Partial Settlement Does Not Divest Business Court of Jurisdiction Once Properly Invoked
Judge Stacy Sharp
Decided December 18, 2025
Mem. Op.
Jurisdiction & Remand
In Ornelas v. Herrera, the Business Court's Fourth Division held that agreed dismissal of claims against most defendants did not reduce the jurisdictional amount in controversy, which is fixed at the suit's commencement based on the plaintiff's pleadings. The court applied Bland ISD v. Blue to conclude that absent proof of fraud or sham pleading, the allegations in the pleadings control the jurisdictional determination.
Court Staff Summary
Ruling that recent resolutions with some defendants do not affect the Court’s jurisdiction over remaining claims and declining to rule at this stage whether the remaining defendant owes fiduciary duties to certain plaintiffs absent the parties' submission of evidence of an agency or employment relationship.
Background
Delfino Ornelas III and Delfino Ornelas II brought individual and derivative claims on behalf of two entities—I Am Trucking, LLC and Veracity Oilfield Services, LLC—against five defendants, including Erasmo Herrera. The original petition alleged an amount in controversy exceeding five million dollars, invoking the Business Court's jurisdiction under Texas Government Code section 25A.004(b). After settling with all defendants except Herrera, plaintiffs amended their petition in September 2025 to pursue only claims against Herrera, maintaining that "the amount in controversy in this case exceeds $5 million." The parties jointly submitted two early legal issues for resolution: whether the partial settlements affected jurisdiction, and whether Herrera owed fiduciary duties to the plaintiff entities.
The Jurisdiction Question
The court held that partial disposition of the suit did not divest it of jurisdiction. In determining the jurisdictional amount in controversy, the court applied the principle from Bland ISD v. Blue, 34 S.W.3d 547, 554 (Tex. 2000), that "the plaintiff's pleadings are determinative unless the defendant specifically alleges that the amount was pleaded merely as a sham for the purpose of wrongfully obtaining jurisdiction, or the defendant can readily establish that the amount in controversy is insufficient." The court also cited the recent Business Court decision ET Gathering & Processing LLC v. Tellurian Production LLC, 2025 Tex. Bus. 11, ¶ 9, for the proposition that "in absence of proof of fraud or a sham pleading, the allegations in the pleadings control to determine whether this court has jurisdiction to hear this case."
Plaintiffs initially sued five defendants, pleading at least five million dollars in controversy. After settling with all defendants except Herrera, the court entered agreed orders dismissing with prejudice all claims against the settling defendants in September 2025. Plaintiffs then amended their petition to include only claims against Herrera while maintaining the allegation that the amount in controversy exceeded five million dollars. No party alleged the pleading was a sham or readily established an insufficient amount in controversy. The court concluded it had jurisdiction of the suit following the agreed disposition of claims against most defendants.
The Fiduciary Duty Question
The source opinion ends at paragraph 6 during the court's recitation of the procedural history and does not contain the court's analysis or ruling on whether Herrera owed fiduciary duties to the plaintiff entities.