Searching over 5,500,000 cases.


searching
Buy This Entire Record For $7.95

Download the entire decision to receive the complete text, official citation,
docket number, dissents and concurrences, and footnotes for this case.

Learn more about what you receive with purchase of this case.

In re Eastman Chemical Co.

Court of Appeals of Texas, Thirteenth District, Corpus Christi-Edinburg

June 20, 2019

IN RE EASTMAN CHEMICAL COMPANY AND EASTMAN IN ITS ASSUMED OR COMMON NAME

          On Petition for Writ of Mandamus.

          Before Chief Justice Contreras and Justices Benavides and Hinojosa

          MEMORANDUM OPINION

          DORI CONTRERAS CHIEF JUSTICE

         Relator Eastman Chemical Company[1] (Eastman) filed a petition for writ of mandamus contending that the respondent trial court[2] abused its discretion, leaving it without an adequate appellate remedy, by denying Eastman's motion to transfer based on a mandatory venue provision. See Tex. Civ. Prac. & Rem. Code Ann. § 15.011. This Court requested and received a response to the petition from real party in interest, Gulf Hydrogen and Energy, Inc. (Gulf), and Eastman filed a reply to the response. We will conditionally grant relief.

         I. Background

         Gulf filed the underlying suit in Nueces County on July 25, 2013. In its live petition, Gulf alleged that it contracted with Resurgence Asset Management (RAM) in 2007 to purchase the stock of Sterling Chemicals, Inc. (Sterling) for $392.5 million. Sterling's primary asset is a chemical plant located in Texas City, which is in Galveston County. Due to a conflict between RAM and Gulf, along with the 2008 financial crisis, the closing of the deal was delayed and eventually cancelled, even though Gulf had allegedly spent over $2 million preparing for the acquisition.

         In 2011, Gulf again sought to purchase Sterling and began meeting and discussing the acquisition with "potential financial partners." On June 22 of that year, however, Eastman agreed to purchase Sterling for $100 million. The Eastman-Sterling agreement provided for a 40-day period, ending on August 1, 2011, during which Sterling could entertain other offers for the purchase of its stock.

         Gulf's co-owner Kenneth Berry began discussions with Eastman executive Mike Humby and Eastman attorney David Woodmansee. According to Gulf, Humby and Woodmansee attempted to dissuade Gulf from making a bid for Sterling, and they told Sterling's shareholders that there were no other interested bidders.

         Ultimately, according to Gulf, an oral agreement was reached under which Gulf would refrain from submitting a bid for Sterling. In exchange, after Eastman completed its purchase of Sterling, "[Gulf] would receive the right to operate three deep waste injection wells" at the Texas City plant, "including sufficient tankage and access to barge, truck and rail transportation to operate those wells commercially." According to Gulf, Eastman "promised to execute any necessary writings after it closed on Sterling." However, after Eastman closed on its acquisition of Sterling on August 9, 2011, Eastman executive Jerry Matthew "denied and repudiated" the oral agreement.

         Gulf's live petition alleged breach of contract, fraud, fraud by non-disclosure, fraud by inducement, statutory fraud, and promissory estoppel, and it sought actual damages that "greatly exceed" $1 million, along with attorney's fees and costs. The petition stated that Nueces County is a proper venue "because a substantial part of the events or omissions giving rise to [Gulf's] claims occurred" there. More specifically, it alleged that "many of the actions or omissions that constitute Eastman's culpable conduct in this matter took place in and/or were directed towards" Nueces County; that Gulf's "acts, dealings, and communications in forming the deal took place" in Nueces County; and that Gulf's principal office and principal place of business is located in Nueces County. In a section regarding damages, the petition also stated: "[Gulf] specifically disclaims that it is seeking recovery of real property or an estate or interest in real property."

         Eastman answered the suit and moved to transfer venue on August 13, 2013. The motion to transfer argued that: (1) mandatory venue lies in Galveston County because Gulf's suit "seeks recovery of real property or an interest in real property located in Galveston County"; and (2) alternatively, permissive venue lies in Galveston County because "[a]ll or a substantial part of the events or omissions giving rise to [Gulf]'s claims occurred in Galveston County."[3] In an amended motion to transfer filed on July 18, 2017, Eastman argued that the mandatory venue statute applies because Gulf "seeks enforcement of an agreement or compensation for loss from an agreement concerning rights and interests in real property" located in Galveston County. See id. Gulf filed a response arguing in part that Eastman had waived its motion to transfer "by waiting over four years to have it heard" and "by requesting affirmative relief from [the trial court] on over a dozen occasions." Eastman filed a reply to the response.

         At a hearing on December 7, 2017, Gulf argued in part that Eastman failed to specifically deny the venue facts alleged in Gulf's petition; therefore, according to Gulf, the trial court was bound to take its venue allegations as true, and Gulf had no burden to produce prima facie proof thereof. See Tex. R. Civ. P. 87(3)(a). Gulf further argued that Eastman waived its motion to transfer because it did not seek a hearing on its original 2013 motion until 2017. The trial court took the matter under advisement. Later, the court granted leave for Gulf to file an affidavit to provide prima facie proof of its venue facts. Gulf then submitted "supplemental evidence" in support of its response to the motion to transfer.

         On January 3, 2018, the trial court signed an order denying Eastman's amended motion to transfer. This original proceeding followed.

         II. Discussion

         Eastman argues by two issues that the trial court erred by (1) denying its amended motion to transfer, and (2) permitting Gulf to submit additional venue ...


Buy This Entire Record For $7.95

Download the entire decision to receive the complete text, official citation,
docket number, dissents and concurrences, and footnotes for this case.

Learn more about what you receive with purchase of this case.