Peterson, Goldman & Villani, Inc. v. Ancor Holdings, LP, Timothy McKibben, Joseph Randall Keene, and Ancor Partners, Inc. ( 2019 )

In the
Court of Appeals
Second Appellate District of Texas
at Fort Worth
___________________________
No. 02-18-00102-CV
___________________________
PETERSON, GOLDMAN & VILLANI, INC., Appellant
V.
ANCOR HOLDINGS, LP; TIMOTHY MCKIBBEN; JOSEPH RANDALL KEENE;
AND ANCOR PARTNERS, INC., Appellees
On Appeal from the 141st District Court
Tarrant County, Texas
Trial Court No. 141-236257-09
Before Sudderth, C.J.; Kerr and Birdwell, JJ.
Opinion by Justice Birdwell
OPINION
After a decade and a half of legal proceedings, appellant Peterson, Goldman &
Villani, Inc. (PGV) is still seeking someone to satisfy a guaranty agreement. In an
earlier suit, PGV obtained a judgment against the defunct company that executed the
guaranty, Ancor Holdings LLC (Ancor LLC). In this suit, PGV seeks to enforce that
judgment against a group of related parties—Ancor Holdings LP (Ancor LP) and its
principals, who are the appellees here.
The trial court rendered a take-nothing summary judgment in favor of
appellees on grounds of res judicata, reasoning that PGV should have pressed all of
its claims in the earlier suit. We hold, to the contrary, that PGV’s suit to enforce the
judgment does not offend res judicata. We further hold that PGV conclusively
established Ancor LP’s liability as a successor to Ancor LLC’s judgment debt. We
therefore affirm, in part, reverse and render, in part, and reverse and remand, in part.
I. Background
Ancor LLC was a holding company whose members were appellees Timothy
McKibben and Joseph Randall Keene. At the turn of the millennium, Ancor LLC
was a significant investor in a company called OpenPoint Systems, Inc., who was a
borrower under a loan agreement with Bank of America. OpenPoint was struggling
in early 2000. In March 2000, as part of an arrangement to restructure the loan,
Ancor LLC executed a guaranty agreement in favor of Bank of America.
2
In May 2000, OpenPoint filed for bankruptcy, triggering the guaranty
agreement. Bank of America sold its rights under the guaranty to PGV. PGV then
attempted to collect from Ancor LLC, filing suit in Dallas County. After three and a
half years of arbitration, PGV obtained an arbitration award against Ancor LLC. In
May 2008, a Dallas district court signed a final judgment confirming the arbitration
award.
In July 2008, PGV discovered that—unbeknownst to it and Bank of America,
and in breach of a clause in the guaranty—Ancor LLC had merged with Ancor LP
approximately eight years earlier, leaving Ancor LP the sole surviving entity. Peterson,
Goldman & Villani, Inc. v. Ancor Holdings, LP, 420 S.W.3d 281, 283 (Tex. App.—
El Paso 2013, pet. denied) (setting out these background facts). Consequently, PGV
moved to modify the judgment to include Ancor LP as a judgment debtor subject to
execution for the confirmed arbitration judgment. The trial court denied PGV’s
motion to modify. Both Ancor LLC and PGV appealed the trial court’s arbitration-
confirmation judgment to the Dallas Court of Appeals, which subsequently affirmed.
While that judgment was on appeal, though, PGV filed this suit against Ancor
LP and its principals, McKibben, Keene, and Ancor Partners, Inc. PGV sought
satisfaction of the judgment awarded against Ancor LLC, alleging various causes of
action including successor liability. Appellees asserted res judicata and limitations as
defenses. The proceeding was soon transferred to a district court in Tarrant County.
3
PGV moved for partial summary judgment on its declaratory-judgment and
breach-of-contract claims against Ancor LP. For their part, appellees filed two
motions for summary judgment in which they argued, inter alia, that PGV’s claims
were barred by res judicata. The trial court denied PGV’s motion for partial summary
judgment, granted appellees’ motions for summary judgment, and dismissed PGV’s
claims with prejudice.
PGV’s appeal was heard on transfer before the El Paso Court of Appeals, from
which we have borrowed our recitation of the background facts. See id. In pertinent
part, the El Paso court held that the elements of res judicata had not been
conclusively established, and therefore summary judgment could not be sustained on
that basis. Id. at 284–85. The court concluded that appellees had “never addressed”
the privity element of res judicata, “much less established” it conclusively. Id. at 285.
For that reason and others, the court reversed the summary judgment to the extent
that it disposed of PGV’s contractual and declaratory-judgment claims. Id. at 287.
The court affirmed the summary judgment to the extent that it disposed of PGV’s
other claims.1 Id.
1
In particular, the court affirmed dismissal of PGV’s claims for fraud, estoppel,
tortious interference with contract, negligent misrepresentation, alter ego, conspiracy,
and punitive damages, because PGV had not challenged dismissal of these claims.
Peterson, Goldman & Villani, Inc. v. Ancor Holdings, LP, 420 S.W.3d 281, 287 (Tex.
App.—El Paso 2013, pet. denied).
4
On remand, PGV amended its petition; it retained its claim for successor
liability while adding some new theories and nonsuiting others.2 Appellees filed an
amended answer in which they pleaded res judicata and laches, among other
affirmative defenses.
The parties once again filed dueling motions for summary judgment. Appellees
focused solely on res judicata, taking pains to address privity. PGV argued that it had
conclusively established Ancor LP’s successor liability on the judgment. Once again,
the trial court denied PGV’s motion, granted appellees’ motion, and dismissed all of
PGV’s claims with prejudice. PGV appeals.
II. Summary Judgment Against PGV
In its first issue, PGV asserts that the trial court erred in granting summary
judgment on the basis of res judicata. PGV asserts that appellees failed to establish
two of the three elements of its res judicata defense: (1) privity between Ancor LLC
and the appellees here and (2) that the subsequent action is based on claims or causes
of action that were or should have been raised in the first action. We agree that the
claims in the subsequent suit—in particular, PGV’s successor-liability claim to enforce
the arbitration judgment—were not and should not have been raised in the first
2
In its live pleading, PGV alleged causes of action including contractual and
successor liability, principal-agent liability, alter ego, punitive damages, unjust
enrichment, and multiple forms of estoppel, while nonsuiting its other theories.
5
action. These were therefore not the type of claims that were required to be raised in
the first action or be forever barred.3
We review a summary judgment de novo. Travelers Ins. v. Joachim, 315 S.W.3d
860, 862 (Tex. 2010). We consider the evidence presented in the light most favorable
to the nonmovant, crediting evidence favorable to the nonmovant if reasonable jurors
could, and disregarding evidence contrary to the nonmovant unless reasonable jurors
could not. Mann Frankfort Stein & Lipp Advisors, Inc. v. Fielding, 289 S.W.3d 844, 848
(Tex. 2009). We indulge every reasonable inference and resolve any doubts in the
nonmovant’s favor. 20801, Inc. v. Parker, 249 S.W.3d 392, 399 (Tex. 2008). A
defendant is entitled to summary judgment on an affirmative defense if the defendant
conclusively proves all elements of that defense. Frost Nat’l Bank v. Fernandez, 315
S.W.3d 494, 508–09 (Tex. 2010); see Tex. R. Civ. P. 166a(b), (c). When both parties
move for summary judgment and the trial court grants one motion and denies the
other, the reviewing court should review both parties’ summary judgment evidence
and determine all questions presented. Mann Frankfort, 289 S.W.3d at 848. We should
3
PGV further asserts that the doctrine of the law of the case prohibits this
court from reconsidering the El Paso Court of Appeals’s determination that appellees
had not conclusively established the element of privity. PGV argues that the
summary judgment record has not changed in anywise; appellees’ only “new”
evidence was PGV’s own summary judgment motions, which were already part of the
summary judgment record. We agree that little has changed in the state of the record.
But because of our disposition on another element of res judicata, we need not
address PGV’s arguments concerning the law of the case and privity. See Tex. R. App.
P. 47.1; Horsley-Layman v. Adventist Health Sys./Sunbelt, Inc., 221 S.W.3d 802, 809 (Tex.
App.—Fort Worth 2007, pet. denied).
6
then render the judgment that the trial court should have rendered. See Myrad Props.,
Inc. v. LaSalle Bank Nat’l Ass’n, 300 S.W.3d 746, 753 (Tex. 2009); Mann Frankfort, 289
S.W.3d at 848.
Res judicata is an affirmative defense. See Tex. R. Civ. P. 94. A defendant who
moves for summary judgment on the basis of this affirmative defense therefore has
the burden to prove conclusively all its elements as a matter of law. Dauz v. Valdez,
571 S.W.3d 795, 803 (Tex. App.—Houston [1st Dist.] 2018, no pet.); see Parsons v.
Turley, No. 02-09-00381-CV, 2010 WL 5187704, at *2 (Tex. App.—Fort Worth
Dec. 23, 2010, pet. denied) (mem. op.).
Res judicata, also known as claim preclusion, prevents the relitigation of a
finally adjudicated claim and related matters that should have been litigated in a prior
suit.4 State & Cty. Mut. Fire Ins. Co. v. Miller, 52 S.W.3d 693, 696 (Tex. 2001). The
policies behind the claim-preclusion doctrine reflect the need to bring all litigation to
an end, prevent vexatious litigation, maintain stability of court decisions, promote
judicial economy, and prevent double recovery. Engelman Irrigation Dist. v. Shields Bros.,
Inc., 514 S.W.3d 746, 750 (Tex. 2017). The elements of the res judicata defense are as
follows: (1) a prior final determination on the merits by a court of competent
4
An arbitration award is treated as a prior final judgment and has preclusive
effect for purposes of res judicata. Premium Plastics Supply, Inc. v. Howell, 537 S.W.3d
201, 205 (Tex. App.—Houston [1st Dist.] 2017, no pet.); Blumberg v. Bergh, No. 02-04-
00138-CV, 2005 WL 1047592, at *2 (Tex. App.—Fort Worth May 5, 2005, no pet.)
(mem. op.) (“An arbitration award has the same effect as the judgment of a court of
last resort[.]”).
7
jurisdiction; (2) identity of parties, or those in privity with them, in the prior and
subsequent actions; and (3) the subsequent action is based on claims or causes of
action that were or should have been raised in the first action. Travelers Ins., 315
S.W.3d at 862. Our focus here is the third element.
In determining whether a claim or cause of action should have been raised in a
prior action, Texas follows the transactional approach. Citizens Ins. Co. of Am. v.
Daccach, 217 S.W.3d 430, 449 (Tex. 2007). Under this approach, we look to whether
the subsequent claim or cause of action arises out of the same subject matter—the
same “transaction, or series of connected transactions, out of which” the original suit
arose. Id. (quoting Barr v. Resolution Tr. Corp. ex rel. Sunbelt Fed. Sav., 837 S.W.2d 627,
631 (Tex. 1992)). Determining the scope of the “subject matter” or “transaction” of
the prior suit requires “an analysis of the factual matters that make up the gist of the
complaint, without regard to the form of action.” Id. This should be done
pragmatically, “giving weight to such considerations as whether the facts are related in
time, space, origin, or motivation, whether they form a convenient trial unit, and
whether their treatment as a trial unit conforms to the parties’ expectations or
business understanding or usage.” Id.
Here, the two lawsuits did not involve a common time, origin, motivation, or
domain. The two lawsuits involve different parties and are predicated on two
different agreements, executed at different times and for different purposes. The
guaranty agreement was executed in March 2000 by Bank of America and Ancor LLC
8
to shore up Bank of America’s loan to OpenPoint. The merger agreement was
executed in September 2000 by Ancor LLC and Ancor LP in order to restructure
McKibben and Keene’s holdings in a different organizational form. The two
agreements are each self-contained, with no internal references between each other.
“Where claims arise at different times through separate transactions not made in the
context of a continuing legal relationship, res judicata may not apply, even where the
parties and subject matter of the transactions are the same.” Pinebrook Props., Ltd. v.
Brookhaven Lake Prop. Owners Ass’n, 77 S.W.3d 487, 497 (Tex. App.—Texarkana 2002,
pet. denied); see Karle v. Innovative Direct Media Ltd., 309 S.W.3d 762, 766 (Tex. App.—
Dallas 2010, no pet.) (determining res judicata did not apply because the “two lawsuits
arose under different facts and different contracts”); Tex. Beef Cattle Co. v. Green, 860
S.W.2d 722, 724 (Tex. App.—Amarillo 1993, writ denied) (concluding that res
judicata did not apply because the two suits concerned separate cattle transactions that
were executed months apart). Moreover, as appellees emphasized during the initial
proceeding, PGV did not have a “continuing legal relationship” with Ancor LP. See
Pinebrook Props., 77 S.W.3d at 497. In their summary judgment briefing, appellees
argued, “Ancor LLC and Ancor LP are not the same entity . . . and [they] never have
been.” They further argued, “These are two distinct entities, and a merger did not
render them ‘one and the same’ for purposes of PGV’s lawsuit.” Ancor LP thus
made clear that its “expectations or business understanding” were to be treated as
9
separate from Ancor LLC for purposes of the guaranty agreement. See Citizens Ins.,
217 S.W.3d at 449.
As such, the two proceedings entailed two discrete sets of proof. The first
proceeding revolved around the interpretation of Ancor LLC’s guaranty agreement, as
well as evidence concerning the value of OpenPoint’s collateral. The second
proceeding was to focus on the distinct terms of the merger agreement and the
successor liability of Ancor LP. Such claims would not necessarily have made a
convenient unit for trial. And if a purpose of res judicata is to prevent repetitive
litigation, we note that PGV’s claims did not require any issues related to OpenPoint
or Ancor LLC’s guaranty to be duplicated in this second suit.5 See Engelman Irrigation,
514 S.W.3d at 750. PGV could simply allege that it had a valid judgment to enforce
against appellees, without delving into detail concerning the origins of that judgment.
Such a lawsuit would not be forbidden, for res judicata does not bar actions
brought to enforce prior judgments. See Matthews Constr. Co. v. Rosen, 796 S.W.2d 692,
694 (Tex. 1990); In re Estate of Lynch, 395 S.W.3d 215, 227 (Tex. App.—San Antonio
2012, pet. denied); McCarroll v. My Sentinel, LLC, No. 14-08-01171-CV, 2009 WL
4667403, at *2 (Tex. App.—Houston [14th Dist.] Dec. 10, 2009, no pet.) (mem. op.);
Walker v. Anderson, 232 S.W.3d 899, 912 (Tex. App.—Dallas 2007, no pet.). Applying
5
Had PGV filed a second suit on the guaranty agreement, such a suit would
have undoubtedly covered some of the same transactional ground as before. But
PGV did not file such a suit. Instead, the guaranty debt was reduced to and
transformed into a judgment, and in this suit to enforce the judgment, few if any
issues from the first suit need be repeated.
10
the doctrine of res judicata in a suit to enforce a judgment would “pervert the sanctity
of judgments, not preserve them,” which is a goal of the doctrine. Lynch, 395 S.W.3d
at 227 (quoting Matthews, 796 S.W.2d at 694).
In Matthews, the Texas Supreme Court applied this thinking to hold that once a
judgment against a corporation was obtained, res judicata did not bar the plaintiff
from seeking to enforce that judgment against an owner who used the corporation as
his alter ego. See 796 S.W.2d at 692–94. The court rejected the owner’s assertion of
res judicata and explained that in seeking to pierce the corporate veil, the plaintiff was
not attempting to challenge the prior judgment but was seeking to enforce it, as the
victorious party was entitled to do. McCarroll, 2009 WL 4667403, at *2 (summarizing
Matthews); see Strange v. Estate of Lindemann, 408 S.W.3d 658, 661 (Tex. App.—Fort
Worth 2013, no pet.) (“Typically, a postjudgment suit against an alleged alter ego is
not a collateral attack on the prior judgment, and thus is not barred by res judicata.”).
In our view, Matthews is on point. Under Matthews, a party may seek to impose
liability for a corporation’s judgment obligations onto a set of closely related
principals without running afoul of res judicata; such a claim is not one that should
have been raised in the initial litigation, per the third element of res judicata. Here,
too, PGV seeks to enforce a judgment for Ancor LLC’s obligations against a set of
closely-related principals who were never made parties to the initial suit. The only
difference here is that the primary basis for that third-party responsibility is successor
liability rather than veil piercing. Under the logic of Matthews, PGV may seek to
11
enforce the confirmed arbitration judgment, and such a claim is not one that should
have been raised in the initial litigation.
Appellees argue, however, that regardless of whether its own liability should have
been raised in the initial proceeding, that claim was indeed raised in the initial
proceeding. Because it was raised in the initial proceeding, appellees argue,
res judicata bars further litigation of this claim. Appellees point to PGV’s motion to
modify during the confirmation proceeding, in which PGV discussed the merger
agreement and asked the trial court to hold Ancor LP liable on the arbitration award
as a successor to Ancor LLC. Appellees argue that PGV has raised essentially the
same successor theory of liability again here and that PGV’s claim should therefore be
precluded.
We disagree. While PGV attempted to raise its successor-liability theory during
the confirmation proceeding, it could not do so due to the limited nature of an
arbitration-confirmation proceeding, which is restricted to the issue of whether
statutory grounds exist for modifying or vacating the award. See Hoskins v. Hoskins,
497 S.W.3d 490, 494 (Tex. 2016); Blumberg v. Bergh, No. 02-04-00138-CV, 2005 WL
1047592, at *2 (Tex. App.—Fort Worth May 5, 2005, no pet.) (mem. op.). Those
statutory grounds do not encompass PGV’s successor-liability theory, and the
confirmation proceeding therefore offered no meaningful opportunity to raise this
argument. See Tex. Civ. Prac. & Rem. Code Ann. §§ 171.088, .091. It would be
inequitable to apply res judicata to this effectively unraised theory, which has never
12
been considered on its merits due to the procedural confines of a confirmation
proceeding. See Kothmann v. Cook, 113 S.W.3d 471, 475–76 (Tex. App.—Amarillo
2003, no pet.) (declining to apply res judicata, reasoning that “[b]ecause of the special
and limited nature of the turnover proceeding, Kothmann would not have been
entitled to raise those substantive claims against Cook had he attempted to do so”); see
also Sysco Food Servs., Inc. v. Trapnell, 890 S.W.2d 796, 799 n.2 & 805 (Tex. 1994)
(declining to apply issue preclusion to state-law claims, in part because a federal
procedural requirement prevented the plaintiff from bringing its state-law claims in a
prior federal suit).
It would also be inconsistent with the policy underlying res judicata. One of
the policies supporting res judicata is preventing double recovery. See Engelman
Irrigation, 514 S.W.3d at 750. But applying res judicata in this case would prevent any
recovery whatsoever on a lawfully obtained judgment. “A court should not apply res
judicata to deprive a prior judgment of its full legal effect.” Drake Interiors, LLC v.
Thomas, 433 S.W.3d 841, 853 (Tex. App.—Houston [14th Dist.] 2014, pet. denied)
(op. on reh’g). This we will not do.
To obtain summary judgment based on res judicata, it was appellees’ initial
burden to conclusively establish each of the defense’s essential elements. See Dauz,
571 S.W.3d at 803. As to the third element of res judicata, whether the claim was or
should have been raised in the initial litigation, this burden was not satisfied. At best,
the summary judgment record showed two suits based on two discrete transactions,
13
and the second suit was merely an attempt to enforce the judgment obtained through
the first suit. Because appellees failed to establish their burden, summary judgment
could not have been granted based on this affirmative defense. The trial court erred
in concluding otherwise, and in dismissing PGV’s claims for contractual and
successor liability, principal-agent liability, unjust enrichment, and multiple forms of
estoppel.6
We sustain PGV’s first issue.
III. Summary Judgment Against Ancor LP
A. Successor Liability of Ancor LP
In its second issue, PGV asserts that it conclusively established that Ancor LP
was liable for the arbitration-confirmation judgment against Ancor LLC. PGV notes
that under Texas law, the surviving entity in a merger assumes all liabilities of the
entity that was merged out. PGV further points out that the merger agreement
contains express language under which Ancor LP agreed to assume Ancor LLC’s
liabilities. PGV asserts that as the surviving entity, Ancor LP must have assumed
liability on the judgment by necessity and as a matter of law. PGV asserts that it is
therefore entitled to summary judgment against Ancor LP for its theory of successor
liability.
We do not reach the same conclusion as to PGV’s theories of alter ego,
6
punitive damages, and plain estoppel. The El Paso Court of Appeals has already
affirmed dismissal of those theories. See Peterson, Goldman & Villani, 420 S.W.3d at
287.
14
To prevail, PGV was required to conclusively show that no genuine issue of
material fact exists and that it is entitled to judgment as a matter of law. Tarr v.
Timberwood Park Owners Ass’n, Inc., 556 S.W.3d 274, 278 (Tex. 2018). The burden
would then shift to appellees to present evidence creating a fact issue. Walker v.
Harris, 924 S.W.2d 375, 377 (Tex. 1996).
Under Texas law, a certificate of merger must be filed for a merger to become
effective if any domestic limited liability company is a party to the merger. See
Trustmark Nat’l Bank v. Tegeler (In re Tegeler), 586 B.R. 598, 650 n.33 (Bankr. S.D. Tex.
2018) (quoting Tex. Bus. Orgs. Code Ann. § 10.151(a)(1)(A)); see also Tex. Bus. Orgs.
Code Ann. § 1.002(22) (including domestic limited liability companies in the definition
of “filing entity,” which must file under section 10.151). “A merger that requires such
a filing takes effect on the acceptance of the filing of the certificate of merger by the
secretary of state or county clerk, as appropriate.” Tegeler, 586 B.R. at 650 n.33
(cleaned up). When a merger takes effect, “all liabilities and obligations of each
organization that is a party to the merger are allocated to one or more of the surviving
or new organizations in the manner provided by the plan of merger.” Alta Mesa
Holdings, LP v. Ives, 488 S.W.3d 438, 449 n.13 (Tex. App.—Houston [14th Dist.] 2016,
pet. denied) (quoting Tex. Bus. Orgs. Code Ann. § 10.008(a)(3)). The surviving
organization to which a liability is allocated under the plan of merger is the primary
obligor for the liability. Id. (quoting Tex. Bus. Orgs. Code Ann. § 10.008(a)(4)).
15
Attached to PGV’s motion for summary judgment were three exhibits showing
the completed merger between Ancor LLC, a domestic limited liability company, and
Ancor LP, a Delaware limited partnership. The first exhibit was titled “Agreement
and Plan of Merger.” It specified that Ancor LLC would merge “with and into”
Ancor LP, the surviving entity, and that Ancor LP would “assume all the liabilities of
every kind and description of” Ancor LLC. Keene executed the merger agreement on
behalf of both Ancor LLC and LP. 7 The second exhibit was the “Articles of Merger,”
which was filed with the Texas Secretary of State. The articles recited that Ancor LLC
and LP were merging and that Ancor LP was the surviving entity. The third exhibit
was a “Certificate of Merger” issued by the Texas Secretary of State, approving the
merger as of September 22, 2000. This evidence conclusively established a completed
merger.
By dint of the merger agreement and the completed merger itself, Ancor LP
assumed all of Ancor LLC’s liabilities, including the confirmed arbitration judgment.
See id. We conclude that PGV satisfied its initial burden to conclusively establish its
successor-liability claim. See Tarr, 556 S.W.3d at 278. The burden therefore shifted to
appellees to present evidence creating a fact issue. See Walker, 924 S.W.2d at 377.
7
More specifically, Keene executed the agreement as a member of Ancor LLC
and as president of Ancor Partners, Inc., which was the general partner of Ancor LP.
16
B. Res Judicata
Appellees first assert that res judicata precludes summary judgment in favor of
PGV.
The nonmovant cannot defeat the granting of a motion for summary judgment
by merely pleading an affirmative defense. New Talk, Inc. v. Sw. Bell Tel. Co., 520
S.W.3d 637, 645 (Tex. App.—Fort Worth 2017, no pet.). Instead, the nonmovant
“must come forward with evidence sufficient to raise an issue of fact on each element
of the defense to avoid summary judgment.” Id.
For the reasons already stated, supra, we conclude that appellees have not
established a fact issue as to the third element of res judicata. Therefore, res judicata
does not stand in the way of a summary judgment in favor of PGV. See id.
C. Attack on Arbitration Award
In an attempt to create a fact issue, appellees next dispute the arbitrator’s
determination that Ancor LLC was liable on the guaranty. Appellees argue that the
guaranty was carefully drafted so that it would trigger only if the value of OpenPoint’s
collateral reached a certain level. Appellees assert that this level was never attained, as
Bank of America recognized when it sold its rights under the guaranty for 2.59 cents
on the dollar. Appellees contend that the arbitrator therefore erred by finding any
liability on the guaranty.
But this is not an appeal from judicial confirmation of the arbitration award;
that matter was resolved by the Dallas Court of Appeals nearly ten years ago. See
17
Ancor Holdings, LLC v. Peterson, Goldman & Villani, Inc., 294 S.W.3d 818, 834 (Tex.
App.—Dallas 2009, no pet.). Even if the merits of the confirmation proceeding were
properly before us, we could not entertain appellees’ criticism of the arbitrator’s
reasoning. “Contentions that the arbitrator’s reasoning was legally erroneous or
internally inconsistent, or that the arbitrator misinterpreted the contract or misapplied
the law do not provide a basis for vacating an award.” Denbury Onshore, LLC v. Texcal
Energy S. Tex., LP, 513 S.W.3d 511, 520 (Tex. App.—Houston [14th Dist.] 2016, no
pet.). “Committing mistakes of fact or law is not a proper ground for vacating an
award[.]” Id.
Appellees’ attack on the arbitration award is doubly precluded, and it does not
create a fact issue sufficient to defeat summary judgment in favor of PGV. See
Walker, 924 S.W.2d at 377.
D. Laches
Next, appellees resist summary judgment by asserting that they have created a
fact issue on a different affirmative defense: laches. See New Talk, 520 S.W.3d at 645.
Appellees note that PGV did not file suit against Ancor LP until eight years after the
merger. According to appellees, this unreasonable delay prejudiced appellees’
discovery rights and ability to settle the case, and PGV’s belated claims against
appellees should therefore be barred by laches.
Laches is an equitable remedy that prevents a plaintiff from asserting a claim
because of a lapse of time; the claim is said to be stale. Vickery v. Vickery, 999 S.W.2d
18
342, 355 (Tex. 1999) (op. on reh’g). To invoke the equitable doctrine of laches,8 the
moving party ordinarily must show (1) an unreasonable delay by the opposing party in
asserting it rights, and (2) the moving party’s good faith and detrimental change in
position because of the delay. In re Laibe Corp., 307 S.W.3d 314, 318 (Tex. 2010) (orig.
proceeding). The defense is available only in extraordinary cases. Brink v. Fid. Bank of
Fort Worth, 966 S.W.2d 684, 684 (Tex. App.—Fort Worth 1998, no pet.).
PGV challenges appellees’ laches defense on its second element in particular.
To defeat summary judgment, appellees were required to create a fact issue as to
8
As an initial matter, PGV asserts that laches does not apply to the purely legal
claims that are at issue in this appeal. PGV cites cases from our sister courts holding
that laches, as an equitable doctrine, may bar only equitable claims or proceedings,
and it is categorically inapplicable to legal claims. See Wayne v. A.V.A. Vending, Inc., 52
S.W.3d 412, 415 (Tex. App.—Corpus Christi 2001, pet. denied); Tex. Att’y Gen. of State
of Tex. on Behalf of Ford v. Daurbigny, 702 S.W.2d 298, 300 (Tex. App.—Houston [1st
Dist.] 1985, no writ). PGV might have also cited older authorities from this court, in
which we implied as much. See Steward v. Steward, 734 S.W.2d 432, 434 n.2 (Tex.
App.—Fort Worth 1987, no writ) (op. on reh’g); Reynolds v. Farmers & Merchants Nat’l
Bank of Nocona, 135 S.W.2d 556, 558 (Tex. App.—Fort Worth 1939, no writ).
However, the Texas Supreme Court has consistently indicated that laches
might apply to legal claims. See Rogers v. Ricane Enters., Inc., 772 S.W.2d 76, 80 (Tex.
1989) (describing the first element of laches as “an unreasonable delay by one having
legal or equitable rights in asserting them”); City of Fort Worth v. Johnson, 388 S.W.2d
400, 403 (Tex. 1964) (same). Recognizing this, some Texas courts have expressly held
that legal claims are subject to laches. See, e.g., Regent Int’l Hotels, Ltd. v. Las Colinas
Hotels Corp., 704 S.W.2d 101, 106 (Tex. App.—Dallas 1985, no writ).
We have reserved judgment, and we will continue to do so here. See Sw. Bell
Tel., LP v. Chappell, No. 02-12-00071-CV, 2013 WL 257369, at *4 n.4 (Tex. App.—
Fort Worth Jan. 24, 2013, no pet.) (mem. op.). We need not decide today whether
laches may apply to legal claims, for even assuming that laches generally applies,
appellees’ proof in support of this defense fails to raise a genuine issue of material
fact. The laches defense thus fails regardless of its applicability.
19
whether they had changed position in good faith and to their detriment because of the
delay. See Laibe, 307 S.W.3d at 318; New Talk, 520 S.W.3d at 645. To that end,
appellees offered Keene’s affidavit testimony that if PGV had not delayed in filing
suit, Ancor LP could have better pursued a “suitable compromise” with Bank of
America.
In response, PGV observes that its delay could not have impaired appellees’
ability to settle with Bank of America. When PGV acquired the guaranty debt, Bank
of America parted with any interest in the debt. From that point, Bank of America
could not settle a dispute regarding rights it no longer owned. Therefore, it was
impossible for any delay on PGV’s part to impair the prospects of a bargain between
appellees and Bank of America.9
Keene also testified concerning another form of detrimental change in position:
that PGV’s delay hampered “Ancor LP’s ability to discover information from Bank of
America to substantiate why the Bank never pursued collection of the Guaranty
against Ancor LP.” We doubt the value of such an inquiry into Bank of America’s
interpretation of the guaranty. What Bank of America thought of the guaranty’s
language is immaterial, because parol evidence such as this cannot be used to
contradict the unambiguous terms of the agreement. See Alta Mesa, 488 S.W.3d at
450. “Where the parties have entered into an unambiguous written contract, the
9
This much was admitted during Keene’s deposition.
20
instrument alone will be deemed to express the intention of the parties because it is
the objective intent, not subjective intent, that controls.” Id.
But even if this avenue of discovery had value, appellees offered nothing
beyond Keene’s conclusory assertions to show that this avenue was impaired. Keene
did not identify any unsuccessful effort to discover evidence. Just the opposite, there
was no shortage of record evidence concerning Bank of America’s thoughts on the
guaranty. The arbitration award makes reference to a number of exhibits concerning
the bank’s impressions, including an affidavit from the bank’s representative
discussing his views of the guaranty, letters and emails drafted by the bank
representative summarizing his perspective of the guaranty’s terms, internal bank
documents purporting to define what terms were incorporated into the guaranty,
direct testimony by counsel for the bank that certain terms were included in the
guaranty, and a report drafted by the bank’s vice president explaining the bank’s
thinking. In short, there was plenty of what Keene claimed to lack.
We have no doubt that one purpose of the laches doctrine is “to prevent
injustice against one party that could result when another asserts his demands so long
after they matured that evidence has been lost or impaired.” Fazakerly v. Fazakerly,
996 S.W.2d 260, 265 (Tex. App.—Eastland 1999, pet. denied). But there must be a
showing of change in position. See id. (sustaining laches based on evidence that a key
witness’s memory was ruined by Alzheimer’s disease); Jernigan v. Scott, 518 S.W.2d 278,
282–83 (Tex. App.—San Antonio 1974, writ ref’d n.r.e.) (sustaining laches because
21
key witness had died). Appellees offered only speculation about missed opportunities
for discovery. This does not suffice to raise a fact issue as to the “extraordinary”
circumstances required for laches. See Brink, 966 S.W.2d at 684; Stanley Works v.
Wichita Falls ISD, 366 S.W.3d 816, 826 (Tex. App.—El Paso 2012, pet. denied)
(“Stanley’s bare claims that the [evidence] had been destroyed and witnesses had
scattered do not conclusively prove that Stanley’s ability to defend was impaired or
that it made a good faith and detrimental change of position as a result of the delay.”);
Wakefield v. Bevly, 704 S.W.2d 339, 345 (Tex. App.—Corpus Christi 1985, no writ)
(rejecting laches claim because there was “no showing that the records were
unavailable” due to delay).
To raise a genuine issue of material fact, “the evidence must transcend mere
suspicion.” Ford Motor Co. v. Ridgway, 135 S.W.3d 598, 601 (Tex. 2004). Appellees’
evidence does not cross this threshold. Because appellees have failed to create a fact
issue, their laches defense is insufficient to defeat PGV’s entitlement to summary
judgment. See New Talk, 520 S.W.3d at 645.
E. Summary
Through its evidence, PGV conclusively established its entitlement to summary
judgment on successor liability, see Tarr, 556 S.W.3d at 278, and appellees failed to
create a fact issue sufficient to show otherwise. See Walker, 924 S.W.2d at 377; New
Talk, 520 S.W.3d at 645. We conclude that the trial court should have granted
summary judgment holding Ancor LP liable on the judgment against Ancor LLC. We
22
will therefore render the judgment the trial court should have rendered. See Myrad
Props., 300 S.W.3d at 753. To that extent, we sustain PGV’s second issue.
IV. Summary Judgment Against Other Appellees
Also within their second issue, PGV contends that it established summary
judgment grounds for its claims against the other appellees, Keene, McKibben, and
Ancor Partners, Inc. PGV asserts that it conclusively established that these other
appellees operated in an implied partnership with Ancor LLC, and these appellees are
therefore jointly and severally liable on the judgment against Ancor LLC.
PGV appears to have raised this implied-partnership claim for the first time on
appeal, for this claim appears nowhere in PGV’s live petition or its motion for
summary judgment. A trial court cannot enter judgment on a theory of recovery not
sufficiently set forth in the pleadings or otherwise tried by consent. Hartford Fire Ins.
Co. v. C. Springs 300, Ltd., 287 S.W.3d 771, 779 (Tex. App.—Houston [1st Dist.] 2009,
pet. denied) (op. on reh’g); Street v. Skipper, 887 S.W.2d 78, 80 (Tex. App.—Fort
Worth 1994, writ denied). Moreover, the movant must state in its motion the specific
grounds upon which the summary judgment should be granted. See Tex. R. Civ. P.
166a(c). It is settled that a court cannot grant summary judgment on grounds that
were not presented. Fed. Deposit Ins. Corp. v. Lenk, 361 S.W.3d 602, 609 (Tex. 2012).
23
The trial court therefore could not have granted summary judgment on this unpleaded
and unpresented claim. 10
To that extent, we overrule the remainder of PGV’s second issue.
V. Conclusion
We affirm the trial court’s judgment to the extent it disposed of PGV’s theories
of alter ego, punitive damages, and plain estoppel. We reverse and render judgment in
favor of PGV on its claim to hold Ancor LP liable on the arbitration-confirmation
judgment rendered against Ancor LLC. We remand to the trial court for further
proceedings concerning PGV’s other claims, including principal-agent liability, unjust
enrichment, and multiple forms of estoppel.
/s/ Wade Birdwell
Wade Birdwell
Justice
Delivered: July 18, 2019
10
See also Super Starr Int’l, LLC v. Fresh Tex Produce, LLC, 531 S.W.3d 829, 839–
40 (Tex. App.—Corpus Christi–Edinburg 2017, no pet.) (citing Duncan v. Allen,
No. 9:15-CV-29, 2016 WL 4467674, at *5 (E.D. Tex. Aug. 24, 2016), and Robbins v.
Payne, 55 S.W.3d 740, 748 (Tex. App.—Amarillo 2001, pet. denied)) (rejecting, as
patently unmeritorious, a claim that an implied partnership overlapped the
organizational form of an LLC and its members).
24