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Staley v. Crossley

Court of Appeals of Texas, Fifth District, Dallas

May 17, 2018


          On Appeal from Probate Court No. 1 Collin County, Texas Trial Court Cause No. PB1-1828-2016

          Before Justices Lang, Brown, and Whitehill



         In this interlocutory appeal, appellants Joe H. Staley, Jr. ("Staley") and Staley Business Partnership Limited ("SBP" or "the partnership") contend in a single issue that the trial court erred by denying their motion to compel arbitration. We decide appellants' issue against them. The trial court's order is affirmed.


         In 1993, Staley and his father, Joe H. Staley, Sr. ("Staley Sr."), formed SBP and assigned to it certain assets. Shortly thereafter, Staley Sr. passed away. Staley and one of his sisters, appellee Delia Crossley, were appointed co-executors of Staley Sr.'s estate ("the Estate"). In 1997, Crossley and another sister, Nancy Rettig, filed a lawsuit against Staley (the "1997 lawsuit") respecting, among other things, (1) the administration, distribution, and settlement of the Estate and (2) the distribution of the assets of SBP.

         In 2005, Staley, Crossley, and Rettig entered into a settlement agreement respecting the 1997 lawsuit (the "2005 Agreement") that was read into the record before the trial court in that lawsuit. The 2005 Agreement stated in part that Crossley and Rettig each held a 29.6666% interest in SBP. Additionally, that agreement provided in part as follows:

The parties hereto agree that they have reached a global, complete, and final settlement of all claims that all the parties may have against the estate of their father and the partnership . . . . The defendant will draft settlement documents that will include confidentiality provisions and full mutual releases of all claims, known or unknown, alleged or not, that each party may have against any other party, any of the parties' spouses, the estate of their father and mother, and the partnership. . . . Defendant will disburse the partnership assets in kind and all property held by the estate on or before December 31st, 2005. . . . .
The parties will agree to an independent Auditor to audit the partnership for the last fiscal year, if not calendar, and up to the date of distribution, or if a calendar fiscal year, the audit will cover January lst, 2005, to the date of the distribution. If there is no agreement as to the auditor than [sic] Kirkpatrick, Mathis & Brown of Dallas, Texas, will conduct the audit. The audit is to be determined this audit is to determine [sic] the assets of the partnership and the value as to of date of distribution, and to identify any asset that is unaccounted for or been transferred out of the asset pool without a corresponding balancing action during the audit period. Sarah Williamson can review copies of all audit materials necessary for the audit called for at this agreement at plaintiff's expense.
If any party chooses to challenge the distribution of the partnership assets or any expenses booked after 12/5/05 after receiving the audit report and claiming that there is a discrepancy in assets totals that reflect on the share received by that party, such party shall complain in writing to defendant and allow 30 days for him to comply with the request of the complaining party. If the party making the compliant [sic] is not satisfied with the results of the defendant's compliance, then the complaining party that chooses to proceed shall give defendant notice to that effect, and the complaining party and the defendant will participate in binding arbitration. The subject of the arbitration will be limited to any purported discrepancy the complaining party believes, according to the audit, requires a different distribution of the partnership assets to the complaining party. . . .
Other than appropriate arbitration proceedings as described herein, each party covenants not to sue any party named in this lawsuit, or any spouse of any party in further consideration of the agreements made herein for a claim that predates the date of the signing of mutual releases described above. . . . . . . .
As it relates to the audit part of the terms and conditions. [sic] It is the agreement of all parties that after Sarah Williamson has had an opportunity to look at the data that an auditor will look at, the plaintiffs may, at their election, decide to dispense with the audit in total or in part.

         In June 2016, Crossley filed the live petition in the matter now before us, [1] in which she asserted in part that after entering into the 2005 Agreement, Staley "distributed all of the securities, bonds, and cash from the Partnership to Plaintiff and her sister, " but "never did distribute the Partnership's mineral-related and surface interests." Further, the petition asserted (1) in approximately 2015, Crossley "discovered that . . . significant mineral and surface interests were never conveyed by [Staley Sr.] to the Partnership" and therefore remain in her parents' estates, and (2) Staley "falsely claims that these mineral and surface interests belong either to him or to the Partnership rather than to the Estates." Crossley sought (1) declarations respecting the assets transferred to SBP in 1993 and her "current ownership interest in [SBP] and in the assets held by [SBP] for her benefit" and (2) "a constructive trust over her 29.6666% of all mineral and connected surface interests controlled and/or held by Defendants, and all profits received by Defendants from those interests."

         Appellants filed a motion to compel arbitration in which they contended (1) "[i]t is undisputed that Staley distributed . . . what Defendants believe to be 29.6666% of SBP's assets to Plaintiff"; (2) "[i]n exchange, " Staley received "a release, " "a covenant not to sue, " and "an agreement to arbitrate any dispute surrounding the distribution of assets from SBP"; (3) Crossley's petition "alleges that Defendants breached the 2005 Settlement Agreement by failing to distribute 29.6666% of SBP's assets to Plaintiff"; and (4) because Crossley's issues in her petition and the declarations sought by her "all go to whether or not Defendants distributed 29.6666% of SBP's assets to Plaintiff, " her claims "are subject to the arbitration clause." Exhibits attached to the motion to ...

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