DANIEL D. CLAYTON v. NANCY L. CLAYTON, JEFFERY R. SHELTON AND MONY LIFE INSURANCE COMPANY OF AMERICA--Appeal from 60th District Court of Jefferson County

In The
Court of Appeals
Ninth District of Texas at Beaumont
____________________
NO. 09-05-517 CV
____________________
DANIEL D. CLAYTON, Appellant
V.
NANCY L. CLAYTON, JEFFREY R. SHELTON, AND
MONY LIFE INSURANCE COMPANY OF AMERICA, Appellees
On Appeal from the 60th District Court
Jefferson County, Texas
Trial Cause No. B-174,198
MEMORANDUM OPINION

This is an appeal from orders entered in a suit for breach of contract, fraud, and breach of fiduciary duty. The underlying dispute, filed in Cause No. B-174,198, involves an annuity subject to division in a divorce decree entered in Cause No. C-172,102. Appellee MONY Life Insurance Company of America ("MONY") filed a motion to dismiss the appeal on the grounds that the three orders identified in the notice of appeal are interlocutory orders that cannot be appealed at this time. The appellant, Daniel D. Clayton, ("Clayton") filed a response. Appellees Nancy L. Clayton and Jeffrey R. Shelton neither join nor challenge the motion to dismiss. Because the trial court has not entered a final judgment in the case, we dismiss the appeal without reference to the merits.

Clayton pled claims against MONY for breach of contract, fraud, and breach of fiduciary duty. MONY filed an answer and a plea in interpleader in which it asked to deposit the disputed funds into the registry of the court. On November 7, 2005, a judge assigned to hear the motion denied a motion for recusal filed by Clayton. That same day, the trial court granted the interpleader filed by MONY, ordered MONY to deposit disputed funds into the registry of the court, and dismissed MONY from the action with prejudice. The trial court also signed an order transferring the case from the 60th District Court to the 317th District Court. (1) The notice of appeal filed on December 6, 2005, states that the appeal is being taken "out of abundance of precaution." MONY contends we lack jurisdiction over this appeal because the orders were entered in a case not yet made final by the signing of a judgment on the claims and issues before the trial court. Clayton asserts that by dismissing MONY from the suit with prejudice, then transferring the case to another court on the ground that the sending court lacked jurisdiction, the judgment against MONY became final and therefore appealable.

 

Clayton argues that a dismissal with prejudice functions as a final determination on the merits. The case on which he relies, Attorney General v. Sailer, 871 S.W.2d 257, 258 (Tex. App.- Houston [14th Dist.] 1994, writ denied), involved an order that disposed of the entire controversy, while the order in this case disposed of the claims against MONY but not the claims against the other defendants. Here, the discharge order may have disposed of the merits of Clayton's claims against MONY, but it did not dispose of Clayton's claims against Nancy Clayton or Shelton. Clayton also relies upon Taliaferro v. Texas Commerce Bank, 660 S.W.2d 151, 152-53 (Tex. App.-Fort Worth 1983, no writ), a published appellate court order entered on motion for rehearing following dismissal of an appeal for lack of jurisdiction. Taliaferro held an order granting a bill of interpleader to be final and appealable because the probate court's order adjudicated the only real controverted issue that affected the stakeholder banks. (2) Id. at 155. The court noted an order that disposes of and is conclusive of the issue or controverted question for which that particular part of the proceeding was brought may be appealed without disposing of the entire probate proceedings. Id. at 153. Taliferro is distinguishable because the order in this case did not dispose of the entire case.

 

MONY contends we lack jurisdiction over an appeal from an order granting a plea in interpleader that does not resolve all the issues pending in the case. It argues we should follow the precedent established by K & S Interests, Inc. v. Texas American Bank/Dallas, 749 S.W.2d 887, 889 (Tex. App.-Dallas 1988, writ denied). The appellant in that case sued a bank for wrongful dishonor, breach of contract, conversion, and deceptive trade practices in connection with the bank's return of a check. Id. at 888. The bank filed an answer and an original counterclaim, third-party petition, and interpleader based on the conflicting claims made by the appellant and third-party defendants. Id. After the bank tendered the funds into the registry of the court and joined the third-party defendants, the trial court discharged the bank from the lawsuit, ordered that the parties take nothing against the bank, and transferred the suit to another county. Id. at 888-89. The K & S court understood the dispute in Taliaferro to be limited to the competing claims to the funds, while the complaints against the bank in K & S sought relief over and above access to the funds in the bank's control. Id. at 889. When the order of discharge was entered, a third-party defendant had filed a counterclaim and cross-claim not addressed by the order of discharge. Id. The appellate court noted there was more at issue between the appellant and the bank than a disinterested stakeholder seeking to avoid multiple liability and that a third party also made claims against the appellant. Id. Because the order of discharge did not follow a trial on the merits and the third parties' claims remained unresolved, the court concluded that the order of discharge was not a final judgment. Id. at 889-90. The transfer order indicated the trial court believed unresolved issues remained. Id. at 890. The appellate court analogized the situation to a partial summary judgment. Id. Without expressing an opinion as to the procedural or substantive propriety of the trial court's disposition of the appellant's claims against the bank, the court dismissed the appeal as interlocutory. Id. at 890-91. We find the Dallas court's reasoning to be persuasive in this case, which is similar in its facts, and hold that when an order of discharge in an interpleader does not dispose of all of the parties and issues in the pending suit, the order is not a final judgment subject to immediate appeal.

Clayton contends the trial court's order transferring the case from the 60th to the 317th District Court effected a severance of Clayton's claims against MONY, making the discharge order final for purposes of appeal. The order on motion to transfer recites that the entire case is transferred to the 317th District Court. The order of discharge is an interlocutory order that is part of the case being transferred. Unless severed or reconsidered, the interlocutory order will merge into the final judgment in the case. See H. B. Zachry Co. v. Thibodeaux, 364 S.W.2d 192, 193 (Tex. 1963). The transfer of the case to another court of the same jurisdiction does not operate as a dismissal when all parties are transferred because the litigation continues in the transferee court.

Clayton argues Bigham v. Dempster, 901 S.W.2d 424, 429 (Tex. 1995), and Azbill v. Dallas County Child Protective Servs., 860 S.W.2d 133, 137 (Tex. App.-Dallas 1993, no writ), support his position that the discharge order is a final judgment. Azbill followed a conventional trial on the merits and Bigham, a mandamus proceeding concerning the power of the transferring court to act in the case, did not address whether an appeal could be taken from the transfer order. Bigham, 901 S.W.2d at 428-29; Azbill, 860 S.W.2d at 135.

The orders in this case neither disposed of all pending claims nor concluded a discrete phase of the litigation for which an appeal is authorized at this time. Without deciding whether the trial court erred, we grant the motion to dismiss the appeal and dismiss the appeal for lack of jurisdiction.

APPEAL DISMISSED.

____________________________

CHARLES KREGER

Justice

 

Opinion Delivered February 9, 2006

Before McKeithen, C.J., Kreger and Horton, JJ.

1. The 317th District Court entered the divorce decree in Cause No. C-172,102.

2. In its subsequent opinion on the merits, the appellate court held the banks' pleading was in the nature of a crossclaim or counterclaim and reversed the trial court's order. Taliaferro v. Texas Commerce Bank-Hurst, 669 S.W.2d 172, 174 (Tex. App.-Fort Worth 1984, no writ).