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. | 2015Background
- 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)
