Koch Gathering Systems, Inc. v. Harms

• Decision Date: 30 April 1997
• Docket Number: No. 13-96-636-CV,13-96-636-CV
• Citation: 946 S.W.2d 453
• Parties: KOCH GATHERING SYSTEMS, INC., David Fogelman and Richard Tuttle, Appellants, v. Kevin HARMS, et al., Appellees.
• Court: Texas Court of Appeals

Page 453

946 S.W.2d 453

KOCH GATHERING SYSTEMS, INC., David Fogelman and Richard

Tuttle, Appellants, v. Kevin HARMS, et al., Appellees.

No. 13-96-636-CV.

Court of Appeals of Texas,

Corpus Christi.

April 30, 1997.

Rehearing Overruled May 29, 1997.

Kent E. Westmoreland, Stanley T. Proctor, Phelps Dunbar L.L.P., Houston, Thomas E. Baker, Gene R. Ward, Russell Manning, Demars, Hornblower, Manning & Ward, Corpus Christi, Robert J. McCully, Koch Industries, Inc., Wichita, KS, for Appellants.

Vernon N. Reaser, Jr., Reaser & Wall, Victoria, Steven A. Kanner, Chicago, IL, Charles David Kipple, Saccomanno & Clegg, Houston, William R. Edwards, Edwards & Terry, Corpus Christi, Carol V. Gilden, Much, Shelist, Freed, Denenberg, Ament, Chicago, IL, for Appellees.

Before SEERDEN, C.J., and YANEZ and RODRIGUEZ, JJ.

OPINION

RODRIGUEZ, Justice.

This is an attempted interlocutory appeal from an order certifying a class action. Appellants Koch Gathering Systems, Inc., David Fogelman and Richard Tuttle (collectively "Koch") claim Appellees failed to satisfy the prerequisites of Rule 42 of the Texas Rules of Civil Procedure relating to class certification. We dismiss for want of jurisdiction.

BACKGROUND

Appellees filed suit against Koch alleging that on October 8, 1994, a Koch pipeline in Gum Hollow Creek ruptured, releasing large quantities of crude oil which subsequently flowed into Nueces Bay, Corpus Christi Bay and Oso Bay, causing Appellees to suffer lost profits due to pollution. Appellees asserted causes of action for negligence, gross negligence and fraud in the inducement regarding the execution of releases by several potential class members.

Appellees filed a Motion and Memorandum for Class Certification. On September 30, 1994, the trial court conducted an extensive hearing on the Motion and on November 8, 1994 signed an order certifying Appellees as representatives of the following class:

All persons, firms, corporations or other entities operating as commercial fishermen harvesting seafood products from the Corpus Christi Bay System or adjacent waters (excluding (a) federal, state and local governmental entities and subdivisions and (b) Defendant, its parent, subsidiaries and affiliates) that suffered harm as a result of the oil spill from Koch pipeline which occurred on or about October 8, 1994.

(the "First Order").

Following a second hearing on November 21, 1996, the court signed another order, identical to the first with the exception that it modified the geographic area affected by Koch's alleged negligence and the time limit for when claims would cease:

All persons, firms, corporations or other entities operating as commercial fishermen harvesting Seafood from the Relevant Area at any time during the period through 1996 after the oil spill from the Koch pipeline which occurred on or about October 8, 1994, or sustained damage to their property as a result of such spill [excluding (a) federal, state and local governmental entities and subdivisions and (b) defendant, its parent, subsidiaries and affiliates].

"Seafood" means commercial fish and shrimp.

"Relevant Area" means the Corpus Christi Bay System, (Corpus Christi Bay, Nueces Bay, and Oso Bay), Aransas Bay, the upper Laguna Madre, and Grid Numbers Nineteen (19) and Twenty (20) in the Gulf of Mexico.

(the "Second Order").

Koch perfected this appeal on December 4, 1996 by filing a cash deposit in lieu of bond. This date is within twenty days of the Second Order, but not the First Order. Appellees filed a Motion to Dismiss for Want of Jurisdiction based on Koch's failure to perfect the appeal within twenty days of the First Order. We ordered the motion carried with the case.

JURISDICTION

An appeal may be prosecuted only from a final judgment and to be final a judgment must dispose of all issues and parties in a case. North East Indep. School Dist. v. Aldridge, 400 S.W.2d 893, 895 (Tex.1966). Accordingly, except as authorized by statute, no appeal lies from an interlocutory order. Cherokee Water Co. v. Ross, 698 S.W.2d 363, 365 (Tex.1985); Aldridge, 400 S.W.2d at 895.

Section 51.014 of the Texas Civil Practice and Remedies Code allows appeals from various types of interlocutory orders, including one that "certifies or refuses to certify a class in a suit brought under Rule 42 of the Texas Rules of Civil Procedure." TEX.CIV.PRAC. & REM.CODE § 51.014(3) (Vernon Supp.1996). Rule 42 of the Rules of Appellate Procedure sets forth the procedure for appealing an interlocutory order, including the timetables for perfecting such an appeal. Appellees assert Koch failed to timely perfect its appeal because the cash deposit in lieu of bond was not filed within 20 days of the signing of the First Order. TEX.R.APP.P. 42(a)(3).

Appellees claim the appellate timetable should run from the signing of the First Order because the Second Order merely changed the class definition and did not constitute an alteration of the "fundamental nature of the class." De Los Santos v. Occidental Chem. Corp., 933 S.W.2d 493, 495 (Tex.1996).

In De Los Santos, the trial court certified a class, and then subsequently entered a second order which permitted the plaintiffs to "opt-out" of the certification if they chose to do so. Several of the plaintiffs opted-out and the case proceeded to trial. After trial, the defendants offered to settle the case conditioned on certification of a mandatory class. Class counsel accepted and after conducting a hearing, the court certified a mandatory class and approved the settlement over the objection of the plaintiffs who had opted-out and not participated in the trial.

An interlocutory appeal was filed and, relying on Pierce Mortuary Colleges, Inc. v. Bjerke, 841 S.W.2d 878, 880-81 (Tex.App.--Dallas 1992, no writ), this Court dismissed the appeal for want of jurisdiction, finding the order certifying the mandatory class only enlarged the size of the existing opt-out class and thus was not an order from which an interlocutory appeal could be taken under section 51.014 of the Texas Civil Practice and Remedies Code. De Los Santos v. Occidental Chemical Corp., 925 S.W.2d 62, 65 (Tex.App.--Corpus Christi 1996).

The supreme court distinguished Pierce Mortuary Colleges and reversed, holding that "changing a class from opt-out to mandatory does not simply enlarge its membership; it alters the fundamental nature of the class." De Los Santos, 933 S.W.2d at 495. Therefore, we must decide whether the modifications contained in the Second Order changed the "fundamental nature" of the class.

Unlike De Los Santos, the definition of the class in the present case did not change from the First Order to the Second. In both orders, the persons who will belong to the class are "all persons, firms, corporations or other entities operating as commercial fishermen harvesting seafood...." The only significant changes between the First Order and the Second Order are that (1) the phrase "Corpus Christi Bay System or adjacent waters" is more specifically defined as requested by Koch, and (2) the time frame for when claims would cease is narrowed from an open ended date to a specific date.

Because the Second Order merely modified an existing certification order, Koch was required to timely perfect the interlocutory appeal from the First Order. It failed to do so.

Koch claims the record reflects all parties operated under the presumption that the trial court did not grant Appellees' Motion for Class Certification until after the November 21 hearing. The belief of the parties is not relevant to a consideration of whether this Court has jurisdiction. See Burke v. Satterfield, 525 S.W.2d 950, 953 (Tex.1975) (it is fundamental that the subject matter jurisdiction of a court cannot be enlarged by an agreement between the parties).

Moreover, the statement of facts from the first hearing does not support Koch's assertion. In that hearing, the trial court stated: "I am going to certify this lawsuit as a class action. The issue of fraud I will review it and get back to you as soon as I can." The court orally rendered its decision from the bench on September 30, 1996 and thereafter signed the First Order on November 8, 1996.

Koch makes reference to the trial court's statement, at the beginning of the November 21 hearing that, "I guess this hearing is for me to enter an order. I considered the pleadings and I am going to grant I think all the issues asked for." Koch interprets this statement as a belief by the trial court that no certification order had yet been entered. Again, the trial court's belief does not affect our jurisdiction.

Koch further claims it did not receive notice of the First Order and thus had ninety days from the date of the First Order to perfect the appeal. Rule 306a provides that

If within twenty days after the judgment or other appealable order is signed, a party adversely affected by it or his attorney has neither received the notice required by paragraph (3) of this rule nor acquired actual knowledge of the order, then with respect to that party all the periods mentioned in paragraph (1) shall begin on the date that such party or his attorney received such notice or acquired actual knowledge of the signing, whichever occurred first, but in no event shall such periods begin more than ninety days after the original judgment or other appealable order was signed.

TEX.R.CIV.P. 306a(4). Accordingly, respective timetables (whether it be to file a motion for new trial or to perfect an appeal) do not begin to run until a party or his attorney receives notice of the judgment or order; however, the rule does not grant a party claiming lack of notice an automatic ninety-day extension.

Rule 306a(5) provides that to establish lack of notice and the application of paragraph (4), the adversely affected party must

prove in the trial court, on sworn motion and notice, the date on which the party or his attorney first either received a notice of the judgment or...