Court of Appeals of Texas, Thirteenth District, Corpus Christi-Edinburg
IN RE EASTMAN CHEMICAL COMPANY AND EASTMAN IN ITS ASSUMED OR COMMON NAME
Petition for Writ of Mandamus.
Chief Justice Contreras and Justices Benavides and Hinojosa
CONTRERAS CHIEF JUSTICE
Eastman Chemical Company (Eastman) filed a petition for writ of
mandamus contending that the respondent trial
court 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.
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.
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.
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
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
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."
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." 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.
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.
January 3, 2018, the trial court signed an order denying
Eastman's amended motion to transfer. This original
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 ...