Texacadian Energy, Inc. v. Lone Star Energy Storage, Inc.

829 S.W.2d 369, 1992 WL 75449
CourtCourt of Appeals of Texas
DecidedMay 14, 1992
Docket13-91-415-CV
StatusPublished
Cited by12 cases

This text of 829 S.W.2d 369 (Texacadian Energy, Inc. v. Lone Star Energy Storage, Inc.) 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
Texacadian Energy, Inc. v. Lone Star Energy Storage, Inc., 829 S.W.2d 369, 1992 WL 75449 (Tex. Ct. App. 1992).

Opinion

OPINION

NYE, Chief Justice.

This is a summary judgment case. Appellant, Texacadian Energy, Inc., sued ap-pellees, Lone Star Energy Storage, Inc., and its director, Marcel De Graye, for fraud. Appellees moved for summary judgment based upon limitations, res judi-cata, and collateral estoppel. The trial court granted a take-nothing summary judgment favorable to appellees. Texaca-dian appeals by four points of error. We reverse and remand the case for trial.

In June, 1990, Texacadian filed its “PETITION TO PERPETUATE TESTIMONY” in which it requested to take the deposition of Lone Star’s president, Craig Lazzari. However, a district court entered an order, denying the request. The order stated that limitations barred Texacadian’s cause of action against Lone Star.

After the trial court entered its order, Texacadian filed suit against Lone Star and Marcel De Graye. Texacadian alleged that about September, 1983, David McGee and Lone Star entered into a retainer agreement in which McGee would receive payment for his consulting services provided to Lone Star. In December, 1986, the retainer agreement was modified into a new agreement (Agreement) which contemplated payments to McGee through December 15, 1988. (A copy of the Agreement was attached to Texacadian’s pleadings.) In consideration for the modified payments and other benefits under the Agreement, McGee waived his right to receive a larger sum of money under the original retainer agreement, and he also waived his right to subscribe to $500,000 of Lone Star’s stock. This stock would have been sold to McGee at a price no greater than the lowest price paid by any other shareholder. At the time the option was given, the fair market value of this stock was $6,740,000.

Texacadian further alleged that on December 6, 1986, Lone Star, through its director, Marcel De Graye, made a material representation to Texacadian. Lone Star represented that the “cost of the North Dayton Project upon ‘Completion Date for the Second Cavern’ as that term is defined in that certain agreement between Lone Star and HL & P [Houston Lighting & Power] dated September 30, 1983, will not be less than $75,000,000.” At all relevant times, Lone Star was involved in the furnishing of a gas-storage facility, which was leased to HL & P. In connection with the agreements between Lone Star and HL & P, HL & P had an option to purchase the facility based upon a formula, which was based, in part, upon the construction cost of the North Dayton Project (Project). If the Project’s cost was substantially less than $75,000,000, the option price and resulting cost to HL & P was higher, and the profit to Lone Star was higher. Consequently, if the Project’s cost was substantially less than $75,000,000, Lone Star’s stock value was correspondingly greater. By extension, the option which McGee held to buy Lone Star’s stock was or would have been greater if the Project’s cost was substantially less than $75,000,000.

By virtue of De Graye’s representation concerning the Project’s cost, McGee was *371 willing to waive his option rights in Lone Star’s stock. Had McGee known that the Project’s cost was substantially less than $75,000,000, he would not have waived his option rights. McGee was fraudulently induced into relinquishing his stock-purchase rights. Texacadian, as assignee of McGee’s claims against appellees, sued ap-pellees for fraud, requesting $11,428,690 in damages.

Appellees moved for summary judgment based upon limitations, res judicata, and collateral estoppel. They contended that a two-year statute of limitations governed fraud claims and that Texacadian did not file suit until roughly ten months after the running of limitations. Appellees argued that res judicata and collateral estoppel barred further litigation of Texacadian’s claims because the trial court’s order denying Texacadian’s “PETITION TO PERPETUATE TESTIMONY,” which said that limitations barred Texacadian’s cause of action, formed a final judgment regarding all of the issues in this case. Appellees’ summary judgment evidence included the affidavit of Lone Star’s president, Craig Lazza-ri, correspondence from David McGee’s attorney, Richard Colton, and certified copies of Texacadian’s “PETITION TO PERPETUATE TESTIMONY” and the trial court’s “ORDER DENYING MOTION TO PERPETUATE TESTIMONY.”

In response, Texacadian contended that limitations did not bar its suit because a four-year statute of limitations governs fraud claims and that the events which were the bases of its fraud claim occurred within four years of the date it filed suit against appellees. Texacadian also argued that res judicata and collateral estoppel did not bar its suit for two reasons. First, the trial court’s order was not an appealable, final judgment. It was an interlocutory order which ruled on a technical or procedural aspect of the case. Second, the trial court’s order merely denied Texacadian’s request to take Craig Lazzari’s deposition and did not involve a trial on the merits. Texacadian’s summary judgment evidence included David McGee’s affidavit.

The trial court granted summary judgment in appellees’ favor, from which Texacadian brings the present appeal. The summary judgment order did not state which defense the trial court relied on when granting the summary judgment. When a summary judgment order does not state the bases upon which it was granted, a party appealing from the order must show that each of the independent arguments alleged in the motion were insufficient to support the trial court’s summary judgment order. Tucker v. Atlantic Richfield Co., 787 S.W.2d 555, 558 (Tex.App.—Corpus Christi 1990, writ denied); McCrea v. Cubilla Condominium Corp. N.V., 685 S.W.2d 755, 757 (Tex.App.—Houston [1st Dist.] 1985, writ ref’d n.r.e.).

Limitations, res judicata, and collateral estoppel are affirmative defenses. Tex.R.Civ.P. 94. When a defendant moves for summary judgment based on an affirmative defense, its burden is to prove conclusively all essential elements of its affirmative defense as a matter of law. Roark v. Stallworth Oil and Gas, Inc., 813 S.W.2d 492, 495 (Tex.1991). In reviewing appel-lees’ summary judgment proof, every reasonable inference must be indulged in favor of Texacadian, the non-movant, and any doubts resolved in its favor. Nixon v. Mr. Property Management Co., 690 S.W.2d 546, 548-49 (Tex.1985).

By point one, Texacadian complains that the trial court erred in granting summary judgment because a four-year statute of limitations applies to fraud claims and that the events which formed the bases of its fraud suit occurred within four years of the date suit was filed. Before 1979, two limitations statutes applied to debts. The two-year statute, formerly art. 5526 of the Revised Civil Statutes and now codified in its amended form as § 16.003 of the Civil Practice and Remedies Code, formerly listed and applied to “Actions for debt where the indebtedness is not evidenced by a contract in writing.” Tex.Rev.Civ.Stat. art. 5526 (1925). The four-year statute, formerly art.

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829 S.W.2d 369, 1992 WL 75449, Counsel Stack Legal Research, https://law.counselstack.com/opinion/texacadian-energy-inc-v-lone-star-energy-storage-inc-texapp-1992.