REVERSE and REMAND and Opinion Filed August 28, 2019




                                         S    In The
                                Court of Appeals
                         Fifth District of Texas at Dallas
                                      No. 05-18-01227-CV

                    GREG GUTMAN, Appellant
                               V.
  RICHARD WAYNE WELLS AND REAL ESTATE ARBITRAGE PARTNERS, LLC,
                            Appellees

                            On Appeal from the 95th District Court
                                    Dallas County, Texas
                             Trial Court Cause No. DC-18-06158

                             MEMORANDUM OPINION
                  Before Justices Whitehill, Partida-Kipness, and Pedersen, III
                                  Opinion by Justice Whitehill
        We withdraw our opinion dated August 5, 2019. This is now the Court’s opinion in this

case.

        This is an appeal from the trial court’s Rule 91a dismissal of Greg Gutman’s declaratory

judgment action against Richard Wells and Real Estate Arbitrage Partners, LLC (Arbitrage).

Gutman’s two issues argue that the trial court erred by (i) dismissing the action and, consequently,

(ii) awarding Wells and Arbitrage reasonable attorney’s fees.

        This case asks us to decide whether a petition alleging that a defendant has repeatedly

harassed and threatened the plaintiff because he refuses to accede to the defendant’s unlawful

demands presents a sufficiently concrete dispute to justify a viable action seeking a judgment

declaring that the plaintiff need not accede to those demands.
       As discussed below, the trial court erred by dismissing the case because there was a

justiciable controversy to be determined by declaratory judgment. And because the dismissal was

reversible error, the court also erred by awarding attorney’s fees against Gutman. We thus reverse

the trial court’s judgment and remand the case for further proceedings.

                                        I. BACKGROUND

       We draw the relevant facts verbatim from the allegations in Gutman’s petition:

       9. Previously Plaintiff had sued Defendants in Cause No. DC-17-1809 in the 95th District
       Court to set aside a contract between Plaintiff and Arbitrage, which request was premised
       upon both, deficiencies in the formation of the contract and fraud practiced by the
       Defendants. Defendants counter-claimed against Plaintiff for alleged fraud and
       enforcement of the contract.

       10. Following a trial in the 95th District Court, all of Plaintiffs claims against Arbitrage
       were validated and found to be meritorious and all of Defendant’s claims were found to be
       groundless. No Judgment issued against Defendant Wells.

       11. Based upon the foregoing, on the 7th day of August, 2017, the Judge of the 95th District
       Court issued a Judgment in favor of Plaintiff and as against Defendant Arbitrage,
       cancelling the contract, and awarding Plaintiff attorney’s fees, court costs and interests.
       Defendants were awarded no relief under their counter-claims. The Judgment survived an
       unsuccessful attempt at an appeal.

       12. Weeks following the Judgment, Plaintiff recorded an Abstract of Judgment in the Deed
       Records of Dallas County. The Abstract of Judgment only referenced the Judgment awards
       against Defendant Arbitrage. The Abstract of Judgment did not contain any indication that
       there was any claim referenced in the Abstract of Judgment with respect to Defendant
       Wells.

       13. The Judgment amounts awarded to Plaintiff were paid in full on the 7th day of May,
       2018. Consistent with his duties, Plaintiff agreed to deliver and did deliver to Arbitrage on
       the 9th of May, 2018, a properly composed, executed, acknowledged and notarized release
       of the Judgment and any related liens arising there under.

       14. Despite delivering a fully completed and executed release of Judgment and lien,
       Defendants had repeatedly demanded that Plaintiff likewise execute and deliver to
       Defendants a release of an Abstract of Judgment against Defendant Wells, despite the fact
       that Defendants know and have been repeatedly advised that Plaintiff never had, nor does
       he now claim to have or hold a Judgment of any type against Defendant Wells.

       Additionally, Gutman’s fifteenth paragraph began:



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       Defendants have repeatedly harassed and threatened Plaintiff for his refusal to
       release a judgment he does not have and rights he does not claim to own. Plaintiff
       believes that there is no obligation under the law to release that which has not been
       claimed. Therefore a justiciable controversy exists about the rights and
       responsibilities of the parties concerning Defendants’ rights if any to demand such
       a release or Plaintiff’s obligation, if any, to provide such a release.

Paragraph fifteen further asked the trial court to end the harassment and intimidation by resolving

the controversy and declaring the parties’ rights.

       Wells and Arbitrage moved to dismiss the case pursuant to Rule 91a because there was no

justiciable controversy. See TEX. R. CIV. P. 91a. The trial court granted the motion and awarded

Wells and Arbitrage $3,605 in attorney’s fees with an additional $7,500 conditioned on the

successful defense of an appeal. This appeal followed.

                                             II. ANALYSIS

A.     Standard of Review and Applicable Law

       Texas Rule of Civil Procedure 91a authorizes a defendant to move for dismissal of a cause

of action that has no basis in law or in fact. TEX. R. CIV. P. 91a; see City of Dallas v. Sanchez,

494 S.W.3d 722, 724–25 (Tex. 2016). “A cause of action has no basis in law if the allegations,

taken as true, together with inferences reasonably drawn from them, do not entitle the claimant to

the relief sought.” TEX. R. CIV. P. 91a.1.

       In deciding a Rule 91a motion, the trial court may consider only the live pleading and any

attachments thereto. TEX. R. CIV. P. 91a.6 (“the court may not consider evidence in ruling on the

motion and must decide the motion based solely on the pleading of the cause of action, together

with any pleading exhibits permitted by Rule 59”); AC Interests, L.P. v. Tex. Comm’n on Envt’l

Quality, 543 S.W.3d 703, 706 (Tex. 2018).

       The rule further requires the trial court to award the prevailing party all costs and

reasonable and necessary attorney’s fees incurred regarding the challenged cause of action in the

trial court. TEX. R. CIV. P. 91a.7.

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        We review de novo a trial court’s decision on a Rule 91a motion. City of Dallas, 494

S.W.3d at 724. In doing so, we apply the fair-notice pleading standard to determine whether the

petition’s allegations are sufficient to allege a cause of action, and we look solely to the pleading

and any attachments to make this determination. Renate Nixdorf GmbH & Co. KG v. TRA Midland

Props., LLC, No. 05-17-00577-CV, 2019 WL 92038, at *4 (Tex. App.—Dallas Jan. 30, 2019, pet.

denied) (mem. op).

        The Declaratory Judgments Act gives trial courts the “power to declare rights, status, and

legal relations” between or affecting parties “whether or not further relief is or could be claimed.”

TEX. CIV. PRAC. & REM. CODE § 37.003(a); see also id. § 37.002(b) (“This chapter is remedial; its

purpose is to settle and to afford relief from uncertainty and insecurity with respect to rights, status,

and other legal relations; and is to be liberally construed and administered.”).

        The critical requirements to obtain a declaratory judgment are the existence of a justiciable

controversy as to the rights and status of the parties that the declaration sought will resolve. See

Bonham State Bank v. Beadle, 907 S.W.2d 465, 467 (Tex. 1995).

        A justiciable controversy involves a real and substantial dispute including a genuine

conflict of tangible interests, rather than merely a theoretical disagreement. See Village of Tiki

Island v. Premier Tierra Holdings, Inc., 555 S.W.3d 738, 744–45 (Tex. App.—Houston [14th

Dist.] 2018, no pet.). There is a real and substantial dispute when the requested declaration will

“serve a useful purpose or will terminate the controversy between the parties.” Bonham State

Bank, 907 S.W.2d at 468.

B.      Application of Law to Facts

        Here, Gutman’s petition alleges that Wells requested a release, Gutman refused to provide

the release, and that Wells harassed and threatened Gutman because he refused to provide the

release. This sets out a controversy—whether Gutman must provide Wells the requested release—


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that is real and not hypothetical. Taking all reasonable inferences in Gutman’s favor there is a

justiciable controversy because the controversy results from Wells repeatedly harassing and

threatening Gutman. Although these allegations are less than specific, at this early stage they

adequately assert that the declaratory judgment will serve a useful purpose of terminating the

parties’ controversy and ending the harassment and threats.

       That the circumstances in this case are not among the civil practice and remedies code

§ 37.004(a) specific examples of situations in which declaratory judgments are proper is of no

moment because that section’s enumeration is not exclusive:

       The enumerations in Sections 37.004 and 37.005 do not limit or restrict the exercise
       of the general powers conferred in this section [§ 37.003] in any proceeding in
       which declaratory relief is sought and a judgment or decree will terminate the
       controversy or remove an uncertainty.

TEX. CIV. PRAC. & REM. CODE § 37.003(c).

       Gutman also argues that the attorney’s fees award was improper because the dismissal was

in error. We agree.

       Because the trial court’s errors resulted in an improper judgment on both issues, we reverse

and remand this case to the trial court for further proceedings.




                                                   /Bill Whitehill/
                                                   BILL WHITEHILL
                                                   JUSTICE




Partida-Kipness, J., dissenting

181227F.P05




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                                        S
                               Court of Appeals
                        Fifth District of Texas at Dallas
                                       JUDGMENT

 GREG GUTMAN, Appellant                             On Appeal from the 95th District Court,
                                                    Dallas County, Texas
 No. 05-18-01227-CV         V.                      Trial Court Cause No. DC-18-06158.
                                                    Opinion delivered by Justice Whitehill.
 RICHARD WAYNE WELLS AND REAL                       Justices Partida-Kipness and Pedersen, III
 ESTATE ARBITRAGE PARTNERS, LLC,                    participating.
 Appellees

        In accordance with this Court’s opinion of this date, the judgment of the trial court is
REVERSED and this cause is REMANDED to the trial court for further proceedings consistent
with this opinion.

       It is ORDERED that appellant GREG GUTMAN recover his costs of this appeal from
appellees RICHARD WAYNE WELLS AND REAL ESTATE ARBITRAGE PARTNERS,
LLC.


Judgment entered August 28, 2019.




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