Kerrville Fitness Prop., L.L.C.v.PE Servs., L.L.C.

Court of Appeals Fifth District of Texas at DallasJun 11, 2019
No. 05-17-01317-CV (Tex. App. Jun. 11, 2019)

No. 05-17-01317-CV

06-11-2019

KERRVILLE FITNESS PROPERTY, L.L.C., J. HOUSER CONSTRUCTION, INC., AND JOSH HOUSER D/B/A HOUSER CONSTRUCTION, Appellants v. PE SERVICES, L.L.C., LANDRY ARCHITECTS, AND FABRISTRUCTURE, INC., Appellees


On Appeal from the 134th Judicial District Court Dallas County, Texas
Trial Court Cause No. DC-14-05761

ORDER

Before the Court are Kerrville Fitness Property, L.L.C., J. Houser Construction, Inc., and John Houser d/b/a Houser Construction's April 4, 2019 motion for rehearing and Landry Architects' April 4, 2019 response to that motion. Both the motion and the response contend that the jurisdictional defect identified in this Court's opinion has been cured and request that this Court render a decision on the merits of the appeal. PE Services, L.L.C. and Fabristructure, Inc. did not file a response to the motion for rehearing.

The events purportedly leading to jurisdiction in this appeal do not occur in a linear timeline. This suit commenced on May 30, 2014. Kerrville's suit against J. Houser Construction, Houser, PE Services, Landry Architects, and Fabristructure asserted claims that arose out of a construction project. Those claims included breach-of-contract claims against J. Houser Construction and negligent-misrepresentation claims against J. Houser Construction and Houser. Also, J. Houser Construction filed cross-claims against Landry Architects and Fabristructure.

During the course of the litigation, Kerrville entered into a "Liquidating Agreement" dated February 15, 2017, with J. Houser Construction and Houser. That "Liquidating Agreement" required J. Houser Construction and Houser to remain in the lawsuit.

The "Liquidating Agreement" also required that counsel for Kerrville, the plaintiff in the underlying lawsuit, would substitute as counsel for J. Houser Construction and Houser, the defendant in the lawsuit. On February 15, 2017, J. Houser Construction and Houser filed an agreed motion to substitute counsel. On February 16, 2017, the trial court signed an agreed order granting the motion to substitute counsel, which permitted counsel for defendants J. Houser Construction and Houser to withdraw and substituted as their counsel the same counsel representing plaintiff Kerrville.

In April 2017, PE Services, Landry Architects, and Fabristructure filed motions for summary judgment on Kerrville's claims against them and J. Houser Construction's cross-claims. Those motions for summary judgment were based on the allegation that the "Liquidating Agreement" among Kerrville, J. Houser Construction, and Houser was an impermissible Mary Carter agreement. On August 17, 2017, the trial court granted the motions for summary judgment and dismissed Kerrville's claims and J. Houser Construction's cross-claims against PE Services, Landry Architects, and Fabristructure. The trial court did not dismiss or otherwise expressly dispose of Kerrville's claims against J. Houser Construction or Houser.

On November 15, 2017, Kerrville, J. Houser Construction, and Houser filed a notice of appeal of the trial court's order granting summary judgment. On December 12, 2018, the Clerk of the Court sent the parties a letter questioning this Court's jurisdiction over the appeal because the order granting summary judgment did not appear to be final. In response to the Court's request, Kerrville, J. Houser Construction, and Houser filed a letter brief asserting this Court has jurisdiction over the appeal because Kerrville non-suited its claims against J. Houser Construction and Houser. Attached to the letter brief was a notice of non-suit filed in the trial court on December 21, 2018. However, the Court did not receive a supplemental clerk's record containing an order granting the non-suit and dismissing Kerrville's claims against J. Houser Construction and Houser. See In re Bennett, 960 S.W.2d 35, 38 (Tex. 1997) (appellate timetables do not run from date non-suit is filed, but from date trial court signs order of dismissal).

Also in response to the Court's request, PE Services, Landry Architects, and Fabristructure filed a letter brief asserting, in part, that "[the] dismissal of the claims against [J. Houser Construction and Houser] impacts the merits of this appeal, as well as the Court's jurisdiction." --------

Also, the notice of non-suit referenced and attached a "Tolling Agreement" among Kerrville, J. Houser Construction, and Houser to toll the statute of limitations for any claims that Kerrville may have against J. Houser Construction and Houser. That "Tolling Agreement" along with the filing of the non-suit of the contract claim by Kerrville against J. Houser Construction and Houser is a substantive modification of the "Liquidating Agreement" that was the basis for the trial court's interlocutory summary judgment order. Accordingly, we concluded that the trial court's disposition of the non-suit was a judicial act, rather than a ministerial act, and the trial court should have an opportunity to resolve the non-suit. As a result, we dismissed the appeal for want of jurisdiction on March 25, 2019.

On March 27, 2019, the trial court signed an order of non-suit dismissing without prejudice Kerrville's claims against J. Houser Construction and Houser. The order of non-suit appears to be the final judgment in this case because it disposes of the remaining parties and claims, even though it does not expressly incorporate the order granting summary judgment. See In re Guardianship of Miller III, 299 S.W.3d 179, 184 (Tex. App.—Dallas 2009, no pet.) (once trial court disposes of all parties and claims, trial court's preceding interlocutory judgments and orders are merged into final judgment regardless of whether they are specifically named within final judgment). However, after reviewing the record, the March 27, 2019 order of non-suit dismissing without prejudice Kerrville's claims against J. Houser Construction and Houser significantly modified their "Liquidating Agreement," which required J. Houser Construction and Houser to remain in the lawsuit. See generally, In re Marriage of Brent, No. 07-11-00223-CV, 2013 WL 683333, at *2 (Tex. App.—Amarillo Feb. 21, 2013, pet. denied) (mem. op.) (when final judgment inconsistent with prior interlocutory order on summary judgment, final judgment sets aside interlocutory order as only one final judgment may be entered in case); Dickson v. Brady, 530 S.W.2d 886, 887 (Tex. App.—Houston [14th Dist.] 1975, no writ) (holding terms of final judgment control over those in interlocutory summary judgment). That modification eliminates an essential element of a Mary Carter agreement, which was the basis for the trial court's summary judgment order. See Elboar v. Smith, 845 S.W.2d 240, 247 & n.14 (Tex. 1992) (Mary Carter agreement exists when settling defendant retains financial stake in plaintiff's recovery and remains party at trial of case, but would not exist if settling defendant acquires financial interest in outcome of trial and then testifies as non-party witness). Further, it appears to eliminate any contract causes of action Kerrville may have against PE Services, Landry Architects, and Fabristructure. As a result, the order granting summary judgment based on the "Liquidating Agreement" is no longer the summary-judgment order on appeal.

Because the March 27, 2019 order of non-suit completely modified the August 17, 2017 order granting summary judgment, we ORDER the trial court to enter an order clarifying its March 27, 2019 order of non-suit as it considers appropriate within THIRTY DAYS to either: (1) affirm the March 27, 2019 order of non-suit and set aside the August 17, 2017 order granting summary judgment that it modifies; or (2) modify the March 27, 2019 order of non-suit to incorporate the August 17, 2017 order granting summary judgment.

The Court also DIRECTS the district clerk to file a supplemental clerk's record containing the order clarifying the trial court's March 27, 2019 order of non-suit within THIRTY DAYS.

The appeal is ABATED to allow the trial court to comply with the above order. The appeal shall be reinstated THIRTY DAYS from the date of this order.

/s/ MICHAEL J. O'NEILL


JUSTICE