Sustainable Texas Oyster Resource Management, LLC v. Hannah Reef, Inc., Shrimps R US, Inc., IVO Slabic and Michael Ivic

Opinion

Opinion issued December 22, 2020

In The

Court of Appeals For The

First District of Texas ———————————— NO. 01-18-00088-CV ——————————— SUSTAINABLE TEXAS OYSTER RESOURCE MANAGEMENT, L.L.C., Appellant V. HANNAH REEF, INC., SHRIMPS R US, INC., IVO SLABIC, AND MICHAEL IVIC, Appellees

On Appeal from the 56th District Court Galveston County, Texas Trial Court Case No. 15-CV-0772

OPINION

The dispute in this case arose after the Chambers–Liberty Counties

Navigation District (“Navigation District”) issued a Coastal Surface Lease to

Sustainable Texas Oyster Resource Management, L.L.C. (“STORM”) in 2014, authorizing STORM to cultivate and harvest oysters on 23,000 acres of submerged

land in Galveston and Trinity Bays. The lease purported to give STORM the

exclusive right to engage in oyster-production activities on the submerged land and

authorized STORM to protect the submerged land from trespassers in the same

manner as a freeholder of the land.

At the time the Navigation District issued the Coastal Surface Lease to

STORM, parts of the 23,000 acres covered by the lease were already subject to six

oyster-production permits, known as “certificates of location,” and accompanying

oyster leases issued by the Texas Parks and Wildlife Department (“TPWD”) to

oystermen (1) Hannah Reef, Inc., (2) Shrimps R Us, Inc. (3) Ivo Slabic, and (4)

Michael Ivic (“the Oystermen”). The certificates of location and accompanying

oyster leases authorized the Oystermen to plant and construct private oyster beds on

the submerged land identified in each certificate of location. The Oystermen also

possessed permits and licenses issued by the TPWD, authorizing the Oystermen to

harvest oysters from naturally-occurring oyster reefs located within public fishing

grounds, which also lie within the boundaries of STORM’s lease.

After STORM began to treat the Oystermen as trespassers, litigation ensued

between the parties regarding which had the right to cultivate and harvest oysters in

the areas of Galveston and Trinity Bays covered by STORM’s Coastal Surface

Lease. At the heart of the dispute was whether the Navigation District had the legal

2 authority to grant STORM the Coastal Surface Lease, purporting to give STORM

the exclusive right to engage in oyster-production activities on the submerged land

covered by the lease, or whether the TPWD had the exclusive authority to regulate

oyster-production activities, including the exclusive authority to grant the right to

cultivate and harvest oysters on land submerged beneath Texas waters. Stephen

Hillman, who claimed to have a TPWD license to fish and harvest oysters in the

public waters that lie within the boundaries of the Coastal Surface Lease, later joined

the suit, aligning with the Oystermen.

In a pre-trial partial summary-judgment order, the trial court rendered

declaratory relief requested by the Oystermen, declaring that (1) the TPWD had the

exclusive authority to regulate the cultivation and harvesting of oysters; (2) the

Navigation District did not have the legal authority to issue the Coastal Surface

Lease to STORM; and (3) the Coastal Surface Lease was void and unenforceable

against the Oystermen’s rights. The trial court also declared that the Oystermen were

not trespassers as a matter of law and ordered STORM to take nothing on its

counterclaims.

The trial court determined that the Oystermen were entitled to recover

attorney’s fees from STORM under the Declaratory Judgments Act. See TEX. CIV.

PRAC. & REM. CODE § 37.009 (providing that “court may award costs and reasonable

and necessary attorney’s fees as are equitable and just” in declaratory-judgment

3 proceeding). The issue of reasonable and necessary attorney’s fees was tried to a

jury, and the trial court rendered judgment on the jury’s verdict, awarding the

Oystermen $417,000 in attorney’s fees for the trial-court proceedings and additional

sums totaling $75,000 for conditional appellate attorney’s fees. The final judgment

also ordered that the Oystermen take nothing on their claim for trespass to try title,

and it incorporated a nonsuit without prejudice filed by Hillman.

Among its challenges on appeal, STORM contends that trial court erred in

declaring that the Navigation District had no legal authority to issue the Coastal

Surface Lease to STORM, and it asserts that the Oystermen improperly prosecuted

their case under the Declaratory Judgments Act. STORM also challenges the trial

court’s take-nothing summary judgment on its trespass and related counterclaims

and disputes the award of attorney’s fees on several grounds, including failure to

segregate the fees. STORM further contends that the trial court erred by permitting

Hillman to nonsuit his claims after trial. Finally, STORM requests that we reconsider

a venue ruling made in an earlier interlocutory appeal in this case.

We agree with STORM that, because the Oystermen did not segregate their

attorney’s fees between claims on which attorney’s fees may be recovered and those

for which they may not, the portion of the judgment awarding attorney’s fees should

be reversed, and the attorney’s fees issue remanded to the trial court for a new trial.

4 We reject STORM’s other arguments and affirm the remainder of the trial court’s

judgment.

Background

A. Historical Facts

The Texas Legislature created the Chambers–Liberty Counties Navigation

District in 1944. Chambers-Liberty Ctys. Navigation Dist. v. State, 575 S.W.3d 339,

342 (Tex. 2019). The Navigation District operated as a navigation district authorized

by Article XVI, Section 59 of the Texas Constitution and Chapter 62 of the Texas

Water Code. Id. In 1974, the Navigation District converted into a “self-liquidating

district,” operating under Chapter 63 of the Water Code. See TEX. WATER CODE

§§ 63.021(a), 63.022.

In 1957 and 1967, the State of Texas conveyed land submerged by the waters

in and around Galveston Bay to the Navigation District. The submerged land, located

in Chambers and Galveston Counties, was conveyed by a series of land patents. The

conveyances were authorized by Texas Revised Civil Statutes article 8225 (1925),

which provided, in part, as follows:

Any Navigation District heretofore or hereafter organized under this title or any General Law under which said subdivision may be created shall have the right to purchase from the State of Texas any lands and flats belonging to said State, covered or partly covered by the waters of any of the bays or other arms of the sea to be used by said District for the purposes authorized by law with the right to dredge out or to fill in and reclaim said lands or otherwise improve the same . . . .

5 Chambers-Liberty Ctys. Navigation Dist., 575 S.W.3d at 342 (setting out text of

article 8225).

From 1975 to 1989, the TPWD issued six certificates of location and

accompanying oyster leases to private parties, permitting those parties to establish

private oyster beds on the submerged land described in the certificates. These six

tracts of submerged land lie within the land transferred to the Navigation District by

the State of Texas in 1957 and 1967. Over time, the six certificates of location and

oyster leases was transferred to different private parties. By 2014, the six certificates

of location and oyster leases were held by the four Oystermen. Hannah Reef and

Michael Ivic each held two certificates of location. The submerged land included in

those four certificates of location was in Galveston County. Shrimps R Us and Ivo

Slabic each held one certificate of location. The submerged land covered by those

two certificates was in Chambers County.

On April 14, 2014, the Navigation District entered into a Coastal Surface

Lease with STORM. The Coastal Surface Lease granted STORM the exclusive right,

for a period of 30 years, to cultivate and harvest oysters on approximately 23,000

acres of submerged land in Galveston and Trinity Bays. The Coastal Surface Lease

stated that ownership of the submerged land was conveyed to the Navigation District

by the State of Texas by patents in 1957 and 1967. The tracts of submerged land

6 subject to the six certificates of location and oyster leases held by the Oystermen

was within the 23,000 acres covered by the Coastal Surface Lease.

On August 5, 2014, STORM sent a letter to the Oystermen entitled “No

Trespass Notice” and “No Unauthorized Oyster Activities Notice.” The letter

notified the Oystermen as follows:

This letter is written notice to you that [STORM] is the Lessee of the land described in the referenced Coastal Surface Lease from [the Navigation District]. [The Navigation District] obtained fee simple title to the land from the State of Texas by . . . Letters Patent. The land is located along the shore of Trinity-Galveston-West-East Bay and is generally submerged land.

....

[The Navigation District] acquired fee simple title to the land in 1957 & 1967. Pursuant to the Coastal Surface Lease, STORM has the superior right to use and possession of the land under [the Navigation District’s] fee simple title for oyster purposes. . . .

The right to plant, cultivate and grow oysters on this land is inherent in [the Navigation District’s] fee title to the land; a right now leased to STORM. It has come to STORM’s attention that you might be engaged in or about to engage in oyster activities on the land that conflict with STORM’s property rights and the Coastal Surface Lease. Be advised that under the Coastal Surface Lease, you may not engage in oyster activities upon the land without STORM’s consent. Likewise, under the Texas Parks & Wildlife Code, you may not catch by any means or method or possess an oyster on this land without STORM’s consent. . . .

Any claim that the State of Texas has the right to authorize you to trespass upon the land is without merit.

7 TAKE NOTICE that you do not have STORM’s consent to engage in oyster activities on the land. If you engage in oyster activities on the land, or interfere with STORM’s rights to use and possession of the land, TAKE NOTICE that STORM will enforce its rights against trespassing and trespassers to the fullest extent of the law.

The letter was signed by STORM’s principal, Tracy Wood.

B. Trial Court Proceedings and Interlocutory Appeal

On July 24, 2015, the Oystermen filed suit against STORM in Galveston

County District Court, asserting claims to quiet title, for trespass to try title, and for

tortious interference with prospective business relations. The Oystermen also sued

under the Declaratory Judgments Act, seeking declaratory relief. In addition, the

Oystermen requested injunctive relief as well as monetary damages and attorney’s

fees.

STORM answered, generally denying the Oystermen’s claims. STORM also

filed a motion to transfer venue to Chambers County. STORM asserted venue was

mandatory in Chambers County for Shrimps R Us’s and Slabic’s claims because the

certificates of location and oyster leases held by those two parties involved

submerged land located in Chambers County.

The Oystermen responded to the motion, arguing that venue was proper in

Galveston County for Shrimps R Us’s and Slabic’s claims because there was an

“essential need” for those claims to be decided in Galveston County District Court,

where the suit was pending. The Oystermen also amended their petition, filing their

8 Fourth Amended Petition. They continued to pursue claims to quiet title, for trespass

to try title, and for tortious interference. The Oystermen maintained that their oyster

leases were valid and that the Coastal Surface Lease, which covered areas including

not only the Oystermen’s six oyster leases, but also public fishing grounds, was

invalid. The Oystermen asserted that the TPWD “has the sole authority to issue

leases (along with certificates of location) authorizing persons to plant oysters and

make a private oyster bed in the public waters of the State.” They alleged that the

Navigation District did not “have any legal authority to lease the submerged lands

for purposes of cultivating or harvesting oysters.”

The Oystermen requested the trial court to enjoin STORM “from seeking

enforcement of [the Coastal Surface Lease] against [the Oystermen], in any manner,

and interfering with [the Oystermen’s] use and enjoyment of their property covered

by their leases with the State.” The Oystermen also requested the trial court to

determine whether STORM, by way of the Coastal Surface Lease, could limit the

Oystermen’s right to harvest oysters from public fishing grounds that lie within the

lease’s boundaries. The Oystermen asserted that the TPWD “has the sole authority

to issue commercial oyster fishermen’s licenses to persons desiring to take oysters

from public waters of the State.” The Oystermen indicated that they each have

licenses, issued by the TPWD, to harvest oysters in the public fishing areas of

9 Galveston Bay. The Oystermen further sought “declaratory relief that [the Coastal

Surface Lease] in no way prohibits their ability to fish for oysters in public waters.”

The Oystermen also requested monetary damages for their tortious

interference claim. They alleged that STORM had engaged “in harassing conduct”

by navigating “their boats so close to [the Oystermen’s] boats that at least one was

forced aground.” They alleged that STORM had been “following and filming one or

more of [the Oystermen’s] crews for purposes of intimidation, to frustrate [the

Oystermen’s] attempts to relocate oysters in danger of dying as a result of the

Memorial Day floods in the Galveston Bay area.” The Oystermen alleged that,

because of STORM’s conduct, they were not able “to rescue and relocate various

beds of oysters.” They claimed that “those oysters died resulting in a loss of

revenue.” The Oystermen further claimed that STORM’s conduct was “exacerbated

by its public statements to the effect that [the Oystermen] were ‘stealing’ STORM’s

oysters.”

The Oystermen requested a temporary injunction “to prevent [STORM] from

acting pursuant to an invalid lease, including the exclusion of [the Oystermen] from

the property at issue and/or interference with [the Oystermen’s] quiet use and

enjoyment of such property.” The Oystermen further sought to restrain “STORM

from interfering with their right to fish for oysters in public waters STORM now

alleges it controls.”

10 Following an evidentiary hearing, the trial court granted the Oystermen’s

request for a temporary injunction. The temporary-injunction order provided,

The Court finds and concludes that [the Oystermen] hold leases and certificates of location issued by the Texas Parks and Wildlife Department . . . authorizing [the Oystermen] to plant and harvest oyster beds in Galveston Bay, as well as licenses to fish for oysters in the public waters of the State.

The Court finds and concludes that STORM, in reliance on [the Coastal Surface Lease], intends to restrict access by [the Oystermen] to the approximately 23,000 acres covered by the [Coastal Surface Lease], which includes areas covered by [the Oystermen’s] leases and certificates of location, and public waters that [the Oystermen] are otherwise licensed to fish in.

The trial court ordered STORM to refrain from entering the Oystermen’s

leaseholds and “from hunting, catching, transplanting, or disturbing” the oysters in

the leaseholds. STORM was also restrained “from prohibiting, preventing, or

limiting [the Oystermen’s] access to and use of the area covered by the [Coastal

Surface Lease], pursuant to licenses issued by the [TPWD].” STORM was further

restrained “from interfering with, harassing, or disrupting [the Oystermen’s] oyster

fishing activities or the oyster fishing activities of any duly licensed oyster

fisherman.”

After granting the temporary injunction, the trial court denied STORM’s

motion to transfer venue of Shrimps R Us’s and Slabic’s claims to Chambers

County. STORM filed an interlocutory appeal challenging the order. Sustainable

Tex. Oyster Res. Mgmt. L.L.C. v. Hannah Reef, Inc., 491 SW.3d 96 (Tex. App.—

11 Houston [1st Dist.] 2016, pet. denied). On appeal, Shrimps R Us and Slabic asserted

that there was an “essential need” for their claims to be tried in Galveston County

along with the other two Oystermen’s claims because transferring all or part of their

claims to Chambers County could result in inconsistent judgments between the two

counties. Id. at 109. They pointed out that the validity of the Coastal Surface Lease

was a central issue to all claims being asserted and that Galveston County was the

proper venue for the Oystermen’s declaratory-judgment claim regarding whether

STORM had the right under the Coastal Surface Lease to exclude licensed oyster

fishermen from public fishing areas within the lease. Id. at 109–10. Shrimps R Us

and Slabic asserted that a determination of the declaratory-judgment claim in

Galveston County could be detrimental to the prosecution of their oyster-lease

claims if those claims were transferred to Chambers County. Id. at 110.

We agreed with STORM that, to prove their trespass-to-try-title claims, the

Oystermen were required to recover on the strength of their own title and not rely on

the weakness of STORM’s title. Id. But we disagreed with STORM’s assertion that

the declaratory-judgment claim regarding whether STORM had the right under the

Coastal Surface Lease to exclude licensed oyster fishermen from the public fishing

areas did not have the potential to affect the trespass-to try-title claims. Id.

We determined that Shrimps R Us and Slabic had shown that it was

“indispensably necessary for them to litigate all of their claims in Galveston County”

12 because there was “the potential for inconsistent judgments if Shrimps R Us’s and

Slabic’s claims were transferred to Chambers County” and given “the possible

preclusive effect of the declaratory judgment as to the validity of STORM’s Coastal

Surface Lease on trying issues in Chambers County that were previously litigated

by the same parties in Galveston County.” Id. at 112. We concluded that Shrimps R

Us and Slabic had “established an essential need to have their claims tried in

Galveston County District Court where the suit is pending.” Id. We held that the trial

court had not erred when it denied STORM’s motion to transfer venue, and we

affirmed the trial court’s order denying the motion. Id.

In the trial court, STORM filed a counterclaim against the Oystermen,

asserting claims for trespass, conversion, money had and received, and accounting.

STORM’s claims were based on its assertion that the Navigation District, not the

TPWD, had the legal authority to lease for oyster production the 23,000 acres of

submerged land conveyed to the Navigation District by the State of Texas in 1957

and 1967. STORM asserted that the Navigation District’s legal authority to lease the

submerged land for oyster production derived from the State’s conveyances of the

property by land patents to the Navigation District and from provisions of the Texas

Water Code governing navigation districts. STORM claimed that the Navigation

District had the legal authority to issue the Coastal Surface Lease to STORM in

2014, but the TPWD had no legal authority to issue, from 1975 to 1989, the

13 certificates of location and oyster leases held by the Oystermen that lie within the

Coastal Surface Lease’s boundaries. STORM asserted that the Coastal Surface Lease

gave it “exclusive possession” of the submerged land “to use, create, manage,

possess, cultivate and control oyster beds.” STORM claimed that the Oystermen

were trespassing on STORM’s property when the Oystermen entered the areas

covered by the certificates of location to engage in oyster-production activities.

STORM also claimed that, by harvesting oysters within the boundaries of their

certificates of location, the Oystermen had wrongfully taken and damaged its

property.

The Oystermen filed a motion for partial summary judgment. They argued

that the Coastal Surface Lease was invalid as a matter of law because the Texas

Wildlife Conservation Act gave the TPWD exclusive authority to regulate oyster-

production activities in Texas. The Oystermen asserted that the Navigation District

is governed by the Water Code, which enables the Navigation District “to improve

waters for purposes of navigation” but does not empower it to issue private oyster

leases. The Oystermen requested that, pursuant to the Declaratory Judgments Act,

the trial court declare that the Coastal Surface Lease was void and unenforceable

against the Oystermen and dismiss STORM’s counterclaims.

STORM filed a combined response to the Oystermen’s motion and a

countermotion for summary judgment. STORM asserted that it was entitled to

14 summary judgment on its counterclaims for trespass and related causes of action.

STORM continued to claim that the Navigation District had the legal authority to

issue the Coastal Surface Lease to STORM. It asserted that the Navigation District

had received fee simple title to the submerged land from the State and that the

Navigation District had statutory authority under the Water Code. STORM also

argued that the Oystermen were not entitled to a declaratory judgment because

“Texas courts have long held that the Declaratory Judgments Act may not be used

to settle issues regarding title to real property because such lawsuits are properly

brought as trespass to try title actions.” In its reply, the Oystermen countered that a

request for declaratory relief was appropriate because the Coastal Surface Lease

affected “not only [the Oystermen’s] certificates of location issued by [the TPWD],

but also the rights of [the Oystermen] to harvest oysters on public reefs during the

public oyster season.”

On September 28, 2016, the trial court signed an order denying STORM’s

countermotion for summary judgment. On the same day, the trial court granted

partial summary judgment in the Oystermen’s favor. The court granted Oystermen’s

requested relief under the Declaratory Judgments Act and ordered that STORM take

nothing on its counterclaims. In the partial summary judgment order favoring the

Oystermen, the trial court ruled:

[T]he Court DECLARES as follows:

15 a. Texas Parks and Wildlife Department has the exclusive authority to control the planting and harvesting of oysters;

b. Chambers-Liberty Counties Navigation District . . . has no legal authority to regulate oysters;

c. [The Navigation District] did not have legal authority under the State Constitution or under State law to enter into the Coastal Surface Lease with Sustainable Texas Oyster Resource Management, L.L.C. (“STORM”), effective April 15, 2014; and

d. The Coastal Surface Lease between [the Navigation District] and STORM, effective April 15, 2014, is null and void and is unenforceable against [the Oystermen’s] rights and privileges granted by fishing and oystering licenses, leases, and permits issued by the State of Texas.

The Court further DECLARES that as to every counterclaim asserted by STORM in its live pleading, Plaintiffs [the Oystermen] are not trespassers as a matter of law, precluding relief to STORM by that counterclaim. It is therefore ORDERED that Defendant STORM’s claims of trespass, conversion, money had and received, accounting, and request for injunctive relief are DISMISSED WITH PREJUDICE and that STORM shall take nothing by its counterclaims against Plaintiffs Hannah Reef, Inc., Shrimps R Us, Inc., Ivo Slabic and Michael Ivic.

It is further ORDERED, ADJUDGED and DECREED that Plaintiffs Hannah Reef, Inc., Shrimps R Us, Inc., Ivo Slabic and Michael Ivic shall recover from Defendant STORM their reasonable and necessary attorney fees and costs under [the Declaratory Judgments Act] Tex. Civ. Prac. & Rem. Code § 37.009. The Court shall set a date for submission of evidence in support of and controverting an award of attorney’s fees, as are equitable and just, by further Order.

At the time the trial court signed the order, the Oystermen’s Sixth Amended

Petition was their live pleading. Stephan Hillman had joined the Oystermen as a

plaintiff in the Fifth Amended Petition. Hillman was described as “the owner of

16 Hillman Guide Service and holds a sports fishing license issued by the [the TPWD],

allowing him to fish and harvest oysters in the public waters of Galveston Bay,

Texas.” Tracy Woody and Jeri’s Seafood were also added as defendants in the Fifth

Amended Petition and remained defendants in the Sixth Amended Petition. The

pleadings alleged that Woody was STORM’s principal and that Jeri’s Seafood was

“a retail and wholesale business that sells oysters” managed by Woody.

The Sixth Amended Petition also contained a new cause of action: conspiracy

in restraint of trade. The new claim involved allegations that the Navigation District

had conspired with STORM, Woody, and Jeri’s Seafood to enter into the Coastal

Surface Lease “to exclude Plaintiffs and others from harvesting oysters in 23,000

acres of Trinity and Galveston Bays and eliminating those in competition with Jeri’s

Seafood.”

The order granting the Oystermen’s motion for partial summary judgment

stated that Hillman “continued his prosecution of the [motion for partial summary

judgment] to a later date and subject to other orders of the Court.” The Oystermen

stated on the record at the summary-judgment hearing that the motion was not

asserted against defendants Woody and Jeri’s Seafood, and the Oystermen later

nonsuited their claims against those two defendants.

The case was called for a jury trial on November 13, 2017. The live pleading,

the Tenth Amended Petition, alleged causes of action for quiet title and trespass to

17 try title. The previously pleaded tort claims of tortious interference and conspiracy

had been abandoned in the Seventh Amended Petition. Damages were no longer

pleaded, but the petition continued to request declaratory and injunctive relief along

with attorney’s fees pursuant to the Declaratory Judgments Act.

At the start of trial, the Oystermen informed the trial court that they were not

pursuing their claims for quiet title and trespass to try title, indicating to the trial

court that the declaratory relief granted in the earlier partial summary judgment order

had given them adequate relief. And the only issue remaining for trial was the

amount of reasonable and necessary attorney’s fees the Oystermen were entitled to

recover under the Declaratory Judgments Act.

In support of the attorney’s fees request, one of the Oystermen’s attorneys

testified as their attorney’s fees expert. He opined that that the reasonable and

necessary attorney’s fees incurred by the Oystermen since the suit was filed was

$417,000. The Oystermen offered billing records to support the requested fees. The

Oystermen’s attorney also provided testimony to support an award of appellate

attorney’s fees.

On cross-examination, STORM asked the Oystermen’s attorney whether he

had segregated the attorney’s fees between claims on which attorney’s fees may be

recovered and those for which they may not. The attorney responded that he had not

segregated the fees because segregation was not necessary in this case. On redirect

18 examination, the Oystermen’s attorney testified that he believed segregation was not

necessary because the attorney’s fees incurred for claims for which attorney’s fees

are not recoverable also “advanced the merits of the [Declaratory Judgments Act]

claim” for which the Oystermen were entitled to recover attorney’s fees.

STORM moved for directed verdict. Among its arguments, STORM objected

that the Oystermen were required to segregate their attorney’s fees and had failed to

do so. The trial court overruled STORM’s motion.

STORM presented the testimony of J. Studer, an attorney’s fees expert. Studer

testified that he had reviewed the billing records of the Oystermen’s attorneys and

had concluded that the attorney’s fees requested by the Oystermen were not

reasonable and necessary. Studer testified that the reasons for his opinion included

that the Oystermen were requesting attorney’s fees “not necessary and not related to

the claim for which they’re making claim on fees.” He stated that it was his opinion

that the Oystermen were “making [a] claim for fees for efforts that are related to

issues or parties that [they] abandoned and that did not advance the claim for [which]

they’re seeking fees today.”

The jury found that the Oystermen’s reasonable and necessary attorney’s fees

for the trial court proceedings was $417,000. The jury also found that the Oystermen

were entitled to conditional attorney’s fees for different stages of appeal, totaling

$75,000.

19 Two weeks after trial, Hillman filed a notice of nonsuit without prejudice.

That same day, the Oystermen filed a motion for entry of judgment on the jury’s

verdict. The trial court granted the motion and signed the final judgment. The

judgment recited that, before trial, the trial court had granted the Oystermen’s motion

for partial summary judgment for declaratory relief and had granted summary

judgment against STORM on its counterclaims. The judgment also recited that

STORM’s countermotion for summary judgment had been denied.

The final judgment incorporated the jury’s findings and awarded the

Oystermen $417,000 in attorney’s fees for proceedings through trial and a total of

$75,000 in conditional appellate attorney’s fees “pursuant to the Declaratory

Judgments Act.” The judgment stated that the Oystermen “shall take nothing by

reason of their claim in the Tenth Amended Petition for Trespass to Try Title.”

The same day that the trial court signed the final judgment, it also signed a

separate order “granting” Hillman’s nonsuit and ordering that “Stephen Hillman’s

claims be nonsuited without prejudice as to re-refiling of the same.” In the final

judgment, the trial court recognized that Hillman had “previously filed a Notice of

Non-suit as to his claims in the Tenth Amended Petition.” The judgment concluded

by stating that it “dispose[d] of all claims and all parties.”

20 Declaratory Relief

In its first issue, STORM challenges the declaratory relief granted in the trial

court’s September 28, 2016 partial summary judgment order. Declaratory judgments

rendered by summary judgment are reviewed under the same standards that govern

traditional summary judgments generally. Hourani v. Katzen, 305 S.W.3d 239, 248

(Tex. App.—Houston [1st Dist.] 2009, pet. denied). We review a traditional motion

for summary judgment de novo to determine whether a party’s right to prevail is

established as a matter of law. See Provident Life & Acc. Ins. Co. v. Knott, 128

S.W.3d 211, 215 (Tex. 2003).

As discussed above, the trial court declared as follows in the partial summary

judgment order:

a. Texas Parks and Wildlife Department has the exclusive authority to control the planting and harvesting of oysters;

b. Chambers-Liberty Counties Navigation District . . . has no legal authority to regulate oysters;

c. [The Navigation District] did not have legal authority under the State Constitution or under State law to enter into the Coastal Surface Lease with Sustainable Texas Oyster Resource Management, L.L.C. (“STORM”), effective April 15, 2014; and

d. The Coastal Surface Lease between [the Navigation District] and STORM, effective April 15, 2014, is null and void and is unenforceable against [the Oystermen’s] rights and privileges granted by fishing and oystering licenses, leases, and permits issued by the State of Texas.

21 The Court further DECLARES that as to every counterclaim asserted by STORM in its live pleading, Plaintiffs [the Oystermen] are not trespassers as a matter of law, precluding relief to STORM by that counterclaim.

A. Declaratory Relief Included in Final Judgment

STORM begins by pointing out that the declaratory relief was rendered in an

interlocutory order granting partial summary judgment and contends that the

declarations were not incorporated into the final judgment. However, contrary to this

contention, the final judgment expressly references the interlocutory order, reciting

that the trial court granted the Oystermen’s motion for partial summary judgment

for declaratory relief. The final judgment also recites, before awarding attorney’s

fees under the Declaratory Judgments Act, that the award was made “pursuant to the

prior declarations, the jury verdict, and [the trial court’s] determinations of law.”

(Emphasis added.) Moreover, even if the final judgment had not referenced and

relied on the interlocutory order, the partial summary judgment granting the

declaratory relief merged into the final judgment. See Bonsmara Nat. Beef Co., LLC

v. Hart of Tex. Cattle Feeders, LLC, 603 S.W.3d 385, 390 (Tex. 2020) (“When a

trial court renders a final judgment, the court’s interlocutory orders merge into the

judgment . . . .”); City of Beaumont v. Guillory, 751 S.W.2d 491, 492 (Tex. 1988)

(per curiam) (holding partial summary judgment becomes appealable when it merges

into final judgment).

22 B. Declaratory-Judgments-Act Claim is a Standalone Claim

STORM also points out that, prior to trial, the Oystermen had abandoned their

claims for tortious interference and conspiracy. And, when trial began, the

Oystermen stated on the record that they were also abandoning their claims to quiet

title and for trespass to try title. At that point, the Oystermen’s claim for declaratory

relief remained in the Tenth Amended Petition, the live pleading. In its order for

partial summary judgment, the trial court had earlier granted the Oystermen’s

requested declaratory relief and ordered that the Oystermen were entitled to their

reasonable and necessary attorney fees under the Declaratory Judgments Act, but the

amount of the Oystermen’s reasonable and necessary attorney’s fees remained to be

tried. See TEX. CIV. PRAC. & REM. CODE § 37.009.

STORM asserts that the declaratory relief rendered by the trial court cannot

stand because, when the final judgment was signed, the Oystermen had no live

causes of action aside from their claim under Declaratory Judgments Act. STORM

incorrectly suggests that a claim under the Declaratory Judgments Act must be

asserted in combination with another cause of action. This and other courts have

long recognized that a suit under the Declaratory Judgments Act is not confined to

cases in which the parties have a cause of action apart from a claim under the Act

itself. Garwood Irr. Co. v. Lundquist, 252 S.W.2d 759, 760 (Tex. App.—Galveston

1952, writ ref’d); see Tex. Dep’t of Pub. Safety v. Moore, 985 S.W.2d 149, 153 (Tex.

23 App.—Austin 1998, no pet.); Transp. Ins. Co. v. Franco, 821 S.W.2d 751, 754 (Tex.

App.—Amarillo 1992, writ denied). “To hold that there must be a cause of action as

that term is ordinarily used [in addition to a Declaratory-Judgments-Act claim]

would defeat the fundamental purpose and destroy the real value of the remedy”

provided by the Act. Garwood Irr. Co., 252 S.W.2d at 760. In short, a suit may be

pursued on a claim under the Declaratory Judgments Act alone, without asserting an

additional cause of action, and we reject STORM’s assertion to the contrary.1 See

Moore, 985 S.W.2d at 153; Franco, 821 S.W.2d at 754; Garwood Irr. Co., 252

S.W.2d at 760.

C. Coastal Surface Lease’s Validity Properly Determined under the Declaratory Judgments Act

STORM argues that the trial court erred by granting partial summary

judgment on the Oystermen’s claim for declaratory relief because the Declaratory

Judgments Act “cannot be used to determine questions of title to real property.”

1 The critical requirements to obtain a declaratory judgment are (1) the existence of a justiciable controversy as to the rights and status of the parties, and (2) the declaration will resolve the controversy. See Brooks v. Northglen Ass’n, 141 S.W.3d 158, 163–64 (Tex. 2004). A justiciable controversy is one in which a real and substantial controversy exists involving a genuine conflict of tangible interest and not merely a theoretical dispute. Unocal Pipeline Co. v. BP Pipelines (Alaska) Inc., 512 S.W.3d 492, 505 (Tex. App.—Houston [1st Dist.] 2016, pet. denied). Here, the dispute over the validity of the Coastal Surface Lease, which STORM relied on to treat the Oystermen as trespassers and prevent their access to areas within the lease, including the public fishing grounds, was a justiciable controversy. The trial court’s declarations, including its declaration that the Coastal Surface Lease was void and unenforceable, resolved the controversy. 24 STORM points out that the Oystermen pleaded and then abandoned their claim for

trespass to try title. STORM asserts that, by allowing the Oystermen to obtain a

declaration regarding the validity of the Coastal Surface Lease, the Oystermen were

permitted to recover the same relief that they sought in their trespass-to-try-title

claim—i.e., “that their [oyster] leases are valid and STORM’s [lease] is not”—

without requiring the Oystermen to prove trespass-to-try title.

A declaratory-judgment action “provides an efficient vehicle for parties to

seek a declaration of rights under certain instruments.” Martin v. Amerman, 133

S.W.3d 262, 265 (Tex. 2004). The Supreme Court of Texas has recognized that

“[t]he issue of whether a claimant must seek relief related to property interests

through a trespass-to-try-title action, as opposed to a suit under the Declaratory

Judgments Act, has been the source of some confusion in [that] Court and others.”

Lance v. Robinson, 543 S.W.3d 723, 735 (Tex. 2018).

The Declaratory Judgments Act provides,

A person interested under a deed, will, written contract, or other writings constituting a contract or whose rights, status, or other legal relations are affected by a statute, municipal ordinance, contract, or franchise may have determined any question of construction or validity arising under the instrument, statute, ordinance, contract, or franchise and obtain a declaration of rights, status, or other legal relations thereunder.

25 TEX. CIV. PRAC. & REM. CODE § 37.004(a). The purpose of the Act is to settle and

to afford relief from uncertainty and insecurity with respect to rights, status, and

other legal relations. Id. § 37.002(b).

In contrast, the Texas Property Code provides that “[a] trespass to try title

action is the method of determining title to lands, tenements, or other real property.”

TEX. PROP. CODE § 22.001(a). A trespass-to-try-title action “is typically used to clear

problems in chains of title or to recover possession of land unlawfully withheld from

a rightful owner.” Martin, 133 S.W.3d at 265. The Supreme Court of Texas has

determined that a trespass-to-try-title action is the proper procedural vehicle “when

the claimant is seeking to establish or obtain the claimant’s ownership or possessory

right in the land at issue.” Lance, 543 S.W.3d at 736 (emphasis in original).

However, if the claimant seeks a declaration regarding a defendant’s authority to

obstruct the claimant’s access to the disputed area, then the claimant may receive

declaratory relief under the Declaratory Judgments Act. See id. at 734–35. For

example, the supreme court has determined “that the trespass-to-try-title statute does

not apply to a claimant who seeks to establish an easement, because such a claimant

does not have such a possessory right. An easement is a nonpossessory interest that

authorizes its holder to use the property for only particular purposes.” Id. at 736

(internal citation and quotation marks omitted).

26 Similarly, here, among their claims, the Oystermen asserted a nonpossessory

interest to harvest oysters in the public fishing grounds within the boundaries of the

Coastal Surface Lease pursuant to the permits and licenses they received from the

TPWD. In their pleadings and in the motion for summary judgment proceeding, the

Oystermen sought declarations relating to the Coastal Surface Lease’s validity to

enforce their right to access the public fishing grounds. See id. at 737. By asserting

their rights to harvest oysters in the public fishing grounds, the Oystermen did not

claim any ownership or possessory interest in the disputed area. Instead, they sought

to void STORM’s lease to defend their nonpossessory interests from exclusion and

obstruction by STORM. See id. Thus, it was proper for the trial court to render

declarations invalidating STORM’s lease. See id. (holding relief under Declaratory

Judgments Act proper when plaintiff sought declaration that defendant had no

ownership interest in property, not to assert superior title or possessory rights, but to

defend nonpossessory easement). The overall effect of declaring the lease void and

“unenforceable against [the Oystermen’s] rights and privileges granted by fishing

and oystering licenses, leases, and permits” was only to deprive STORM of the

ability to exclude the Oystermen from the disputed areas within its lease and prevent

STORM from treating the Oystermen as trespassers. See id. While the declarations

implicated the validity of the Oystermen’s certificates of location and oyster leases,

the declarations did not determine the Oystermen’s ownership or possessory rights

27 in any disputed areas within the Coastal Surface Lease. We hold that the Declaratory

Judgments Act was the correct mechanism to invalidate the Coastal Surface Lease,

and the Oystermen were not required to prove a trespass-to-try-title claim.

D. Declarations Correct as Matter of Law

STORM further asserts that the trial court’s declarations—that the Navigation

District “did not have legal authority under the State Constitution or under State law

to enter into the Coastal Surface Lease with [STORM]” and that the lease is void

and unenforceable—are incorrect as a matter of law. After STORM’s opening brief

was filed in this case, the Supreme Court of Texas held in Chambers-Liberty

Counties Navigation District v. State—a case involving the validity of the same

Coastal Surface Lease at issue here—that the TPWD, not the Navigation District,

has the “exclusive regulatory authority” to grant the right “to cultivate and harvest

oysters on submerged land beneath state waters.” 575 S.W.3d at 353.

In that case, the State of Texas filed suit in Travis County against the

Navigation District, its Commissioners in their official capacities, and STORM,

seeking to invalidate the Coastal Surface Lease “under the theory that Texas law

affords the [TPWD], not the District, the sole power to decide who may and may not

cultivate oysters” in and around Galveston Bay. Id. at 341. The State sought a

declaratory judgment that the Coastal Surface Lease was void because it exceeds the

lawful authority of the Navigation District and its Commissioners, who acted ultra

28 vires by entering into the lease. Id. at 343. The State also requested monetary

damages, which it described as “restitution,” from the Navigation District and

STORM under sections 12.301 and 12.303 of the Parks and Wildlife Code. Id.

The Navigation District and its Commissioners filed a plea to the jurisdiction

and a motion to dismiss under Texas Rule of Civil Procedure 91a, asserting that the

Navigations District’s immunity from suit barred the State’s claims. Id. The trial

court denied the plea and the motion. Id.

The Navigation District and the Commissioners (but not STORM) filed an

interlocutory appeal in the Third Court of Appeals, challenging the denial of the plea

to the jurisdiction and motion to dismiss. Id. at 343–44. The court of appeals reversed

the portion of the trial court’s order permitting the State to pursue an ultra vires claim

against the Navigation District itself but otherwise affirmed the denial of the plea to

the jurisdiction. Id. at 344. The court of appeals held that the State could pursue a

claim against the Navigation District for money damages under the Parks and

Wildlife Code. Id. It also held that the State could not pursue ultra vires claims

against the Navigation District, but it could pursue ultra vires claims against the

Commissioners in their official capacities. Id. The court determined that issuing the

Coastal Surface Lease exceeded the Commissioners’ lawful authority and that the

State had therefore pleaded a viable ultra vires claim against the Commissioners. Id.

29 The Supreme Court of Texas granted the Commissioners’ petition for review.

The court held that the court of appeals erred by permitting the State to pursue

monetary relief against the Navigation District under the Parks and Wildlife Code

because the State’s claims against the Navigation District were barred by immunity.

Id. at 348. The court held that the court of appeals had correctly determined that the

State’s ultra vires claim could not proceed against the Navigation District itself. Id.

The court also affirmed the court of appeals’ conclusion that the State had

properly asserted an ultra vires claim against the Commissioners in their official

capacities by asserting that the Commissioners had acted beyond their statutory

authority when they entered into the Coastal Surface Lease with STORM. Id. at 349.

In its analysis of this issue, the supreme court stated that, “[t]o determine whether

the District, through its Commissioners, acted beyond its legal authority, we first

examine the sources of that authority.” Id. at 350. The court recognized that the

Navigation District’s authority derives from Article XVI, Section 59 of the Texas

Constitution. Id. The court explained that Article XVI, Section 59(b) provides that

the “rights, privileges and functions” of the Navigation District are limited to those

“conferred by law.” Id. The source of such law is enactments of the Legislature. Id.

The court stated that the Navigation District “was originally created under TEX. REV.

CIV. STATS. ANN. art. 8225 (1925)” and noted that article 8225 confirmed that the

Navigation District’s purposes are only those which are “authorized by law.” Id.

30 “Navigation districts created by Article XVI, Section 59 are governed by Chapter 62

of the Water Code.” Id. 350–51 (citing TEX. WATER CODE § 62.021 (“A navigation

district may be created in the manner prescribed by this subchapter under Article

XVI, Section 59, of the Texas Constitution.”)).

The supreme court recognized that “[a] district created under Chapter 62 may

acquire land.” Id. at 351 (citing TEX. WATER CODE § 62.107(a)). And a district may

“lease and grant easements on any part of the acquired land to any person and may

charge for the lease or easement reasonable tolls, rents, fees, or other charges.” Id.

(citing TEX. WATER CODE §§ 62.107(b), 60.038(a)). However, the supreme court

clarified “that general authority to lease land is not a license to enter into any lease

imaginable. As with any other activity it undertakes, the District may exercise its

authority to lease land only when doing so is consistent with its limited statutory

purposes conferred by law.” Id. (citing TEX. CONST. art XVI, § 59(b)).

The court stated that the Navigation District’s leasing authority needed to be

considered in conjunction with the statutory provisions of the Water Code, which

established the Navigation District’s limited purpose: navigation. Id. (citing TEX.

WATER CODE. §§ 61.116(b), 63.152, 63.153). The court noted that “[t]he sources of

legislative authority on which the Commissioners rel[ied] [did] not expressly

mention oyster cultivation and harvesting.” Id. And “[t]he closest the

Commissioners [came] to a specific statutory source of such authority is section

31 61.116(b) of the Water Code, which defines ‘navigation’ as referring ‘to marine

commerce and immediately related activities, including . . . commercial and sport

fishing.’” Id. But, section 61.116(b) did “not expressly refer to oysters, and it is not

directly applicable to the District, because Chapter 61 governs districts created under

Article III, Section 52 of the Texas Constitution,” while the Navigation District “was

created under Article XVI, Section 59.” Id.

The court observed: “Whether, standing alone, the District’s generic statutory

authority to lease land and regulate commerce and wildlife for navigation purposes

is sufficient to authorize it to go into business as an oyster landlord is perhaps a close

question.” Id. However, “[t]he District’s enabling statutes do not exist in a vacuum”

and must be considered along with “other sources of state law that limit or enlarge

the District’s legal authority,” such as “the Parks and Wildlife Code, which contains

an extensive and exclusive grant of authority to the [TPWD] to regulate the

harvesting and cultivation of oysters.” Id.

The court was mindful that it had “previously held that if the Legislature has

enacted two statutory regimes that arguably govern the conduct of the parties, the

regime that more narrowly and with more specificity covers the conduct at issue is

presumed to govern.” Id. Specific provisions of the Parks and Wildlife Code give

the TPWD, not the Navigation District, “the authority under Texas law to regulate

the conservation and harvesting of oysters.” Id. at 352; see TEX. PARKS & WILD.

32 CODE § 1.011(c) (“All the beds and bottoms and the products of the beds and bottoms

of the public rivers, bayous . . . bays . . . and of that part of the Gulf of Mexico within

the jurisdiction of this state are the property of this state. The state may permit the

use of the waters and bottoms and the taking of the products of the bottoms and

waters.”); id. § 1.011(d) (“The Parks and Wildlife Department shall regulate the

taking and conservation of fish, oysters . . . and all other kinds and forms of marine

life . . . in accordance with the authority vested in it by this code.”); id. § 12.001(a)

(stating, without reservation, that TPWD “shall administer the laws relating to game,

fish, oysters, and marine life”); id. § 12.0011(a) (TPWD “is the state agency with

primary responsibility for protecting the state’s fish and wildlife resources”).

The supreme court found to be significant that “the Parks and Wildlife Code

has an entire chapter—Chapter 76—vesting the Department with detailed authority

over the regulation of oysters.” Chambers-Liberty Ctys. Navigation Dist., 575

S.W.3d at 352. Chapter 76 contains over forty provisions, including section 76.003,

which provides that oyster beds and reefs, other than natural oyster beds, are “subject

to location by the [TPWD].” Id. (citing TEX. PARKS & WILD. CODE § 76.003). The

court discussed numerous provisions in Chapter 76 governing various aspects of

oyster production. Id. at 352–53. The supreme court then concluded:

The detailed, specific regulatory authority described above does not give way when it comes into conflict with general provisions regarding the authority of navigation districts, none of which relate specifically to oysters. The conflict is more than theoretical. In this case, STORM has 33 attempted to stop oyster cultivation by third parties to whom the Department has granted certificates of location. And the rights granted to STORM under the Lease purport to give it the right to cultivate and harvest oysters over an area vastly exceeding the area permitted under Chapter 76 of the Parks and Wildlife Code.

Id. at 353.

The court also addressed an argument raised by the Commissioners and by

STORM, which sought to participate in the supreme court proceedings.2 STORM

and the Commissioners claimed that the Navigation District’s “ownership of the

submerged lands in fee simple [gave] it a property right to lease its land free from

the [TPWD’s] interference.” Id. They asserted that the Navigation District’s “alleged

right to lease its submerged land for oyster cultivation, even though the State

regulates the oysters, is like the right of a rancher to lease his land for deer hunting

even though the State regulates the wild deer.” Id. STORM contended that, if the

Navigation District cannot lease its submerged land to whom it chooses, “then no

landowner is safe from the Parks and Wildlife Department’s interference with

property rights.” Id.

The supreme court found “[that] line of argument [to be] specious,”

explaining as follows:

2 At the end of its opinion, the supreme court held that STORM could not participate in the supreme court proceedings because it had not been involved in the Navigation District’s plea to the jurisdiction and was not a party in the court of appeals. Chambers-Liberty Ctys. Navigation Dist. v. State, 575 S.W.3d 339, 355–56 (Tex. 2019). 34 The District is not a private property owner. It is the government. This case has nothing to do with private property rights. The only real estate at issue is public. Unlike private landowners, whose fundamental private property rights pre-date the constitution and are protected by several provisions of it, navigation districts have no private property rights. Any “rights” a navigation district can be said to have come directly from the Legislature, and the Legislature may cabin or limit those “rights” as it sees fit. To the extent the Legislature may have given the District some oblique grant of power to execute oyster-cultivation leases under the Water Code, it took that power away in the Parks and Wildlife Code by vesting specific and exclusive regulatory authority over oyster cultivation in the Department. The statutory-interpretation question before the Court has nothing to do with property rights and everything to do with the scope of authority granted by the Legislature to various components of government. By contrast, a private landowner objecting to state interference with his right to lease his land would have all manner of constitutional, statutory, and common-law arguments that the District does not, and cannot, make. Such a case would look nothing like this one.

Id.

Ultimately, after considering “the extensive and exclusive regulatory

authority vested in the Parks and Wildlife Department by the Legislature to decide

who may cultivate and harvest oysters in state waters,” the court held, albeit on a

“limited record,” that “the Commissioners exceeded their authority by entering into

a Lease that purported to grant to STORM the exclusive right to cultivate and harvest

oysters on submerged land beneath state waters.” Id. The court further held that the

authority to grant the right to cultivate and harvest oysters “rests exclusively with

the [TPWD].” Id. The court explained, “If it were shared with the District and other

35 similarly situated local governments, the [TPWD] could not carry out its statutory

obligations unfettered by local interference.” Id.

The arguments raised by the Commissioners and rejected by the supreme

court in Chambers-Liberty Counties Navigation District are essentially the same as

those raised by STORM here to support its contention that the Navigation District

had the legal authority to issue the Coastal Surface Lease. Even though the supreme

court’s decision was in the context of an interlocutory appeal involving a plea to the

jurisdiction on a “limited record,” we are bound by the supreme court’s

determination of law that the authority to grant parties the right to cultivate and

harvest oysters on the submerged land beneath state waters rests exclusively with

the TPWD. See id.; see also Swilley v. McCain, 374 S.W.2d 871, 875 (Tex. 1964)

(“After a principle, rule or proposition of law has been squarely decided by the

Supreme Court, or the highest court of the State having jurisdiction of the particular

case, the decision is accepted as a binding precedent by the same court or other courts

of lower rank when the very point is again presented in a subsequent suit between

different parties.”). Thus, the Navigation District had no legal authority to issue the

Coastal Surface Lease to STORM. See Chambers-Liberty Ctys. Navigation Dist.,

575 S.W.3d at 353. We hold that the trial court’s declarations—that the Navigation

District “did not have legal authority under the State Constitution or under State law

36 to enter into the Coastal Surface Lease with [STORM]” and that the lease is void

and unenforceable—are correct as a matter of law. See id.

E. No Conflict Between Declarations and Final Judgment

Finally, we address STORM’s assertion that the provision in the final

judgment, ordering that the Oystermen take nothing by their abandoned trespass-to-

try-title claim, conflicts with declarations in the order granting partial summary

judgment. STORM asserts that, “because the final judgment renders judgment

against the [Oystermen] on their trespass to try title claim, it necessarily vests title

and the right of possession to the land in STORM.” In support of its position,

STORM relies on the following language from Hejl v. Wirth:

It has long been the rule in this State that in a trespass to try title suit, the plaintiff must recover upon the strength of his own title. If the plaintiff under the circumstances fails to establish his title, the effect of a judgment of take nothing against him is to vest title in the defendant. The rule is a harsh one, but it also has been well established as a rule of land law in this State.

343 S.W.2d 226, 226 (Tex. 1961).

STORM asserts that “[t]he final judgment, which renders judgment against

the [Oystermen] on their trespass to try title claim,” conflicts with the declarations

in the partial summary judgment order, which STORM contends gave the Oystermen

“a superior right of possession to the leased land.” STORM claims that, under the

rule in Hejl, the take nothing order in the final judgment operates to nullify the

37 declarations in the partial summary judgment order and to vest title in disputed land

in STORM. We disagree for two reasons.

First, no conflict exists between the final judgment and the partial summary

judgment order because, as discussed, the declarations do not give the Oystermen

ownership or possession of the disputed areas. Second, we do not agree that the rule

stated in Hejl applies here. The supreme court made clear in Chambers-Liberty

Counties Navigation District that the TPWD has the exclusive authority to grant

parties the right to cultivate and harvest oysters on the submerged public land

beneath the state waters of Galveston Bay. See 575 S.W.3d at 353. In the extensive

and detailed statutory scheme governing oyster conservation and cultivation in

Texas, the Legislature has decided that only the TPWD may determine who will

receive a certificate of location, lease, permit, or license to cultivate and harvest

oysters in Texas. See id. Thus, the action or inaction of a private party in prosecuting

its trespass-to-try title claim cannot operate to override that Legislative mandate and

permit a party not approved by the TPWD to engage in oyster-production activities.

For all the above-stated reasons in this and the proceeding subsections, we

hold that the trial court did not err when it granted the Oystermen’s partial summary

judgment on their requested declaratory relief. Accordingly, we overrule STORM’s

first issue.

38 STORM’s Counterclaims

In its second issue, STORM contends that the trial court erred when it granted

summary judgment in favor of the Oystermen on STORM’s trespass and related

counterclaims. The trial court’s order granting partial summary judgment stated:

The Court further DECLARES that as to every counterclaim asserted by STORM in its live pleading, [the Oystermen] are not trespassers as a matter of law, precluding relief to STORM by that counterclaim. It is therefore ORDERED that Defendant STORM’s claims of trespass, conversion, money had and received, accounting, and request for injunctive relief are DISMISSED WITH PREJUDICE and that STORM shall take nothing by its counterclaims against [the Oystermen].

STORM asserts, “The trial court’s dismissal of STORM’s counterclaims was

premised on its conclusion that the [Oystermen] are not trespassers as a matter of

law. Because the [Oystermen] are in fact trespassers as a matter of law, this Court

should reverse the dismissal of STORM’s counterclaims.” STORM further asserts

that its “primary cause of action is for trespass” and that each of its additional

counterclaims is “directly related to the trespass claim.” STORM contends that, if

the trial incorrectly determined that the Oystermen were not trespassers, then

summary judgment on all its counterclaims must be reversed.

“Trespass” is defined as “an unauthorized entry upon the land of another.”

Envtl. Processing Sys., L.C. v. FPL Farming Ltd., 457 S.W.3d 414, 424 (Tex. 2015)

(quoting Barnes v. Mathis, 353 S.W.3d 760, 764 (Tex. 2011)). The gist of a claim

for trespass to real property is the injury to the right of possession. Coastal Oil &

39 Gas Corp. v. Garza Energy Trust, 268 S.W.3d 1, 9 (Tex. 2008). The supreme court

has defined “trespasser” to mean “someone who ‘enters upon the property of another

without any right, lawful authority, or express or implied invitation, permission, or

license.’” Envtl. Processing Sys., L.C., 457 S.W.3d at 424 (quoting Tex.-La. Power

Co. v. Webster, 91 S.W.2d 302, 306 (Tex. 1936)).

STORM re-asserts its contention that “the final judgment vests title and the

right of possession [of the submerged land] in STORM.” It also asserts that the

Navigation District “is the owner of the submerged land and has the exclusive right

to possess and lease that land to others.” STORM contends that “for both of these

reasons STORM—and not the [Oystermen]—is entitled to possession of the land

and has the exclusive right to use the land for cultivating and harvesting oysters.”

However, we have already determined that the final judgment did not vest title or

right of possession in STORM. And we have determined that the Navigation District

did not have legal authority to issue the Coastal Surface Lease. See Chambers-

Liberty Ctys. Navigation Dist., 575 S.W.3d at 353. Moreover, the summary-

judgment evidence included the Oystermen’s certificates of location issued by

TPWD, permitting the Oystermen to enter the disputed area to cultivate and harvest

oysters. Thus, the trial court properly concluded that the Oystermen were not

trespassers in the context of STORM’s claims against them, which were based on

40 the Oystermen’s oyster-harvesting activities in the disputed area. We hold that the

trial court did not err in granting summary judgment on STORM’s counterclaims.

We overrule STORM’s second issue.

Attorney’s Fees

In its third issue, STORM contends that the trial court erred by awarding

attorney’s fees to the Oystermen under the Declaratory Judgments Act. Under the

Act, a court “may award . . . reasonable and necessary attorney’s fees as are equitable

and just.” TEX. CIV. PRAC. & REM. CODE § 37.009. Based on the jury’s findings, the

trial court awarded the Oystermen $417,000 in attorney’s fees for the trial-court

proceedings and a total of $75,000 in conditional appellate attorney’s fees.

In challenging the attorney’s fees award, STORM again asserts that the

Oystermen’s request to invalidate the Coastal Surface Lease was in effect a claim

for trespass to try title, a claim that does not permit the recovery of attorney’s fees.

See Martin, 133 S.W.3d at 267 (holding that when “the trespass-to-try-title statute

governs the parties’ substantive claims . . ., [the plaintiff] may not proceed

alternatively under the Declaratory Judgments Act to recover their attorney’s fees”).

Because we have held that they were entitled to declaratory relief, the Oystermen

were entitled to obtain attorney’s fees under the Declaratory Judgments Act. See

TEX. CIV. PRAC. & REM. CODE § 37.009.

41 STORM also challenges the attorney’s fees award on the ground that the

Oystermen failed to segregate the fees between recoverable and unrecoverable fees.

Texas law does not allow for recovery of attorney’s fees unless authorized by statute

or contract. Tony Gullo Motors I, L.P. v. Chapa, 212 S.W.3d 299, 310 (Tex. 2006).

As a result, attorney’s-fee claimants have always been required to segregate fees

between claims for which they are recoverable and claims for which they are not. Id.

at 311. The need to segregate attorney’s fees is a question of law, and the extent to

which certain claims can or cannot be segregated is a mixed question of law and fact.

Id. at 312–13; CA Partners v. Spears, 274 S.W.3d 51, 81 (Tex. App.—Houston [14th

Dist.] 2008, pet. denied). The party seeking to recover attorney’s fees has the burden

of demonstrating that fee segregation is not required. Lion Co-Polymers Holdings,

LLC v. Lion Polymers, LLC, No. 01-16-00848-CV, 2018 WL 3150863, at *17 (Tex.

App.—Houston [1st Dist.] June 28, 2018, pet. denied) (mem. op.) (citing Hong Kong

Dev., Inc. v. Nguyen, 229 S.W.3d 415, 455 (Tex. App.—Houston [1st Dist.] 2007,

no pet.)).

If any attorney’s fees relate solely to a claim for which such fees are

unrecoverable, a claimant must segregate recoverable from unrecoverable fees.

Chapa, 212 S.W.3d at 313. “Intertwined facts do not make tort fees recoverable; it

is only when discrete legal services advance both a recoverable and unrecoverable

claim that they are so intertwined that they need not be segregated.” Id. at 313–14.

42 “[T]o meet a party’s burden to segregate its attorney[’s] fees, it is sufficient to submit

to the fact-finder testimony from a party’s attorney concerning the percentage of

hours related to claims for which fees are not recoverable.” RM Crowe Prop. Servs.

Co., L.P. v. Strategic Energy, L.L.C., 348 S.W.3d 444, 453 (Tex. App.—Dallas

2011, no pet.); see Chapa, 212 S.W.3d at 314 & n.83; Young v. Dimension Homes,

Inc., No. 01-14-00331-CV, 2016 WL 4536407, at *10 (Tex. App.—Houston [1st

Dist.] Aug. 30, 2016, no pet.) (mem. op.) (“[A]n attorney can satisfy his evidentiary

burden by presenting evidence of unsegregated attorney’s fees and a rough

percentage of the amount attributable to the claims for which fees are not

recoverable.”).

In addition to their claim for declaratory relief, for which attorney’s fees were

recoverable, the Oystermen also asserted claims for trespass to try title, tortious

interference with prospective business relations, and conspiracy in the restraint of

trade, claims for which attorney’s fees were not recoverable. See Palacios v. Patel,

No. 02-18-00119-CV, 2018 WL 2728441, at *4 (Tex. App.—Fort Worth June 7,

2018, no pet.) (mem. op.) (attorney’s fees not recoverable for civil conspiracy);

Friend v. Friend, No. 02-15-00166-CV, 2016 WL 7240596, at *2 (Tex. App.—Fort

Worth Dec. 15, 2016, no pet.) (mem. op.) (attorney’s fees not recoverable for tortious

interference); I-10 Colony, Inc. v. Lee, 393 S.W.3d 467, 477 (Tex. App.—Houston

43 [14th Dist.] 2012, pet. denied) (attorney’s fees not recoverable in trespass-to-try-title

action).

As evidence of their attorney’s fees, the Oystermen offered the testimony of

one of their attorneys and redacted billing records. The Oystermen’s attorney

testified that the reasonable and necessary amount of attorney’s fees incurred by the

Oystermen in the trial-court proceedings was $417,000. On cross-examination,

STORM asked the Oystermen’s attorney whether he had segregated the attorney’s

fees between claims on which attorney’s fees may be recovered and those for which

they may not. The attorney responded that he had not segregated the fees because

segregation was not necessary in this case. On redirect examination, the Oystermen’s

attorney testified, without elaboration, that he believed segregation was not

necessary because the attorney’s fees incurred for claims for which attorney’s fees

are not recoverable also “advanced the merits of the [Declaratory Judgments Act]

claim” for which the Oystermen were entitled to recover attorney’s fees. On further

cross-examination, the attorney testified that the “legal services that had been

performed in connection with claims for which attorney’s fees would not be

recoverable like a tort claim, in my opinion advanced the prosecution of the claims

for which we could recover attorney’s fees and so I had not segregated.”

An examination of the record, however, shows that evidence of fee

segregation was required. Discrete legal services were expended to advance claims

44 for which fees were not recoverable. As an example, we observe that the Oystermen

filed ten versions of their petition, pleading separate claims for which attorney’s fees

are not recoverable. In each of their ten petitions, the Oystermen pleaded trespass to

try title, set out in several paragraphs in each petition. The Oystermen also pleaded

tortious interference with prospective business relations in their first seven petitions

along with a request for actual and exemplary damages. And, the Oystermen added

conspiracy in the restraint of trade in their Sixth Amended Petition, omitting it after

their Seventh Amended Petition. Where asserted, the claims for tortious interference

and for conspiracy, along with the request for associated damages, comprised

multiple paragraphs.

We are mindful that unrecoverable fees are not rendered recoverable “merely

because they are nominal.” Chapa, 212 S.W.3d at 313. If any of the component tasks

relate solely to a cause of action for which legal fees are not recoverable, the claimant

must segregate the fees. 7979 Airport Garage, L.L.C. v. Dollar Rent A Car Sys., Inc.,

245 S.W.3d 488, 509 (Tex. App.—Houston [14th Dist.] 2007, pet. denied) (op. on

reh’g). Courts have determined that evidence of fee segregation is required

concerning the drafting of a petition when the petition pleads causes of action for

which attorney’s fees are both recoverable and unrecoverable, and portions of the

petition relate solely to the causes of action for which fees are unrecoverable. See

Chapa, 212 S.W.3d at 313. (“But when Chapa’s attorneys were drafting her

45 pleadings or the jury charge relating to fraud, there is no question [that] those fees

were not recoverable.”); Chevron Phillips Chem. Co. LP v. Kingwood Crossroads,

L.P., No. 09-14-00316-CV, 2017 WL 4182292, at *8 (Tex. App.—Beaumont Sept.

21, 2017, no pet.) (mem. op.) (reversing attorney’s fees award when unrecoverable

fees for drafting paragraphs in petitions not segregated); CA Partners, 274 S.W.3d

at 84 (holding fee segregation required when claims for which fees were not

recoverable required “drafting separate portions of [the appellee’s] pleading,”

“separate legal research,” and “possibly separate discovery requests”); 7979 Airport

Garage, L.L.C., 245 S.W.3d at 509–10 (determining that fees were unrecoverable

for neither drafting paragraph of petition asserting claim for which fees were not

recoverable nor for drafting two jury-charge questions related to that claim and

reversing attorney’s fees award for failure to segregate those fees).

Here, the attorney’s fees incurred to prepare the portions of the Oystermen’s

petitions relating solely to the causes of action for trespass to try title, tortious

interference with prospective business relations, and conspiracy were not

recoverable, and the attorney’s fees for drafting those portions of the petitions should

have been segregated. Even if these fees are nominal, they must nonetheless be

segregated from the recoverable fees.3 See Chapa, 212 S.W.3d at 313; Corey v.

3 We are not suggesting that there are no additional attorney’s fees that may need to be segregated. We are using the unrecoverable fees incurred in preparing the petitions only as an example. 46 Rankin, No. 14–17–00752–CV, 2018 WL 5914531, at *11 (Tex. App.—Houston

[14th Dist.] Nov. 13, 2018) (mem. op.).

We conclude that the Oystermen were required to present evidence of the

segregation of their attorney’s fees. See Chapa, 212 S.W.3d at 313–14. Because they

did not do so, we must reverse the attorney’s fees award and remand the issue to the

trial court for a new trial on that limited issue. See id. at 314; see also McMahon v.

Zimmerman, 433 S.W.3d 680, 691 (Tex. App.—Houston [1st Dist.] 2014, no pet.)

(“Typically, if segregation is required and the claimant does not provide testimony

from counsel on the proper segregation of the fee, the cause is remanded for a factual

determination of the portion of the attorneys’ work that is attributable to the

recoverable claim.”). This includes a reversal and remand of the attorney’s fees

incurred during the trial-court proceedings and the conditional appellate attorney’s

fees. See Prudential Ins. Co. v. Durante, 443 S.W.3d 499, 515 (Tex. App.—El Paso

2014, pet. denied) (reversing and remanding appellate attorney’s fees when appeal

was partially successful based on segregation-of-fees issue).

We sustain STORM’s third issue for the reasons discussed above.

Hillman’s Nonsuit

In its fifth issue, STORM contends that the trial court erred by permitting

Hillman to nonsuit his claims without prejudice after trial on the Oystermen’s

47 attorney’s fees.4 STORM asserts that “[t]he nonsuit of Plaintiff Hillman’s claims

against STORM without prejudice after the close of evidence and trial was an

improper attempt to avoid a final judgment that he take nothing because he proved

nothing.”

The record reflects that after trial on the Oystermen’s attorney’s fees, but

before the trial court signed the final judgment, Hillman filed a notice that he was

nonsuiting his claims without prejudice. The same day that the trial court signed the

final judgment, it also signed a separate order “granting” Hillman’s nonsuit and

ordering that “Stephen Hillman’s claims be nonsuited without prejudice as to re-

refiling of the same.” The final judgment noted that “Plaintiff Stephen Hillman has

previously filed Notice of Nonsuit as to his claims in the Tenth Amended Petition.”

STORM objected to the nonsuit in its motion for new trial, which was denied.

STORM complains that the Rules of Civil Procedure prohibit a party from

nonsuiting its claims after it has finished presenting its evidence at trial. See TEX. R.

CIV. P. 162; Epps v. Fowler, 351 S.W.3d 862, 868 (Tex. 2011). “The trial court may,

however, grant a plaintiff’s nonsuit after the close of evidence in its sound

discretion.” M & E Endeavours LLC v. Cintex Wireless LLC, No. 01-15-00234-CV,

2016 WL 1590642, at *5 (Tex. App.—Houston [1st Dist.] Apr. 19, 2016, no pet.)

4 We consider STORM’s fifth issue before its fourth issue for purposes of organization and efficiency. 48 (mem. op.) (citing Miller v. Sam Montgomery Oldsmobile Co., 656 S.W.2d 917,

918–19 (Tex. App.—Houston [1st Dist.] 1983, writ dism’d)); see also O’Brien v.

Stanzel, 603 S.W.2d 826, 828 (Tex. 1980) (“We do not hold that there are no

situations in which a trial court may exercise discretion even though the trial has

progressed beyond the rule’s point of no return.”).

Although Hillman filed his notice of nonsuit after trial on the Oystermen’s

attorney’s fees, the record reflects that Hillman did not participate in trial. The order

for partial summary judgment provided that the Oystermen “shall recover from

Defendant STORM their reasonable and necessary attorney fees and costs under

TEX. CIV. PRAC. & REM. CODE § 37.009.” The order did not state that Hillman could

recover attorney’s fees.

The final judgment stated that “[a]fter announcements of ready for trial, the

Court and jury heard the evidence submitted by Plaintiffs Hannah Reef, Inc.,

Shrimps R Us, Inc., Ivo Slabic, and Michael Ivic, Plaintiffs [sic], and Defendant

Sustainable Texas Oyster Resource Management, L.L.C. (STORM).” Nothing in the

record indicates that Hillman participated in trial. The final judgment reflects that

only the Oystermen were awarded attorney’s fees, not Hillman. Considering these

circumstances, the trial court did not abuse its discretion in allowing Hillman to

nonsuit his claims without prejudice. See O’Brien, 603 S.W.2d at 828; M & E

Endeavours LLC, 2016 WL 1590642, at *5; Miller, 656 S.W.2d at 919.

49 We overrule STORM’s fifth issue.5

Venue

In its fourth issue, STORM requests that we reconsider our affirmance in the

interlocutory appeal of the trial court’s order denying STORM’s motion to transfer

venue from Galveston County to Chambers County. See Sustainable Tex. Oyster

Res. Mgmt. L.L.C., 491 SW.3d at 112. STORM qualifies its request by stating that

it seeks reconsideration of the venue issue if “any part of the Chambers County

claims is retried.” Because the only issue being remanded to the trial court is the

issue of attorney’s fees, we do not read STORM’s request to encompass that issue.

But even if it does, the law-of-the case doctrine applies to our earlier holding

regarding venue. See Nw. Indep. Sch. Dist. v. Carroll Indep. Sch. Dist., 414 S.W.3d

684, 688 (Tex. App.—Fort Worth 2014, pet. denied) (en banc) (holding that decision

on question of law in earlier, interlocutory appeal was “law of the case” in

subsequent appeal from final judgment).

The law-of-the case doctrine is defined as “that principle under which

questions of law decided on appeal to a court of last resort will govern the case

5 In its fifth issue, STORM also complains that “the trial court erred by not specifying the post-judgment rate of interest in the award of attorney’s fees.” Because the award of attorney’s fees is reversed, we do not address this complaint. See TEX. R. APP. P. 47.1 (providing that “court of appeals must hand down a written opinion that is as brief as practicable but that addresses every issue raised and necessary to final disposition of the appeal”). 50 throughout its subsequent stages.” Loram Maint. of Way, Inc. v. Ianni, 210 S.W.3d

593, 596 (Tex. 2006) (citing Hudson v. Wakefield, 711 S.W.2d 628, 630 (Tex.

1986)). Although a decision rendered on an issue before the appellate court does not

absolutely bar re-consideration of the same issue on a second appeal, application of

the doctrine lies within the discretion of the court, depending on the particular

circumstances surrounding the case. Briscoe v. Goodmark Corp., 102 S.W.3d 714,

716 (Tex. 2003). Given that the only issue to be remanded to the trial court is the

issue of attorney’s fees, we do not exercise our discretion to reconsider our earlier

ruling regarding venue.

We overrule STORM’s fourth issue.

Conclusion

We reverse the portion of the trial court’s judgment awarding attorney’s fees,

including conditional appellate attorney’s fees, affirm the remainder of the

judgment, and remand the case to the trial court for a new trial limited to the issue

of the Oystermen’s reasonable and necessary attorney’s fees. See TEX. CIV. PRAC. &

REM. CODE § 37.009; TEX. R. APP. P. 43.2; see also Getty v. Perryman, No. 14-17-

00887-CV, 2019 WL 1768604, at *6 (Tex. App.—Houston [14th Dist.] Apr. 23,

2019, no pet.) (mem. op.) (reversing portion of judgment awarding attorney’s fees

based on failure to segregate, affirming remainder of judgment, and remanding for

new trial limited to issue of attorney’s fees).

51 Richard Hightower Justice

Panel consists of Chief Justice Radack and Justices Hightower and Adams.