Moncrief v. Moncrief

672 S.W.3d 156

Richard W. MONCRIEF and Marshall M. Searcy, individually and in their respective capacities as Successor General Partners of Moncrief Family Partnership, L.P. and Trustees of the W.A. Moncrief, Jr. Management Trust, and on behalf of the Management Trust and MFP, Appellants

v.Tom Oil MONCRIEF, Gloria Marie Moncrief, and Gary R. Allen, Appellees

No. 02-22-00077-CV

Court of Appeals of Texas, Fort Worth.

Delivered: May 18, 2023

Rehearing En Banc Denied July 20, 2023

ATTORNEYS FOR APPELLANTS: WILLIAM L. KIRKMAN, PRESTON B. SAWYER, KIRKMAN LAW FIRM, PLLC, FORT WORTH, TEXAS, ANDREW D. SIMS, RUSSELL R. BARTON, MICHAEL V. FITZPATRICK, J. NATHANIEL JAMES, HARRIS, FINLEY & BOGLE, P.C., FORT WORTH, TEXAS, ROBERT J. MYERS, JOHN J. SHAW, MYERS SHAW, FORT WORTH, TEXAS, STEVEN K. HAYES, LAW OFFICE OF STEVEN K. HAYES, FORT WORTH, TEXAS.

ATTORNEYS FOR APPELLEES: RALPH H. DUGGINS, PHILIP VICKERS, KATE HANCOCK, CANTEY HANGER LLP, FORT WORTH, TEXAS, WALKER C. FRIEDMAN, CHRISTIAN D. TUCKER, JACK E. PRICE, JR., FRIEDMAN, SUDER & COOKE, FORT WORTH, TEXAS, SARAH PATEL PACHECO, LEN A. WADE, JACKSON WALKER LLP, FORT WORTH, TEXAS, ALEXANDRA WILSON ALBRIGHT, ALEXANDER DUBOSE & JEFFERSON LLP, AUSTIN, TEXAS, WILLIAM J. BOYCE, ALEXANDER DUBOSE & JEFFERSON LLP, HOUSTON, TEXAS, TIMOTHY D. HOWELL, SHAYNE D. MOSES, MOSES, PALMER & HOWELL, L.L.P., FORT WORTH, TEXAS.

Before Sudderth, C.J.; Birdwell and Wallach, JJ.

Opinion by Justice Wallach This case involves ongoing litigation among multiple parties involving multiple claims concerning the Moncrief family trusts and business entities. This is an interlocutory appeal from the trial court's order granting a temporary injunction prohibiting Appellants from proceeding to arbitration against Appellees and its refusal to rule on Appellants’ concurrent motion to refer to arbitration Appellees’ counterclaims against Appellants. We will reverse the trial court's order granting the temporary injunction. We will decline to entertain the appeal of the trial court's refusal to rule on the motion to refer the counterclaims to arbitration due to lack of jurisdiction.¹

I. Background

Appellants are Richard W. Moncrief (Dick) and Marshall M. Searcy (Marshall) individually and in their respective capacities as alleged successor general partners of the Moncrief Family Partnership, L.P. (MFP) and alleged Trustees of the W.A. Moncrief, Jr. Management Trust (Management Trust), and on behalf of the Management Trust and MFP, sometimes collectively referred to as Appellants. Appellees are Tom Oil Moncrief (Tom), Gloria Moncrief (Gloria), and Gary R. Allen (Gary), sometimes collectively referred to as Appellees.² In order to better understand the facts, we are including a graphic depiction of the relevant Moncrief family tree:

As shown, Bill, Charlie, Dick, and Tom are sons of Tex. Gloria is the oldest daughter of Charlie, who is now deceased.

Monty and Tex founded Montex Drilling Company in the 1940s to administer Moncrief family assets and interests, and other aspects of their businesses, including assets held in various family entities. Montex administers the assets of MFP and is the repository of its records, including financial records. MFP purportedly has assets valued at over one billion dollars.

In 1966, Monty and Elizabeth created a trust named the William Alvin Moncrief, Jr. Trust (the "1966 Trust") for their four living grandsons, Bill, Dick, Charlie, and Tom. The 1966 Trust assets have also been administered by Montex since the 1966 Trust was created. Gloria claims to hold the majority ownership (52%) interest in Montex. Gary is the Chief Financial Officer of Montex. The 1966 Trust owns 48% of Montex. Appellants assert that Gloria and Gary have wrongfully claimed to be Trustees of the 1966 Trust.

MFP was confirmed in 2010 by the Amended and Restated Limited Partnership Agreement of Moncrief Family Partnership, L.P. (MFP Agreement). The signatory parties to the MFP Agreement were Tex and the Estate of Deborah B. Moncrief, as general partners, and Tex and the Estate of Deborah Moncrief, as Limited Partners. Tex signed in his individual capacity, in both general and limited partner capacities, and as Personal Representative of the Estate of Deborah Moncrief in both capacities. Charlie was designated as an automatic successor general partner in the event of Tex's death, disability, or legal incapacity.

Under the MFP Agreement, "Partners" is defined as the "General Partners and the Limited Partners, and such other Persons who become Partners in accordance with the terms of this Agreement." "Successor General Partner" is defined as "[t]hat Person or those Persons appointed as a successor to any General Partner in accordance with Section 5.1(B) of this Agreement." "Limited partners" are defined as "[a]ny Partner who is designated as a Limited Partner on Exhibit 1 to this Agreement, including Substituted Limited Partners admitted in accordance with the terms of this Agreement." The MFP Agreement further provided that the General Partners could amend the agreement with the written approval of all Partners. The Management Trust became a Limited Partner of MFP on January 1, 2012, under the First Amendment to the MFP Agreement, substituting for Tex, individually, as a limited partner. Its status as Limited Partner has not subsequently changed.

The MFP Agreement contains a broad arbitration clause providing in pertinent part:

If at any time during the existence of the Partnership, any question, disagreement, difference[,] or controversy shall arise between the Partners concerning the Partnership, or its affairs, transactions, business[,] or accounts, or the meaning or interpretation of this Agreement, or the rights, duties[,] or obligations of the Partners, then any Partner may cause such question, disagreement, difference[,] or controversy to be submitted to and determined by arbitration, in accordance with the rules then in effect of the American Arbitration Association. [Emphasis added.]

Further, MFP Agreement section 8.6 states that "[t]his Agreement shall be binding upon the parties hereto and their respective ... successors."

The signatory parties to the Fourth Amendment, dated June 19, 2019, were general partners Tex, individually, and as Trustee for the Deborah Beggs Moncrief Family Trust, and limited partners Tex, as Trustee of the Deborah Beggs Moncrief Family Trust and as Trustee of the Management Trust. The Fourth Amendment named Charlie, Tom, and Gary as Successor General Partners of MFP in the event of Tex's death, disability, or legal incapacity, and Gloria as automatic successor to Charlie in the event of his death, disability, or legal incapacity. Subsequently, Gloria succeeded to Charlie. The Fourth Amendment did not amend or delete the arbitration agreement. Instead, it ratified and continued it and all other non-amended portions of the MFP Agreement.

The Fifth Amendment was signed by Tex effective in August 2021. Tom, Dick, and Marshall were appointed as the new successor general partners in the event of Tex's death, disability, or legal incapacity. Tex again signed as general partner individually and on behalf of the Deborah Beggs Moncrief Family Trust, and as limited partners on behalf of the Deborah Beggs Moncrief Family Trust and the Management Trust. The Fifth Amendment, like the Fourth, did not delete or amend the arbitration agreement but ratified and continued it and all non-amended portions of the MFP Agreement. Tex died on December 29, 2021, at 101 years of age.

Procedurally relevant to this appeal, on January 14, 2022, Appellees filed a Counterclaim against Appellants which disputed the validity of the Fifth Amendment, alleging, among other things, that Tex did not have the mental capacity, or was unduly influenced, to execute it. On January 17, 2022, the MFP, through Dick and Marshall in their capacities as alleged General Partners of MFP, instituted an arbitration proceeding with the American Arbitration Association under the broad arbitration clause in the MFP Agreement, which was docketed under Case No. 1-22-0000-2303 (the "arbitration proceeding"). The arbitration proceeding was supplemented on January 27, 2022, and February 10, 2022, to also include as claimants (1) Dick and Marshall, individually as the General Partners of MFP and (2) the Management Trust, as a Limited Partner of MFP, through Dick and Marshall in their capacities as Trustees of the Management Trust.

In the arbitration proceeding, Dick and Marshall challenged the validity of the Fourth Amendment under which Appellees claim to be general partners. Dick and Marshall make this challenge as General Partners of MFP under the Fifth Amendment, as the Trustees of the Management Trust (a limited partner of MFP, hence a "partner" as defined), and on behalf of MFP itself. Dick and Marshall alleged that they took this action because the Fourth Amendment was superseded by the Fifth Amendment, which made them successor general partners along with Tom.

On January 19, 2022, Dick, Marshall, the Management Trust, and MFP filed a Motion to Refer Matter to Arbitration, Plea in Abatement, and Motion to Stay (the "Motion to Compel Arbitration and Stay Litigation"). The Motion to Compel Arbitration and Stay Litigation was amended on February 8, 2022.

On March 1, 2022, Appellees filed an Amended Counterclaim (the "Amended Counterclaim") which continued to dispute the validity of the Fifth Amendment by alleging that Tex did not have the mental capacity or was unduly influenced to sign it. Appellees, as counterclaimants, claimed to be general partners in MFP under the Fourth Amendment. They sought, in part, temporary and permanent injunctive relief against Appellants to prevent Appellants from proceeding with arbitration under the Fifth Amendment. Appellees also sought declaratory relief that,

a. Unless and until Dickie and Searcy establish they are each partners in MFP, neither has any right, in any capacity, to invoke the MFP Partnership

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