Date: 01-29-2004

Case Style: Mobil Oil Corporation, et al. v. Gary H. Shores, et al.

Case Number: 2-00-430-CV

Judge: John Cayce

Court: Texas Court of Appeals, Second District

Plaintiff's Attorney: Donovan Campbell Jr. and James J. Hartnett, Jr.

Defendant's Attorney: Brian S. Engel

Description:

This case involves interlocutory appeals from the statutory probate court's order denying appellants' pleas to the jurisdiction and motions to transfer venue. On our own motion, we withdraw our opinion of April 5, 2001 and substitute the following.1 The motion for rehearing filed by Shell Cortez Pipeline Company, Shell CO2 Company, Ltd., Shell Oil Company, Shell Western E & P Inc., and SWEPI LP (the "Shell appellants") and the motion for rehearing and for en banc rehearing filed by appellees are denied as moot. We will dismiss the appeals in part for want of jurisdiction and vacate the probate court's order in part for want of subject matter jurisdiction.

FACTUAL AND PROCEDURAL BACKGROUND

The underlying litigation is a suit to recover under-paid carbon dioxide royalties. The appellees are: Gary Shores, John Barfield, and Frank Gibson, in their representative capacities as co-trustees of the Alicia L. Bowdle Trust (collectively the "Bowdle Trust"); William G. Kemp and Marie J. Bench, in their representative capacities as co-trustees of the Bernard M. Bench Family Trust (collectively the "Bench Family Trust"); Bonnie Lynn Whiteis; and William C. Armor, Jr. (hereinafter also referred to collectively as "appellees"). Appellees brought suit in the probate court of Denton County, Texas against appellants Mobil Oil Corporation, Mobil Producing Texas & New Mexico, Inc., and Mobil Cortez Pipeline, Inc. (the "Mobil appellants"), the Shell appellants, and Cortez Pipeline Company (hereinafter also referred to collectively as "appellants").2 Appellees are overriding royalty interest owners of a unitized carbon dioxide pool, the McElmo Dome Unit, in Colorado and claim that since 1982 appellants have under-paid royalties for carbon dioxide produced from that pool.

The Bowdle Trust is a Texas inter vivos trust with its principal place of business and situs of administration in Denton County, Texas. The Bench Family Trust is a Colorado inter vivos and charitable trust with its principal office located in Denver County, Colorado. Whiteis is a Texas citizen who resides in Wichita County, Texas. Armor is a citizen of Florida who resides in Martin County, Florida. Denton County is not the location of any appellant's principal Texas office.

Appellants filed pleas to the probate court's jurisdiction and motions to transfer venue to Harris County asserting, among other complaints, that the Bench Family Trust, Whiteis, and Armor were improperly joined in the lawsuit under former section 15.003 of the Texas Civil Practice and Remedies Code.

After a hearing, the probate court signed a November 30, 2000 order denying appellants' pleas to the jurisdiction and their motions to transfer venue. The court did not specify the basis for its ruling. Appellants then perfected their interlocutory appeals to this court.3

ISSUES ON APPEAL

Appellants assert the probate court erred by denying their motions to transfer venue of the claims of the Bench Family Trust, Whiteis, and Armor because they did not independently establish proper venue in Denton County and their joinder in the Bowdle Trust suit was improper. The Mobil appellants also contend that the order denying the motions to transfer venue is void because the probate court has no subject matter jurisdiction over the claims of the Bench Family Trust, Whiteis, and Armor. In a cross-point, appellees contend that the interlocutory appeals should be dismissed for mootness and lack of jurisdiction, or, alternatively, abated and the case remanded to the probate court for clarification.

APPELLATE COURT JURISDICTION

Before reaching appellants' complaints, we must first address appellees' contention that this court lacks appellate jurisdiction over appellants' interlocutory appeals.

Generally, a party may appeal only a final order or judgment.4 An interlocutory appeal from a nonfinal order or judgment is permitted only when authorized by statute.5 Because interlocutory appeal from an order denying a plea to the jurisdiction is available by statute only to governmental agencies,6 we agree with appellees' contention that we have no jurisdiction to review the probate court's denial of appellants' pleas to the jurisdiction under section 51.014(a)(8).

Interlocutory appeal is, however, available under former section 15.003(c) of the civil practice and remedies code from a ruling allowing or disallowing joinder of a plaintiff who is unable to independently establish venue.7 To be appealable under former section 15.003(c), the venue ruling must "necessarily determine" an intervention or joinder issue under this section.8 If the trial court's order necessarily determines an intervention or joinder issue, we conduct an independent de novo review of the record to ascertain the correctness of that ruling.9 If, however, a joined plaintiff has properly asserted a legally cognizable theory supporting venue in the county of suit independently of any other plaintiff, review of the trial court's denial of a motion to transfer venue concerning that plaintiff must wait until direct appeal following a final judgment.10

Based on the record before us, we conclude that neither the Bench Family Trust, Whiteis, nor Armor pleaded any venue facts that would independently establish proper venue in Denton County under a legally cognizable venue theory. Consequently, they are "person[s] who [are] unable to establish proper venue" under former section 15.003(a) and cannot intervene or be joined in this suit unless they each independently satisfy the four joinder factors contained in former section 15.003(a).11 Furthermore, because the probate court denied appellants' motions to transfer venue as to these parties, the probate court "necessarily determined" that these parties did each independently satisfy the intervention or joinder requirements of former section 15.003(a). As a result, we have jurisdiction under former section 15.003(c) over appellants' interlocutory appeals of the probate court's determination of the intervention or joinder issues relating to the Bench Family Trust, Whiteis, and Armor.

The Mobil appellants contend that the order determining the intervention or joinder issues relating to the Bench Family Trust, Whiteis, and Armor should be vacated and dismissed because the probate court lacks subject matter jurisdiction over the joined parties' claims. Appellees contend that we have no authority to review the probate court's subject matter jurisdiction in an interlocutory appeal brought under former section 15.003(c).12 We disagree.

In Shell Cortez Pipeline Co., an interlocutory appeal from the probate court's order certifying a class action in the same case, we recently observed:

The Texas Supreme Court and numerous courts of appeals have . . . repeatedly recognized that when an appellate court is granted jurisdiction to review an interlocutory order or judgment, that jurisdiction encompasses a review of the validity of the interlocutory order or judgment. . . . In other words, the trial court's authority or jurisdiction to enter the appealable interlocutory order or judgment is subject to appellate review along with the merits of the ruling because "[s]imply put, if the court has no authority to act, it can hardly be said that the court's action is valid."

Moreover, a trial court's subject matter jurisdiction is never presumed and cannot be waived. Our jurisdiction over the merits of an appeal extends no further than that of the court from which the appeal is taken. Thus, if the trial court lacked jurisdiction, we only have jurisdiction to set the trial court's judgment aside and dismiss the cause.13

Based on the binding precedent of our decision in Shell Cortez Pipeline Co. and the longstanding Supreme Court of Texas decisions on which we relied in that case, we clearly have the jurisdiction and authority to review the probate court's subject matter jurisdiction to render the appealable order here. "To hold otherwise would nonsensically preclude our review of a fundamental tenet - subject matter jurisdiction - underlying an order the legislature has statutorily authorized us to review."14

THE STATUTORY PROBATE COURT'S

SUBJECT MATTER JURISDICTION

A statutory probate court may exercise only that jurisdiction accorded it by statute.15 Appellees contend that the probate court below has subject matter jurisdiction by virtue of former probate code sections 5(d), 5A(b), and 5A(c)(2)-(3). Former section 5(d) states in pertinent part that "[a] statutory probate court has concurrent jurisdiction with the district court . . . in all actions involving an inter vivos trust [and] in all actions involving a charitable trust."16 Former section 5A(b) defines the phrases "appertaining to estates" and "incident to an estate":

In proceedings in the statutory probate courts and district courts, the phrases "appertaining to estates" and "incident to an estate" in this Code include the probate of wills, the issuance of letters testamentary and of administration, and the determination of heirship, and also include, but are not limited to, all claims by or against an estate, all actions for trial of title to land and for the enforcement of liens thereon, all actions for trial of the right of property, all actions to construe wills, the interpretation and administration of testamentary trusts and the applying of constructive trusts, and generally all matters relating to the settlement, partition, and distribution of estates of deceased persons.17

Former section 5A(c) provides that "[a] statutory probate court has concurrent jurisdiction with the district court in all actions . . . (2) involving an inter vivos trust [and] (3) involving a charitable trust."18

The Bench Family Trust's, Whiteis's, and Armor's claims do not fall within any of the specific examples listed in former section 5A(b). Nor is the "controlling issue" in this suit "the settlement, partition, and distribution of estates of deceased persons."19 Therefore, we must determine whether the claims of the Bench Family Trust, Whiteis, and Armor are actions involving an inter vivos or charitable trust under former probate code sections 5(d) and 5A(c)(2) and (3).

A statutory probate court's jurisdiction over actions involving trusts is concurrent with that of a district court.20 Thus, the district court's jurisdiction over actions involving trusts determines the extent of a statutory probate court's jurisdiction over such actions.

The trust actions over which a district court has jurisdiction are enumerated in section 115.001(a) of the Texas Trust Code, as follows:

(1) construe a trust instrument;

(2) determine the law applicable to a trust instrument;

(3) appoint or remove a trustee;

(4) determine the powers, responsibilities, duties, and liability of a trustee;

(5) ascertain beneficiaries;

(6) make determinations of fact affecting the administration, distribution, or duration of a trust;

(7) determine a question arising in the administration or distribution of a trust;

(8) relieve a trustee from any or all of the duties, limitations, and restrictions otherwise existing under the terms of the trust instrument or of this subtitle;

(9) require an accounting by a trustee, review trustee fees, and settle interim or final accounts; and

(10) surcharge a trustee.21

Texas courts considering section 115.001(a) and its predecessor, Texas Trust Act article 7425b-24(A),22 have consistently held that those statutes provide the exclusive list of actions "concerning trusts" over which a district court has jurisdiction.23

No cause of action alleged by appellees in this case is specifically enumerated in section 115.001(a). Nevertheless, appellees argue that this is a proceeding "concerning trusts" under Texas Trust Code section 115.001(a)(6) and (a)(7), because the trustees have the power under the Texas Trust Code to enter into mineral leases and to contest claims of or against a trust.24 In essence, appellees contend that because the trustees have these powers, every suit to which they are a party raises questions "affecting the administration, distribution, or duration of a trust" and questions "arising in the administration or distribution of a trust."25 We believe this argument proves too much.

Under appellees' theory, every lawsuit to which a trustee is a party would come within section 115.001 no matter what the subject matter. The mere fact that a plaintiff happens to be a trustee, however, does not transform a case into one "concerning trusts."26

Moreover, construing section 115.001(a)(6)-(7) as appellees suggest would vitiate the remaining carefully drafted provisions in section 115.001(a). It is an axiom of Texas law that the court may not construe a statute in any manner that fails to give effect to all the provisions the legislature enacted or that reduces any provision to mere surplusage.27 We are unwilling to ignore or undo the legislature's care in limiting matters concerning trusts for jurisdictional purposes by embracing the all-encompassing construction appellees urge here.28

For the reasons stated above, we hold that the Bench Family Trust's, Whiteis's, and Armor's claims for damages relating to the royalty payments at issue in this case are not within the statutory probate court's limited statutory jurisdiction. Therefore, the probate court's order denying appellants' motions to transfer venue as to these appellees is void.

Outcome: Having determined that the statutory probate court has no subject matter jurisdiction over the Bench Family Trust’s, Whiteis’s, and Armor’s claims, we vacate the probate court’s order denying appellees’ motions to transfer venue of those claims and dismiss those causes.29 We dismiss for want of jurisdiction the appeals from the probate court’s order denying appellants’ pleas to the jurisdiction.

Plaintiff's Experts: Unknown

Defendant's Experts: Unknown

Comments: None