the City of Friendswood and Kevin Holland v. Paul and Carolyn Horn, Mike and Lucy Stacy, Pete and Judy Garcia and Janice Frankie ( 2016 )

Opinion issued February 11, 2016
In The
Court of Appeals
For The
First District of Texas
————————————
NO. 01-15-00378-CV
———————————
AC INTERESTS L.P., FORMERLY AMERICAN COATINGS, L.P.,
Appellant
V.
TEXAS COMMISSION ON ENVIRONMENTAL QUALITY, Appellee
On Appeal from the 345th District Court
Travis County, Texas1
Trial Court Case No. D-1-GN-14-005160
1
The Texas Supreme Court transferred this appeal from the Court of Appeals for the
Third District of Texas. Misc. Docket No. 15-9054 (Tex. March 24, 2015); see also
TEX. GOV’T CODE ANN. § 73.001 (Vernon 2005) (authorizing transfer of cases).
Because the Austin Court of Appeals has ruled on the legal issues before this Court,
we apply the precedent of that court. See TEX. R. APP. P. 41.3 (requiring reviewing
court to “decide the case in accordance with the precedent of the transferor court”).
We do not separately determine if precedent from this Court would result in the
same outcome. See id. (permitting reviewing courts to address whether outcome
would be different under precedent of reviewing court).
MEMORANDUM OPINION
AC Interests L.P. filed suit against the Texas Commission on Environmental
Quality (the “TCEQ”). The TCEQ filed a motion to dismiss based on AC Interest’s
failure to serve it with process within 30 days. The trial court granted the motion.
On appeal, AC Interests argues the trial court abused its discretion by granting the
motion to dismiss.
We affirm.
Background
AC Interests applied for certification of emission credits with the Office of
Air division of the TCEQ. AC Interests alleged that the TCEQ denied its application.
AC Interests filed suit against the TCEQ on December 10, 2014. Forty-eight days
later, the TCEQ filed a motion to dismiss, alleging that AC Interests was required to
serve it within 30 days of filing suit and that, as of that date, it has not been served
with process. Ten days later, AC Interests served the TCEQ with process. In its
response to the motion, AC Interests asserted various reasons for why its failure to
serve the TCEQ with process should not result in dismissal. The trial court granted
the dismissal.
2
Rule 91a Motion to Dismiss
This appeal concerns whether the trial court erred by dismissing AC
Interests’s claim against the TCEQ. The TCEQ styled its motion as a Rule 91a
motion to dismiss, and both parties refer to it as such. See TEX. R. CIV. P. 91a. The
motion, however, is not governed by Rule 91a.
Under Rule 91a, “a party may move to dismiss a cause of action on the
grounds that it has no basis in law or fact.” TEX. R. CIV. P. 91a.1. This determination
is made entirely on the pleadings, along with permitted exhibits attached to the
pleadings, and no further evidence is considered. TEX. R. CIV. P. 91a.6. The
TCEQ’s motion argued that AC Interests had failed to serve it with process within
the permissible time required by law after suit had been filed. This is not a matter
that can be resolved by looking only at the allegations in the pleadings.
It is a general principle of law that courts consider a motion based on its
substance not its title. Sierra Club v. Tex. Comm’n on Envtl. Quality, 188 S.W.3d
220, 222 (Tex. App.—Austin 2005, no pet.). The Austin Court of Appeals has held
that failure to serve the TCEQ within the prescribed time for claims containing
deadlines for service can support a motion to dismiss. See TJFA, L.P. v. Tex.
Comm’n on Envtl. Quality, 368 S.W.3d 727, 737–38 (Tex. App.—Austin 2012, pet.
denied). Accordingly, we treat the TCEQ’s motion as a more general motion to
dismiss and review whether granting the motion was proper.
3
Motion to Dismiss
In its sole issue on appeal, AC Interests argues the trial court abused its
discretion by granting the motion to dismiss.
A. Standard of Review
Typically, motions to dismiss are reviewed for an abuse of discretion. See
Young v. Valt.X Holdings, Inc., 336 S.W.3d 258, 261 (Tex. App.—Austin 2010, pet.
dism’d). In this case, however, the parties’ arguments center around the meaning of
the applicable statutes. “Statutory construction is a legal question we review de
novo.” City of Rockwall v. Hughes, 246 S.W.3d 621, 625 (Tex. 2008). Unless terms
are specifically defined by the legislature, we use the plain and common meaning to
the statute’s word. Id.
B. Analysis
AC Interests filed suit against the TCEQ on December 10, 2014. In the
petition, AC Interests alleged that it had sought certification of emission credits and
that the TCEQ’s Office of Air had wrongly denied the certification. AC Interests
asked the trial court to void the denial of the certification.
Forty-eight days after AC Interests filed suit, the TCEQ filed a motion to
dismiss, alleging that it had not been served with process within 30 days. It argued
that AC Interests was required by law to serve it with process within 30 days of filing
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suit. The TCEQ argued that, due to AC Interests’s failure to serve it with process,
the trial court was required to dismiss the suit against it.
In its response, AC Interests implicitly acknowledged that it had not formally
served the TCEQ with process within 30 days. 2 It argued dismissal was not proper
because, among other things, the TCEQ had actual knowledge of the suit, the Texas
Water Code did not require the TCEQ to be served within 30 days of suit, and it had
“good and sufficient cause” for delay.
The trial court granted the motion to dismiss. On appeal, AC Interests
reasserts the above-mentioned grounds for why failure to serve the TCEQ with
process within 30 days of suit does not require dismissal.
Section 382.032(c) of the Texas Clean Air Act requires, “Service of citation
on the [TCEQ] must be accomplished within 30 days after the date on which the
petition is filed.” TEX. HEALTH & SAFETY CODE ANN. § 382.032(c) (Vernon 2010).
In TJFA, the Austin Court of Appeals reviewed the effect of a similar provision in
the Solid Waste Disposal Act. 368 S.W.3d at 733–38. The plaintiff in that suit
opposed the expansion of a landfill near its property. Id. at 729. The TCEQ granted
the application for the expansion, and the plaintiff filed suit in a trial court. Id. The
plaintiff gave the TCEQ a copy of the petition but did not serve it with process until
2
The record reflects that the TCEQ was not served with process until February 6,
2015. This was 58 days after AC Interests filed suit.
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41 days after suit was filed. Id. The TCEQ filed a motion to dismiss based on the
failure to serve it with process within 30 days of process. Id. The trial court
dismissed the suit. Id.
The applicable provision of the Solid Waste Disposal Act requires, “Service
of citation [on the TCEQ] must be accomplished not later than the 30th day after the
date on which the petition is filed.” TEX. HEALTH & SAFETY CODE ANN.
§ 361.321(c) (Vernon 2010). The Austin Court of Appeals considered whether this
provision was mandatory, requiring dismissal if the provision was not satisfied.
TJFA, 368 S.W.3d at 733.
The court recognized, “Statutory provisions that ‘are included for the purpose
of promoting the proper, orderly and prompt conduct of business’ are not generally
construed as mandatory . . . particularly when the failure to comply will not
prejudice the rights of the interested parties.” Id. at 734 (quoting Chisholm v. Bewley
Mills, 287 S.W.2d 943, 945 (Tex. 1956)). Nevertheless, the court held that the
provision was mandatory. See id. at 735. The court reasoned that “the legislature’s
decision to provide an explicit deadline must be afforded some significance.” Id.
Typically, courts consider whether a plaintiff exercised due diligence in serving the
defendant. Id. By providing an explicit deadline, the legislature overrode this
typical analysis. Id.
6
The court gave even greater significance to the fact that the same statute
required suit to be filed within 30 days of the TCEQ’s ruling, which is a jurisdictional
requirement. Id. at 735–36 (citing HEALTH & SAFETY § 361.321(c)). Putting the
two together “is indicative of the importance that the legislature placed on the service
deadline.” Id. at 736. The court also considered it relevant that another subsection
within the same statute allowed consideration of explanations of failure to prosecute
the action within one year, while the subsection for service of citation deadline did
not. Id. at 736–37 (citing HEALTH & SAFETY § 361.321(d)). Finally, the Austin
court reasoned that, “[b]y coupling the right to judicial review with a requirement
that suits be filed and that service be executed within short deadlines, the legislature
has demonstrated its intent to promote the quick resolution of appeals of decisions
by the [TCEQ] and to promote the finality of the [TCEQ]’s actions.” Id. at 737.
All of the reasons supporting the Austin Court of Appeals’s decision in TJFA
are present here. The legislature’s variance of the usual due-diligence review in
serving the defendant must be afforded some significance. The provision requiring
service within 30 days is in the same statute requiring suit to be filed within 30 days
of the TCEQ’s ruling. HEALTH & SAFETY § 382.032(b), (c). There is also a
subsection allowing consideration of explanations of failure to “prosecute the action
within one year.” Id. § 382.032(d). The subsection for service of citation does not
have comparable language. See id. § 382.032(c).
7
AC Interests argues that this 30-day-service requirement does not apply to it
because it is not required under the Texas Water Code. See TEX. WATER CODE ANN.
§§ 5.351–.357 (Vernon 2008) (provisions concerning seeking judicial review of
actions of the TCEQ). AC Interests argues that the Water Code once contained a
30-day-service requirement but the Texas Legislature repealed it in 1971. Because
the Water Code predates the Clean Air Act, Appellant argues, “It follows that the
Legislature would again look to the Water Code for guidance when amending the
Clean Air Act and will remove the provision for 30 day service of citation.”
Regardless of any future amendments, the Texas Legislature has not removed the
requirement in the intervening 44 years.
AC Interests also argues that the Water Code is controlling because its
“original petition said this suit was being filed under the Tex[as] Water Code.” Its
petition contains two citations to the Water Code, both to the same statute. See
WATER § 5.351 (requiring suit challenging act or decision by TCEQ to be filed
within 30 days of act or decision). The remainder of the petition, however,
challenges the TCEQ’s denial of its application for certification for credits for air
pollutant emissions.
As AC Interests asserts, the Water Code contains the provisions establishing
and delegating authority to the TCEQ. See generally TEX. WATER CODE ANN.
§§ 5.001–.315 (Vernon 2008 & Supp. 2014). The Water Code contains a general
8
authority permitting judicial review of acts and decisions of the TCEQ. Id. § 5.351.
Even so, the Clean Air Act contains the authority for the TCEQ to regulate air
emissions. See generally TEX. HEALTH & SAFETY CODE ANN. §§ 382.001–.510
(Vernon 2010 & Supp. 2014). That act provides the specific authority permitting
judicial review of acts and decisions of the TCEQ. Id. § 382.032. Under this
authority, the TCEQ must be served with process within 30 days filing suit. Id.
§ 382.032(c). We must apply “the traditional statutory construction principle that
the more specific statute controls over the more general.” Horizon/CMS Healthcare
Corp. v. Auld, 34 S.W.3d 887, 901 (Tex. 2000). Because AC Interests sought
judicial review of matters specifically governed by the Clean Air Act, the specific
judicial review statute in that act controls over the general judicial review statute in
the Water Code. See id.
Next, AC Interests argues that it showed good and sufficient cause for citation
being more than 30 days. The 30-day-service provision does not have an exception
for good and sufficient cause, however. HEALTH & SAFETY § 382.032(c). This lack
of an exception formed part of the Austin Court of Appeals’s basis for holding that
the comparable provision in the Solid Waste Disposal Act was mandatory. TJFA,
368 S.W.3d at 736–37. Accordingly, whether AC Interests had good and sufficient
cause for the delay is not relevant to our analysis. See id.
9
We likewise find no relevance to AC Interests’s argument that the TCEQ had
actual knowledge of the suit. “Personal jurisdiction, a vital component of a valid
judgment, is dependent ‘upon citation issued and served in a manner provided for
by law.’ If service is invalid, it is ‘of no effect’ and cannot establish the trial court’s
jurisdiction over a party.” In re E.R., 385 S.W.3d 552, 563 (Tex. 2012) (internal
citations omitted). “Absent service, waiver, or citation, mere knowledge of a
pending suit does not place any duty on a defendant to act.” Wilson v. Dunn, 800
S.W.2d 833, 837 (Tex. 1990). AC Interests’s reliance on the Fifth Circuit’s rulings
in Curry does not bear on this analysis because Curry concerned application of
federal rules for service to requirements for state rules for equitable tolling of a
statute of limitations. See Curry v. Heard, 819 F.2d 130, 131 (5th Cir. 1987).
Finally, AC Interests argues that dismissal of its suit against the TCEQ denies
it a vested property right. As the TCEQ argues, this is not proven in the record.
Accordingly, even if this were a basis to avoid dismissal, AC Interests has failed to
establish its application.
Applying the precedent of the Austin Court of Appeals,3 we affirm the trial
court’s granting the motion to dismiss. We overrule AC Interests’s sole issue.
3
See TEX. R. APP. P. 41.3.
10
Conclusion
We affirm the judgment of the trial court.
Laura Carter Higley
Justice
Panel consists of Justices Higley, Huddle, and Lloyd.
11