Texas Intervention Procedure Explained; Trial Court's Disallowance of Intervention Affirmed

R. Hassell & Company, Inc. v. Springwoods Realty Co, Harris County Improvement Dist #18, Walter P. Moore, Inc, and Costello, Inc. No. 01-17-00154-CV (Tex.App. - Houston [1st Dist.] April 19, 2018) (order striking intervention in pending lawsuit affirmed)

Trial court: 333rd District Court Harris County, Texas Trial Court Case No. 2012-42981

MEMORANDUM OPINION

R. HASSELL & COMPANY, INC. AND R. HASSELL BUILDERS, INC., Appellants,
v.
SPRINGWOODS REALTY COMPANY, HARRIS COUNTY IMPROVEMENT DISTRICT #18, WALTER P. MOORE, INC., AND COSTELLO, INC., Appellees.

No. 01-17-00154-CV.

Court of Appeals of Texas, First District, Houston.

Opinion issued April 19, 2018.   

John P. Cahill, Jr., for Costello, Inc., Appellee.

Christine N. York, John L. Engvall, Jr., for Harris County Improvement District #18, Appellee.

Andrew Patrick Parma, Felicia Harris, for R. Hassell & Company, Inc., and R. Hassell Builders, Inc., Appellant.

Weston Davis, Gregory N. Ziegler, for Walter P. Moore and Associates, Inc. d/b/a Walter P. Moore, Appellee.

Debra Donaldson, Kelly Ann Conklin, Timothy M. McDaniel, for Springwoods Realty Company, Appellee.

On Appeal from the 333rd District Court, Trial Court Case No. 2012-42981, Harris County, Texas.

Panel consists of Chief Justice Radack and Justices Massengale and Brown.

MEMORANDUM OPINION

SHERRY RADACK, Chief Justice.

Appellants, R. Hassell & Company, Inc. and R. Hassell Builders, Inc. (collectively, "RHC"), challenge the trial court's order granting the motion of appellees, Springwoods Realty Company ("Springwoods"), Harris County Improvement District #18 (the "District"), Walter P. Moore, Inc. ("WPM"), and Costello, Inc. ("Costello") (collectively, "appellees"), to strike RHC's Second Petition in Intervention. In its sole issue, RHC contends that the trial court erred in striking its Second Petition in Intervention.

We affirm.

Background

In its July 26, 2012 original petition, as amended, Hassell Construction Company ("HCCI")^[1] alleged that the District solicited bids for a roadway construction project in Harris County, Texas, known as the Springwoods Project (the "Project"). The Project involved the construction of Springwoods Village Parkway, as well as water and sanitary sewer lines, paving, and traffic and drainage improvements, in connection with ExxonMobil Corporation's Houston Campus. Based on the information that the District provided, HCCI submitted a bid. Costello, an engineer on the Project, recommended that the District award the contract to HCCI because HCCI was a "known entity with a great deal of experience on similar projects in the area and was ready to turn the Project around very quickly." After a public bidding process, HCCI was awarded the Project.

HCCI, as "Contractor," then entered into a construction contract (the "Contract") with the District, as "Owner." Pursuant to an attached "Special Condition," Springwoods, the Project Developer, was also to be considered an "Owner" for certain purposes under the Contract.^[2] According to HCCI, the Contract contained material provisions integral to the timely completion of the scope of work, which included that "time was of the essence" and that "HCCI would be paid for the performance of the Scope of Work required by the drawings." HCCI alleged that, after its work on the Project commenced, however, the District and Springwoods made over 500 revisions to the construction plans, which materially changed the scope of work, the Contract price, and the timeline. The District and Springwoods then refused to pay for the changes and further accelerated the work, resulting in damage to HCCI. In its Third Amended Petition, HCCI brought claims against the District and Springwoods for breach of contract and against Springwoods for fraud. In the alternative, HCCI sought recovery against the District under Texas Local Government Code section 271.153(a)(2)^[3] and against Springwoods for quantum meruit and unjust enrichment.

Subsequently, the District and Springwoods each filed a third-party petition against WPM, who had provided engineering and design services on the Project. The District brought claims against WPM for breach of contract, breach of warranty, and negligence, seeking indemnity. Springwoods asserted a negligence claim against WPM, also seeking indemnity. WPM, in turn, filed a third-party petition against Costello, seeking contribution.

On September 15, 2014, RHC^[4] filed its First Petition in Intervention, alleging that RHC and HCCI were partners, had pursued and executed selected construction projects in Harris County, and had "agreed to jointly bid, and as low bidder agreed to perform," the Project. RHC noted that its "joint venture relationship" with HCCI was disclosed to the District and Springwoods. RHC asserted that it provided project management and performed work on the Project utilizing RHC equipment and personnel. HCCI then submitted RHC's progress-payment reports to the District and Springwoods, and HCCI and RHC split the proceeds received from the Project, with "99% to RHC and 1% to HCCI."

RHC further alleged that HCCI had filed the instant lawsuit "under the name HCCI representing the partnership." RHC asserted that it had a justiciable interest in HCCI's lawsuit because RHC, "as a partner of HCCI," could have brought all or part of the original suit in its own name," and RHC's claims "ar[o]se from the claims" made by HCCI. RHC added conspiracy claims against the District, Springwoods, and the law firm of Coats Rose, who had previously represented HCCI. RHC also alleged that Coats Rose had tortiously interfered with RHC's relationship with HCCI. RHC further brought "cross-claims" against HCCI for breach of fiduciary duty and asserted that HCCI, "acting in concert with" Coats Rose, had intentionally inflicted emotional distress on the Hassell family. RHC noted that, although the parties had already exchanged "substantial documents," the "defendants had forestalled oral depositions."

HCCI answered RHC's First Petition in Intervention, generally denying the allegations and including a verified denial that a partnership existed between HCCI and RHC. HCCI also moved to strike RHC's petition in intervention, asserting that HCCI had filed its original petition in the suit in July 2012, and RHC had waited over two years afterwards to intervene. HCCI asserted that RHC lacked a justiciable interest in the lawsuit because HCCI, and not RHC, was awarded the Contract and entered into the Project as general contractor. In addition, RHC was not a party to the Contract and lacked standing to bring suit in its own name; rather, RHC had simply performed project management and other work on the Project, as had various subcontractors. Further, "[e]ven if RHC were to allege damages separate and apart from those of HCCI, as pass-through claims, the Texas Supreme Court has held that those claims would still need to be asserted by HCCI and could not be asserted directly by the intervenors against the owners of the Project. HCCI asserted that RHC's intervention excessively multiplied the issues by inserting RHC and its partnership allegations into the construction-delay lawsuit.

On October 20, 2014, after a hearing, the trial court struck RHC's First Petition in Intervention. RHC does not, in this appeal, challenge the trial court's order on its First Petition in Intervention.

In February 2015, RHC filed a suggestion of bankruptcy on behalf of the "Hassell 2012 Joint Venture and Springwoods Joint Venture," seeking to stay the instant case in the trial court. In March, April, and May 2015, the District, Springwoods, and WPM filed motions for summary judgment, in which Costello joined, against HCCI, and the trial court set the motions for a hearing on May 29, 2015. On May 27, 2015, however, the United States Bankruptcy Court for the Southern District of Texas sent to the trial court a "Request for Abatement," stating that, although the trial court's continuation of the suit before it did not violate the statutory stay,^[5] an abatement of the proceedings was requested. On May 29, 2015, the trial court abated the instant case.

Subsequently, in April 2016, the Bankruptcy Court granted RHC's motion to dismiss its bankruptcy petition. The trial court reinstated the instant case and reset the hearing on appellees' motions for summary judgment for October 7, 2016.

A week prior to the hearing, on September 30, 2016, RHC filed its Second Petition in Intervention, which is the subject of this appeal. RHC asserted a "right to intervene as principal on the contract at issue." RHC asserted that, during the initial bidding process on the Project, RHC, and not HCCI, had received and reviewed the bid package information and had submitted, in the name of HCCI, the winning low bid of $14,960,786.80. RHC asserted that HCCI had "pretend[ed] it performed as contractor." After RHC was awarded the contract, HCCI confirmed to the District that RHC "was the Contractor performing the Contract under the name of [HCCI]." Although the contract had been awarded "in the name of HCCI," RHC had mobilized its equipment and employees, communicated with appellees' agents, and controlled all of the work on the Project. After RHC encountered delays, RHC retained counsel, who filed the instant suit "on behalf of and in consultation with HCCI." RHC stated: "RHC filed the petition because it was the Contractor on the Project and held a good-faith belief that it was, at a minimum, a partner with HCCI in the [Project]; or alternatively, that HCCI served as RHC's agent in bidding and securing the [Contract], as HCCI had done on other projects."

RHC argued that it had a justiciable interest in the instant suit because it could have brought the same action, or any part thereof, in its own name. RHC asserted that it had acted as principal, with HCCI as agent, in bidding and securing the Contract. Further, under the "sham contractor" statute,^[6] HCCI and the District, as the "nominal parties" to the Contract, had entered into the agreement lacking a good-faith intention that HCCI would perform the Contract.

RHC argued that its intervention would not complicate the case because it sought to recover its damages "from the same defendants that HCCI alleged [had] caused it harm." RHC had already answered third-party subpoenas for documents served on it by appellees, the parties had not taken oral depositions, and, under the current docket plan, discovery had not yet closed.

RHC argued that its intervention was essential to effectively protect its interests because appellees had, in their summary-judgment motions, argued that they were entitled to judgment as a matter of law because HCCI could not demonstrate that it had suffered any damages. Rather, the damages alleged were suffered by RHC. RHC asserted that appellees, through their summary-judgment motions, sought a judgment which would "prejudice RHC's right to recover."

RHC, in its Second Petition in Intervention, brought a breach-of-contract claim against the District and Springwoods and an alternative claim against the District for recovery under Texas Local Government Code section 271.153. RHC brought quantum meruit and unjust enrichment claims against both the District and Springwoods. RHC also brought new claims against the "Defendants and Third-Party Defendants," i.e., the District, Springwoods, WPM, and Costello for common law fraud, fraud by nondisclosure, and fraudulent inducement. RHC further brought a conspiracy claim against the District, Springwoods, WPM, and Costello, alleging that they each knew that the construction plans that RHC had relied upon in submitting its bid for the Project were not intended to be the actual plans, and they had "secretly agreed with each other to delay payment [for change orders] to force RHC to bear the costs." RHC also brought a breach of warranty claim against the District, Springwoods, WPM, and Costello, alleging that they had "breached their warranty that the plans provided to bidders were suitable to bid and build the Project." RHC also "[brought] suit for HCCI's breach of their implied contract," arising out of their "past dealings."

On October 3, 2016, HCCI non-suited all of its claims against Springwoods and the District. On October 4, 2016, appellees moved to strike RHC's Second Petition in Intervention as untimely, moot, and barred by judicial admissions. They noted that RHC had waited over two years after the inception of the lawsuit to file its First Petition in Intervention. And, RHC had waited over four years after the inception of the lawsuit, and two years after the parties had filed their motions for summary judgment, to file its Second Petition in Intervention. Further, RHC had filed its Second Petition in Intervention just one week prior to the scheduled hearing on appellees' summary-judgment motions. Appellees asserted that the striking of the Second Petition in Intervention was "not only squarely within the [trial court's] discretion, but clearly supported, if not mandated, by the record."

In addition, appellees asserted that RHC's allegation of a principal-agent relationship with HCCI was contradicted by RHC's allegations, in its First Petition in Intervention, that RHC and HCCI had performed the Project as part of a "joint venture" and were "partners" on the Project. Appellees asserted that RHC, having judicially admitted that it performed the Project as a partnership with HCCI, was precluded from claiming a principal-agency relationship with HCCI, or that RHC, and not HCCI, was the contractor on the Project. Appellees asserted that an intervention by RHC would excessively multiply the issues by requiring litigation of a variety of new issues.

After a hearing, the trial court granted appellees' motion to strike RHC's Second Petition in Intervention. Subsequently, appellees nonsuited all of their claims. The trial court then entered a final judgment dismissing all claims and all parties.

Intervention

In its sole issue, RHC argues that the trial court erred in granting appellees' motion to strike RHC's Second Petition in Intervention because RHC established that it had a justiciable interest in the suit; any one of several bases would have allowed it to recover in its own name; and the striking of its petition prejudiced RHC as a matter of law because it was deprived of the benefit of the relation-back doctrine to respond to limitations challenges and deprived of the "thousands of pages of discovery accumulated between 2012 and 2016."

Standard of Review and Legal Principles

"Any party may intervene by filing a pleading, subject to being stricken out by the court for sufficient cause on the motion of any party." TEX. R. CIV. P. 60. Rule 60 "authorizes a party with a justiciable interest in a pending suit to intervene in the suit as a matter of right." In re Union Carbide, 273 S.W.3d 152, 154 (Tex. 2008). An intervenor need not secure the trial court's permission to intervene; rather, a party opposing the intervention has the burden to challenge it by a motion to strike. Harris Cty. v. Luna-Prudencio, 294 S.W.3d 690, 699 (Tex. App.-Houston [1st Dist.] 2009, no pet.); see also Nat'l Union Fire Ins. Co. of Pittsburgh v. Pennzoil Co., 866 S.W.2d 248, 250 (Tex. App.-Corpus Christi 1993, no writ) ("An entity need only file a petition in intervention and await a motion to strike it.").

If a party moves to strike the intervention, the burden shifts to the intervenor to show a justiciable interest in the suit. Union Carbide, 273 S.W.3d at 155; In re Webb, 266 S.W.3d 544, 548 (Tex. App.-Fort Worth 2008, pet. denied). An intervenor has a justiciable interest in a lawsuit "when his interests will be affected by the litigation." In re Webb, 266 S.W.3d at 548. The interest asserted by the intervenor may be legal or equitable, but generally must be more than "a mere contingent or remote interest." In re Webb, 266 S.W.3d at 548; see Guar. Fed. Sav. Bank v. Horseshoe Operating Co., 793 S.W.2d 652, 657 (Tex. 1990).

We review a trial court's ruling on a motion to strike a petition in intervention for an abuse of discretion. In re Lumbermans Mut. Cas. Co., 184 S.W.3d 718, 722 (Tex. 2006). A trial court abuses its discretion if it acts without reference to any guiding rules and principles. Downer v. Aquamarine Operators, Inc., 701 S.W.2d 238, 241-42 (Tex. 1985). Although the trial court has broad discretion in determining whether an intervention should be stricken, a trial court abuses its discretion by striking the petition if (1) the intervenor could have brought the same action, or any part thereof, in his own name, (2) the intervention will not complicate the case by an excessive multiplication of the issues, and (3) the intervention is almost essential to effectively protect the intervenor's interest. Guar. Fed. Savs. Bank, 793 S.W.2d at 657; Ginther v. Bank of Am., N.A., No. 01-08-00430-CV, 2010 WL 2244098, at *6 (Tex. App.-Houston [1st Dist.] May 28, 2010, pet. denied) (mem. op.); Harris Cty., 294 S.W.3d at 699.

Timeliness and Multiplication of Issues

Here, among appellees' grounds for striking RHC's Second Petition in Intervention is that the intervention was untimely and "would excessively multiply the issues by requiring the litigation of a variety of new issues." See Guar. Fed. Savs. Bank, 793 S.W.2d at 657.

"Because a trial court has `broad' discretion in determining whether to strike an intervention, that discretion presumably includes consideration of all issues related to whether intervention was proper in the case under the circumstances, i.e., any sufficient cause." Muller v. Stewart Title Guar. Co., 525 S.W.3d 859, 873 (Tex. App.-Houston [14th Dist.] 2017, no pet.) (quoting Allen Parker Co. v. Trustmark Nat'l Bank, No. 14-12-00766-CV, 2013 WL 2457113, at *6 (Tex. App.-Houston [14th Dist.] June 6, 2013, pet. denied) (mem. op.)). Although there is not a deadline for intervention in the Rules of Civil Procedure, Tex. Mut. Ins. Co. v. Ledbetter, 251 S.W.3d 31, 36 (Tex. 2008), a significant delay in filing a petition in intervention may qualify as "sufficient cause" to strike an intervention. Muller, 525 S.W.3d at 874; see also Amwest Sav. Ass'n. v. Marchman, No. 05-93-00017-CV, 1994 WL 374241, at *1 (Tex. App.-Dallas July 18, 1994, no writ) (not designated for publication) (holding that significant delay in filing petition in intervention, "standing alone," may be sufficient grounds to strike intervention). "`[U]ntimely' with respect to a petition in intervention can refer to a petition filed so late that it would delay the proceeding or unjustifiably complicate it." Muller, 525 S.W.3d at 874 (holding trial court acts within its broad discretion in striking late-filed petition in intervention); see Allen Parker Co., 2013 WL 2457113, at *6 (considering "last-minute nature" of attempted intervention in finding no abuse of discretion by trial court in striking intervention); Roberson v. Roberson, 420 S.W.2d 495, 499 (Tex. Civ. App.-Houston [14th Dist.] 1967, writ ref'd n.r.e.) ("Had the trial court allowed such intervention [filed two years after inception of suit], this suit for divorce between husband and wife and division of community property probably would have been confused and clouded by a new and complicated set of issues. We believe that interminable trouble, confusion and delay would have resulted by the intervention."); Armstrong v. Tidelands Life Ins. Co., 466 S.W.2d 407, 412 (Tex. Civ. App.-Corpus Christi 1971, no writ) (holding petition in intervention filed three years and nine months after suit was filed and after motion for summary judgment set for hearing, not timely filed).

In addition, the injection of new issues into litigation excessively multiplies issues and gives a trial court grounds to strike a petition in intervention. Rimkus Consulting Grp., Inc. v. Concierge Care Nursing Centers, Inc., No. 01-09-01024-CV, 2010 WL 3447907, at *3 (Tex. App.-Houston [1st Dist.] Aug. 31, 2010, no pet.) (mem. op.); Law Offices of Windle Turley, P.C. v. Ghiasinejad, 109 S.W.3d 68, 71 (Tex. App.-Fort Worth 2003, no pet.) (holding that trial court could have concluded that submitting breach of contract and breach of fiduciary duty issues to jury along with malpractice issues would have caused unnecessary confusion and complicated already difficult medical malpractice issues).

In Muller, Muller was one of three individuals who formed La Paz Golf Villas, LLC, in order to purchase development property from Desarrollos for a golf resort. 525 S.W.3d at 862-63. La Paz and Desarrollos entered into an escrow agreement, with Stewart Title Company ("STGC"), as escrow agent. Id. at 863. After a disagreement arose and La Paz and Desarrollos cancelled the agreement, STGC released the escrow funds to La Paz. Id. Muller sued STGC and its employee, Alvarado, for not releasing the funds to Muller. Id. STGC and Alvarado each moved for a summary judgment and a hearing was set. Id.at 864. On the eve of the summary judgment hearing, La Paz intervened. Id. STGC and Alvarado moved to strike the intervention as untimely and prejudicial, arguing that they had litigated the case for over a year, had conducted discovery, and had filed and set their summary-judgment motions for a hearing, which effectively set the case for trial. Id.at 874. The trial court struck the intervention. Id. at 865.

On appeal, the Muller court noted that significant delay in filing a petition in intervention may qualify as sufficient cause to strike an intervention, and a trial court acts within its broad discretion in striking a late-filed petition in intervention if it would have interjected new issues and caused delay. Id. at 874. The court noted that La Paz had waited almost 20 months after Muller filed suit and two-and-a-half months after STGC and Alvarado had filed their motions for summary judgment, to intervene on the eve of the summary-judgment hearing. Id. The court held that, considering the trial court's broad discretion to consider all the issues related to whether the intervention was proper, La Paz had not shown that the trial court acted without any reference to guiding rules or principles. Id. at 874-75.

Here, HCCI filed its suit on July 26, 2012, and it is undisputed that RHC was aware of the suit from its inception. Over two years later, on September 15, 2014, RHC filed its First Petition in Intervention, asserting an interest in the suit as HCCI's partner. On October 20, 2014, the trial court struck RHC's First Petition in Intervention, and RHC does not challenge that ruling. Appellees began filing motions for summary judgment in March 2015. A hearing on appellees' motions for summary judgment was set for May 29, 2015. However, the case was abated on May 29, 2015 because RHC filed a petition for bankruptcy in the name of the alleged partnership. A year later, RHC dismissed its bankruptcy petition. After the trial court reinstated the case, the appellees' motions for summary judgment were reset for a hearing on October 7, 2016. However, a week before the hearing, on September 30, 2016, RHC filed its Second Petition in Intervention. In sum, RHC filed its Second Petition in Intervention four years after HCCI filed the instant suit, 18 months after appellees began filing motions for summary judgment, and just one week before the hearing was reset on the summary-judgment motions that, as Springwoods notes in its brief, "could have concluded the case."

In addition, RHC interjected numerous new claims into the suit. HCCI brought claims against the District and Springwoods for breach of contract and against Springwoods for fraud. In the alternative, HCCI sought recovery against the District under Texas Local Government Code section 271.153 and against Springwoods for quantum meruit and unjust enrichment. The District brought claims against WPM for breach of contract, breach of warranty, and negligence, seeking indemnity. Springwoods asserted a negligence claim against WPM, also seeking indemnity. WPM filed a third-party petition against Costello, seeking contribution.

Like HCCI, RHC, in its Second Petition in Intervention, brought a breach-of-contract claim against the District and Springwoods and an alternative claim against the District for recovery under Local Government Code section 271.153. Unlike HCCI, RHC brought its quantum meruit and unjust enrichment claims against both the District and Springwoods. RHC also brought new claims against the "Defendants and Third-Party Defendants," i.e., the District, Springwoods, WPM, and Costello for common law fraud, fraud by nondisclosure, and fraudulent inducement. RHC further brought a new conspiracy claim against the District, Springwoods, WPM, and Costello, alleging that they each knew that the construction plans that RHC had relied upon in submitting its bid for the Project were not intended to be the actual plans, and they had "secretly agreed with each other to delay payment [for change orders] to force RHC to bear the costs." RHC also brought a new breach of warranty claim against the District, Springwoods, WPM, and Costello, alleging that they had "breached their warranty that the plans provided to bidders were suitable to bid and build the Project." RHC also "[brought] suit for HCCI's breach of their implied contract," arising out of their "past dealings." Moreover, whether RHC could bring direct claims against the District, Springwoods, WPM, and Costello, along with RHC's new allegations that HCCI had acted as RHC's agent in executing the Contract and that RHC was the "victim of a sham contract," further interjected new issues that would have to be resolved.

RHC argues that its Second Petition in Intervention "could not have excessively complicated the litigation," because, three days after it was filed, HCCI non-suited its claims against the District and Springwoods. Thus, "no other party was in position to claim affirmative relief" based on the Contract.

Appellees argue that, after HCCI non-suited its claims, the only claims remaining were the third-party claims seeking indemnity and contribution, which became moot. Thus, "as a practical matter, there [was] no lawsuit in which to intervene." Appellees assert that "[h]ad RHC been allowed to intervene, it would have become a new and the only plaintiff" and "would have created an entirely new lawsuit." Appellees "would have been facing a host of new and difficult issues that would have required the parties to start over from scratch over four years" after the lawsuit was filed and causing further delay in a four-year-old case.

Given RHC's filing of its Second Petition in Intervention so late in the proceedings and its attempts to interject new claims and issues, the trial court, in exercising its broad discretion, could have reasonably concluded that RHC's intervention was untimely, in that it would have unreasonably delayed and complicated the proceeding by multiplying the issues presented. Such delay and complication of issues constitutes sufficient cause for striking an intervention. See Muller, 525 S.W.3d at 874 (holding trial court acts within its broad discretion in striking late-filed petition in intervention which would have interjected new issues and caused delay); Allen Parker Co., 2013 WL 2457113, at *6 (considering "last-minute nature" of attempted intervention in finding no abuse of discretion by trial court in striking intervention); Roberson, 420 S.W.2d at 499 (holding that petition in intervention, filed two years after divorce proceeding was instituted and which sought to determine status of property, properly stricken); see also Marchman,1994 WL 374241, at *1 (holding that significant delay in filing petition in intervention, "standing alone," sufficient grounds to strike intervention). We need not reach whether RHC could have brought the same action, or any part thereof, in its own name or whether the intervention is essential to effectively protect RHC's interest. See Guar. Fed. Savs. Bank, 793 S.W.2d at 657 (holding that trial court abuses its discretion by striking the petition if (1) the intervenor could have brought the same action, or any part thereof, in his own name, (2) the intervention will not complicate the case by an excessive multiplication of the issues, and (3) the intervention is almost essential to effectively protect the intervenor's interest); Ginther, 2010 WL 2244098, at *7.

To prevail on appeal, RHC had the burden to show that the trial court abused its discretion by striking its Second Petition in Intervention without regard to guiding rules and principles. See Downer, 701 S.W.2d at 241. RHC has not shown that the trial court acted without reference to any guiding rules or principles. See id. Accordingly, we hold that the trial court did not abuse its discretion by granting appellees' motion to strike RHC's Second Petition in Intervention.

We overrule RHC's sole issue.

Conclusion

We affirm the judgment of the trial court.

[1] HCCI is not a party to this appeal.

[2] Springwoods, the Project "Developer," was to be considered an "Owner" for purposes of approving requests for, and making payments to, the Contractor of any portion of the Contract price and "for paying all or any damages that might ever be due, including any costs associated with any change orders to the Contract."

[3] TEX. LOC. GOV'T CODE ANN. § 271.153(a)(2) (West 2016) (governing breach-of-contract damages against local governmental entities, including amounts owed for change orders).

[4] The First Petition in Intervention also included as intervenors: R. Hassell Holding Company, Inc., and Royce and Sylvia Hassell. The intervenors explained that R. Hassell & Company, Inc., R. Hassell Builders, Inc. and R. Hassell Holding Company, Inc. are corporations owned by Royce and Silvia Hassell and managed by Royce, who is President of each of the companies. HCCI is also owned by various Hassell family members, including Royce.

[5] See 11 U.S.C. § 362(a) (2012).

[6] See TEX. PROP. CODE ANN. § 53.026(a)(3) (West 2014).

Battle over O'Quinn's Fortune: Was he informally married? - 1st Court of Appeals weighs in on dispute between John M. O'Quinn Foundation and O'Quinn Girlfriend-Companion-Partner Darla Lexington

POST-MORTEM CLAIM OF INFORMAL MARRIAGE ALIVE AND WELL. LITIGATION OVER O'QUINN ESTATE TO CONTINUE AFTER APPELLATE COURT DECLINES TO STEP IN AND STOP IT.  IN RE DARLA LEXINGTON O'QUINN, No 01-11-00641-CV (Tex.App. -- Houston [1st Dist.] Nov. 3, 2011)(mandamus denied) Original Proceeding on Petition for Writ of Mandamus  O P I N I O N           Relator, Darla Lexington O’Quinn (“Darla”), complains of the trial court’s order denying her motion in limine, plea to the jurisdiction, and motion to strike the petition in intervention of real party in interest, The John M. O’Quinn Foundation (“the Foundation”).[1]  She contends that the trial court erred in denying her motions because the Foundation, as the sole beneficiary under the decedent’s will in an independent administration, does not have a justiciable interest in the underlying proceeding and thus lacks standing to assert its declaratory judgment claims.           We deny the petition for writ of mandamus. Background           On July 17, 2008, decedent John M. O’Quinn (“O’Quinn”) executed a self-proving will. In this will, O’Quinn devised all of his personal effects to the Foundation, a charitable organization dedicated to providing funding to educational institutes, hospitals, and other charities.  O’Quinn also devised the residue of his estate to the Foundation and provided that the Foundation would receive any assets remaining in the O’Quinn Law Firm Testamentary Trust after the trustees dissolved the law firm and sold or transferred the firm’s assets.  The will specifically recited that at the time of execution O’Quinn was unmarried, and the will did not include any devises or bequests in favor of Darla.           O’Quinn died in a car accident on October 29, 2009.  The Probate Court Number 2 of Harris County admitted the will to probate on November 17, 2009, appointed T. Gerald Treece as independent executor (“the Executor”), and issued letters testamentary.           On April 16, 2010, the Foundation intervened in the ongoing probate proceeding.  The Foundation’s petition in intervention listed only the Foundation and the Executor as parties; it did not name Darla as a party.  The Foundation alleged that at the time of his death, O’Quinn was neither formally nor informally married.  The Foundation sought declarations that:  (1) O’Quinn was not married, either formally or informally, at the time of his death; (2) no children were born to or adopted by O’Quinn after he executed his will; (3) O’Quinn devised all personal effects under the will to the Foundation; (4) O’Quinn devised all remaining property under the will to the Foundation; and (5) the Foundation is the sole residual beneficiary of the O’Quinn Law Firm Testamentary Trust.           On July 7, 2010, the Executor filed a petition for declaratory judgment and named Darla, the Foundation, and Hartford Financial Services Group, Inc., the holder of the proceeds of O’Quinn’s 401(k) plan, as defendants.  In his petition, the Executor stated that, “It is anticipated that the Foundation will intervene in this matter.”  The Executor alleged that, although O’Quinn and Darla had dated for several years, O’Quinn never married her and, thus, was single when he died.  The Executor sought, among other things, declarations from the trial court that: (1) O’Quinn never married Darla and (2) O’Quinn did not gift any art or cars to Darla except for the items for which the Executor had already paid the required gift taxes.           On July 8, 2010, Darla sued the Executor in the 125th District Court of Harris County “for the return and delivery of property that belongs to Darla Lexington as a result of her community property interests acquired by marriage, and received by gifts” and asserted causes of action for breach of fiduciary duty, negligence, tortious interference, and conversion.  Darla also sought the imposition of a constructive trust against the Estate and applied for a temporary restraining order to prevent the Executor from “proceeding with the auction of any property belonging to Darla Lexington.”  Darla contended that she and O’Quinn had informally married in 2003, that O’Quinn had made several inter vivos gifts to her of personal property and classic cars, and that O’Quinn had promised her that “he would provide for her welfare in the event something was to happen to him” and that she “did not need to worry about living expenses.”  Darla sought, among other things, preliminary and permanent injunctive relief to prevent the sale of her property, a declaration that she and O’Quinn had informally married, and receipt of one-half of the community estate.[2]           Four days later, the Foundation filed an amended petition in intervention in the Executor’s suit for declaratory relief, this time naming Darla as a defendant.  The Foundation again sought declarations that:  (1) O’Quinn was not married at the time of his death; (2) no children were born to or adopted by O’Quinn after he executed his will; (3) all of O’Quinn’s personal effects were devised under the will to the Foundation; (4) those personal effects included all right, title, and interest in O’Quinn Land & Cattle Co., the O’Quinn River Ranch, and Classy Classic Cars, Ltd., and all cars purchased through or titled in the name of Classy Classic Cars, Ltd.; (5) O’Quinn devised all remaining property to the Foundation; and (6) the Foundation is the sole residual beneficiary of the O’Quinn Law Firm Testamentary Trust.           The probate court subsequently issued an order pursuant to Probate Code section 5B transferring Darla’s lawsuit to it from the 125th District Court and consolidating her suit with the Executor’s and the Foundation’s petitions for declaratory relief.           In her answer to the Foundation’s amended petition in intervention, Darla asserted, by verified denial, that the Foundation lacks the capacity to intervene because only the Executor has the right to seek declaratory relief regarding the alleged marriage and alleged gifts made to Darla by O’Quinn.  Darla also asserted that the Foundation lacks standing to pursue its claims because it does not have a justiciable interest “in the outcome of this litigation.”           On May 10, 2011, Darla filed a motion in limine, plea to the jurisdiction, and motion to strike the Foundation’s petition in intervention.  Darla again asserted that the trial court lacks subject-matter jurisdiction over the Foundation’s petition in intervention because the Foundation “lacks the requisite interest, standing, and capacity to participate in this matter.”  Darla argued that the Executor, who virtually represents all beneficiaries under the will, is the sole party who has the right to prosecute and defend lawsuits on behalf of the Estate.  Darla also contended that the Executor, as the representative of the Estate, is the only party who has a justiciable interest in the claims being litigated.  Darla further contended that the Executor could adequately protect the Foundation’s interests, and thus its intervention was not necessary.           At a hearing, the trial court denied Darla’s motions.  The court reasoned that “[i]f [the Foundation] was not a party to the decision as to whether or not Ms. Lexington was common-law spouse, I think they would have a sufficient interest to come back in and try it again.”  This mandamus proceeding followed. Standard of Review           Mandamus relief is available only to correct a clear abuse of discretion when there is no adequate remedy by appeal.  See In re Odyssey Healthcare, Inc., 310 S.W.3d 419, 422 (Tex. 2010) (per curiam).  A trial court commits a clear abuse of discretion when its action is “so arbitrary and unreasonable as to amount to a clear and prejudicial error of law.”  In re CSX Corp., 124 S.W.3d 149, 151 (Tex. 2003) (per curiam).  A trial court has no discretion in determining what the law is or in applying the law to the particular facts.  In re Prudential Ins. Co. of Am., 148 S.W.3d 124, 135 (Tex. 2004).  Mandamus relief is permissible when a trial court abuses its discretion by erroneously denying a motion to strike a petition in intervention. See In re Union Carbide Corp., 273 S.W.3d 152, 156–57 (Tex. 2008) (per curiam).           We must uphold a trial court’s decision on any grounds that are before the court and supported by the record.  See Guar. Cnty. Mut. Ins. Co. v. Reyna, 709 S.W.2d 647, 648 (Tex. 1986) (per curiam) (“We must uphold a correct lower court judgment on any legal theory before it, even if the court gives an incorrect reason for its judgment.”).  “This approach is even more compelling in a mandamus proceeding where the issue is abuse of discretion.  A trial court cannot abuse its discretion if it reaches the right result . . . .”  Luxenberg v. Marshall, 835 S.W.2d 136, 142 (Tex. App.—Dallas 1992, no writ). Foundation’s Standing to Assert Claims           Darla contends that the Foundation lacks a justiciable interest in the underlying proceedings and, thus, lacks standing to assert its claims for declaratory relief.  The Foundation contends that it has a justiciable interest because if Darla succeeds on her claims and the fact-finder determines that she was informally married to O’Quinn and that he made several gifts to her, this result diminishes the size of the estate passing to the Foundation under the will.  The Foundation also contends that, as a devisee, it may permissibly seek declaratory relief to “determine any question arising in the administration of the . . . estate” under Civil Practice and Remedies Code section 37.005(3).  We agree with the Foundation. A.   Justiciable Interest Texas Rule of Civil Procedure 60 authorizes a party with a justiciable interest in a pending suit to intervene as a matter of right.  TEX. R. CIV. P. 60 (“Any party may intervene by filing a pleading, subject to being stricken out by the court for sufficient cause on the motion of any party.”); In re Union Carbide, 273 S.W.3d at 154.  To constitute a justiciable interest, “‘[t]he intervenor’s interest must be such that if the original action had never been commenced, and he had first brought it as the sole plaintiff, he would have been entitled to recover in his own name to the extent at least of a part of the relief sought’ in the original suit.”  In re Union Carbide, 273 S.W.3d at 155 (quoting King v. Olds, 12 S.W. 65, 65 (Tex. 1888)).  “[A] party may intervene if the intervenor could have ‘brought the [pending] action, or any part thereof, in his own name.’” Id. (quoting Guar. Fed. Sav. Bank v. Horseshoe Operating Co., 793 S.W.2d 652, 657 (Tex. 1990)); Harris Cnty. v. Luna-Prudencio, 294 S.W.3d 690, 699 (Tex. App.—Houston [1st Dist.] 2009, no pet.). The Uniform Declaratory Judgments Act (“UDJA”) is “merely a procedural device for deciding cases already within a court’s jurisdiction rather than a legislative enlargement of a court’s power, permitting the rendition of advisory opinions.”  Tex. Ass’n of Bus. v. Tex. Air Control Bd., 852 S.W.2d 440, 444 (Tex. 1993).  A declaratory judgment is appropriate only if (1) a justiciable controversy exists regarding the rights and status of the parties and (2) the declaration sought will resolve the controversy.  Di Portanova v. Monroe, 229 S.W.3d 324, 329 (Tex. App.—Houston [1st Dist.] 2006, pet. denied).  “To constitute a justiciable controversy, there must exist a real and substantial controversy involving a genuine conflict of tangible interests and not merely a theoretical dispute.”  Id.; see also In re Estate of Webb, 266 S.W.3d 544, 548 (Tex. App.—Fort Worth 2008, pet. denied) (“This interest must be more than ‘a mere contingent or remote interest.’  The intervenor has a justiciable interest in a lawsuit ‘when his interests will be affected by the litigation.’”) (quoting Law Offices of Windle Turley, P.C. v. Ghiasinejad, 109 S.W.3d 68, 70 (Tex. App.—Fort Worth 2003, no pet.)).  A court does not have the power to “pass upon hypothetical or contingent situations, or to determine questions not then essential to the decision of an actual controversy.”  Di Portanova, 229 S.W.3d at 330.  If a justiciable controversy does not exist, the court must dismiss the case for lack of subject-matter jurisdiction.  Id. Under Probate Code section 37, “[w]hen a person dies, leaving a lawful will, all of his estate devised or bequeathed by such will . . . shall vest immediately in the devisees or legatees of such estate . . . .”  TEX. PROB. CODE ANN. § 37 (Vernon 2003); see also Nowlin v. Frost Nat’l Bank, 908 S.W.2d 283, 288 (Tex. App.—Houston [1st Dist.] 1995, no writ) (“[U]nder the Probate Code, title to property vests in the beneficiary immediately upon a testator’s death.”). During the administration of the estate, the testator’s executor holds legal title to estate assets and retains the right of possession, but the devisees hold the equitable title to the assets.  SeeTEX. PROB. CODE ANN. § 37; see also Bailey v. Cherokee Cnty. Appraisal Dist., 862 S.W.2d 581, 584 (Tex. 1993) (“[I]t is true that the heirs hold equitable title to estate property . . . .”); Nowlin, 908 S.W.2d at 288 (“A ‘vested interest’ is a present right or title to a thing, which carries with it an existing right of alienation, even though the right to possession or enjoyment may be postponed to some uncertain time in the future.”). In In re Estate of York, the Corpus Christi Court of Appeals addressed the factually analogous situation of whether a beneficiary’s executor had standing to intervene in an heirship proceeding.  934 S.W.2d 848 (Tex. App.—Corpus Christi 1996, writ denied).  Charles York’s will provided that all of his assets were to be placed in a testamentary trust for the benefit of his mother, Myrtle, for her life, and were then to pass to the Mallettes, who ultimately disclaimed their interest in the assets.  Id. at 849.  Several years after York died and the Mallettes disclaimed their interest, Kristopher Gostecnik brought an heirship proceeding, alleging that he was York’s illegitimate son and only heir, and thus was entitled to the remainder of the trust assets.  Id.  Myrtle intervened to assert her own claims as York’s sole heir, but she died before the conclusion of the heirship proceeding.  Id.  As a result, her executor, the Victoria Bank, sought to pursue her claim in intervention on behalf of her estate.  Id.  The trial court ruled that the bank was not an interested party in Charles York’s estate, concluded that the bank lacked standing to intervene in the heirship proceeding, and struck Myrtle’s petition in intervention.  Id. In reversing the trial court’s ruling, the Corpus Christi Court of Appeals concluded that Myrtle, as a potential heir, was a person interested in Charles York’s estate and thus had standing to contest the heirship claims.  See id. at 850.  The court then noted that Myrtle’s estate “may be augmented or diminished by the outcome of Gostecnik’s heirship proceeding.”  Id.  Thus, “[b]ecause Myrtle York’s estate could benefit from such a contest, we hold that Victoria Bank as executor of Myrtle York’s estate has standing to contest Gostecnik’s claims in the proceeding to declare heirship.”  Id.  The court further distinguished between the bank’s capacity as executor of Charles York’s estate and its capacity as executor of Myrtle York’s estate: Charles York’s estate does not stand to gain or lose anything by Gostecnik’s heirship proceeding; the disposition of the estate’s assets may be affected, but the gross assets will be unaffected.  In contrast, Myrtle York’s estate will be affected by the outcome of Gostecnik’s heirship proceeding. Id. at 851.           Darla cites our previous opinion in Wilder v. Mossler, 583 S.W.2d 664 (Tex. Civ. App.—Houston [1st Dist.] 1979, no writ), for the proposition that lawsuits seeking to establish the decedent’s liability on a claim are properly brought against the personal representative of the estate and that heirs and devisees are not necessary and proper parties to such claims.  We first note that, unlike in this case, the heir in Wilder sought a jury trial to oppose the settlement of a claim against the estate but asserted no claims for affirmative relief in her own right.  Id. at 668. Second, we agree with the Foundation that, as in Lieber v. Mercantile National Bank at Dallas, Darla’s claims are not a “routine suit to establish a claim against the estate,” but are instead more like “a suit attacking and seeking to reform a will.”  331 S.W.2d 463, 472 (Tex. Civ. App.—Dallas 1960, writ ref’d n.r.e.). In Lieber, the widow, who was a beneficiary under the decedent’s will, sought a declaratory judgment to establish an antenuptial agreement that the decedent had allegedly made to provide financially for the widow for the rest of her life.  Id. at 466–67.  The executor sought a declaration that no such agreement existed, and he named the decedent’s four sisters, who were the beneficiaries of the bulk of the decedent’s estate under the will, as necessary parties.  Id. at 466.  The Dallas Court of Civil Appeals, in affirming the trial court’s denial of the widow’s motion to dismiss the sisters as parties, held that Lieber’s suit “was really an attack on the will of [the decedent]” because “the effect of sustaining her claim would be to defeat and prevent the full effect and operation of other parts of the will.”  Id. at 472, 471.  The court also held that, because resolution of the widow’s claims would affect their interests as legatees, the sister-beneficiaries were proper parties to the suit.  Id. at 473.  Similarly, by contending that she was informally married to O’Quinn and that he had made numerous gifts to her and had promised to take care of her financially after his death, Darla essentially attacks the provisions of O’Quinn’s will that (1) state that he was unmarried, and (2) leave all of his personal effects and remaining property to the Foundation as the sole beneficiary. As the sole beneficiary under O’Quinn’s will, the Foundation has a vested interest in property owned by O’Quinn, subject to possession and administration by the Executor, as of the moment of death.  By contending that she was O’Quinn’s common-law spouse, and thus entitled to a community property interest, and that O’Quinn had made several inter vivos gifts and promises to her, Darla seeks to significantly reduce the total amount of assets that are part of O’Quinn’s probate estate.  The Foundation opposes Darla’s claims and argues that she has no community property interest in estate assets because she was not married to O’Quinn and that O’Quinn never made any gifts or financial promises to Darla.  If she is successful, the determination that Darla has a one-half community interest and that particular assets belong to her reduces the gross assets available for the Estate, which affects the total amount of assets to be distributed to the Foundation as the sole beneficiary under O’Quinn’s will.  See Lieber, 331 S.W.2d at 473 (“This suit also involves that executor’s cross-action for declaratory judgment which we have held the executor was entitled to remain.  Since their interest would be affected as legatees the Four Sisters are proper parties.”). We therefore conclude that a “real and substantial controversy involving a genuine conflict of tangible interests” exists between the Foundation and Darla and that this dispute is not merely theoretical, hypothetical or contingent.  See Di Portanova, 229 S.W.3d at 329.  We hold that the Foundation has a justiciable interest in the underlying proceeding. B.   Applicability of Civil Practice and Remedies Code Section 37.005(3) Civil Practice and Remedies Code section 37.005(3) provides: A person interested as or through an executor or administrator, including an independent executor or administrator, a trustee, guardian, other fiduciary, creditor,devisee, legatee, heir, next of kin, or cestui que trust in the administration of a trust or of the estate of a decedent, an infant, mentally incapacitated person, or insolventmay have a declaration of rights or legal relations in respect to the trust or estate: . . . . (3) to determine any question arising in the administration of the trust or estate, including questions of construction of wills and other writings . . . . TEX. CIV. PRAC. & REM. CODE ANN. § 37.005(3) (Vernon 2008) (emphasis added).  Under this section, devisees “are among the classes of persons who are given the power to seek a declaration of rights with respect to the estate to, among other things, determine any question arising in the administration of the estate . . . .”  In re Estate of Bean, 120 S.W.3d 914, 918 (Tex. App.—Texarkana 2003, pet. denied) (holding that devisees in independent administration have power to seek declaration concerning construction of decedent’s will).           The plain language of section 37.005(3) allows a devisee to seek a declaration of rights or legal relations to determine “any question arising in the administration” of an estate.  TEX. CIV. PRAC. & REM. CODE ANN. § 37.005(3) (emphasis added).  The statutory language of this section does not include any limitations on the types of questions on which an interested party may seek a declaration by the trial court.  See Fitzgerald v. Advanced Spine Fixation Sys., Inc., 996 S.W.2d 864, 866 (Tex. 1999) (noting that, when interpreting statute, we start with plain language because “it is a fair assumption that the Legislature tries to say what it means, and therefore the words it chooses should be the surest guide to legislative intent”).  Darla cites no authority holding that a devisee may not seek declarations under this section that a purported widow was not married, either formally or informally, to the decedent and that the decedent did not make certain inter vivos gifts and financial promises to the purported widow.           Darla cites numerous cases for the proposition that, except in certain limited situations, the personal representative has the exclusive right to sue and defend on behalf of the estate.  SeeChandler v. Welborn, 294 S.W.2d 801, 806 (Tex. 1956); Burns v. Burns, 2 S.W.3d 339, 342 (Tex. App.—San Antonio 1999, no pet.); Glover v. Landes, 530 S.W.2d 910, 911 (Tex. Civ. App.—Houston [1st Dist.] 1975, writ ref’d n.r.e.).  As the Foundation notes, this line of cases is limited to situations in which the heirs or devisees are suing to recover or collect property belonging to the estate.  See, e.g., Austin Nursing Ctr., Inc. v. Lovato, 171 S.W.3d 845, 850–51 (Tex. 2005) (survival action for personal injury); Chandler, 294 S.W.2d at 804 (suit for trespass to try title to recover property conveyed to third party); see also Roach v. Rowley, 135 S.W.3d 845, 847 (Tex. App.—Houston [1st Dist.] 2004, no pet.) (holding that general rule did not apply in suit in which devisee objected to final accounting because “[devisee] was not filing a lawsuit to recover property belonging to the estate”).  Here, the Foundation is not asserting a claim against Darla alleging, for example, that she owes money to O’Quinn’s Estate or that Darla is wrongfully possessing property that belongs to the Estate; instead, it is seeking, among other things, a declaration to resolve the question of whether property properly belongs to the Estate, and thus passes to the Foundation under O’Quinn’s will, or to Darla.  Civil Practice and Remedies Code section 37.005(3) specifically authorizes a devisee, such as the Foundation, to bring a declaratory relief action such as this one.  See TEX. CIV. PRAC. & REM. CODE ANN.§ 37.005(3) (allowing devisee to seek declaration of rights or legal relations to “determine any question arising in the administration of the . . . estate”).  Darla cites no authority supporting a contention that the general rule that only the personal representative may maintain a suit to recover estate assets trumps the Foundation’s statutory right as a beneficiary to seek a declaration resolving a question arising during the administration of the estate that involves the proper ownership of purported estate assets.           We conclude that the Foundation, as the devisee under O’Quinn’s will, may permissibly seek declaratory relief pursuant to Civil Practice and Remedies Code section 37.005(3) to determine “any question arising in the administration” of O’Quinn’s estate, including questions of whether O’Quinn and Darla were married and whether O’Quinn made gifts and financial promises to Darla.  We therefore hold that because the Foundation may seek declaratory relief under this section, the trial court did not abuse its discretion in denying Darla’s motion in limine, plea to the jurisdiction, and motion to strike the Foundation’s petition in intervention.[3] Conclusion           We deny the petition for writ of mandamus.                                                                    Evelyn V. Keyes                                                                    Justice Panel consists of Justices Keyes, Higley, and Massengale. [1]           The Honorable Mike Wood, Judge of the Probate Court No. 2 of Harris County, Texas, Respondent.  The underlying lawsuit is T. Gerald Treece, Independent Executor of the Estate of John M. O’Quinn, Deceased v. Darla Lexington, The John M. O’Quinn Foundation, and Hartford Financial Services Group, Inc., 392,247-402 (Prob. Ct. No. 2, Harris Cnty., Tex.). [2]           In her ninth amended original petition, which is her live pleading, Darla specified that she was seeking, among other things:  (1) title and possession of all cars promised to her by O’Quinn; (2) $20 million in cash that O’Quinn had promised her upon his death; (3) the fair market value of 750 acres of O’Quinn’s Hays County ranch; (4) the value of all gifts from O’Quinn that became her separate property and were wrongfully converted by the Executor; (5) one-half of the community estate; and (6) the value of a life estate in O’Quinn’s River Oaks residence, which she contends was their homestead. [3]           Because we hold that the Foundation has standing to pursue its own declaratory relief claims under Civil Practice and Remedies Code section 37.005(3), we do not address the Foundation’s additional grounds for standing.  We also note that although Darla argues that, under Civil Practice and Remedies Code section 37.006, the Foundation is not a necessary party to the Executor’s declaratory relief claims, in which the Executor named the Foundation as a defendant, she seeks only to dismiss the Foundation’s own declaratory relief claims in its petition in intervention.  She does not challenge, either in the trial court or in this mandamus proceeding, the Executor’s declaratory relief claims.