BHP Petroleum Co. Inc. v. Millard

• Decision Date: 21 November 1990
• Docket Number: No. C-9504,C-9504
• Citation: 800 S.W.2d 838
• Court: Texas Supreme Court
• Parties: BHP PETROLEUM COMPANY INC., Relator, v. The Honorable Richard W. MILLARD, Judge, Respondent.

Page 838

800 S.W.2d 838

BHP PETROLEUM COMPANY INC., Relator, v. The Honorable Richard W. MILLARD, Judge, Respondent.

No. C-9504.

Supreme Court of Texas.

Nov. 21, 1990.

Rehearing Overruled Jan. 23, 1991.

Stephen D. Susman, John B. McArthur, Jon M. Bowden, W. James Kronzer, Houston, Jack D. Sage, Grand Rapids, Mich., for relator.

Thomas R. McDade, Layne E. Kruse, Roger Townsend, Houston, for respondent.

OPINION

HIGHTOWER, Justice.

In this original proceeding, Relator BHP Petroleum Company, Inc. (BHP) seeks a writ of mandamus directing the trial judge to grant its motion for nonsuit and dismiss the entire proceeding including ANR Pipeline Company, Inc.'s counterclaim. We deny the writ of mandamus.

BHP is a producer and seller of natural gas. ANR Pipeline Company, Inc. (ANR), the real party in interest, is engaged in the purchasing, transporting and selling of natural gas. BHP and ANR entered into a gas purchase contract in 1984; however, due to market conditions ANR requested relief from some of its obligations under the contract. In 1985, ANR filed a lawsuit in a Michigan state district court seeking declaratory relief. ¹ BHP filed a Motion for Stay Pending Arbitration. ANR objected to the motion, contending that various portions of the contract were not subject to arbitration. In 1987, the Michigan court granted BHP's motion and ANR unsuccessfully appealed. ²

In January 1989, BHP brought suit in Harris County against ANR for, among other things, its failure to comply with the contract. ³ In response, ANR filed its Defendant's Original Answer and Original Counterclaim ⁴ which included the following counterclaim and prayer for relief:

32. ANR repeats and incorporates by reference all of the allegations of the preceding paragraphs 1 through 31.

33. An actual controversy exists between ANR and BHP regarding (a) the interpretation of certain provisions of the Contract; (b) the respective rights and obligations resulting therefrom; and (c) the claims BHP has asserted or may assert against ANR related to the Contract.

* * * * * *

WHEREFORE, ANR requests that this Honorable Court grant it relief as follows:

* * * * * *

2. Enter a declaratory judgment pursuant to Chapter 37 of the Texas Civil Practice and Remedies Code determining and declaring as follows:

In September 1989 and apparently before the commencement of any discovery, BHP filed a motion for nonsuit. ⁵ The trial judge signed an order of nonsuit which dismissed the claims brought by BHP, retained ANR's counterclaim as a pending claim for affirmative relief that was not affected by the order and realigned the parties with ANR as plaintiff and BHP as defendant. Subsequently, BHP filed a request for reconsideration which was denied.

BHP argues that ANR's counterclaim failed to plead a claim for affirmative relief pursuant to Rule 162 of the Texas Rules of Civil Procedure and that the counterclaim is nothing more than a response to its Original Petition. ⁶ In response, ANR argues that its counterclaim is a "pending claim for affirmative relief" which may not be dismissed. ⁷ We agree with ANR.

"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. 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. Greenberg v Brookshire, 640 S.W.2d 870, 871 (Tex.1982); McQuillen v. Hughes, 626 S.W.2d 495, 496 (Tex.1981). To determine the propriety of the trial judge's action in this case, we must determine whether ANR's counterclaim ⁸ stated a claim for affirmative relief.

To qualify as a claim for affirmative relief, a defensive pleading must allege that the defendant has a cause of action, independent of the plaintiff's claim, on which he could recover benefits, compensation or relief, even though the plaintiff may abandon his cause of action or fail to establish it.

General Land Office v. Oxy U.S.A., Inc., 789 S.W.2d 569, 570 (Tex.1990) (quoting Weaver v. Jock, 717 S.W.2d 654, 657 (Tex.App.--Waco 1986, writ ref'd n.r.e.); Newman Oil Co. v. Alkek, 614 S.W.2d 653, 655 (Tex.App.--Corpus Christi 1981, writ ref'd n.r.e.).

Thus, under Rule 162, "[i]f a defendant does nothing more than resist plaintiff's right to recover, the plaintiff has an absolute right to the nonsuit." General Land Office, 789 S.W.2d at 570. The use of a creative pleading that merely restates defenses in the form of a declaratory judgment action cannot deprive the plaintiff of this right. See Newman Oil, 614 S.W.2d at 655. In Newman Oil, the plaintiffs sued defendants for fraudulent representations, breach of contract and violations of the Deceptive Trade Practices-Consumer Protection Act (the "DTPA"). Id. at 653. The defendants filed a counterclaim for declaratory relief and moved for summary judgment on the basis that they had not committed fraud, engaged in common law tort or deceptive trade practices, breached any contracts with the plaintiffs and were not liable under the DTPA. Id. at 654-655. Even though the counterclaim was framed in the form of a request for declaratory relief, the court of appeals held as follows:

We hold that the above allegations pled in defendants' counterclaim are not any averments of fact upon which affirmative relief could be granted. They are merely denials of plaintiffs' cause of action. Since plaintiffs had an absolute right to a nonsuit, the trial court had no other alternative than to grant the nonsuit and dismiss plaintiffs' cause of action without prejudice.

Id. at 655 (emphasis added).

The Declaratory Judgments Act is "not available to settle disputes already pending before a court." Heritage Life v. Heritage Group Holding, 751 S.W.2d 229, 235 (Tex.App.--Dallas 1988, writ denied); John Chezik Buick v. Friendly Chevrolet, 749 S.W.2d 591, 594 (Tex.App.--Dallas 1988, writ denied). This court in Abor v. Black, 695 S.W.2d 564, 566 (Tex.1985), eschewed use of a declaratory judgment action to "deprive the real plaintiff of the traditional right to chose the time and place of suit." Concluding that Texas trial courts should decline to exercise jurisdiction seeking a declaration of non-liability in a tort action, we followed cases holding that "a declaration of non-liability for past conduct is not normally a function of the declaratory judgment statute because it deprives the potential plaintiff of the right to determine whether to file, and if so, when and where." Id. Similarly, in John Chezik Buick, 749 S.W.2d at 594, the court found that a declaratory judgment counterclaim was not properly brought, because the issue raised by the defendant, that no agency relationship existed, was already before the court as part of the plaintiff's case. The court distinguished counterclaims seeking a true declaration controlling an ongoing and continuing relationship: "In our current case, the harm sued upon was a one time occurrence that is fully covered by [the plaintiff]'s original suit." Id. at 595 (emphasis added). See also Heritage Life, 751 S.W.2d at 235 (dismissal of declaratory judgment counterclaim proper because no new controversies presented).

In certain instances, however, a defensive declaratory judgment may present issues beyond those raised by the plaintiff. In Winslow v. Acker, 781 S.W.2d 322, 328 (Tex.App.--San Antonio 1989, writ denied), the plaintiffs filed suit to recover their share of overriding royalties in a mineral estate. The defendants filed a counterclaim to obtain a declaration of their right to the overriding royalties and for attorney's fees under the Declaratory Judgments Act. The plaintiffs filed a motion to strike defendants' counterclaim for declaratory relief and for attorney's fees; the trial court denied the motion to strike. Id. at 323. The court of appeals stated that "when a declaratory judgment counterclaim has greater ramifications than the original suit, the court may allow the counterclaim." Id. at 328. Since the plaintiffs sought recovery of their alleged proportion of the overriding royalty interests and the counterclaim would have the effect of settling all future disputes as to the granting of royalties under the deed, the court of appeals concluded that the declaratory judgment counterclaim had greater ramifications than the original suit and held that the trial court did not err in allowing the defendants' counterclaim to remain on file. Id. See Placid Oil Co. v. Louisiana Gas Intrastate, Inc., 734 S.W.2d 1, 5 (Tex.App.--Dallas 1987, writ ref'd n.r.e.).

In its counterclaim, ANR incorporated all of the allegations in its Defendant's Original Answer and Original Counterclaim and stated: "An actual controversy exists between ANR and BHP regarding (a) the interpretation of certain provisions of the Contract; (b) the respective rights and obligations resulting therefrom; and (c) the claims BHP has asserted or may assert against ANR related to the Contract." In its "request for relief," ANR requested, among other things, that the court determine and declare "[t]hat events have occurred which constitute force majeure, as the parties agreed to define the term, or other causes not reasonably within the control of ANR and its customers, which have affected and will continue for the...