Elamex v. , Elamex USA, Corp.
| Decision Date | 02 May 2012 |
| Docket Number | No. 08–11–00110–CV.,08–11–00110–CV. |
| Citation | 367 S.W.3d 891 |
| Parties | In re: ELAMEX, S.A. de C.V., Elamex USA, Corp., and Mount Franklin Foods, L.L.C. |
| Court | Texas Court of Appeals |
OPINION TEXT STARTS HERE
Corey Haugland, James & Haugland, P.C., El Paso, TX, for Relators.
David R. Pierce, Robert L. Edwards, Pierce & Little, PC, Stuart R. Schwartz, Scott Hulse PC, El Paso, TX, for Real Parties in Interest.
Before McCLURE, C.J., ANTCLIFF, J., and CHEW, C.J. (Senior)(Sitting by Assignment).
In this original proceeding, Relators seek to compel Respondent to vacate an order denying their motion to dismiss for lack of jurisdiction. For the reasons stated below, we deny Relators' petition for writ of mandamus.
This case centers on a dispute among entities and individuals involved in the candy business.
The two Plaintiffs in the underlying suit are Real–Parties–in–Interest in this mandamus action. One of the Plaintiffs is Dulces Arbor, S. de R.L. de C.V. (“Dulces Arbor”), a Mexican corporation. The other is Blueberry Sales, LLP (“Blueberry Sales”), a Delaware limited liability partnership that has its principal place of business in El Paso.1 Blueberry Sales is the American counterpart to Dulces Arbor.2
There are seven Defendants in the underlying lawsuit, but only three of them are Relators in this mandamus action. Relators are Elamex, S.A. de C.V. (“Elamex Mexico”), Elamex USA, Corp. (“Elamex USA”), and Mount Franklin Foods, LLC (“MFF”). Elamex Mexico is a Mexican corporation doing business in Texas. Elamex USA is a Delaware corporation doing business in Texas. MFF is a Texas limited liability company. These three entities are interrelated—Elamex Mexico owns Elamex USA, which in turn owns MFF—and all operate from or have offices in El Paso, Texas.
The other Defendants in the underlying suit are Sunrise Candy, LLC (“Sunrise Candy”), Casas Grandes Confections, LLC (“Casas Grandes”), Robert J. Whetten (“Whetten”), and David Stewart (“Stewart”). Sunrise Candy is a Nevada limited liability company doing business in Texas. Casas Grandes is also a Nevada limited liability company doing business in Texas. Like Relators, these entities have offices in El Paso. Whetten is a resident of El Paso, who at various times was an executive or board member for Casas Grandes, Elamex USA, Elamex Mexico, and MFF as well as some other entities. Like Whetten, Stewart is a resident of El Paso, who at various times was also an executive for Elamex Mexico, Sunrise Candy, and MFF.
At the heart of the dispute between Plaintiffs and Defendants is a building located in Cuidad Juarez, Mexico (the Mexican real property) used to manufacture candy. Throughout the litigation, Dulces Arbor has maintained that it owns the Mexican real property, which it expanded with financing provided by several lenders, including Bank of the West.3 Dulces Arbor attempted to sell the Mexican real property to several entities affiliated with the Defendants, but negotiations broke down between Dulces Arbor and Whetten and Stewart and the sale was never consummated.4 The parties disagree about who is to blame for the failure to reach an agreement. In any event, Dulces Arbor's assertion that it owned the Mexican real property remained unchallenged until early last year when Relators claimed in their motion to dismiss for lack of subject matter jurisdiction that Dulces Arbor had transferred ownership of the Mexican real propertyinto a trust for the benefit of the lenders, including Bank of the West.
Another dispute between Plaintiffs and Defendants concerns machinery and computers (the personal property) originally leased by Blueberry Sales from C Leasing Company, a subsidiary of Bank of the West. Except for one computer that remained in El Paso but was nonetheless part of the manufacturing process, the personal property was installed on the Mexican real property. Blueberry Sales eventually purchased the personal property.
Several leases concerning the occupancy and use of the Mexican real property play a large role in this dispute as well. Originally, Dulces Arbor leased the Mexican real property to Blueberry Sales. However, that changed when Blueberry Sales and another entity named Dulces Blueberry, S.A. de C.V. (“Dulces Blueberry”) combined assets with another entity to create Simply Goodies, LLP (“Simply Goodies”).5 Following this combination, Dulces Arbor leased the Mexican real property to Dulces Blueberry. Simply Goodies acted as guarantor of this lease. Although the mandamus record is unclear as to what exactly occurred, MFF's maquiladora counterpart, Confecciones de Juarez, S.A. de C.V. (“Confecciones de Juarez”), currently has a submaquila agreement with Dulces Blueberry to use the Mexican real property.
At the time of this mandamus action, Plaintiffs' live pleading was their sixth amended petition. Plaintiffs sued Defendants for fraud, tortious interference, breach of contract, breach of contract under an alter ego theory, unjust enrichment, and conspiracy.
Plaintiffs allege that Defendants committed several types of fraud. First, Plaintiffs claim that Whetten and Relators indicated that they wanted to purchase the Mexican real property when they actually had no intention of doing so. Thus, Plaintiffs assert that by inducing them to undertake negotiations for the sale of the Mexican real property, Whetten and Relators caused them to forebear from taking actions to protect the Mexican real property and the personal property. Second, Plaintiffs claim that Relators used Delgado to acquire information from them and then used that information against them, and that Relators referred Delgado to Plaintiffs without disclosing that he would act adversely to Plaintiffs' interests. Third, Plaintiffs claim that Defendants fraudulently “cheated” them out of “the rent payments, other Lease obligations, and other rights that Dulces Arbor is entitled to under the contract with Dulces Blueberry and Simply Goodies.”
As for their conversion claim, Plaintiffs assert that Relators, both on their own and through other entities, exercised “unlawful dominion and control” over the personal property and thus deprived them of the use, enjoyment, dominion, and control over the personal property. Plaintiffs have two tortious interference claims. First, Plaintiffs allege that Defendants caused Bridge not to consummate the letter of credit. Second, Plaintiffs assert that Relators and others prevented Dulces Blueberry from performing its obligations under its lease with Dulces Arbor.
Plaintiffs contend that Relators breached a contract with Dulces Arbor in which they agreed to reimburse Dulces Arbor for $25,000 in attorney's fees that Dulces Arbor incurred in pursuing the sale of the Mexican real property.
As for their breach of contract claim under the theory of alter ego, Plaintiffs assert that Simply Goodies breached its guaranty agreement with Dulces Arbor, and the corporate veil of Elamex Mexico should be pierced to render it liable for the breach.
As to their claim for unjust enrichment, Plaintiffs allege that Defendants did not compensate Dulces Arbor for the use of the Mexican real property to produce candy, which was sold without further compensation to Dulces Arbor.
Finally, Plaintiffs claim that Defendants, along with others, conspired to commit the torts described above.
To obtain mandamus relief from the order denying its motion to dismiss for lack of subject matter jurisdiction, Relators must meet two requirements. They must show that the trial court clearly abused its discretion and that they have no adequate remedy by appeal. In re Prudential Ins. Co. of Am., 148 S.W.3d 124, 135–36 (Tex.2004) (orig. proceeding).
A trial court abuses its discretion if it reaches a decision so arbitrary and unreasonable as to constitute a clear and prejudicial error of law. In re Cerberus Capital Mgmt., L.P., 164 S.W.3d 379, 382 (Tex.2005) (orig. proceeding). When reviewing the trial court's decision for an abuse of discretion, we may not substitute our judgment for that of the trial court with respect to resolution of factual issues or matters committed to the trial court's discretion. See Walker v. Packer, 827 S.W.2d 833, 839 (Tex.1992); see also Downer v. Aquamarine Operators, Inc., 701 S.W.2d 238, 242 (Tex.1985). However, we are much less deferential when reviewing the trial court's determination of the legal principles controlling its ruling. See Walker, 827 S.W.2d at 840. A trial court has no discretion in determining what the law is or applying the law to the facts, even when the law is unsettled. Prudential, 148 S.W.3d at 135. A clear failure by the trial court to analyze or apply the law correctly will constitute an abuse of discretion. Walker, 827 S.W.2d at 840.
Absent extraordinary circumstances, mandamus will not issue unless the relator lacks an adequate remedy by appeal. In re Van Waters & Rogers, Inc., 145 S.W.3d 203, 210–11 (Tex.2004) (orig. proceeding). Whether a clear abuse of discretion can be adequately remedied by appeal depends on a careful analysis of costs and benefits of interlocutory review. In re McAllen Med. Ctr., Inc., 275 S.W.3d 458, 464 (Tex.2008) (orig. proceeding). Because it depends heavily on circumstances, such a cost-benefit analysis must be guided by principles rather than by simple rules that treat cases as categories. See id. In addition, we must consider whether mandamus will spare the litigants and the public “the time and money utterly wasted enduring eventual reversal of improperly conducted proceedings.” In re Team Rocket, L.P., 256 S.W.3d 257, 262 (Tex.2008) (orig. proceeding), quoting Prudential, 148 S.W.3d at 136.
Relators argue that the trial court abused its discretion in denying their motionto dismiss for lack of subject matter jurisdiction because Dulces...
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