In Re: Ranger Alternative Management (GP), LLC v. the State of Texas ( 2024 )

CONDITIONALLY GRANT and Opinion Filed March 18, 2024
S In The
Court of Appeals
Fifth District of Texas at Dallas
No. 05-24-00064-CV
IN RE RANGER ALTERNATIVE MANAGEMENT (GP), LLC, Relator
Original Proceeding from the 134th Judicial District Court
Dallas County, Texas
Trial Court Cause No. DC-22-14668
MEMORANDUM OPINION
Before Justices Reichek, Goldstein, and Kennedy
Opinion by Justice Reichek
In this mandamus proceeding, relator contends the trial court granted real
parties’ Motion for Scheduling Order and Trial Date, issued a scheduling order, and
set the case for trial after its plenary power had expired. We agree. Accordingly, we
conditionally grant relator’s petition for writ of mandamus.
BACKGROUND
Relator, Ranger Alternative Management (GP), LLC, is the plaintiff in the
underlying proceeding. Ranger sued its former employee, Wesley McKnight, and
his wife, Tracie McKnight, asserting breach of contract claims arising out of a
settlement agreement to which the McKnights were both signatories, and a separate
breach of contract claim against Wesley based on his employment agreement.
Ranger generally alleged that the McKnights breached the confidentiality provisions
contained therein by failing to prevent the disclosure of confidential and privileged
information in response to two sets of subpoenas. Ranger sought its reasonable
attorneys’ fees, expenses, and court costs based on the settlement agreement, which
provided that a prevailing party “shall be entitled to recover its reasonable attorneys’
fees, expenses, and court costs incurred in enforcing its rights under this Agreement”
as well as Chapter 38 of the Texas Civil Practice and Remedies Code. (Emphasis
added.) In their answer, the McKnights asserted a general denial and affirmative
defenses, and in their prayer they requested “all costs and reasonable and necessary
attorneys’ fees in defending this action,” and all other relief to which they may be
justly entitled. (Emphasis added.)
On July 6, 2023, Ranger filed a notice of nonsuit, nonsuiting without prejudice
all claims alleged in its petition against the McKnights. On July 12, 2023, the trial
court signed an order granting Ranger’s notice of nonsuit without prejudice. In the
order, the trial court referred to the notice of nonsuit and then stated “[i]t is therefore
ORDERED, ADJUDGED and DECREED that Plaintiff’s Notice of Nonsuit as to
Defendants is granted without prejudice.” On August 10, 2023, the McKnights filed
a motion to modify the judgment pursuant to Texas Rule of Civil Procedure 329b(g),
noting that the trial court’s docket sheet reflected that the case was closed, but their
request for attorneys’ fees was an affirmative claim for relief that remained pending.
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They asserted that the nonsuit order was not a final judgment and asked the trial
court to reform the judgment to reflect that the case remained pending. On August
18, 2023, the McKnights filed an “Original Counterclaim and Third-Party
Complaint” which asserts a claim for attorneys’ fees, alleging the attorneys’ fees
language in the settlement agreement entitles them to their fees “in connection with
the enforcement of the Settlement Agreement.”
Meanwhile, the trial court did not rule on the McKnights’ motion to modify
the judgment, which was overruled by operation of law on September 25, 2023. See
TEX. R. CIV. P. 329b(c). On December 13, 2023, the McKnights filed a motion for
scheduling order and trial date. Ranger filed a response, arguing the trial court’s
plenary power had expired. On January 11, 2024, the trial court granted the motion
and subsequently issued a second amended scheduling order and set the case for
trial.
Ranger sought mandamus review and a stay of the trial court proceedings. In
this original proceeding, Ranger argues the order granting its nonsuit was a final
judgment so by the time the trial court granted the McKnights’ motion for scheduling
order and trial date, issued its second amended scheduling order, and set the case for
trial, the trial court lacked plenary power to do so. We stayed all proceedings in the
trial court pending resolution of this original proceeding.
APPLICABLE LAW
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Mandamus will issue if Ranger establishes a clear abuse of discretion for
which there is no adequate remedy by appeal. See In re Prudential Ins. Co., 148
S.W.3d 124, 135–36 (Tex. 2004) (orig. proceeding). A trial court abuses its
discretion when it issues a void order, In re Elavacity, LLC, No. 05-18-00135-CV,
2018 WL 915031, at *1 (Tex. App.—Dallas Feb. 16, 2018, orig. proceeding) (mem.
op.), and in such a case a party need not show that it lacks an adequate remedy by
appeal. In re Sw. Bell Tel. Co., 35 S.W.3d 602, 605 (Tex. 2000) (orig. proceeding)
(per curiam). Generally, judicial action taken after plenary power expires is void.
In re Saving Grace #2, LLC, No. 05-23-00745-CV, 2023 WL 6783511, at *3 (Tex.
App.—Dallas Oct. 13, 2023, orig. proceeding) (mem. op.); see TEX. R. CIV. P.
329b(f).
DISCUSSION
The McKnights’ timely–filed motion to modify the judgment was overruled
by operation of law on September 25, 2023. See TEX. R. CIV. P. 329b(c). If the July
12, 2023 order granting Ranger’s nonsuit was a final judgment, the trial court’s
plenary power expired on October 25, 2023,1 and the trial court was without
1
A trial court retains jurisdiction over a cause for thirty days after ordering a nonsuit. TEX. R.
CIV. P. 329b(d). A motion to modify the judgment during the initial thirty-day period will extend
the trial court’s plenary power for a limited period of time, the amount of which depends on
whether the court determines the motion or it is overruled by operation of law. TEX. R. CIV. P.
329b(c), (d), and (g). Such motion is overruled by operation of law if it is not determined by
written order signed within seventy-five days after the judgment was signed. TEX. R. CIV. P.
329b(c). Plenary power extends until thirty days after all timely-filed post-trial motions are
overruled, either by written and signed order or by operation of law, whichever occurs first. TEX.
R. CIV. P. 329b(e). The trial court signed the order granting Ranger’s nonsuit on July 12, 2023.
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jurisdiction to grant the McKnights’ motion for scheduling order and trial date, issue
the second amended scheduling order, and set the case for trial. See Saving Grace,
2023 WL 6783511 at *3. As follows, we conclude the order granting nonsuit was a
final judgment.
A judgment without a trial is final if it either “actually disposes of every
pending claim and party” or “clearly and unequivocally states that it finally disposes
of all claims and parties, even if it does not actually do so.” Patel v. Nations
Renovations, LLC, 661 S.W.3d 151, 154 (Tex. 2023) (per curiam) (citations
omitted); see also Bella Palma, LLC v. Young, 601 S.W.3d 799, 801 (Tex. 2020)
(per curiam) (citing Lehmann v. Har-Con Corp., 39 S.W.3d 191, 205 (Tex. 2001)).
Here, the trial court’s July 12, 2023 nonsuit order does not contain any indicia of
finality so we must look to the record to determine if the order disposed of the entire
case. See Patel, 661 S.W.3d at 154. The only pleading the McKnights had on file at
the time Ranger filed its notice of nonsuit was their original answer. They did not
file a formal counterclaim in that pleading, and while they prayed for their attorneys’
fees “in defending this action” they did not cite any legal basis for this request.
While a dismissal pursuant to Rule 162 “shall not prejudice the right of an adverse
party to be heard on a pending claim for affirmative relief,” TEX. R. CIV. P. 162, “[t]o
The McKnights filed a motion to modify the judgment within thirty days, and the motion was
overruled by operation of law seventy-five days after the nonsuit order, on September 25, 2023.
If the July 12 order was a final judgment, the trial court’s plenary power expired thirty days later,
on October 25, 2023.
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qualify as a claim for affirmative relief, the defendant must allege a cause of action,
independent of plaintiff’s claims, on which he could recover compensation or relief
even if the plaintiff abandons or fails to establish his cause of action.” Jackson v.
Ali Zaher Enters., LLC, No. 05-18-00288-CV, 2019 WL 698019, at *2 (Tex. App.—
Dallas Feb. 20, 2019, no pet.) (mem. op.). While an affirmative claim, stated in an
answer, for recovery of attorneys’ fees for preparation and prosecution of a defense
constitutes a claim for affirmative relief for the purpose of Rule 162, “[a] general
prayer for relief will not support an award for attorney’s fees because it is a request
for affirmative relief that must be supported by the associated pleading or
pleadings.” Id. In AIX Specialty Insurance Co., we held that “[a] request for
attorney’s fees qualifies as a request for affirmative relief when asserted with an
independent claim for relief.” AIX Specialty Ins. Co. v. Shiwach, No. 05-18-01050-
CV, 2019 WL 6888515, at *8 (Tex. App.—Dallas Dec. 18, 2019, pet. denied) (mem.
op.). In that case, the defendant alleged affirmative defenses in its answer and then
included in its prayer for relief a request for its reasonable attorneys’ fees “for
responding to and defending the allegations raised against it.” Id. We concluded that
the defendant “asserted no counterclaims” and that the defendant’s request for
attorneys’ fees and its affirmative defenses were dependent on the plaintiff’s claims
and thus did not assert any “claims for affirmative relief.” Id. Here, too, the
McKnights generally prayed for attorneys’ fees “in defending this action” but did
not cite any legal or contractual basis for their recovery of attorneys’ fees. They also
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did not allege any facts that we could construe as a counterclaim. Their answer did
not assert any independent basis for recovery of their attorneys’ fees.
As the McKnights point out, though, we must also look at whether the
allegations in Ranger’s petition provide the missing substance to cure the omissions
in the McKnights’ answer. See Jackson, 2019 WL 698019, at *2. We conclude they
do not. The McKnights assert that their request for attorneys’ fees is an affirmative
claim because the settlement agreement provided that the prevailing party is entitled
to recover its reasonable attorneys’ fees. They contend that Ranger judicially
admitted in its petition that the settlement agreement entitles a “prevailing party” in
a contract dispute to their reasonable attorneys’ fees. Thus, the McKnights argue,
they were not required to plead a breach of contract or the details of the settlement
agreement to prevail and recover their fees. We disagree.
First, this argument misconstrues Ranger’s petition and the language of the
settlement agreement. The settlement agreement described in Ranger’s petition does
not authorize a defendant to recover attorneys’ fees if it prevails in defending against
a contract dispute. Rather, Ranger alleged that “the parties agreed that a prevailing
party ‘shall be entitled to recover its reasonable attorneys’ fees, expenses, and court
costs incurred in enforcing its rights under this Agreement.’” [Emphasis added].
Thus, the settlement agreement Ranger described authorizes an award of attorneys’
fees only to a claimant who prevails in enforcing the settlement agreement—not to
a defendant who prevails in defending against such a claim. In other words, the
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settlement agreement alleged in Ranger’s original petition is not a general
“prevailing party” provision; instead, it authorizes a fee award only to a prevailing
claimant. The McKnights do not suggest in their answer that they were entitled to
attorneys’ fees for enforcing the settlement agreement; on the contrary they alleged
in their answer that they wanted their “costs and reasonable and necessary attorneys’
fees in defending this action.” [Emphasis added.] The McKnights do not explain
how defending against Ranger’s suit is tantamount to enforcing their rights under
the settlement agreement.2
The McKnights cite several cases to support their position, but most are
distinguishable on grounds that the claims before the trial court involved a statute
that provided the defendant with an independent right to seek attorneys’ fees even if
the plaintiff dismissed its own claims.3 But the McKnights do not assert any similar
2
While the McKnights did allege in their answer the affirmative defense of prior material
breach, they did so only to establish an excuse for their own alleged breach, and they did not plead
any facts to support that defense. Regardless, they did not pray for fees to enforce their rights under
the settlement agreement. That they knew how to do so is demonstrated by the counterclaim they
filed in August 2023, after the nonsuit was granted, wherein they expressly prayed for fees “in
connection with the ‘enforcement’ of the Settlement Agreement.”
3
E.g., Kelsall v. Haisten, 564 S.W.3d 157, 163–64 (Tex. App.—Houston [1st Dist.] 2018, no
pet.) (involving § 156.005 of the family code, which authorizes a trial court to assess attorneys’
fees as costs when a party files a frivolous modification suit); Bacon Tomsons, Ltd. v. Chrisjo
Energy, Inc., No. 01-15-00305-CV, 2016 WL 4217254, at *10 (Tex. App.—Houston [1st Dist.]
Aug. 9, 2016, no pet.) (mem. op.) (involving §134.001(b) of the Texas Civil Practice and Remedies
Code, the Texas Theft Liability Act, which authorizes attorneys’ fees to “[e]ach person who
prevails” in a suit brought under that statute); Dean Foods Co. v. Anderson, 178 S.W.3d 449, 453
(Tex. App.—Amarillo 2005, pet. denied) (involving § 408.221(c) of the labor code, which makes
an insurance carrier who seeks judicial review of a final decision of an appeals panel liable for
reasonable and necessary attorneys’ fees incurred by a claimant as a result of the appeal if the
claimant prevails); Reyes v. Fraga, No. 14-21-00036-CV, 2022 WL 3973544, at *1 (Tex. App.—
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independent right to recover their attorneys’ fees. The McKnights also rely on In re
Frost National Bank, 103 S.W.3d 647, 650 (Tex. App.—Corpus Christi–Edinburg
2003, orig. proceeding [mand. denied]), where the appellate court concluded that a
general prayer for attorneys’ fees in an answer constituted a counterclaim that
survived an oral nonsuit. But the opinion does not explain the nature of the plaintiff’s
suit or if there was anything in the answer that would otherwise provide a factual or
legal basis for the request for fees that was independent of the plaintiff’s claims.
There was also a motion for sanctions filed between the oral nonsuit and entry of the
nonsuit order, and it is not clear from the opinion if this played a role in the court’s
decision. Thus, we do not find this opinion instructive. The McKnights also cite ECC
Parkway Joint Venture v. Baldwin, 765 S.W.2d 504, 514 (Tex. App.—Dallas 1989,
writ denied), in support of their position, where we stated generally, “[a] claim for
attorney’s fees is a claim for affirmative relief.” But this Court was not addressing
whether a general prayer for attorneys’ fees is a pending claim for affirmative relief
that survives a nonsuit under rule 162. Rather, we were determining whether a cross-
Houston [14th Dist.] Sept. 1, 2022, no pet.) (mem. op.) (involving request for attorneys’ fees based
on a suit being filed frivolously or for harassment); Bailey v. Smith, 581 S.W.3d 374, 386 (Tex.
App.—Austin 2019, pet. denied) (involving request for fees under the Uniform Declaratory
Judgments Act, Texas Civil Practice and Remedies Code § 37.009, which permits the trial court
to award costs and fees “as are equitable and just”); Nolte v. Flournoy, 348 S.W.3d 262, 267–68
(Tex. App.—Texarkana 2011, pet. denied) (involving allegations that a claim was frivolous and
filed for an improper purpose and a prayer for sanctions); Falls Cnty. v. Perkins & Cullum, 798
S.W.2d 868, 870–71 (Tex. App.—Fort Worth 1990, no writ) (involving a request for attorneys’
fees in an answer to a petition asserting a claim under the Uniform Declaratory Judgments Act).
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claim for declaratory judgment to recover attorneys’ fees was barred by limitations.
Id. at 513.
Accordingly, we conclude that the McKnights did not have a pending claim
for affirmative relief when Ranger filed its notice of nonsuit. Thus, the nonsuit order
disposed of the entire case and is a final judgment. As a result the trial court abused
its discretion in January 2024 when it entered a scheduling order and set a trial date
months after expiration of its plenary power.
CONCLUSION
Ranger has shown the trial court abused its discretion by issuing void orders,
and because these orders are void, Ranger is relieved of showing it lacks an adequate
remedy by appeal. We therefore conditionally grant Ranger’s petition for writ of
mandamus and direct the trial court to vacate (1) its order granting the McKnights’
Motion for Scheduling Order and Trial Date, and (2) the Second Amended
Scheduling Order. The writ will issue only if the trial court fails to do so.
/Amanda L. Reichek/
AMANDA L. REICHEK
240064F.P05 JUSTICE
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