Case Information
*0 FILED IN 12th COURT OF APPEALS TYLER, TEXAS 4/9/2015 4:16:09 PM CATHY S. LUSK Clerk *1 ACCEPTED 12-14-00134-CV TWELFTH COURT OF APPEALS TYLER, TEXAS 4/9/2015 4:16:09 PM CATHY LUSK CLERK BRETT F. MILLER BMILLER@WSFIRM.COM April 9, 2015
Cathy S. Lusk, Clerk
Twelfth Court of Appeals
1517 West Front Street, Suite 354
Tyler, Texas 75702
Re: Case Number: 12-14-00134-CV
Trial Court Case No.: 2012-1842-A
Style: American Idol, General, LP d/b/a The REO, and Randy Hanson a/k/a Randall Hanson
v. Pither Plumbing Co., Inc.
Dear Ms. Lusk:
During today’s oral argument, the Justices requested that I send this letter with the following citations and enclose copies of those opinions:
1. Thomas v. Long , 207 S.W.3d 334, 339-340 (Tex. 2006) (implicit ruling case) 2. Am. Star Energy & Minerals Corp. v. Stowers , No. 13-0484, 2015 Tex. LEXIS 161, *5 (Tex. Feb. 27, 2015) (partner liability case)
Please deliver a copy of this letter and the enclosed opinions to each Justice for their review and consideration. Thank you in advance for your assistance in this matter.
Very respectfully yours, Brett F. Miller
BFM/tlw
Enclosures cc: Mr. Ken Good ( via electronic filing )
P.O. BOX 1231 LONGVIEW, TEXAS 75606 T 903.757.6400 F 903.757.2323 WWW.WSFIRM.COM *2 | | Caution
As of: April 9, 2015 12:36 PM EDT
Thomas v. Long
Supreme Court of Texas
February 11, 2004, Argued ; April 21, 2006, Delivered NO. 03-0204
Reporter
207 S.W.3d 334; 2006 Tex. LEXIS 280; 49 Tex. Sup. J. 532; 24 I.E.R. Cas. (BNA) 956
TOMMY THOMAS, SHERIFF OF HARRIS for lack of jurisdiction his appeal of a trial court’s
COUNTY, PETITIONER, v. JEANNE LONG, denial of his plea to the jurisdiction.
RESPONDENT
Overview
Subsequent History: [**1] As Corrected April The underlying dispute concerned the
26, 2006. interpretation of an order issued by the county
sheriff’s department civil service commission Prior History: ON PETITION FOR REVIEW relating to respondent former county employee’s
FROM THE COURT OF APPEALS FOR THE appeal of her termination. The court held that
FOURTEENTH DISTRICT OF TEXAS. although the sheriff’s plea was made as part of a
Thomas v. Long, 97 S.W.3d 300, 2003 Tex. App. summary judgment motion, the court of appeals LEXIS 129 (Tex. App. Houston 14th Dist., 2003) had jurisdiction to consider the interlocutory appeal. By ruling on the merits of the employee’s
Core Terms declaratory judgment claim, the trial court
necessarily denied the sheriff’s challenge to its jurisdiction. That implicit denial satisfied Tex. Civ. trial court, interlocutory appeal, Commission’s, Prac. & Rem. Code Ann. § 51.014(a)(8) and gave subject matter jurisdiction, exclusive jurisdiction, the court of appeals jurisdiction to consider the court of appeals, termination, employees, return sheriff’s interlocutory appeal. However, the court
to work, Remedies, summary judgment, dismissed the claims relating to the employee’s
reinstatement, pet, lack of subject matter reinstatement to employment because her failure
jurisdiction, sheriff’s department, physical ability, to exhaust administrative remedies deprived the
jurisdictional challenge, summary judgment trial court of subject matter jurisdiction over those
motion, disciplinary action, seniority, benefits, claims. Once the employees of a department
partial, orders, declaratory judgment, elected to create a commission, and the
administrative body, no loss, regulations, requires, commission’s rules created rights employees
exhaust, rights
would not have at common law, the commission Case Summary obtained exclusive jurisdiction over those matters under Tex. Loc. Gov’t Code Ann. §§ 158.032-.033 ,
.035. Procedural Posture Outcome
In an interlocutory appeal, petitioner sheriff
challenged a judgment of the Court of Appeals for The court reversed the court of appeals’ judgment
the Fourteenth District of Texas, which dismissed and rendered judgment dismissing for lack of
subject matter jurisdiction the employee’s claims HN3 It is proper for a trial court to dismiss claims
relating to her reinstatement. over which it does not have subject matter
jurisdiction but retain claims in the same case LexisNexis® Headnotes over which it has jurisdiction. A trial court is not required to deny an otherwise meritorious plea to
the jurisdiction or a motion for summary judgment Civil Procedure > ... > Subject Matter Jurisdiction > based on a jurisdictional challenge concerning
Jurisdiction Over Actions > General Overview some claims because the trial court has jurisdiction
Civil Procedure > ... > Summary Judgment > over other claims. To the extent some courts of Motions for Summary Judgment > General appeals have held otherwise, the state supreme Overview court disapproves of those holdings. Civil Procedure > Appeals > Appellate Jurisdiction >
Interlocutory Orders Civil Procedure > ... > Subject Matter Jurisdiction > Jurisdiction Over Actions > General Overview
HN1 Because there is a conflict among the courts
of appeals on whether a governmental unit’s Civil Procedure > Appeals > Appellate Jurisdiction > Interlocutory Orders
challenge to subject matter jurisdiction is
appealable if raised in a motion for summary Civil Procedure > Appeals > Appellate Jurisdiction > judgment, the state supreme court has jurisdiction State Court Review over an interlocutory appeal involving the issue. The legislature has provided for an
Tex. Gov’t Code Ann. §§ 22.001(a)(2) , 22.225(c) interlocutory appeal when a trial court denies a
Civil Procedure > ... > Responses > Defenses, governmental unit’s challenge to subject matter
Demurrers & Objections > Motions to Dismiss jurisdiction, irrespective of the procedural vehicle used. Tex. Civ. Prac. & Rem. Code Ann. §
Civil Procedure > Appeals > Appellate Jurisdiction > Final Judgment Rule 51.014(a)(8) . To the extent some courts of appeals have held otherwise, the state supreme court
Civil Procedure > Appeals > Appellate Jurisdiction > disapproves of those holdings.
Interlocutory Orders Generally, appeals may only be taken from Civil Procedure > ... > Subject Matter Jurisdiction >
final judgments or orders. Tex. Civ. Prac. & Rem. Jurisdiction Over Actions > General Overview Code Ann. § 51.014 . Section 51.014(a)(8) provides Civil Procedure > ... > Responses > Defenses, an exception to this general rule by allowing an Demurrers & Objections > Motions to Dismiss appeal from an interlocutory order that grants or Civil Procedure > Appeals > Appellate Jurisdiction >
denies a plea to the jurisdiction by a governmental Interlocutory Orders
unit as that term is defined in Tex. Civ. Prac. & Rem. Code Ann. § 101.001 To be entitled to an interlocutory appeal, Tex. Civ. Prac. & Rem. Code Ann. § 51.014(a)(8)
Civil Procedure > ... > Subject Matter Jurisdiction > requires the denial of a jurisdictional challenge. Jurisdiction Over Actions > General Overview The Texas Rules of Appellate Procedure only
Civil Procedure > ... > Responses > Defenses, require that the record show the trial court ruled Demurrers & Objections > Motions to Dismiss on the request, objection, or motion, either
Civil Procedure > Dismissal > Involuntary expressly or implicitly. Tex. R. App. P.
Dismissals > Appellate Review 33.1(a)(2)(A) . Because a trial court cannot reach the merits of a case without subject matter
Civil Procedure > Appeals > Appellate Jurisdiction > jurisdiction, a trial court that rules on the merits of
State Court Review
an issue without explicitly rejecting an asserted HN7 Determining whether the Harris County
jurisdictional attack has implicitly denied the Sheriff’s Department Civil Service Commission
jurisdictional challenge. has exclusive jurisdiction requires examination
and construction of the relevant statutory scheme.
Administrative Law > Judicial Review > Where there is no express legislative indication of
Reviewability > Exhaustion of Remedies exclusive jurisdiction, the state supreme court looks to the legislative scheme to determine if the
Administrative Law > Judicial Review > Standards legislature intended the Commission to have sole
of Review > De Novo Standard of Review authority to make the initial determination in a
Administrative Law > Separation of Powers > dispute. Jurisdiction
Administrative Law > Separation of Powers > Governments > Local Governments > Legislative Controls > Scope of Delegated Authority Administrative Boards Civil Procedure > ... > Subject Matter Jurisdiction > HN8 Tex. Loc. Gov’t Code Ann. §§ 158.033 and Jurisdiction Over Actions > General Jurisdiction 158.034 permit the creation of a sheriff’s department civil service system and a commission Whether the Harris County Sheriff’s in certain counties.
Department Civil Service Commission has
exclusive jurisdiction over a dispute is a question Governments > Local Governments >
of law that the state supreme court reviews de Administrative Boards
novo. Texas trial courts are courts of general
jurisdiction with the power to hear and determine See Tex. Loc. Gov’t Code Ann. § 158.035(a) any cause that is cognizable by courts of law or
equity and to grant any relief that could be granted Administrative Law > Separation of Powers > by either courts of law or equity. Tex. Gov’t Code Legislative Controls > Scope of Delegated Authority Ann. § 24.007-.008 ; Tex. Const. art. V, § 8. In
Governments > Local Governments > contrast, administrative bodies only have the Administrative Boards powers conferred on them by clear and express
statutory language or implied powers that are Governments > Local Governments > Employees &
reasonably necessary to carry out the legislature’s Officials
intent. When the legislature grants an Labor & Employment Law > Employment administrative body the sole authority to make an Relationships > At Will Employment > Public initial determination in a dispute, the agency has Employees exclusive jurisdiction over the dispute. If an
administrative body has exclusive jurisdiction, a The Harris County Sheriff’s Department
party must exhaust all administrative remedies Civil Service Commission is authorized by statute
before seeking judicial review of the decision. to regulate employment matters in the sheriff’s
Until the party has satisfied this exhaustion department. The Harris County Sheriff’s
requirement, a trial court lacks subject matter Department Civil Service Regulations detail the
jurisdiction and must dismiss those claims without rules and procedures adopted by the Commission.
prejudice to refiling. Harris County, Tex., Sheriff’s Dep’t Civil Serv.
Regs. R. 1.01-19.01. The regulations address Administrative Law > Separation of Powers > employment position classification, employment
Jurisdiction criteria, disciplinary actions (including layoffs and dismissals) and appeals, grievances, and
Administrative Law > Separation of Powers > performance evaluations, among other things.
Legislative Controls > Scope of Delegated Authority
Harris County, Tex., Sheriff’s Dep’t Civil Serv. sheriff’s decision to the Commission. Harris
Regs. R. 4.01-.06, 6.01-.02, 12.01-.05, 13.01-.04, County, Tex., Sheriff’s Dep’t Civil Serv. Regs. R.
15.01-.08. One of these regulations, Harris County, 12.04. Tex. Loc. Gov’t Code Ann. § 158.037 then provides for a substantial evidence review of the Tex., Sheriff’s Dep’t Civil Serv. Regs. R. 12.03(a), Commission’s decision by the district court. An
states that no employee shall be subject to any employee subject to for-cause termination has a
disciplinary action including termination except
for just cause. The Regulations define disciplinary property interest in continued employment
action as any action taken against an employee sufficient to entitle the employee to judicial review of an administrative decision to terminate
by the Department due to improper conduct by the employment.
employee that will result in termination,
suspension, demotion, reduction in rank, or refusal Administrative Law > Agency Adjudication > to rehire at the end of a contractual period. Harris General Overview County, Tex., Sheriff’s Dep’t Civil Serv. Regs. R. Administrative Law > Separation of Powers >
12.01.
Jurisdiction
Labor & Employment Law > Employment Governments > Local Governments >
Relationships > At Will Employment > General Administrative Boards
Overview Governments > Local Governments > Employees & Officials Absent an express agreement to the
contrary, Texas is an employment-at-will state. Labor & Employment Law > Employment
Subject to certain exceptions, employment is Relationships > At Will Employment > Public Employees
terminable at any time by either party with or
without cause. However, an employer may modify Although the statute authorizing the creation the employment terms of the at-will status of its of the Harris County Sheriff’s Department Civil employees. Service Commission does not contain the words exclusive jurisdiction, as many statutes granting
Administrative Law > Agency Adjudication > an administrative body exclusive jurisdiction do, Review of Initial Decisions it authorizes the Commission to extend specified
Administrative Law > Judicial Review > Standards rights to employees that are not available at
of Review > Substantial Evidence common law. By promulgating Harris County, Tex., Sheriff’s Dep’t Civil Serv. Regs. R. 12.03(a),
Governments > Local Governments > Employees & as authorized by the Texas Local Government
Officials Code, the Commission vested Department
Labor & Employment Law > Employment employees with for-cause employment status, Relationships > At Will Employment > Exceptions which they have only because the Commission The Harris County Sheriff’s Department conferred that right on them. To enforce those
Civil Service Commission’s rules implement rights, employees must follow the procedures
procedures for disciplinary actions, including enumerated in the Commission’s rules as
termination for just cause. Harris County, Tex., authorized by statute. Once the employees of a
Sheriff’s Dep’t Civil Serv. Regs. R. 12.03(a). The department elect to create a commission, and the
regulations describe the initial parts of the appellate commission’s rules create rights employees would
process: within the prescribed time periods, an not have at common law, the commission obtains
employee may appeal a disciplinary action to the exclusive jurisdiction over those matters. Tex.
sheriff; after that, the employee may appeal the Loc. Gov’t Code Ann. § 158.032-.033 , .035. Counsel: For PETITIONER: Mr. Michael A. Sheriff’s Department terminated Jeanne Long’s
Stafford, Mr. Michael R. Hull, HARRIS COUNTY employment as a jailer for violations of the
ATTORNEY, Houston, TX. Department’s employee conduct manual. Long
appealed her termination to the Harris County For RESPONDENT: Mr. Bruce A. Coana, Mr. Sheriff’s Department Civil Service Commission.
Ajay Choudhary, COANA & ASSOCIATES, Over a year later on September 6, 2001, the
Houston, TX. Commission determined that Long’s termination
was not supported by sufficient evidence and For AMICUS CURIAE:Mr. Kristofer S. Monson, ordered the Department to reinstate Long with no
ASSISTANT SOLICITOR GENERAL, Austin, loss of seniority or benefits. The Commission
TX. denied Long’s request for reimbursement of wages. Long did not appeal the Commission’s
Judges: JUSTICE WAINWRIGHT delivered the decision. In letters dated September 7, 2001, and opinion of the Court. November 7, 2001, the Department informed Long that she would be required to complete a
Opinion by: J. Dale Wainwright physical ability test before returning to work. Long refused to take the test. The Department
Opinion maintained its position that because Long had been absent from duty for more than twelve JUSTICE WAINWRIGHT delivered the months, the Department’s employee manual opinion of the Court. required Long to complete the physical ability test before returning to work. The [**3]
This is an interlocutory appeal of a trial court’s Commission’s order did not mention the test.
denial of a jurisdictional plea. Although the plea
was made as part of a motion for summary judgment, the court of appeals had jurisdiction to section consider the interlocutory appeal under Remedies Code . We conclude that the court erred 51.014(a)(8) of the Texas Civil Practice and administrative remedies deprived the trial court of subject matter jurisdiction over those claims. [1] to her employment because her failure to exhaust claims relating to the respondent’s reinstatement consider the appeal. However, we dismiss the in determining that it was without jurisdiction to entitled to immediately return to work with no [2] Department district court against Harris County Sheriff Tommy On November 13, 2001, Long filed suit in state Thomas and the Harris County Sheriff’s seeking a declaration that she was with back pay dating from the Commission’s tests, without re-applying for employment, but loss of seniority or benefits, without taking any order. Long sought a writ of mandamus compelling Thomas to comply with the Commission’s order,
and she sought a temporary restraining order and temporary injunction allowing her to return [*337] [**2] I. Factual and Procedural Background
to work immediately with no loss of seniority or The underlying dispute concerns the interpretation benefits and without undergoing additional testing.
of an order issued by an administrative body. It is Long’s petition also included a retaliation claim under section 21.055 of the Texas Labor Code
not an appeal from the administrative order itself. In a June 1, 2000 letter, the Harris County Thomas asserted a partial plea in bar, contending
[1] The respondent’s retaliation claim under section 21.055 of the Texas Labor Code, and claims for attorney’s fees and back pay, are not part of this interlocutory appeal and remain pending at the trial court. Long later amended her petition nonsuiting all claims against the Department.
that the trial court ″ should not exercise jurisdiction Thomas’s notice also acknowledged that his ″ appeal includes all three of the orders signed by
over any of Plaintiff’s reinstatement claims the Court on March 4, 2002 since all three orders
because exclusive or primary jurisdiction over relate to [Thomas’s] dispute as to [the trial court’s]
this matter has been given to the Harris County jurisdiction. ″ The court of appeals dismissed the Sheriff’s Department Civil Service Commission. ″ appeal for lack of jurisdiction, explaining that
The trial court never explicitly ruled on Thomas’s because our record does not contain an order [**4] partial plea in bar. granting or denying a plea to the jurisdiction, and
Long moved for partial summary judgment on the because section 51.014(a) does not include an declaratory judgment and mandamus actions. appeal of the denial of a summary judgment based Thomas filed a cross-motion for summary on lack of subject matter jurisdiction, that statute judgment on the same causes of action, arguing does not explicitly provide that we have that the trial court lacked subject matter jurisdiction jurisdiction over this interlocutory appeal. ″ 97 over those claims. Arguing in the alternative, S.W.3d 300, 302 . Thomas petitioned this Court Thomas requested the trial court to decline to for review. [**6] exercise jurisdiction over the matter because the
Commission had primary jurisdiction. Finally, II. Jurisdiction of this Court Thomas argued that even if the trial court had
jurisdiction, he was entitled to judgment as a We have jurisdiction over this interlocutory
matter of law on Long’s mandamus and appeal because there is a conflict among the
declaratory judgment actions. The trial court courts of appeals on whether a governmental
entered a partial judgment in favor of Long unit’s challenge to subject matter jurisdiction is under
declaring that the Civil Service appealable if raised in a motion for summary
Commission’s September 6, 2001 Order, (1) judgment. TEX. GOV’T CODE §§ 22.001(a)(2) ,
over interlocutory appeals of jurisdictional the Department conceded that the trial court had jurisdiction over at least one claim. 685 S.W.2d
challenges raised in motions for summary 22, 28 Tex. Sup. Ct. J. 235 (Tex. 1985) . In Speer , judgments). [**7] We address both issues raised this Court held that a trial court’s order sustaining in this petition for review: (1) whether the court of a misnomered plea in abatement, which challenged
appeals had subject matter jurisdiction to address the trial court’s subject matter jurisdiction, was a
Thomas’s interlocutory appeal and (2) whether final and appealable order. 685 S.W.2d at 23
the trial court had jurisdiction to issue a declaratory Comparing the effect of the two pleas, the Court judgment interpreting the Commission’s order. stated that ″ sustaining a plea to the jurisdiction requires dismissal; sustaining a plea in abatement
[**8] III. Jurisdiction of the Court of Appeals
requires that the claim be abated until removal of some impediment. Id. Long argues this means if Generally, appeals may only be taken from final judgments or orders. See TEX. CIV. PRAC. the trial court lacks jurisdiction over some claims & REM. CODE § 51.014 ; Qwest Commc’ns Corp. but not others, it must [**10] deny the plea. We v. AT&T Corp., 24 S.W.3d 334, 336, 43 Tex. Sup. disagree. As we recognized in American Motorists
Ct. J. 600 (Tex. 2000) ; Jack B. Anglin Co. v. Tipps, Insurance Company v. Fodge , it is proper
for a trial court to dismiss claims over which it 842 S.W.2d 266, 272, 36 Tex. Sup. Ct. J. 205 (Tex.
does not have subject matter jurisdiction but 1998) . Section 51.014(a)(8) of the Texas Civil
retain claims in the same case over which it has Practice and Remedies Code provides an
jurisdiction. 63 S.W.3d 801, 805, 45 Tex. Sup. Ct. exception to this general rule by allowing an appeal from an interlocutory order that grants or J. 122 (Tex. 2001) (holding that the trial court erred in dismissing all claims but the court
denies a plea to the jurisdiction by a governmental
unit as that term is defined in Section 101.001 . ″ of appeals erred in requiring the reinstatement of all claims); see also Tex. Highway Dep’t v. Jarrell,
Thomas’s appeal to the court of appeals challenged 418 S.W.2d 486, 488, 10 Tex. Sup. Ct. J. 522 (Tex. the trial court’s interlocutory orders denying his 1967) ( As applied to a pending claim for relief or motion for partial summary judgment disputing cause of action, a plea to the jurisdiction, if the trial court’s subject matter jurisdiction. The sustained, would require a dismissal . . . . ). A trial court of appeals concluded that it lacked court is not required to deny an otherwise jurisdiction for two reasons. 97 S.W.3d at 302 meritorious plea to the jurisdiction or a motion for First, it concluded there was no final judgment summary judgment based on a jurisdictional disposing of all issues and parties, observing that challenge concerning some claims because the one of the trial court’s orders explicitly identified trial court has jurisdiction over other claims. See pending claims, which include claims for Fodge, 63 S.W.3d at 805 . To the extent some retaliation, attorney’s fees, [**9] and back pay. courts of appeals have held otherwise, we Id. Second, the court held that because the record disapprove of those holdings. See Aledo Indep.
does not contain an order granting or denying a Sch. Dist. v. Choctaw Props., L.L.C., 17 S.W.3d plea to the jurisdiction, and because section 260, 262-63 (Tex. App.-Waco 2000, no pet.) ; 51.014(a) does not include an appeal of the denial Harris County Flood Control Dist. v. PG & E Tex. of summary judgment based on lack of subject Pipeline, L.P., 35 S.W.3d 772, 773 [**11] (Tex. matter jurisdiction, that statute does not explicitly App.-Houston [1st Dist.] 2000, pet. dism’d w.o.j.), provide that [the court of appeals has] jurisdiction disavowed on other grounds by City of Houston v. over this interlocutory appeal. Id. Northwood Mun. Util. Dist.No. 1, 74 S.W.3d 183
Relying on Speer v. Stover , Long argues that the (Tex. App.-Houston [1st Dist.] 2002, no pet.) ; Life
trial court properly denied Thomas’s plea because Mgmt. Ctr. for MH/MR Servs. v. Cruz, 2003 Tex.
App. LEXIS 10419, No. 08-03-00121-CV, 2003 rejection of Thomas’s jurisdictional challenges. WL 22923927, at *3-*4 (Tex. App.-El Paso Dec. The Texas Rules of Appellate Procedure only 11, 2003, no pet.) (mem. op.). require that the record show the trial court ruled on the request, objection, or motion, either The court of appeals correctly observed that the expressly or implicitly. TEX. R. APP. P.
record does not contain an order explicitly denying 33.1(a)(2)(A) . Because a trial court cannot reach a plea to the jurisdiction. Thomas did not file a document titled ″ plea to the jurisdiction ″ with the the merits of a case without subject matter jurisdiction, Tex. Ass’n of Bus. v. Tex. Air Control
trial court. However, Thomas’s summary judgment Bd., 852 S.W.2d 440, 443, 36 Tex. Sup. Ct. J. 607 motion clearly challenged the trial court’s subject (Tex. 1993) , a trial court that rules on the merits of matter jurisdiction. The Legislature provided an issue without explicitly rejecting an asserted for an interlocutory appeal when a trial court jurisdictional attack has implicitly denied
denies a governmental unit’s challenge to subject
matter jurisdiction, irrespective of the procedural TEX. CIV. PRAC. & REM. CODE [4] vehicle used. Harris County v. Sykes, 136 S.W.3d ; § 51.014(a)(8) 635, 638, 47 Tex. Sup. Ct. J. 618 (Tex. 2004) ; see S.W.2d 598, 601, 42 Tex. Sup. Ct. J. 993 (Tex. also Surgitek, Bristol-Myers Corp. v. Abel, 997 See 762 (6th Cir. 1999) e.g. ; Soberay Mach. & Equip. Co. v. MRF Ltd., 181 F.3d 759, n.9 (Haw. 1982) Home Lands, 64 Haw. 327, 640 P.2d 1161, 1165 Ahuna v. Dep’t of Hawaiian . By ruling on the merits of , , the jurisdictional challenge. Long’s declaratory judgment claim, the trial court
necessarily denied Thomas’s challenge to the 1999) (holding that the availability of interlocutory
court’s jurisdiction. That implicit [**14] denial appeal [**12] from a section 15.003(a) joinder
decision is not ″ constrained by the form or caption satisfies section 51.014(a)(8) of the Texas Civil
of a pleading ″ but will be determined by ″ the Practice and Remedies Code and gives the court of appeals jurisdiction to consider Thomas’s
substance of a motion to determine the relief
sought, not merely its title ). To the extent some interlocutory appeal.
courts of appeals have held otherwise, we IV. Jurisdiction of the Trial Court-Exhaustion
disapprove of those holdings. See 97 S.W.2d at of Remedies
302 ; Lozano, 72 S.W.3d at 445 ; City of Garland v.
Rutherford, 1998 Tex. App. LEXIS 6006, No. Thomas contends that the trial court lacked subject
05-98-00295-CV, 1998 WL 652318, at *4 & n.1 matter jurisdiction because the Commission had
(Tex. App.-Dallas Sept. 24, 1998, no pet.) (not exclusive jurisdiction over Long’s reinstatement designated for publication). claims, and Long failed to exhaust her administrative remedies before filing this suit. To be entitled to an interlocutory appeal,
section 51.014(a)(8) requires the denial of a Whether the Commission has exclusive jurisdictional challenge. In this case, none of the jurisdiction over this dispute is a question of law
trial court’s orders on the parties’ cross-motions that we review de novo. Subaru of Am. v. David for summary judgment explicitly denied the relief McDavid Nissan, Inc., 84 S.W.3d 212, 222, 45 sought in the section of Thomas’s motion for Tex. Sup. Ct. J. 907 (Tex. 2002) . Texas district summary judgment challenging the [**13] trial courts are courts of general jurisdiction with the power to hear and determine any cause that is
court’s subject matter jurisdiction. However, the cognizable by courts of law or equity ″ and to
trial court’s rulings on the merits of some claims grant any relief that could be granted by either
for which Thomas argued the trial court lacked courts of law or equity. TEX. GOV’T CODE §
subject matter jurisdiction constitute an implicit
We refer to governmental unit as defined by section 101.001 of the Texas Civil Practice and Remedies Code.
24.007-.008 ; see also TEX. CONST. art. V, § 8; (a) HN9 The commission shall adopt, David McDavid Nissan, 84 S.W.3d at 220 ; Dubai publish, and enforce rules regarding: Petroleum Co. v. Kazi, 12 S.W.3d 71, 75, 43 Tex. (1) selection and classification of Sup. Ct. J. 412 (Tex. 2000) In contrast, employees; administrative [**15] bodies only have the powers
conferred on them by clear and express statutory (2) competitive examinations;
language or implied powers that are reasonably (3) promotions, seniority, and tenure; necessary to carry out the Legislature’s intent.
David McDavid Nissan, 84 S.W.3d at 220 ; Tex. (4) layoffs and dismissals; Workers’ Comp. Comm’n v. Patient Advocates of (5) disciplinary actions; Tex., 136 S.W.3d 643, 652, 47 Tex. Sup. Ct. J. 607
(Tex. 2004) . When the Legislature grants an (6) grievance procedures; administrative body the sole authority to make an (7) the rights of employees during an
initial determination in a dispute, the agency has internal investigation; and
exclusive jurisdiction over the dispute. David
McDavid Nissan, 84 S.W.3d at 221 . If an (8) other matters relating to the [*341] administrative body has exclusive jurisdiction, a selection of employees and the procedural
party must exhaust all administrative remedies and substantive rights, advancement, before seeking judicial review of the decision. Id. benefits, and working conditions of Until the party has satisfied this exhaustion employees. requirement, the trial court lacks subject matter
jurisdiction and must dismiss those claims without TEX. LOC. GOV’T CODE § 158.035(a) . Thus,
prejudice to refiling. Id. HN10 the Commission is authorized [**17] by statute to regulate employment matters in the Determining whether the Commission has sheriff’s department. The Harris County Sheriff’s exclusive jurisdiction requires examination and Department Civil Service Regulations detail the construction of the relevant statutory scheme. Id. rules and procedures adopted by the Commission.
Here, there is no express legislative indication of HARRIS COUNTY SHERIFF’S DEP’T CIVIL
exclusive jurisdiction. Thus, we look to the SERV. REGS. R. 1.01-19.01. The regulations
legislative scheme to determine if the Legislature address employment position classification,
intended [**16] the Commission to have sole employment criteria, disciplinary actions
authority to make the initial determination in this (including layoffs and dismissals) and appeals,
dispute. Id. at 223 grievances, and performance evaluations, among Sections 158.033 and 158.034 of the Texas other things. Id. R. 4.01-.06, 6.01-.02, 12.01-.05, Local Government Code permit the creation of a 13.01-.04, 15.01-.08. One of these regulations, sheriff’s department civil service system and a Rule 12.03(a), states that no employee shall be commission in certain counties. Thomas contends that subsection 158.035(a) of the Texas Local Government Code vests the Commission with subject to any disciplinary action [including termination] except for just cause. [5] ″
[**18] Absent an express agreement to the exclusive jurisdiction over the dispute in this case. titled Powers of
Section 158.035 , the contrary, Texas is an employment-at-will state. Commission, ″ provides in relevant part: City of Odessa v. Barton, 967 S.W.2d 834, 835, 41
The Regulations define Disciplinary action as any action taken against an employee by the Department due to improper conduct
by the employee that will result in termination, suspension, demotion, reduction in rank, or refusal to rehire at the end of a contractual period. HARRIS COUNTY SHERIFF’S DEP’T CIVIL SERV. REGS. R. 12.01.
Tex. Sup. Ct. J. 663 (Tex. 1998) . Subject to certain in the Commission’s rules as authorized by statute. exceptions, employment is terminable at any time See Bullock v. Amoco Prod. Co., 608 by either party with or without cause. Barton, 967 S.W.2d 899, 901, 24 Tex. Sup. Ct. J. 15 (Tex. S.W.2d at 835 ; see Fed. Express Corp. v. 1980) . We hold that once the employees of a Dutschmann, 846 S.W.2d 282, 283, 36 Tex. Sup. department elect to create a commission, and the Ct. J. 530 (Tex. 1993) ; see also East Line & Red commission’s rules create rights employees would River R.R. Co. v. Scott, 72 Tex. 70, 10 S.W. 99, 102 not have at common law, the commission obtains (1888) . However, an employer may modify the exclusive jurisdiction over those matters. See employment terms of the at-will status of its TEX. LOC. GOV’T CODE § 158.032-.033 , .035
employees. Barton, 967 S.W.2d at 835 . In this case, termination for just cause. HARRIS COUNTY procedures for disciplinary actions, including the Commission’s rules implement SHERIFF’S DEP’T CIVIL SERV. REGS. R. Commission. R. 12.04. Id. time periods, an employee may appeal a disciplinary action to the sheriff; after that, the of the appellate process: within the prescribed 12.03(a). The regulations describe the initial parts Section 158.037 of the employee may appeal the sheriff’s decision to the ″ substantial evidence then provides for a As Commission’s decision by the district court. [6] Texas Local Government Code [**19] review of the Commission’s scheme when she appealed her in this case. Long exercised her rights under the requirement with the Commission, and the benefits. Nothing in our record indicates whether Thomas or Long raised the physical ability test appeal was successful--the Commission overturned termination by the sheriff to the Commission. Her Long’s termination and ordered that she be allowed to return to work with no loss of seniority or Commission did not address the issue in its order. exclusive jurisdiction over the employment dispute We therefore conclude that the Commission had In a letter dated the day after the Commission’s order, the Department [**21] notified Long that,
we have recognized, an employee subject to according to its interpretation of the order, she for-cause termination has a property interest in would be required to complete a physical ability continued employment sufficient to entitle the test upon her return to work after a year-long employee to judicial review of an administrative absence. Long did not return to the Commission decision to terminate employment. Barton, 967 to obtain a decision regarding the Department’s S.W.2d at 835-36 enforcement of a physical ability test requirement. Although the statute authorizing the creation If she had, and she received an adverse decision,
of the Commission does not contain the words she could have appealed to the district court. exclusive jurisdiction, as many statutes granting Instead, she bypassed the Commission and filed
an administrative body exclusive jurisdiction do, this suit seeking interpretation and enforcement of
it authorizes the Commission to extend specified the Commission’s first order. Although Long
rights to employees that are not available at obtained a decision in her favor regarding
common law. By promulgating Rule 12.03(a), as reinstatement, the law requires Long to exhaust
authorized by the Local Government Code, the her administrative remedies by obtaining a
Commission vested Department employees with Commission decision regarding Thomas’s refusal
for-cause employment status, which they have to allow her to return to work without completing
only because [**20] the Commission conferred a physical ability test. She failed to do so. For
that right on them. To enforce those rights, these reasons, the trial court did not have subject
employees must follow the procedures enumerated matter jurisdiction over Long’s reinstatement
Presumably because Long’s appeal to the Commission was successful, she did not pursue judicial review of the order. The
constitutionality of the standard of review provided by the Code was not challenged.
claims. challenge.
The fact that Long fashioned this suit as a V. Conclusion declaratory judgment action does not change this For the reasons stated above, we reverse the court
analysis. The subject matter of her declaratory of appeals’ judgment and render judgment
judgment action--the interpretation of the dismissing for lack of subject matter jurisdiction
Commission’s order as it applies to completing a Long’s claims relating to her reinstatement.
physical ability test--is [**22] the same subject
matter over which the Legislature intended the J. Dale Wainwright
Commission to exercise exclusive jurisdiction. Justice
The trial court was without subject matter
jurisdiction to issue a declaratory judgment in this OPINION DELIVERED: April 21, 2006
case and erred in denying Thomas’s jurisdictional
| | Neutral
As of: April 9, 2015 12:38 PM EDT
Am. Star Energy & Minerals Corp. v. Stowers Supreme Court of Texas
October 14, 2014, Argued; February 27, 2015, Opinion Delivered NO. 13-0484
Reporter
2015 Tex. LEXIS 161; 58 Tex. Sup. J. 401
Notice: PUBLICATION STATUS PENDING. Partnership Act, not the agreement, but it was still based on the judgment creditor’s underlying
CONSULT STATE RULES REGARDING contract claim, consistent with § 152.306(b)(2) ;
PRECEDENTIAL VALUE. [4]-The partners had the same opportunity to
Prior History: ON PETITION FOR contest their liability as they would have had were they sued within the underlying limitations period.
REVIEW FROM THE COURT OF APPEALS
FOR THE SEVENTH DISTRICT OF TEXAS. Outcome
Am. Star Energy & Minerals Corp. v. Stowers,
405 S.W.3d 905, 2013 Tex. App. LEXIS 5933 (Tex. Judgment reversed. App. Amarillo, 2013)
LexisNexis® Headnotes Core Terms
Business & Corporate Law > ... > Management partnership, partner, limitations period, entity, Duties & Liabilities > Rights of Partners > Authority
limitations, accrued, citations, accrual, Oil, cause to Act
of action, court of appeals, statute of limitations, Business & Corporate Law > ... > Management
trial court, prerequisites, satisfaction, cases, Duties & Liabilities > Rights of Partners >
separate suit, obligations, parties Partnership Property A Texas partnership is an entity distinct from
Case Summary its partners, Tex. Bus. Orgs. Code Ann. § 152.056 Though that has not always been clear, the Overview Legislature unequivocally embraced he entity HOLDINGS: [1]-While the judgment creditor theory of partnership when it enacted the Texas could have named the partners in the original suit, Revised Partnership Act (TRPA), since codified in
doing so would not change the result as the the Texas Business Organizations Code. As an
judgment creditor would not have been able to independent entity, a partnership may enter into
pursue the partners’ assets until after judgment contracts in its own name, may own its own
was finalized in 2009, Tex. Bus. Orgs. Code Ann. property, and may sue and be sued in its own § 152.306(b)(2)(C)(iii) ; [2]-There was no evidence name, Tex. Bus. Orgs. Code Ann. § 152.101 ; Tex. that the partnership’s agreement with the judgment R. Civ. P. 28
creditor imposed any obligation on the partners or
gave the judgment creditor the right to compel Business & Corporate Law > ... > Management
anything of the partners; [3]-The suit was to Duties & Liabilities > Causes of Action >
enforce liability created by the Texas Revised Partnership Liabilities
HN2 Under the Texas Revised Partnership Act functions to compel the exercise of a right of
(TRPA), a partner remains jointly and severally action within a reasonable time. However, when the Legislature employs the term accrues without
liable for all obligations of the partnership, Tex. Bus. Orgs. Code Ann. § 152.304(a) . This personal an accompanying definition, the courts must liability, undoubtedly an aggregate-theory feature, determine when that cause of action accrues and is a defining characteristic of the partnership form thus when the statute of limitations commences to and distinguishes it from other entity types. run. To determine accrual in any particular case is Through its scheme for enforcing that liability, to establish a general rule of law for a class of however, the TRPA imposes even on this aggregate cases. feature an entity aspect. A judgment against a
partnership is not by itself a judgment against a Governments > Legislation > Statute of partner, so a creditor must obtain a judgment Limitations > Time Limitations
against the partner individually, Tex. Bus. Orgs. Business & Corporate Law > ... > Management Code Ann. § 152.306(a) . A creditor may attempt Duties & Liabilities > Causes of Action > to do so in the suit against the partnership or in a Partnership Liabilities separate suit, Tex. Bus. Orgs. Code Ann. § 152.305 Business & Corporate Law > ... > Management
It may not, however, seek satisfaction of the Duties & Liabilities > Causes of Action > Derivative judgment against a partner until a judgment is Actions rendered against the partnership, §
152.306(b)(2)(A) HN5 The appellate court is left to establish a rule of accrual for partner-liability suits, which must Business & Corporate Law > ... > Management be founded on reason and justice. Reason requires Duties & Liabilities > Causes of Action > the appellate court to consider the Texas Revised Partnership Liabilities Partnership Act’s overall scheme and the legislative intent expressed therein. Justice requires The Texas Revised Partnership Act (TRPA) the appellate court to examine the rule’s policy
generally requires time to collect the debt from implications and equity of its consequences. In
the partnership first: the judgment against the light of a partnership’s status as a separate entity
partnership must go unsatisfied for ninety days and the statutory prerequisites to proceeding
before a creditor may proceed against a partner against a partner, the cause of action against a
and his assets, Tex. Bus. Orgs. Code Ann. § partner does not accrue until a creditor can proceed 152.306(b)(2)(C) . The enforcement of a partner’s against a partner’s assets—that is, generally at the liability is considered the most confusing aspect expiration of the ninety-day satisfaction period.
of partnership law. Still, the passage of time, in
conjunction with the plain language of the TRPA’s Business & Corporate Law > ... > Management
text, forecloses any argument that the Legislature Duties & Liabilities > Causes of Action > rejected any aspect of the entity theory. Partnership Liabilities
Governments > Legislation > Statute of Business & Corporate Law > ... > Management
Limitations > Time Limitations Duties & Liabilities > Rights of Partners > Partnership Property Generally a cause of action accrues when
facts come into existence that authorize a claimant As a result of the partnership’s statutorily
to seek a judicial remedy, when a wrongful act confirmed status as a separate entity, a
causes some legal injury, or whenever one person partnership’s acts are only its own, not a partner’s.
may sue another. The resulting limitations period Individual partners do not own partnership income
and profits while they remain in the partnership’s Business & Corporate Law > ... > Management
hands and have not been distributed to the partners. Duties & Liabilities > Causes of Action >
Partnership Liabilities Business & Corporate Law > ... > Management HN9 The Texas Revised Partnership Act allows a
Duties & Liabilities > Causes of Action > partner to be sued in the action against the
Partnership Liabilities partnership or in a separate action, and the
HN7 The statutory prerequisites to enforcement appellate court’s definition of accrual in an action make a partner’s liability not only derivative of against the partner is consistent with that the partnership’s liability, but contingent on it for permissive rule, Tex. Bus. Orgs. Code Ann. § all practical purposes. If a partnership obligates 152.305 . Especially considering its enforcement itself to pay a sum or perform a service under a scheme, this rule suggests the Legislature considers contract, the individual partners, though liable for the collection action to be separate from the the obligation under the Texas Revised Partnership underlying litigation. The only practical reason to Act, cannot immediately be called on to pay or sue a partner separately is to be able to sue him perform in lieu of the partnership. In either case, later—a concurrent separate suit would the claim must be litigated against the partnership presumably be consolidated or sit pending so that its obligation is determined, reduced to disposition of the case against the partnership. damages, and fixed in a judgment, Tex. Bus. Orgs. The most likely time, if not the only logical time, Code § 152.306(b)(2)(A) Second, the a plaintiff would do so is when the partnership plaintiff-creditor must have ninety days’ fails to satisfy the judgment. In allowing separate opportunity to satisfy that judgment from the suits, the Legislature must have contemplated that partnership’s assets, § 152.306(b)(2)(C) at least some subsequent actions against partners would be brought outside of the original limitations Business & Corporate Law > ... > Management period. Duties & Liabilities > Causes of Action >
Partnership Liabilities Business & Corporate Law > ... > Management Duties & Liabilities > Causes of Action > General Considering the derivative and contingent Overview
nature of that liability, the only obligation for
which a partner is really responsible is to make Governments > Legislation > Statute of
good on the judgment against the partnership, and Limitations > Time Limitations
generally only after the partnership fails to do so. Limitations exist to compel the exercise of The significance of joint and several liability in a right of action within a reasonable time so that the partnership context is that once that the the opposing party has a fair opportunity to prerequisites are met, a creditor can seek the defend while witnesses are available. In the whole debt from one party and is not required to partnership context, these concerns are addressed join all the partners, obtain judgments against by the limitations period applying to the underlying them, or apportion liability among them. This cause of action against a partnership. scheme defers a partner’s liability, and as a result
a creditor cannot seek a judicial remedy from a Business & Corporate Law > ... > Management partner until these prerequisites are met. Because Duties & Liabilities > Causes of Action > a creditor’s rights against a partner do not arise Partnership Liabilities when the partnership incurs an obligation, the
appellate court defines accrual as occurring when A judgment against a partnership is not by
those rights arise. itself a judgment against a partner.
Business & Corporate Law > General Partnerships > a judgment creditor attempted to collect from a
Formation > Partnership Agreements partnership after litigating a contract claim for over a decade and a half, only to find the The partnership form has built-in partnership insolvent. When the creditor sought a mechanisms to provide further notice of any judgment against the individual partners, the trial impending liability. First, each partner has a right court ruled the limitations period began when the to manage and conduct partnership business, Tex. underlying cause of action accrued. Because that Bus. Orgs. Code Ann. § 152.203(a) . When a period had passed, limitations precluded pursuit partnership is sued, the litigation presumably of the partners’ assets. The court of appeals becomes part of that business. Second, each affirmed. We hold today that the limitations period partner owes to the others a duty of care, Tex. Bus. against a partner generally does not commence Orgs. Code Ann. § 152.204(a)(2) . When a until after final judgment against the partnership partnership is served with a lawsuit, that duty may is entered. Because this action was brought within require the partner served to apprise the other that period, we reverse the court of appeals’ partners. Third, partners can agree to provide judgment. notice of pending litigation to one another in their
partnership agreement, Tex. Bus. Orgs. Code Ann. I § 152.002
In 1980, the four petitioners (together, the Partners) Business & Corporate Law > ... > Management formed S & J Investments, a Texas general Duties & Liabilities > Causes of Action > partnership, to invest in and manage certain Partnership Liabilities oil and gas properties. S & J and American Star Energy and Minerals Corporation were parties to A party doing business with a partnership an agreement that governed operation of those
does so knowing that if the partnership fails on its properties. In the early 1990s, American Star sued
obligations, relief is not wholly subject to the S & J for breach of that agreement and eventually
adequacy of the partnership assets. Conversely, prevailed on its claims. S & J appealed that
individuals who choose the partnership form as judgment, and a court of appeals reversed it in
the vehicle for their enterprise do so knowing that part and remanded the case to the trial court. See
their personal assets are on the line. Equity S & J Invs. v. Am. Star Energy & Minerals Corp.,
demands the court leave these expectations No. 07-99-0090-CV, 2001 Tex. App. LEXIS 7730, undisturbed where a plaintiff proceeds as the law 2001 WL 1380027, at *6 (Tex. App.—Amarillo allows. Nov. 7, 2001, pet. denied) (not designated for publication). In 2007, the trial court awarded Judges: JUSTICE BROWN delivered the opinion American Star a second judgment, and S & J
of the Court.
again appealed. The court of appeals affirmed that Opinion by: Jeffrey V. Brown judgment, and we denied review of its decision. See S & J Invs. v. Am. Star Energy & Minerals
Opinion Corp., No. 07-07-0357-CV, 2008 Tex. App. LEXIS 5078, 2008 WL 2669665, at *5 (Tex. In this case we must decide whether Texas App—Amarillo July 8, 2008, pet. denied) (mem.
partnership law requires a plaintiff seeking to op.).
enforce a partner’s liability for a partnership debt
to sue the partner within the limitations period on S & J owes American Star $227,884.46 under the
the underlying claim against the partnership. Here, judgment. But S & J proved to be undercapitalized,
and its assets cannot satisfy the judgment debt. In distinguishes it from other entity types. Cf. id . § 152.801(a) ( ″ [A] partner is not personally liable . June 2010, American Star brought this action
seeking a judgment against the Partners . . for any obligation of the partnership incurred
individually. In response, the Partners argued the while the partnership is a limited liability partnership. ″ ); id . § 101.114 ( ″ [A] member or
action was barred by the four-year statute of limitations that applies to the underlying manager is not liable for a debt, obligation, or liability of a limited liability company . . . . ″ );
breach-of-contract claim. Both sides moved for
summary judgment. The trial court granted the Willis v. Donnelly, 199 S.W.3d 262, 271 (Tex. 2006) ( ″ A bedrock principle of corporate law is [*3] Partners’ motion and ordered that American that an individual can incorporate a business and
Star take nothing. A divided court of appeals thereby normally shield himself from personal
affirmed, holding the limitations period began liability for the corporation’s contractual
when the underlying breach-of-contract claim obligations. ″ ) (collecting cases); see also 1 A LAN against the partnership accrued, barring this suit. R. B ROMBERG & L ARRY E. R IBSTEIN , B ROMBERG AND
405 S.W.3d 905, 906-07 (Tex. App.—Amarillo R IBSTEIN ON P ARTNERSHIP § 1.03(c)(4) (2012) ( ″ The 2013) . American Star sought this review. personal liability of partners is perhaps the most important aggregate feature of partnership . . . . ″ ).
II Through its scheme for enforcing that liability, A Texas partnership is ″ an entity distinct however, the TRPA imposes even on this aggregate
from its partners. ″ T EX . B US . O RGS . C ODE § 152.056 . under the TRPA, a partner
Though that has not always been clear, the Legislature ″ . P. 28 IV C theory of partnership’ ″ when it enacted the Texas ’unequivocally embrace[d] the entity ODE T ; § 152.101 [1] name. See T EX . R. Revised Partnership Act (TRPA), since codified in the Texas Business Organizations Code. . B US . O EX RGS Allcat Claims Serv., L.P., 356 S.W.3d 455, 464 In re . C . A NN (quoting (Tex. 2011) T EX EV into contracts in its own name, may own its own property, and may sue and be sued in its own . R IV . C . S TAT of Bar Committee—1993)) (alteration in original). As an independent entity, a partnership may enter . art. 6132b-2.01 cmt. (Vernon Supp. 2010) (Comment Nonetheless, . C A NN . art. 6132b-3.05 cmt. (Vernon Supp. 2010) EX See T generally requires time to collect the debt from . O RGS . C ODE § 152.306(a) . A creditor may attempt to do so in the suit against the partnership or in a separate suit. Id creditor must obtain a judgment against the partner individually. T . § 152.305 . feature an entity aspect. (Comment of Bar Committee—1993) (stating the TRPA’s enforcement provisions judgment against a partner until a judgment is It may not, however, seek satisfaction of the by itself a judgment against a partner, EX so a entity ). A judgment against a partnership is not are consistent with the emphasis [*5] on the partnership as an rendered against IV . S TAT . . R . B US 152.306(b)(2)(A) . On top of that, the TRPA EV the partnership. Id § .
remains jointly and severally liable for all the partnership first: the judgment against the
obligations [*4] of the partnership. T EX . B US partnership must go unsatisfied for ninety days
O RGS . C ODE § 152.304(a) . This personal liability, before a creditor may proceed against a partner functions ″ to compel the exercise of a right of the most confusing aspect of partnership law. See action within a reasonable time. ″ Moreno v.
R OBERT A. R AGAZZO & F RANCES S. F ENDLER , C LOSELY H ELD B USINESS O RGANIZATIONS 193 (2d ed. 2012) Sterling Drug, Inc., 787 S.W.2d 348, 351 (Tex. 1990) (citation omitted). However, ″ [w]hen the (quoting 2 B ROMBERG & R IBSTEIN , supra , § 5.08(a)). Still, ″ [t]he passage of time, in conjunction with [L]egislature employs the term ’accrues’ without
the plain language of the TRPA’s text, forecloses an accompanying definition, the courts must
any argument that the Legislature rejected any determine when that cause of action accrues and
aspect of the entity theory. ″ Allcat, 356 S.W.3d at thus when the statute of limitations commences to run. ″ Id. at 351-52, 354 (refusing to apply the 467
discovery rule to a wrongful-death action, but III noting that it would have applied had the applicable statute of limitations not specifically
Despite the Legislature’s efforts to define the fixed the point of accrual). ″ ’[T]o determine
relationship between a partner and the partnership [accrual] in any particular case is to establish a and to control the circumstances under which a general rule of law for a class of cases . . . .’ ″ Id.
partner’s liability may be enforced, it did not at 351 (quoting Fernandi v. Strully, 35 N.J. 434, expressly dictate when a suit against a partner 173 A.2d 277, 285 (N.J. 1961)) (other citations must be brought. The Partners argue that because omitted). American Star could have sued them in its original The statutes of limitations applicable here use the suit against S & J, this cause of action accrued and term ″ accrues ″ but do not specify when accrual limitations on this suit began to run at the same occurs. Compare T EX . C IV . P RAC . & R EM . C ODE § time as on the suit against S & J—at the breach of 16.004(a)(3) (providing limitations period for a the underlying agreement. American Star, on the debt cause of action), and id . § 16.051 (providing other hand, insists the Partners owed no obligation residual [*8] limitations period), with id . § until the judgment against S & J became final in 16.003(b) ( ″ The cause of action [for wrongful 2009, and the limitations period began then. The death] accrues on the death of the injured person. ″ ). parties agree that a four-year limitations period We are thus left to establish a rule of accrual applies to this action. They further acknowledge for partner-liability suits, which ″ ’must be founded this action was brought more than four years after on reason and justice.’ ″ Moreno, 787 S.W.2d at the underlying cause of action accrued but within (quoting Fernandi, 173 A.2d at 285 ) (other four years of the judgment against S & J. citations omitted). Reason requires us to consider Generally a cause of action accrues when the TRPA’s overall scheme and the legislative
facts come into existence [that] authorize a intent expressed therein. See Tex. Dep’t of Transp. claimant to seek a judicial remedy, ″ ″ when a v. City of Sunset Valley, 146 S.W.3d 637, 642 (Tex. injury, ″ or 2004) (stating [w]e must read the statute as a wrongful act causes some legal whenever one person may sue another. Exxon whole ″ and consider the objective the law seeks to obtain (citations omitted)). Justice requires us
Corp. v. Emerald Oil & Gas Co., 348 S.W.3d 194, 202 (Tex. 2011) (citations omitted); S.V. v. R.V., to examine the rule’s policy implications and 933 S.W.2d 1, 4 (Tex. 1996) (citations omitted); equity of its consequences. In light of a Luling Oil & Gas Co. v. Humble Oil & Ref. Co., partnership’s status as a separate entity and the 144 Tex. 475, 191 S.W.2d 716, 721 (Tex. 1945) statutory prerequisites to proceeding against a
(citation omitted). The resulting limitations period partner, we hold that the cause of action against a
is excessively burdensome, or (4) the partner’s liability arises independently of his status as a partner. T EX . B US . O RGS . C ODE § 152.306(c). None of those exceptions apply here.
partner does not accrue until a creditor can proceed good on the judgment against the partnership, and
against a partner’s assets—that is, generally at the generally only after the partnership fails to do so.
expiration of the ninety-day satisfaction period. [3] See 1 B ROMBERG & R IBSTEIN , supra , § 1.03(c)(4)
( ″ Under [the entity theory], the partners are A essentially guarantors of an independent partnership debt rather than being directly
HN6 As a result of the partnership’s statutorily responsible. ″ ); cf . U NIF . P’ SHIP A CT § 307 cmt. 4
confirmed status as a separate entity, a (1997) ( [The Revised Uniform Partnership Act’s
partnership’s acts are only its own, not a partner’s. exhaustion requirement] respects the concept of a [*9] Cf. Allcat, 356 S.W.3d at 468 ( Individual partnership as an entity and makes partners more partners do not own [partnership income and in the nature of guarantors than principal debtors profits] while they remain in the partnership’s on every partnership debt. ). The significance of
hands and have not been distributed to the joint and several liability in the partnership context partners. (citations omitted)). Here, it was S & J is that once that the prerequisites are met, a that was party to and breached the agreement with creditor can seek the whole debt from one party American Star. The Partners, separate entities by and is not required to join all the partners, obtain statute, were not in privity with American Star, judgments against them, or apportion liability and they committed no wrongful act and caused among them. Cf . 2 B ROMBERG & R IBSTEIN , supra , § no legal injury. See S.V., 933 S.W.2d at 4 . Surely, 5.08(g) (stating the exhaustion requirement defeats the Partners are liable for S & J’s breach, but only the joint-and-several characterization). This by operation of the statute. An effect of the entity scheme defers a partner’s [*11] liability, and as a theory is that a partner’s liability is wholly result a creditor cannot seek a judicial remedy derivative of the partnership’s liability. from a partner until these prerequisites are met. See Exxon Corp., 348 S.W.3d at 202 . Because a The statutory prerequisites to enforcement creditor’s rights against a partner do not arise make a partner’s liability not only derivative of when the partnership incurs an obligation, we
the partnership’s liability, but contingent on it for define accrual as occurring when those rights
all practical purposes. If a partnership obligates arise. See S.V., 933 S.W.2d at 3 ( [Limitations]
itself to pay a sum or perform a service under a
contract, the individual partners, though liable for quicken diligence by making [a claim] in some measure equivalent to a right . . . . (quoting
the obligation under the TRPA, cannot
immediately be called on to pay or perform in lieu Gautier v. Franklin, 1 Tex. 732, 739 (1847)) of the partnership. In either case, the claim must (internal quotation marks omitted)).
be litigated against the partnership so that its The TRPA allows a partner to be sued in the obligation is determined, reduced to damages, and action against the partnership or in a separate fixed in a judgment. See T EX . B US . O RGS . action, and our definition of accrual in an action C ODE § 152.306(b)(2)(A) Second, the against the partner is consistent with that plaintiff-creditor must have ninety days’ permissive rule. See T EX . B US . O RGS . C ODE § opportunity to satisfy that judgment from the 152.305 . Especially considering its enforcement partnership’s assets. Id . § 152.306(b)(2)(C) scheme, this rule suggests the Legislature considers Considering the derivative and contingent the collection action to be separate from the
nature of that liability, the only obligation for underlying litigation. The only practical reason to
which a partner is really responsible is to make sue a partner separately is to be able to sue him
Because the satisfaction period applies here, we do not address accrual when a creditor may proceed directly against a partner under
Texas Business Organizations Code section 152.306(c).
later—a concurrent separate suit would begin to run. Id. at 209 (citing Getty Oil Co. v. Ins. presumably be consolidated or sit pending Co. of N. Am., 845 S.W.2d 794, 799 (Tex. 1992)) ; disposition of the case against the partnership. City of San Antonio v. Talerico, 98 Tex. 151, 81 S.W. 518, 520 (Tex. 1904) ( ″ It is permitted by our The most likely time, if not the only logical time, a plaintiff would do so is when the partnership law to bring into the suit against it the party whom
fails to satisfy the judgment. Though the time it seeks to hold liable as an indemnitor, . . . but this
required here to obtain [*12] the judgment against does not make the limitation applicable to the
S & J is probably extraordinary, this case illustrates cause of action of the plaintiff control its action over against the indemnitor. ″ ). This rule is based
that litigation of such claims can continue well on our interest in judicial economy. See Getty Oil,
beyond the applicable limitation periods. In 845 S.W.2d at 799 ( ″ Forcing the indemnity suit to allowing separate suits, the Legislature must have contemplated that at least some subsequent actions wait for judgment in the liability suit ’would
against partners would be brought outside of the contravene the policy of the courts to encourage settlements and to minimize litigation.’ ″ (quoting
original limitations period. See U NIF . P’ SHIP A CT §
307 cmt. 2 (1997) ( ″ [Allowing separate suit of K & S Oil Well Serv., Inc. v. Cabot Corp., 491
partners] will simplify and reduce the cost of S.W.2d 733, 739 (Tex. Civ. App.—Corpus Christi
litigation, especially in cases of small claims 1973, writ ref’d n.r.e.)))
where there are known to be significant partnership Similarly, Luling Oil & Gas ’s rule does not assets and thus no necessity to collect judgment readily apply to the partnership-liability context. out of the partners’ assets. ″ ). While American Star In that case, we addressed a garden-variety contract
could have named the Partners in the original suit, action between a seller and buyer of [*14] oil and doing so would not change the result here: gas interests. See 191 S.W.2d at 718-19, 721-22 American Star would not have been able to pursue (noting the contract ″ fixed the rights and the Partners’ assets until after the judgment was obligations of the parties ″ and gave the seller ″ the finalized in 2009. See T EX . B US . O RGS . C ODE § right to compel ″ the relief sought). ″ In this 152.306(b)(2)(C)(ii) (providing the satisfaction situation , ″ we held, ″ the statute of limitation period as to a contested partnership judgment begins to run at the time when a suit could be begins only once a stay on execution expires). commenced upon the claim asserted. ″ Id. at 722
Despite this specific statutory context, the Partners (emphasis added) (citation omitted). Here, there is
and the court of appeals would apply to this suit no evidence that S & J’s agreement with American
the general rule of accrual as stated in Luling Oil Star imposed any obligation on the Partners or & Gas : ″ [W]henever one person may sue gave American Star the right to compel anything another[,] a cause of action has accrued. ″ 191 of the Partners. Further, the TRPA’s scheme S.W.2d at 721 (citation omitted). That rule is not, mirrors aspects of our indemnity jurisprudence however, universal. For example, a cause of and serves as a legislative basis for excepting suits action for indemnity does not accrue until the against partners from the general accrual rule.
indemnitee’s liability to the party seeking damages
becomes fixed and certain, generally by a The Partners and the court of appeals also rely on
judgment. Ingersoll-Rand Co. v. Valero Energy the TRPA’s requirement that the judgment against a partner must be based on the same claim as Corp., 997 S.W.2d 203, 208 (Tex. 1999) (citations
omitted). Still, an indemnitee may bring a claim the judgment against the partnership to argue this
against an indemnitor before the judgment is suit is really a suit on the underlying contract
assigned against the indemnitee —before the obligation. See T EX . B US . O RGS . C ODE §
cause of action accrues and before limitations 152.306(b)(2) If the judgment created an independent cause of action, the Partners argue, contained no provision similar to the TRPA’s
American Star could not satisfy this statutory liability-enforcement provision). The Partners
prerequisite. We are not persuaded. This suit is to unconvincingly argue the Legislature confirmed
enforce liability created by the TRPA, not the the rule applied in these cases when it codified the
agreement, [*15] but it is still based on American TRPA into the Business Organizations Code
Star’s underlying contract claim, consistent with without overruling those decisions. On the
the statute. contrary, the TRPA’s passage eliminates any
instructive or persuasive value those decisions Federal courts applying the TRPA have reached may have once had. We therefore decline to rely
the same conclusion we reach today. See Evanston on them. Ins. Co. v. Dillard Dep’t Stores, Inc., 602 F.3d Those cases, however, were decided under S.W.3d at 463-64 See Allcat, 356 proceeding against a partner. theory and did not impose the prerequisites to The TUPA did not expressly follow the entity discussion of relevant statutory partnership law. TRPA’s predecessor, and contain no meaningful the Texas Uniform Partnership Act (TUPA), the (stating that though the TUPA [4] claim. limitations period running from the underlying be individually named and served within the which they insist has always required partners to federal-court decisions are contrary to Texas law, cite lower-court precedent to argue that the ’to allay previous concerns
(citations omitted) (alteration in ″ members’ a partnership was an entity or an aggregate of its confusion as to whether that stemmed from 610, 617 (5th Cir. 2010) TRPA was passed the ″ ’lean[ed] heavily toward the entity idea,’ Jones, 161 B.R. 180, 183 (Bankr. N.D. Tex. 1993) Under the entity theory of partnerships, it is ″ of judgment against the firm, at the earliest); sued for trademark infringement accrued on entry logical that a partner has no liability until the ( In re to recover against partners of law firm successfully (holding a cause of action partnership liability is established. ″ ). The Partners the exercise of a right of action within a reasonable underlying purpose of limitations and instead to compel would be a purely formal exercise. ″ See Matthews ″ They exist would fail to serve the Constr. Co. v. Rosen, 796 S.W.2d 692, 694 (Tex. Our holding does not disturb the policy purposes (citation omitted). B The Partners argue that behind limitations. 1990) omitted). In the partnership context, these concerns (citation statute of limitations on the claim, American Star Moreno, 787 S.W.2d at 351 did exercise its contract right of action within a partnership. Here, by suing S & J within the ″ available. reasonable time. This action to collect to the underlying cause of action against a are addressed by the limitations period applying to defend while witnesses are judgment debt from the Partners does not require [*17] relitigation of that claim. At issue is only whether opportunity the judgment exists and whether the Partners were in fact partners at the time of injury alleged. Applied here, the limitations period running from the underlying claim ″ time so that the opposing party has a fair this suit imposes the automatic liability and undermines their
original)); Kao Holdings, L.P. v. Young, 261 S.W.3d 60, 63 (Tex. 2008) (stating the TUPA dueprocess rights. They point to Kao Holdings , in
See Mathew v. McCoy , 847 S.W.2d 397, 400 (Tex. App.—Houston [14th Dist.] 1993, no writ) (holding no judgment could be taken against partners who were not added and served within the limitations period running from the underlying claim); Partee v. Phelps , 840 790 S.W.2d 796, 800 (Tex. App.—Eastland 1990, writ denied) (holding statute governing service on partnership S.W.2d 512, 514-15 (Tex. App.—Dallas 1992, no writ) (holding res judicata barred suit against partners); Cothrum Drilling Co. v. Partee , does not authorize a (citations judgment against the partners who were not served before the claims against them were barred by the statute of limitations
omitted)).
which we said partners ″ should be both named instances to recognize a special accrual date
and served so that they are on notice of their where the policies underlying limitations outweigh
potential liability and will have an opportunity to any justification for doing so. See, e.g., Robinson contest ″ that liability. 261 S.W.3d at 64 . There, we v. Weaver, 550 S.W.2d 18, 22 (Tex. 1977) (declining overturned a judgment against a partner who had to apply the discovery rule to cases involving
not been named or served at all, either in the [*18] medical misdiagnosis). This is not such an
original suit against the partnership or in a separate instance.
suit. Id. at 65 . In doing so, we simply applied the Similarly, our holding avoids the injustice of a TRPA’s rule that a judgment against a partner shielding himself from liability through partnership is not by itself a judgment against a limitations where their policy purposes are not partner. Id. at 63-64 . The Partners’ liability is not served. See Matthews Constr., 796 S.W.2d at 694 automatic—this action naming them personally is (refusing to apply limitations where doing so required to establish it. They have the same ″ would effectively permit the corporate form to be
opportunity to contest their liability as they would used as a ’cloak for fraud’ ″ (citation omitted));
have had were they sued within the underlying Moreno, 787 S.W.2d at 351 ( ″ [Courts] have
limitations period. consciously sought to apply [limitations] with due More generally, the Partners were on notice of regard to the underlying statutory policy of repose, their potential liability when they agreed to form without, however, permitting unnecessary and do business as a partnership. The individual injustices. ″ (quoting Fernandi, 173
partnership form has built-in mechanisms to A.2d at 285 ) (other citations omitted)). A provide further notice of any impending liability. party doing business with a partnership does so First, each partner has a right to manage and knowing that if the partnership fails on its conduct partnership business. T EX . B US . O RGS obligations, relief is not wholly subject to the C ODE § 152.203(a) . When a partnership is sued, adequacy of the partnership assets. Conversely, the litigation presumably becomes part of that individuals who choose the partnership form as business. Second, each partner owes to the others the vehicle for their enterprise do so knowing that a duty of care. Id . § 152.204(a)(2) . When a their personal assets are on the line. Equity partnership is served with a lawsuit, that duty may demands we leave these expectations undisturbed require the partner served to apprise the other where a plaintiff proceeds as the law allows. partners. See Zinda v. McCann St., Ltd., 178 * * * S.W.3d 883, 890 (Tex. App.—Texarkana 2005, pet. denied) ( Partners have a duty to one another to The Legislature has gone to great lengths to make full disclosure of all matters affecting the address enforcement of a partnership debt against
partnership . . . . (citations omitted)). Third, a partner. The court of appeals did not see in the
partners can agree [*19] to provide notice of TRPA’s scheme legislative intent to supersede our
pending litigation to one another in their more general limitations jurisprudence. We do,
partnership agreement. See T EX . B US . O RGS . C ODE § ( 152.002 [A] partnership agreement governs the relations of the partners and between the partners and that intent spurs our determination today. American Star’s suit against the Partners. Accordingly, we hold that limitations does not bar [5] We
and the partnership. ). Though the Partners would reverse the court of appeals’ judgment and remand
have us presume our holding causes them harm, the case to the trial court for further proceedings
we are not persuaded. We have declined in some consistent with this opinion.
The Partners argue that [t]olling or any other basis to suspend the running of limitations was not presented to the trial court and
cannot serve as grounds for reversal. American Star’s argument at all stages concerns when limitations began , however, not that they
Jeffrey V. Brown OPINION DELIVERED: February 27, 2015
Justice
were tolled or suspended. Deferring accrual and thus delaying the commencement of the limitations period is distinct from
suspending or tolling the running of limitations once the period has begun. S.V ., 933 S.W.2d at 4. Our holding today does the former. 22.225(c) ;
[3] Plaintiff is entitled to immediately return to work Tex. Dep’t of Parks & with no loss of seniority or benefits, (2) Plaintiff Wildlife v. Miranda, 133 S.W.3d 217, 223, 47 Tex. does not need to perform any tests as a condition Sup. Ct. J. 386 (Tex. 2004) ; compare 97 S.W.3d at to returning to work, and (3) Plaintiff [**5] does 302 , and Brazos Transit Dist. v. Lozano, 72 not need to apply for re-employment. On the S.W.3d 442, 445 (Tex. App.-Beaumont 2002, no same day, the trial court granted Thomas’s motion pet.) (dismissing interlocutory appeals from denials for partial summary judgment in part and of motions for summary judgment challenging dismissed Long’s request for mandamus relief. subject matter jurisdiction for lack of jurisdiction), The court also entered an order identifying Long’s with Bexar County v. Gant, 70 S.W.3d 289, 291-92 claims for retaliation, attorney’s fees, and back (Tex. App.-San Antonio 2002, pet. denied) , and pay as the only remaining claims before the court. Sw. Tex. State Univ. v. Enriquez, 971 S.W.2d 684, Thomas filed a notice of an interlocutory appeal 685 (Tex. App.-Austin 1998, pet. denied) , to challenge the court’s denial of his Plea to the abrogated on other grounds by Kerrville State Jurisdiction signed by [the trial court] on March 4, Hosp. v. Fernandez, 28 S.W.3d 1, 6, 43 Tex. Sup. 2002. ″ Ct. J. 1036 (Tex. 2000) (assuming jurisdiction
[3] The Legislature amended section 22.001 of the Texas Government Code, effective September 1, 2003. Act of June 2, 2003, 78th Leg., R.S., Ch. 204, § 1.04, 2003 Tex. Gen. Laws 847, 849-50 (codified as section 22.001(e) of the Texas Government Code). The amendment, which applies to actions filed on or after September 1, 2003 and therefore does not govern our jurisdiction in this case, provides that one court holds differently from another when there is inconsistency in their respective decisions that should be clarified to remove unnecessary uncertainty in the law and unfairness to litigants. The Legislature amended section 22.225 to add a similar provision. Act of June 2, 2003, 78th Leg., R.S. Ch. 204, § 1.02, 2003 Tex. Gen. Laws 847, 848-49 (codified as section 22.225(e) of the Texas Government Code).
and his assets.
[2] Id . § 152.306(b)(2)(C) . The undoubtedly an aggregate-theory feature, is a defining characteristic of the partnership form and enforcement of a partner’s liability is considered
[1] The parties disagree whether the TRPA or the recodified version applies to this case. There is no substantive difference in the provisions we apply today. Though we refer to the law applied as TRPA, we cite to the codified version for practicality’s sake.
[2] The TRPA allows a creditor to forego this satisfaction period if (1) the partnership is in bankruptcy, (2) the parties have agreed to waive the period, (3) a court orders so after finding that the partnership assets are clearly insufficient or that the satisfaction period