Opinion
No. 01-10-00033-CV
Opinion issued August 31, 2010.
On Appeal from the 215th District Court, Harris County, Texas, Trial Court Cause No. 2001-06263.
Panel consists of Justices JENNINGS, KEYES, and HIGLEY.
Justice KEYES, dissenting.
OPINION
In two issues, appellants, Dixon Financial Services, Ltd. ("Dixon Financial") and Hyperdynamics Corporation ("Hyperdynamics"), contend that the trial court erred by rendering a take-nothing judgment against appellee, Erin Oil Exploration, Inc. ("Erin Oil") and by refusing to render judgment against appellee, Bill Knollenberg. We reverse and remand.
Background
A detailed factual background of this case is described in Dixon Financial Services, Ltd. v. Greenberg, Peden, Siegmyer Oshman, P.C., No. 01-06-00696-CV, 2008 WL746548 (Tex. App.-Houston [1st] Mar. 20, 2008, pet. denied) (mem. op.).
Dixon Financial sued Hyperdynamics; Fidelity Transfer Company ("Fidelity"); Greenberg, Peden, Siegmyer Oshman, P.C.; Gerald Siegmyer; Ron Bearden and R.F. Bearden Associates, Inc. (collectively, "Bearden"); Erin Oil, Bill Knollenberg; Johnson, Burnett, Chang ("JBC"); James Chang; Nick Johnson; and Riley Burnett, Jr. Dixon Financial asserted causes of action for conversion, abuse of process, tortious interference, and fraud. Hyperdynamics filed a cross-claim against Bearden, Greenberg Peden, Siegmyer, Erin Oil, Chang, JBC, Johnson, and Burnett asserting claims for negligent misrepresentation, tortious interference, abuse of process, malicious prosecution of a civil suit, breach of contract, and contribution.
The trial court later dismissed Fidelity based on lack of personal jurisdiction.
Greenberg Peden, Siegmyer, and Bearden filed motions for summary judgment, asserting that Dixon Financial had no actionable claim against them as a matter of law. Chang, JBC, Johnson, and Burnett (collectively hereinafter "the JBC defendants") also filed a motion for summary judgment. The JBC defendants asserted that Dixon Financial failed to state an actionable claim.
The trial court granted each of the motions for summary judgment. Greenberg Peden, Siegmyer, and Bearden ("the Greenberg Peden defendants") requested the trial court to sever Dixon Financial's and Hyperdynamics's claims against them from the remainder of the case. In May 2006, the trial court granted the severance converting the order granting summary judgment in favor of the Greenberg Peden defendants into a final, appealable judgment.
In appellate cause number 01-06-00696-CV, Dixon Financial and Hyperdynamics appealed the summary judgments granted by the trial court in favor of the Greenberg Peden defendants. We affirmed the summary judgments obtained by the Greenberg Peden defendants against Dixon Financial and Hyperdynamics in Dixon Financial Services, Ltd., 2008 WL 746548, at * 13.
The JBC defendants did not seek a severance of Dixon Financial's and Hyperdynamics's claims against them. The order granting the JBC defendants' motion for summary judgment remained interlocutory. In addition, Dixon Financial's and Hyperdynamics's claims against Knollenberg and Erin Oil remained in the trial court. On February 22, 2007 the trial court signed a "Final Judgment" addressing the remaining claims.
The Final Judgment reflected that the trial court conducted a jury trial between January 29, 2007 and February 1, 2007. The judgment recited that Knollenberg, who had previously appeared in the lawsuit pro se and had notice of the trial setting, did not appear at trial. The judgment reflected that, after receiving proper service, Erin Oil never filed an answer or otherwise appeared.
In the Final Judgment, the trial court ordered that the interlocutory summary judgments obtained by the JBC defendants against Dixon Financial and Hyperdynamics became final. The Final Judgment also ordered:
• A default judgment should be entered against Erin Oil. Dixon Financial should recover $3,500,000 in actual damages from Erin Oil.
• Judgment should be entered against Knollenberg on the jury's verdict. Dixon Financial should recover $3,500,000 in actual damages and $500,000 in exemplary damages from Knollenberg.
• Hyperdynamics should recover from Knollenberg $3,550,000 in actual damages, $245,000 in attorney's fees through trial, and $110,000 in attorney's fees for appeal.
• The interlocutory summary judgment obtained by Dixon Financial against Hyperdynamics "as to liability only" is "final." On the jury's verdict, Dixon Financial should recover $3,500,000 in actual damages, $1,400,000 in attorney's fees through trial, and $175,000 in attorney's fees on appeal from Hyperdynamics.
• Based on the jury's verdict, Hyperdynamics was entitled to contribution from Knollenberg in the amount of $5,075,000, to the extent that Hyperdynamics paid Dixon Financial monies to satisfy its obligation as defined in the judgment.
After the trial court signed the Final Judgment, Knollenberg retained counsel. On March 22, 2007, Knollenberg filed a "Motion to Modify the Judgment, or in the Alternative, for Entry of Judgment N. O. V." In the motion, Knollenberg challenged the portions of the Final Judgment awarding damages against him in favor of Dixon Financial and Hyperdynamics on the basis that Dixon Financial and Hyperdynamics had non-suited their respective claims against him in April 2005.
Knollenberg also challenged the contribution award of $5,075,000 in favor of Hyperdynamics to compensate Hyperdynamics for monies it was required to pay Dixon Financial under the Final Judgment. Knollenberg pointed out that, not only had the jury not made a damages finding against Hyperdynamics in favor of Dixon Financial, the jury had found that Hyperdynamics caused no damages to Dixon Financial.
The trial court conducted two hearings in which the issue of whether Dixon Financial and Hyperdynamics had non-suited Knollenberg was discussed. Although Knollenberg's post-judgment motion challenging the Final Judgment had already been overruled by operation of law, the trial court ultimately agreed that Dixon Financial and Hyperdynamics had non-suited Knollenberg two years earlier.
On May 22, 2007, the trial court signed an "Amended Judgment," which provided, in relevant part, as follows:
The court finds that Defendant Erin Oil Exploration, Inc. was properly served with citation by Plaintiff Dixon Financial Services, Ltd., but failed to answer or appear and that the return of citation has been on file a sufficient period of time and that default judgment should be entered against Defendant Erin Oil Explorations, Inc. The court finds that Dixon failed to submit an issue related to damages to the jury. Accordingly, the Court orders that Dixon take nothing on its claims against Erin Oil.
The Court, having finalized the interlocutory summary judgment against Hyperdynamics Corporation [as described in an earlier portion of the judgment] finds that Dixon did not submit an issue related to damages caused by the conduct of Hyperdynamics to the jury. Accordingly, it is THEREFORE ORDERED, ADJUDGED and DECREED that Dixon Financial Services, Ltd. take nothing on its claims against Hyperdynamics Corporation.
A footnote in the Amended Judgment further provides,
The Court hereby amends its final judgment dated February 20, 2007. The Court does so, acting sua sponte, after it has [inadvertently] let defendant Bill Knollenberg's motion to modify the judgment or in the alternative, for entry of judgment N. O. V. be overruled by operation of law. The Court concludes that defendant Knollenberg was non-suited by plaintiff Dixon and by defendant, cross plaintiff, Hyperdynamics. The Court reaches this conclusion on the basis of matters raised by Knollenberg and through the doctrine of misnamed pleadings which the Court raised sua sponte.
(Brackets in original.)
Presenting three issues, Dixon Financial and Hyperdynamics appeal the trial court's Amended Judgment.
We originally issued an opinion and a judgment disposing of the issues raised in this appeal on August 31, 2009, in appellate cause number 01-07-00233-CV. One week later, we were informed by one of the defendants/appellees, Bill Knollenberg, that he had filed Chapter 7 bankruptcy prior to the issuance of our opinion. As a result of the bankruptcy filing, the appeal was suspended, see TEX. R. APP. P. 8.2, and our opinion and judgment of August 31, 2009 were void. See Continental Casing Corp. v. Samedan Oil Corp., 751 S.W.2d 499, 501 (Tex. 1988). Subsequently, the appellees in appellate cause number 01-07-00233-CV filed a motion to sever appellants' appeal with regard to Knollenberg and appellee, Erin Oil Exploration, of which Knollenberg is the principal, and to reinstate the appeal in appellate cause number 01-07-00233-CV. See Tex. R. App. P. 8.3. By separate order, the motion was granted, and appellants' appeal against Knollenberg and Erin Oil was severed into the instant appeal, appellate cause number 01-10-00033-CV. See Ma-Stell, Inc. v. Anadarko E P Co., No. 10-03-358-CV, 2005 WL 984785, at *1 (Tex.App.-Waco Apr. 27, 2005, order). We reinstated the original appellate cause, number 01-07-00233-CV, styled Dixon Financial Services, Ltd. Hyperdynamics Corp. v. James Chang, Nick H. Johnson, Riley L. Burnett, Jr., Johnson, Burnett Chang, L.L.P.. See id. The only issue in that appeal was whether the trial court properly granted summary judgment in favor of the JBC defendants. By an opinion dated, February 18, 2010, we affirmed the summary judgment. See Dixon Financial Servs., Ltd. v. Chang, No. 01-07-00233-CV, 2010 WL 547497 (Tex. App.-Houston[1st Dist.] Feb. 18, 2010, pet. filed). Thereafter, the bankruptcy court lifted the stay with respect to the instant appeal (appellate cause number 01-10-00033-CV), and on June 9, 2010, we reinstated the appeal. This appeal disposes of appellants' remaining issues regarding the trial court's rulings as to Knollenberg and Erin Oil.
Non-suit of Claims Against Knollenberg
In their first and second issues, Dixon Financial and Hyperdynamics (collectively, "appellants" in this discussion) contend that the trial court erred (1) by concluding that appellants had non-suited Knollenberg and (2) by its concomitant refusal to render judgment against Knollenberg on the jury's verdict. Knollenberg and Erin Oil (collectively, "appellees") assert that they were both non-suited by appellants. Appellees point to "numerous representations" made by appellants to the trial court that appellants had non-suited appellees. More particularly, appellees point to a proposed "Agreed Final Judgment" attached to a "Joint Motion to Enter Judgment" filed by appellants in April 2005.
The decretal portions of the proposed Agreed Final Judgment awarded Dixon Financial actual damages against Hyperdynamics in the amount of $2,015,264 and set forth the various summary judgment rulings of the trial court. Toward the end of the Agreed Final Judgment was a provision that read, "[Dixon Financial] and Hyperdynamics do hereby Non-Suit without prejudice their claims against the Defendants Erin Oil Exploration, Inc. and Bill Knollenberg." The Agreed Final Judgment was signed only by Hyperdynamics's attorney but contained signature lines for all counsel to sign. The proposed judgment indicated that the signatories were approving the judgment "as to form." The Joint Motion to Enter Judgment was signed by Hyperdynamics's counsel and Dixon Financial's counsel by permission.
The trial court denied appellants' request for the court to sign the Agreed Final Judgment. Through a series of hearings and signed orders, the trial court explained to appellants that it would not sign the agreed judgment unless all parties approved the judgment not only as to form, but also as to substance.
In two amended motions to enter judgment, at several hearings, and in a "Brief in Support of Counsel Approved Judgment," Dixon Financial and Hyperdynamics explained to the trial court that they requested rendition of the proposed judgment to facilitate a settlement reached between them and to obtain a final, appealable judgment. Obtaining a final judgment would allow appellants to pursue an appeal of the summary judgments granted in favor of the attorney defendants. Appellants explained to the trial court that, if they approved the judgment as to substance, they would be precluded from challenging the summary judgments on appeal.
Appellants submitted two more proposed final judgments to the trial court in January and February 2006. Each of these proposed judgments contained similar decretal provisions to the first Agreed Final Judgment. Each contained a non-suit provision regarding appellees, and each approved the judgment only as to form, but not as to substance. The proposed judgment filed in February 2006 was signed by all counsel. The certificates of service indicate that Knollenberg, who was pro se, was sent copies of the various filings relating to appellants' request for entry of judgment.
As mentioned, Erin Oil never answered Dixon Financial's suit or otherwise appeared in the trial court.
Despite all counsel having approved the February 2006 proposed judgment and despite numerous attempts to persuade the trial court to sign the proposed judgment, the trial court remained resolute that it was contrary to Texas law to sign a judgment that was not approved as to substance, as well as to form. The court continued to sign written orders denying appellants' request to enter an agreed judgment.
In March 2006, Hyperdynamics filed its request for a jury trial and for a trial setting. Hyperdynamics described the trial court's refusal to sign the agreed judgment. Hyperdynamics stated that "[a]s a result of the Court's rulings as described [], there remains to be tried the question of damages against Hyperdynamics, and the claims and causes of action, in their entirety, against Erin Oil and Knollenberg." Again, counsel indicated that Knollenberg was sent a copy of the request for a jury trial and for a trial setting.
In November 2006, appellants filed a "Joint Motion to Enter Judgment on Stipulated Damages." Attached to the motion was yet another proposed judgment similar to the earlier proposed judgments. The trial did not grant the motion or sign the judgment. A couple of days before trial in January 2007, appellants each filed a "Notice of Withdrawal of Joint Motion to Enter Judgment." Each appellant stated that the notice was filed "[i]n an abundance of caution and to eliminate any confusion." Each appellant expressly withdrew the "Joint Motion to Enter Judgment on Stipulated Damages" and withdrew "the proposed Final Judgment previously filed." Appellants also proclaimed that [a]ll claims or causes of action" asserted before "the Joint Motion continue in full force and effect for all purposes and will be asserted at trial." The withdrawal notices indicate that they were sent to Knollenberg. On appeal, appellees contend that appellants had indeed non-suited their claims against them. Appellees rely primarily on the non-suit language of the proposed agreed judgment submitted to the trial court and on the accompanying motion requesting entry of the proposed judgment. Appellees cite the well-established principle that a non-suit is effective when it is filed and "extinguishes a case or controversy from `the moment the motion is filed.'" Univ. of Tex. Med. Branch at Galveston v. Estate of Blackmon, 195 S.W.3d 98, 100 (Tex. 2006).
Appellants counter that the non-suit language cannot be read in isolation. Rather, it is but one provision found in a series of proposed judgments that were never signed. Appellants contend that, when read in the context of not only the entire proposed judgment, but also the entire record, it is clear that the non-suit was conditioned on the trial court's rendition of the proposed judgment. Appellants assert that, because the trial court never signed the judgment, the non-suit never became effective.
We agree with appellants. The only way to reach the conclusion that appellants non-suited their claims against appellees is to read the non-suit provision in isolation by removing it from the proposed judgment and the entirety of the proceedings. When read contextually, it is clear that the non-suit clause is not an independent provision, but was one part of appellants' plan to expedite the conclusion of the litigation in an efficient and beneficial manner. The record, including the numerous motions for entry of judgment and the transcripts from the various hearings, show that the non-suit in the proposed judgments was contingent on appellants' obtaining what they truly desired: a final, appealable judgment that would allow them to pursue their appeals against the attorney defendants and a settlement between Hyperdynamics and Dixon Financial. Because appellants were unable to obtain the end result that they were seeking, the inclusion of the non-suit language in the proposed judgment did not effectuate a dismissal of appellants' claims against appellees.
Appellees also rely on a statement made by Hyperdynamics's attorney at a March 2, 2006 hearing on the joint motion for entry of judgment. To persuade the trial court to sign the proposed judgment, Hyperdynamics's counsel described how each of the claims were or would be resolved. In this regard, counsel was attempting to show that the suit was ripe for the rendition of a final judgment. It was in this context that Hyperdynamics's counsel made the following statement: "Hyperdynamics and Dixon resolved the remaining issues in the case dismissing by non-suit the parties that we decided not to pursue further and agreeing on a settlement by which Hyperdynamics may or will pay Dixon some amount of money in damages." When read in context, it is apparent that the statement was not intended to, and did not, effectuate or recognize a non-suit of appellants' claims but was offered to persuade the trial court to allow entry of the proposed judgment submitted by appellants.
At oral argument, appellees directed us to a provision in appellants' Second Amended Motion to Enter Judgment, filed January 23, 2006, which states, "All claims by Dixon and Hyperdynamics against defendants not obtaining summary judgments have been dismissed from their action by voluntary non-suit. . . ." Appellees contend that such statement constituted a judicial admission that appellants had previously non-suited appellees. A judicial admission results when a party makes a statement of fact which conclusively disproves a right of recovery or defense he currently asserts. Brown v. Lanier Worldwide, Inc., 124 S.W.3d 883, 900 (Tex. App.-Houston [14th]2004, no pet.). A party may not judicially admit a question of law. H.E. Butt Grocery Co. v. Pais, 955 S.W.2d 384, 388 (Tex. App.-San Antonio 1997, no pet.); Pierce v. Pierce, 850 S.W.2d 675, 679 (Tex. App.-El Paso 1993, writ denied); Fort Bend Cen. Appraisal Dist. v. Hines Wholesale Nurseries, 844 S.W.2d 857, 859 (Tex.App.-Texarkana 1992, writ denied). Whether appellants had non-suited appellees is not a question of fact, rather it is a question of law that cannot be judicially admitted. See Pais, 955 S.W.2d at 388. Moreover, when read in context, the cited statement was made in support of a legal argument to persuade the trial court to allow rendition of the proposed judgment submitted by appellants. Thus, it was not a clear, deliberate, and unequivocal statement sufficient to constitute a judicial admission. See Regency Advantage Ltd. Partnership v. Bingo Idea-Watauga, Inc., 936 S.W.2d 275, 278 (Tex. 1996) ("A judicial admission must be a clear, deliberate, and unequivocal statement.").
Appellants' contention that they did not non-suit their claims against appellees is further supported by their notices of withdrawal filed before trial. The withdrawal notices unequivocally stated that appellants no longer consented to the entry of the proposed judgment, which necessarily included the non-suit, and expressly indicated that appellants intended to prosecute their claims against appellees.
In Texas, a party has the right to revoke its consent to a judgment at any time before the rendition of judgment. Golodetz Trading Corp. v. Curland, 886 S.W.2d 503, 504 (Tex. App.-Houston [1st] 1994, no writ). This includes a party's right to withdraw consent to a non-suit before rendition of judgment. See id. at 505 (holding that party was entitled to withdraw consent to non-suit with prejudice before rendition occurred). Here, even if we assume that appellants had agreed to a non-suit, they had the right to withdraw consent before judgment was rendered. See id. at 504.
We conclude that appellants did not non-suit their claims against appellees. We hold that the trial court erred by failing to render judgment on the jury's verdict against Knollenberg.
We sustain appellants' first and second issues.
Default Judgment Against Erin Oil
In its third issue, Dixon Financial contends that the trial court erred by rendering judgment that it take nothing against Erin Oil.
As discussed, despite proper service by Dixon Financial, Erin Oil did not answer or appear in the trial court. In the Final Amended Judgment, the trial court stated that a default judgment should be entered against Erin Oil. Nonetheless, the trial court ordered that Dixon Financial take nothing against Erin Oil because Dixon Financial did not submit "an issue related to damages to the jury."
On appeal, Dixon Financial argues that it was not required to submit a damages issue to the jury. Dixon Financial correctly points out that Rule of Civil Procedure 243 provides that when, as here, the damages being claimed are unliquidated, the court rendering a default judgment must hear evidence regarding damages. TEX. R. CIV. P. 243; see Holt Atherton Industries, Inc. v. Heine, 835 S.W.2d 80, 86 (Tex. 1992). Only when the defendant requests a jury trial must the issue of damages be submitted to the jury. See TEX. R. CIV. P. 243. It is undisputed that Erin Oil made no appearance at trial and no request that the damages issue be submitted to the jury.
We agree with Dixon Financial that it was not required to submit a damages issue to the jury. See id. The trial court should have heard evidence regarding damages and, if it found the evidence established damages, should have rendered a money judgment against Erin Oil. See id. Thus, the trial court erred by rendering a take-nothing judgment in favor of Erin Oil on the basis that Dixon Financial failed to submit a damages issue to the jury.
Erin Oil contends that Dixon Financial waived its complaint that the trial court erred by rendering a take-nothing judgment against it. Erin Oil contends that Dixon Financial did not alert the trial court to its complaint that the trial court had a duty to hear damages evidence. In response, Dixon Financial correctly points out that, following trial, it filed a motion for entry of judgment and submitted a proposed judgment. The proposed judgment contained a decretal provision rendering a default judgment and an award of $3,500,000 in damages against Erin Oil in favor of Dixon Financial. The filing of the motion for entry of judgment and the accompanying proposed judgment preserved error. See Elliott v. Kraft Foods N. Am., Inc., 118 S.W.3d 50, 55 (Tex. App.-Houston [14th Dist.] 2003, no pet.).
The question arises regarding the proper disposition given the trial court's error in rendering a take-nothing judgment against Erin Oil. We note that when an appellate court sustains a legal-sufficiency point after an uncontested hearing on unliquidated damages following a no-answer default judgment, the appropriate disposition is not the rendition of a take-nothing judgment, but rather a remand for a new trial on the issue of unliquidated damages. Holt, 835 S.W.2d at 86. In other words, even when a plaintiff fails to offer legally sufficient proof at an uncontested damages hearing following a no-answer default, it is entitled to another chance to prove its damages. See id. Thus, regardless of the level of proof of damages offered at trial by Dixon Financial with respect to Erin Oil, we conclude that the proper disposition is remand for a new trial on the issue of unliquidated damages.
Dixon Financial requests this Court to render judgment in the amount initially awarded by the trial court in the original Final Judgment: $3,500,0000. It contends that it offered sufficient evidence of damages at trial with respect to Erin Oil to support the original award. However, it is not a matter of whether the evidence might support the requested award, rather it is a matter of whether the trial court, as the appropriate fact finder regarding damages against Erin Oil, made such finding after independently evaluating the evidence. From the record, it is unclear whether the trial court made any factual determination regarding damages with respect to Erin Oil. The case should be remanded for the trial court to make that determination.
We sustain Dixon Financial's third issue.
Conclusion
We reverse the portion of the trial court's judgment that renders a take-nothing judgment against Erin Oil, and we reverse the judgment to the extent that it fails to render judgment against Bill Knollenberg. We remand the case (1) for a new trial on the issue of unliquidated damages against Erin Oil and (2) for the trial court to render judgment against Bill Knollenberg in accordance with the jury's verdict.
DISSENTING OPINION
I respectfully dissent. Appellants Dixon Financial Services, Ltd. ("Dixon Financial") and Hyperdynamics Corporation ("Hyperdynamics"), defendants and counter-plaintiffs below, have been found in written opinions of this Court and of this panel to have no viable claims against any of the parties to this multi-suit litigation except each other. Nevertheless, the majority affirms an award to Dixon Financial and Hyperdynamics of many millions of dollars against appellees Erin Oil Exploration, Inc. ("Erin Oil") and Bill Knollenberg based on what the majority terms Dixon Financial's and Hyperdynamics's "contingent" non-suit of these parties, which the majority holds had no effect. The majority holds this despite Dixon Financial's and Hyperdynamics's non-suits of these defendants filed with the court, Dixon Financial's and Hyperdynamics's assertions in open court that they had non-suited these parties, Dixon Financial's and Hyperdynamics's failure to serve Erin Oil and Knollenberg with pleadings and notices following their non-suit, Dixon Financial's and Hyperdynamics's failure to timely notify Erin Oil and Knollenberg of the "trial" they sought against them, Erin Oil's and Knollenberg's non-participation in the "trial" as non-parties, and repeated instances of error and invited error by the trial court. I believe the majority misconstrues established law. I would dismiss for lack of subject matter jurisdiction.
App.-Houston [1st] Mar. 20, 2008, pet. denied) (not designated for publication); Dixon Fin. Servs., Ltd. v. Chang, No. 01-07-00233-CV, 2010 WL 547497 (Tex. App.-Houston [1st] Feb. 18, 2010, pet. filed).
Background
This case arises out of an attempt by the law firm of Johnson, Burnett, Chang ("the JBC defendants") to collect an arbitration award entered eleven years ago, in September 1999, in favor of JBC's clients, Erin Oil, and Knollenberg, principal of Erin Oil, and in favor of Ron Bearden and R.F. Bearden Associates, Inc. (collectively, "Bearden") against Michael Watts, a securities broker, and Texas Capital Securities, the securities brokerage firm for which Watts worked.
As part of the 1999 arbitration award, Bearden, Knollenberg, and Erin Oil were awarded common stock and warrants in Hyperdynamics. They filed suit to confirm the award in their favor (the " Watts litigation"). In the course of that litigation, the Watts plaintiffs — Bearden, Knollenberg, and Erin Oil — alleged in the trial court that Watts had sold Hyperdynamics securities belonging to them for his own personal benefit and that he had transferred shares of Hyperdynamics to which they were entitled into the account of Island Communications. In the course of representing the Watts plaintiffs, James Chang, an attorney for JBC, tried unsuccessfully to obtain from Hyperdynamics's transfer agent, Fidelity Transfer Company ("Fidelity"), information regarding the Hyperdynamics stock held by Fidelity in the name of Island Communications, and he informed Fidelity that Hyperdynamics "may be prohibited from transferring any shares in the name of Island."
In response to Chang's communications with Fidelity in the Watts litigation, Dixon Financial and Hyperdynamics sued Fidelity, Erin Oil, Knollenberg, and Erin Oil's and Knollenberg's attorneys, the JBC defendants, including Chang, as well as Bearden and its attorneys, the law firm of Greenberg, Peden, Siegmyer Oshman, P.C. ("Greenberg Peden") in this litigation, claiming that Chang's actions had tortiously interfered with their business relations and cost them millions of dollars in damages. The trial court granted Fidelity's special appearance. It also granted motions for summary judgment filed by Bearden and Greenberg Peden (collectively "the Bearden defendants") and by the JBC defendants against Dixon Financial and Hyperdynamics. Erin Oil never appeared in the litigation, and Knollenberg filed an answer but subsequently took no part in the action. Hyperdynamics and Dixon Financial then settled their differences between themselves.
On April 27, 2005, Hyperdynamics and Dixon Financial filed in the trial court a "Joint Motion to Enter Judgment." Attached to the "Joint Motion" was an "Agreed Final Judgment," signed by Dixon Financial and Hyperdynamics as to form only, which specifically reserved their right to appeal the summary judgments entered against them on all counts. The Agreed Final Judgment represented that all of the parties to the Agreed Final Judgment had appeared and that the issues among them had been disposed of by summary judgment except for Dixon Financial's claim against Hyperdynamics, which had been settled. The joint motion asked the court to order that Dixon Financial recover $2,015,264, plus pre-and post-judgment interest, from Hyperdynamics and to grant the motions for summary judgment in favor of the Bearden defendants and the JBC defendants on all of Hyperdynamics's and Dixon Financial's claims.
The Agreed Final Judgment also contained a representation by Dixon Financial and Hyperdynamics that they did "hereby Non-Suit without prejudice their claims against the Defendants Erin Oil Exploration, Inc. and Bill Knollenberg." All of the terms of the Agreed Final Judgment, including the non-suits, were incorporated into the Motion for Entry of Judgment filed with the court by Dixon Financial and Hyperdynamics. After the April 27, 2005 non-suit of the claims against them by Dixon Financial and Hyperdynamics, neither Knollenberg, who had only answered, nor Erin Oil, which had not appeared, took any part in the action before the trial court nor is there any evidence that they received any pleadings or notices.
The trial court did not rule on Hyperdynamics's and Dixon Financial's Joint Motion for Entry of Judgment, on November 16, 2005, as requested in their Motion and in their attached Agreed Judgment. Nor did the court enter the Agreed Judgment as a consent judgment. But it did grant the JBC defendants' motion for summary judgment, on which it had previously entered interlocutory judgment but as to which no written order could be found.
A week later, on November 23, 2005, Dixon Financial and Hyperdynamics filed an "Amended Joint Motion to Enter Judgment." In that amended motion they again requested that the trial court enter their Agreed Judgment as the judgment of the court, and they explained that they had approved it only as to form because they did not agree with the substance of the judgment to the extent it made final any of the summary judgments or interlocutory orders against them, but they wished to finalize those orders so that the judgment could be appealed, all matters having been disposed of. The trial court, however, denied their Amended Joint Motion on December 7, 2005.
On January 20, 2006, Dixon Financial and Hyperdynamics filed a Second Amended Motion to Enter Judgment, attaching the same proposed final Agreed Judgment. Dixon Financial, Hyperdynamics, and Greenberg Peden appeared at hearings on the Second Amended Motion on February 9, 2006 and again on March 2, 2006. The trial court denied the Second Amended Motion to Enter Judgment by written order entered March 2, 2006, because the Agreed Judgment was agreed to only as to form and was agreed to by only some of the parties. The parties who had not agreed to the judgment included Knollenberg and Erin Oil, who had been non-suited in the Motion for Entry of Judgment filed with the court by Dixon Financial and Hyperdynamics on April 27, 2005. Nor is there any evidence that any of Dixon Financial's or Hyperdynamics's settlement between themselves or their attempts to get the trial court to enter their Agreed Judgment were in any way shared with Knollenberg or Erin Oil. Hyperdynamics moved the court to reconsider the Second Amended Motion to Enter Judgment.
On March 6, 2006, counsel for Dixon Financial, Hyperdynamics, and the Bearden defendants appeared at a third hearing before the trial court on their Second Amended Motion for Entry of Judgment, seeking entry of final judgment on the summary judgments and their settlement between themselves so that the case could be appealed. The trial court again refused to enter the judgment on the ground that it "doesn't comport with [Rule] 301[of the Texas Rules of Civil Procedure, governing final judgments,] because it's not an agreed judgment." Counsel for Hydrodynamics, Philip Livingston, demurred and made the following representation to the court:
Rule 301 provides:
The judgment of the court shall conform to the pleadings, the nature of the case proved and the verdict, if any, and shall be so framed as to give the party all the relief to which he may be entitled either in law or equity. Provided, that upon motion and reasonable notice the court may render judgment non obstante veredicto if a directed verdict would have been proper, and provided further that the court may, upon like motion and notice, disregard any jury finding on a question that has no support in the evidence. Only one final judgment shall be rendered in any cause except where it is otherwise specially provided by law. Judgment may, in a proper case, be given for or against one or more of several plaintiffs, and for or against one or more of several defendants or intervenors.
TEX. R. CIV. P. 301.
Your honor, as I read Rule 301, it's the rule for entry of judgment after jury verdict. This case was never submitted to a jury. In fact, it was — this court granted summary judgments, granting no liability summary judgments for what I have referred to in this case as the bad lawyers. It then granted no liability summary judgment as to the bad lawyers' clients or at least some of them. The court then granted a special appearance as to Fidelity and then the court granted summary judgment as to liability against Hyperdynamics in this case.
At that point, Hyperdynamics and Dixon resolved the remaining issues in the case dismissing by non-suit the parties that we decided not to pursue further and agreeing on a settlement by which Hyperdynamics may or will pay Dixon some amount of money in damages. And we believe that that will resolve all the issues in the case. Both for the summary judgments that were not final and for the issues that were remaining between Dixon and Hyperdynamics.
(Emphasis added). In short, Hyperdynamics and Dixon reiterated in open court their dismissal by non-suit of Erin Oil and Knollenberg, which they had filed on April 27, 2005 in their Joint Motion to Enter Judgment, their settlement of their differences between themselves, and their acknowledgement of the summary judgments entered against them on all other claims.
The trial court, however construed Rule 301 "to mean a court can enter three types of judgments, summary judgment — actually four. A verdict, judgment on the verdict, a judgment disregarding the verdict or a wholly and completely agreed judgment." Hyperdynamics then stated, "Okay. Then I guess what we need to do then is set the case for trial," and the court replied, "And the other defendants are invited but not required and the court's not going to sua sponte sever." Hyperdynamics then advised the court it might ask the court to reconsider the summary judgments.
Subsequently, in its request for trial setting, filed March 22, 2006, Hyperdynamics stated that it had tried to have the agreed judgment entered as the judgment of the trial court at a hearing that it, Dixon, and the Bearden defendants had attended; that "[n]o other party or counsel appeared or opposed the motion or the proposed judgment"; that the trial court had refused to enter the judgment; and that, "[a]s a result of the Court's rulings as described above, there remains to be tried the question of damages as against Hyperdynamics, and the claims and causes of action, in their entirety, against defendants Erin Oil and Knollenberg." In other words, Hyperdynamics and Dixon Financial represented that they were adding Knollenberg and Erin Oil — whom they had acknowledged non-suiting and against whom they had filed non-suits — back into the suit. Hyperdynamics acknowledged in its certificate of service that it had "been unable to contact Erin Oil or Knollenberg prior to the filing of this Request and the Request is therefore filed as opposed." Hyperdynamics also affirmatively stated in its request, "Because neither Erin Oil nor Knollenberg are [sic] likely to be in attendance at the hearing on this Request, Hyperdynamics requests that this matter be set for jury trial at least 45 days from the date of the hearing on this Request." Hyperdynamics and Dixon Financial filed no new pleading naming Knollenberg and Erin Oil as defendants.
Additional filings followed in which Dixon Financial and Hyperdynamics attempted repeatedly to obtain a final judgment from the trial court, during all of which the non-suits of Knollenberg and Erin Oil remained on file and no new claims were filed against them or served on them. On May 19, 2006, the trial court severed the summary judgment it had granted the Bearden defendants against Dixon Financial and Hyperdynamics. On November 14, 2006, Dixon Financial and Hyperdynamics filed a "Joint Motion to Enter Judgment on Stipulated Damages," which rendered as a stipulation their agreement as to the damages owed Dixon Financial by Hyperdynamics as a result of the actions of Chang. That agreement was supported by an affidavit from Watts required by the trial court. The attached agreed "Final Judgment" reiterated the non-suits of Hyperdynamics's and Dixon Financial's claims against Knollenberg and Erin Oil and was again signed by counsel for Dixon Financial and Hyperdynamics. It was not signed by the JBC defendants, the only other party with a signature blank, due to the suit against the Bearden defendants having been severed and Knollenberg and Erin Oil having been non-suited and, therefore, not being parties to the Agreed Final Judgment.
Without ruling on the "Joint Motion to Enter Judgment on Stipulated Damages," the trial court set the case for trial on January 29, 2007, as Hyperdynamics and Dixon Financial stated in separate filings, styled "Notice of Withdrawal of Joint Motion to Enter Judgment," filed on January 22 and 26, 2007, respectfully. Although Hyperdynamics and Dixon Financial withdrew their Joint Motion to Enter Judgment, there is no indication in the record that they filed and served any pleadings reinstating their claims against Knollenberg and Erin Oil or gave them notice that they were expected to appear for trial on Monday January 29, 2007.
The trial court then went ahead, three days later, on Monday, January 29, 2007, with a jury trial on Dixon Financial's claims for damages due to the loss of value of its stock, which it had stipulated it was owed by Hyperdynamics, during the time the stock could not be traded,. In the absence of Knollenberg and Erin Oil, and with no indication that they had ever received notice of the trial or notice that Hyperdynamics and Dixon Financial intended to try the non-suited claims to a jury, Dixon Financial and Hyperdynamics tried the case exclusively against Erin Oil and Knollenberg and obtained jury findings that Knollenberg was liable for $3,500,000 in actual damages and $500,000 in exemplary damages owed to Dixon and $3,550,000 in actual damages and $500,000 in exemplary damages owed to Hyperdynamics, or $7,050,000 all told. Neither Dixon Financial nor Hyperdynamics sought damages against Erin Oil in the jury charge.
On February 20, 2007, the trial court entered a final judgment on Hyperdynamics's and Dixon Financial's claims against Knollenberg and Erin Oil. After acknowledging that Knollenberg and Erin Oil had not appeared for trial and that "Erin Oil made no answer to Plaintiff's pleadings after service," the trial court entered judgment awarding Dixon $12,480,000 against Knollenberg, including double recovery of the jury award and attorney's fees, plus interest, and it made Erin Oil liable to Dixon for costs, "despite the fact that Dixon neither requested, nor obtained, any jury findings against Erin Oil, and despite the fact that the Final Judgment does not award Dixon any relief against Erin Oil," as Knollenberg pointed out in his timely "Motion to Modify the Judgment, or in the Alternative, for Entry of Judgment N.O.V." Following a response by Hyperdynamics to Knollenberg's Motion to Modify and a hearing, the trial court signed an Amended Final Judgment on May 22, 2007. That May 22, 2007 judgment is the judgment now on appeal. The majority affirms the original February 20, 2007 judgment.
In its May 22, 2007 Final Judgment, the trial court amended its February 20, 2007 Final Judgment to reflect "that defendant Knollenberg was non-suited by plaintiff Dixon and by defendant, cross plaintiff, Hyperdynamics." The trial court also held that Erin Oil was properly served but failed to answer or appear and that default judgment should be entered against it. However, since both Dixon and Hyperdynamics had failed to submit an issue related to damages against Erin Oil to the jury, the court awarded Dixon and Hyperdynamics take nothing judgments against Erin Oil.
Meanwhile, Hyperdynamics and Dixon Financial appealed the summary judgment obtained against them by the Bearden defendants on their claims that Chang "with the knowledge and consent of his co-conspirators, . . . intentionally and knowingly" misrepresented to the trial court and to Fidelity the extent to which the arbitration award applied to Hyperdynamics's stock held in the name of Island Communications, which had been severed prior to trial. See Dixon Fin. Servs., Ltd. v. Chang, No. 01-07-00233-CV, 2010 WL 547497, at *2-3 (Tex. App.-Houston [1st Dist.] Feb. 18, 2010, pet. filed).
On March 20, 2008, this Court affirmed the summary judgment in favor of the Bearden defendants, holding, as the majority opinion in this case states, that "to promote zealous representation, courts have held that an attorney has `qualified immunity' from civil liability, with respect to nonclients, for actions taken in connection with representing a client in litigation." Id. at *4 (citing Dixon Fin. Servs., Ltd. v. Greenberg, Peden, Siegmyer Oshman, P.C., No. 01-06-00696-CV, 2008 WL 746548, at 7 (Tex. App.-Houston [1st] Mar. 20, 2008, pet. denied) (not designated for publication)). We agreed with the Greenbeg Peden defendants that the conduct alleged by Dixon Financial and Hyperdynamics as being tortious was not actionable because it constituted conduct undertaken by an attorney to assist a client in securing and recovering an arbitration award, and thus "the Greenberg Peden defendants were entitled to summary judgment as a matter of law." Id.
Subsequent to the May 22, 2007 Final Judgment, Hyperdynamics and Dixon Financial appealed the summary judgments taken against them by the JBC defendants. They also pled that the trial court had erred in amending its February 20, 2007 judgment to take away the many millions of dollars awarded them against Knollenberg and Erin Oil. On February 2, 2010, we issued an opinion and judgment affirming the summary judgments issued against Dixon Financial and Hyperdynamics in favor of Chang and the JBC defendants on the same grounds on which we affirmed the summary judgments against the Greenberg Defendants, namely that Dixon Financial and Hyperdynamics had no actionable claim against them for Chang's actions in representing Knollenberg and Eric Oil. See id. at *5.
An earlier opinion, issued August 31, 2009, included Dixon Financial's and Hyperdynamics's claims against Knollenberg and Erin Oil. One week later, however, Knollenberg notified us that he had filed Chapter 7 bankruptcy prior to the issuance of our opinion. See Dixon Fin. Servs., 2010 WL 547497, at *1 n. 1. As the appeal was, therefore, suspended and our opinion void, we withdrew the opinion. See id.
We specifically held that "the JBC defendants [including Chang] cannot be held liable, as a matter of law, for the conduct pled by Dixon Financial." Id. at *6. Hyperdynamics had pled that it was entitled to attorney's fees incurred in relation to the Watts litigation under a 2000 settlement agreement and that the defendants had breached the agreement by "continu[ing] to communicate with Fidelity Transfer for the express purpose of preventing Fidelity Transfer from transferring specific shares into free trading shares in Dixon." Id. We held that Hyperdynamics had presented no competent summary judgment evidence to support its claims, and, therefore, the JBC defendants' joint motion for summary judgment was properly granted. Id. at *7-10.
Despite our holdings in both the Greenberg Peden case and the JBC defendants case — both involving exactly the same claims that Dixon Financial and Hyperdynamics made at the same time in the same litigation against Knollenberg and Erin Oil and this court has twice found to be non-justiciable — the panel majority inexplicably decides to reverse the trial court's judgment acknowledging Dixon Financial's and Hyperdynmaics' non-suit of Knollenberg and to hold that Knollenberg is liable for millions of dollars in damage to Dixon Financial and Hyperdynamics on claims this Court has twice found to be non-actionable. Whether the majority is affirming the judgment for $7,500,000 actually awarded Hyperdynamics and Dixon Financial by the jury verdict in the trial of which Knollenberg and Erin Oil were given no notice or for the $12,480,000 the trial court's superseded February 20, 2006 judgment awarded Hyperdamics and Dixon from Knollenberg, including double recovery, is unclear.
The majority likewise reverses the trial court's take-nothing judgment entered against Erin Oil on Dixon Financial's and Hyperdynamics's non-justiciable claims against it, which they had non-suited and for which they did not even seek damages against Erin Oil at trial. The majority holds that Erin Oil's liability to Dixon Financial and Hyperdynamics is established as a matter of law; and it orders that the case be remanded so that the amount of damages Erin Oil owes Dixon Financial and Hyperdynamics can be determined.
I, therefore, dissent. I would hold that both this Court and the trial court lack subject-matter jurisdiction over the claims against Erin Oil and Knollenberg both because Hyperdynamics and Dixon Financial non-suited their claims against both defendants and because the non-suited claims were based entirely on actions by Chang that this Court has twice held to be not actionable. I would also hold that, even if the trial court and this Court somehow had jurisdiction to address the merits of the judgments taken by Hyperdynamics and Dixon Financial against Knollenberg, Hyperdynamics and Dixon Financial would be judicially estopped from asserting a cause of action for damages against them.
Analysis
1. Justiciability of Claims Against Knollenberg and Erin Oil
"[B]efore a court may address the merits of any case, the court must have jurisdiction over the party or the property subject to the suit, jurisdiction over the subject matter, jurisdiction to enter the particular judgment, and capacity to act as a court." State Bar of Texas v. Gomez, 891 S.W.2d 243, 245 (Tex. 1994). "Subject matter jurisdiction requires that the party bringing the suit have standing, that there be a live controversy between the parties, and that the case be justiciable." Id.; see Texas Ass'n of Bus. v. Texas Air Control Bd., 852 S.W.2d 440, 443-46 (Tex. 1993). Standing is a necessary component of subject matter jurisdiction and is, therefore, a threshold issue. Patterson v. Planned Parenthood of Houston and Se. Tex., Inc., 971 S.W.2d 439, 442 (Tex. 1998); Barshop v. Medina County Underground Water Conservation Dist., 925 S.W.2d 618, 626 (Tex. 1996). Standing focuses on the question of who may bring an action and "emphasizes the need for a concrete injury for a justiciable claim to be presented." Patterson, 971 S.W.2d at 442. The constitutional roots of standing as a doctrine of justiciability lie in the prohibition against courts' rendering advisory opinions, which, in turn, stems from the separation of powers doctrine. Id. at 442-43; Texas Ass'n of Bus., 852 S.W.2d at 444 (explaining that supreme court has construed separation of powers article of Texas Constitution to prohibit courts from issuing advisory opinions because that is function of executive rather than judiciary). "The courts of this state are not empowered to give advisory opinions." Patterson, 971 S.W.2d at 443.
This Court has twice held that Dixon Financial and Hyperdynamics have no justiciable cause of action arising from Chang's communications with Hyperdynamics's transfer agent, Fidelity, on which their entire suit is based. If Hyperdynamics and Dixon Financial have no justiciable cause of action arising from Chang's actions, then the courts of this state have no jurisdiction over such claims. See id. at 443-44; Barshop, 925 S.W.2d at 626. Nevertheless, even though the panel has held that Hyperdynamics's and Dixon Financial's claims are non-justiciable, the majority still reverses the take-nothing judgment rendered by the trial court against Erin Oil on claims entirely derivative of the same non-justiciable claims and "reverse[s] the judgment to the extent that it fails to render judgment against Bill Knollenberg," and it determines the trial court improperly failed to grant a default judgment against Knollenberg for the millions of dollars in damages assessed by the jury in its post-non-suit trial. Slip Op. at 17. It then remands the case "(1) for a new trial on the issue of unliquidated damages against Erin Oil and (2) for the trial court to render judgment against Bill Knollenberg in accordance with the jury's verdict." Id.
I can find no legal basis for the majority's judgment with respect either to Erin Oil or to Knollenberg. I would hold that Dixon Financial's and Hyperdynamics's derivative claims against Erin Oil and Knollenberg, which were based exclusively on the actions of Chang, are not justiciable and that the trial court therefore lacked subject matter jurisdiction to entertain them and this Court has jurisdiction only to dismiss them for lack of jurisdiction.
In addition, I would hold that Dixon Financial and Hyperdynamics had an absolute right to non-suit Knollenberg and Erin Oil, which they exercised by filing a motion in the trial court on April 27, 2005 incorporating the non-suit of their claims against those defendants and which was repeatedly reinforced by their statements on the record in open court and in their pleadings. I would also hold that Dixon Financial and Hyperdynamics never filed and served pleadings reinstating their claims against Knollenberg and Erin Oil following their non-suit of those claims and that the trial court lacked jurisdiction to adjudicate those claims on that additional ground as well.
2. Non-Suit of Knollenberg and Erin Oil
Texas Rule of Civil Procedure 162 provides, "At any time before the plaintiff has introduced all of his evidence other than rebuttal evidence, the plaintiff may dismiss a case, or take a non-suit. . . ." TEX. R. CIV. P. 162. Texas courts have long held that, under Rule 162, "[a] plaintiff has an absolute right to a non-suit of its case at the moment the plaintiff files the motion with the clerk or makes a motion in open court." Harris County Appraisal Dist. v. Wittig, 881 S.W.2d 193, 194 (Tex. App.-Houston [1st] 1994, no pet.). "The plaintiff's right to take a nonsuit is unqualified and absolute as long as the defendant has not made a claim for affirmative relief." BHP Petroleum Co. v. Millard, 800 S.W.2d 838, 840 (Tex. 1990) (emphasis in original). The trial court's granting of a nonsuit is merely ministerial; "a plaintiff's right to nonsuit of its own action exists at the moment a motion is filed, and . . . the only requirement is the mere filing of the motion with the clerk of the court." Shadowbrook Apts. v. Abu-Ahmad, 783 S.W.2d 210, 211 (Tex. 1990). When a party non-suits a legal action, the action "places the parties in the position that they were in before the court's jurisdiction was invoked just as if the suit had never been brought." Crofts v. Court of Civil Appeals for the Eighth Supreme Judicial Dist., 362 S.W.2d 101, 104 (Tex. 1962); see also Old Farms Owners Ass'n v. Houston Ind. Sch. Dist., 277 S.W.3d 420, 423 (Tex. 2009); Hagberg v. City of Pasadena, 224 S.W.3d 477, 484 (Tex. App.-Houston [1st] 2007, no pet.).
The majority, however, mistakenly reads the record as showing that the non-suit of Knollenberg and Erin Oil was a matter of an agreement between Hyperdynamics and Dixon Financial that was conditioned on rendition of judgment by the trial court and was withdrawn before rendition. This is not the case. The non-suit was contained not only in the original Agreed Judgment filed with the court and in many subsequent agreed judgments filed by Hyperdynamics and Dixon Financial as attachments to their subsequent motions for entry of judgment, but also in the April 27, 2005 motion for entry of judgment, and it was reiterated repeatedly in the motions of Hyperdynamics and Dixon Financial and reiterated on the record in open court by counsel for Hyperdynamics as a fait accompli without any condition being attached.
The majority relies on Golodetz Trading Corp. v. Curland, 886 S.W.2d 503 (Tex. App.-Houston [1st] 1994, no pet.), for its holding on non-suit. Golodetz is, however, inapplicable to this case. In Golodetz, the parties announced in open court the non-suit of their claims against each other, after which Curland offered "mutual dismissal with prejudice" on the record and Golodetz agreed. Id. at 505. The trial judge thanked the parties and told them they could withdraw their exhibits, but it did not otherwise orally accept the agreement of the parties to dismiss their claims with prejudice, nor did it enter a written judgment adopting that agreement as a judgment of the court. See id. Golodetz subsequently filed a motion for new trial in which he complained "that in this case Judge Millard only accepted a nonsuit and not a mutual dismissal with prejudice." Id.
The sole issue on appeal of the denial of the motion was whether Judge Millard had rendered judgment on Curland's and Golodetz's agreement to dismiss with prejudice their claims against each other. Id. This Court held that by merely thanking the parties and telling them they could withdraw their exhibits the court had not rendered judgment dismissing the claims with prejudice. Id. That the parties had non-suited their claims against each other by their statements on the record was not in dispute. See id. We stated, "The settlement was dictated into the record, and although it may be an enforceable agreement, the appellant's withdrawal of consent prohibited a consent judgment in this case." Id. In other words, Golodetz's consent to the agreement of the parties to dismiss their claims with prejudice having been withdrawn prior to rendition of judgment, the claims were not dismissed with prejudice by a consent judgment.
The non-suits were not contested by Golodetz and were not affected by this Court's judgment. Thus, Golodetz in no way alters the established law that, unlike a settlement agreement, which does not become an agreed judgment of the court if consent to the agreement is withdrawn by a party prior to rendition, a non-suit occurs as soon as it is filed or announced in open court, and the trial court's acceptance of the non-suit is "merely . . . ministerial." Shadowbrook Apts., 783 S.W.2d at 211. Golodetz's acknowledgment that the claims had been mutually non-suited and his failure to contest the non-suit in his motion for new trial indicates that, in that case, the parties understood and did not challenge established law.
I would find, on the basis of the foregoing law, that Hyperdynamics and Dixon Financial non-suited their claims against both Knollenberg and Erin Oil on April 27, 2005. See BHP Petroleum, 800 S.W.2d at 840; Shadowbrook Apts., 783 S.W.3d at 211. The parties were therefore returned to their original positions prior to suit on that date. Old Farms Owners Ass'n, 277 S.W.3d at 423; Crofts, 362 S.W.2d at 104. Because Hyperdynamics's and Dixon Financial's claims against Knollenberg and Erin Oil were no longer before the trial court after April 27, 2005 and no new claims were filed against them, I would hold that there was no live case against Knollenberg and Erin Oil before the trial court and that it, therefore, lacked jurisdiction to adjudicate the claims against Knollenberg and Erin Oil on this ground as well as well as on the intrinsic non-justiciability of the claims themselves. See Gomez, 891 S.W.2d at 245; Patterson, 971 S.W.2d at 442-43.
3. Judicial Estoppel
Even if I thought that the trial court had jurisdiction to adjudicate Hyperdynamics's and Dixon Financial's claims against Knollenberg and Erin Oil, I would still hold that Hyperdynamics and Dixon Financial were judicially estopped from trying those claims.
Estoppel generally prevents one party from misleading another to the other's detriment or to the misleading party's own benefit. Ulico Cas. Co. v. Allied Pilots Ass'n, 262 S.W.3d 773, 778 (Tex. 2008); Johnson Higgins of Tex., Inc. v. Kenneco Energy, Inc., 962 S.W.2d 507, 515-16 (Tex. 1998). More specifically, the equitable rule of judicial estoppel generally prevents a party from prevailing in one phase of a case on an argument and then relying on a contradictory argument to prevail in another phase. Maine v. New Hampshire, 532 U.S. 742, 749-51, 121 S. Ct. 1808, 1814-15 (2001); Schmidt v. State, 278 S.W.3d 353, 358 (Tex. Crim. App. 2009). The doctrine is not, strictly speaking, estoppel, but rather a rule of procedure based on justice and sound public policy. Pleasant Glade Assembly of God v. Schubert, 264 S.W.3d 1, 6 (Tex. 2008). It precludes a party from adopting a position inconsistent with one that it maintained successfully in an earlier proceeding. Id. Contradictory positions taken in the same proceeding do not, however, invoke the doctrine of judicial estoppel. Id. Rather, its essential function "is to prevent the use of intentional self-contradiction as a means of obtaining unfair advantage." Id. (quoting Andrews v. Diamond, Rash, Leslie Smith, 959 S.W.2d 646, 650 (Tex. App.-El Paso 1997, writ denied)). The basis for judicial estoppel is "the assertion of a position clearly inconsistent with a previous position accepted by the court," and "the determinative factor is whether the appellant intentionally misled the court to gain an unfair advantage." Id. (quoting Tenneco Chem. v. William T. Burnett Co., 691 F.2d 658, 665 (4th Cir. 1982)).
Here, while the frustration of Hyperdynamics and Dixon Financial at their inability to obtain a final judgment from the trial court, despite the resolution of all issues, is understandable, their actions in non-suiting Erin Oil and Knollenberg and nevertheless trying a multi-million dollar case for damages against them in a trial at which Erin Oil and Knollenberg did not appear, of which they were not advised, and of which it is frankly inconceivable that they had actual knowledge brings their claims within the purview of the doctrine of judicial estoppel.
Hyperdynamics and Dixon non-suited their claims against both Erin Oil and Knollenberg on April 27, 2005 by incorporating the non-suit into their original motion for entry of agreed judgment and filing that motion with the trial court. That non-suit was effective immediately upon filing. They then appeared before the trial court in the absence of Knollenberg and Erin Oil, who had been led to believe they had been non-suited and who actually had been non-suited, and reaffirmed the non-suits in open court. When the court refused to accept the agreed judgment and stated that it would go ahead with trial and that "the other defendants are invited but not required" to attend, Hyperdynamics's counsel affirmed to the court that it did not expect Knollenberg and Erin Oil to attend the trial. It then set the case for trial, but acknowledged in the certificate of service that it had not contacted Knollenberg and Erin Oil about the filing. Meanwhile, without ever filing new pleadings against Erin Oil and Knollenberg reinstating their suit against them, Hyperdynamics and Dixon Financial prepared for trial, and, one business day before trial, withdrew their Motion for Entry of Stipulated Damages and proceeded to trial exclusively on their non-suited claims against Erin Oil and Knollenberg in their absence, inviting error by the trial court. They then submitted a jury charge that sought $7,050,000 in damages against Knollenberg, to be split between them, and were awarded by the trial court in its first judgment not only the damages they sought at trial, but also an additional $5,000,000 they did not seek, as well as costs against Erin Oil, which they likewise did not seek.
Only after being reminded of the non-suit of the claims against Knollenberg and the failure of Hyperdynamics and Dixon Financial to seek damages against Erin Oil at trial by Knollenberg's "Motion to Modify the Judgment," did the court correct the judgment to accurately reflect the non-suit of Knollenberg and the fact that no damages were sought at trial or found against Erin Oil. The majority opinion in this Court undoes both of these correct rulings.
Far from being a case in which Knollenberg and Erin Oil should be held liable for millions of dollars in damages on non-justiciable claims tried against them after being non-suited, as the panel majority holds, this is a classic case in which jurisdiction is lacking over the claims the majority adjudicates. And, even if it were not, the doctrine of judicial estoppel, as well as the doctrine of invited error, would preclude Hyperdynamics and Dixon Financial from profiting from the advantage they gained by their misleading actions in the trial court.
I would hold, as did the trial court, that the non-suit filed by Dixon Financial and Hyperdynamics was effective to non-suit Knollenberg — and also Erin Oil — the moment it was filed with the clerk of the trial court on April 27, 2005. See Shadowbrook Apts., 783 S.W.2d at 211. I would hold that the trial court thus lacked subject-matter jurisdiction over those claims. I would also hold that the claims were non-justiciable in any event. But even if the trial court had had jurisdiction to adjudicate those claims and they were justiciable, I would still hold that Dixon Financial and Hyperdynamics were judicially estopped to try them under the circumstances of this case
Conclusion
I would dismiss appellants' claims against Erin Oil and Knollenberg for lack of subject-matter jurisdiction.