Wyatt v. Shaw Plumbing Co.

• Decision Date: 26 October 1988
• Docket Number: No. C-6801,C-6801
• Citation: 760 S.W.2d 245
• Parties: Oscar S. WYATT, Jr., Petitioner, v. SHAW PLUMBING COMPANY, Respondent.
• Court: Texas Supreme Court

Page 245

760 S.W.2d 245

Oscar S. WYATT, Jr., Petitioner, v. SHAW PLUMBING COMPANY, Respondent.

No. C-6801.

Supreme Court of Texas.

Oct. 26, 1988.

Rehearing Denied Dec. 14, 1988.

Ken Dahlbert, Wood & Burney, Corpus Christi, Tracy DuBose, DuBose & Short, Montgomery, Joe R. Greenhill and Larry F. York, Baker & Botts, Austin, for petitioner.

Richard J. Hatch, Prichard, Peeler, Hatch, Cartwright, Hall & Kratzig, Corpus Christi, for respondent.

OPINION

RAY, Justice.

This case arises out of a dispute over the services provided by a plumbing contractor in the construction of a house in Duval County. The issue presented by this appeal involves a plea in abatement filed in a second suit in Nueces County when a prior suit was pending in Duval County. The court of appeals affirmed the Nueces County district court, holding that the decision to grant a plea in abatement was within the discretion of the Nueces County court and there was no abuse of that discretion. 736 S.W.2d 763. We hold that the Nueces County district court was required to grant the plea in abatement because a previously filed suit between the parties was pending. We, therefore, reverse the judgment of the court of appeals and remand the cause to the Nueces County district court with instructions to vacate its judgment and abate all proceedings pending final disposition of the Duval County lawsuit, which was previously filed.

This controversy involves a suit between the parties in the district court of Duval County and another suit subsequently filed in the district court of Nueces County. Oscar Wyatt was building a house in Duval County. On Wyatt's behalf, Morgan Spear entered into an oral agreement with Shaw Plumbing Company for Shaw to perform work on the house. When Wyatt did not pay Shaw Plumbing for its services, Shaw made a written demand for payment. Following Shaw Plumbing's demand letter, Wyatt filed suit against Shaw in Duval County on February 7, 1983, alleging fraud and violation of the Deceptive Trade Practices Act.

On April 4, 1983, Shaw Plumbing filed a breach of contract suit against Wyatt and Spear in Nueces County to recover for its services. Wyatt filed a plea in abatement in the Nueces County suit based upon the pendency of the previously filed Duval County suit. The Nueces County district court signed an order denying Wyatt's plea in abatement on June 15, 1984. On February 13, 1986, Wyatt filed a second plea in abatement in Nueces County after he agreed to indemnify Spear for any claims against Spear by Shaw Plumbing. The Nueces County district court again denied the plea. Prior to the trial in Nueces County, the trial judge struck Wyatt's pleadings as a sanction for alleged discovery abuse. Judgment was rendered against Wyatt following a jury trial in Nueces County.

It has long been the policy of the courts and the legislature of this state to avoid a multiplicity of lawsuits. The need for judicial economy has recently become more acute because the dockets of our trial courts are overburdened, and litigants must wait far too long for their cases to be heard. In keeping with the policy to avoid multiple lawsuits, Texas Rule of Civil Procedure 97(a) was promulgated. This rule regarding compulsory counterclaims dictates that a pleading shall assert a counterclaim if it meets six elements. A counterclaim is compulsory if: (1) it is within the jurisdiction of the court; (2) it is not at the time of filing the answer the subject of a pending action; (3) the action is mature and owned by the pleader at the time of filing the answer; (4) it arises out of the transaction or occurrence that is the subject matter of the opposing party's claim; (5) it is against an opposing party in the same capacity; and (6) it does not require for its adjudication the presence of third parties over whom the court cannot acquire jurisdiction. See Tex.R.Civ.P. 97(a), (d); see also 2 R. McDonald, Texas Civil Practice in District and County Courts § 7.49, at 253-54 (rev.1982). If a claim meets these elements, it must be asserted in the initial action. A defendant's failure to assert a compulsory counterclaim precludes its assertion in later actions. Gray v. Kirkland, 550 S.W.2d 410, 411 (Tex.Civ.App.--Corpus Christi 1977, writ ref'd n.r.e.); see 2 R. McDonald, supra, § 7.49, at 254. Shaw Plumbing's suit against Wyatt was a compulsory counterclaim under the requirements of Rule 97(a).

In the case in which Wyatt as plaintiff sued Shaw Plumbing as defendant on tort and DTPA theories, the counties in which venue was proper were: (1) Nueces County, where the defendant had its principal office situated; (2) Duval County, where the construction and plumbing was done, and thus the cause of action arose; or (3) Harris County, where the plaintiff resided at the time the cause of action arose. Act of Apr. 29, 1943, ch. 228, 48th Leg., 1943 Tex.Gen.Laws 350, revised by Act of May 28, 1983, ch. 385, sec. 1, § 3(f), 68th Leg., 1983 Tex.Gen.Laws 2119, 2122, repealed by Civil Practice and Remedies Code, ch. 959, sec. 9, 69th Leg., 1985 Tex.Gen.Laws 3242, 3322 (current venue law codified at Tex.Civ.Prac. & Rem.Code Ann. § 15.036 (Vernon Supp.1988)). Wyatt's agent, Morgan Spear, was not a party to the suit brought by Wyatt. Spear was a party, however, to Shaw Plumbing's suit in Nueces County, which was based solely on breach of contract. Because there was a difference in both issues and parties, Shaw argues that the Nueces County district court was not obliged to grant the plea in abatement. We disagree.

When an inherent interrelation of the subject matter exists in two pending lawsuits, a plea in abatement in the second action must be granted. It is not required that the exact issues and all the parties be included in the first action before the second is filed, provided that the claim in the first suit may be amended to bring in all necessary and proper parties and issues. See 2 R. McDonald, supra, § 7.10, at 165. In determining whether an inherent interrelationship exists, courts should be guided by the rule governing persons to be joined if feasible and the compulsory counterclaim rule. See Tex.R.Civ.P. 39, 97(a).

Shaw Plumbing should have brought its compulsory counterclaim on the contract in Wyatt's tort and DTPA suit in Duval County. If Shaw Plumbing had joined Morgan Spear, venue would have been proper in the Duval County suit filed by Wyatt, where the cause of action arose. ¹ If Wyatt had sued Shaw Plumbing in Nueces County, venue would have also been proper because Shaw's principal office was situated in Nueces County. However, since Wyatt filed suit first, he chose Duval County.

It is well settled that when suit would be proper in more than one county, the court in which suit is first filed acquires dominant jurisdiction to the exclusion of other courts. Curtis v. Gibbs, 511 S.W.2d 263, 267 (Tex.1974); V.D. Anderson Co. v. Young, 128 Tex. 631, 636, 101 S.W.2d 798, 800 (1937); Cleveland v. Ward, 116 Tex. 1, 19, 285 S.W. 1063, 1070 (1926). As long as the forum is a proper one, it is the plaintiff's privilege to choose the forum. Mutual Sav. & Loan Ass'n v. Earnest, 582 S.W.2d 534, 535 (Tex.Civ.App.--Texarkana 1979, no writ). Defendants are simply not at liberty to decline to do battle in the forum chosen by the plaintiff. 2 R. McDonald, supra, § 7.49, at 254.

Abatement of a lawsuit 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. See McCurdy v. Gage, 123 Tex. 558, 565-66, 69 S.W.2d 56, 59, reh'g overruled per curiam and opinion adopted, 75 S.W.2d 1107 (Tex.Comm'n App.1934). The plea in abatement must be raised in a timely manner, however, or it is waived. Cleveland, 116 Tex. at 21, 285 S.W.2d at 1071-72. There has been no waiver in the present case.

There are three exceptions to the rule of Cleveland v. Ward that the court where suit is first filed acquires dominant jurisdiction: (1) Conduct by a party that estops him from asserting prior active jurisdiction; (2) lack of persons to be joined if feasible, ² or the power to bring them before the court; and (3) lack of intent to prosecute the first lawsuit. Young, 128 Tex. at 636-37, 101 S.W.2d at 800-01; see also Curtis, 511 S.W.2d at 267. None of these exceptions applies in this case.

Shaw Plumbing relies on our opinion in Dolenz v. Continental National Bank to support its argument that the trial court's decision to grant the plea in abatement was discretionary. Dolenz, 620 S.W.2d 572 (Tex.1981). In that case we held that the trial court did not abuse its discretion in denying a plea in abatement. Dolenz must be distinguished, however, for two reasons. First, the second lawsuit in Dolenz came into being as a result of Continental Bank's plea of privilege. The court in the second suit properly denied the bank's plea in abatement because a party may not request that a suit against it be severed and transferred to another court, and subsequently seek to abate the second suit. Second, we held that a judgment in the first suit would not foreclose all issues between Continental Bank and Dolenz. Dolenz, 620 S.W.2d at 575.

We reaffirm that the rule of Cleveland v. Ward is the law regarding conflicts of jurisdiction between Texas courts of coordinate jurisdiction. In the case at bar, both lawsuits involve the same issues. Moreover, the parties in the second suit were either present in the first suit, or parties who should have been joined in the first suit. Since venue was proper in either Duval, Harris, or Nueces County, the court where suit was first filed, Duval County, acquired dominant jurisdiction. The Nueces County district court, therefore, had no discretion to deny Wyatt's plea in abatement.

Accordingly, we reverse the judgment of the court of appeals and remand the cause to the Nueces County district court with instructions to vacate its judgment and abate all proceedings pending...