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American Star Energy and Minerals Corporation v. Richard "dick" Stowers, Richard W. Stowers, Frank K. Stowers and Linda Sue Jasurda
457 S.W.3d 427
| Tex. | 2015
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Background

  • In 1980 four individuals formed S & J Investments, a Texas general partnership, which contracted with American Star Energy and Minerals Corporation.
  • American Star sued S & J in the 1990s for breach of contract and eventually obtained a judgment against the partnership; after appeals the judgment became final in 2009 and S & J was unable to satisfy the judgment because it was undercapitalized.
  • In June 2010 American Star sued the individual partners to enforce partner liability under the Texas Revised Partnership Act (TRPA); the Partners moved for summary judgment asserting the suit was time-barred by the four-year limitations period for the underlying breach claim.
  • The trial court granted summary judgment for the Partners; a divided court of appeals affirmed, holding accrual—and thus the limitations period—began when the underlying breach claim accrued against the partnership.
  • The Texas Supreme Court granted review to decide whether a suit to enforce partner liability accrues when the underlying partnership claim accrues or only after a final judgment against the partnership (and the TRPA’s 90-day satisfaction period) so that limitations runs from that later date.

Issues

Issue Plaintiff's Argument Defendant's Argument Held
When does a cause of action to recover from a partner accrue for statute of limitations purposes? Accrual begins when the judgment against the partnership becomes final (and thus within four years of that judgment American Star sued). Accrual began when the underlying breach-of-contract claim against the partnership first accrued, so suit against partners was time-barred. A partner-liability cause of action generally accrues when the creditor can proceed against the partner’s assets—normally after final judgment against the partnership and expiration of the TRPA 90-day satisfaction period.

Key Cases Cited

  • Exxon Corp. v. Emerald Oil & Gas Co., 348 S.W.3d 194 (Tex. 2011) (general accrual principles: cause accrues when claimant can seek judicial remedy)
  • S.V. v. R.V., 933 S.W.2d 1 (Tex. 1996) (limitations quicken diligence; accrual analysis)
  • Luling Oil & Gas Co. v. Humble Oil & Ref. Co., 191 S.W.2d 716 (Tex. 1945) (traditional rule that claim accrues when a suit can be commenced)
  • Moreno v. Sterling Drug, Inc., 787 S.W.2d 348 (Tex. 1990) (statutory accrual requires court-developed rule when legislature is silent)
  • Ingersoll-Rand Co. v. Valero Energy Corp., 997 S.W.2d 203 (Tex. 1999) (indemnity claims accrue when indemnitee’s liability is fixed, generally by judgment)
  • Getty Oil Co. v. Ins. Co. of N. Am., 845 S.W.2d 794 (Tex. 1992) (policy favoring consolidation of indemnity claims for judicial economy)
  • Allcat Claims Serv., L.P. v. [opinion reference], 356 S.W.3d 455 (Tex. 2011) (TRPA adopts entity theory of partnership)
  • Kao Holdings, L.P. v. Young, 261 S.W.3d 60 (Tex. 2008) (partners should be named and served to contest liability; judgment against partnership alone is not judgment against partner)
  • Matthews Constr. Co. v. Rosen, 796 S.W.2d 692 (Tex. 1990) (limitations should not produce unjust results that defeat statutory policy)
Read the full case

Case Details

Case Name: American Star Energy and Minerals Corporation v. Richard "dick" Stowers, Richard W. Stowers, Frank K. Stowers and Linda Sue Jasurda
Court Name: Texas Supreme Court
Date Published: Feb 27, 2015
Citation: 457 S.W.3d 427
Docket Number: 13-0484
Court Abbreviation: Tex.