Krobar Drilling, L.L.C. v. Fred Ormiston, Ormiston Family Properties, LLC and Applied MacHinery Corporation
2012 Tex. App. LEXIS 3478
| Tex. App. | 2012Background
- Krobar Drilling purchased a 1300-hp mud pump from Kenner Manufacturing; shipping was Krobar's responsibility, but Krobar allowed Kenner to keep the pump in Kenner's Texas warehouse for a demonstration, with Kenner agreeing to ship it to Wyoming after the conference.
- The mud pump was stored in Fred Ormiston’s Katy, Texas warehouse; Kenner was evicted for nonpayment and Ormiston later sold the seized property at auction, with Applied Machinery Corporation purchasing the pump at auction.
- Krobar sued Kenner in November 2007 for breach of contract; in September 2009 Krobar obtained a judgment totaling $274,237.24, including the pump price, refurbishment costs, and delay expenses plus attorneys’ fees.
- Unable to collect on the Kenner judgment, Krobar sued Ormiston, Applied, and Ormiston Family Properties in tort for conversion and TLTA violations, seeking the same $274,237.24.
- At trial in June 2010, all defendants moved for directed verdict arguing double recovery and judicial estoppel; the trial court granted, and Krobar took nothing against Ormiston, Ormiston Family Properties, and Applied.
- The court reversed and remanded, holding that one-satisfaction rule applies to a single injury but does not bar separate actions against different defendants arising from independent transactions, and that judicial estoppel did not bar Krobar’s claims due to a non-unequivocal, non-sworn allegation in the Kenner suit.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Double recovery applicability | Krobar may sue multiple defendants for the same injury; unsatisfied judgments do not bar later actions. | One-satisfaction rule bars multiple recoveries for the same injury once a judgment is satisfied. | One-satisfaction rule does not bar Krobar from pursuing separate actions against other defendants for the same injury. |
| Judicial estoppel | Krobar did not take inconsistent positions in separate suits. | Krobar’s pleadings implied inconsistencies to gain advantage. | Judicial estoppel does not apply; Krobar’s Kenner pleading was not sworn, unequivocal, or advantageous. |
| Election of remedies | Distinct causes of action against independent defendants are not mutually exclusive. | Pursuing contract and tort claims for the same injury against different defendants constitutes an election of remedies. | Election-of-remedies doctrine does not bar concurrent, consistent claims against independent parties arising from separate transactions. |
Key Cases Cited
- Stewart Title Guar. Co. v. Sterling, 822 S.W.2d 1 (Tex. 1991) (one-satisfaction rule governs multiple recoveries for a single injury)
- Crown Life Ins. Co. v. Casteel, 22 S.W.3d 378 (Tex. 2000) (injury may be indivisible, supporting multiple theories against different tortfeasors)
- Oyster Creek Fin. Corp. v. Richwood Investments II, Inc., 176 S.W.3d 307 (Tex. App.—Houston [1st Dist.] 2004) (allows settlement credit and single injury despite multiple theories)
- E. T. James & Co., Inc. v. Statham, 558 S.W.2d 865 (Tex. 1977) (one-satisfaction rule as applied to joint tortfeasors)
- Mosher Mfg. Co. v. Eastland, W.F. & G.R. Co., 259 S.W.2d 253 (Tex. Civ. App.—El Paso 1924) (election of remedies addressed where two suits are inconsistent)
- Custom Leasing, Inc. v. Texas Bank & Trust Co. of Dallas, 491 S.W.2d 869 (Tex. 1973) (election of remedies does not apply to distinct actions arising from independent transactions)
- Am. Savings & Loan Ass’n of Houston v. Musick, 531 S.W.2d 581 (Tex. 1976) (election of remedies not applicable when actions are not inconsistent)
- Liberty Mut. Ins. Co. v. First Nat’l Bank of Dallas, 245 S.W.2d 237 (Tex. 1951) (election of remedies considerations in practical contexts)
- Heath v. Herron, 732 S.W.2d 748 (Tex. App.—Houston [14th Dist.] 1987) (no election of remedies where claims are legally consistent)
- Sheffield v. City of Glenn Heights, 55 S.W.3d 164 (Tex. App.—Dallas 2001) (illustrates inconsistent remedies bar under election doctrine when remedies conflict)
- B. L. Nelson & Assocs., Inc. v. City of Argyle, 535 S.W.2d 906 (Tex. Civ. App.—Fort Worth 1976) (no election where remedies not inconsistent)