Fuller v. Fuller

• Decision Date: 06 October 2011
• Docket Number: NO. 02-09-00442-CV,02-09-00442-CV
• Parties: FRANCES JANE FULLER JACKSON MORRIS APPELLANT v. MARGARET ANN FULLER APPELLEE
• Court: Texas Court of Appeals

FRANCES JANE FULLERJACKSON MORRIS APPELLANT

v.MARGARET ANN FULLER APPELLEE

NO. 02-09-00442-CV

COURT OF APPEALS SECOND DISTRICT OF TEXAS FORT WORTH

Dated: October 6, 2011

FROM THE 67TH DISTRICT COURT OF TARRANT COUNTY

MEMORANDUM OPINION¹

Appellee Margaret Ann Fuller (Fuller) sued her sister Appellant Frances Jane Fuller Jackson Morris (Morris) for tortious interference with contract. Morris countersued for breach of fiduciary duty and for an accounting for the income of the sisters' joint venture. Morris appeals from the trial court's take-nothing judgment on her breach of fiduciary duty claim and its judgment awarding anaccounting to determine the existing indebtedness of the joint venture. In four issues, Morris argues that the case should have been transferred under a mandatory venue provision; that the assignment by which the trial court found she had assigned her interest in the joint venture to her sister was forged; that the trial court's judgment incorrectly calculated her interest under the assignment and should have ordered that her interest became effective on September 11, 2009; and that the trial court's judgment is vague and unenforceable and improperly awarded Fuller relief not requested in her pleadings. Because we hold that the mandatory venue provision did not apply and that the trial court's judgment was not erroneous, we affirm.

Robert P. Fuller owned interests in oil, gas, and mineral properties in Hemphill County, Texas, and in 1972, he conveyed some of these interests to a joint venture to be owned equally by his two daughters, Morris and Fuller. The joint venture was originally called the Cope-Jackson Joint Venture (at the time, Morris was married to Leete Jackson III, and Fuller was married to John Cope).

In 1984, after Fuller had divorced Cope and remarried, the sisters formed a new joint venture, the Lydick-Jackson Joint Venture (reflecting Fuller's new last name).² Their father and their brother, Rex Fuller, were appointed as agents to manage the joint venture.

Robert P. Fuller died in 1988, and in 1989, the sisters terminated Rex as the joint venture's agent and hired Gruy Petroleum Management to manage their interests. A Gruy report dated February 9, 1989, reflected the joint venture's outstanding loans, including $2.6 million owed to First National Bank of Lubbock, $4.5 million owed to Continental Illinois National Bank, and $7.5 million owed to two other banks. The report noted that no payments were being made on the note to Continental and that FDIC intervention was "probable." The report then noted that "[a]lmost all properties are mortgaged to the lending institutions," that "[i]t will be necessary to continue receiving revenue from the properties pledged to [Continental] for the [joint venture] to pay interest payments, lease operating expenses, and receive any revenue," and that if the FDIC intervened, "additional monies will be required to service interest on the loan."

In February 1992, the FDIC (as successor in interest to Continental) obtained a judgment of $4,500,096.50 against Morris, Fuller, and Rex (individually and as executor of their father's estate), jointly and severally, and perfected liens against their oil and gas interests. In May 1992, First National Bank of Lubbock notified the three siblings that each of them had failed to fulfill provisions of a 1990 settlement agreement they had made with the bank. Among other things, Morris had agreed to assign to Rex her interest in the joint venture but had not done so. The letter states that "[u]nless the above is completed the bank will determine the contract breached and continue to hold [Morris] responsible for the original indebtedness."

Fuller testified at trial that because of the FDIC judgment, Morris wanted to assign her interest in the joint venture to Fuller. On May 8, 1992, an assignment of Morris's interest in the joint venture, dated May 7, 1992, (the assignment) was filed in Lubbock, Texas, by family friend John Walker. The assignment states that "[Morris] . . . does hereby transfer and assign unto [Fuller] all of [Morris's] rights, title, and interest" in the joint venture, effective as of January 1, 1991. The assignment also states that "[a]fter payout of all indebtedness of [the joint venture] and that specific note of [Fuller] at First National Bank in Lubbock, Texas, [Morris] whall [sic] be entitled to a 40% net profit interest in the properties conveyed in this assignment." Because of the assignment, First National Bank released Morris from her obligation for the debt owed by Fuller, Morris, and Rex.

In 1995, Fuller and Rex negotiated an agreement with the FDIC under which the FDIC forgave a large portion of the outstanding judgment. The debt forgiveness caused Fuller to incur tax liability of over $2.5 million. The IRS did not attempt to collect from Morris any taxes owed by the joint venture interests for the years after the assignment.

In 2006, Fuller sued Morris and Devon Louisiana Corporation in Tarrant County, asserting a claim for breach of contract against Devon and a claim for tortious interference with contract against Morris. She alleged that their father had conveyed mineral interests to them "in the nature of a joint venture"; that Devon was contractually obligated to pay royalties from oil and gas production on the subject properties; that Morris had assigned to Fuller her interest in the jointventure; that in June 2005, Morris had contacted Devon and claimed that she had not executed the assignment and that she was entitled to royalties; and that as a result, Devon stopped making payments to Fuller. Fuller alleged that venue was proper in Tarrant County because the contract payments were sent to Tarrant County and Fuller resided in Tarrant County. Fuller subsequently dismissed her claims against Devon.

Morris filed a motion to transfer venue to Hemphill County on the ground that Fuller's suit involved title to real property located in Hemphill. The trial court denied the motion. Morris also countersued Fuller for breach of fiduciary duty and for an accounting.

At the bench trial, Morris testified that she did not sign the assignment. John Weldon, a forensic document examiner, testified that in his opinion, the signature on the assignment was Morris's genuine signature. Fuller testified that Morris had personally given her a copy of the assignment and that she, Morris, and Morris's husband went together to take the assignment to First National Bank.

After the trial, the trial court made the following findings of fact:

• Morrios had assigned her interest in the joint venture to Fuller in order to avoid liability under the FDIC judgment and "possible IRS issues looming."

• In 1995, Fuller and Rex reached an agreement with the FDIC in which the FDIC agreed to forgive a large part of the judgment owed. This forgivendebt was reported to the IRS, increasing Fuller's personal tax liability to over $2.5 million.

• Because of the assignment, the IRS did not attempt to collect from Morris any of the tax debt owed by the joint venture for the years after the assignment.

• After the assignment, Morris never claimed any profit or loss from the joint venture interests on her personal income tax returns.

• Morris and Fuller were sued in 2005 for unpaid property taxes in Hemphill County. During Fuller's attempts to have the taxes paid through proceeds received from Devon, Morris intentionally made false representations and claims to some of the monies Devon held. Her claims forced Devon to suspend payments to Fuller, and Fuller consequently incurred late penalties on the taxes.

• Morris breached the terms of the assignment, but no evidence established the amount of damages incurred by Fuller as a result of this breach.

• Once all of the indebtedness of the joint venture is satisfied, Morris's reversionary interest in the net proceeds of the joint venture shall occur.

• Under the plain language of the assignment, Morris is not entitled to the benefit from the actions of Fuller and Rex in reducing the amount of the FDIC judgment.

The trial court signed a judgment incorporating its findings and conclusions and ordering that "the relationship between [Fuller] and [Morris] regarding theirrespective rights to the [joint venture] shall and is hereby governed by the terms of [the assignment]." The judgment ordered that Fuller prepare an accounting setting forth the existing indebtedness of the joint venture. The trial court further ordered that after that indebtedness has been paid in full, Morris "shall receive twenty (20%) percent of the net profits of the [joint venture] thereafter (representing forty percent (40%) of the fifty percent (50%) interest assigned by [Morris] to [Fuller] in [the assignment])." The trial court also ordered that Morris take nothing on her breach of fiduciary duty counterclaim. Morris now appeals.

In her first issue, Morris argues that venue should be transferred to Hemphill County, Texas, where the mineral properties in question are located, because there is no probative evidence in the record to overcome the mandatory venue provision in Texas Civil Practice and Remedies Code section 15.011.³ Section 15.011 applies to: (1) actions for recovery of real property or for recovery of an estate or interest in real property, (2) actions for partition of real property, (3) actions to remove encumbrances from the title to real property, (4) actions for recovery of damages to real property, and (5) actions to quiet title to real property.⁴ Any of these specified types of actions must be brought in the county in which part or all of the property is located.⁵ Morris argues that Fuller's suit wasone to recover oil and gas royalties, a royalty interest is an interest in land, and therefore venue for Fuller's suit is mandatory in the county where the mineral interest is located.

The dominant purpose of a suit determines whether it falls within the mandatory venue provision.⁶ To determine the...