Opposition Brief — Youell & Cos. v. Getty Oil Co.

Supreme Court of the United States

October Term, 1992

¢

YOUELL & COMPANIES AND

INSURANCE COMPANY OF NORTH AMERICA,

Petitioners,

GETTY OIL COMPANY AND TEXACO INC.,

Respondents.

S

On Petition For Writ Of Certiorari

To The Supreme Court Of Texas

RESPONDENTS’ BRIEF IN OPPOSITION

L

Jor G. Roapy

Counsel of Record

Mary-Anwn A. BELLATTI

SHEINFELD, MA.ey & Kay, P.C.

3700 First City Tower

Houston, Texas 77002

(713) 658-8881

rig, for Respondents

Getty Oil Company and

Texaco Inc.

BEST AVAILABLE COPY

COUNTERSTATEMENT OF QUESTION PRESENTED

Is a summary judgment movant denied due process

of law when, in an appeal by the non-movant from the

granting of the summary judgment, the highest court of a

state construes a document as unambiguous against the

construction requested by the movant, and remands the

case to the trial court for further proceedings consistent

with the opinion?

The Supreme Court of Texas did not grant Respon-

dents’ motion for partial summary judgment, as repre-

sented by Petitioners.

il

TABLE OF CONTENTS

PP YE ae es ae | eee ere ere ere

SUMMARY OF RESPONDENTS’ ARGUMENT: REA-

SONS WHY CERTIORARI SHOULD NOT BE

oF ty) errr re ers ee eer re

FDRSUIIGRNGS 0 i ss000 iv 1gnnsececeneeel caeaeeues

1.

THE QUESTION PRESENTED IS NOT

WITHIN THE CONSIDERATIONS

EXPREoaes? IN RULE 00. iis csvsscecnteevs

MISREPRESENTATION OF THE RESULT

BELOW ALONE JUSTIFIES DENIAL OF THE

WIRES oc 0000s sseke er bdbewk eee eee.

THERE IS NO DEPRIVATION OF DUE PRO-

CESS OF LAW, «.<05<5 +04 een eee

(a) PETITIONERS’ CLAIM DOES NOT

INVOLVE A PROTECTED INTEREST....

(b) PETITIONERS HAVE NOT SHOWN A

DEPRIVATION: THERE IS NO FINAL

JUTIADEEIGE, «vs sinus earenscaeeareeeeas

(c) PETITIONERS PLACED THE ISSUE

BEPORS THE COAG 5.«és hs inendateseess

(d) PETITIONERS WERE GIVEN ADEQUATE

NOTICE AND OPPORTUNITY TO

RESIS oss 0scsesseescunehsaeenes

PETITIONERS’ NOVEL DUE PROCESS THE-

ORY WOULD DEPRIVE COURTS OF AN

INHERENT POWER AND WOULD HARM

THE ADMINISTRATION OF CIVIL JUSTICE .

CONCLUSION . 0.0.00 s008s 00000000) e eee

11

13

15

iii

TABLE OF AUTHORITIES

Page

CAsEs

Armstrong v. Manzo, 380 U.S. 545 (1965)........... 6, 15

Black Warrior Elec. Membership Corp. v. Mississippi

Power Co., 413 F.2d 1221 (5th Cir. 1969)............ 7

Board of Regents of State Colleges v. Roth, 408 U.S.

EE aii aun va Nes sane as ced cr sess neo 7

Coach Leatherware Co. v. AnnTaylor, Inc., 93 F.2d 162

ee ion 4.0 5 weed nen eds ged van edeses 7

Cohen v. Beneficial Indus. Loan Corp., 337 U.S. 541

ES 9

E. C. Ernst Inc. v. General Motors Corp., 537 F.2d

ESE ae ee ne 7

Eichelberger v. Eichelberger, 582 S.W.2d 395 (Tex.

oda yh shina scan vvdecsesucdicds 16

First Nat’l Bank v. Maryland Cas. Co., 290 F.2d 246

6 ho 6 6c5 hb Wiodeds 6'0.s'b baa sces see 8

Fountain v. Filson, 336 U.S. 681 (1949)............... 13

Grannis v. Ordean, 234 U.S. 385 (1914)............... 10

Gulbenkian v. Penn, 252 S.W.2d 929 (Tex. | 14

Gutierrez-Rodriguez v. Cartagena, 882 F.2d 553 (1st

SS EIS i Serna 12

Hudson v. Wakefield, 711 S.W.2d 628 (Tex. 1986)...... 10

Insurance Group Comm. v. Denver & R. G. W. Ry.

Co., 329 U.S. 607 (1947)........ 0... cece cece eee 10

Int'l Longshoremen’s Ass‘n v. Seatrain Lines, Inc., 326

F.2d 916 (2d Cir. 1964)...................0..-0055,. 8

iv

TABLE OF AUTHORITIES - Continued

Page

Landry v. Airline Pilots Ass’n Int'l, 901 F.2d 404 (5th

Cir. 1990), cert. denied, 111 S.Ct. 244 (1990)........ 14

Lewis v. East Texas Finance Co., 146 S.W.2d 977 (Tex.

RNa 56 baka baad ne5d cake e ence eee ees ee eae 15

Lone Star Gas Co. v. X-Ray Gas Co., 164 S.W.2d 504

CR. TE Ak. hs bene oc ect beck bate a recak ees 7

Mackey v. Montrym, 443 U.S. 1 (1979)................ 18

Marbury v. Madison, 5 U.S. 137 (1 Cranch 137)

(ee rene ere ee art eS ere ee 16

Mathews v. Eldridge, 424 U.S. 319 (1976)........... 6, 17

Mingus Constructors v. United States, 812 F.2d 1387

Lan. Ga. Rs 6 acpuhabesn ae eee daa aae tees aeeues 11

Morrow v. Corbin, 62 S.W.2d 641 (Tex. 1933)......... 16

Mullane v. Central Hanover Bank & Trust, 339 US.

Ne THOUS civ kncckucawncars ets ecusataneiveeeeciees 9

Muskrat v. United States, 219 U.S. 346 (1911)......... 16

NL Industries, Inc. v. GHR Energy Corp., 940 F.2d

957 (5th Cir. 1991), cert. denied, 112 S.Ct. 873...... 16

Nebraska Press Ass‘n v. Stuart, 423 U.S. 1327 (1975) ..... 9

Pennoyer 0 Ney, 95 U.S. 714 (1677). «00.5 sees sescess 10

Prepo Corp. v. Pressure Can Corp., 234 F.2d 700 (7th

Ca SE <ysns uk no caw ks cee eee ead ena 11

Proctor & Gamble Indep. Union v. Proctor & Gamble

Mis. Co., S12 F.2d 162 (2d Cie, WBZ). own i ctwcsee. 8

EEE

Vv

TABLE OF AUTHORITIES - Continued

Page

Pubali Bank v. City Nat’l Bank, 777 F.2d 1340 (9th

eh EE be aw Co oak ees ene eee een 10

R & P Enterprises v. LaGuarta, Gavrel & Kirk, Inc.,

ee Be 17

Sun Oil Co. (Del.) v. Madeley, 626 S.W.2d 726 (Tex.

| CET ET Ce Oe ee ee Peer 8

Walters v. National Ass’n of Radiation Survivors, 473

Se EEE ice vad atau wee ee eLeuah oan ees 18

Zinermon v. Burch, 494 U.S. 113 (1990)............... 17

CONSTITUTIONS, STATUTES AND RULES

Ps Wi A Oe ED eens kc civenneadcescveueudeecace 14

IE te IE BN as 4 4 Scias ck eadwodlackweraedeass 4

pe ee ere er Tee a eee 16

Tex. Gov’t Code Ann., § 22.001 (Vernon 1987)....... 16

STATEMENT OF THE CASE

Respondents’ action as originally instituted against

Petitioners (“INA” and “Youell”) was essentially an

insurance coverage case combined with a breach of con-

tract case against NL Industries Inc. (“NL”) for its refusal

to extend to Getty the coverages of NL’s liability policies

with INA and Youell, to protect Getty as an additional

insured. The language creating the duties on which the

action was based is found in a contract between Getty

and NL.

Petitioners filed a motion for summary judgment

claiming, among other things, that as a matter of law the

contract language should be construed in such a way as

to pretermit the action entirely. Respondents had previ-

ously filed a motion for partial summary judgment based

upon a contrary construction which unambiguously exis-

ted as a matter of law.! Respondents’ motion was denied

by the trial court. While the Petitioners’ motion was

pending, a “mini-trial” was held to determine whether

the contract language “was part of an agreement between

NL and Getty” at a particular time. The jury found for

Respondents.2

The trial court then granted Petitioners’ summary

judgment motion on three grounds: (1) the contract

should be construed so as to make the additional insured

language an indemnity; (2) an anti-indemnity statute

applied; and (3) res judicata and collateral estoppel

applied.

1 See Respondents’ Appendix A.

2 See Respondents’ Appendix B.

Respondents’ arguments concerning the unambiguous

construction of the contract language, first made in their

motion for partial summary judgment, were a part of the

appellate record as responses to Petitioners’ motion, con-

trary to Petitioners’ representation.®

The Texas Fourteenth Court of Appeals affirmed Peti-

tioners’ summary judgment on res judicata, but rejected

Petitioners’ construction of the contract language.4 The

Supreme Court of Texas upheld the judgment as to NL on

res judicata grounds, but sustained the court of appeals

opinion on the contract construction issue, agreeing with

Respondents’ contention that the language unam-

biguously separated the insurance and indemnity provi-

sions.°

Despite Petitioners’ many assertions to the contrary

in their argumentative “Statement of the Case,” the Texas

Supreme Court did not grant Respondents’ motion for

partial summary judgment. The opinion and judgment of

the court state that the case is remanded for further

proceedings consistent with the opinion.© Respondents

3 Such matters, by specific trial court order (see Respon-

dents’ Appendix C), were included in Petitioners’ summary

judgment record and were thereafter specifically included in the

appellate record (see indexed items 50, 66, 68 and 77 in the

Amended Designation of Transcript, Respondents’ Appendix

D). (In Texas, in an appeal from a summary judgment, the

“Transcript” is the appellate record, except for depositions

which may be sent up with the record.)

4 See Petitioners’ Appendix D, pages 7-9.

5 See Petitioners’ Appendix A, pages 23-24.

6 The judgment says “in conformity with.” See Petitioners’

Appendices A, page 29; B (no page numbers given).

were not granted any affirmative relief, as Petitioners’

misrepresentation suggests. The only result in the

Supreme court was a reversal and remand for further

proceedings.

Further, responding to Petitioners’ argument in their

Statement of Case (see Petition, page 4) that ” ... it has

never been determined that a contract exists or that it

applies to the underlying circumstances,” the verdict of

the jury (Respondents’ Appendix B) speaks for itself.

*

SUMMARY OF RESPONDENTS’ ARGUMENT:

REASONS WHY CERTIORARI SHOULD

NOT BE GRANTED

1. The question presented is not within the

considerations goverring review under

Supreme Court Rule 10 because no conflict

is shown with the decision of another state

court of last resort or of a United States

court of appeals, the case does not involve

an important question of Federal law which

has not been, but should be, settled by this

Court and the opinion does not conflict with

applicable decisions of this Court.

2. In their statement of the question presented,

and in their statement of the case, Peti-

tioners misrepresent the result in the

Supreme Court of Texas as the granting of a

sua sponte partial summary judgment for

Respondents, when in actuality the case was

reversed and remanded to the trial court for

further proceedings.

3. The circumstances of which Petitioners com-

plain present no deprivation of due process

of law because Petitioners (a) present no

material fact question as to which a hearing

is required and therefore have no protected

interest; (b) have not shown a deprivation in

the absence of the degree of finality repre-

sented by a final judgment; (c) placed the

issue before the court; and (d) were given

adequate notice and opportunity to respond

to contrary constructions of the contract lan-

guage.

4. Petitioners’ novel due process theory would

deprive courts of their inherent power to

declare matters of law and would harm the

efficient administration of civil justice.

¢

ARGUMENT

1. THE QUESTION PRESENTED IS NOT WITHIN

THE CONSIDERATIONS EXPRESSED IN RULE 10.

Petitioners have not attempted to address the consid-

erations expressed in Supreme Court Rule 10.1(b) or (c).

They have not attempted to show any conflict with

another state court of last resort or a United States court

of appeals or this Court. They do not attempt to suggest

how the question presented is “an important question of

federal law which has not been, but should be, settled by

this Court,...”

Particularly because Petitioners have misrepresented

the result below by claiming that the Texas Supreme

Court granted Respondents’ motion for partial summary

5

judgment, but even if the question as restated by Respon-

dents is fully considered, the issue does not present the

S@FiduS due process problem claimed by Petitioners. A

construction of a document as unambiguous, coupled

with a remand to the trial court for further proceedings,

simply does not rise to the level of a deprivation of due

process of law. As shown in the paragraphs to follow, no

“important question of federal law” has been presented.

2. MISREPRESENTATION OF THE RESULT BELOW

ALONE JUSTIFIES DENIAL OF THE WRIT.

The correct result below is reflected in Petitioners’

own Appendix.” Petitioners have attempted to invoke the

jurisdiction of this Court by making a statement - many

times — which is palpably untrue. They have not couched

their question and their argument on the proposition that

the Texas Supreme Court merely construed the contract

as Respondents contended it should be construed. They

have not argued that the effect is as Respondents would

have it had their motion been granted. They have stated

as fact that the Texas Supreme Court granted Respon-

dents’ motion. That is not true. Petitioners should be

denied this Court’s review based upon such a misrepre-

sentation.®

” See Petitioners’ Appendix A, page 29.

8 Petitioners used the word “effectively” the first time the

contention was made in the text (Petition, page 4), but not in

their version of the question presented, and they never again

qualified the statement. Their obvious intent, guilefully, is to

bolster their argument by making the supreme court decision

appear to have a judgment finality which it does not have.

3. THERE IS NO DEPRIVATION OF DUE PROCESS

OF LAW.

(a) PETITIONERS’ CLAIM DOES NOT INVOLVE

A PROTECTED INTEREST.

The analysis of a due process claim begins with an

identification of the private interest that is affected by the

alleged deprivation. Mathews v. Eldridge, 424 U.S. 319,

334-35 (1976). Petitioners claim that they have been

deprived of a right to be heard on alternative theories,

requiring evidence, about the meaning of the contract.

While the right to be heard is a fundamental element of

procedural due process, Armstrong v. Manzo, 380 U.S. 545

(1965), it does not exist in the abstract. There must be

some concrete interest, about which the claimant is entit-

led to present evidence, which is affected by the alleged

deprivation. The question is: right to be heard about

what?

Petitioners claim only that they have been deprived

of the opportunity to contend, and present evidence, that

the contract language in question is ambiguous. Against a

holding by the Texas Supreme Court that the language is

unambiguous, that is not a protected interest.

Petitioners’ claim places the cart before the horse.

They argue that they should be allowed to urge “course

of performance, course of dealing or usage of trade”

(Petition, page 6) to establish ambiguity. They argue that

they should be allowed to present “extrinsic evidence as

to the meaning of the document” (Petition, page 6). They

have it backwards and wrong. Evidence of course of

dealing (same as “course of performance”) or usage of

—— =

a

trade is admissible under Texas law only after the court

has determined as a matter of law that the language in

question is ambiguous, and not for the purpose of deter-

mining ambiguity. Lone Star Gas Co. v. X-Ray Gas Co., 164

S.W.2d 504 (Tex. 1942). All that has occurred below is that

the Texas Supreme Court has determined that the lang-

uage is unambiguous. None of Petitioners’ alleged

“defenses” are material and no evidence concerning them

may be admitted.

Petitioners have not been deprived of any right; their

complaint is about a supposed right which they never

had in the first place.?

It is only when material fact issues remain to be deter-

mined, after a summary judgment is reversed, that due

process may require further opportunity to be heard.!°

*° Compare Board of Regents of State Colleges v. Roth, 408 U.S.

564, 577 (1972) (procedural due process protects only those

interests to which a person has a “legitimate claim of entitle-

ment” .)

10 That opportunity to be heard is fact-oriented, and is not

an issue On appeal where questions of law are involved, or

where supposed fact issues are not material, or where the facts

are not in dispute, is illustrated by the following cases: Coach

Leatherware Co. v. AnnTaylor, Inc., 933 F.2d 162, 167 (2d Cir. 1991)

(“Absent some indication that the moving party might other-

wise bring forward evidence that would affect the court’s sum-

mary judgment determination, failure to provide an

opportunity to respond is not reversible error.”); E. C. Ernst, Inc.

v. General Motors Corp., 537 F.2d 105, 109 (5th Cir. 1976) (sum-

mary judgment may be entered for the non-moving party “only

in the rare case in which it is very clear that all material facts are

before the reviewing court.”); Black Warrior Elec. Membership

Corp. v. Mississippi Power Co., 413 F.2d 1221, 1226 (5th Cir. 1969)

Petitioners, as shown above, do not allege the existence of

material fact issues. Alleged facts bearing on the issue of

ambiguity are not material when the language is unam-

biguous. Sun Oil Co. (Del.) v. Madeley, 626 S.W.2d 726

(Tex. 1981).

Finally, Petitioners’ own motion for summary judg-

ment agrees with Respondents. In their motion, Peti-

tioners represented to the trial court that (1) “the

construction of this contractual provision is a legal issue

for the Court and can never be a jury issue;” and (2)

“extrinsic evidence is admissible only if, after applying

applicable rules of construction, genuine uncertainty

remains as to the proper construction of the contract.”

Petitioners should be bound by their representations.

(summary judgment may be entered for the non-moving party

where there are no material issues of fact and the parties treat

the issue of whether an agreement indemnifies a party for its

own negligence as a question of law.); Int'l Longshoremen’s Ass’n

v. Seatrain Lines, Inc., 326 F.2d 916, 920 (2d Cir. 1964) (declaration

as a matter of law that agreement violates statute entitles

non-moving party to judgment); Proctor & Gamble Indep. Union

v. Proctor & Gamble Mfg. Co., 312 F.2d 181, 190 (2d Cir. 1962)

(where collective bargaining agreement expired by its own

terms, there was no triable issue of fact and holding that union

could not compel arbitration required entry of judgment for

company even in absence of cross-motion); First Nat’l Bank v.

Maryland Cas. Co., 290 F.2d 246, 251-52 (2d Cir. 1961) (where all

issues were before the court and no material issue of fact is

disputed, summary judgment may be granted to non-movant).

11 See Respondents’ Appendix E, pages App. 52, 53.

(b) PETITIONERS HAVE NOT SHOWN A DEPRI-

VATION: THERE IS NO FINAL JUDGMENT.

Although Petitioners have misrepresented that there

is a judgment finality to the rights of the parties by their

oft-repeated statement that Respondents have been

granted a partial summary judgment, there is no final

judgment, partial or otherwise. The reversal of Peti-

tioners’ summary judgment and remand to the trial court

is not the kind of “proceeding which is to be accorded

finality,” Mullane v. Central Hanover Bank & Trust, 339 U.S.

306, 314 (1950), to which the due process right might

independently apply.!2 The Texas Supreme Court has

said, in effect, “If the NL-Getty contract applies, then it

has the meaning which we say it has; it is up to the trial

court to determine whether it applies.”'*

12 Petitioners’ one brush with “the requirement of finality,”

found in footnote 4 (Petition, page 5), is not supported by the

cases which they cite. Cohen v. Beneficial Indus. Loan Corp., 337

U.S. 541 (1949) involves considerations surrounding an inter-

locutory appeal under 28 U.S.C. § 1291, and does not support

equating a remand for trial, after deciding a law question, witha

final judgment. Nebraska Press Ass'n v. Stuart, 423 U.S. 1327

(1975) is a stay order by one justice of a prior restraint on free

speech. Justice Blackmun concluded that a delay in a state court

review was intolerable and amounted to a decision that the

restraint could remain in effect during the delay. That is not

remotely analogous to the circumstances of this case.

13 Note that the court specifically refused to hold that Getty

was an additional insured by virtue of the language in question

(Petitioners’ Appendix A, page 29), considering that to be a

“coverage” question. The fact-based defenses which Petitioners

may allege about whether coverage exists, if the contract does

apply, are preserved.

10

The question, more particularly, involves the applica-

tion of the doctrine of the law of the case. See Insurance

Group Comm. v. Denver & R.G.W.Ry.Co., 329 U.S. 607

(1947). Technically, when a summary judgment is

reversed on a question of law, no facts have been deter-

mined on the merits. The appellate court is announcing

that if the facts at trial, on remand, are the same as the

facts on which the summary judgment was based, then

the determination of the law question by the appellate

court will control the result on remand. The “law of the

case” applies to govern the trial, if on the same facts. See

Hudson v. Wakefield, 711 S.W.2d 628 (Tex. 1986). Compare

Pubali Bank v. City Nat'l Bank, 777 F.2d 1340 (9th Cir. 1985)

(it is proper on remand to enter summary judgment for

the plaintiff based upon the law of the case unless the

defendants produce new evidence to establish the exis-

tence of a material fact).

While, realistically, the language of the NL-Getty

contract will not change, technically there is nothing to

prevent the Petitioners from contending that different facts

apply than those which were considered in connection

with their summary judgment motion. The opportunity to

contend, even with the smallest chance of success, is the

sine qua non of due process. Pennoyer v. Neff, 95 U.S. 714

(1877); Grannis v. Ordean, 234 U.S. 385, 394 (1914).

To be sure, Respondents now contend and will con-

tend at trial that the facts (the contract language) cannot

change and that the law of the case will prevent Peti-

tioners from claiming ambiguity in the insurance and

indemnity provisions of the contract and from claiming

11

that the additional insured provision supports the indem-

nity. Nevertheless, until the trial reaches its conclusion

without different evidence (such as that an altogether

different contract applied to the circumstances which

gave rise to the claim),!* Petitioners will have an oppor-

tunity to be heard. That is due process.

Neither of the other cases relied on by Petitioners is

on point. Neither involves a question of contract con-

struction. Both involve actual judgments against the party

who moved for summary judgment. That is a finality not

found in this case. Thus, in Prepo Corp. v. Pressure Can

Corp., 234 F.2d 700 (7th Cir. 1956), judgment was entered

for the non-movant in the trial court; and in Mingus

Constructors v. United States, 812 F.2d 1387 (Fed. Cir.

1987), judgment was entered for one party on cross-

motions for summary judgment. Those cases add nothing

to Petitioners’ contention.!©

(c) PETITIONERS PLACED THE ISSUE BEFORE

THE COURT.

In their Amended Motion for Summary Judgment,

Petitioners specifically requested a judicial construction

14 Respondents do not say that there is a different contract.

They say only that Petitioners will have the opportunity to

present that kind of evidence, if it exists.

15 The final judgments found in Prepo and Mingus make

clear why Petitioners misrepresented that the Texas Supreme

Court granted Respondents’ motion for partial summary judg-

ment. That is the only way they could argue that Prepo and

Mingus apply to this case. That is an inexcusable abuse of their

duties as officers of the Court.

12

of the contract language (See Respondents’ Appendix E,

pages 3-8), advancing a particular construction. Both

appellate courts in Texas rejected Petitioner’s construc-

tion and held that the language had another meaning

entirely, as a matter of law. There is no due process right

which would prevent a court from declaring the plain

meaning of unambiguous language in a document, partic-

ularly where the party complaining of a supposed

absence of due process invoked the processes of the court

to obtain a construction in the first place. Petitioners

made the choice of seeking summary judgment on one

theory of construction; they cannot now complain that

they could have advanced other theories, when the choice

of procedure was theirs. See Gutierrez-Rodriguez v. Car-

tagena, 882 F.2d 553 (1st Cir. 1989) (defendant in civil

rights case not denied due process when he was not

allowed to testify at trial after having asserted Fifth

Amendment in pre-trial discovery).

Importantly, the result would have been the same

had Respondents not filed a motion for partial summary

judgment on the construction ultimately adopted by the

Texas courts. It would be a strange anomaly to penalize

Respondents for filing their motion, when the result

would have been the same had they not filed it.'©

16 Note that the question presented, as restated by Respon-

dents, removes from consideration the existence of Respon-

dents’ partial motion for partial summary judgment. It is truly

irrelevant to the issue before the Court.

13

(d) PETITIONERS WERE GIVEN ADEQUATE

NOTICE AND OPPORTUNITY TO

RESPOND.

Respondents’ motion for partial summary judgment

was filed, heard and denied long prior to Petitioners’

motion. The arguments made by Respondents in their

motion (later ordered to be a part of Petitioners’ summary

judgment record as a response — see Respondents’ Appen-

dix C), gave Petitioners adequate notice of the arguments

that the contract language was unambiguous, and meant

exactly what the court of appeals and supreme court later

said it meant. By placing an extreme and patently unrea-

sonable construction on the language, and by seeking

summary judgment based on such construction, Peti-

tioners in fact deprived themselves of the opportunity to

present alternate arguments. Manifestly, Petitioners have

not shown that either Respondents or the Texas courts

deprived them of any substantial right.

The case on which Petitioners principally rely, Foun-

tain v. Filson, 336 U.S. 681 (1949), holds merely that an

appellate court cannot find facts and then enter or instruct

judgment for the non-movant, where no cross-motion

was filed, when the point on which the summary judg-

ment was granted is reversed. The sole question on

appeal in Fountain was whether New Jersey law would

permit the imposition of a resulting trust under the cir-

cumstances presented in the complaint and accompany-

ing documents. The court of appeals, however, after

overturning the lower court on that law point, proceeded

to review the facts disclosed in the depositions on file,

and instructed entry of a judgment for the plaintiffs. That

is not what the Texas Supreme Court has done in this

14

case. The Texas court has not decided any disputed fact

question. It has only stated what the words of the con-

tract mean, which is a question of law. While it is clear

that an appellate court may not finally declare matters of

fact on an appeal of a summary judgment, Gulbenkian v.

Penn, 252 S.W.2d 929 (Tex. 1952), no such prohibition

inhibits declarations of matters of law.

The United States Fifth Circuit Court of Appeals case

relied on by Petitioners, Landry v. Airline Pilots Ass‘n Int'l,

901 F.2d 404, 437-38 (5th Cir. 1990), cert. denied, 111 S.Ct.

244 (1990) is not different from Fountain. The Fifth Circuit

court made fact findings on a summary judgment record

and recognized its mistake on rehearing. Notably (see

footnote 2 on Motion For Rehearing, page 437), the Court

confirmed a holding on a law point relating to the exis-

tence of a duty (that a party “clearly did possess fiduciary

duties”), and reserved for trial determination the ques-

tion of whether the duty had been breached. Here the

Texas Supreme Court has ruled that the contract has a

certain meaning and has reserved for trial determination

the question of whether the contract, so construed, will

be given effect.

None of the “notice” cases cited by Petitioners is on

point.'!7 All involve various circumstances relating to the

ten-day notice requirement of Fed. R. Civ. P. 56(c) and/or

sua sponte judgments, with or without written motions.

Petitioners had adequate notice of Respondents’ conten-

tion that the contract language was unambiguous, and of

the court of appeals’ determination that the language was

17 See notice cases cited in Petition, pages 9-10.

15

unambiguous. They were amply warned that the Texas

Supreme Court could decide the issue against them on

the same basis.

Contrary to Petitioners’ contention based on Arm-

strong v. Manzo, 380 U.S. 545 (1965), the Texas Supreme

Court did not here “alter[{] the burdens of proof.” (Peti-

tion, page 11). The contention assumes that proof would

be offered by Respondents, failing which they “would not

prevail” (Petition, page 11). However, no proof is

required (or allowed, for that matter) to demonstrate that

the contract language is unambiguous. Lewis v. East Texas

Finance Co., 146 S.W.2d 977 (Tex. 1941). Since the language

is unambiguous, neither side may offer proof of its mean-

ing, one way or the other.

4. PETITIONERS’ NOVEL DUE PROCESS THEORY

WOULD DEPRIVE COURTS OF AN INHERENT

POWER AND WOULD HARM THE ADMINISTRA-

TION OF CIVIL JUSTICE.

Petitioners new due process theory would have a

deleterious effect on the administration of justice and

would accomplish an absurd result: in any case involving

an appeal from a summary judgment, where the judg-

ment depended upon the construction of a document

(and no cross-motion for final summary judgment on the

same issue was involved), the appellate court would be

prevented from declaring the meaning of the document if

that meaning was different from the meaning supported

by the appellee/summary judgment movant. The court

would be forced to say: “We can’t tell you what the

contract means; it just doesn’t mean what the appellee

16

says.” That would be a grossly inefficient result, requir-

ing a trial even if the contract language is unambiguous,

and would deprive the court of its inherent power, in the

resolution of cases and controversies, to declare matters

of law. The declaration of matters of law is the essence of

the judicial power. Marbury v. Madison, 5 U.S. 137 (1

Cranch 137) (1803); Muskrat v. United States, 219 U.S. 346,

356 (1911). See also, Morrow v. Corbin, 62 S.W.2d 641, 645

(Tex. 1933); Eichelberger v. Eichelberger, 582 S.W.2d 395

(Tex. 1979). Moreover, the constitution and laws of the

State of Texas give the Texas Supreme Court express

power to review questions of law arising in cases decided

by the Texas courts of appeals. Tex. Const. art. V, § 3; Tex.

Gov’t Code Ann., § 22.001 (Vernon 1987). The Texas

Supreme Court, therefore, has at minimum the inherent,

but more specifically the express, judicial power to declare

as a matter of law the meaning of an unambiguous con-

tract when that issue is put squarely to it, as it was in this

case.!® Petitioners’ position would prevent such a

18 This principle is illustrated by a case in which current

counsel for Petitioners Youell & Companies was on the other

side of the question, representing NL. In NL Industries, Inc. v.

GHR Energy Corp., 940 F.2d 957 (5th Cir. 1991), cert. denied, 112

S.Ct. 873, in an appeal by NL from a summary judgment, the

Fifth Circuit Court, applying Texas law, reviewed two separate

provisions of a contract, finding one construed by the movant to

be a damage limitation provision to be unambiguous against the

movant, and the other to be ambiguous. It reversed and

remanded, directing a trial as to the parties’ understanding of

the meaning of the latter provision. Thus, the court exercised its

power to determine matters of law. The effects were (1) GHR

would not be entitled to contend on remand that the first provi-

sion was a damage limitation provision nor would GHR be

entitled to introduce evidence to attempt to claim ambiguity;

Se

17

declaration, based on the fact that Respondents filed a

motion for partial summary judgment seeking the same

declaration. Since the court would have the power to

declare the meaning of the contract if Respondents had

not filed a motion for partial summary judgment, why

should a limitation exist on the court's power when

Respondents did file such a motion (but which was not

involved in the appeal)? There is no such limitation. See

R & P Enterprises v. LaGuarta, Gavrel & Kirk, Inc., 596

S.W.2d 517 (Tex. 1980).

Petitioners’ new due process claim would also

eviscerate the law of the case doctrine by depriving

appellate courts of the power to declare matters of law,

when reviewing summary judgments, for the guidance of

lower courts on remand.

Since the analysis of a due process claim requires a

balancing test, Mathews v. Eldridge, supra; Zinermon v.

Burch, 494 U.S. 113 (1990), one of the elements of Peti-

tioners’ claim to be weighed in the balance is the adverse

effect it would have on the administration of civil justice.

Petitioners have not demonstrated that they have been

denied an opportunity to present their construction of the

contract language. They have presented their construc-

tion and both Texas appellate courts have found it want-

ing. Their interest in presenting additional, putative (and,

frankly spurious) contentions is far outweighed by the

efficient exercise of the judicial power embodied in a

and (2) both parties would get a trial on the meaning of the

ambiguous provision. The power of the court to declare the

meaning of the unambiguous provision against the construction

advanced by the movant (GHR) apparently was not questioned.

18

court’s declaration of matters of law (here, the meaning

of unambiguous contract language).

No deprivation of due process exists in the exercise

of that judicial power. No “fundamental unfairness” has

been shown. Walters v. National Ass'n of Radiation Sur-

vivors, 473 U.S. 305, 320 (1985), citing Mackey v. Montrym,

443 U.S. 1 (1979).

CONCLUSION

Petitioners have not shown any reason why certiorari

should be granted. The Court should deny the petition.

Respectfully submitted,

SHEINFELD, MA.Ley & Kay, P.C.

Joe G. Roapy

Counsel of Record

Mary-Ann A. BELLATTI

3700 First City Tower

Houston, Texas 77002

(713) 658-8881

(713) 658-9756-Fax

Attorneys for Respondents

Getty Oil Company and

Texaco Inc.