Lead Opinion
OPINION
This is an appeal from the judgment rendered after a bench trial on the plaintiffs’ claims arising from the purchase and lease of real property for the operation of a hospital, and from the financial management of the business entities involved. The trial court rendered judgment holding the defendants and one non-party jointly and severally liable to two-plaintiffs for more than $13.4 million in actual damages, together with pre- and post-judgment interest and $350,000 in attorney’s fees. The trial court further ordered two of the defendants to pay more .than $33.5 million in punitive damages, bringing the total judgment to more than $50 million.
Although the appellants have presented more than twenty issues and sub-issues for our review, the dispositive arguments are subsumed within a single question: given that they objected in the trial court that the proposed factual findings included invalid theories of liability for which there was no evidence, did the trial court reversibly err in refusing their request for specific findings identifying the damages that the trial court awarded for each' cause of action? Because we conclude that at least one theory of liability is insupportable, we answer that question in the affirmative. That answer is sufficient for us to grant all the relief that the appellants have requested, which is that we reverse the trial court’s judgment and remand the case for a new trial on all issues of liability and damages.
I. Background
This case arises from the dealings among the companies, managers, and investors involved in the purchase of real property and an unsuccessful attempt to operate a hospital.
Medistar Corporation owned real property referred to as Katy Pin Oak Hospital (“Pin Oak”), and Prestige Consulting, Inc. d/b/a Turnaround Management Group
Zaidi recruited a number of investors, nearly all of whom were physicians. Dr. Pankaj K. Shah (“Shah”) was among the investors in the project. Like the other investors, he was a limited partner in the Tenant, and owned a membership interest in the Tenant’s General Partner. Shah and his wife Bharati also owned Indus Associates, LLC (“Indus”), and Indus owned the majority of the membership interests in the Landlord. Shah and Zaidi were co-managers of the Landlord. The General Partner was co-managed by Zaidi and one of three other investors—including Shah— who acted as co-managers on a rotating basis.
In January 2007, the Landlord agreed to buy the Pin Oak property from Medistar and lease it to the Tenant. The Landlord borrowed $9 million of the property’s $13.5 million purchase price from MetroBank, and Shah personally guaranteed over $6 million of the loan. We therefore refer to the Landlord ánd Shah collectively as “the Borrowers.”
The enterprise was not a success, and the Tenant never paid the full amount of each month’s rent. Under the lease agreement, the Tenant’s obligation to pay rent was secured by a lien on its accounts receivable, and in August 2009, an attorney hired by Shah to represent the Landlord attempted to foreclose on the lien. Shah then learned that more than a year earlier the Landlord’s co-manager Zaidi had signed a waiver of all of the Landlord’s interests in the Tenant’s personal property. The month after the failed foreclosure attempt, the Tenant filed for bankruptcy.
In this consolidated civil suit, many claims, counterclaims, and cross-claims were asserted among the companies, managers, investors, and affiliated entities and individuals connected to the purchase and operation of the Pin Oak property. The record before us shows that at the time of trial, the plaintiffs and cross-plaintiffs included the Landlord, Shah, Shah’s wife Bharati, and the Shahs’ company Indus; of these parties, however, Shah and the Landlord were the only ones to appear at trial and the only ones to prevail on their claims. The defendants were Zaidi, Chagla, Prestige, the General Partner (collectively “the Turnaround Parties”) and US TMG, LLC, which is another company affiliated with Prestige. The trial court, however, rendered judgment not only against all of these defendants but also against the Tenant, which was no longer a party to the case by the time of trial.
The trial court held the Turnaround Parties, US TMG, LLC and the Tenant jointly and severally liable to the Landlord for actual damages of $4,071,584, and held them liable to Shah for actual damages of $9,336,920. The trial court also held Zaidi liable for exemplary damages of $18,673,840 to Shah and $8,143,168 to the Landlord, and held Chagla liable for exemplary damages of $4,668,460 to Shah and $2,035,792 to the Landlord.
The trial court issued findings of fact and conclusions of law in which the damages were neither identified nor linked to any cause of action. The Turnaround Parties timely requested additional findings, but the trial court issued nothing further, and the Turnaround Parties appealed.
II. Issue Addressed
Of the many issues presented, we address only a portion' of the Turnaround
III. Standard op Review
When a complete reporter’s record is filed, we review the trial court’s factual findings for legal sufficiency under the same standard we apply to jury verdicts. See Green v. Alford,
IV. Casteel Analysis
A judgment is reversible if the trial court made an error of- law that probably prevented the appellant from properly presenting the case to the appellate court. Tex. R. App. P. 44.1(a)(2). One such error occurs when, over a party’s objection, the trial court submits to the jury a broad-form liability question incorporating multiple theories of liability, at least one of which is invalid. See Crown Life Ins. Co. v, Casteel,
It is fundamental to our system of justice that parties have the right to be judged by a jury properly instructed in the law. Yet, when a jury bases a finding of liability on a single, broad-form question that commingles invalid theories of liability with valid theories, the appellate court is often unable to determine the effect of this error. The best the court can do is determine that some evidence could have supported the jury’s conclusion on a legally valid theory. To hold this error harmless would allow a defendant to be held liable without a judicial determination that a factfinder actually found that the defendant should be held liable on proper, legal grounds.
Id. (citations omitted).
The Texas Supreme Court later expanded the doctrine, applying it to a jury’s assessment of damages when the jury was asked to" consider damage elements for which there was no support. See Harris County v. Smith,
Although the Casteel line of cases arose in the context of jury trials, the parties have assumed that the same reasoning applies to nonjury trials. Other courts have relied on Casteel when reviewing appeals from judgments rendered after a bench trial, although none have reversed on that basis,
The Texas Supreme Court has emphasized that Casteel-type errors must be preserved in the trial court by a timely and specific objection, although the parties need not specifically mention Casteel. See Tex. Comm’n on Human Rights v. Morrison,
The trial court nevertheless issued findings of fact and conclusions of law that contained no findings linking any amount of damages to any cause of action, but which included the global finding that “the Defendants engaged in this [sic] acts, omissions, representations and non-disclosures individually and collectively in conspiracy ... and that this proximately caused harm and damages to the Plaintiffs, individually and collectively.” The Turnaround Parties requested additional findings of fact, asking the trial court to identify the damages awarded to each of the Borrowers for each cause of action, but the trial court did not do so. This issue therefore has been preserved for our review. See Miranda v. Byles,
It would be sufficient for us to discuss a single unsupported cause of action, but given the dearth of opinions applying the Casteel line of cases to a nonjury trial,, we address three examples. These, however, are examples only, and by discussing these particular bases of liability, we do not suggest that any claim we have not discussed is valid.
A. Fraudulent-Inducement Claims Against All of the Turnaround Parties
The Turnaround Parties argue that the trial court erred in including fraudulent inducement as a basis for their liability to the Borrowers, because despite the trial court’s conclusion that “several contracts existed between Plaintiffs and Defendants,” there is no evidence of a contract between any Borrowers and any of the Turnaround Parties.
A claim for fraudulent inducement includes all of the elements of common-law fraud, plus elements that are specific to itself. A plaintiff seeking to recover for fraud must prove that (1) the speaker made a material representation;' (2) the representation was false; (3) when the representation was made, the speaker either knew it was false or made it recklessly without any knowledge of its truth and as a positive assertion; (4) the speaker intended the plaintiff to act upon the representation; (5) the plaintiff acted in reliance on the representation; and (6) the plaintiff suffered injury thereby. See Italian Cowboy Partners, Ltd. v. Prudential Ins. Co. of Am.,
“Fraud” and “fraudulent inducement” are not different names for the same claim; they are different claims, and the trial court held the Turnaround Parties liable to the Borrowers under both theories of liability. Regardless of whether the Borrowers proved the elements of a fraud claim—a question we do not address—the evidence is legally insufficient to hold the Turnaround Parties liable for fraudulent inducement.
Because the trial court awarded cumulative damages based on multiple causes of action, we cannot know the extent to which the judgment rests on this erroneous finding. Thus, as in Casteel, the form of the findings and the award of cumulative damages based on claims that included an invalid theory of liability have prevented the Turnaround Parties from properly presenting their case on appeal.
B. Breach-of-Fiduciary-Duty Claims Against the General Partner, Chag-la, and Prestige
The trial court found that “Defendants, individually and collectively, owed
Fiduciary duties arise in two types of relationships. A confidential relationship—which may arise from a moral, social," domestic, or purely personal relationship of trust and confidence—may give rise to an informal fiduciary duty. Associated Indem. Corp. v. CAT Contracting, Inc.,
More commonly, certain formal relationships—such as those between an attorney and client, between partners, and between a trustee and a trust beneficiary—give rise to fiduciary duties as a matter of law. See Ins. Co. of N. Am. v. Morris,
The Borrowers do not dispute this absence of fiduciary duties, but instead argue only that Zaidi “was a fiduciary to many parties” and “all entities and individuals who conspired with, participated with, aided/abetted, or employed Zaidi while he was committing any breaches of fiduciary duty were also responsible for those breaches.” But, to hold the General Partner, Chagla, and Prestige liable for conspiring in Zaidi’s breach of fiduciary duty is one theory of liability, and to hold them liable for breaching their own fiduciary duties is a distinct theory of liability. Regardless of whether there is legally sufficient evidence that Zaidi’s co-defendants conspired in his breach of fiduciary duty—a question we do not address—such evidence would not support a finding that each of the Turnaround Parties owed fiduciary duties to each of the Borrowers. Once again, the trial court has prevented the Turnaround Parties from properly presenting the case on appeal by issuing findings that include invalid bases of liability.
C. Default Judgment Against the General Partner
Before any evidence was heard at trial, the Borrowers urged the trial court to enter default judgment against the General Partner because it allegedly “forfeited its corporate privileges, including its right to sue and to defend.” As support for a default judgment, the Borrowers relied on Texas Tax Code section 171.252(1), under which a corporation that has forfeited its corporate privileges for nonpayment of taxes “shall be denied the right to sue or defend in a court of this state.” Tex. Tax Code Ann. § 171.252(1) (West 2015). The same provisions apply to any taxable entity, such as a limited liability company. See
Despite the statute’s language, it has long been established that when such a taxable entity has been sued, the plaintiff still must prove its case, and the entity may raise defenses and introduce evidence that “negatives the plaintiffs case.” Bryan v. Cleveland Sand & Gravel Co.,
A default judgment operates as an admission by the defaulting party of all of the petition’s factual allegations other than the amount of unliquidated damages. See Holt Atherton Indus., Inc. v. Heine,
V. Harm
The trial court’s global factual findings were burdened with more causes of actions than the evidence would bear, so we must reverse and remand, unless we are “reasonably certain that the [factfinder] was not significantly influenced” by the inclusion of invalid theories of liability. See Romero v. KPH Consol,, Inc.,
VI. Disposition
Having found harmful error, we must consider the appropriate remedy and the extent to which it applies to the various claims and parties.
A. Type of Remedy Available
As in the Casteel line of cases, we must remand the cause for a new trial, but we have considered whether it is appropriate to render judgment in part on the fraudulent-inducement and breach-of-fiduciary-duty claims discussed above. See Tex. R. App. P. 43.3 (requiring an appellate court, when reversing a trial court’s judgment, to render the judgment the trial court should have rendered unless remand is required for further proceedings or in the interests of justice); Tex R. App. P. 44.1(b) (providing that if reversible error does not affect a part of the controversy that is separable without unfairness to the parties, then the appellate court must order retrial only of the part affected by the error). As a general rule, however, we can grant parties less relief than requested, but we cannot grant more. See, e.g., Enzo Invs., LP v. White,
According to the dissent, it has been this court’s rule since 1984 to grant the party prevailing on appeal the relief appropriate for a given type of error, without regard for what relief was requested. As support for this proposition, the dissent cites Olin Corp. v. Dyson,
Olin does not support the proposition for which it is cited. In Olin, the appellant argued that there was no evidence to support the jury’s finding of gross negligence, but requested only remand or modification rather than rendition of judgment. See id. Contrary to the dissent’s characterization, however, the question of whether the appellant nevertheless was entitled to the unrequested relief of rendition of judgment was never before the court because we overruled the no-evidence point of error. See id. We discussed the appellant’s prayer for relief only because the appellees argued “that appellant failed to preserve a no evidence point because it does not include in its prayer for relief a request for reversal-and rendition.” Id. We rejected that argument, explaining,
If the language of a point of error leaves a Court of Civil Appeals in doubt as to whether it is a no evidence point, aninsufficient evidence point, .., the court should resolve the doubt by looking to the procedural predicate for the point, the argument under the point, and the prayer for relief.
Id. (quoting Robert W. Calvert, No Evidence and Insufficient Evidence Points of Error, 38 Tex. L. Rev. 361, 372 (1960)). We concluded, “This court has no need to look to the prayer for relief in appellant’s brief to determine whether appellant raises a no evidence point because appellant’s final point of error specifically alleges legal insufficiency of the evidence.” Id.
Although the dissent would hold that we can render judgment even if only remand was requested, that result cannot be reconciled with the Texas Supreme Court’s recent statements to the contrary. See e.g., Tex. Parks & Wildlife Dep't v. Sawyer Trust,
In stating that “a party generally is not entitled to relief it. does not seek,” the Texas Supreme Court was not speaking solely to situations in which the relief at issue was not requested in the trial court. In Sawyer Trust, for example, the court refused to remand for repleading, but that generally is not a request that the plaintiff is required to make in the trial court. See Sawyer Trust,
Appellate courts ean, however, grant less relief than requested. For example, an appellate court usually is granting less relief than requested when it modifies the judgment or suggests and accepts remittitur in lieu of a new trial. And courts frequently grant the lesser relief of remand when rendition is requested. See Tony Gullo Motors I, L.P. v. Chapa,
The rule that appellate courts can grant less relief than requested, but cannot grant more relief than requested, is consistent with the rule that obtains in trial courts. Compare G&H Towing Co. v. Magee, 3
Because the Turnaround Parties have not asked us to render judgment regarding any specific claim but instead seek only remand, we conclude that remand is the relief to which they are entitled. See Enzo Invs., LP,
B. Parties on Remand
We also must identify which plaintiffs’ claims must be relitigated against which defendants. Although we generally reverse the judgment only as to the parties who have successfully appealed it, that rule does not apply when the rights of appealing and nonappealing parties are interwoven or dependent on one another. See Sonat Expl. Co. v. Cudd Pressure Control, Inc.,
1. The claims of Bharati Shah and Indus áre not remanded.
Although Shah’s wife Bharati and their company Indus Associates, LLC are not mentioned in the judgment, the record shows that in answering a petition in intervention, they asserted their own claims, including cross-claims against the Turnaround Parties. The record does not show that those claims were nonsuited or severed, so they appear to be part of the final judgment before us. The judgment expressly states that it “disposes of all claims and all parties, and is appealable.”
Bharati Shah and Indus did not appeal the portion of the judgment expressly denying all relief that was not. granted, and their rights are not interwoven with or dependent on the rights of the Turnaround Parties. Because their unsuccessful claims are separable without unfairness, we sever the portion of the judgment denying them any relief and exclude their claims from the scope of remand. See Starkey v. Graves,
2. The Borrowers’ claims against the Turnaround Parties and US TMG, LLC are remanded.
On the defense side of the case, the trial court held the Turnaround Parties, US TMG, LLC, and the Tenant liable to the Borrowers, but only the Turnaround Parties appealed. We conclude, however, that because the trial court found that the Turnaround Parties, US TMG, and the Tenant committed every alleged misdeed “individually and collectively” against each Borrower “individually and collectively” and held all of them jointly and severally liable for the Borrowers’ actual damages, the.rights of all of these individuals and entities are so interwoven and interdependent that we must reverse the judgment against all of them. See Truck Drivers, Chauffeurs, Warehousemen & Helpers, Local No. 941 v. Whitfield Transp., Inc.,
Although we reverse the judgment against all of the persons and entities that the trial court held liable in its final judgment, the record shows that the Tenant had ceased to be a party to the case before trial. Because there were no claims -by or against the Tenant by the time of trial,
VII. Conclusion
For the foregoing reasons, we sever the portion of the judgment denying any relief to Bharati Shah and Indus Associates, LLC; reverse the remainder of the judgment; and remand the cause—the parties to which are Zaidi, Chagla, Prestige, the General Partner, US TMG, LLC, the Landlord, and Pankaj Shah—for a new trial.
Frost, C.J., dissenting.
Notes
. This also appears in the record as TurnAround. Management Group.
. The General Partnership owned a 1% partnership interest in the Tenant; Prestige owned 50% of the membership interests in the General Partnership; and Prestige was owned 71% by Zaidi and 29% by Chagla.
. See, e.g., Town Ctr. Mall, L.P. v. Dyer, No. 02-14-00268-CV,
. The trial court erroneously identified the Tenant as a defendant, and although there was a lease contract between the Tenant and the Landlord, the Borrowers amended their pleadings before trial to drop the Tenant as a defendant. Because Bharati Shah and Indus did not prevail in their claims, we do not consider whether there was a contract between either of them and any of the Turnaround Parties.
. The record contains neither a motion for default judgment nor any evidence that 'the General Partner’s right to sue and defend was forfeited. The record shows only that the Borrowers' attorney represented that the company’s rights were forfeited, and the Turnaround Parties' attorney represented that the company “got [its] charter back” before trial. On appeal, the Turnaround Parties challenge the default judgment only on the ground that the trial court misconstrued the statutes on which the Borrowers relied, We therefore treat as true the Borrowers’ representation that the General Partner’s "corporate privileges” Were forfeited after the company was sued, but before the case was tried,
. The General Partner was one of the defendants against whom the trial court rendered judgment. In its findings of fact and conclusions of law, the trial court stated under "Preliminary Matters” that "default judgment shall be entered against [the General Partner] because [the General Partner] forfeited its corporate privileges prior to trial.”
The dissent argues that the findings were an untimely attempt to modify the judgment. But, this cannot be so. If the findings are consistent with the judgment, then the' findings simply explain the court’s reasoning without modifying the judgment, The findings do not conflict with the judgment merely because the latter does not state why judgment was rendered against the General Partner. See Tex. R. Civ. P. 299a ("Findings of fact shall not be recited in á judgment,”). Nor is there a conflict between the recitals preceding the decretal portion of the judgment and the findings of fact and conclusions of law. See J.K.A. v. State,
.By refusing the application for writ of error, the Texas Supreme Court adopted the opinion as its own. See Myers v. Gulf Coast Minerals Mgmt. Corp.,
. The dissent states that in Humble Oil & Refining Co. v. Blankenburg,
Dissenting Opinion
dissenting.
I respectfully dissent and write separately to address two points.
First, the court need not address the appellants’ fifteenth-issue argument that the trial court erred in granting a default judgment because that issue is moot. Mootness notwithstanding, the majority concludes that a corporate entity has the right to defend itself in a Texas court even if the entity’s right to transact business in Texas has been forfeited under subchapter F of Tax Code chapter 171 and not revived. But, the unambiguous language of Tax Code section 171.252 and precedent from the Supreme Court of Texas mandates the opposite conclusion.
Second, under this court’s binding precedent, if an appellant shows that the evidence is legally insufficient to support an essential element of a claim, this court should reverse and render a take-nothing judgment on that claim, even if the appellant did not expressly request that appellate relief in the appellant’s briefing. Therefore, this court must address all of the appellant’s legal-sufficiency arguments before concluding that all claims should be remanded to the trial court for a new trial.
The fifteenth issue is moot because the trial court did not render a default judgment.
Trial on the Merits of the Liability and Damage Issues
Just before trial began, appellees/plain-tiffs Dr. Pankaj K. Shah and Apex Katy Physicians, LLC (hereinafter collectively the “Plaintiffs”) asked the trial court to grant a default judgment against appellant/defendant Apex Katy Physicians-TMG, LLC (hereinafter the “General Partner”). After hearing argument, the trial court took the request under advisement but did not rule on it. The case proceeded to a four-day bench trial of all pending issues, including the General Partner’s liability on the Plaintiffs’ claims, in which the General Partner participated.
The Nature of the Final Judgment
About four months after trial, the court rendered a final money judgment against appellants/defendants Adeel Zaidi, A.K. Chagla, Prestige Consulting, Inc. d/b/a Turnaround Management Group, and the General Partner (hereinafter collectively the “Turnaround Parties”). In the judgment, the trial court stated that the case was called for trial and that the Plaintiffs and the Turnaround Parties, including the General Partner, appeared, announced ready for trial, and that the Plaintiffs’ claims against the Turnaround Parties, including the General Partner, had been tried to the bench. The trial court found that all defendants, including the General Partner, had engaged in a civil conspiracy and that all defendants were jointly and severally liable for the Plaintiffs’ actual damages. The trial court rendered a money judgment against the defendants, jointly and severally, for an amount representing each plaintiffs actual damages, prejudgment interest on the damages, and attorney’s fees. The trial court stated
The trial court did not state that the General Partner failed to appear or failed to answer. Nor did the trial court state that the General Partner had forfeited its right to defend against the Plaintiffs’ claims. On the contrary, the trial court stated that the General Partner had defended itself against the Plaintiffs’ claims, although unsuccessfully. The trial court did not state that it had granted a default judgment against the General Partner or that anything had operated as an admission by the General Partner of all the Plaintiffs’ factual allegations regarding liability. If the trial court had granted a default judgment that operated in this manner, the default judgment would have obviated the need for trial of these issues.
When the language of the trial court’s judgment is unambiguous, as in this case, the reviewing court is to interpret the judgment according to its plain language. Reiss v. Reiss,
The Expiration of Plenary Power to Modify, Correct, or Reform the Judyment
No party filed a motion that would extend the trial court’s plenary power to modify, correct, or reform its final judgment; therefore, the trial court’s plenary power, expired by operation of law on August 25, 2014. See Tex. R. Civ. P. 329b; In re Gillespie,
On October 3, 2014, long after its plenary power to modify, correct, or reform its judgment had expired, the trial court signed findings of fact and conclusions of law. Although there are a number of findings of fact and conclusions of law directed against the General Partner as if no default judgment had been rendered, in one sentence, the trial court stated that “[t]he Court concludes that default judgment shall be entered against [the General Partner] because [the General Partner] forfeited its corporate privileges prior to trial.” The trial court did not state that it had rendered a default judgment in its final judgment. Even though its plenary power to modify, correct, or reform had expired, the trial court still could sign findings of fact and conclusions of law explaining the reasons for its final judgment. See In re Gillespie,
The majority asserts that, even if the trial court’s conclusions of law conflict with the final judgment as to whether the trial court granted a default judgment, the conclusions of law control and thus modify the trial court’s final judgment.
The majority concludes that the trial court reversibly erred by rendering a default judgment against the General Partner that operated as an admission by the General Partner of all- the Plaintiffs’ factual allegations other than the amount of unliquidated damages.
Because the trial court did not grant any default judgment while it had power to do so, the fifteenth issue is moot. See Emesowum v. Morgan, No. 14-13-00397-CV,
The majority’s resolution of the fifteenth issue is based on an improper statutory construction.
Mootness aside, the majority reaches the wrong conclusion in interpreting the
The Plaintiffs asked the trial court to grant a default judgment against the General Partner on the ground that the General Partner’s corporate privileges had been forfeited for failure to pay franchise taxes or to file a required report and that under Tax Code section 171.252, the General Partner did not havé the right to defend itself in the trial court. The General Partner argued that under Texas case law, a corporate entity -has the right to defend itself in a Texas court even if the entity’s right to transact business in Texas has been, forfeited under subchapter F of Tax Code chapter 171 and has not been revived. The trial court granted the default judgment. -
Under their fifteenth issue, the Turnaround Parties assert a single legal argument: “Despite the language of section 171.252 of the Texas Tax Code, which by its terms denies a corporate entity the right to ‘sue or defend in a court of this state’ if its charter has been forfeited, it has been the settled law in Texas for years that a corporate entity that has forfeited its charter may indeed nevertheless defend itself.”
Applicable Text of Tax Code Section 171.252
For the purposes of this analysis, this court may presume: (1) the General Partner is a “taxable entity” as defined in Tax Code section 171.0002 and as used in Tax Code section 171.2515; (2) under Tax Code sections 171.251 and 171.2515 (whieh are in subchapter F of Tax Code chapter 171), the comptroller forfeited the. General Partner’s right to transact business in Texas; and . (3) the General Partners right to transact business in Texas has not been revived.
Plain Meaning of Tax Code Section 171.252
Under Tax Code Section 171.252, because the General Partner’s right to transact business in Texas has been forfeited under subchapter F of Chapter 171, the General Partner “shall be denied the right to sue or defend in a court of this state.” Tex. Tax Code Ann, § 171.252 (West, Westlaw through 2015 R.S.). Also relevant, in Tax Code section 171.254, entitled “Exception to Forfeiture,” the Legislature provides that “[t]he forfeiture of the corporate privileges of a corporation does not
The meaning of the quoted part of Tax Code section 171.252 is a legal question, which this court reviews de novo to ascertain and give effect to the Legislature’s intent. Entergy Gulf States, Inc. v. Summers,
The plain meaning of “defend” in this context is “to deny, contest, or oppose (an allegation or claim).” Black’s Law DictioNary 450 (8th ed. 2004). Therefore, under the unambiguous language of Tax Code Section 171.252, because the General Partner’s right to transact business in Texas has been forfeited under subchapter F of Chapter 171, the General Partner does not have the right to deny, contest, or oppose allegations or claims in a Texas court. See Tex. Tax Code Ann. § 171.252; Black’s Law Dictionry 450 (8th ed. 2004). The plain meaning of the exception in section 171.254 (which does not apply to today’s case) shows that in proceedings in Texas courts riot' described in the exception, the forfeiture of a corporation’s privileges or of a taxable entity’s right to transact business in Texas does result in the loss of the entity’s right to defend. See id. §§ 171.252, 171.254.
The trial court is a Texas court, and the Plaintiffs are asserting claims and making allegations against the General Partner in a Texas court. Therefore, under the unambiguous text of section 171.252, the General Partner may not deny, contest or oppose the Plaintiffs’ allegations and claims against the General Partner unless and until the General Partner’s right to transact business in Texas has been revived. See Tex. Tax Code Ann. § 171.252; Black’s Law Dictionary 450 (8th ed. 2004). This statutory construction does not produce an absurd result that would allow or compel this court to ignore the plain language of the statute. Entergy Gulf States, Inc.,
The majority relies upon the Supreme Court of Texas precedent created decades
Eleven years later, the Supreme Court of Texas concluded that under the same predecessor statute, the effect of a “forfeiture of the right of the corporation to do business in this state ... is to prohibit the corporation from doing business and to deny to it the right to sue or defend in any court of the state except in a suit to forfeit its charter.” Humble Oil & Refining Co. v. Blankenburg,
Before reversing the trial court’s judgment and remanding for a new trial, this court must consider and overrule all of the appellate issues that would result in rendition of judgment on appeal.
Under at least six of their fifteen appellate issues, the Turnaround Parties argue that the evidence is legally insufficient to support a finding as to one or more essential elements of one of the Plaintiffs’ claims or vicarious-liability theories.
Under binding precedent, this court must reverse and render a take-nothing judgment if an appellant shows the evidence is legally insufficient to support an essential element of a claim on appeal of a judgment after a bench trial, even if the appellant did not expressly request rendition in the appellate brief.
If a trial court renders judgment against a defendant following a bench trial, and the defendant shows on appeal that the evidence is legally insufficient to support an essential element of one of the plaintiffs claims, the proper appellate course is to reverse and render judgment that the plaintiff take nothing on that claim. See Dallas Nat’l Ins. Co. v. De La Cruz,
The majority acknowledges that this court may reverse and remand even if an appellant never requested a remand in its briefing, if the appellant shows the trial court erred and if reversal and remand is the appropriate judgment.
In three other- cases, this court has addressed whether the court may reverse and render on appeal, if that is the proper appellate judgment for the error shown by the appellant, even though the appellant did not expressly request that appellate relief in appellate briefing.
The majority’s conclusion that this court may not reverse and render unless that remedy .is expressly requested in the appellant’s briefing is contrary to this court’s binding precedent (including two cases decided earlier this year) and would require either an affirmance or the reversal and remand for a new trial of a claim that fails as á matter of law because of the appel
The majority asserts that this panel should not follow these three precedents because they conflict with three Supreme Court of Texas precedents.
In State v. Brown, Brown sought attorney’s fees and litigation expenses, but did not request sanctions in either the trial court or on appeal.
In Stevens v. National Education Centers, Inc., the Supreme Court denied a petition for review because remand was the proper remedy and the petitioner “specifically requested that th[e] Court not remand for a new trial.”
None of the Supreme Court of Texas cases conflict with or address the Olin Rule.
The Olin Rule comports with the Rules of Appellate Procedure.
Texas Rule of Appellate Procedure 43.3 provides that “[w]hen reversing a trial court’s judgment, [the court of appeals] must render the judgment that the trial court should have rendered,” except in two cases in which the court of appeals should remand to the trial court.
Under the rule the majority applies, a court of appeals must either affirm or reverse and remand for a new trial of a claim that fails as a matter of law because of the appellant’s failure to expressly request rendition, even though the appellant showed in its appellate brief that the evidence is legally insufficient to support a recovery on that claim. This rule is not absolutely necessary to effect the purpose of any appellate rule, and it is contrary to the mandate of Rule 43.3.
The Olin Rule furthers the judicial economy sought by the greatest-degree-of-finality rule.
If more than one appellate judgment is potentially appropriate based on the record, the briefs, and the law, an appellate court must render the judgment that moves the case to the greatest degree of finality.
Even under the majority’s rule this court may reverse and render based on the appellants’ statements during oral argument.
Even if this court were not bound to follow the Olin Rule, this court still should consider all of the Turnaround Parties’ legal-sufficiency arguments before reversing and remanding based on statements of the Turnaround - Parties’ counsel at oral argument. Though the Turnaround Parties focused on remand points during oral argument, one of their attorneys stated during oral argument that the Turnaround Parties also were asserting “reasons for rendering parts of the judgment” but that, at a minimum, the Turnaround Parties were entitled to a reversal and remand. Thus, the Turnaround Parties showed at oral argument that' they are seeking a partial rendition of judgment based on their legal-insufficiency arguments.
Conclusion
The appellants’ fifteenth-issue challenge to the trial-court’s purported granting of a default judgment is moot because the trial court did not grant the Plaintiffs’-request for default judgment in its final judgment. The trial court’s plenary power had expired when it signed the findings of fact and conclusions of law stating the trial court would enter a default judgment. Because the findings of fact and conclusions of law could not modify the trial court’s final judgment, the trial court did not grant a default judgment against the defendant in question. The fifteenth issue is moot.
The majority incorrectly concludes that a corporate entity has the right to defend itself in a Texas court even if the entity’s right to transact business in Texas has been forfeited under subchapter F of Tax Code chapter 171 and has not been revived. Under the plain wording of Tax Code section 171.252 and precedent from the Supreme Court of Texas, a corporate entity whose right to transact business in Texas has been forfeited under subchapter F of Tax Code chapter 171 and has not been revived does not have the right to defend itself in a Texas court.
Under this court’s binding precedent, if an appellant shows that the evidence is legally insufficient to support an essential element of a claim, this court should reverse and render a take-nothing judgment on that claim, even if the appellant did not outright ask for that appellate relief in its briefing. Therefore, this court must ad
. See post at 452, n. 6.
. From 1991 through this court’s en banc decision in In re Gillespie in 2003, this court held that a request for findings of fact and conclusions of law extended the trial court’s plenary power, making it less likely that findings would be signed outside of the trial court’s plenary power than under the current rule of In re Gillespie. See
.See ante at 454, 456.
. This quote is from the Turnaround Parties’ opening brief. Though there appears to have been no evidence before the trial court to prove that the General Partner’s right to transact business in Texas had been forfeited, the Turnaround Parties have not raised this issue on appeal. Nor have the Turnaround Parties raised an issue as to any alleged revival of the General Partner's right to transact business in Texas. The Turnaround Parties have not asserted on appeal that the Plaintiffs waived their ability to obtain a default judgment by proceeding to trial without obtaining a ruling on their request for a default judgment.
. These points were premises of the Plaintiffs’ request for a default judgment, and the Turnaround Parties have not challenged them on appeal.
. The Turnaround Parties have not asserted on appeal that the Plaintiffs used an improper procedural vehicle to raise their argument under Tax Code section 171.252 or that the General Partner should have been given an opportunity to have its right to transact business in Texas revived.
. At a minimum, the Turnaround Parties make such arguments under their fourth, eighth, ninth, tenth, eleventh, and twelfth issues.
. Ante at 452.
. See post at 448.
. See post at 456-58.
. See, e.g., Garza v. Cantu,
. See Crotts v. Cole,
. See post at 456.
. See id.
. See Enzo Investments, L.P. v. White,
. See Enzo Investments, L.P.,
. See post at 456,
. See Enzo Invs.,
. See In re Marriage of Day,
. See In re Marriage of Day,
. See post at 456.
. See id,
. See Olin Corp.,
. See id.
. See id.
. See In re Marriage of Day,
. See ante at 456.
. See Tex. Parks and Wildlife Dept. v. Sawyer Trust,
. See Tex. Parks and Wildlife Dept.,
. See id. at 390-92.
. See id. at 392.
. See id.
. Id.
. See id.
. See id.
. See id.
. See id.
. See
. See id.
. See id.
. See id.
. See id.
. See id.
. See id.; Crotts,
. In the Horrocks case in which the Supreme Court of Texas held that reversal and remand is the appropriate appellate judgment when the only means by which the appellant preserved error in a jury case was through a motion for new trial. See Horrocks v. Tex. Dep't of Transp.,
. Tex. R. App. P. 43.3 (emphasis added).
. See id.
. See Tex. R. App, P. 38.1(j).
. See id.
. See Tex. R. App. P. 44.3.
. Republic Underwriters Ins. Co. v. Mex-Tex, Inc.,
. Perry v. Cohen, 272 S.W.3d 585, 588 (Tex.2008).
. See Tex. R. App. P. 43.3; Garza,
. See Tex. R. App. P. 43.3; Garza,
. See Natural Gas Pipeline Co. of Am. v. Pool,
. See Natural Gas Pipeline Co. of Am.,
. See Natural Gas Pipeline Co. of Am.,
. See Natural Gas Pipeline Co. of Am.,
. See Bradleys' Electric, Inc.,