an impermissible collateral attack on the take-nothing judgment in Rusty’s favor that is barred by res judicata.

Section 21.223 of the Business Organizations Code provides that a corporation’s shareholder may not be held liable to the corporation’s obligees for “any contractual obligation of the corporation or any matter relating to or arising from the obligation on the basis that the holder ... is or was the alter ego of the corporation or on the basis of actual or constructive fraud, a sham to perpetrate a fraud, or other similar theory [or] the failure of the corporation to observe any corporate formality” unless the holder “caused the corporation to be used for the purpose of perpetrating and did perpetrate an actual fraud on the obligee primarily for the direct personal benefit of the holder.” Tex. Bus. Orgs. Code Ann. § 21.223 (West 2012) (emphasis added). The actual fraud exception is “exclusive and preempts any other liability imposed for that obligation under common law or otherwise.” Id. § 21.224.

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Cite This Page — Counsel Stack

Bluebook (online)
408 S.W.3d 658, 2013 WL 4017342, 2013 Tex. App. LEXIS 9904, Counsel Stack Legal Research, https://law.counselstack.com/opinion/strange-v-estate-of-lindemann-texapp-2013.