Opinion
05-22-00010-CV
06-30-2023
FARMLAND PARTNERS INC., Appellant v. FIRST SABREPOINT CAPITAL MANAGEMENT, L.P., SABREPOINT CAPITAL PARTNERS, LP, SABREPOINT CAPITAL PARTICIPATION, LP, GEORGE BAXTER, AND DONALD MARCHIONY, Appellees
On Appeal from the 44th Judicial District Court Dallas County, Texas Trial Court Cause No. DC-21-08643
Before Chief Justice Burns, Justice Molberg, and Justice Reichek
MEMORANDUM OPINION
KEN MOLBERG, JUSTICE
Appellant Farmland Partners, Inc. (FPI), a publicly-traded real estate investment trust, appeals the trial court's order granting summary judgment on collateral estoppel grounds on its claims against the five defendant-appellees, to whom we collectively refer as "Sabrepoint"-hedge fund Sabrepoint Capital Partners, LP (the Fund), Sabrepoint Capital Participation, LP (the Fund's General Partner), First Sabrepoint Capital Management, L.P. (First Sabrepoint), George Baxter, and Donald Marchiony. Because we conclude the trial court erred in granting summary judgment on FPI's claims based on collateral estoppel, we reverse and remand for further proceedings consistent with this memorandum opinion. See TEX. R. APP. P. 47.4.
FPI alleges Sabrepoint Capital Participation, LP is "the general partner of the Fund."
FPI alleges First Sabrepoint is "an investment advisor/management company to" the Fund.
FPI alleges Baxter "owns and/or manages First Sabrepoint, the Fund, and the Fund's General Partner, along with other affiliated entities."
FPI alleges Marchiony "works as an Analyst for First Sabrepoint.".
Rule 47.4 states, in part, "If the issues are settled, the court should write a brief memorandum opinion no longer than necessary to advise the parties of the court's decision and the basic reasons for it."
I. Background
A. Overview of FPI's Claims in this Lawsuit
In this complex commercial dispute, the parties and others have been embroiled in litigation on multiple fronts over what FPI describes as "an intentional and malicious scheme to manipulate the securities markets to secure a quick and illegal financial windfall by disseminating false and misleading statements" about FPI, which it claims caused "reputational and monetary harm to FPI and its shareholders." FPI alleges these false and misleading statements "were made as part of a 'short-and-distort' campaign to disparage [FPI] and profit from trades with legitimate investors as [the investors] digested the falsehoods disseminated by" a third party, Rota Fortunae, "a/k/a David Quinton Mathews (Mathews), who [Sabrepoint] at least negligently hired, retained, and/or directed as [Sabrepoint's] co-conspirator, accomplice, and/or agent." At its core, FPI's current lawsuit seeks to establish that Sabrepoint's negligent, reckless, and intentional acts caused FPI substantial damages. FPI's pleading states, in part:
3. Non-party David Quinton Mathews published a false and defamatory article about [FPI] on the investor website Seeking Alpha (the "Article") . . . and made related comments on Twitter, causing [FPI] to suffer a roughly 39% decline in its stock price and lose a pivotal joint venture that had been in progress, among other injuries....
33. .... Defendants intended, knew, recklessly disregarded, and/or should have known that, by asking Mathews to research [FPI] and indicating that the Fund had a significant short position in the company, Mathews was substantially certain to publish a negative pseudonymous article under the name Rota Fortunae on Seeking Alpha about [FPI] . . . thereby intentionally, knowingly, recklessly, and/or negligently causing Mathews to publish the Article and thus causing [FPI's] stock price to decline, interfering with its existing and prospective business opportunities, and deceiving consumers of financial information and analysis, among other things.
63. On information and belief, Defendants were aware of the contents of the Article they paid Mathews to research, among other things, having hired Mathews to research; their role in spurring and developing Mathews's research; their provision of ideas, framing, content, research, and resources; their repeated communications and meetings with Mathews throughout the period in which he was drafting the Article; and their receipt of Mathews's Excel workbook containing many of the Article's tables.
134. Based on the preceding paragraphs, [FPI] brings the following claims for relief under Colorado law, and in the alternative under Texas law, both of which are satisfied by the aforementioned allegations. For each claim, among other things, Defendants conspired with Mathews and his one-person company QKM, L.L.C. (collectively "Mathews") to profit by harming [FPI], based on Defendants' bringing Mathews the idea of looking into [FPI] after the Fund was short as something they could "collaborate on" and working with Mathews on the Article's "thesis," "language," "fram[ing]," and content to "include" when Mathews had published numerous hit pieces in similar situations; aided
and abetted Mathews in harming [FPI], based on Defendants' giving substantial assistance and encouragement for Mathews to write and publish the Article throughout their many meetings, emails, and calls, with knowledge that he was substantially certain to again publish a hit piece, as evidenced by the Fund's multimillion dollar bet that [FPI's] stock price would significantly fall in a short period of time; intended the harm to [FPI] that resulted from their directions to Mathews about the company, based on Defendants' desire for the Fund's short position to be profitable instead of losing money as expected; negligently hired, retained, and/or directed Mathews, based on Defendants' breach of their duty not to use individuals who would foreseeably publish defamatory hit pieces about companies in which the Fund had invested, after Mathews repeatedly manufactured profits for the Fund by publishing hit pieces under a pseudonym; and/or employed Mathews as an agent, and he harmed [FPI] in the course and scope of that employment, based on Defendants' retaining the right to control his activities such that he "never wrote an article on Seeking Alpha contrary to a trading position that [he] knew Sabrepoint had taken," providing the Article's key themes, framing, and content for inclusion, and paying Mathews a monthly salary while he worked on the various articles.
FPI's pleading alleges six causes of action against Sabrepoint, which it describes as follows: (1) "intentional and tortious interference with prospective business relations/advantage and/or negligence;" (2) deceptive trade practice in violation of the Colorado Consumer Protection Act; (3) civil conspiracy; (4) "unjust enrichment/money had and received;" (5) "disparagement/business disparagement," and (6) defamation.
No specific citation to this Act is included in FPI's pleading, appellees' motion for summary judgment, or in the trial court's summary judgment order.
Generally, FPI alleges that, together with Mathews, Sabrepoint committed acts covered by each of these causes of action and that such acts resulted in "millions of dollars" of harm to FPI. In its pleading, in addition to other forms of relief, FPI asks that it be awarded "damages incurred as a result of the false, misleading, defamatory, and disparaging statements about" FPI.
Mathews is not a party in this case.
B. FPI's Prior Lawsuit in Colorado
Before suing Sabrepoint in Texas, FPI sued Mathews and others in a Colorado state court. The case was removed to federal court, and FPI amended its complaint to add as additional defendants some, but not all, of the five appellees in this case: Baxter, Marchiony, and an entity named as "First Sabrepoint Capital Management d/b/a Sabrepoint Capital Management, LP," which we assume for purposes of this appeal is appellee First Sabrepoint.
According to FPI's first amended complaint in the federal litigation, and the case style in the federal district court's order that we refer to herein, at least two of the appellees in this case-the Fund and the Fund's General Partner-were not named as parties in the Colorado litigation.
After Sabrepoint removed the case to federal court and FPI amended its complaint to add First Sabrepoint, Baxter, and Marchiony as defendants in the Colorado case, First Sabrepoint, Baxter, and Marchiony then moved to dismiss FPI's claims against them under federal rule of civil procedure 12(b)(2), on the sole ground that the Colorado court lacked personal jurisdiction over them. See FED. R. CIV. P. 12(B)(2). The Colorado Court Granted Their Motion, see Farmland Partners, Inc. v. Rota Fortunae, Civil Action No. 1:18-cv-02351-RBJ, 2021 WL 765362, at *1-3 (D. Colo. Feb. 26, 2021), and later entered a final judgment in their favor and against FPI. Because the dismissal was involuntary and was based on a lack of personal jurisdiction, the judgment did not operate as an adjudication on the merits.
We provide more detail regarding the Colorado court's analysis in Section II.B.3 below.
See FED. R. CIV. P. 41(b) ("Unless the dismissal order states otherwise, a dismissal under this subdivision (b) and any dismissal not under this ruleexcept one for lack of jurisdiction, improper venue, or failure to join a party under Rule 19-operates as an adjudication on the merits.") (emphasis added).
C. Summary Judgment and Other Proceedings in this Lawsuit
FPI later sued Sabrepoint in Texas in the lawsuit now before us.
Sabrepoint filed an original answer, and in it, Sabrepoint generally denied FPI's allegations and asserted various affirmative defenses, including collateral estoppel. Shortly thereafter, Sabrepoint moved for summary judgment based solely on its collateral estoppel defense. Sabrepoint submitted evidence with its summary judgment motion, which included, but was not limited to, certified copies of the Colorado court's order and final judgment. In its summary judgment motion, Sabrepoint argued FPI should be collaterally estopped from pursuing all of its claims in this case because FPI's claims were merely a collateral attack on the Colorado court judgment.
FPI filed a response opposing Sabrepoint's summary judgment motion and submitted evidence of its own, portions of which Sabrepoint objected to. The trial court sustained some of these objections and overruled others. No issue is presented on appeal regarding the trial court's evidentiary rulings.
Shortly after filing its motion for summary judgment, Sabrepoint also filed a motion to dismiss FPI's claims under the Texas Citizens Participation Act (TCPA). See TEX. CIV. PRAC. &REM. CODE § 27.003. The trial court heard the TCPA motion on November 12, 2021, and in the hearing, Sabrepoint's counsel reminded the trial court that its pending summary judgment motion also involved collateral estoppel.
On December 17, 2021, more than thirty days after the TCPA hearing, the trial court signed the order at issue, which granted Sabrepoint's summary judgment motion, purported to grant Sabrepoint's TCPA motion, dismissed FPI's claims against Sabrepoint with prejudice, and ordered that FPI take nothing by way of its claims against Sabrepoint.
As explained below, we have previously determined the TCPA portion of the order is void.
FPI appealed both aspects of the trial court's order. Because we questioned our jurisdiction over the appeal, we requested and received letter briefing from both sides regarding our jurisdiction. After considering that briefing, we issued an order (1) limiting the scope of this appeal to the summary judgment portion of the order and (2) determining the TCPA portion of the trial court's order was void. The parties have not asked us to reconsider those rulings.
Our letter questioning our jurisdiction stated that the trial court's order purporting to grant Sabrepoint's TCPA motion to dismiss was not a final order because it did not resolve the issue of attorney's fees and sanctions and stated the order was not appealable as an interlocutory order because no statute authorizes its appeal. See TEX. CIV. PRAC. & REM. CODE § 27.009(a)(1)-(2) (if trial court orders dismissal of a legal action under Chapter 27, it shall award to the moving party court costs and reasonable attorney's fees incurred in defending against the legal action and may award to the moving party sanctions against the party who brought the legal action as the court determines sufficient to deter the party who brought the legal action from bringing similar actions described in Chapter 27); Moore v. Dallas Morning News, Inc., No. 05-21-00841-CV, 2021 WL 5480679, at *1 (Tex. App.-Dallas Nov. 23, 2021, no pet.) (mem. op.).
Despite the order's language purporting to grant the TCPA motion, the motion was, in fact, overruled by operation of law prior to the order's signing, as the TCPA hearing concluded more than thirty days before the court ruled on the TCPA motion. See TEX. CIV. PRAC. AND REM. CODE §§ 27.005(a) (trial court must rule on motion not later than the thirtieth day following the date the hearing on the motion concludes); 27.008 (if trial court does not rule on motion in the time prescribed by Section 27.005, the motion is considered to have been denied by operation of law and the moving party may appeal); In re Tabletop Media, LLC, No. 05-20-00454-CV, 2020 WL 2847272, at *2 (Tex. App.-Dallas June 2, 2020, orig. proceeding) (mem. op.).
II. Issues and Analysis
FPI appeals the trial court's order granting summary judgment on its claims against Sabrepoint and raises two issues on appeal. Specifically, FPI argues the trial court erred in granting summary judgment based on collateral estoppel because the order (1) precludes FPI from litigating the merits of its claims in this lawsuit, which FPI argues the Colorado court did not do, and (2) precludes litigation of FPI's claims in this lawsuit that were neither asserted in nor ruled on by the Colorado court.
A. Applicable Standards 1. Summary Judgment Standards
We review de novo the trial court's ruling on a motion for summary judgment. Ortiz v. State Farm Lloyds, 589 S.W.3d 127, 131 (Tex. 2019); Valence Operating Co. v. Dorsett, 164 S.W.3d 656, 661 (Tex. 2005). In conducting our review, "we take as true all evidence favorable to the nonmovant, and we indulge every reasonable inference and resolve any doubts in the nonmovant's favor." Ortiz, 589 S.W.3d at 131 (quoting Dorsett, 164 S.W.3d at 661).
A traditional motion for summary judgment requires the moving party to show that no genuine issue of material fact exists and that it is entitled to judgment as a matter of law. Tex.R.Civ.P. 166a(c); Ortiz, 589 S.W.3d at 131; Lujan v. Navistar, Inc., 555 S.W.3d 79, 84 (Tex. 2018). If the movant does so, the burden then shifts to the nonmovant to come forward with competent controverting evidence sufficient to raise a genuine issue of material fact on the challenged element. Lujan, 555 S.W.3d at 84. A genuine issue of material fact exists if the evidence regarding the challenged element "rises to a level that would enable reasonable and fair-minded people to differ in their conclusions." First United Pentecostal Church of Beaumont v. Parker, 514 S.W.3d 214, 220 (Tex. 2017) (quoting Merrell Dow Pharms., Inc. v. Havner, 953 S.W.2d 706, 711 (Tex. 1997)).
Traditional "summary judgment for a defendant is proper only when the defendant negates at least one element of each of the plaintiff's theories of recovery . . . or pleads and conclusively establishes each element of an affirmative defense." Sci. Spectrum, Inc. v. Martinez, 941 S.W.2d 910, 911 (1997) (citations omitted) (stating this prior to addition of rule 166a(i)).
When, as here, a party has moved for traditional summary judgment on an affirmative defense, the movant has the initial burden of establishing entitlement to judgment as a matter of law by conclusively establishing each element of its affirmative defense. See Chau v. Riddle, 254 S.W.3d 453, 455 (Tex. 2008) (per curiam); see also TEX. R. CIV. P. 166a(b)-(c). A matter is conclusively established if reasonable people could not differ as to the conclusion to be drawn from the evidence. See City of Keller v. Wilson, 168 S.W.3d 802, 816 (Tex. 2005); see also Goodyear Tire & Rubber Co. v. Mayes, 236 S.W.3d 754, 755 (Tex. 2007) (per curiam) (stating, “An appellate court reviewing a summary judgment must consider whether reasonable and fair-minded jurors could differ in their conclusions in light of all of the evidence presented.”).
Although Sabrepoint's summary judgment motion did not state whether it was a traditional or a noevidence motion, a traditional motion was the only type of summary judgment motion available to it, considering that the sole ground for Sabrepoint's motion was an affirmative defense on which Sabrepoint bore the burden of proof. Compare TEX. R. CIV. P. 166a(c), (i) (allowing a party to file a no-evidence summary judgment motion under subsection (i) "on the ground that there is no evidence of one or more essential elements of a claim or defense on which an adverse party would have the burden of proof at trial.") (emphasis added); see Calabrian Corp. v. Alliance Specialty Chems., Inc., 418 S.W.3d 154, 157-58 (Tex. App.-Houston [14th Dist.] 2013, no pet.) (noting that res judicata, also known as claim preclusion, and collateral estoppel, also known as issue preclusion, are affirmative defenses, and the party asserting the defense has the burden of pleading and proving its elements); see also Teal Trading & Dev., LP v. Champee Springs Ranches Prop. Owners Ass'n, 593 S.W.3d 324, 333 (Tex. 2020) ("'The hallmark characteristic' of an affirmative defense 'is that the burden of proof is on the defendant to present sufficient evidence to establish the defense and obtain the requisite . . . findings.'") (quoting Zorrilla v. Aypco Constr. II, LLC, 469 S.W.3d 143, 156 (Tex. 2015)).
If the movant meets its burden, the burden then shifts to the nonmovant to present evidence raising a genuine issue of material fact as to one or more elements of the affirmative defense, precluding summary judgment. See Centeq Realty, Inc. v. Siegler, 899 S.W.2d 195, 197 (Tex. 1995). .
2. Collateral Estoppel
"The doctrine of collateral estoppel precludes relitigation of ultimate issues of fact actually litigated and essential to the judgment in a prior suit." Getty Oil Co. v. Ins. Co. of N. Am., 845 S.W.2d 794, 801 (Tex. 1992); see Tarter v. Metro. Sav. & Loan Ass'n, 744 S.W.2d 926, 927 (Tex. 1988). "Ultimate issues are those factual determinations submitted to a jury that are necessary to form the basis of a judgment." Tarter, 744 S.W.2d at 928. "The term 'ultimate issue' does not refer to a cause of action or claim." Id.
"Collateral estoppel requires that the issue decided in the first action be identical to the issue in the pending action." Getty Oil, 845 S.W.2d at 802 (emphasis added). "The doctrine applies when the party against whom collateral estoppel is asserted had a full and fair opportunity to litigate the issue in the prior suit[,]" Tarter, 744 S.W.2d at 927, and "when relitigation could result in an inconsistent determination of the same ultimate issue; it does not bar litigation merely because the outcomes of two suits may appear to be inconsistent." Id. at 928-29.
The doctrine "is designed to promote judicial efficiency, protect parties from multiple lawsuits, and prevent inconsistent judgments by precluding the relitigation of issues." In re USAA Gen. Indem. Co., 629 S.W.3d 878, 883 (Tex. 2021) (quoting Sysco Food Servs., Inc. v. Trapnell, 890 S.W.2d 796, 801 (Tex. 1994)).
Trapnell states, "[s]ince collateral estoppel is an affirmative defense, [a defendant has] the burden of pointing out the issue [the defendant wishes] to be estopped." 890 S.W.2d at 802. Trapnell further explains the burden as follows:
A party seeking to assert the bar of collateral estoppel must establish that (1) the facts sought to be litigated in the second action were fully and fairly litigated in the first action; (2) those facts were essential to the judgment in the first action; and (3) the parties were cast as adversaries in the first action.890 S.W.2d at 801 (emphasis added) (but noting, with respect to third element, that strict mutuality of parties is no longer required); see also Van Dyke v. Boswell, O'Toole, Davis & Pickering, 697 S.W.2d 381, 384 (Tex. 1985) ("Collateral estoppel, or issue preclusion, is more narrow than res judicata in that it only precludes the relitigation of identical issues of facts or law that were "actually litigated and essential to the judgment in a prior suit.") (emphasis added).
As Trapnell states, "[s]trict mutuality of parties is no longer required.... To satisfy the requirements of due process, it is only necessary that the party against whom the doctrine is asserted was a party or in privity with a party in the first action." 890 S.W.3d at 801 (citations omitted).
"To determine whether the facts were fully and fairly litigated in the first suit, we consider [whether] '(1) . . . the parties were fully heard, (2) . . . the court supported its decision with a reasoned opinion, and (3) . . . the decision was subject to appeal or was in fact reviewed on appeal.'" BP Auto. LP v. RML Waxahachie Dodge, LLC, 517 S.W.3d 186, 200 (Tex. App.-Texarkana 2017, no pet.) (quoting Mower v. Boyer, 811 S.W.2d 560, 562 (Tex. 1991)). "To determine whether a fact issue is essential to the judgment, i.e. whether it is an 'ultimate issue,' we look to the factual determinations made by the trier of fact that are 'necessary to form the basis of a judgment.'" Id. (quoting Tarter, 744 S.W.2d at 928).
We review collateral estoppel's application de novo because it is a question of law. Webb v. Diversegy, LLC, No. 05-17-01258-CV, 2019 WL 1146707, at *4 (Tex. App.-Dallas Mar. 13, 2019, pet. denied) (mem. op.).
3. Collateral Estoppel in Lack of Jurisdiction Context
"A personal judgment for the defendant, although valid and final, does not bar another action by the plaintiff on the same claim . . . [w]hen the judgment is one of dismissal for lack of jurisdiction[.]" RESTATEMENT (SECOND) OF JUDGMENTS § 20(1)(a) (Am. L. Inst. 1982).
Comment c of this section explains the rationale for this by stating, in part, "Dismissals on the grounds specified in this Clause are explicitly referred to as not operating as an adjudication 'on the merits' in Rule 41(b) of the Federal Rules of Civil Procedure and in many of the state rules patterned on that provision." RESTATEMENT (SECOND) OF JUDGMENTS § 20 CMT. C (AM. L. INST. 1982). Rule 41(b) has been described as meaning "only that the dismissal permits a second action on the same claim that corrects the deficiency found in the first action. The judgment remains effective to preclude relitigation of the precise issue of jurisdiction or venue that led to the initial dismissal." 18A CHARLES ALAN WRIGHT, ARTHUR R. MILLER &EDWARD H. COOPER, FEDERAL PRACTICE AND PROCEDURE § 4436 (3D ED. 1998).
However, "[i]f a federal court dismisses a removed case for want of personal jurisdiction, that determination may preclude the parties from relitigating the very same personal jurisdiction issue in state court." Ruhrgas AG v. Marathon Oil Co., 526 U.S. 574, 585 (1999) (emphasis added); see 18A Charles Alan Wright, Arthur R. Miller &Edward H. Cooper, Federal Practice and Procedure § 4436 (3d ed. 1998) (stating a judgment dismissing a claim for lack of subjectmatter or personal jurisdiction or for improper venue will remain effective to "preclude relitigation of the precise issue of jurisdiction or venue that led to the initial dismissal") (emphasis added).
Recently, we stated, "An order dismissing claims for lack of personal jurisdiction precludes re-litigation of the jurisdictional issues that were actually litigated and essential to the dismissal" but "does not preclude a second action asserting the same claims in a court that can establish personal jurisdiction based on issues that were not decided in the first action." In re C.H., No. 05-21-00015-CV, 2022 WL 2187451, at *2 (Tex. App.-Dallas June 17, 2022, no pet.) (mem. op.). Also, in In re Assurances Generales Banque Nationale, 334 S.W.3d 323, 325 (Tex. App.-Dallas 2010, no pet.), we stated:
An order dismissing claims for lack of personal jurisdiction precludes relitigation of the jurisdictional issues that were actually litigated and essential to the dismissal. Nguyen v. Desai, 132 S.W.3d 115, 118 (Tex. App.-Houston [14th Dist.] 2004, no pet.). In many instances, a Texas court's dismissal of a suit for lack of personal jurisdiction will preclude the assertion of personal jurisdiction in a second suit involving the same or similar claims arising out of the same occurrence against the same parties. Id. at 119.
B. Analysis
1. FPI's Issues on Appeal
On appeal, FPI argues the trial court erred in granting summary judgment on FPI's claims because the order (1) precludes FPI from litigating the merits of its claims in this lawsuit, which FPI argues the Colorado court did not do, and (2) precludes litigation of FPI's claims here that were neither asserted in nor ruled on by the Colorado court. Before we determine whether the trial court erred in granting summary judgment on FPI's claims based on collateral estoppel, we first discuss how Sabrepoint defines the issue it claims should be estopped.
2. Sabrepoint's Characterization of the Issue to be Estopped
To obtain summary judgment based on collateral estoppel, Sabrepoint was required to conclusively establish three elements, the first two of which require Sabrepoint to conclusively establish that the facts FPI seeks to establish in this lawsuit were fully and fairly litigated and essential to the Colorado court's judgment in favor of Sabrepoint. See Trapnell, 890 S.W.2d at 801 (listing collateral estoppel elements); Martinez, 941 S.W.2d at 911 (summary judgment burden). Collateral estoppel applies only if the issue decided in the first action is identical to the issue in the pending action. See Getty Oil, 845 S.W.2d at 802 (describing this as a requirement). As the movant on its collateral estoppel defense, Sabrepoint had the "burden of pointing out the issue [Sabrepoint wishes] to be estopped." See Trapnell, 890 S.W.2d at 802.
We discuss only the first two because the third element is undisputed.
In its summary judgment motion, Sabrepoint stated:
The factual issues underlying the [personal] jurisdictional dispute [in the Colorado lawsuit] - namely, Sabrepoint's lack of involvement with the allegedly defamatory article - are the same facts that determine the merits of FPI's claims. Specifically, there are three issues that are central to FPI's claims in this litigation: (1) whether Sabrepoint was involved in writing or publishing the article; (2) whether the article's author, Quinton Mathews, acted as Sabrepoint's agent[;] and (3) whether Sabrepoint conspired with Mathews to publish the article.
Although Sabrepoint expanded that list elsewhere in its motion, throughout its motion, Sabrepoint distilled these issues into a broader one-repeatedly referring to Sabrepoint's "lack of involvement with the article" or the "allegedly defamatory article." Sabrepoint continued this theme on appeal, acknowledging this distilled basis for its summary judgment motion in its appellate brief, where it describes the summary judgment motion and its arguments as follows:
Later in its motion, Sabrepoint expanded the list of three to six: (1) "[w]hether Sabrepoint knew about the article," (2) "[w]hether Sabrepoint and Mathews exchanged language, information, and ideas related to the article," (3) "[w]hether Sabrepoint saw a draft and/or copy of the article prior to the publication," (4) [w]hether Sabrepoint conspired with Mathews to write and publish the article," (5) "[w]hether Mathews acted as Sabrepoint's agent," and (6) "[w]hether Sabrepoint had any role whatsoever in the article's publication."
The Sabrepoint Defendants filed a motion for summary judgment contending that this lawsuit was barred by collateral estoppel.... [and] argued that the Colorado court's jurisdictional determinations, which established the Sabrepoint Defendants' "lack of involvement with the allegedly defamatory article," precluded FPI's claims in the [Texas] suit, all of which depended upon showing that the Sabrepoint Defendants were involved with the article.
Thus, Sabrepoint argued in the trial court and argues on appeal that FPI's claims are collaterally estopped because its "lack of involvement with the allegedly defamatory article" was fully and fairly litigated and was essential to the Colorado court's judgment against FPI.
3. Trial Court Erred in Granting Summary Judgment
We agree with FPI's position that Sabrepoint failed to identify any identical issue that FPI fully and fairly litigated in the Colorado case and was essential to the Colorado court's decision. For the three reasons below, we conclude the trial court erred in granting summary judgment on FPI's claims based on collateral estoppel.
First, with respect to FPI's claims against all appellees, as FPI argues, Sabrepoint's characterization of the issue to be estopped as its "lack of involvement with the allegedly defamatory article" misses the mark. The Colorado federal court dismissed FPI's prior lawsuit for lack of personal jurisdiction over First Sabrepoint, Baxter, and Marchiony. As previously indicated, "[i]f a federal court dismisses a removed case for want of personal jurisdiction, that determination may preclude the parties from relitigating the very same personal jurisdiction issue in state court." Ruhrgas AG, 526 U.S. at 585 (emphasis added); see In re Assurances Generales Banque Nationale, 334 S.W.3d at 325 ("An order dismissing claims for lack of personal jurisdiction precludes relitigation of the jurisdictional issues that were actually litigated and essential to the dismissal."); 18A Charles Alan Wright, Arthur R. Miller & Edward H. Cooper, Federal Practice and Procedure § 4436 (3d ed. 1998) (stating a judgment dismissing a claim for lack of jurisdiction or improper venue will "preclude relitigation of the precise issue of jurisdiction or venue that led to the initial dismissal") (emphasis added). But an order dismissing claims for lack of personal jurisdiction "does not preclude a second action asserting the same claims in a court that can establish personal jurisdiction based on issues that were not decided in the first action."). In re C.H., 2022 WL 2187451, at *2.
See Farmland Partners, Inc., 2021 WL 765362, at *1 (stating, "This matter is before the Court on the Sabrepoint Capital, LP defendants' motion to dismiss for lack of personal jurisdiction" and "[f]or the purposes of this motion the [Colorado court] refers to Baxter, Marchiony, and Sabrepoint Capital, LP collectively as 'Sabrepoint'").
In the Colorado case, the precise issue of jurisdiction the court considered was whether the Colorado court had specific personal jurisdiction over First Sabrepoint, Baxter, and Marchiony. But in this case, jurisdiction is undisputed, and no issue regarding specific personal jurisdiction over Sabrepoint is presented. Thus, based on the authorities discussed in the above paragraph, the Colorado judgment dismissing FPI's claims for lack of jurisdiction has no preclusive effect on FPI's claims against Sabrepoint in this case. To the extent our conclusion is in conflict with Matosantos Com. Corp. v. Applebee's Int'l, Inc., 245 F.3d 1203 (10th Cir. 2001), upon which Sabrepoint relies, we decline to apply it because we conclude it is in conflict with the authorities already mentioned.
The Colorado court limited its analysis to whether First Sabrepoint, Baxter, and Marchiony were "subject to [that] Court's specific personal jurisdiction." See Farmland Partners, Inc., 2021 WL 765362, at *3. The court stated that because the Colorado long-arm statute mirrors the due process clause, the court needed only to determine whether asserting jurisdiction over First Sabrepoint, Baxter, and Marchiony comported with due process. Id., at *4. In the Colorado court's analysis, after discussing the evidence presented by both sides, the court concluded FPI had not met its burden and stated:
Plaintiff does present evidence that Sabrepoint[ ] knew Mr. Mathews was Rota Fortunae, and that he had published articles on Seeking Alpha in the past. At most plaintiff's facts support a reasonable inference that Sabrepoint knew that, by hiring QKM to research FPI, it was possible Quinton Mathews would publish an article about FPI as Rota Fortunae. However, even if the Court makes this deduction, a defendant's mere knowledge that a third party may purposely direct activity toward a forum state is insufficient to establish an intentional action for purposeful direction. Put differently, Sabrepoint's knowledge that Mr. Mathews might publish an article about FPI is insufficient to establish that Sabrepoint purposely directed its activities at Colorado. In sum, there is nothing in the record to support an inference that the Seeking Alpha article is attributable to Sabrepoint. Thus, the article on its own cannot establish that Sabrepoint purposely directed its activity at the forum state. ....
Based on the evidence and allegations before the Court, Sabrepoint was [not] involved in . . . the article. Thus, [FPI] has not established that Sabrepoint committed an intentional act aimed at the state of Colorado.
.... Accordingly, the Court finds that it does not have specific personal jurisdiction over defendant Sabrepoint.See id., at *7-8. The Colorado court granted First Sabrepoint, Baxter, and Marchiony's rule 12(b)(2) motion, id., at *12, and later entered a final judgment dismissing the case as to those defendants "for lack of personal jurisdiction," and entering judgment in favor of First Sabrepoint, Baxter, and Marchiony.
Second, as to FPI's claims against the Fund and the Fund's General Partner, even if we assume Sabrepoint correctly characterized the issue to be precluded as its "lack of involvement with the allegedly defamatory article," summary judgment based on collateral estoppel would still be improper, as the parties never litigated any issues regarding those two entities in the Colorado litigation because they were not parties to the lawsuit. See Getty Oil, 845 S.W.2d at 802 ("collateral estoppel only applies where the identical issue was litigated in the prior suit"); Tarter, 744 S.W.2d 928-29 ("The doctrine of collateral estoppel applies when relitigation could result in an inconsistent determination of the same ultimate issue; it does not bar litigation merely because the outcomes of two suits may appear to be inconsistent.").
Of course, as Trapnell makes clear, Sabrepoint was not required to establish mutuality of parties in the prior and current lawsuits in order to establish its collateral estoppel defense, and our prior statements in this paragraph should not be interpreted as stating otherwise. Instead, our point is more nuanced, and our conclusion is driven by the specific circumstances before us, where Sabrepoint defines the issue to be estopped in terms of a certain group's "lack of involvement in" a particular act. Given the nomenclature used here and in the Colorado court's judgment, a hurried reader might easily miss this, but, in short, because "Sabrepoint" in the Colorado action referred only to First Sabrepoint, Baxter, and Marchiony, the parties in that case did not litigate, and the Colorado court did not reach any conclusion on, whether the Fund or the Fund's General Partner were "involved in the allegedly defamatory article." Thus, even if we assume Sabrepoint correctly characterized the issue to be estopped here, a second reason collateral estoppel does not apply to FPI's claims against the Fund and the Fund's General Partner in this case is because there is no possibility of an inconsistent determination of the same ultimate issue, when the Colorado court never determined their involvement, if any, in the allegedly defamatory article. See Tarter, 744 S.W.2d at 928-29 (collateral estoppel "applies when relitigation could result in an inconsistent determination of the same ultimate issue" and "does not bar litigation merely because the outcomes of two suits may appear to be inconsistent").
See Trapnell, 890 S.W.3d at 801.
Third, again as to FPI's claims against the Fund and the Fund's General Partner, preclusion of FPI's claims does not serve the underlying purposes of the collateral estoppel doctrine, which "is designed to promote judicial efficiency, protect parties from multiple lawsuits, and prevent inconsistent judgments by precluding the relitigation of issues." In re USAA Gen. Indem. Co., 629 S.W.3d at 883 (quoting Trapnell, 890 S.W.2d at 801). The Fund and the Fund's General Partner were not named in the Colorado litigation and thus have not been subjected to multiple lawsuits, and because the ultimate issues in FPI's Colorado lawsuit and this suit are different, precluding FPI from proceeding with its case against the Fund and its General Partner does not prevent relitigation of issues or inconsistent judgments but instead simply deprives FPI of a possible remedy.
We conclude the trial court erred in granting summary judgment on FPI's claims based on collateral estoppel and sustain FPI's issues.
III. Conclusion
For the reasons stated above, we reverse the trial court's summary judgment order and remand this case for further proceedings consistent with this opinion.
JUDGMENT
Chief Justice Burns and Justice Reichek participating.
In accordance with this Court's opinion of this date, the judgment of the trial court is REVERSED and this cause is REMANDED to the trial court for further proceedings consistent with this opinion.
It is ORDERED that appellant FARMLAND PARTNERS INC. recover its costs of this appeal from appellees FIRST SABERPOINT CAPITAL MANAGEMENT, L.P., SABREPOINT CAPITAL PARTNERS, LP, SABREPOINT CAPITAL PARTICIPATION, LP, GEORGE BAXTER, and DONALD MARCHIONY.