Court of Appeals of Texas, Second District, Fort Worth
IN RE HAPPY STATE BANK AND SCOTTY LINDLEY RELATORS
ORIGINAL PROCEEDING TRIAL COURT NO. CV16-0134
SUDDERTH, C.J.; GABRIEL and PITTMAN, JJ.
MEMORANDUM OPINION 
mandamus proceeding, we are asked to determine dominant
jurisdiction and venue regarding two suits pending in Parker
and Taylor Counties. The Parker County trial court determined
that neither dominant jurisdiction nor statutory venue
provisions required abatement or transfer of the Parker
County case to Taylor County. We conclude that the two suits
are inherently interrelated, requiring abatement of the
second-filed, Parker County suit based on dominant
procedural histories of the underlying suits are lengthy and
detailed, which is true in most cases involving dominant
jurisdiction. Our recitation of these histories is
necessarily protracted to place our holding in the
Indebtedness and Guaranty Agreements
December 30, 2013, relator Happy State Bank (HSB) and real
party in interest LeClair Operating, L.L.C. entered into
a loan agreement under which HSB loaned LeClair $2.3 million
and LeClair signed a promissory note in favor of HSB,
providing that the note was secured by a deed of trust
"on real property located in Taylor County, State of
Texas." The note contained a choice-of-venue paragraph,
stating that LeClair agreed, upon HSB's request, "to
submit to the jurisdiction of the court of Taylor
County" if "there is a lawsuit" and "if
the transaction evidenced by this Note occurred in Taylor
County." Tony Robinson, the "Managing Member and
President" of LeClair, signed the promissory note. That
same day several guarantors signed guaranty agreements under
which they agreed to be jointly and severally liable for
LeClair's repayment obligations under the note, including
any renewals, extensions, or modifications of LeClair's
debt. Each guaranty agreement included a choice-of-venue
provision: "[T]he Guarantor hereby unconditionally
submits and agrees to the jurisdiction of any appropriate
Court in Taylor County, Texas, wherein venue hereunder shall
exclusively lie." The initial guarantors for
LeClair's note were Tony Robinson; Lori Robinson; David
Deison; Nancy Deison; J. Lyndell Kirkley; Bart Dale; Jennifer
Dale; the Deisons' company Blest, Ltd.;
Kirkley's company Sevens Corporation; and the Dales'
company Bart Dale Oil & Gas, LP (BDOG).
March 24, 2014, LeClair and HSB entered into an amendment to
the loan agreement, allowing LeClair to transfer some of its
securing assets to two of its subsidiary companies-Petrol
Services & Plugging, L.L.C. and Petrolchem, L.L.C.-and
recognizing that the subsidiaries granted HSB security
interests in those assets to secure the note. Relator Scotty
Lindley, the "President Abilene Market, " signed
the amendment on behalf of HSB. That same day, Petrol
Services and Petrolchem executed a guaranty agreement in
favor of HSB regarding LeClair's debt. As did each of the
previous agreements, venue was contractually and
"exclusively" set in Taylor County. Kirkley, Tony
Robinson, David Deison, and Bart Dale signed the agreement as
"Manager[s]" of Petrol Services and Petrolchem.
31, 2014, LeClair borrowed an additional $56, 000 from HSB to
purchase a truck, which HSB acquired a security interest in.
Tony Robinson signed the promissory note and the security
agreement on behalf of LeClair.
defaulted on its repayment obligations under both notes, and
HSB accelerated the maturity of the indebtedness as permitted
under the terms of the notes. HSB demanded payment from
LeClair's guarantors to no avail.
February 5, 2016, LeClair and King Goen, LLC-another company
Tony Robinson was a "member" of-filed suit against
Tony Robinson and TSW Energy, LLC in Parker County. LeClair
and King Goen alleged that "Tony Robinson and his family
are owners of TSW Energy, LLC." LeClair and King Goen
asserted that Tony Robinson and TSW misappropriated entity
property, slandered their other members, and refused to turn
over operations of wells owned by King Goen. Other than a
reference to a certificate of deposit held by HSB as security
for the disputed wells, LeClair and King Goen do not mention
any actions or inactions by HSB or Lindley or the specific
promissory notes in their claims. As characterized by
HSB and Lindley, this suit was an "inter-company
October 10, 2016, LeClair and King Goen amended their
petition to add David Deison, Bart Dale, and Kirkley as
plaintiffs but did not amend the substance of their claims.
Based on an arbitration clause contained in King Goen's
membership agreement, Tony Robinson and TSW Energy moved to
compel arbitration. In response, the Parker County plaintiffs
summarized their claims, which again did not include any
mention of HSB, Lindley, or the enforceability of the notes
and guaranties. The trial court entered an agreed order
granting the motion and sent the case to mediation and, if
unsuccessful, to arbitration.
February 1, 2017, the Parker County plaintiffs amended their
petition to add BDOG and Sevens Corporation as plaintiffs,
but did not add any substantive claims. All parties,
including newly added plaintiffs BDOG and Sevens Corporation,
signed a letter agreement on February 21, 2017, recognizing
that the previously ordered arbitration had resulted in
"a comprehensive resolution of all of the disputes
between and among the various parties." Although the
letter agreement requested that the trial court enter an
"Agreed Final Arbitration Award, " the record
before this court does not reflect that the trial court has
entered such an award.
1, 2017, HSB filed suit against the Robinsons, the Deisons,
Kirkley, the Dales, Blest, Sevens Corporation, and BDOG-the
majority of LeClair's guarantors-seeking recovery based
on those guarantors' breaches of their guaranty
agreements. HSB further alleged that venue was proper in
Taylor County based on the venue provision in each guaranty
agreement, citing the general venue rule and the permissive
venue statute applicable to contracts that are to be
performed in a particular county. See Tex. Civ.
Prac. & Rem. Code Ann. §§ 15.002, 15.035(a)
2, 2017, the Deisons, Kirkley, the Dales, Blest, Sevens
Corporation, and BDOG-many of the guarantors of LeClair's
debts-filed counterclaims against HSB, cross-claims against
the Robinsons, and third-party claims against Lindley,
alleging fraud and civil conspiracy based on HSB's, the
Robinsons', and Lindley's misrepresentations
surrounding the execution of the guaranty agreements.
See Tex. R. Civ. P. 38(a), 97(a), (e). They
requested that the guaranties be "rescind[ed]."
days after the guarantors filed their counterclaims,
cross-claims, and third-party claims in Taylor County, the
Parker County plaintiffs amended their petition for a third
time to add Nancy Deison, Jennifer Dale, and Blest as
plaintiffs, which had all been named as defendants in Taylor
County. In the same amended petition, LeClair filed claims
against Lindley, HSB, Lori Robinson, and the "other
Defendants"-Tony Robinson, TSW Energy, and TSW Oil &
Gas-for fraud and civil conspiracy and requested that the
trial court "rescind the Promissory Notes."
filed a plea in abatement and an alternative motion to
transfer venue. In its plea, HSB asserted that the Taylor
County suit was the first-filed suit regarding the
enforcement of the notes and guaranty agreements held by HSB
and, therefore, acquired dominant jurisdiction over
LeClair's claims filed in Parker County. In its
alternative venue motion, HSB argued that mandatory venue
over LeClair's claims filed in Parker County lay in
Taylor County as provided in the guaranty agreements, which
were major transactions that specified venue in Taylor
County. See Tex. Civ. Prac. & Rem. Code Ann.
§ 15.020(b), (c)(2) (West 2017). Lindley filed a motion
to transfer venue and alternative plea in abatement, adopting
HSB's venue and plea-in-abatement arguments. The Parker
County plaintiffs amended their petition for a fourth time
after HSB and Lindley sought abatement or transfer of
LeClair's claims, but they added no new parties or
distinct claims. No party argues that the guarantor
plaintiffs' claims in Parker County-the inter-company
claims-were subject to the pleas in abatement or motions to
transfer. Indeed, HSB and Lindley moved for abatement or
transfer of only "LeClair's claims" brought
December 11, 2017, the Parker County trial court entered an
order denying HSB's and Lindley's pleas in abatement
and motions to transfer venue.HSB and Lindley now seek
mandamus relief from the trial court's denials.
STANDARD FOR RELIEF
relief is justified only if the trial court committed a clear
abuse of discretion and the relator has no adequate remedy at
law. See In re Coppola, 535 S.W.3d 506, 508 (Tex.
2017) (orig. proceeding).
Adequate Remedy at Law
trial court clearly abuses its discretion by denying a plea
in abatement involving dominant jurisdiction, the appropriate
remedy is by mandamus. See In re Red Dot Bldg. Sys.,
Inc., 504 S.W.3d 320, 322 (Tex. 2016) (orig.
proceeding); In re J.B. Hunt Transp., Inc., 492
S.W.3d 287, 299-300 (Tex. 2016) (orig. proceeding);
Curtis v. Gibbs, 511 S.W.2d 263, 267 (Tex. 1974)
(orig. proceeding); Dall. Fire Ins. Co. v. Davis,
893 S.W.2d 288, 292 (Tex. App.-Fort Worth 1995, orig.
proceeding). Similarly, mandamus is the proper remedy if the
trial court clearly abuses its discretion by denying a motion
to enforce a contractual, mandatory venue-selection clause.
See Tex. Civ. Prac. & Rem. Code Ann. §
15.0642 (West 2017); In re Laibe Corp., 307 S.W.3d
314, 316 (Tex. 2010) (orig. proceeding); In re Lyon Fin.
Servs., Inc., 257 S.W.3d 228, 231 (Tex. 2008) (orig.
proceeding). See generally In re Masonite Corp., 997
S.W.2d 194, 197 (Tex. 1999) (recognizing venue rulings
generally not reviewable by mandamus unless the trial court
disregarded guiding principles of law, rendering mandamus
appropriate remedy). Thus, we need only determine if the
trial court clearly abused its discretion by denying
HSB's and Lindley's pleas in abatement based on
dominant jurisdiction or by denying their motions to transfer
Clear Abuse of Discretion
court clearly abuses its discretion if its decision is so
arbitrary or unreasonable that it amounts to a clear and
prejudicial error of law or if it incorrectly analyzes or
applies the law. In re Olshan Found. Repair Co., 328
S.W.3d 883, 888 (Tex. 2010) (orig. proceeding). We review the
trial court's application of the law de novo. See
Walker v. Packer, 827 S.W.2d 833, 840 (Tex. 1992) (orig.
proceeding) "A trial court has no 'discretion'
in determining what the law is or applying the law to the
facts." Id. As such, "[w]e must . . .
carefully establish the controlling legal principles at issue
in this case." J.B. Hunt, 492 S.W.3d at 294. We
conclude, based on controlling dominant-jurisdiction
precepts, that the trial court clearly abused its discretion
by denying HSB's and Lindley's pleas in abatement.
Lindley, and LeClair recognize that the trial court's
dominant-jurisdiction determination was governed by a
two-part inquiry: (1) whether there was an inherent
interrelation between the subject matter of the Taylor and
Parker County suits and (2) if so, whether an exception to
dominant jurisdiction applied. See id. at 292, 294,
298. Of course, their positions diverge regarding the answers
to these questions.
the court in which suit is first filed acquires dominant
jurisdiction to the exclusion of other coordinate courts.
Id. at 294. "In instances where inherently
interrelated suits are pending in two counties, and venue is
proper in either county,  the court in which suit was first
filed acquires dominant jurisdiction." Red Dot,
504 S.W.3d at 322. Thus, when two suits are inherently
interrelated, the trial court is required to abate the
second-filed suit. Id.; J.B. Hunt, 492
S.W.3d at 294. To determine if claims are inherently
interrelated, triggering dominant jurisdiction, we are guided
by the compulsory-counterclaim rule. See J.B. Hunt,
492 S.W.3d at 292-93; see also Tex. R. Civ. P.
97(a). A counterclaim is compulsory if the claim: (1) is
within the jurisdiction of the court, (2) was not the subject
of a pending action when the original suit was commenced, (3)
is mature and owned by the defending party at the time the
pleading is filed, (3) arose out of the same transaction or
occurrence that is the subject matter of the opposing
party's claim, (4) is against an opposing party in the
same capacity, and (5) does not require the presence of third
parties over whom the court cannot acquire jurisdiction.
See Tex. R. Civ. P. 97(a); J.B. Hunt, 492
S.W.3d at 292-93.
claims are interrelated and subject to a plea in abatement if
the first-filed claims are not the subject of a pending
action at the time the pleading raising those claims is filed
and if the claims meet the other dictates of rule 97(a).
Tex.R.Civ.P. 97(a); see J.B. Hunt, 492 S.W.3d at 293
("[A] counterclaim is compulsory if, in addition to Rule
97(a)'s other requirements, it was not the subject of a
pending action when the original suit was commenced.").
LeClair asserts that its claims against HSB and Lindley are
not compulsory essentially because LeClair is not a named
party to the Taylor County suit and because the Taylor County
court does not have personal jurisdiction over LeClair or
subject-matter jurisdiction over the dispute between LeClair,
HSB, and Lindley.
following reasons, we conclude that LeClair's Parker
County claims are compulsory counterclaims and, thus, are
inherently interrelated to the first-filed, Taylor County
claims. See, e.g., Cleveland v. Ward, 285
S.W. 1063, 1066 (Tex. 1926), disapproved of on other
grounds by Walker, 827 S.W.2d at 842; Lamar Sav.
Ass'n v. White, 731 S.W.2d 715, 716 (Tex.
App.-Houston [1st Dist.] 1987, orig. proceeding) (quoting
V.D. Anderson Co. v. Young, 101 S.W.2d 798, 800-01
(Tex. 1937)). See generally J.B. Hunt, 492 S.W.3d at
292-93 (discussing rule 97(a) requirements for counterclaim
to be considered compulsory).
within the jurisdiction of ...