Dallas City Limits Property Co., L.P. v. Austin Jockey Club, Ltd., and KTAGS Downs Holding Company, L.L.C ( 2013 )

Reversed and Remanded and Opinion filed December 10, 2013.
In The
Fourteenth Court of Appeals
NO. 14-12-00530-CV
DALLAS CITY LIMITS PROPERTY CO., L.P., Appellant
V.
AUSTIN JOCKEY CLUB, LTD. AND KTAGS DOWNS
HOLDING COMPANY, L.L.C, Appellees
On Appeal from the 127th District Court
Harris County, Texas
Trial Court Cause No. 2010-16733
OPINION
This interpleader action is but one of multiple lawsuits1 and administrative
proceedings pertaining to ownership of or rights in a racetrack license—a license
that is the sole asset of Longhorn Downs, Inc.
1
See, e.g., Dallas City Limits Prop. Co., L.P. v. Austin Jockey Club, Ltd., 376 S.W.3d
792 (Tex. App.—Dallas 2012, pet. denied) (the Dallas County litigation).
Appellant Dallas City Limits Property Co., L.P. (Dallas City Limits)
challenges the trial court‘s final judgment ordering the interpled stock in this case
delivered to KTAGS Downs Holding Company, L.L.C. and awarding attorney‘s
fees to KTAGS and Austin Jockey Club, Ltd. In five issues, Dallas City Limits
asserts that: (1) inasmuch as the judgment in the Dallas County litigation has been
reversed, the judgment here arising from res judicata should be reversed; (2) the
trial court abused its discretion by refusing to keep this interpleader action abated
until final resolution of the Dallas County litigation; (3) the trial court erred in
applying principals of res judicata to the Dallas County trial court‘s take-nothing
judgment; (4) the trial court erred in interpreting the Texas Racing Commission‘s
approval of KTAGS as a ―potential‖ transferee of the interplead stock; and (5) the
trial court erred in awarding Austin Jockey Club and KTAGS attorney‘s fees. We
conclude that because the trial court‘s final judgment in this case rests upon a
judgment from another case that has since been reversed, the judgment in this
cause must likewise be reversed.
BACKGROUND
In August 2005, Dallas City Limits2 sought to purchase 100% of the
common stock of Longhorn Downs, Inc., a wholly-owned subsidiary of Austin
Jockey Club. The only asset of Longhorn Downs was a Class 2 Racetrack License
issued by the Texas Racing Commission. To effectuate this purchase, Austin
Jockey Club and Dallas City Limits entered into a stock purchase agreement (the
DCL Stock Purchase Agreement or the Agreement), which required certain
government approvals for the transfer, including the approval of the transfer of the
2
The agreement, dated August 25, 2005, was originally between Austin Jockey Club and
Dallas City Limits, LLC. However, the record reflects that the appellant in this case, Dallas City
Limits Property Co., was the applicant presented to the Racing Commission by Austin Jockey
Club for transfer of the Longhorn Downs stock in September 2009.
2
Longhorn Downs stock by the Racing Commission. Dallas City Limits paid
Austin Jockey Club the purchase price of $1.5 million in several non-refundable
installments. Both Dallas City Limits and Austin Jockey Club were required to use
their reasonable best efforts to effectuate the terms of the Agreement. The parties
set no time limit for closing of the DCL Stock Purchase Agreement; however the
Agreement did contain a time-is-of-the-essence clause. The Agreement provided
that the Longhorn Downs stock would be held in escrow pending closing of the
sale, pursuant to an escrow agreement.
Several delays hampered the closing of the DCL Stock Purchase Agreement.
But on September 15, 2009, Austin Jockey Club presented Dallas City Limits‘
application for transfer of the Longhorn Downs stock at a hearing of the Racing
Commission. At this hearing, the Commission unanimously voted to deny Dallas
City Limits‘ application, citing various deficiencies in the application. The Racing
Commission noted that nothing prevented Dallas City Limits from amending its
application and having it resubmitted by Austin Jockey Club at a later hearing.
On November 6, 2009, Austin Jockey Club wrote to Dallas City Limits,3
stating that it had received a letter dated October 27, 2009, from the Racing
Commission, which it previously had forwarded to Dallas City Limits‘ attorney.
According to this October 27th letter, the Racing Commission had provided Austin
Jockey Club until November 6, 2009, to:
Have a request to establish a racetrack location with any needed updated
information on the racetrack facility;
Provide a general description of the proposed business model to be used by
Austin Jockey Club, including plans for pre-opening simulcasting; and
3
This letter was addressed to Dallas City Limits LLC, its successor Dallas City Limits,
LP, a Texas limited partnership, and its assignee, Dallas City Limits Operating Co., Ltd., the
appellant in this case.
3
Provide a timeline with dates for completing planning, developing, and
construction of the racetrack facility. The timeline was to identify a realistic
schedule for building the facilities and collecting purse revenue in time to
conduct live racing on July 29, 2011. The schedule was to include sufficient
time for Racing Commission personnel review and approval.
Austin Jockey Club stated in its November 6th letter to Dallas City Limits that it
had ―previously demanded‖ that Dallas City Limits ―cure all defaults‖ by 3:00 p.m.
on November 5, 2009. The Club declared in this letter that, because Dallas City
Limits had failed to timely provide the Club information required by the Racing
Commission, Dallas City Limits was in breach of the DCL Stock Purchase
Agreement. Austin Jockey Club further stated that if it ―did not take immediate
and responsive corrective action to mitigate its damages and respond appropriately
to the Texas Racing Commission, the Racing Commission would proceed to
revoke‖ the Longhorn Downs racing license. The Club explained that, due to
Dallas City Limits‘ ―repeated failures‖ to ―accomplish the fundamental tasks
necessary to both effect a transfer of the ownership of and preserve the License
since it undertook that obligation on August 25, 2005,‖ Austin Jockey Club was
entitled to terminate the Agreement. In this letter, the Club notified Dallas City
Limits that the DCL Stock Purchase Agreement was terminated and demanded that
Dallas City Limits ―execute all directives necessary to release the Longhorn
Downs common stock from escrow and return it to Austin Jockey Club.‖
That same day, Austin Jockey Club entered into a second stock purchase
agreement with KTAGS Downs Holding Company, LLC (the KTAGS Agreement)
purporting to transfer the Longhorn Downs stock to KTAGS for the purchase price
of $100.00. The KTAGS Agreement specifically stated that Dallas City Limits
claimed to have continuing rights under the DCL Stock Purchase Agreement and
refused to consent to the release of the Longhorn Downs stock from escrow. The
KTAGS Agreement further provided, ―The rights granted in this instrument are
4
subject to any rights, if any [sic], which may remain in Dallas City Limits or its
successors‖ pursuant to the DCL Stock Purchase Agreement.
This impasse spawned two lawsuits. In November 2009, Dallas City Limits
sued Austin Jockey Club for breach of the DCL Stock Purchase Agreement in the
160th District Court in Dallas County (the Dallas County litigation). Austin
Jockey Club counterclaimed, asserting that Dallas City Limits had breached the
Agreement, which justified its termination. Then, on March 15, 2010, the escrow
agent holding the Longhorn Downs stock, Crady, Jewett & McCulley, L.L.P., filed
this interpleader action in Harris County, pursuant to the terms of the escrow
agreement between Austin Jockey Club and Dallas City Limits.
The trial court originally abated this action because the parties‘ rights to the
interpled stock would be determined in the previously filed Dallas County
litigation. Following a trial in the Dallas County litigation, a jury found that
Austin Jockey Club had breached the DCL Stock Purchase Agreement and that
Dallas City Limits had not breached the Agreement. The trial court‘s judgment in
the Dallas litigation signed January 4, 2011, however, reflects that, after hearing
various motions and responses and considering the jury‘s verdict, the trial court
determined that ―a take nothing judgment should be entered as to all claims and all
parties.‖ Both parties appealed the judgment.
While the appeal was pending before the Dallas Court of Appeals, Austin
Jockey Club sought to lift the abatement of this interpleader action, arguing that
abatement was no longer necessary as the Dallas County litigation resolved the
parties‘ rights. Austin Jockey Club also sought summary judgment against Dallas
City Limits on two grounds: (1) the take-nothing judgment in the Dallas County
litigation meant the DCL Stock Purchase Agreement was terminated and Austin
Jockey Club was therefore entitled to possession of the Longhorn Downs stock in
5
the registry of the court under principals of res judicata; and (2) the Racing
Commission‘s denial of Dallas City Limits‘ application for transfer of the
Longhorn Downs stock meant that ―releasing the stock to [Dallas City Limits]
would be illegal.‖ On June 17, 2011, the trial court granted both Austin Jockey
Club‘s motion to lift the abatement and its motion for summary judgment against
Dallas City Limits. The trial court subsequently entered a series of orders relating
to the interpled stock and severance of parties,4 but ultimately reconsolidated the
principal parties, including Austin Jockey Club and Dallas City Limits, and their
claims remaining after summary judgment.
KTAGS intervened in this action on October 31, 2011, asserting a claim for
declaratory relief that (a) Dallas City Limits has no right, title or interest
whatsoever in the stock of Longhorn Downs or the racetrack license held by it;
(b) the KTAGS Agreement is the only valid agreement related to the purchase of
the Longhorn Downs stock; (c) pursuant to this agreement, KTAGS is entitled to
receive the Longhorn Downs stock; and (d) pursuant to this agreement, Austin
Jockey Club is bound to deliver the Longhorn Downs stock to KTAGS.
Meanwhile, Austin Jockey Club presented KTAGS‘ application to transfer
ownership of the stock to the Racing Commission at a meeting on February 7,
2012. The Racing Commission unanimously approved a 100% change of
ownership of Longhorn Downs to KTAGS.
Because the Dallas County litigation remained on appeal, Dallas City Limits
renewed its request to abate this case pending final resolution of that appeal. The
trial court denied the request and called the remaining matters for trial.
4
The order on summary judgment purported to be a final judgment, but it was not.
Therefore, the trial court signed an amended order granting summary judgment, noting the
interlocutory nature of the relief. The trial court then granted a severance, but later ordered a
reconsolidation. The trial court also entered orders releasing the stock from its registry, but then
ordered it retendered.
6
The trial court conducted a bench trial on May 8, 2012, signed a final
judgment on May 24, 2012, and an amended final judgment on June 8 in favor of
Austin Jockey Club and KTAGS. This judgment provides, in pertinent part:
On May 8, 2012, the above cause came on for non-jury trial on
the remaining claims in this suit, including the declaratory judgment
actions of Austin Jockey Club, Ltd. and KTAGS Downs Holding
Company, LLC. . . .
The Court then heard the evidence adduced by the parties and
the arguments of counsel. Having heard the arguments of counsel, the
Court finds and determines that Austin Jockey Club . . . and KTAGS
. . . are entitled to the declaratory relief sought in their trial pleadings.
The Court accordingly makes the following findings of fact and
conclusions of law and declarations, and awards the following relief:[]
1. The Texas Racing Commission has exclusive jurisdiction over
horse racing licenses in the State of Texas and has exclusive
jurisdiction over the transfer of ownership of the horse racing
license owned by Longhorn Downs, Inc.
2. The racing license held by Longhorn Downs, Inc. is non-
transferable. The only means for transferring the benefits of the
racing license is the transfer of the stock of Longhorn Downs,
Inc.
3. Because the Texas Racing Commission has exclusive
jurisdiction over the transfer of the ownership of Longhorn
Downs, Inc., the stock of Longhorn Downs, Inc. cannot be
transferred absent the Texas Racing Commission‘s approval.
4. On September 15, 2009, the Texas Racing Commission denied
the request of Austin Jockey Club to transfer the stock of
Longhorn Downs, Inc. to Dallas City Limits, and accordingly,
Dallas City Limits cannot lawfully own the stock of Longhorn
Downs, Inc.
5. On February 7, 2012, the Texas Racing Commission approved
the request of Austin Jockey Club to transfer the stock of
Longhorn Downs, Inc. from Austin Jockey Club to KTAGS.
***
7
7. While the Texas Racing Commission has exclusive jurisdiction
over the substantive issue of ownership of the racing license,
the Texas Racing Commission has no mechanism for enforcing
its substantive determination under the facts of this case. The
Texas Racing Commission must rely on this Court to require
the Clerk of this Court to release the stock in order to effectuate
its substantive determination.
8. The Court declares that the [DCL] Stock Purchase Agreement
was terminated on November 6, 2009. Further, the Court
declares that the Stock Purchase Agreement did not continue
after November 6, 2009.
9. The Court has jurisdiction to award relief that effectuates the
substantive determinations of the Texas Racing Commission in
situations where the Commission has approved a request to
transfer stock, as the Commission did here on February 7, 2012.
Accordingly, this Court has jurisdiction to enter orders as
required to effectuate the decisions of the Texas Racing
Commission.
10.In order to effectuate the substantive determination of the Texas
Racing Commission, the Court therefore orders that:
a. Daniel F. Patton of Munsch, Hardt, Kopf & Harr, P.C., 700
Louisiana Street, Suite 4600, Houston, Texas is hereby
appointed Master in Chancery in this proceeding. Mr.
Patton‘s only duty in this matter is to deliver the stock of
Longhorn Downs, Inc. from the registry of this court to
KTAGS to fully effectuate the substantive determination of
the Texas Racing Commission.
b. The Clerk is ORDERED to immediately deliver a certified
copy of this Amended Final Judgment to the Master, Daniel
Patton; and
c. Upon receipt of the stock of Longhorn Downs, Inc. and a
certified copy of this Amended Final Judgment, the Master
Daniel Patton is ORDERED to deliver the stock of
Longhorn Downs, Inc. to KTAGS‘s corporate representative
at 3:00 P.M. on Tuesday, June 12, 2012.5
5
The trial court also awarded trial and conditional appellate fees to both Austin Jockey
Club and KTAGS.
8
(emphasis added).
Dallas City Limits perfected its appeal on June 5, 2012. The statements
excerpted above were incorporated verbatim into findings of fact and conclusions
of law signed by the trial court on July 10, after Dallas City Limits filed a notice of
past due findings and conclusions. On July 11, 2012, the Dallas Court of Appeals
issued an opinion in the Dallas County Litigation reversing and remanding the
Dallas County trial court‘s take-nothing judgment. See Dallas City Limits Prop.
Co., L.P. v. Austin Jockey Club, Ltd., 376 S.W.3d 792, 794–95 (Tex. App.—Dallas
2012, pet. denied).
EFFECT OF THE DALLAS COURT OF APPEALS’ DECISION
In Dallas City Limits‘ first issue, it asserts that the decision of the Dallas
Court of Appeals, reversing and remanding the Dallas County district court‘s take-
nothing judgment, requires reversal of the summary judgment and final judgment
below because these judgments were based entirely on the alleged res judicata
effect of the Dallas County court‘s judgment.
The Texas Supreme Court has explained that ―[a] judgment in a second case
based on the preclusive effects of a prior judgment should not stand if the first
judgment is reversed.‖ Scurlock Oil Co. v. Smithwick, 724 S.W.2d 1, 6 (Tex.
1986); see also Restatement (Second) of Judgments § 16 (1982) (―A judgment
based on an earlier judgment is not nullified automatically by reason of the setting
aside, or reversal on appeal, or other nullification of that earlier judgment; but the
later judgment may be set aside, in appropriate proceedings, with provision of any
suitable restitution of benefits received under it.‖). Comment (c) to the
Restatement provides that, if the later judgment is on appeal and remains
undecided, ―a party may inform the trial or appellate court of the nullification of
9
the earlier judgment and the consequent elimination of the basis for the later
judgment. The court should then normally set aside the later judgment.‖
Restatement (Second) of Judgments § 16 cmt. (c) (1982); see also Watson v.
Houston Indep. Sch. Dist., No. 01-04-01116-CV, 2005 WL 3315254, at *1–2 (Tex.
App.—Houston [1st Dist.] Dec. 8, 2005, no pet.) (mem. op.) (―Because the earlier
judgment, on which HISD relies, has been reversed, the summary judgment
rendered against [Watson] cannot stand.‖). The parties agree that the prior
judgment of the Dallas trial court was reversed by the Dallas Court of Appeals.
Dallas City Limits urges that such reversal is dispositive of this cause. Austin
Jockey Club and KTAGS disagree.
A. The Trial Court’s Judgments Were Based on the Dallas County
Litigation
We first address the argument of Austin Jockey Club and KTAGS that the
Dallas Court of Appeals‘ decision reversing and remanding the Dallas County trial
court‘s take-nothing judgment has no impact on the trial court‘s judgments in this
case. Austin Jockey Club and KTAGS urge that inasmuch as specific performance
will never be available to Dallas City Limits in the Dallas County litigation,
summary judgment is proper against Dallas City Limits in this interpleader action.
Austin Jockey Club‘s and KTAGS‘ argument is rooted in Dallas City
Limits‘ asserted failure to appeal the Dallas County trial court‘s denial of its
requested remedy of specific performance. But in the appeal of the Dallas County
litigation, Dallas City Limits contended the trial court erred (1) by refusing to
allow a requested trial amendment that Austin Jockey Club‘s termination of the
Dallas City Limits Agreement was wrongful and ineffective and (2) by failing to
award Dallas City Limits the remedy of specific performance. Dallas City Limits
Prop. Co., 376 S.W.3d at 794–95. In its conditional cross-appeal, Austin Jockey
Club challenged the trial court‘s denial of its motion for judgment notwithstanding
10
the verdict on two grounds: (1) that there was insufficient evidence to support the
jury‘s finding that Dallas City Limits did not breach the Agreement and (2) that
there was insufficient evidence to support the jury‘s finding that Austin Jockey
Club did breach the Agreement.
The Dallas Court of Appeals reversed the trial court, concluding that Dallas
City Limits‘ requested trial amendment was mandatory. See id. at 798–99. But
because Dallas City Limits sought the trial amendment after the close of evidence,
the Court of Appeals remanded to the trial court with instructions to allow the trial
amendment pleading for declaratory relief and to sign a new judgment based on the
jury‘s findings in light of the amendment.6 Id. at 799. Because of its resolution of
this issue, the Dallas Court of Appeals did not address Dallas City Limits‘ issue
regarding specific performance. Id.
Moreover, Austin Jockey Club did not seek summary judgment in this case
on the basis that Dallas City Limits is not entitled to specific performance. We
cannot entertain this new basis for summary judgment on appeal. See Fed. Deposit
Ins. Corp. v. Link, 361 S.W.3d 602, 609 (Tex. 2012) (―It is settled that ‗[a] court
cannot grant summary judgment on grounds that were not presented.‘‖ (quoting
Johnson v. Brewer & Pritchard, P.C., 73 S.W.3d 193, 204 (Tex. 2002).7
6
We note from an informal submission by Dallas City Limits that the Dallas trial court
has now entered an amended final judgment declaring that ―Austin Jockey Club, Ltd. termination
of the Stock Purchase Agreement was wrongful and ineffective.‖ The final judgment does not
award specific performance. We have no information regarding an appeal from that judgment.
7
See also Tex. R. Civ. P. 166a(c) (instructing that a ―motion for summary judgment shall
state the specific grounds therefor‖); McConnell v. Southside Indep. Sch. Dist., 858 S.W.2d 337,
341 (Tex. 1993) (―[A] motion for summary judgment must itself expressly present the grounds
upon which it is made. A motion must stand or fall on the grounds expressly presented in the
motion.‖).
11
B. Reversal of the Dallas County Litigation Requires Reversal of the Trial
Court’s Judgments
We now turn to Dallas City Limits‘ first issue and address whether the
reversal of the Dallas County trial court‘s take-nothing judgment necessitates a
reversal of the trial court‘s summary judgment and final judgment in this case.
Because the trial court did not specify the basis for the summary judgment, we
look to the motion to determine the possible grounds for it.8
In its motion, Austin Jockey Club asserted it was entitled to release of the
interpled stock on two grounds: (1) summary judgment against Dallas City Limits
is appropriate because of the res judicata effect of the Dallas County trial court‘s
take-nothing judgment against Dallas City Limits; and (2) summary judgment is
appropriate because releasing the stock to Dallas City Limits would be illegal
where, as here, the Racing Commission has ―unequivocally denied‖ Dallas City
Limits‘ application for transfer of the stock and racing license.
The first ground for summary judgment is explicitly tied to the Dallas
County trial court‘s take-nothing judgment, which was reversed on appeal and thus
has been eliminated as a ground for summary judgment. See Scurlock Oil Co., 724
S.W.2d at 6; Watson, 2005 WL 3315254, at *2. The second ground is also entirely
dependent upon the take-nothing judgment and Austin Jockey Club‘s interpretation
of the meaning of that judgment. Specifically, by its second ground Austin Jockey
Club urged that releasing the stock to Dallas City Limits would be illegal because
Dallas City Limits was not approved by the Racing Commission.
Austin Jockey Club reasons that Dallas City Limits was not approved by the
Racing Commission, did not appeal that decision, and can never be approved
8
See Tex. R. Civ. P. 166a(c). We do so notwithstanding the trial court‘s statement on the
record that res judicata formed the sole basis for its decision to grant summary judgment.
12
because the DCL Stock Purchase Agreement is terminated; thus, it would be illegal
to transfer the stock to a party who cannot ever be approved. In short, Austin
Jockey Club‘s argument rests upon the premise that the take-nothing judgment
meant the DCL Stock Purchase Agreement was dead and with it died Dallas City
Limits‘ chances of being approved by the Racing Commission. Even if the take-
nothing judgment actually meant the DCL Stock Purchase Agreement was
terminated, that judgment no longer exists. Neither the Racing Commission‘s
―unequivocal denial‖ of Dallas City Limits‘ initial application—which explicitly
invited a cure—nor the DCL Stock Purchase Agreement itself forecloses
subsequent application.9 Thus, this record will not support an as-a-matter-of-law
determination that transfer of the stock to Dallas City Limits would be illegal.
As such, the trial court‘s summary judgment cannot rest upon the second
urged ground. We thus conclude that both grounds asserted for summary judgment
have been eliminated by reversal of the Dallas County district court‘s take-nothing
judgment. See Scurlock Oil Co., 724 S.W.2d at 6; Watson, 2005 WL 3315254, at
*2.
9
Amicus curiae Texas Racing Commission urges this Court to affirm the judgment of the
trial court in recognition of the Racing Commission‘s exclusive jurisdiction. As noted above, the
trial court entered a finding that the Texas Racing Commission has exclusive jurisdiction over
horse racing licenses in the State of Texas and has exclusive jurisdiction over the transfer of
ownership of the horse racing license owned by Longhorn Downs, Inc. This finding post-dates
the trial court‘s order granting summary judgment against Dallas City Limits. The Racing
Commission‘s exclusive jurisdiction over licenses was not a basis for Austin Jockey Club‘s
motion for summary judgment. As such, even if the Racing Commission‘s exclusive jurisdiction
is somehow dispositive of the issues in this or the Dallas County litigation, it cannot be
dispositive for the first time on appeal. Moreover, the Dallas Court of Appeals suggests that the
Racing Commission‘s jurisdiction over licenses ―has no direct bearing on [Dallas City Limits]‘s
contractual right to purchase the Stock.‖ Dallas City Limits Prop. Co., L.P., 376 S.W.3d at 796.
Nothing in the Racing Commission‘s approval of the stock transfer to KTAGS purports to
supersede the parties‘ respective contract rights or indicates that the Commission will no longer
consider an application for approval of a stock transfer to Dallas City Limits. See Tex. Rev. Civ.
Stat. Ann. art. 179e, § 6.13(b) (―Each transaction that involves an acquisition or a transfer of a
pecuniary interest in the association must receive prior approval from the commission.‖).
13
Turning to the trial court‘s final judgment, appellees and amicus curiae, the
Texas Racing Commission, urge this court to disregard the summary judgment and
look solely to the final judgment as a basis to affirm. We are, however, unable to
isolate the trial court‘s final judgment from the error we find in the summary
judgment because even the final judgment was based on the preclusive effects of
the Dallas County litigation. First, we emphasize that it is undisputed that, on this
record, Dallas City Limits‘ competing claim to the stock in the interpleader action
was adjudicated on summary judgment before KTAGS had any colorable claim to
the stock and before the Racing Commission approved KTAGS application. Thus,
when the trial court called the remaining claims for bench trial, Dallas City Limits
had no burden to establish its right to the stock—it had already lost, so it was no
longer a claimant. The fact that Austin Jockey Club or KTAGS or the Racing
Commission as a nonparty might have provided the trial court with an additional
reason Dallas City Limits could have lost is of no moment; Dallas City Limits
couldn‘t lose on the merits of its claim again. Summary judgments may not be
bolstered, after the fact, on grounds not presented in the motion. See McConnell v.
Southside Indep. Sch. Dist., 858 S.W.2d 337, 341 (Tex. 1993).
Second, according to its live pleadings at the time of the bench trial, Austin
Jockey Club sought a declaration
that the take-nothing judgment in Dallas County was a final judgment
for purposes of res judicata, that the [Dallas City Limits Agreement] is
terminated, that Austin Jockey Club is not in breach of the [Dallas
City Limits Agreement] by engaging in negotiations to sell the capital
stock of Longhorn Downs, Inc. to someone other than Dallas City
Limits, and that Austin Jockey Club, which has been given possession
of the capital stock of Longhorn Downs, Inc. is free to sell, transfer,
assign, or encumber the capital stock of Longhorn Downs, Inc.
14
All of these requested declarations are either intimately tied to the Dallas County
litigation or to the trial court‘s prior summary judgment, which was based on the
Dallas County litigation. Moreover, at the time Austin Jockey Club sought these
declarations and at the time the trial court conducted a bench trial on the remaining
claims, Dallas City Limits‘ claim to the interpled stock had been adjudicated.
Accordingly, the declarations the trial court made in favor of Austin Jockey Club
as well as the final judgment in favor of Austin Jockey Club and KTAGS were
dependent upon the preclusive effect of the Dallas County trial court‘s take-
nothing judgment, which has been reversed on appeal. See Scurlock Oil Co., 724
S.W.2d at 6; Watson, 2005 WL 3315254, at *2.
We conclude that the summary judgment and final judgment in this case are
based on the preclusive effect of the Dallas County court‘s judgment. This
judgment has been reversed on appeal. We therefore conclude that the judgment in
this case should likewise be reversed in its entirety. See Scurlock Oil Co., 724
S.W.2d at 6; Watson, 2005 WL 3315254, at *2. We sustain Dallas City Limits‘
first issue.
CONCLUSION
Because we have sustained Dallas City Limits‘ first issue, our appellate rules
forbid an advisory opinion on the remaining issues unnecessary to this disposition,
15
including abatement. See Tex. R. App. P. 47.1. Having sustained Dallas City
Limits‘ first issue, we reverse and remand for proceedings consistent with this
opinion.
/s/ Sharon McCally
Justice
Panel consists of Justices McCally, Busby, and Donovan.
16