In Re A&P Transportation Co., Inc. (Tex.App.- Houston [14th Dist] Sep. 10, 2009)(per
curiam denial)(mandamus denied re: denial of motion to strike counterclaim)
(compulsory counterclaim, not same deadline as for filing answer to original petition & citation)
MOTION OR WRIT DENIED: Per Curiam
Before Justices Brock Yates, Frost and Brown
14-09-00729-CV In Re A&P Transportation Co., Inc., Clayton Allen Potter, Toby Allen Potter, T.A.
Potter Management, LLC, and Superior Nationwide Logistics, Ltd.
Appeal from 133rd District Court of Harris County
Trial Court Judge: Jaclanel McFarland
M E M O R A N D U M O P I N I O N
On August 24, 2009, relators, A & P Transportation Co., Inc., Clayton Allen Potter, Toby Allen Potter, T.
A. Potter Management, LLC, and Superior Nationwide Logistics, Ltd. filed a petition for writ of
mandamus in this court. See Tex. Gov't Code Ann. § 22.221 (Vernon 2004); see also Tex. R. App. P.
52. In the petition, relators ask this court to compel the Honorable Jaclanel McFarland, judge of the
133rd District Court in Harris County to vacate her order of May 18, 2009, denying their motion to strike
counterclaims filed by North American Transport Concepts, Inc. (NATCO), the real party in interest.
Relators further seek a stay of the proceedings in the court below.
Factual and Procedural Background
On November 15, 1994, relator, Clayton Allen Potter, entered into an agreement with NATCO in which
Potter agreed to operate a business known as NATCO-Houston in exchange for administrative services
of NATCO, including billing services. In January, 2000, Potter organized A & P Transportation Co.,
which continued doing business as contemplated by the earlier agreement with NATCO. A dispute later
arose when relators chose to operate their own accounting system. Relators allege that after instituting
their accounting system, they discovered discrepancies with NATCO's system that led them to believe
NATCO's system caused them to be underpaid according to their agreement.
On November 15, 2008, relators filed suit against NATCO alleging, among other claims, that NATCO
underpaid them and prevented them access to vendors and customers. On December 15, 2008,
NATCO filed an answer to relators' suit. On February 19, 2009, NATCO filed several counterclaims
against relators and four third-party defendants. On March 30, 2009, relators moved to strike NATCO's
counterclaims alleging they were compulsory counterclaims required to be filed within the time for the
filing of NATCO's answer. On May 18, 2009, the respondent denied relators' motion to strike.
Mandamus is an extraordinary remedy to correct a trial court's abuse of discretion that cannot be
remedied through standard appellate channels. Walker v. Packer, 827 S.W.2d 833, 840-44 (Tex.
1992) (orig. proceeding). A trial court clearly abuses its discretion if it reaches a decision so arbitrary
and unreasonable as to amount to a clear and prejudicial error of law. Id.
Relators argue that NATCO's counterclaims are compulsory under Rule 97(a) of the Texas Rules of
Civil Procedure. They further argue that Rule 97(a) requires compulsory counterclaims to be filed
within the time permitted for the defendant to answer. Therefore, relators allege that because the
counterclaims were not filed within the time permitted for NATCO to answer, the trial court abused its
discretion in failing to strike NATCO's pleading. Rule 97(a) provides in pertinent part:
(a) Compulsory Counterclaims. A pleading shall state as a counterclaim any claim within the jurisdiction
of the court, not the subject of a pending action, which at the time of filing the pleading the pleader has
against any opposing party, if it arises out of the transaction or occurrence that is the subject matter of
the opposing party's claim and does not requires for its adjudication the presence of third parties of
whom the court cannot acquire jurisdiction [.]
Tex. R. Civ. P. 97(a).
The plain language of Rule 97(a) does not require a compulsory counterclaim to be filed within the time
for filing the defendant's answer.
The compulsory counterclaim rule is designed to avoid piecemeal or duplicative litigation. Its purpose is
to provide that a potential counterclaimant with a justiciable interest arising out of the same transaction
or occurrence at issue in the opposing party's claim bring the counterclaim in the same proceeding or it
will be deemed waived. Bard v. Charles R. Myers Ins. Agency, Inc., 839 S.W.2d 791, 796 (Tex. 1992).
“The 'compelling interest' underlying the compulsory counterclaim rule is solely in judicial economy; its
purpose is to prevent multiple suits arising out of the same transactions or occurrences." Id. NATCO
does not challenge relators' assertion that the counterclaims are compulsory under Rule 97(a) in that
the claims arose out of the same transaction or occurrence at issue in relators' claim. Therefore,
NATCO concedes it is required to bring the counterclaims in this litigation, but argues that Rule 97(a)
does not require the counterclaims to be filed within the time designated for the filing of NATCO's
Rule 97(a) mandates that if a party chooses not to assert a compulsory counterclaim during the initial
litigation between the parties in which such a claim is compulsory, when the initial lawsuit becomes final,
the party loses the right to file a later suit on the claims that were compulsory in the first suit. See
Williams v. Nat'l Mortg. Co., 903 S.W.2d 398, 403 (Tex. App.-Dallas 1995, writ denied) (“A party's failure
to assert compulsory counterclaims precludes that party from asserting them in later lawsuits.") The
only deadline imposed by Rule 97(a) for filing a compulsory counterclaim is prior to final judgment in the
initial action between the parties involving the same transaction or occurrence. Therefore, the trial
court did not abuse its discretion in denying relators' motion to strike.
Relators have failed to establish an abuse of discretion by the trial court because Rule 97(a) does not
require a compulsory counterclaim to be filed within the deadline for filing the defendant's answer. For
this reason, relators are not entitled to mandamus relief. Accordingly, we deny relators' petition for writ
of mandamus and their motion for stay of proceedings below.
Panel consists of Justices Yates, Frost, and Brown.