In re HPGM, LLC

Decision Date25 September 2020
Docket NumberNo. 06-20-00019-CV,06-20-00019-CV
Citation629 S.W.3d 418
Parties IN RE HPGM, LLC, et al.
CourtTexas Court of Appeals

Before Morriss, C.J., Burgess and Stevens, JJ.

OPINION

Opinion by Chief Justice Morriss

"When two inherently interrelated suits are brought in different counties, the first-filed suit ordinarily acquires dominant jurisdiction and the second-filed suit should be abated." In re Red Dot Bldg. Sys., Inc. , 504 S.W.3d 320, 321 (Tex. 2016) (orig. proceeding). The exceptions are limited. In this contingency-fee agreement dispute, HPGM, LLC (HPGM),1 seeks mandamus relief from the trial court order in the second-filed suit, in Titus County, denying its plea in abatement on estoppel grounds. We conclude that the first-filed rule applies, because the claimed exception has not been established. We conditionally grant the requested relief.

When country music legend Ray Price died in 2013, his widow, Janie Price, hired attorneys Mark Haney and Kelly Puls of Puls & Haney, P.L.L.C., and Ross Griffith and Thomas Michel of Griffith, Jay & Michel, LLP, to represent her in a will contest. After that lawsuit was concluded in her favor, Price conveyed certain rights to musical recordings and related intellectual property, among other things, to HPGM2 in accordance with a contingency fee agreement (the Fee Agreement).

After a dispute arose over the Fee Agreement, HPGM filed a declaratory judgment action against Price in the County Court at Law No. 3 of Tarrant County on August 2, 2019. Three days later, Price sued HPGM in the district court in Titus County.3 HPGM filed a motion to abate the later-filed Titus County lawsuit under the dominant-jurisdiction doctrine. Price responded and claimed that, although she did not dispute that all of the elements of dominant jurisdiction in Tarrant County were satisfied, HPGM had fraudulently represented that it would consider settlement and thereby had caused her to delay filing the Titus County lawsuit. Price, therefore, claimed that HPGM was estopped to assert the prior active jurisdiction of the Tarrant County court.

The trial court conducted a hearing on the plea in abatement at which HPGM introduced file-marked copies of its Tarrant County petition and Price's Titus County petition as evidence of the earlier-filed Tarrant County lawsuit. Price went on record and claimed only an equitable exception to dominant jurisdiction.4 Price's verified response to the plea in abatement was admitted into evidence by the trial court without objection. The verified response5 alleged,

On March 24, 2019, counsel for Mrs. Price wrote a letter to Defendants asking that Defendants agree to the relief sought in this suit. No response was received. After telephone conferences with Defendants' representatives, and exchanges of messages, a meeting was set for June 17, 2019. Defendants did not appear at this meeting. A second meeting was set for July 1, 2019. Kelly Puls appeared at the offices of Price's attorneys, and was unable to answer the question: "Do you still represent Mrs. Price?"
When asked for a proposal to resolve the dispute, Mr. Puls stated he would have a response in a week. Nine days later, on July 10, the undersigned had a telephone call with Mark Haney. Mr. Haney said that they would have a response by the end of the week (July 12).
No response was received on July 12. No response has ever been received.

Price's response then claimed,

If Defendants had no intention of resolving this case—as is evident by their failure to make even a single counter-offer—and if Defendants had communicated this fact to Price, then Price would have been able to file this suit before August 2. Price's suit in Titus County would have had dominant jurisdiction, and Defendants' inequitable conduct would not have caused the unnecessary delay in filing the suit.

The trial court expressed concern that

the defendants ... did perpetuate for months the idea that they were considering settlement. That's even noted in Mr. Haney's exhibit, in his affidavit.[6 ] ... And they went so far as to have a meeting in July and tell them they would get them a settlement offer within a week or within two weeks but never did.

At the conclusion of the hearing, the trial court found, based on the evidence, that there was fraudulent inducement of delay. The trial court, thereafter, denied the motion to abate the Titus County lawsuit. HPGM asked the trial court to reconsider its denial of the plea in abatement. The trial court held a hearing on the motion to reconsider—at which no evidence was offered—and denied the motion. The trial court's written order following the hearing denied the motion to reconsider "on the basis of inequitable conduct by the Defendants."

"In instances where inherently interrelated suits are pending in two counties, and venue is proper in either county, the court in which suit was first filed acquires dominant jurisdiction." Red Dot Bldg. Sys., Inc. , 504 S.W.3d at 322 ; see In re J.B. Hunt Transp., Inc. , 492 S.W.3d 287, 294 (Tex. 2016) (orig. proceeding) ; Gonzalez v. Reliant Energy, Inc. , 159 S.W.3d 615, 622 (Tex. 2005). "Abatement of a suit due to the pendency of a prior suit is based on the principles of comity, convenience, and the necessity for an orderly procedure in the trial of contested issues." In re CTMI, LLC , No. 05-16-01078-CV, 2016 WL 7163830, at *2 (Tex. App.—Dallas Dec. 8, 2016, orig. proceeding) (mem. op.) (citing Miles v. Ford Motor Co. , 914 S.W.2d 135, 138 (Tex. 1995) (per curiam) ).

"The first-filed rule admits of exceptions when its justifications fail, as when ... the race to the courthouse was unfairly run." Perry v. Del Rio , 66 S.W.3d 239, 252 (Tex. 2001) (orig. proceeding). This exception provides that "the plaintiff in the first suit may be guilty of such inequitable conduct as will estop him from relying on that suit to abate a subsequent proceeding brought by his adversary." J.B. Hunt Transp., Inc. , 492 S.W.3d at 294 (quoting Curtis v. Gibbs , 511 S.W.2d 263, 267 (Tex. 1974) (orig. proceeding) ). "The purpose of this exception is to prevent a first-filer from unjustly claiming dominant jurisdiction in the first court when that priority was obtained through underhanded means." Id. (citing Perry , 66 S.W.3d at 252 ).

This exception is satisfied when there is a "fact issue as to whether the first-filer[ ] [is] ‘guilty of certain acts of fraud and deceit’ that caused the second-filer to delay filing the second suit." Id. at 294–95 (quoting V.D. Anderson Co. v. Young , 128 Tex. 631, 101 S.W.2d 798, 799 (1937) (orig. proceeding)). "By contrast ... this exception [is] not satisfied where the party opposed to abatement ‘fail[s] to raise any fact issues’ as to bad faith and fraud." Id. at 295 (quoting Wheeler v. Williams , 158 Tex. 383, 312 S.W.2d 221, 228 (1958) (orig. proceeding)). "Our caselaw requires alleged ‘facts which, if established, would estop the plaintiff in the prior action from asserting his plea in abatement.’ " Id. at 298 (quoting Curtis v. Gibbs , 511 S.W.2d 263, 267 (Tex. 1974) (orig. proceeding) ).

When dealing with a plea in abatement in a dominant-jurisdiction case, to get mandamus relief, a party needs to show an abuse of discretion. Id. at 294. "[I]f the court in the second action abuses its discretion by not abating the action, no additional showing is required for mandamus relief." Red Dot Bldg. Sys., Inc. , 504 S.W.3d at 322. We, therefore, must determine whether there was a clear abuse of discretion in the denial of HPGM's plea in abatement based on dominant jurisdiction. But first, we must deal with a threshold issue.

(1) HPGM Acquiesced in the Trial Court's Consideration of Price's Verified Response as Evidence

The parties join issue on whether HPGM is estopped from asserting the prior, active jurisdiction of the Tarrant County court based on HPGM's alleged inequitable conduct.7 HPGM claims the estoppel exception does not apply here because, among other things, no evidence supports Price's inequitable-conduct defense. HPGM contends that Price relied solely on her verified response to the plea in abatement and that that response was not evidence. We must, therefore, initially determine whether the trial court properly considered the response to the plea in abatement as evidence.

It is well established that a party seeking abatement must prove the allegations in its plea by a preponderance of the evidence. Flowers v. Steelcraft Corp. , 406 S.W.2d 199, 199 (Tex. 1966). As stated by our sister court, "[A] party who urges a plea in abatement has the burden of proving by a preponderance of the evidence at the hearing on such plea the facts that are alleged in the plea as grounds for abating and dismissing the plaintiff's case." Brazos Elec. Power Co-op., Inc. v. Weatherford Indep. Sch. Dist. , 453 S.W.2d 185, 188 (Tex. App.—Fort Worth 1970, writ ref'd n.r.e.) ; see S. Cty. Mut. Ins. Co. v. Ochoa , 19 S.W.3d 452, 469 (Tex. App.—Texarkana 2000, no pet.) (proponent of plea has burden of proof to establish allegations in motion); Lopez v. Tex. Workers' Comp. Ins. Fund , 11 S.W.3d 490, 493 (Tex. App.—Austin 2000, pet. denied) ("The proponent of a motion to abate has the burden of proving by a preponderance of the evidence at the hearing on the motion the facts that are alleged in the motion as grounds for abating the case."); Bernal v. Garrison , 818 S.W.2d 79, 82 (Tex. App.—Corpus Christi 1991, writ denied) ; Seth v. Meyer , 730 S.W.2d 884, 885 (Tex. App.—Fort Worth 1987, no writ).8 "A defendant who merely presents its plea in abatement without offering evidence to prove the grounds urged waives the plea unless it can demonstrate that the plaintiff's...

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