Opinion
No. 07-15-00455-CV
01-08-2016
IN RE NANCY HIGGINSON, DEBBIE CHEADLE, EDWARD CHEADLE, ARTHUR CHEADLE, WAYNE CARSON, FINNEY CHEADLE, CHERYL SHOOP, AND KEITH SAWAYA, RELATORS
Original Proceeding Arising from Trial Court No. 2013-506,513 72nd District Court, Lubbock County, Texas
Honorable Ruben G. Reyes, Presiding
MEMORANDUM OPINION ON ORIGINAL PROCEEDING
Before QUINN, C.J., and CAMPBELL and PIRTLE, JJ.
This original proceeding arises out of a trial court proceeding involving a dispute among the shareholders of a closely-held corporation, concerning the right of the Real Party in Interest, Raeanne Martin, to transfer her shares to members of one group of shareholders (the "Byrne Parties") instead of another group of shareholders (the "Higginson Parties"), who are the Relators in this proceeding. The Higginson Parties seek mandamus relief directing the trial court to vacate its order denying their motion to sever claims concerning the Martin and Byrne Parties from claims concerning the Martin and Higginson Parties. Alternatively, they seek mandamus relief directing the trial court to abate the underlying proceeding pending resolution of an interlocutory appeal pending before this court concerning the trial court's denial of their motion to confirm an arbitration award rendered in their favor and granting Martin's motion to vacate that same award. For the reasons that follow, we deny any relief.
Cause No. 2013-506,513, styled Raeanne Martin, Plaintiff v. Nancy Higginson, Debbie Cheadle, Edward Cheadle, Arthur Cheadle, Wayne Carson, Finney Cheadle, Cheryl Shoop, Keith Sawaya, Michael V. Byrne, Richard Byrne, Jim Byrne, Jr., Barbara Holladay, West Womack, and the Carolyn Victoria Cain Irrevocable Trust, Defendants and Cross-Plaintiffs v. Michael Byrne and Richard Byrne, Cross-Defendants, pending in the 72nd District Court, Lubbock County, Texas, the Honorable Ruben G. Reyes, Presiding.
Relators are: Nancy Higginson, Debbie Cheadle, Edward Cheadle, Arthur Cheadle, Wayne Carson, Finney Cheadle, Cheryl Shoop, and Keith Sawaya. For purposes of clarity, the Relators will hereinafter be referred to as the Higginson Parties.
Cause No. 07-15-00343-CV, styled Nancy Higginson, Debbie Cheadle, Edward Cheadle, Arthur Cheadle, Wayne Carson, Finney Cheadle, Cheryl Shoop, and Keith Sawaya v. Raeanne Martin.
Although the Higginson Parties contend the trial court abused its discretion in denying their motions to sever and abate, they never specifically pray for any mandamus relief directing the trial court to either grant their motion to sever or their alternative motion to abate.
BACKGROUND
In order to fully grasp the issues in this mandamus proceeding, it is essential to understand the pending expedited appeal in Cause No. 07-15-00343-CV, styled Nancy Higginson, Debbie Cheadle, Edward Cheadle, Arthur Cheadle, Wayne Carson, Finney Cheadle, Cheryl Shoop, and Keith Sawaya v. Raeanne Martin. The substantive issue in that appeal is whether the trial court erred in vacating an arbitration award in favor of the Higginson Parties, while at the same time denying their motion to confirm that award.
The underlying litigation was initially commenced when Martin brought a declaratory judgment action seeking to establish as unenforceable a shareholder agreement between her and the Higginson Parties that putatively restricted her ability to transfer her shares in the closely-held family corporation to the Byrne Parties. Alternatively, Martin sought a declaratory judgment pertaining to the rights, responsibilities, and remedies of the parties arising out of that shareholder agreement. During the course of the underlying litigation, the three groups of shareholders (the Higginson Parties, the Byrne Parties, and Martin) filed claims and cross-claims against one another after Martin attempted to sell her shares to the Byrne Parties. Because the shareholder agreement between Martin and the Higginson Parties contained an arbitration agreement, claims relating to that agreement were referred to arbitration. The Byrne Parties declined to voluntarily participate in that arbitration and, instead, filed a cross-claim against the Higginson Parties seeking a declaration that the shareholder agreement between Martin and the Higginson Parties was unenforceable.
In April 2014, arbitration commenced before a three-person panel of the American Arbitration Association. The Higginson Parties argued that Martin had breached the shareholder agreement and that they had been damaged by that breach. Martin contended the shareholder agreement was unenforceable and, alternatively, that the Higginson Parties' sole contractual remedy was to set aside any transfer that breached the agreement, rather than monetary damages. The Higginson Parties and Martin, through their attorneys, reached a putative settlement agreement; however, the arbitrators refused to accept it. Instead, the dispute proceeded to a final arbitration hearing where the panel awarded the Higginson Parties $2,000,000 in damages, over $322,000 in attorney's fees, and $5,725 in costs.
On July 7, 2015, the Higginson Parties moved to confirm the arbitrators' award. At the same time, Martin sought to vacate or modify the award on the ground that the arbitrators exceeded their authority. On August 25, 2015, the trial court heard Martin's Amended Motion to Vacate or Modify Arbitration Award and the Higginson Parties' Petition to Confirm and Enforce Award of Arbitrators. Two days later, the trial court entered a Level II scheduling order, setting the case for trial on September 12, 2016. On September 1, 2015, after consideration of the evidence and arguments of counsel, the trial court granted Martin's motion to vacate the arbitration award and denied the Higginson Parties' petition to confirm that award. The Higginson Parties timely perfected an accelerated interlocutory appeal of the trial court's September 1 order and that proceeding is now pending before this court.
Shortly after the Higginson Parties filed their notice of appeal, Martin moved the trial court to compel mediation between herself, the Higginson Parties, and the Byrne Parties. The Higginson Parties objected to mediation and, instead, reurged an earlier filed motion to sever their claims against Martin from the remaining claims pending in the underlying trial court proceeding. Alternatively, the Higginson Parties asked the trial court to abate the underlying trial court proceeding pending resolution of their interlocutory appeal. On November 13, 2015, the trial court heard the Higginson Parties' motion to abate and sever, and it subsequently signed an order denying any relief.
In seeking mandamus relief, the Higginson Parties contend that severance and abatement promote judicial economy and avoid prejudice by allowing Martin to proceed with additional claims still existing in the underlying trial court cause of action. The Higginson Parties further contend that because all disputes existing between them and Martin are currently on appeal, this court should have dominant jurisdiction over anything pending in the trial court that might affect them.
The Higginson Parties' third-party claims against Richard Byrne and Michael Byrne and cross-claims by the Byrnes against the Higginson Parties have all been non-suited. Still pending in the underlying trial court cause of action are cross-actions between Martin and the Byrnes.
ANALYSIS
As a preliminary matter, Texas Rule of Appellate Procedure 52.3 identifies the requirements for a petition for writ of mandamus filed in this court. The Higginson Parties have failed to fully comply with these requirements. Specifically, Rule 52.3(j) requires that a party seeking mandamus relief must certify that he or she has reviewed the petition and concluded that every factual statement in the petition is supported by competent evidence included in the appendix or record. While this court has granted the request of the Higginson Parties to consider the record in Cause No. 07-15-00343-CV to be a part of the record in this proceeding, no certification in compliance with Rule 52.3(j) exists in this case. Accordingly, this court could deny mandamus relief on this basis alone. Because we recognize that the Higginson Parties could file a new petition that complies with all of the requirements of Rule 52.3, in the interest of judicial economy, we will address, in part, the merits of the petition.
Further citation of Texas Rules of Appellate Procedure will be by reference to Rule ___.
Even if we were to overlook the pleading deficiency discussed hereinabove, in order to be entitled to mandamus relief it would also be necessary for the Higginson Parties to meet two merits-based requirements: one is to show that the trial court clearly abused its discretion and the other is to show they have no adequate remedy by appeal. In re Ford Motor Co., 988 S.W.2d 714, 718 (Tex. 1998) (orig. proceeding); Walker v. Packer, 827 S.W.2d 833, 840-44 (Tex. 1992) (orig. proceeding). Mandamus issues only to correct a clear abuse of discretion or the violation of a duty imposed by law when there is no other adequate remedy by law. Walker, 827 S.W.2d at 839 (quoting Johnson v. Fourth Court of Appeals, 700 S.W.2d 916, 917 (Tex. 1985) (orig. proceeding)).
To establish an abuse of discretion, the complaining party must demonstrate that the trial court acted unreasonably, arbitrarily, or without reference to any guiding rules or principles. See Downer v. Aquamarine Operators, Inc., 701 S.W.2d 238, 241-42 (Tex. 1965). Accordingly, an incorrect construction of the law or a misapplication of the law to undisputed facts is an abuse of discretion. Walker, 827 S.W.2d at 840.
As to the second requirement, "no adequate remedy by appeal," there is no comprehensive definition of the word "adequate." An appellate remedy in not inadequate simply because it may involve more expense or delay, rather it is inadequate only when parties stand to lose substantial rights. Walker, 827 S.W.2d at 842. Whether ordinary appeal can provide an adequate remedy to a trial court's abuse of discretion depends on a careful analysis of the costs and benefits of granting the writ versus allowing the case to run its course. In re McAllen Med. Ctr., Inc., 275 S.W.3d 458, 464 (Tex. 2008). That determination is a matter left to the sound discretion of the compelling court after a "careful balance of jurisprudential considerations," including both public and private interests. In re Prudential Ins. Co. of Am., 148 S.W.3d 124, 136 (Tex. 2004); In re Marriage of J.B. and H.B., 326 S.W.3d 654, 661 (Tex. App.—Dallas 2010, orig. proceeding).
The underlying proceeding was brought by an individual seeking to dissolve his same-sex marriage. The State filed a petition to intervene, plea to the jurisdiction, and petition for writ of mandamus to correct an allegedly erroneous denial of the petition to intervene and plea to the jurisdiction. The petition for mandamus was conditionally granted, and the trial court was ordered to vacate its order to the extent that it denied the State's petition in intervention. The trial court's prior order was reversed to the extent that it denied the State's plea to the jurisdiction. The petition for review pertaining to petition to intervene and plea to the jurisdiction subsequently was dismissed. See In re Marriage of J.B., 2015 Tex. LEXIS 850 (Tex., Sept. 11, 2015). --------
Mandamus review of significant rulings in exceptional cases may be essential to preserve important substantive and procedural rights from impairment or loss, allow the appellate courts to give needed and helpful direction to the law that would otherwise prove elusive in appeals from judgments, and spare private parties and the public the time and money utterly wasted enduring eventual reversal of improperly conducted proceedings. An appellate remedy is "adequate" when any benefits to mandamus review are outweighed by the detriments.In re Prudential Ins. Co. of Am., 148 S.W.3d at 136. This balancing analysis recognizes that the adequacy of an appeal depends on the facts involved in each case. In re McAllen Med. Ctr., Inc., 275 S.W.3d at 469. "When the benefits outweigh the detriments, appellate courts must consider whether the appellate remedy is adequate." In re Prudential Ins. Co. of Am., 148 S.W.3d at 136.
When a petition for writ of mandamus is filed, the relator bears the burden to show entitlement to the relief requested. Johnson, 700 S.W.2d at 917. Therefore, in order to be entitled to mandamus relief in this case, the Higginson Parties would have to establish that the complained of decisions were unreasonable, arbitrary, or without reference to any guiding rules and principles and that they have no an adequate remedy at law.
Even if we were to assume for purposes of our analysis that the Higginson Parties met their burden of establishing that the trial court clearly abused its discretion by denying their motion to sever and abate (a decision we expressly do not make), in order to establish their entitlement to mandamus relief, the Higginson Parties would still have to establish that an ordinary appeal would not provide them adequate relief. In re Prudential Ins. Co. of Am., 148 S.W.3d at 135-36; Walker, 827 S.W.2d at 839. In attempting to meet this burden, the Higginson Parties contend "any further action by the Trial Court during the pendency of this appeal will interfere with the relief that may be granted by this Court [in the pending expedited appeal in Cause No. 07-15-00343-CV]." They contend further action in the underlying cause of action will "only serve to increase the cost of this case" because they would be required to participate in discovery efforts and mediation.
The Higginson Parties fail to discuss, much less explain, how proceedings in an underlying cause of action, in which they contend there are no claims being made by or against them, would interfere with the pending interlocutory appeal or how it would amount to a loss of their substantial rights. Instead, they merely seek to hedge their bet in the event this court were to affirm the trial court's vacatur of the arbitration panel award should they choose to not participate in on-going discovery regarding claims they contend are unrelated to their own cause of action. Having balanced the interests of the parties and various other jurisprudential considerations, we fail to see how the costs and benefits of granting mandamus relief in this case would substantially outweigh the benefits of allowing the case to run its course. The underlying claims have been, are now, and will continue to be intertwined. As such, even if this court were to affirm the trial court's vacatur of the arbitration award and the Higginson Parties were then required to participate in the underlying proceeding, we find they would have an adequate remedy at law by means of both further proceedings in the trial court and then through an appeal.
Having failed to establish no adequate remedy at law, the Higginson Parties' Petition for Writ of Mandamus is denied.
Per Curiam