McAlester Fuel Company v. Smith International, Inc., d/b/a Smith Services--Appeal from 11th District Court of Harris County

Opinion issued July 26, 2007

In The

Court of Appeals

For The

First District of Texas

NO. 01-05-00468-CV

McALESTER FUEL COMPANY, Appellant

V.

SMITH INTERNATIONAL, INC., Appellee

On Appeal from the 11th District Court

Harris County, Texas

Trial Court Cause No. 2003-64509

DISSENTING OPINION

Because the majority errs in holding that the declaration in the trial court's March 30, 2005 final judgment against appellant, McAlester Fuel Company ("McAlester"), renders harmless any error committed by the trial court in previously entering its November 29, 2004 partial summary judgment in favor of appellee, Smith International, Inc. ("Smith"), I respectfully dissent.

In support of its holding, the majority first asserts, in discussing waiver, that because "McAlester directed no argument specifically at the declaratory judgment portion of the [final] judgment in its opening brief," it needs to address "only those contentions asserted in [McAlester's] reply brief that can be construed to expound on McAlester's second issue presented in its opening brief or that reply to issues fully briefed by Smith." Next, the majority asserts that "there is no indication that the trial court relied on its grant of the motion for summary judgment when it determined [Smith's] declaratory judgment claim." Thus, it concludes that "McAlester has not shown that the declaratory judgment portion of the final judgment should be reversed." In support of this conclusion the majority relies on Progressive County Mutual Insurance Company v. Boyd, 177 S.W.3d 919, 921 (Tex. 2005).

However, in regard to the majority's discussion of waiver, it is important to consider exactly what McAlester is complaining about in this appeal. In its first issue, McAlester contends that the trial court erred in granting summary judgment on November 29, 2004, on McAlester's claims for breach of contract, negligence, negligent misrepresentation, and violations of the Texas Deceptive Trade Practices Act ("DTPA"). (1) Although it does not separately attack each portion of the final judgment, McAlester, in its second issue, expressly contends that the trial court erred in entering its March 30, 2005 final judgment, "which concerned the same facts as the November 29, 2004 summary judgment and resulted from that erroneous ruling." Simply put, McAlester is challenging the final judgment in its entirety, including the trial court's declaration. Accordingly, this Court should not fault McAlester for failing to anticipate and specifically address the harmless error argument made by Smith in its appellee's brief.

Moreover, although the trial court did not state that it "relied on its grant of the motion for summary judgment" in the paragraph of the final judgment in which it made its declaration, it did state in the preceding paragraph:

The Court, after taking judicial notice of its file (including its Order on Defendant's Motion for Summary Judgment [signed November 29, 2004] and its Order [signed March 7, 2005]) and considering the evidence, stipulations, and jury answers, is of the opinion that McAlester should take nothing by this suit and that Smith should recover damages from McAlester.

Thus, it is readily apparent that the trial court did in fact rely upon its November 29, 2004 partial summary judgment when it entered its March 30, 2005 final judgment. I, therefore, would not summarily dismiss McAlester's argument that "[a]n erroneous partial summary judgment precluded McAlester from presenting DTPA, misrepresentation, negligence, and its own breach of contract claims to the jury." See NationsBank of Tex., N.A. v. Akin, Gump, Strauss, Hauer & Feld, L.L.P., 979 S.W.2d 385, 396 (Tex. App.--Corpus Christi 1998, pet. denied).

Finally, the majority's reliance on Boyd is misplaced. In Boyd, an insurance coverage case, the Texas Supreme Court held that even if the trial court erred in granting a partial summary judgment as to a bad-faith and certain extra-contractual claims, the error was harmless because a jury finding in the underlying breach of contract case negated coverage by Progressive's insurance policy. 177 S.W.3d at 920. Importantly, the breach of contract claim brought by Boyd, the insured, was "fully litigated after the summary judgment was granted." Id. at 921. Moreover, at the conclusion of trial, the jury specifically found that Boyd had not been involved in an accident with an uninsured vehicle. Id. at 920. This specific finding logically "negated" Boyd's bad-faith and other extra-contractual claims. Id. at 921-22.

Here, as noted by the majority, only Smith's counterclaim for breach of contract and McAlester's fraudulent inducement claims were tried to a jury. Unlike the specific jury finding in Boyd, the trial court's declaration in this case does not logically negate McAlester's claims for breach of contract, negligence, negligent misrepresentation, and violations of the DTPA.

Accordingly, this Court should hold that the declaration in the trial court's March 30, 2005 final judgment did not render harmless any error committed by the trial court in previously entering its November 29, 2004 partial summary judgment and address the merits of McAlester's two issues.

Terry Jennings

Justice

Panel consists of Justices Nuchia, Jennings, and Higley.

Justice Jennings, dissenting.

1. See Tex. Bus. & Com. Code Ann. 17.46(b)(2), (5), (7), (8), (24) (Vernon Supp. 2006).