Nauslar v. Coors Brewing Co.

• Court: Texas Supreme Court
• Writing for the Court: O'Neill
• Citation: Nauslar v. Coors Brewing Co., 170 S.W.3d 242 (Tex. 2005)
• Decision Date: 19 August 2005
• Docket Number: No. 05-04-00704-CV.,05-04-00704-CV.
• Parties: Dennis NAUSLAR and Nauslar Investments, L.L.C., Appellant v. COORS BREWING CO. and Golden Distributing Enterprises, L.P., Appellees.

170 S.W.3d 242

Dennis NAUSLAR and Nauslar Investments, L.L.C., Appellant v. COORS BREWING CO. and Golden Distributing Enterprises, L.P., Appellees.

No. 05-04-00704-CV.

Court of Appeals of Texas, Fifth District, Dallas.

August 19, 2005.

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Martin J. Siegel, Houston, TX, for Appellant.

Jon P. Christiansen, Michael J. Aprahamian, Foley & Lardner LLP, Milwaukee, WI, Monica Wiseman Latin, J. Michael Hughes, Rodney H. Lawson and John Franklin Guild, Carrington, Coleman, Sloman & Blumenthal, L.L.P., David Bryant, Diamond, McCarthy, Taylor, Finley, Bryant & Lee, Sean Joseph McCaffity, Dallas, TX, for Appellee.

Before Justices BRIDGES, O'NEILL, and MAZZANT.

OPINION

Opinion by Justice O'NEILL.

The trial court granted the Defendants' pleas to the jurisdiction for lack of standing on all of the Plaintiffs' claims and dismissed the case. We conclude that (1) Plaintiff-Appellants lack standing on the statutory and common-law causes of action brought on their own behalf. Concerning the causes of action asserted "on behalf of" the business entity that they sold, they affirmatively negate having capacity to bring those claims. Accordingly, we affirm the trial court's dismissal of all of Plaintiffs' claims. We reverse the trial court's order denying Coors attorneys' fees and remand that issue.

Facts

The crux of this dispute is the disapproval by Coors Brewing Co. ("Coors") of a proposed consolidation in 2001 between Willow Distributors, L.P. ("Willow"), an entity distributing Coors beer in the Dallas area, and the distributor of Miller beer, Miller of Dallas ("Miller"). Plaintiffs alleged that Willow and Miller had agreed to a joint venture that would be operated by a new entity, United LP. Willow and Miller would each own 50% of the new entity, and the cash flow from the new business would be shared equally. In addition, Nauslar asserts the new enterprise would employ him as a company manager.

At the time of the proposed consolidation (the "Consolidation"), neither of the Plaintiffs was party to the distributorship agreement with Coors. Rather, Willow was the contracting party and the named distributor under the distributor agreement with Coors. Plaintiff Dennis Nauslar, individually, did not have a direct ownership interest in Willow, and Plaintiff Nauslar Investments was the limited partner in Willow. The structure underpinning Willow is as follows: Willow's general partner was DEN L.P. and its limited partner was Nauslar Investments LLC. Nauslar, individually, was 100% owner of Nauslar Investments, which in turn was the limited partner in DEN L.P (general partner in Willow).

When, in September 2001, Nauslar presented the proposed Consolidation to Coors for its approval, Coors rejected the deal. Instead, Coors invoked its right under the distributorship agreement to negotiate exclusively to buy Willow. It assigned that exclusive right to Golden Distributing Enterprises, L.P. (Golden). Over the next year, according to Plaintiffs, it became clear that Golden could not feasibly consolidate with or purchase Willow. Subsequently, Nauslar approached Miller again, but this time Miller was interested in only an outright purchase of Willow. Coors approved an outright sale to Miller. Coors, relying on a clause in the distributorship agreement, required Nauslar to sign a "mutual release" on behalf of Willow. Under that agreement, both Willow and Coors released any and all claims each had against the other and also warranted that neither party had assigned any such claims to a third party. Nauslar signed the release, and Miller bought Willow and DEN L.P. from Nauslar and Nausar Investments for $57.8 million.

Nauslar and Nauslar Investments sued Coors, alleging it unreasonably disapproved the proposed Consolidation with Miller, in violation of the Texas Beer Industry Fair Dealing Law. They also brought a number of common-law claims against Coors and Golden, including one for tortious interference with the Consolidation. After two hearings, the trial court granted Coors's and Golden's pleas to the jurisdiction and dismissed all of the Plaintiffs' causes of action for lack of standing. Plaintiffs brought this appeal, challenging the trial courts' dismissal of their statutory and common-law causes of action.

Summary

Plaintiffs seek to bring their claims in their own right, as individual claims brought on their own behalf. They also assert — as former partners and owners of Willow — claims "on behalf of" Willow, for alleged injuries to Willow itself, but with recovery going to Plaintiffs, not Willow. First, we address the individual claims and conclude that Plaintiffs lack standing to bring either the common-law or statutory causes of action in their own right. We address next the claims brought "on behalf of" Willow, i.e., the Willow partnership's claims. We conclude that Plaintiffs, in their live pleading, affirmatively negate that they have capacity to bring claims on behalf of Willow. Having rejected their other theory by which to allege capacity, we affirm dismissal of the claims asserted on behalf of Willow. We conclude that an award of attorney's fees under the statute is mandatory if one party prevails in an action under that statute, and thus we reverse the trial court's order denying Coors its attorney's fees and remand that issue.

I. Common-Law Causes of Action Asserted as Individual Right of Action

We address whether the Plaintiffs have standing, in their own right, to bring and personally recover on the common-law causes of action¹ they assert against Defendants. We note first the injury asserted. Plaintiffs allege that Willow was weakened by Coors's efforts to force a deal with Golden, and that Willow's value declined between the time of the disapproval in 2001 and the subsequent sale to Miller in 2003. Specifically, Plaintiffs assert damages as follows: Nauslar, individually, seeks redress for (1) the distributions, profits and other benefits of ownership he would have reaped as the sole owner of Willow and other corporate entities, had Coors approved the Consolidation; and (2) loss of salary, bonuses and other employment compensation he would have been paid by United (the operating entity to be formed upon Consolidation) as well as employment-related losses as an employee of Willow. Nauslar Investments, Inc. asserts that, as the former general partner of DEN LP (the general partner of Willow) and as the former limited partner of Willow, it was "injured to the same degree as — and could assert all claims of DEN LP and Willow."

In sum, Nauslar seeks damages for loss of the benefits of ownership and employment-related losses. Nauslar Investments, as former general partner of the general partner of Willow, seeks damages that mirror those suffered by Willow.

A. Standard of Review and Principles Governing Standing

Because the question of standing is a legal question, we review de novo a trial court's ruling on a plea to the jurisdiction. Mayhew v. Town of Sunnyvale, 964 S.W.2d 922, 928 (Tex.1998). Standing is a component of a court's subject-matter jurisdiction. Tex. Ass'n of Bus. v. Tex. Air Control Bd., 852 S.W.2d 440, 446 (Tex.1993). The plaintiff has the burden of alleging facts that affirmatively demonstrate a court's jurisdiction to hear a cause. Id. A plea to the jurisdiction challenges a trial court's authority to hear a case by alleging that the factual allegations in the plaintiff's pleadings, when taken as true, fail to invoke the trial court's jurisdiction. El Paso Cmty. Partners v. B & G/Sunrise Joint Venture, 24 S.W.3d 620, 623 (Tex.App.-Austin 2000, no pet.) (citing Bybee v. Fireman's Fund Ins. Co., 160 Tex. 429, 331 S.W.2d 910, 917 (1960)). We construe the allegations in the pleadings in favor of the pleader. Tex. Air Control Bd., 852 S.W.2d at 446.

When a plaintiff fails to plead facts that establish jurisdiction, but the petition does not affirmatively demonstrate incurable defects in jurisdiction, the issue is one of pleading sufficiency and the plaintiff should be afforded the opportunity to amend. County of Cameron v. Brown, 80 S.W.3d 549, 555 (Tex.2002). On the other hand, if the pleadings affirmatively negate the existence of jurisdiction, then a plea to the jurisdiction may be granted without allowing the plaintiff an opportunity to amend. Id.

A person has standing to sue when he is personally aggrieved by the alleged wrong. Nootsie Ltd. v. Williamson County Appraisal Dist., 925 S.W.2d 659, 661 (Tex.1996). A person has standing if (1) he has sustained, or is immediately in danger of sustaining, some direct injury as a result of the wrongful act of which he complains; (2) he has a direct relationship between the alleged injury and claim sought to be adjudicated; (3) he has a personal stake in the controversy; (4) the challenged action has caused the plaintiff some injury in fact, either economic, recreational, environmental, or otherwise; or (5) he is an appropriate party to assert the public's interest in the matter, as well as his own. Precision Sheet Metal Mfg. Co., Inc. v. Yates, 794 S.W.2d 545, 552 (Tex.App.-Dallas 1990, writ denied).

Without a breach of a legal right belonging to a plaintiff, that plaintiff has no standing to litigate. Exxon Corp. v. Pluff, 94 S.W.3d 22, 27 (Tex.App.-Tyler 2002, pet. denied); Cadle Co. v. Lobingier, 50 S.W.3d 662, 669-70 (Tex.App.-Fort Worth 2001, pet. denied); Brunson v. Woolsey, 63 S.W.3d 583, 587 (Tex.App.-Fort Worth 2001, no pet.). Only the person whose primary legal right has been breached may seek redress for an injury. Nobles v. Marcus, 533 S.W.2d 923, 927 (Tex.1976) (defrauded party only can bring suit to set aside deed obtained by fraud). "Without breach of a legal right belonging to the plaintiff no cause of action can accrue to his benefit." Id.

B. Legal Principles: Whose Primary Legal Right Was Allegedly Infringed?

Plaintiffs' principle argument is...