Opinion
No. 05-08-00716-CV
Opinion Filed August 19, 2010.
On Appeal from the 95th Judicial District Court, Dallas County, Texas, Trial Court Cause No. 06-03056.
Before Justices O'NEILL, LANG, and MYERS.
MEMORANDUM OPINION
This case arises from a dispute over the consideration due to Eustace H. Winn, Jr., Betty Lee Jones Winn, and John C. Kisalus, trustee of the Eustace H. Winn, Jr., Family Trust (collectively the Winns) resulting from Eustace Winn's agreement to sell his ownership interest in EPG back to EPG as reflected in the redemption agreement. The trial court rendered a final judgment against the Winns and in favor of EPG Partners, LLC, CDX, LLC n/k/a Mr. Exploration Venture, LLC (as successor) (CDX), CDX Apache Del Sur, LLC n/k/a CDX Tapicito, LLC (by merger) (Apache), and CDX Rio, LLC (Rio). The Winns appeal the final judgment, which ordered that the Winns take-nothing on their counterclaims and granted EPG, CDX, Apache, and Rio's request for a declaratory judgment.
In three issues, the Winns argue the trial court erred when it: (1) granted EPG and CDX's motion for summary judgment and Apache and Rio's conditional motion for summary judgment because they raised an issue of material fact precluding judgment as a matter of law on their securities act counterclaims; (2) granted summary judgment respecting EPG, CDX, Apache, and Rio's request for declaratory relief and attorneys' fees; and (3) signed the final judgment because it (a) awards EPG, CDX, Apache, and Rio relief for which they did not plead, i.e., it "details" the amount of consideration and states they did not have an interest in the property, and (b) the post-judgment interest rate is "wrong."
Issues one, two, and the first part of issue three are decided against the Winns. We need not decide the second part of issue three. The trial court's final judgment is affirmed. We issue this memorandum opinion because the issues in this appeal are settled. See Tex. R. App. P. 47.4.
I. PROCEDURAL BACKGROUND
In their original petition, EPG, CDX, Apache, and Rio requested a declaratory judgment that concluded: (1) the redemption agreement between EPG and the Winns does not entitle the Winns to claim or receive any rights in real property not specifically described in the redemption agreement; (2) EPG and CDX have performed all acts required of them under the redemption agreement; (3) the Winns have received from EPG, CDX, Apache, and Rio all the consideration to which they were entitled under the terms of the redemption agreement; and (4) the trust has no right to receive further consideration from EPG, CDX, Apache, or Rio by way of money or property. Attorneys' fees were also sought.
The Winns answered, generally denying the claims. They asserted the following counterclaims against EPG: (1) a request for a declaratory judgment concluding that the redemption agreement terminated according to its own terms; (2) breach of contract and rescission respecting the redemption agreement due to material mistake; (3) fraud in a stock transaction; (4) securities fraud under the Texas Securities Act; (5) securities fraud under the Mississippi Securities Act; (6) registration violations under the Texas Securities Act; (7) registration violations under the Mississippi Securities Act; (8) negligent misrepresentation; (9) breach of fiduciary duty; and (10) common law fraud. Also, the Winns asserted a counterclaim against CDX, Apache, and Rio alleging they aided and abetted EPG in committing securities fraud under the Texas Securities Act. Further, the Winns' counterclaims sought a full accounting of all the books and records of EPG, CDX, Apache, Rio, and other related corporations, and attorneys' fees against all of the counter-defendants.
The Winns also asserted third-party claims against Joe French Associates, P.C., and Joseph J. French, Jr., alleging claims for fraud in a stock transaction, securities fraud pursuant to the Texas Securities Act, securities fraud pursuant to the Mississippi Securities Act, registration violations of the Texas Securities Act, registration violations of the Mississippi Securities Act, negligent misrepresentation, breach of fiduciary duty, common law fraud, and negligence. These claimed were severed from the suit against EPG, CDX, Apache, and Rio.
EPG, CDX, Apache, and Rio answered by generally denying the counterclaims. They also asserted several affirmative defenses and pleas in avoidance, including waiver and ratification. Then, EPG, CDX, Apache, and Rio filed an amended petition seeking a declaratory judgment and attorneys' fees, and adding claims against Eustace Winn for breach of fiduciary duties as a manager of EPG and breach of contract respecting the redemption agreement. Eustace and Betty Winn filed a motion to realign the parties, claiming they were the true plaintiffs even though EPG, CDX, Apache, and Rio filed the lawsuit.
The Winns advise that a hearing was held on this motion, but the trial court did not enter an ordering denying their motion to realign the parties.
Then, EPG and CDX moved for summary judgment on the Winns' counterclaims. First, they sought traditional summary judgment on their request for a declaratory judgment. Second, they sought traditional summary judgment on their affirmative defenses of statute of frauds and their plea in avoidance of ratification. Finally, they sought a traditional summary judgment on the Winns' counterclaims, arguing that the counterclaim for rescission was without merit because there was no mutual mistake and their remaining counterclaims lacked merit as a matter of law because the summary judgment evidence demonstrates there was no misrepresentation of a material fact.
The Winns responded that issues of fact and law relating to EPG and CDX's alleged fraud precluded summary judgment on EPG and CDX's request for a declaratory judgment and their counterclaims. Also, they responded that EPG and CDX failed to plead the affirmative defense that the statute of frauds barred their counterclaims. Further, they responded that the plea in avoidance of ratification and the affirmative defense of waiver do not apply as a matter of law to violations of the Texas Securities Act. Then EPG, CDX, Apache, and Rio filed a supplemental answer to the Winns' counterclaims asserting generally as to all claims the affirmative defense of the statute of frauds.
The trial court granted EPG and CDX's motion for summary judgment, concluding that EPG and CDX were entitled to judgment on their request for a declaratory judgment. Also, the trial court determined that there was no genuine issue of material fact and that EPG and CDX were "entitled to judgment as a matter of law on all [of the counterclaims] asserted against them in this action by [the Winns]."
After the trial court granted EPG and CDX's motion for summary judgment, Apache and Rio filed a conditional motion for summary judgment. They claimed they were entitled to summary judgment on the same basis as EPG and CDX because (1) EPG and CDX sought identical declaratory relief against the Winns; (2) the Winns asserted counterclaims against Apache and Rio based on the same theory of liability as their counterclaim against CDX; and (3) the trial court granted summary judgment on these same issues in favor of EPG and CDX in this matter. Apache and Rio's conditional motion for summary judgment was granted. The order granting EPG and CDX's motion for summary judgment and the order granting Apache and Rio's conditional motion for summary judgment were incorporated into the trial court's final judgment, which states, in part, the Winns "take nothing by their [counter]claims and causes of against [EPG, CDX, Apache, and Rio]." The final judgment also dismisses without prejudice EPG, CDX, Apache, and Rio's remaining claims against Eustace Winn for breach of fiduciary duty and breach of contract.
I. SUMMARY JUDGMENT ON THE WINNS' COUNTERCLAIMS
In issue one, the Winns limit their appeal to claim the trial court erred in granting summary judgment only as to their counterclaims of securities fraud under the Texas and Mississippi securities acts. They argue the trial court erred when it granted EPG, CDX, Apache, and Rio's motions for summary judgment because they raised an issue of material fact precluding judgment as a matter of law. EPG, CDX, Apache, and Rio argue that the Winns' fraud counterclaims were barred by the contract and other operative documents presented to the trial court. The record reflects that one of the grounds supporting summary judgment asserted by EPG, CDX, Apache, and Rio was that the Winns' counterclaims were barred by the statute of frauds. The trial court's orders granting summary judgment do not state the grounds on which summary judgment was granted. Further, the Winns have not raised before this court any claimed error in granting the summary judgment on the basis of the affirmative defense of statute of frauds, which was raised in EPG, CDX, Apache, and Rio's pleadings as well as being specifically identified in their motion for summary judgment as a ground supporting summary judgment.
A. Standard of Review
When more than one ground is asserted in a motion for summary judgment and the trial court does not specify the grounds on which it rendered summary judgment, an appellant must challenge each ground asserted. See Malooly Bros., Inc. v. Napier, 461 S.W.2d 119, 121 (Tex. 1970); Worldwide Asset Purchasing, LLC v. Rent-A-Center E., Inc., 290 S.W.3d 554, 569 (Tex. App.-Dallas 2009, no pet.). If an appellant fails to challenge one of the grounds for summary judgment, an appellate court may affirm the summary judgment on that ground alone. See Worldwide Asset, 290 S.W.3d at 569.
B. Application of the Law to the Facts
EPG and CDX moved for summary judgment, inter alia, on their affirmative defense that the counterclaims were barred by the statute of frauds. The Winns responded that EPG and CDX failed to plead the affirmative defense that the statute of frauds barred their counterclaims. Then, EPG, CDX, Apache, and Rio filed a supplemental answer to the Winns' counterclaims asserting the affirmative defense of the statute of frauds. Specifically, they asserted that:
[EPG, CDX, Apache, and Rio] assert that [the Winns'] claims for a 10% interest in the nature of an override and/or any other claims for any cash, profits, participation or royalty interest in the property owned by [Apache] are barred by the statute of frauds.
In a written order, the trial court granted EPG and CDX's motion for summary judgment and the same order states that during the hearing the trial court "granted leave for all necessary amendments and supplements filed as of the date of the hearing to be considered as part of the record for the hearing." Apache and Rio moved for conditional summary judgment on the same basis as EPG and CDX, which the trial court granted. These orders were incorporated into the trial court's final judgment.
On appeal, the Winns claim that the evidence raises a fact issue that EPG, CDX, Apache, and Rio made multiple misrepresentations and omissions to Eustace Winn. Also, they argue that as a matter of law, EPG, CDX, Apache, and Rio's plea in avoidance of ratification and affirmative defenses of waiver, disclaimer of reliance, merger clause, mitigation, comparative fault, due diligence, and causation do not apply to claims for violations of the Texas and Mississippi securities acts. Further, they argue the exemptions to the Texas and Mississippi securities acts do no preclude their counterclaims. However, the Winns do not challenge all possible grounds on which the trial court could have granted EPG and CDX's and Apache and Rio's motions for summary judgment on their counterclaims. Specifically, they do not assert as error the granting of summary judgment on the ground of the statute of frauds or provide argument negating EPG, CDX, Apache, and Rio's affirmative defense of the statute of frauds. Because the Winns do not challenge every possible ground for the trial court's summary judgment on their counterclaims, we must conclude the trial court did not err when it granted summary judgment in favor of EPG, CDX, Apache, and Rio on the Winns' counterclaims for violations of the Texas and Mississippi securities acts. See Worldwide Asset, 290 S.W.3d at 569.
Issue one is decided against the Winns.
III. DECLARATORY JUDGMENT
In issue two, the Winns argue that the trial court erred when it granted EPG, CDX, Apache, and Rio's request for declaratory relief and attorneys' fees. EPG, CDX, Apache, and Rio respond that this issue is waived because the Winns assert this argument for the first time on appeal. The Winns reply that they preserved this issue for appeal because the argument presented in their motion to realign the parties is the same as their argument on appeal and the "Motion to Realign Parties and the hearing on their motion was more than sufficient `to make the trial court aware of their complaint that the declaratory judgment was improper.' [citation omitted]"
A. Applicable Law
Texas Rule of Appellate Procedure 33.1 establishes the prerequisites for preserving an appellate complaint. To preserve a point for appellate review, a party must make a timely, specific objection or motion to the trial court that states the grounds for the ruling sought with sufficient specificity, unless the grounds are apparent from the context, obtain a ruling on the complaint, and comply with the rules of evidence or procedure. Tex. R. App. P. 33.1. Complaints and arguments on appeal must correspond with the complaint made at the trial court level. Knapp v. Wilson N. Jones Mem'l Hosp., 281 S.W.3d 163, 170 (Tex. App.-Dallas 2009, no pet.). To preserve an error for appeal, a party's argument on appeal must comport with its argument in the trial court. Id. at 170-71.
B. Application of the Law to the Facts
EPG, CDX, Apache, and Rio requested a declaratory judgment that concluded: (1) the redemption agreement between EPG and the Winns does not entitle the Winns to claim or receive any rights in real property not specifically described in the redemption agreement; (2) EPG and CDX have performed all acts required of them under the agreement; (3) the Winns have received from EPG, CDX, Apache, and Rio all the consideration to which they were entitled under the terms of the agreement; and (4) the trust has no right to receive further consideration from EPG, CDX, Apache, or Rio by way of money or property. They also sought an award of attorneys fees pursuant to sections 37.009 and 38.001 of the Texas Civil Practice and Remedies Code.
On appeal, the Winns argue that although EPG, CDX, Apache, and Rio "won the race to the courthouse," their request for a declaratory judgment is simply a defense to the Winns' counterclaims alleging they engaged in fraud, breach of fiduciary duties, and other acts. The Winns argue that Texas law does not permit a party to present an affirmative defense in the guise of a request for declaratory judgment in order to obtain attorneys' fees and expenses that would otherwise be unavailable. According to the Winns, this point was raised before the trial court in their motion to realign the parties. EPG, CDX, Apache, and Rio claim this argument was raised for the first time on appeal.
In their motion to realign the parties, the Winns argued, in part, as follows:
The current alignment does not accurately reflect the common interests and antagonistic interests between and among the parties. Although [EPG, CDX, Apache, and Rio] originally filed suit, the Winns are the true claimants in this matter. Specifically, [EPG, CDX, Apache, and Rio] filed a claim against the Winns seeking a declaratory judgment that a particular Redemption Agreement did not entitle the Winns to an overriding royalty interest in certain property.
In response, the Winns filed counterclaims against [EPG, CDX, Apache, and Rio] . . . and alleged, among other things, breach of contract, fraud in a stock transaction, Texas and Mississippi securities fraud, registration violations of the Texas and Mississippi Securities acts, common law fraud, negligent misrepresentation, breach of fiduciary duty, and negligence.
It has thus become clear that both [EPG, CDX, Apache, and Rio] . . . are actually joint Defendants, and the Winns are the true Plaintiffs in this action. Therefore, the parties should be realigned so that their respective interests are properly described on the correct sides of the docket. . . .
The Winns advise this Court that the trial court did not sign an order denying their motion to realign. However, they claim the trial court's order granting EPG, CDX, Apache, and Rio's request for a declaratory judgment implicitly overruled their request to realign the parties. See Tex. R. App. P. 33.1 (to preserve point for appellate review party must obtain a ruling on complaint).
We conclude that the Winns' argument on appeal does not comport with the argument in their motion to realign the parties. The motion to realign the parties only advised the trial court that the Winns claimed they were the real plaintiffs in the lawsuit. That motion did not advise the trial court of the Winns' claim, as asserted on appeal, respecting EPG, CDX, Apache, and Rio's request for a declaratory judgment. The record does not show the Winns made a timely, specific objection or motion to the trial court that states the grounds for the ruling sought with sufficient specificity or that they obtained a ruling on their complaint. See Tex. R. App. P. 33.1. Accordingly, we conclude the Winns have failed to preserve this issue for appellate review.
Issue two is decided against the Winns.
IV. RELIEF GRANTED AND POST-JUDGMENT INTEREST
In issue three, the Winns argue the trial court erred when it signed the final judgment because (1) it awarded EPG, CDX, Apache, and Rio relief for which they did not plead and (2) the post-judgment interest rate is wrong.
A. Relief Granted in the Final Judgment
The Winns claim the final judgment improperly (1) "details numerous percentages of ownership in various interests that [they] were [] entitled to receive as consideration" and (2) states "[n]one of the 10% cash flow interest in the nature of an override in any portion of the properties owned or ever owned by [CDX, Apache, or Rio]." EPG, CDX, Apache, and Rio respond that the judgment's description of the consideration tracks the precise language requested by the Winns in their response and objections to EPG, CDX, Apache, and Rio's motion for entry of a final judgment, and the "interests" listed in the final judgment were specified in their amended motion for summary judgment. Also, they respond that the Winns raise this issue for the first time on appeal when they complain of the language stating they did not have an interest in the property.
1. Applicable Law
A party to a lawsuit cannot ask something of a trial court and then complain on appeal that the trial court committed error in granting that party's request. See Ne. Tex. Motor Lines, Inc. v. Hodges, 138 Tex. 280, 282, 158 S.W.2d 487, 488 (1942); Naguib v. Naguib, 137 S.W.3d 367, 375 (Tex. App.-Dallas 2004, no pet.). This rule is grounded in even justice and dictated by common sense. See Ne. Tex. Motor Lines, 138 Tex. at 282, 158 S.W.2d at 488; Naguib, 137 S.W.3d at 375. When the record on appeal conclusively establishes that the trial court entered its judgment in full compliance with an appellant's request, all complaints by the appellant about the trial court's action in so doing are foreclosed. See Naguib, 137 S.W.3d at 375.
Also, to preserve a point for appellate review, a party must make a timely, specific objection or motion to the trial court that states the grounds for the ruling sought with sufficient specificity, unless the grounds are apparent from the context, obtain a ruling on the complaint, and comply with the rules of evidence or procedure. Tex. R. App. P. 33.1.
2. Application of the Law to the Facts
In their response and objections to EPG, CDX, Apache, and Rio's motion for entry of a final judgment, the Winns objected to the paragraph in the proposed final judgment setting out the consideration the Winns were entitled to receive. Then, the Winns requested that the proposed final judgment be modified and provided the specific language they asked the trial court to include in the final judgment. The portion of the final judgment setting out the consideration the Winns were entitled to receive is identical to the language the Winns requested. The Winns cannot complain on appeal that the trial court erred because the final judgment improperly sets out the consideration when the Winns expressly requested the inclusion of that very language. See Naguib, 137 S.W.3d at 375
Also, the Winns complain that the pleadings do not support the statement in the final judgment that "[n]one of the 10% cash flow interest in the nature of an override in any portion of the properties owned or ever owned by [CDX, Apache, or Rio]." However, the Winns did not object to this language in their response and objections to EPG, CDX, Apache, and Rio's motion for entry of a final judgment or otherwise present this issue to the trial court after it signed the final judgment. See Tex. R. App. P. 33.1. Accordingly, we conclude the Winns did not preserve this issue for appellate review.
The first portion of issue three is decided against the Winns.
B. Post-Judgment Interest
In a letter brief to this Court, the Winns concede that they failed to object to the excessive interest rate in the trial court and this Court's opinion in Marauder Corp. v. Beall, 301 S.W.3d 817 (Tex. App.-Dallas 2009, no pet.) forecloses their arguments regarding the correction of the post-judgment interest rate in the final judgment. Accordingly, we need not consider the second portion of issue three.
V. CONCLUSION
The trial court did not err when it granted summary judgment in favor of EPG, CDX, Apache, and Rio because the Winns do not challenge every possible ground for the trial court's summary judgment on their counterclaims. Also, the Winns failed to preserve for appellate review their issue claiming that the trial court erred when it granted EPG, CDX, Apache, and Rio's request for declaratory relief and attorneys' fees. The Winns cannot complain on appeal that the final judgment improperly sets out the amount of consideration because they requested that specific language. Further, the Winns failed to preserve for appellate review their complaint regarding the language in the final judgment that states they did not have an interest in the property. Finally, the Winns have conceded their issue claiming that the trial court erred when it awarded EPG, CDX, Apache, and Rio relief for which they did not plead and the post-judgment interest rate is wrong.
The trial court's final judgment is affirmed.