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Cypress Drilling, LLC v. Medve Energy Ventures, LLC

Court of Appeals of Texas, Seventh District, Amarillo

October 31, 2019


          On Appeal from the 415th District Court Parker County, Texas, Trial Court No. CV18-0071; Honorable Graham Quisenberry, Presiding

          Before QUINN, C.J. and PIRTLE and PARKER, J.J.


          Patrick A. Pirtle Justice.

         Appellant, Cypress Drilling, LLC, appeals the trial court's order dismissing its petition seeking an order to compel arbitration with Appellee, Medve Energy Ventures, LLC, based upon the trial court's lack of subject matter jurisdiction over Cypress's petition.[1] In a single issue, Cypress asserts that the trial court erred in denying its motion to compel and dismissing its petition for lack of subject matter jurisdiction. We affirm the trial court's order.


         In January 2018, Cypress filed its Original Petition and Motion to Compel Arbitration between Cypress and Medve pursuant to a Participation Agreement executed in 2016 by the two parties ("contract"). The contract required that "[t]he legal relations among the parties shall be governed and construed in accordance with the laws of the State of Louisiana." The arbitration clause in the contract also required the following:

All disputes between the Parties hereto with respect to any provision of this Agreement or rights and obligations of any Party hereunder (other than disputes involving allegations of intentional fraud), which cannot be resolved by mutual agreement, will be resolved by binding arbitration in accordance with the Rules of the American Arbitration Association in Lafayette, Louisiana[, ] or by any other means of alternative dispute resolution mutually agreed upon by the parties.

         Cypress's petition sought to resolve "disputes" between it and Medve regarding their respective obligations under the contract. That is, Cypress sought a declaration that the contract did not contain any of the requirements that Medve was seeking to impose on Cypress under the contract. The petition neither described any disputes with Medve nor indicated any provisions of the contract in dispute. In its motion, Cypress sought an order compelling the parties to arbitrate and abate the case until such time as an arbitrator has decided any issues.

         In March 2018, Medve filed a motion to dismiss Cypress's petition for forum non conveniens.[2] In its motion, Medve asserted that Louisiana was the most convenient forum to litigate the parties' claims based on the contract because there was pending litigation related to the contract between the two parties in federal court in Louisiana.

         Also, in March 2018, the trial court held a hearing to decide Medve's motion to dismiss. At the hearing, Cypress represented that the parties had agreed to arbitrating their dispute in Louisiana and that the dispute would be resolved in Louisiana. By its motion, Cypress also represented that it merely sought an order to compel the parties to arbitrate and would not be seeking a final judgment from the trial court in Texas. At the hearing's conclusion, the trial court interpreted Medve's motion to dismiss as a motion challenging the subject matter jurisdiction of the court and dismissed the case because it lacked subject matter jurisdiction.

         Standard of Review

         We review an order denying a motion to compel arbitration under an abuse of discretion standard. Bonded Builders Home Warranty Ass'n of Tex. v. Smith, 488 S.W.3d 468, 476 (Tex. App.-Dallas 2016, no pet.). Under this standard of review, we defer to the trial court's factual determinations if they are supported by the evidence, but we review the trial court's legal determinations de novo. In re Labatt Food Serv., L.P., 279 S.W.3d 640, 643 (Tex. 2009) (orig. proceeding). We also view the evidence in the light most favorable to the trial court's ruling and defer to the trial court's resolution of conflicting evidence. INEOS Group, Ltd. v. Chevron Phillips Chem. Co., LP, 312 S.W.3d 843, 848 (Tex. App.-Houston [1st Dist.] 2009, no pet.). When written findings of fact are not requested or filed, as here, we affirm the ruling if it can be upheld on any legal theory reasonably supported by the evidence; Tex. Dep't of Pub. Safety v. Wilmoth, 83 S.W.3d 929, 931 (Tex. App.-Amarillo 2002, no pet.) (citing In re W.E.R., 669 S.W.2d 716, 717 (Tex. 1984) (per curiam)), and we reverse a trial court for abusing its discretion only when we determine the court acted in an unreasonable or arbitrary manner, meaning that it acted without reference to any guiding rules and principles. Jackson v. Bell, 484 S.W.3d 161, 166 (Tex. App.-Amarillo 2015, no pet.) (citing Downer v. Aquamarine Operators, Inc., 701 S.W.3d 238, 241-42 (Tex. 1985)).

         Subject matter jurisdiction is essential for a court to have the authority to resolve a case. Tex. Dep't of Transp. v. Jones, 8 S.W.3d 636, 638-39 (Tex. 1999). Whether a trial court has subject matter jurisdiction is a threshold inquiry that can be addressed by the court sua sponte and at any time. Montenegro v. Ocwen Loan Servicing, LLC, 419 S.W.3d 561, 567 (Tex. App.-Amarillo 2013, pet. denied) (citing Mayhew v. Town of Sunnyvale, 964 S.W.2d 922, 928 (Tex. 1998)). Review of subject matter jurisdiction is a question of law, and we review ...

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