Lead Opinion
Dalisa, Inc., and Enchanted Rock Pictures, L.P. (“Dalisa” collectively) appeal from a summary judgment recovered against them by sixteen landowners (“Bradford” collectively).
THE CONTROVERSY
Under the Uniform Declaratory Judgments Act, Bradford sued Dalisa for the following declaratory relief: (1) Dalisa possessed no interest in Bradford’s tract of land; (2) no contract pertaining to the land existed between Dalisa and Bradford; and (3) Dalisa was not entitled to record against the tract a lis pendens notice. See Tex. Civ. Prac. & Rem. Code Ann. §§ 37.001-011 (West 1997) (the “Act” hereafter). Bradford also claimed a right to attorney’s fees under section 37.009 of the Act.
Dalisa included in its answer the following counterclaims: an action for specific performance of an alleged contract or contracts wherein Bradford agreed to sell the land to Dalisa; actions for money damages based upon allegations of fraudulent or negligent misrepresentation made by Bradford in the course of negotiations aimed at selling the land to Dalisa; a
Bradford moved for partial summary judgment. After hearing, the trial judge signed a “Final Judgment” awarding Bradford the following declaratory relief: (1) Dahsa has no contract for the purchase of Bradford’s land; (2) Dahsa owns no beneficial interest in the land; and (3) Dahsa possesses no other interest in the land sufficient to support the filing of a lis pendens notice or otherwise to cloud Bradford’s title.
Immediately after signing the “Final Judgment,” the trial judge severed from the cause Bradford’s claim for declaratory rehef under the Act, leaving for an independent adjudication Bradford’s claim for attorney’s fees under section 37.009 of the Act and Dalisa’s counterclaims. The trial court denied, however, Bradford’s motion to cancel the lis pendens notice recorded by Dahsa.
Dahsa appealed to this Court from the order granting Bradford’s motion for summary judgment. Bradford appealed from the denial of his motion to cancel the lis pendens notice. We consohdated the two appeals.
Dahsa contends the tidal court abused its discretion by severing Bradford’s statutory cause of action under the Act; and, as a result, there is no vahd severance order upon which our appellate jurisdiction depends.
SEVERANCE ORDERS UNDER RULE 41, TEXAS RULES OF CIVIL PROCEDURE
Rule 41 of the Texas Rules of Civil Procedure states that “[a]ny claim against a party may be severed and proceeded with separately.” Tex.R. Civ. P. 41. The effect of a severance is to divide a lawsuit into two or more independent suits that wih be adjudicated by distinct and separate judgments. See Van Dyke v. Boswell, O’Toole, Davis & Pickering,
In their administration of Rule 41, trial courts have broad authority and their decisions to grant or deny a severance will not be reversed on appeal absent an abuse of discretion. Liberty Nat’l Fire Ins. Co. v. Akin,
Comphance with Rule 41, providing for the severance of “[a]ny claim,” requires the following: (1) a controversy involving more than one cause of action; (2) a severed claim that is the proper subject of a lawsuit if asserted independently of the other claims; and (3) a severed claim that is not so interwoven with the remaining actions as to involve the same facts and issues. See State Dept. of Highways & Public Transp. v. Cotner, 845
BRADFORD’S CLAIM FOR ATTORNEY’S FEES UNDER THE ACT
The trial-court severance necessarily implies a conclusion by that court that Bradford’s claim for declaratory relief under section 37.003 of the Act and his claim for attorney’s fees under section 37.009 can be adjudged in independent lawsuits culminating in separate and distinct judgments. Dalisa contends the two claims are instead merely different phases of a single cause of action. We concur with Dalisa.
Section 37.009 is headed “Costs” and states as follows: “In any proceeding under this chapter, the court may award costs and reasonable attorney’s fees as are equitable and just.” Tex. Civ. Prac. & Rem.Code Ann. § 37.009 (emphasis added). “That a suit for the statutory attorney’s fees as a separate action could not be maintained is evident from the wording of the statute.... The attorney’s fees, while not costs, partake of the nature of the costs of suit and are assessed in accordance with the judgment ” reached in the proceeding. Huff v. Fidelity Life Ins. Co.,
Bradford urges six appellate decisions in support of his position that a claim for attorney’s fees under section 37.009 may be maintained in an independent proceeding and made the subject of a separate and distinct judgment. Four of the decisions involve different statutory authorizations for the recovery of attorney’s fees.
We hold the trial court abused its discretion when it severed Bradford’s claim for declaratory relief from his claim for attorney’s fees under the Act.
DALISA’S COUNTERCLAIMS
As indicated above, the discretion lodged in trial courts by Rule 41 may not be exercised in a manner that is contrary to legal rules and principles applicable in the particular case. One such rule forbids the severance of a claim that is interwoven with the remaining actions to an extent that they involve the same facts and issues. We believe that rule was violated here.
Bradford requests negative declaratory relief exclusively: that Dalisa possesses no interest in the Bradford tract, that no contract exists between the parties by reason of negotiations and writings exchanged between them, and that Dalisa in consequence has no right to record a lis pendens notice against the tract. Dalisa’s requested declaratory relief is exactly contraposi-tive: that Dalisa does possess a legal or equitable interest in the Bradford tract by reason of a contract resulting from negotiations between the parties and writings exchanged between them. Ancillary to its request for declaratory relief, Dalisa requested specific performance of the alleged contract or, alternatively, money damages for fraudulent or negligent misrepresentations allegedly made by Bradford in the course of their negotiations. It is difficult to conceive how these opposing actions do not involve the same facts and issues. We conclude from the face of the parties’ pleadings that they do.
DISPOSITION OF THE APPEALS
To be appealable, Bradford’s summary judgment must dispose of all parties and all issues before the trial court. See Mafrige v. Ross,
We vacate the trial-court severance order for the abuse of discretion found above. For want of an appealable judgment, we dismiss Dalisa’s appeal from the summary judgment recovered by Bradford. Bradford’s appeal from the trial-court order denying his motion to cancel the lis pendens notice depends upon the merits and validity of his claim for declaratory relief. No final judgment has been rendered sustaining his claim in that regard. His appeal is therefore premature.
We dismiss the consolidated appeal for want of jurisdiction.
Notes
. The landowners are Lawren E. Bradford; Charles E. Pratt, III; Martha Claire Tompkins; John Francis Heard, Jr.; Mary Ellen Heard; Susan Frances Heard; Joan Heard; Michael Thomas Heard; Judith Jacks Lide; James H.W. Jacks; Jennifer Jacks Henley; Liza Billups Lewis; LeAnn Billups; James S. Billups III 1996 Trust No. 1; James S. Bill-ups, III, Trustee; Francesca Billups Mannix; and Marcella Billups Symington.
. Attorney’s fees incurred in defending a separate lawsuit cannot be recovered under section 37.009 of the Act, notwithstanding that the separate lawsuit concerned the same issues as those in the declaratory judgment suit. See National Union Fire Ins. Co. v. Care Flight Air Ambulance Service, Inc.,
. Great Am. Res. Ins. Co. v. Britton,
.International Ass’n of Firefighters Loc. 624 v. San Antonio,
. See, e.g., Westgate, Ltd. v. State,
. If we understand correctly the dissenting opinion, it concedes the correctness of our holding, under existing authorities, regarding the trial-court severance of Bradford’s claim for statutory attorney's fees. The dissenting opinion contends for an opposite holding, however, because “the trial bench and bar” have become "comfortable” with a contrary, if incorrect, practice that "appellate courts have largely ignored.” If it indeed exists, such a practice is untenable. Suppose, for example, that we must reverse a plaintiffs money judgment and render judgment that he take nothing on the merits of his claim against the defendant. Then, in a separate appeal from an independent judgment awarding the plaintiff attorney's fees, we find we must affirm that judgment because no reversible error is shown in the record of that severed proceeding. This would be intolerable, the opposite of a rational system for the administration of justice.
. Similar instances of counterclaims interwoven with the plaintiff's claim so as to involve the same facts and issues are found in the following illustrative cases: Jinkins v. Bryan,
Dissenting Opinion
dissenting.
Because the majority today substitutes its judgment for that of the district court in matters within that court’s discretion, thus greatly restricting a trial court’s ability to procedurally manage cases pending before it, I respectfully dissent.
I. The Issue
The majority dismisses this appeal, holding that this Court lacks jurisdiction to entertain it because the district court erred in severing portions of the case, postjudgment, thereby rendering his final judgment interlocutory and unappealable. Simply stated, it is the majority’s view that the district court did not follow existing law when he severed Bradford’s claim for attorney’s fees and Dalisa’s counterclaims from Bradford’s original action for declaratory relief.
The Texas Rules of Civil Procedure provide that “[a]ny claim against a party may be severed and proceeded with separately.” Tex.R. Civ. P. 41. The supreme court has repeatedly affirmed that Rule 41 invests the trial court with broad discretion in dealing with matters of severance. Guaranty Fed. Sav. Bank v. Horseshoe
II. Attorney’s Fees
It will no doubt come as a surprise to the trial bench and bar alike to discover that a trial court cannot reserve for later determination the amount of attorney’s fees to be awarded. It is not uncommon for a trial court to sever issues of attorney’s fees from the main suit, allowing the substantive issues in the case to go before the appellate court before assessing liability for and the amount of the fees to be awarded. Indeed, a strong argument may be made that such is the preferable practice. It avoids the rather awkward procedure often employed, but now by implication mandated in all cases, of guessing a reasonable attorney’s fee for a successful appeal to the court of appeals, for drafting a petition for review to the supreme court, for briefing in the supreme court, and for oral argument in the supreme court. Courts euphemistically refer to this practice as a “conditional award” of attorney’s fees. See, e.g., Hughes v. Habitat Apartments,
Before today, a trial court, in the exercise of its discretion, often severed attorney’s-fee issues. If, after the appellate process had run its course, issues remained regarding the entitlement to or the amount of attorney’s fees that might be recovered in the action, the trial court could determine such issues based on real, not theoretical, knowledge of the final outcome of the case and the actual time and effort of the attorneys. This seems to me to be the preferable practice, particularly if left to the discretion of the trial court.
The majority takes a narrow view of the instances in which a trial court can sever a claim from the main suit, determining that the supreme court’s general language in
I do not doubt that it may be so applied. In a general sense, the majority is correct. The consideration of attorney’s fees is the consideration of an issue or claim, not the consideration of a separate cause of action. In such an analysis, a trial court’s severance of an attorney’s-fee demand can never survive appellate-court scrutiny and must always render the trial-court judgment interlocutory. This is so because “attorney’s fees may not be recovered from an opposing party unless such recovery is provided for by statute or by contract between the parties.” Travelers Indent. Co. v. Mayfield,
Initially, it is important to note that neither Guaranty Federal Savings Bank nor Cotner, nor any case in their pedigree, concerns or discusses the propriety of a trial court’s preappeal severance of a request for attorney’s fees. See, e.g., Guaranty Fed. Sav. Bank,
Bradford directs this Court to several eases in which appellate courts have severed attorney’s fees claims and remanded for a new trial. See Great Am. Reserve Ins. Co. v. Britton,
What the majority actually holds is that only causes of action may be severed by a trial court. This would appear consistent with the language of Guaranty Federal Savings Bank. See
The majority is correct that neither section 37.009 nor section 38.001 of the civil practice and remedies code recognizes a stand-alone action for attorney’s fees. See Tex. Civ. Prac. & Rem.Code Ann. §§ 37.009 & 38.001 (West 1997); see also Huff v.. Fidelity Life Ins. Co.,
Severance is proper ... only where the suit involves two or more separate and distinct causes of action. Each of the causes into which the action is severed must be such that the same might properly be tried and determined if it were the only claim in controversy.... A sev-erable cause of action may be tried separately ..., but an issue that might properly be the subject of a separate trial is not necessarily severable.
Kansas Univ. Endowment Ass’n v. King,
Although its genesis may have been in confusion, it is my belief that, as applied to a claim for attorney’s fees, severance practice has developed a character of its own, evolving into a system with which both the trial bench and bar are comfortable and, until today, appellate courts have largely ignored. Such evolution is to be expected.
The truth is, that the law is always approaching, and never reaching, consistency. It is forever adopting new principles from life at one end, and it always retains old ones from history at the other, which have not yet been absorbed or sloughed off. It will become entirely consistent only when it ceases to grow.
Oliver Wendell Holmes, Jr., The Common Law 36 (Legal Classics Library 1982) (1881). I see no reason to disturb a practice that is the natural outgrowth of trial courts’ exercising their discretion to prevent the attorney’s-fee tail from wagging the substantive-issue dog.
The supreme court has observed that “[t]he controlling reasons for a severance are to do justice, avoid prejudice and further convenience.” Guaranty Fed. Sav. Bank,
III. Counterclaims
I also disagree with my colleagues’ holding that the district court abused his discretion when he severed Dalisa’s counterclaims. The district court’s final judgment declared that
(a) [Dalisa has] no contract for the purchase of the real property of [Bradford] that is described in [Bradford’s] Original Petition (the “Property”);
(b) [Dalisa has] no beneficial interest in the Property; and
(c) [Dalisa has] no other interest in the Property sufficient to support the filing of any lis pendens or otherwise to cloud [Bradford’s] title.
The district court had earlier granted Bradford partial summary judgment on these issues and, on the same day the above-quoted judgment was signed, severed into a separate case “all of [Dalisa’s] causes of action for damages and attorneys’ fees and [Bradford’s] request for an award of reasonable and necessary attorneys’ fees under the Declaratory Judgment Act.” The stated reason for the court’s action was to prevent Dalisa’s damage claims from delaying resolution of the legal title to the property at issue. The district court thus severed the parties’ title claims from their damage claims. I believe this action to be appropriate and well within the district court’s discretion.
Cherokee Water Company [Cherokee], as holders of the preferential right to purchase, brought suit against Martha Paul Rogers Forderhause and others [mineral owners] for declaratory judgment and specific performance of the preferential right to purchase. The mineral owners brought a counterclaim for reformation of the deed. Both Cherokee and the mineral owners moved for summary judgment.
The trial court granted Cherokee’s motion for summary judgment. It severed the mineral owners’ claim for reformation of the deed. The trial court found that Cherokee was the holder of a preferential right to purchase under the deed, that and oil and gas lease executed by the mineral owners constituted an attempted sale of the oil, gas and other minerals under the terms of the preferential right to purchase, and ordered specific performance.
Id. (emphasis added) (brackets in original). In approving the trial-court severance, the supreme court observed that “[a] claim may be properly severed if it is part of a controversy which involves more than one cause of action, and the trial judge is given broad discretion in the manner of severance and consolidation of causes.” Id. at 525 (emphasis added) (citing McGuire,
Under these facts, we cannot find ... abuse of discretion. The reformation claim was severed after summary judgment was granted for Cherokee, apparently in an effort to expedite appellate review of the declaratory judgment action. While it may have been preferable to try the reformation issue before an appeal would normally lie, we cannot say that any abuse of discretion occurred.
Id. at 526. I cannot distinguish the district court’s action in the case at bar from that of the trial court in Cherokee Water Co.
By holding that the district court “abused its discretion when it severed Bradford’s claim for declaratory relief from Dalisa’s counterclaims because both are interwoven to an extent that they involve the same facts and issues,” Dalisa, slip op. at 881, the majority has intruded in an area best left to trial courts. This Court, indeed the author of the majority opinion, has recognized that the abuse-of-discretion standard is “so amorphous that it means everything and nothing at the same time.” Landon v. Jean-Paul Budinger, Inc.,
IV. Harm or Prejudice
Finally, I do not agree that harm or prejudice is shown simply because a severance has the effect of converting an otherwise interlocutory judgment into a final one. Dalisa, slip op. at 882 (citing Standard Concrete Pipe,
V. Conclusion
This Court accomplishes nothing but a further delay in the resolution of this cause by dismissing the appeal. I would overrule Dalisa’s motion to dismiss and consider the appeal on its merits. Because the majority does otherwise, I respectfully dissent.
. For clarity, I will refer to the parties in the same manner as the majority, "Dalisa” and "Bradford."
. This three-part test first appears in a law-review comment in 1958:
[I]n order that there may be a severance:
(1) There must be a controversy involving more than one cause of action.
(2) The cause severed must be such that it could be the proper subject of a lawsuit were it the only claim involved in the controversy.
(3) The causes- sought to be severed must not be so interwoven as to involve the same identical facts and issues nor, in certain instances, may the causes be severed if they relate to the same subject matter.
Robert A. Hall, Comment, Severance and Separate Trial in Texas, 36 Tex. L.Rev. 339, 339 (1958) (footnotes omitted). The progression from law-review comment to supreme-court standard is traced by the following cases: Hayes v. Norman,
. The language used by Hall in his comment avoided such confusion. See Hall, supra, note 2.
. See also Zemaco, Inc. v. Navarro,
