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Date: 08-15-2017

Case Style: Howard Construction Company, Inc. v. Texas Association of Women's Clubs

Case Number: 07-15-00361-CV

Judge: Campbell

Court: Texas Court of Appeals, Seventh District on appeal from the 413th District Court of Johnson County

Plaintiff's Attorney: Jeffrey S. Davis

Defendant's Attorney: Daniel Aguilar, David F. Farris and John R. Lively

Description: Appellant Howard Construction Company, Inc. sued appellee Texas Association
of Women’s Clubs for reformation of a deed, declaratory relief, establishment of an
easement by necessity, and an accounting. It also alleged claims of slander of title and
tortious interference with prospective business relations. TAWC filed a counterclaim
alleging breach of contract and requesting sanctions. TAWC moved for summary
judgment on Howard’s claims but not those alleged by its counterclaim. The trial court
granted TAWC’s motion for summary judgment and rendered a final judgment disposing
of the entire case. Howard and TAWC each appealed and each filed motions to dismiss
the other’s appeal. We will sustain Howard’s motion and dismiss the appeal of TAWC
for want of jurisdiction. We will overrule TAWC’s motion to dismiss. Finally, we will
overrule each of Howard’s issues on appeal and affirm the judgment of the trial court.
Background
TAWC owns Camp McMullen. The recreational facility is located on a 60-acre
tract in Johnson County, Texas, and beginning in the 1950s provided a rural
encampment for children.
By the early 2000s the camp had fallen into disrepair. In order to renovate the
facility, in 2004 TAWC contracted with Howard. The contract stated its purpose was “to
establish the terms and conditions under which Howard will lease Camp McMullen from
the TAWC. This lease allows for Howard . . . to be completely free to explore and find
ways to fund and make the needed improvements to the camp, get the camp re-opened
and operating as quickly as possible at a profit.” The contract provided a one-year
“construction lease period.” The work Howard was to perform during the construction
lease period “include[d] road and trail building, remodeling or new construction,
demolition of existing structure [sic] (except those of an emergency nature), etc. The
purpose of this year is to get the camp re-opened and operational.” Part of the
consideration TAWC was to pay Howard was the transfer of title to an adjoining sixty-
five acre tract, known as “Tract B.” At times the parties refer to the sixty-acre tract on
which the camp is situated as “Tract A.”
2
The contract provided the procedure for Howard’s acquisition of Tract B:
[The] General Warranty Deed transferring Tract B to Howard shall be
executed as part of this agreement and held in escrow by a land title
company serving as an escrow agent until the construction lease period is
completed and the camp is ready to be re-opened. ·At the end of the
construction lease period, provided that Howard has made improvements
valued at $250,000 and barring any disputed or uncured defects, Howard
shall be deemed to own Tract B. Upon notice from either party; the
escrow agent shall verify with the other party that no disputes exist and,
barring none, shall be obligated to file and record the executed deed at the
Johnson County courthouse. The escrow agent is hereby authorized to
complete the filings after 15 days have expired without a response from
the other party. Notwithstanding any other provisions of this agreement,
upon release of this deed by the escrow agent, title to Tract B shall be
owned by Howard in fee simple thereafter free and clear of the terms and
conditions of this agreement.
Title to Tract B shall include a 40 foot wide permanent access easement
along both perimeter property lines of Tract A providing access to and
from FM415.
The warranty deed to Tract B was attached to the contract as an exhibit. It is
undisputed that Howard drafted the contract and warranty deed.
The contract contains language granting Howard the “exclusive authority to act
as TAWC’s agent with regard to the Camp McMullen property,” with the authority to
make decisions related to the property except for restrictions contained in the contract.
The restrictions included those prohibiting Howard from selling or imposing a lien on the
property.
During 2005 TAWC also designated Howard its attorney in fact to negotiate with
third parties for a right of way or easement over camp property and Tract B. In 2006,
TAWC granted Southwestern Gas Pipeline, a subsidiary of “Devon Energy” a pipeline
easement across Tract B. Howard complained that the pipeline’s route caused property
3
damage and diminished the tract’s value. The parties also disputed entitlement to
proceeds paid by Devon for the easement and for other rights.
In April 2006 TAWC directed Howard to cease work on the camp project. The
following month Howard sued TAWC in Tarrant County. In this 2006 suit, Howard
alleged causes of action in contract and tort, a claim for declaratory relief, an application
for temporary and permanent injunctive relief, and, claiming a fiduciary relationship
between it and TAWC, an accounting. Tract B and the actions taken by the parties with
regard to Tract B were the primary subjects of Howard’s lawsuit.
On a date unclear from the record but apparently during 2006, Howard also filed
the escrowed deed to Tract B in the Johnson County real property records.
In 2008, TAWC filed a counterclaim against Howard. TAWC asserted an action
for trespass to try title as to Tract B as well as claims for damages in contract and tort,
and a claim for declaratory relief. Thereafter, the trial court granted TAWC’s traditional
and no-evidence motion for summary judgment on all of Howard’s claims and rendered
judgment that Howard take nothing. The judgment also awarded TAWC attorney’s fees
of $40,000. The judgment against Howard was severed and assigned a new cause
number. Howard did not seek appellate review.
In 2009 Howard filed for bankruptcy protection but the following year the stay
was modified, allowing TAWC to proceed with litigation and collection attempts. It
abstracted the judgment against Howard in Tarrant County but not in Johnson County.
Howard satisfied TAWC’s judgment in 2010.
4
TAWC’s counterclaims in the Tarrant County suit were tried by jury in 2012. The
jury found against TAWC, and a take-nothing judgment was accordingly rendered in
Howard’s favor. The judgment was affirmed on appeal. Tex. Ass’n of Women’s Clubs
v. Howard Constr. Co., No. 13-12-00452-CV, 2014 Tex. App. LEXIS 5686 (Tex. App.—
Corpus Christi May 29, 2014, no pet.) (mem. op.).
The present Johnson County suit commenced on April 27, 2015, when Howard
sued TAWC for claims arising from the 2004 contract and concerning Tracts A and B.
TAWC filed a counterclaim alleging Howard breached the 2004 contract by filing suit
without following the alternative dispute resolution procedure set out in the contract. It
also sought attorney’s fees and sanctions against Howard.
TAWC filed a motion for summary judgment attacking all of Howard’s claims,
primarily on the grounds of res judicata and the statute of limitations. But it did not seek
summary judgment on its counterclaims. On August 10, 2015, the trial court signed an
order granting TAWC’s summary-judgment motion. Howard filed a motion to reconsider
on August 24, which the court denied by order of August 26. Howard then filed a notice
of appeal on September 8.
In December 2015, TAWC filed a motion to dismiss the appeal, asserting the
August 10 order was an unappealable interlocutory order. Howard responded. On our
own motion we abated the appeal and remanded the case for the trial court to clarify
whether it intended its August 10 order as a final judgment.1 A supplemental clerk’s
record was filed containing the trial court’s January 20, 2016 “modified final judgment.”
1
See Howard Constr. Co. v. Tex. Ass’n of Women’s Clubs, No. 07-15-00361-CV,
2016 Tex. App. LEXIS 10 (Tex. App.—Amarillo Jan. 4, 2016, per curiam order).
5
A recital in the judgment stated, “In signing and entering the [August 10 order], this
Court intended the Order entered to finally and fully dispose of all claims and all parties
in the case.” Elsewhere the instrument decreed: “[TAWC’s] Motion for Summary
Judgment is hereby Granted, [Howard] shall take nothing on its claims against [TAWC],
with all Costs taxed against [Howard]. All other relief requested by any party is denied
and this Judgment is Final.”
We reinstated the appeal in January 2016. On February 3, 2016, TAWC filed a
notice of appeal which stated TAWC desired to appeal the January 20, 2016 judgment.
Analysis
Motions to Dismiss
In March 2016, Howard filed a motion to dismiss TAWC’s subsequent appeal.
We carried that motion, along with TAWC’s December 2015 motion to dismiss, with the
case.
Howard argued in its motion that TAWC’s appeal was untimely because it was
filed almost six months after the trial court’s August 10 order. See TEX. R. APP. P.
26.1(d). In a brief response TAWC argued that on its face the August 10 order was not
a final or appealable order.
Our order of abatement and remand authorized the trial court only to clarify
whether its August 10 order was intended as a final judgment. See Lehmann v. Har-
Con Corp., 39 S.W.3d 191, 206 (Tex. 2001). By its January 20, 2016 “modified final
6
judgment,” the trial court made clear that its August 10 order was indeed intended as a
final judgment, disposing of all claims and all parties in the case.
A notice of appeal must generally be filed within thirty days after the signing of an
appealable order or judgment. TEX. R. APP. P. 26.1(a). The thirty-day deadline is
extended to ninety days if any party files a timely motion for new trial, a motion to modify
the judgment, a motion to reinstate under Texas Rule of Civil Procedure 165a, or a
request for findings of fact and conclusions of law. TEX. R. APP. P. 26.1(a)(1)-(4). Any
party seeking to alter the trial court’s judgment must file a notice of appeal within the
applicable period stated in Rule 26.1 or fourteen days after the first filed notice of
appeal, whichever is later. TEX. R. APP. P. 26.1(d). When a party files an untimely
subsequent notice of appeal, the court of appeals has no jurisdiction over any issues
that party intended to raise. Charette v. Fitzgerald, 213 S.W.3d 505, 509 (Tex. App.—
Houston [14th Dist.] 2006, no pet.).
Here, although a motion for new trial was filed extending the appellate timetable
ninety days from August 10, TAWC’s February 3, 2016 notice of appeal was untimely
and our jurisdiction did not attach for consideration of any issue through which TAWC
sought more favorable relief than the trial court granted. Howard’s motion to dismiss is
granted and TAWC’s appeal is dismissed.2
2
TAWC filed a brief as cross-appellant asserting the trial court had no basis for
dismissing its counterclaim and asserting its due process rights were violated. TAWC
seeks reversal and remand in part for the trial court’s determination of its counterclaim.
Because we lack jurisdiction, TAWC’s two issues on appeal are dismissed.
7
Because the August 10 order was a final judgment disposing of the entire case,
TAWC’s motion to dismiss, based on the argument that the August 10 order was
interlocutory and unappealable, is denied.
Howard’s Appellate Issue on the Merits
Through a single issue containing multiple subparts Howard argues the trial court
erred in granting TAWC’s motion for summary judgment.3
We review de novo the grant of summary judgment. Nall v. Plunkett, 404 S.W.3d
552, 555 (Tex. 2013) (per curiam). We take as true all evidence favorable to the non-
movant, and indulge every reasonable inference and resolve any doubt in the non-
movant’s favor. Nixon v. Mr. Property Management Co., 690 S.W.2d 546, 548-49 (Tex.
1985). Where the movant for a traditional summary-judgment motion is a defendant, it
must conclusively negate at least one essential element of the plaintiff’s cause of action.
KCM Fin. LLC v. Bradshaw, 457 S.W.3d 70, 80 (Tex. 2015). Likewise, a defendant who
conclusively establishes each element of an affirmative defense is entitled to summary
judgment. Id. When a trial court’s order granting summary judgment does not specify
the ground or grounds relied on for its ruling, as in this case, summary judgment will be
affirmed on appeal if any of the theories advanced are meritorious. State Farm Fire &
Cas. Co. v. S.S., 858 S.W.2d 374, 380 (Tex. 1993).
We review a summary judgment granted on a no-evidence motion under the
same legal sufficiency standard as a directed verdict. King Ranch, Inc. v. Chapman,
3
See Malooly Bros, Inc. v. Napier, 461 S.W.2d 119, 121 (Tex. 1970) (point of
error on appeal stating simply that trial court erred by granting summary judgment
“allow[s] argument as to all the possible grounds upon which summary judgment should
have been denied”).
8
118 S.W.3d 742, 750 (Tex. 2003). In response to a no-evidence motion for summary
judgment, it is the nonmovant’s burden to present competent evidence raising a
genuine issue of material fact as to each challenged element of its cause of action.
TEX. R. CIV. P. 166a(i); Johnson v. Brewer & Pritchard, P.C., 73 S.W.3d 193, 206 (Tex.
2002).
Res judicata is an affirmative defense that precludes relitigation of claims that
were finally adjudicated in a prior action or arise out of the same subject matter and
could have been litigated in the prior action. See TEX. R. CIV. P. 94; Amstadt v. U.S.
Brass Corp., 919 S.W.2d 644, 652 (Tex. 1996). “The policies behind the doctrine [of res
judicata] reflect the need to bring all litigation to an end, prevent vexatious litigation,
maintain stability of court decisions, promote judicial economy, and prevent double
recovery.” Barr v. Resolution Trust Corp., 837 S.W.2d 627, 629 (Tex. 1992). A party
relying on res judicata must prove: (1) a prior final judgment on the merits by a court of
competent jurisdiction; (2) identity of parties or those in privity with them; and (3) a
second action based on the same claims as were raised in the first action or could have
been raised in the first action. Amstadt, 919 S.W.2d at 652. Claims barred by res
judicata include matters actually litigated in the prior suit and those which could have
been litigated “through the exercise of diligence.” Barr, 837 S.W.3d at 631. A summary
judgment is an adjudication on the merits entitled to res judicata effect. See Igal v.
Brightstar Info. Tech. Group, Inc., 250 S.W.3d 78, 90 (Tex. 2008) (summary judgment
on limitations is adjudication on the merits entitled to res judicata effect), superseded on
other grounds by statute, TEX. LAB. CODE ANN. § 61.051(c) (West Supp. 2016);
9
Fernandez v. Memorial Healthcare Sys., Inc., 896 S.W.2d 227, 230 (Tex. App.—
Houston [1st Dist.] 1995, writ denied) (applying federal principles of res judicata).
To meet its summary judgment burden conclusively establishing the affirmative
defense of limitations, a defendant must: (1) “conclusively prove when the cause of
action accrued, and (2) negate the discovery rule, if it applies and has been pleaded or
otherwise raised, by proving as a matter of law that there is no genuine issue of material
fact about when the plaintiff discovered, or in the exercise of reasonable diligence
should have discovered the nature of its injury.” KPMG Peat Marwick v. Harrison Cty.
Housing Fin. Corp., 988 S.W.2d 746, 748 (Tex. 1999). If the movant establishes that
the statute of limitations bars the action, the nonmovant then must show evidence
raises a fact issue in avoidance of the statute of limitations. Id.
We turn now to each of the claims Howard raised in the 2015 litigation.
Reformation of the Tract B Warranty Deed
In the 2015 litigation, Howard sought reformation of the warranty deed for Tract B
in two respects: it alleged the warranty deed did not convey the easement across Tract
A that was promised in the contract; and it alleged a 2012 survey of Tract B revealed
the tract contains only 58 acres rather than the “65.7 acres, more or less” stated by the
deed. Howard’s pleadings asserted that both the omission of the easement and the
shortage in the acreage were the result of mistakes or scrivener’s errors. It asked that
the deed be corrected or reformed to include the easement, and “corrected or reformed
to expand the legal description of Tract B to include 7.2 acres of the present Tract A.”
In the alternative, Howard sought money damages for the acreage shortage, in the
10
amount of $4500 per acre for the missing 7.2 acres. TAWC’s motion for summary
judgment asserted the claims were barred by limitations and by res judicata. We
address the omitted easement first, then the shortage in acreage.
Easement across Tract A
With regard to TAWC’s limitations ground for summary judgment, the parties
agree that the limitations period for bringing a suit to reform a deed is the residual four-
year period of Civil Practice and Remedies Code section 16.051. TEX. CIV. PRAC. &
REM. CODE ANN. § 16.051 (West 2015); Cosgrove v. Cade, 468 S.W.3d 32, 35 (Tex.
2015) (four-year limitations period applies to deed-reformation claims). Relying on
Lathem v. Richey, 772 S.W.2d 249, 253 (Tex. App.—Dallas 1989, writ denied), Howard
argues an issue of fact exists as to when it discovered the omission of the easement
from the deed, or should have discovered it in the exercise of reasonable diligence.
The Texas Supreme Court’s holdings in Cosgrove are fatal to Howard’s position. “A
plainly evident omission on an unambiguous deed’s face is not a type of injury for which
the discovery rule is available.” Cosgrove, 468 S.W.3d at 36. That the warranty deed
to Howard conveys no easement across the adjoining Tract A is apparent from the face
of the deed. The deed’s property description reads: “65.7 acres, more or less, in the J.
Wallace Survey, A-863, Johnson County, Texas, more particularly described in attached
Exhibit described (sic) as Tract B or Second Tract.” The exhibit attached to the deed is
a map or plat depicting Camp McMullen and surrounding lands. Tracts labelled “Tract
A” and “Tract B” are outlined. Within Tract A is a notation reading “60.00 Ac.” Tract B
contains a similar notation, reading “65.70 Ac.”
11
Neither the deed nor its attachment makes any reference to an easement across
Tract A. The omission of the 40-foot easement across Tract A is no less plain or
evident than the failure of the deed in Cosgrove to reserve mineral rights. Because the
omission of the easement required by the parties’ contract was plain on the face of the
warranty deed, Howard was charged as a matter of law with knowledge of the material
omission. See id. at 37 (grantors were charged with actual knowledge “of what the
deed included, and excluded, and limitations began to run from the date of execution”).
Howard acknowledges the holding in Cosgrove, but reads the opinion to apply
only to grantors. We cannot agree with Howard’s reading. The court’s expressly-stated
holding is not limited to grantors. See Cosgrove, 468 S.W.3d at 34 (“Plainly obvious
and material omissions in an unambiguous deed charge parties with irrebuttable notice
for limitations purposes”); see also Whitfield v. Ondrej, No. 04-15-00052-CV, 2016 Tex.
App. LEXIS 13491, at *9 n.7 (Tex. App.—San Antonio Dec. 21, 2016, no pet.) (mem.
op.) (also rejecting argument Cosgrove applies only to grantors).
TAWC executed the warranty deed in 2004 and Howard recorded it in 2006.
Howard asserts no means of tolling the running of limitations except the discovery rule.
As a matter of law, its suit for reformation to remedy the omission of its contracted-for
easement, filed in 2015, was barred by limitations.
For similar reasons, Howard’s easement-reformation claim also is barred by res
judicata. Under our state’s transactional approach to res judicata, a subsequent suit is
barred “if it arises out of the same subject matter of a previous suit and which through
the exercise of diligence, could have been litigated in a prior suit.” Barr, 837 S.W.2d at
12
631. By its pleadings in its 2006 lawsuit, Howard described its contract with TAWC and
asserted its entitlement to what was described there as “the 65 acre tract.” The 2004
contract was an exhibit to Howard’s pleadings. The pleadings sought a declaration that
Howard had substantially performed its contractual obligations so as “to have earned its
conveyance of the fee simple title to the 65 acre tract.” We agree with TAWC that, by
the exercise of diligence, Howard could have raised the issue of the omission from the
deed of the easement provided by the contract, and sought to reform or correct the
deed to incorporate the easement.
Acreage in Tract B
As we must, we assume for today’s purpose the accuracy of Howard’s summary
judgment evidence that Tract B actually consists of only 58 acres rather than the “65.7
acres, more or less,” described in the deed. The fact of the acreage discrepancy is not
plainly obvious on the face of the deed. The holding in Cosgrove that the discovery rule
is inapplicable to a “plainly evident omission on an unambiguous deed’s face,” 468
S.W.3d at 36, thus does not by itself preclude the discovery rule’s application to
Howard’s claim for reformation to correct the acreage conveyed. See Sullivan v.
Barnett, 471 S.W.2d 39, 45-46 (Tex. 1971) (citing, e.g., Sims v. Haggard, 162 Tex. 307,
346 S.W.2d 110 (1961), permitting reformation of deeds executed eleven years before
suit).
We have no need, however, to consider whether the summary judgment record
establishes as a matter of law that the exercise of reasonable diligence would have led
Howard to learn of his injury of receiving only 58 acres rather than the 65.7 he believed
13
Tract B contained. See Hooks v. Samson Lone Star, Ltd. P’ship, 457 S.W.3d 52, 59
(Tex. 2015) (noting exercise of reasonable diligence usually a question of fact but court
in some circumstances can determine its effect as a matter of law). Such an inquiry is
unnecessary because we conclude without difficulty that Howard’s reformation claim is
barred by res judicata.
As noted, Howard’s 2006 Tarrant County lawsuit sought, among other relief, a
declaration that Howard had substantially performed its contractual obligations so as “to
have earned its conveyance of the fee simple title to the 65 acre tract.” The pleadings
also alleged TAWC had breached their contract by conveying interests in the 65 acre
tract to third parties, reducing its value. The pleadings referred to TAWC’s “flagrant
violation of the agreement through its direct sale of property rights related to the 65 acre
tract [which] has substantially and materially reduced the value of the 65 acre tract.”
Howard further alleged TAWC had excluded Howard from the benefits of the third-party
agreements, wrongfully receiving the proceeds from sale of “permanent easements,
permanent ingress-egress rights, surface water rights, and drill-site locations on the 65
acre tract.” Howard asserted TAWC owed it a fiduciary duty with regard to the 65 acre
tract, and breached the duty by “selling, conveying, contracting, permitting and/or
allowing a pipeline easement to cut across the interior” of the tract.
For its part, TAWC took the position in the 2006 suit that Howard had not earned
any right to conveyance of Tract B, and was not entitled to conveyance. Its
counterclaim in that suit asserted actions in contract and trespass to try title, contending
Howard’s recording of the warranty deed was wrongful. It asserted claims based on
estoppel and fraud, and a claim for declaratory relief.
14
The transactional approach to res judicata requires that claims arising out of the
same subject matter be litigated in a single lawsuit. Hallco Tex., Inc. v. McMullen
County, 221 S.W.3d 50, 58 (Tex. 2006) (citing Barr, 837 S.W.2d at 631). Howard’s
current claim for additional acreage or damages through reformation manifestly arises
out of the same subject matter as the parties’ previous suit, which also litigated the
issues of Howard’s entitlement to Tract B under their contract. See Barr, 837 S.W.2d at
631; Pinebrook Props., Ltd. v. Brookhaven Lake Prop. Owners Ass’n, 77 S.W.3d 487,
497 (Tex. App.—Texarkana 2002, pet. denied) (claims arising from legal relationship
such as lease or contract “will arise from the same subject matter and be subject to res
judicata”). Howard’s acreage claim does not merely arise from its contract with TAWC;
it arises from the specific provision of the contract calling for conveyance of Tract B to
Howard. Relitigation of the acreage issue to determine Howard’s entitlement to
equitable relief from a mutual mistake would require reexamination of the parties’
transaction and their performance of the obligations each undertook, requiring
“significant duplication of effort of the court and the parties involved.” Barr, 837 S.W.2d
at 631; see also id. (determination whether claims arise from same transaction to be
made pragmatically) (citing Restatement (Second) of Judgments § 24(2) (1982)).4 At
bottom, Howard’s acreage claim is merely another iteration of the issue adjudicated in
4
Despite the merger doctrine, which holds that when a deed is delivered and
accepted as performance of a contract to convey, “the contract is merged in the deed,”
and the deed alone is considered to determine the rights of the parties, Howard’s
assertion the deed incorporated a mistake would require examination of the contract as
well as the deed. See Cosgrove, 468 S.W.3d at 42-43 (Boyd, J., dissenting) (internal
citations omitted).
15
the parties’ first suit, whether Howard had received from TAWC what it was entitled to
under their contract.5
Howard points to the summary judgment evidence that neither TAWC nor
Howard was aware that Tract B contains only 58 acres until 2012. It cites Citizens Ins.
Co. of Am. v. Daccach as holding that res judicata does not bar litigation of claims that
could not have been litigated in a prior action because the “damage-causing injury” had
not then been discovered. 217 S.W.3d 430, 452 (Tex. 2007). The court’s discussion in
Daccach to which Howard cites refers to its opinion in Pustejovsky v. Rapid-Am. Corp.,
35 S.W.3d 643 (Tex. 2000), in which the court decided whether a plaintiff may bring
separate actions for separate latent occupational diseases caused by exposure to
asbestos. The case involved a patient who developed mesothelioma years after he
settled a claim arising from a diagnosis of the nonmalignant condition of asbestosis. Id.
at 645. The complications of latent consequences of exposure to toxic substances that
led the court to find the single action rule did not preclude the plaintiff’s suit are wholly
absent from the case before us. See id. at 652 (noting record revealed that “no amount
of due diligence” would have allowed plaintiff to recover for mesothelioma when he
brought his suit for asbestosis). There is nothing latent about the number of acres in
Tract B.
As noted, it is undisputed that Howard prepared the 2004 contract and the
warranty deed. Before it initiated the 2006 litigation Howard possessed TAWC’s power
5
Moreover, litigation of Howard’s current claims for reformation of the deed to
convey an additional 7.2 acres from the Tract A retained by TAWC, or for compensation
in damages for the shortage in acreage, would require in the first instance a
determination whether it was entitled under the contract to 65.7 acres or entitled to Tract
B whatever its acreage.
16
of attorney to negotiate with third parties regarding Tract B. In his summary judgment
affidavit, Randle D. Howard, president of Howard, described his oversight of Tracts A
and B, stating that, before their disagreements arose, “TAWC forwarded to [Howard] all
oil and gas correspondence and documents related to Tract A and Tract B and relied on
[Howard] alone to handle all meetings and coordination with oil and gas
representative[s] and others.” According to Howard, he made about “two dozen trips,
60 miles round-trip, to handle oil and gas related matters only.”
We find Howard, with diligence, could have brought its request to reform the
deed or for related declaratory relief in its 2006 litigation. Litigation of these claims in
the 2015 litigation was barred by res judicata.
Other Theories to Establish Easement Across Tract A
As alternatives to its deed-reformation claim, Howard’s 2015 pleadings sought to
establish the easement across Tract A under other theories of law. It plead for a
declaratory judgment that the provision of the contract calling for the easement “is still in
full force and effect.” Its pleadings also sought an implied easement by necessity,
alleging it had no other route of ingress or egress to Tract B and the easement provided
in the contract is necessary to its enjoyment of Tract B.6 To apply the transactional
approach to res judicata, “we examine the factual bases, not the legal theories,
presented in the cases to determine whether the cases share the same set of operative
facts.” Better Bus. Bureau of Metro. Houston, Inc., v. John Moore Servs., 500 S.W.3d
6
See Hamrick v. Ward, 446 S.W.3d 377, 382 (Tex. 2014) (elements of “necessity
easement”).
17
26, 40 (Tex. App.—Houston [1st Dist.] 2016, pet. denied); Pinebrook, 77 S.W.3d at 496.
Howard’s alternative claims alleging its entitlement to an easement across Tract A are
barred like its deed-reformation claim.7
Slander of Title
In its live pleading in the 2015 litigation, Howard alleged that in December 2010
when it paid the amount due TAWC under the judgment from the 2006 litigation, TAWC
became obligated to file a release of its judgment lien filed in Tarrant County. It further
alleged failure to remove the lien after satisfaction of the judgment was a publication
establishing the first element of a suit for slander of title.
A plaintiff alleging slander of title must prove it sustained special damages. K&N
Builders Sales, Inc. v. Baldwin, No. 14-12-00012-CV, 2013 Tex. App. LEXIS 4027, at
*23 (Tex. App.—Houston [14th Dist.] Mar. 28, 2013, pet. denied) (mem. op.) (citing
Williams v. Jennings, 755 S.W.2d 874, 884 (Tex. App.—Houston [14th Dist.] 1988, writ
denied). “Special damages are those damages proximately, naturally and reasonably
resulting from the alleged slander.” Williams, 755 S.W.2d at 884 (citation omitted). The
plaintiff must prove it lost a specific sale; that is, the slander defeated a pending
transaction. Id. (citing A.H. Belo Corp. v. Sanders, 632 S.W.2d 145, 146 (Tex. 1982)).
TAWC’s motion for summary judgment asserted Howard had no evidence it lost
a specific sale of any of its Tarrant County property because of TAWC’s failure to
7
While Civil Practice and Remedies Code section 37.011 allows subsequent
ancillary litigation of matters previously adjudicated in a declaratory judgment action, it
does not authorize litigation of matters that should have been brought in a prior suit or
relitigation of issues previously adjudicated. TEX. CIV. PRAC. & REM. CODE ANN. § 37.011
(West 2015); Genecov Group, Inc. v. Addicks—Fairbanks Road Sand Co., 144 S.W.3d
546, 553 (Tex. App.—Tyler 2003, pet. denied).
18
release the lien. According to Howard, it suffered special damages in that it was unable
to refinance its property or sell the property. The summary judgment record in the 2015
litigation contains the affidavit of financier Don Konipol, who described his efforts to
obtain new financing for property Howard owned in Tarrant County. Assuming, without
deciding, that the affidavit raises an issue of fact that the unreleased lien defeated a
pending transaction, on its face the affidavit demonstrates the slander of title claim is
barred by limitations.
Slander of title is subject to a two-year statute of limitations. Hill v. Heritage Res.,
964 S.W.2d 89, 116 (Tex. App.—El Paso 1997 pet. denied); TEX. CIV. PRAC. & REM.
CODE ANN. § 16.003(a) (West 2017). The cause of action accrues on the plaintiff’s loss
of a specific sale. Hill, 964 S.W.2d at 116. Konipol’s affidavit indicates that the failed
refinancing would have been accomplished in February 2011 but for the unreleased
lien. Konipol calculates Howard’s damages from the difference in interest paid under
Howard’s existing financing and the lower interest that would have obtained under the
failed refinancing, beginning in March 2011. Howard’s slander of title claim, filed in April
2015, was barred.
Tortious Interference with Prospective Business Relations
Howard’s 2015 suit included allegations that TAWC tortiously interfered with its
prospective business relations with Devon Energy concerning fences around Tracts A
and B, surface damages to Tract B from the pipeline construction, and a prospective
agreement for Devon’s purchase of water for its operations. Common to each alleged
act of interference is Howard’s claim that TAWC represented to Devon that Howard had
19
no interest in Tract B. Howard’s pleadings in the 2006 litigation also included the
allegation that TAWC tortiously interfered with its prospective relationships with Devon
“with respect to the surface of the 65 acre tract.” Howard’s summary judgment
evidence leaves no doubt that TAWC’s statement to Devon denying Howard’s interest
in Tract B occurred before initiation of the 2006 suit. We find reasonable minds could
not disagree that Howard should have, and indeed did, allege its tortious interference
claim in the 2006 litigation. Its tortious interference claim asserted in the 2015 litigation
was barred by res judicata.
Suit for Accounting
In its pleadings in the current suit, Howard asked the trial court to order TAWC
“to make an accounting to [Howard] of all monies received by [TAWC] from the use
and/or enjoyment of Tracts A and B . . . .” In response to TAWC’s motion for summary
judgment, Howard limited its claim for an accounting to proceeds of oil and gas
production received by TAWC. It cited to the trial court such cases as Cox v. Davison,
397 S.W.2d 200 (Tex. 1965), which addresses the obligation of a cotenant who
produces minerals from common property without the consent of another cotenant to
account to the nonconsenting cotenant for its share of the produced minerals, receiving
credit for costs of production and marketing. Id. at 203. On appeal, Howard focuses on
royalty payments paid to TAWC for gas production from January 2007 through October
2013. Howard asserts it is “undisputed” that Howard and TAWC are cotenants. TAWC
disagrees, responding that nothing in the summary judgment record suggests the
parties are cotenants. After review of the record, we agree with TAWC. The trial court
20
did not err by granting summary judgment to TAWC on Howard’s claimed entitlement to
an accounting on the basis of cotenancy.

Outcome: TAWC’s attempted appeal is dismissed for want of subject matter jurisdiction.
Finding no error in the trial court’s rulings on Howard’s claims, we affirm its judgment
that Howard take nothing.

Plaintiff's Experts:

Defendant's Experts:

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