Court of Appeals of Texas, Seventh District, Amarillo
IN RE HURST SATURN, LTD.; FORT WORTH SATURN, LTD.; ARLINGTON SATURN, LTD.; MICHAEL EDWARDS; JENNI MARSHALL; AND GLEN POLLARD, RELATORS
OPINION ON ORIGINAL PROCEEDING FOR WRIT OF MANDAMUS
Before
QUINN, C.J., [1] and PIRTLE and PARKER, JJ.
MEMORANDUM OPINION
Judy
C. Parker, Justice
Relators
filed this mandamus proceeding after the trial court issued
an order granting the motion filed by the real party in
interest to designate responsible third parties, pursuant to
section 33.004 of the Texas Civil Practice and Remedies Code.
We find that mandamus relief is not warranted and deny the
writ.
Background
This
case arises from financial problems at three Metroplex-area
car dealerships: Hurst Saturn, Ltd., Fort Worth Saturn, Ltd.,
and Arlington Saturn, Ltd. The three entities, along with
their owners, Michael Edwards, Jenni Marshall, and Glen
Pollard, are Relators herein.
Relators
allege that, between 2010 and 2015, real party in interest
Robinson Burdette Martin & Seright, LLP
("Robinson") prepared and reviewed financial
statements and tax returns that tended to show that the
dealerships were turning a profit. According to Relators,
they relied on the documents and representations from
Robinson in making investment decisions and paying taxes. In
2015-16, however, Relators learned that the dealerships were
not in sound fiscal shape, but were in fact
"hemorrhaging money" and near collapse. When they
investigated this financial downturn, Relators discovered
mismanagement and theft by some of the dealerships'
employees and their associates. These discoveries led them
eventually to file lawsuits against employees, lenders, and
others. In the present case, they sued Robinson, alleging
professional negligence, breach of contract, and negligent
misrepresentation. Relators contend that Robinson's
failures caused them to pour money into failing businesses
and pay taxes on nonexistent profits.
Robinson
moved for leave to designate as responsible third parties
several other entities and individuals, including dealership
employees and their affiliates, who Relators had alleged to
be involved in falsifying records, sales fraud, financing
fraud, rebate fraud, audit fraud, and more. Over
Relators' objection, the trial court granted Robinson
leave to designate eighteen responsible third parties.
Relators
then filed the instant petition for writ of mandamus, in
which they argue that the trial court's decision was an
abuse of discretion and that they have no adequate remedy by
appeal.
Law and
Analysis
Standards
for Mandamus
A writ
of mandamus will issue only if the trial court clearly abused
its discretion and the relator has no adequate remedy on
appeal. In re Prudential Ins. Co. of Am., 148 S.W.3d
124, 135-36 (Tex. 2004) (orig. proceeding). "A trial
court abuses its discretion if it reaches a decision so
arbitrary and unreasonable as to amount to a clear and
prejudicial error of law . . . ." In re Cerberus
Capital Mgmt., L.P., 164 S.W.3d 379, 382 (Tex. 2005)
(orig. proceeding) (per curiam) (internal quotations
omitted). A trial court also abuses its discretion if it
fails to correctly analyze or apply the law, because a trial
court has no discretion in determining what the law is or
applying it to the facts. See Prudential, 148 S.W.3d
at 135.
No
Adequate Remedy by Appeal
The
Texas Supreme Court has held that "[a]llowing a case to
proceed to trial despite [the] erroneous denial of a
responsible-third-party designation would skew the
proceedings, potentially affect the outcome of the
litigation, and compromise the presentation of [the
relator's] defense in ways unlikely to be apparent in the
appellate record." In re Coppola, 535 S.W.3d
506, 509 (Tex. 2017) (orig. proceeding) (per curiam)
(internal quotations omitted). Consequently, the court
determined that mandamus may be appropriate to review an
order that either denies or grants a defendant's motion
to designate a responsible third party. See In re
Dawson, 550 S.W.3d 625, 631 (Tex. 2018) (orig.
proceeding) (per curiam). ...