Humble Exploration Co. v. Browning

• Decision Date: 11 July 1984
• Docket Number: No. 05-82-01378-CV,05-82-01378-CV
• Parties: HUMBLE EXPLORATION COMPANY, et al., Appellants, v. Jane H. BROWNING, et al., Appellees.
• Court: Texas Court of Appeals

Page 111

677 S.W.2d 111

HUMBLE EXPLORATION COMPANY, et al., Appellants, v. Jane H. BROWNING, et al., Appellees.

No. 05-82-01378-CV.

Court of Appeals of Texas,

Dallas.

July 11, 1984.

Rehearing Denied Sept. 7, 1984.

Louis P. Bickel, Bickel & Case, Douglas M. Robison, Geary, Stahl & Spencer, Dallas, Joe H. Reynolds, Kay K. Daniel Pierce, and J. Bruce Bennett, Reynolds, Allen & Cook, Houston, for appellants.

G.H. Kelsoe, Jr., Kelsoe & Kelsoe, R. Jack Ayres, Jr., Joseph W. Geary, Geary, Stahl & Spencer, Dallas, for appellees.

Before GUITTARD, C.J., and WILLIAMS ¹, and KEITH ², JJ. (Retired).

KEITH, Justice (Retired).

Pat Holloway, Humble Exploration Company, Inc., and others appeal from a multimillion-dollar judgment in favor of Jane Browning and her children in a suit for damages for fraud and breach of fiduciary duties and for imposition of a constructive trust on certain corporate stock and producing mineral interests. Although the appeal is ripe for decision, none of the parties wish it to proceed at this time. Appellees have moved to dismiss the appeal on the ground that appellants have obtained in a federal court a summary judgment declaring that the judgment appealed from is void under federal law. Appellants request that the appeal be abated until a final decision is rendered on appeal from the summary judgment in the federal court. We overrule the motion to abate and grant the motion to dismiss.

The unseemly conflict between the courts of the state and federal system began when one of the appellants sought refuge in Chapter 11 bankruptcy proceedings after the institution of the suit by the plaintiffs below. This, of course, invoked the automatic stay of proceedings under Section 362 of the Bankruptcy Code. Later, the parties entered into a stipulation and the Bankruptcy Court entered its "Order Remanding Causes of Action and Modifying Automatic Stay."

We quote from such order of the Bankruptcy Court:

Cause No. 79-9623-L, styled Jane Browning, et al. v. Pat S. Holloway, et al., and Cause No. 79-12292-J/L, styled Jane Browning, et al. v. Sterling Pipeline Company, be and hereby are remanded to the 193rd Judicial District Court of Dallas County, Texas, pursuant to the terms set out in the annexed Stipulation and Agreement as amended; and it is further

ORDERED, ADJUDGED AND DECREED that the automatic stay provisions of Section 362 of the Bankruptcy Code are modified so as to permit the remand of said causes of action and the trial of same pursuant to the terms of the annexed Stipulation and Agreement as amended.

The document annexed to the Bankruptcy Court's Order is entitled "Stipulation and Agreement on Manner in Which Controversy Shall Be Heard, Determined and Liquidated," and paragraphs one and two thereof specifically provide that:

1. Upon the approval of this Stipulation and agreement, cause No. 79-9723-L styled Jane Browning, et al. v. Pat S. Holloway, et al., in the 193rd Judicial District Court of Dallas County, Texas and cause No. 79-12292-J/L in the 193rd Judicial District Court of Dallas County, Texas, styled Browning, et al. v. Sterling Pipeline Company shall be remanded for trial by the Bankruptcy Court to the 193rd District Court of Dallas County, Texas.

2. The BROWNING INTERESTS and Debtors shall then file an agreed motion in the 193rd Judicial District Court to consolidate cause No. 79-12292-J/L with cause No. 79-9623-L, so that upon consolidation the surviving consolidated cause shall be cause No. 79-9623-L. Upon the Court's signing of the order consolidating the said causes, the parties will then present a joint motion to the Judge of the 193rd District Court asking him to request of the Honorable Paul Peurifoy in his capacity as Presiding Judge of the First Administrative Judicial District that he assign a retired state court district judge or, in the alternative, a visiting state court district judge or a retired judge of the court of civil appeals agreed to by the parties, to hear this consolidated cause and all motions and other matters in conjunction therewith.

Paragraph 3 of the annexed Stipulation provides that:

3. The order of the Bankruptcy Court remanding said consolidated cause to the state court for trial shall recite that such remand is conditional upon and shall only take effect upon the final assignment of said consolidated cause as prescribed in paragraphs 1 and 2 above. In the event that the BROWNING INTERESTS and Debtors are unable to obtain the assignment of said consolidated cause as prescribed in paragraphs 1 and 2 above, then in that event, the remand of said consolidated cause shall not take effect and the Bankruptcy Court shall retain jurisdiction over said cause which shall proceed to trial in the Bankruptcy Court before a jury.

Notwithstanding the quoted language, the parties went to trial before a regular, active district judge of Dallas County, Texas, and not before a retired or visiting state court district judge. In our large record, we do not find that appellants presented the order to Judge Walker in whose court the litigation was tried before a jury and the judgment entered from which an appeal has been taken to the federal district court, as noted earlier, and to this court.

There is no suggestion in our record that appellants did not realize, during the course of the lengthy trial, that the trial court was not proceeding with full and unchallenged authority to render a valid final judgment based upon jury findings. After the entry of the judgment and the commencement of the state appellate process plaintiffs sought to require appellants to file a supersedeas bond or deliver the specific property to which they recovered title in the trial court. When appellees went into the Bankruptcy Court for an order enforcing their judgment, appellants attacked the judgment as void. For the first time, so far as our record shows, they asserted that the 162nd District Court lacked jurisdiction because one of the provisions of the stipulation on which the case was remanded by the Bankruptcy Court was not observed, namely, the provision that the case be assigned to a retired or visiting judge. On this ground the United States District Judge rendered summary judgment declaring the judgment void and refusing to enforce it. Browning v. Navarro, No. 83-0380 (N.D.Tex. Dec. 5, 1983).

Although we recognize, as we must, the authority of the federal court, and we defer to its interpretation of the applicable federal law, we conclude that appellants are barred from further relief in the state courts by obtaining nullification of the judgment in the federal court on a ground they failed to raise in the state court. Appellants have likened the conditions upon which the case was remanded to a "leash" which the bankruptcy court could, at any time, use to return the case to the bankruptcy court, regardless of its status in the state system and without raising the matter in the state court. ³ Judge Sanders' opinion seems to support this interpretation.

If this interpretation is upheld, we must recognize it as the applicable federal law, but, as a matter of state law, we are not bound to permit parties to trifle with state courts in this fashion. Here appellants wholly failed to present the order of remand or the stipulation on which it was based to the trial court in the present suit. The record before us shows only that in a different suit, a receivership proceeding initiated by other parties, in which appellants and appellees were co-defendants, appellees attached the order of remand and the stipulation as exhibits to their pleading and asked the court to decide whether the receivership suit could properly proceed. Appellants advised the court that the...