CITGO PETROLEUM CORPORATION AND CITGO REFINING AND CHEMICALS, INC. v. WRIGHT PETROLEUM COMPANY, INC. ET AL.--Appeal from 92nd District Court of Hidalgo County

NUMBER 13-03-367-CV

COURT OF APPEALS

THIRTEENTH DISTRICT OF TEXAS

CORPUS CHRISTI - EDINBURG

___________________________________________________________________

CITGO PETROLEUM CORPORATION AND

CITGO REFINING AND CHEMICALS, INC., Appellants,

v.

WRIGHT PETROLEUM CO., INC., D/B/A

WRIGHT PETROLEUM, AND WILLIAM E.

WRIGHT, JR., INDIVIDUALLY, Appellees.

___________________________________________________________________

On appeal from the 92nd District Court

of Hidalgo County, Texas.

___________________________________________________ _______________

  MEMORANDUM OPINION[1]

Before Chief Justice Valdez and Justices Hinojosa and Rodriguez

Memorandum Opinion by Justice Rodriguez

This is an appeal from a summary judgment granting declaratory relief and awarding attorney's fees in favor of appellees, Wright Petroleum Co., Inc., d/b/a Wright Petroleum, and William E. Wright, Jr., individually. See Tex. Civ. Prac. & Rem. Code Ann. '' 37.002, 37.009 (Vernon 1997). By three issues, appellants, Citgo Petroleum Corporation and Citgo Refining and Chemicals, Inc., contend the following: (1) the trial court erred by granting appellees a declaratory judgment on issues that were pending before the court; (2) the trial court erred by assessing the amount and reasonableness of attorney's fees without presenting these questions to a jury; and (3) the trial court erred in granting summary judgment in favor of appellees when there was a material fact issue as to the amount and reasonableness of attorney's fees. We affirm.

I. Background

Both appellants and appellees were named as defendants in the underlying wrongful death and survival action. Appellants then filed a cross-claim against appellees, alleging that appellees had breached their contractual obligation to indemnify and defend them in the underlying suit based on provisions found in a Distributor Franchise Agreement and a Carrier Card Agreement signed by Citgo Petroleum Corporation and Wright Petroleum Co., Inc.[2] Appellees also filed a counterclaim against appellants pursuant to the Uniform Declaratory Judgments Act (the Act), seeking a declaratory judgment and attorney's fees. See Tex. Civ. Prac. & Rem. Code Ann. '' 37.002, 37.009. In addition, appellees filed motions for summary judgment on appellants' cross-claim and on their counterclaim. The trial court granted summary judgments in favor of appellees on their motions for summary judgment.[3] As a result of granting declaratory relief in favor of appellees, the trial court awarded appellees attorney's fees. See id. '37.009.

II. Declaratory Judgment

By their first issue, appellants contend the trial court erred in granting appellees a declaratory judgment on their counterclaim because it raised issues already pending before the court. We disagree.

The purpose of the Act is "to settle and afford relief from uncertainty and insecurity with respect to rights, status, and other legal relations." Id. '37.002(b). A declaratory judgment is appropriate only if a justiciable controversy exists as to the rights and status of the parties and the controversy will be resolved by the declaration sought. Bonham State Bank v. Beadle, 907 S.W.2d 465, 467 (Tex. 1995). However, the Act is not available to settle disputes already pending before the court. BHP Petroleum Co. v. Millard, 800 S.W.2d 838, 841 (Tex. 1990) (orig. proceeding); Staff Indus., Inc. v. Hallmark Contracting, Inc., 846 S.W.2d 542, 547-48 (Tex. App.BCorpus Christi 1993, no writ). Therefore, a counterclaim seeking a declaratory judgment is proper only if it is more than a mere denial of and has greater ramifications than the plaintiff's original claim. BHP Petroleum Co., 800 S.W.2d at 842. A counterclaim has greater ramifications than the original suit if it seeks affirmative relief. HECI Exploration Co. v. Clajon Gas Co., 843 S.W.2d 622, 638-39 (Tex. App.BAustin 1992, writ denied). To state a claim for affirmative relief, a counterclaim must allege that the defendant has a cause of action, independent of the plaintiff's claim, on which he could recover benefits, compensation or relief, even if the plaintiff were to abandon his cause of action or fail to establish it. BHP Petroleum Co., 800 S.W.2d at 841. A counterclaim that presents no new controversy, but instead exists solely to pave the way for an award of attorney's fees, is improper. Hitchcock Props. Inc. v. Levering, 776 S.W.2d 236, 239 (Tex. App.BHouston [1st Dist.] 1989, writ denied).

The Texas Supreme Court has held that an existing contract creates an ongoing and continuing relationship between the parties to that contract. See BHP Petroleum Co., 800 S.W.2d at 842. Based on that ongoing relationship, the Texas Supreme Court has also held that appellees' counterclaim has greater ramifications than appellants' cross-claim if it seeks an interpretation of the contract that would have the effect of defining obligations of the parties under the contract for the foreseeable future. See id. Here, the Distributor Franchise Agreement and Carrier Card Agreement established an ongoing and continuing relationship between the parties thereto.[4] Id. While appellees' counterclaim incorporated appellants' allegations with respect to the underlying action, it also sought a declaration of future obligations pursuant to the Distributor Franchise Agreement and Carrier Card Agreement.[5] Because appellees' counterclaim sought an interpretation of the agreements that would have the effect of defining the rights and obligations of the parties thereto for the foreseeable future with respect to (1) the indemnity provisions, (2) the insurance provisions, and (3) the personal liability of William E. Wright, Jr., based on the agreements, their counterclaim was more than a mere denial of and had greater ramifications than appellants' cross-claim. See id. Appellees' counterclaim stated a cause of action on which they could recover benefits, compensation or relief, even if appellants had abandoned their cause of action or had failed to establish it. See id. Therefore, we conclude that appellees properly sought a declaratory judgment and the trial court did not err in granting appellees declaratory relief based on their counterclaim. We overrule appellants' first issue.

III. Attorney's Fees

By their third issue, appellants contend the trial court erred in granting summary judgment in favor of appellees with respect to attorney's fees when there was a material fact issue as to the amount and reasonableness of the fees.[6]

A. Standard of Review

We review the granting of a traditional motion for summary judgment de novo. Natividad v. Alexsis, Inc., 875 S.W.2d 695, 699 (Tex. 1994). To prevail, the moving party has the burden of showing that there is no genuine issue of material fact and that he is entitled to judgment as a matter of law. Tex. R. Civ. P. 166a(c); Lear Siegler, Inc. v. Perez, 819 S.W.2d 470, 471 (Tex. 1991). In determining whether there is a genuine issue of material fact precluding summary judgment, we take evidence favorable to the nonmovant as true, indulge every reasonable inference in favor of the nonmovant, and resolve all doubts against the movant. M.D. Anderson Hosp. & Tumor Inst. v. Willrich, 28 S.W.3d 22, 23 (Tex. 2000) (per curiam).

B. Analysis

Appellants first argue that appellees did not file a motion for summary judgment as to reasonable and necessary attorney's fees. However, appellees requested attorney's fees pursuant to section 37.009 in their motion for summary judgment on their counterclaim. See Tex. Civ. Prac. & Rem. Code Ann. ' 37.009. Therefore, we conclude that appellees did move for summary judgment as to attorney's fees.

Appellants also contend that their original and amended affidavits filed as evidence on attorney's fees raised an issue of material fact. We disagree. Appellees filed their affidavit in support of attorney's fees on December 13, 2002, and filed a correction to the affidavit on December 16, 2002. Appellants' original affidavit and objections to appellees' affidavit were file stamped on January 15, 2003.[7] On February 13, 2003, without leave of court, appellants filed an amended affidavit. On March 19, 2003, the trial court entered final summary judgment in favor of appellees on appellants' cross-claim and on their counterclaim. The trial court, in sustaining appellees' objections to appellants' original affidavit, struck appellants' original affidavit and awarded appellees reasonable and necessary attorney's fees.[8] The judgment made no mention of appellants' amended affidavit. Because it is well established that summary judgment evidence may not be filed late except on leave of court, we presume the trial court did not consider appellants' amended affidavit. See Tex. R. Civ. P. 166a(c); Benchmark Bank v. Crowder, 919 S.W.2d 657, 663 (Tex. 1996) (citing INA of Tex. v. Bryant, 686 S.W.2d 614, 615 (Tex. 1985) (providing that where nothing appears of record to indicate that late filing of summary judgment response was with leave of court, it is presumed that trial court did not consider the response)). Therefore, appellants offered no evidence to create an issue of material fact as to attorney's fees.

Finally, appellants assert that appellees' affidavit regarding the reasonableness and necessity of attorney's fees is conclusive and does not support a summary judgment on attorney's fees. We disagree. Appellees' uncontroverted affidavit of Roberto L. Ramirez, appellees' counsel, sets out his qualifications, identifies the nature and type of work performed by the firm of Kittleman, Thomas, Ramirez & Gonzales, P.L.L.C., and the firm of Norquest and Brisack in the representation of appellees, specifies the number of hours expended representing appellees in this matter, and states the fees requested are reasonable and necessary and customarily charged for similar services. See Columbia Rio Grande Reg'l Hosp. v. Stover, 17 S.W.3d 387, 397 (Tex. App.BCorpus Christi 2000, no writ) (identifying the factors that are to guide our determination of whether attorney's fees are reasonable and necessary). Therefore, we conclude that appellees' affidavit regarding attorney's fees was not conclusory, but rather provided a basis on which the court could make a factual determination as to the reasonableness and necessity of the fees and a legal determination as to whether the fees are just and equitable. See id.

Thus, we conclude that there was no genuine issue of material fact precluding the granting of summary judgment in appellees' favor. See M.D. Anderson Hosp.& Tumor Inst., 28 S.W.3d at 23. We overrule appellants' third issue.

IV. Jury Trial on Attorney's Fees

By their second issue, appellants contend that the trial court erred in assessing the amount and reasonableness of attorney's fees without presenting these questions to a jury. We disagree.

As we have concluded above, appellants failed to raise an issue of material fact as to the reasonableness and necessity of attorney's fees. As a result, the trial court granted a summary judgment on attorney's fees. The purpose of the summary judgment rule is to provide a method of summarily terminating a case when it clearly appears that there are no genuine issues of fact. Marts v. Transp. Ins. Co., 111 S.W.3d 699, 703 (Tex. App.BFort Worth 2003, pet. denied) (citing Lattrell v. Chrysler Corp., 79 S.W.3d 141, 150 (Tex. App.BTexarkana 2002, pet. denied)). When a party cannot show a material fact issue, there is nothing to submit to a jury, and the granting of summary judgment to the opposing party does not violate the constitutional right to a jury trial. Id. (citing Lattrell, 79 S.W.3d at 150; Querner Truck Lines, Inc. v. Alta Verde Indus., Inc., 747 S.W.2d 464, 469 (Tex. App.BSan Antonio 1988, no writ)). Thus, we conclude that the trial court properly granted summary judgment in favor of appellees as to attorney's fees because there was no controverted evidence to present to a jury. Id. We overrule appellants' second issue.

V. Conclusion

Accordingly, we affirm the judgment of the trial court.

NELDA V. RODRIGUEZ

Justice

Memorandum Opinion delivered and

filed this 23rd day of November, 2005.

[1]All issues of law presented by this case are well settled, and the parties are familiar with the facts. Therefore, we will not recite the law or the facts except as necessary to advise the parties of the Court's decision and the basic reasons for it. See Tex. R. App. P. 47.4.

[2]Appellees contend that Citgo Refining and Chemicals, Inc., and William E. Wright, Jr., individually, are not parties to the Distributor Franchise Agreement and Carrier Card Agreement.

[3]The trial court severed appellants' cross-claim and appellees' counterclaim from the underlying wrongful death and survival action.

[4]The Distributor Franchise Agreement is written so that it automatically renews at three year intervals unless a party to the agreement terminates it pursuant to its terms. The Carrier Card Agreement is written so that it does not expire unless it is revoked or terminated according to its terms.

[5]Appellants' sixth amended cross-claim alleged the following: (1) that if appellants were found liable in the underlying wrongful death and survival action, they were entitled to contribution from appellees; (2) appellees agreed to indemnify, defend and hold harmless appellants from allegations made against them in the underlying suit and failed to do so; (3) appellees agreed, pursuant to written contracts, to name appellants as additional insureds and to provide a certain amount of insurance coverage in favor of appellants and failed to do so; (4) appellees breached their contractual obligations; (5) appellants were the intended beneficiaries of any contract of insurance between appellees and their insurance companies; and (6) all conditions precedent have been performed, and alternatively, appellees and their insurers have waived any such terms, conditions, notices or requirements, or are estopped from asserting them. In essence, appellants' cross-claim was a suit for contribution and breach of contract with respect to the underlying wrongful death and survival action. In their first amended counterclaim, appellees sought a declaration that (1) the indemnity provisions in question are unenforceable to the extent they fail to comply with the express negligence test and are not conspicuous, (2) they were not bound to indemnify appellants in the underlying cause and that the claims are unenforceable as to all past and future obligations, (3) William E. Wright, Jr., is not personally liable under the terms of the agreements as to the underlying cause and as to all past and future obligations, (4) Citgo Refining and Chemicals, Inc., has no right to make claims under the agreements in question, (5) insofar as appellees were settling parties in the underlying action, they owe no contribution to appellants, (6) they complied with the terms of the agreements in terms of purchasing the proper limits of insurance and designating Citgo Petroleum Corporation as an additional insured as to the underlying cause and all past and future obligations arising under the agreements, (7) alternatively, appellants waived any technical non-compliance with the agreements, and (8) an award of reasonable and necessary attorney's fees to appellees is authorized pursuant to section 37.009 of the Texas Civil Practice and Remedies Code.

[6]The Act allows for the award of attorney's fees in any proper declaratory judgment proceeding. Tex. Civ. Prac. & Rem. Code Ann. ' 37.009. The awarding of attorney's fees pursuant to the Act rests within the trial court's discretion; however, the Act imposes four limitations upon the court's discretion. See Columbia Rio Grande Reg'l Hosp. v. Stover, 17 S.W.3d 387, 397 (Tex. App.BCorpus Christi 2000, no writ) (citing Bocquet v. Herring, 972 S.W.2d 19, 21 (Tex. 1998); Welder v. Green, 985 S.W.2d 170, 180 (Tex. App.BCorpus Christi 1998, pet. denied)). The attorney's fees must be reasonable, necessary, equitable, and just. Id. The reviewing court must make a factual determination as to the reasonableness and necessity of the fees awarded and a legal determination as to whether the fees are equitable and just. Id.

[7]Appellants' affidavit and responsive materials were due on or before January 14, 2003. However, we do not determine on appeal whether appellants' original affidavit and objections were timely filed.

[8]Appellees objected to appellants' original affidavit claiming that the statements contained in the affidavit were mere legal conclusions and unsubstantiated opinions of the affiant. In addition, appellees objected to the affidavit in that it did not indicate the facts or reasoning on which the expert based his opinion.