Opinion
No. 14-09-00729-CV
Opinion filed September 10, 2009.
Original Proceeding.
Writ of Mandamus.
Panel consists of Justices YATES, FROST, and BROWN.
MEMORANDUM OPINION
On August 24, 2009, relators, A P Transportation Co., Inc., Clayton Allen Potter, Toby Allen Potter, T.A. Potter Management, LLC, and Superior Nationwide Logistics, Ltd. filed a petition for writ of mandamus in this court. See TEX. GOV'T CODE ANN. § 22.221 (Vernon 2004); see also TEX. R. APP. P. 52. In the petition, relators ask this court to compel the Honorable Jaclanel McFarland, judge of the 133rd District Court in Harris County to vacate her order of May 18, 2009, denying their motion to strike counterclaims filed by North American Transport Concepts, Inc. (NATCO), the real party in interest. Relators further seek a stay of the proceedings in the court below.
FACTUAL AND PROCEDURAL BACKGROUND
On November 15, 1994, relator, Clayton Allen Potter, entered into an agreement with NATCO in which Potter agreed to operate a business known as NATCO-Houston in exchange for administrative services of NATCO, including billing services. In January, 2000, Potter organized A P Transportation Co., which continued doing business as contemplated by the earlier agreement with NATCO. A dispute later arose when relators chose to operate their own accounting system. Relators allege that after instituting their accounting system, they discovered discrepancies with NATCO's system that led them to believe NATCO's system caused them to be underpaid according to their agreement.
On November 15, 2008, relators filed suit against NATCO alleging, among other claims, that NATCO underpaid them and prevented them access to vendors and customers. On December 15, 2008, NATCO filed an answer to relators' suit. On February 19, 2009, NATCO filed several counterclaims against relators and four third-party defendants. On March 30, 2009, relators moved to strike NATCO's counterclaims alleging they were compulsory counterclaims required to be filed within the time for the filing of NATCO's answer. On May 18, 2009, the respondent denied relators' motion to strike.
ANALYSIS
Mandamus is an extraordinary remedy to correct a trial court's abuse of discretion that cannot be remedied through standard appellate channels. Walker v. Packer, 827 S.W.2d 833, 840-44 (Tex. 1992) (orig. proceeding). A trial court clearly abuses its discretion if it reaches a decision so arbitrary and unreasonable as to amount to a clear and prejudicial error of law. Id.
Relators argue that NATCO's counterclaims are compulsory under Rule 97(a) of the Texas Rules of Civil Procedure. They further argue that Rule 97(a) requires compulsory counterclaims to be filed within the time permitted for the defendant to answer. Therefore, relators allege that because the counterclaims were not filed within the time permitted for NATCO to answer, the trial court abused its discretion in failing to strike NATCO's pleading. Rule 97(a) provides in pertinent part:
(a) Compulsory Counterclaims. A pleading shall state as a counterclaim any claim within the jurisdiction of the court, not the subject of a pending action, which at the time of filing the pleading the pleader has against any opposing party, if it arises out of the transaction or occurrence that is the subject matter of the opposing party's claim and does not requires for its adjudication the presence of third parties of whom the court cannot acquire jurisdiction[.]
The plain language of Rule 97(a) does not require a compulsory counterclaim to be filed within the time for filing the defendant's answer. The compulsory counterclaim rule is designed to avoid piecemeal or duplicative litigation. Its purpose is to provide that a potential counterclaimant with a justiciable interest arising out of the same transaction or occurrence at issue in the opposing party's claim bring the counterclaim in the same proceeding or it will be deemed waived. Bard v. Charles R. Myers Ins. Agency, Inc., 839 S.W.2d 791, 796 (Tex. 1992). "The `compelling interest' underlying the compulsory counterclaim rule is solely in judicial economy; its purpose is to prevent multiple suits arising out of the same transactions or occurrences." Id. NATCO does not challenge relators' assertion that the counterclaims are compulsory under Rule 97(a) in that the claims arose out of the same transaction or occurrence at issue in relators' claim. Therefore, NATCO concedes it is required to bring the counterclaims in this litigation, but argues that Rule 97(a) does not require the counterclaims to be filed within the time designated for the filing of NATCO's answer.
Rule 97(a) mandates that if a party chooses not to assert a compulsory counterclaim during the initial litigation between the parties in which such a claim is compulsory, when the initial lawsuit becomes final, the party loses the right to file a later suit on the claims that were compulsory in the first suit. See Williams v. Nat'l Mortg. Co., 903 S.W.2d 398, 403 (Tex. App.-Dallas 1995, writ denied) ("A party's failure to assert compulsory counterclaims precludes that party from asserting them in later lawsuits.") The only deadline imposed by Rule 97(a) for filing a compulsory counterclaim is prior to final judgment in the initial action between the parties involving the same transaction or occurrence. Therefore, the trial court did not abuse its discretion in denying relators' motion to strike.
CONCLUSION
Relators have failed to establish an abuse of discretion by the trial court because Rule 97(a) does not require a compulsory counterclaim to be filed within the deadline for filing the defendant's answer. For this reason, relators are not entitled to mandamus relief. Accordingly, we deny relators' petition for writ of mandamus and their motion for stay of proceedings below.