California Insurance Guarantee Association, Oklahoma Property and Casualty Insurance Guaranty Association, and Texas Property and Casualty Insurance Guaranty Association v. Hill Brothers Transportation, Inc. ( 2015 )

ACCEPTED
03-15-00314-CV
8219871
THIRD COURT OF APPEALS
AUSTIN, TEXAS
STONE LOUGHLIN & SWANSON, LLP P.O. BOX 30111 12/14/2015 11:47:51 AM
JEFFREY D. KYLE
ATTORNEYS AT LAW AUSTIN, TEXAS 78755
CLERK
512.343.1300
512.343.1385 FAX
DAN PRICE
DPRICE@SLSAUSTIN.COM
WWW.SLSAUSTIN.COM
FILED IN
3rd COURT OF APPEALS
AUSTIN, TEXAS
December 14, 2015
12/14/2015 11:47:51 AM
JEFFREY D. KYLE
Clerk
Via E-Filing
Jeffrey D. Kyle, Clerk
Court of Appeals
Third District of Texas
P.O. Box 12547
Austin, Texas 78711-2547
Re: California Insurance Guarantee Association, Oklahoma Property and Casualty Insurance
Guaranty Association and Texas Property and Casualty Insurance Guaranty Association v.
Hill Brothers Transportation, Inc., Cause No. 03-15-00314-CV, in the 3rd Court of Appeals
Texas, Trial Court No. D-1-GN-09-001010; SLS No. 21744
AMENDED LETTER BRIEF
(adding Certificate of Compliance with TEX. R. APP. P. 9.4)
Dear Mr. Kyle:
During oral argument on December 2, 2015, the Court presented the parties with the question of
whether Hill Bros.’ cross-point of appeal is a jurisdictional issue that must be addressed by the
Court, irrespective of whether the issue was the proper subject of appeal of the trial court’s summary
judgment. This letter brief is provided in response to the Court’s request.
Applying a liberal reading to the arguments presented in support of the cross-appeal, the Guaranty
Associations acknowledge Hill Bros. raised as an issue whether the Guaranty Associations have
standing to sue for breach of contract.
Issue Presented on Cross-Appeal
Hill Bros.’ issue on cross-appeal alleges “the Guaranty Associations are not proper parties to sue for
breach of contract.”1
1
Appellee’s Br. at 17.
OFFICES LOCATED AT 3508 FAR WEST BOULEVARD, SUITE 200, AUSTIN, TEXAS 78731
STONE LOUGHLIN & SWANSON, LLP
ATTORNEYS AT LAW
Standing is a Jurisdictional Question
Whether a plaintiff has standing is an issue of subject matter jurisdiction that may be raised for the
first time on appeal. Tex. Ass’n of Business v. Tex. Air Control Bd., 852 S.W.2d 440, 445-46 (Tex.
1993).
Standing in Breach of Contract Cases
“The general test for standing in Texas requires that there ‘(a) shall be a real controversy between
the parties, which (b) will be actually determined by the judicial declaration sought.’” Id. (quoting
Bd. of Water Eng’rs v. City of San Antonio, 283 S.W.2d 722, 724 (Tex. 1955)). A justiciable
controversy exists “only if there is a real and substantial controversy involving a genuine conflict of
tangible interests and not merely a theoretical dispute.” Basic Energy Servs., Inc. v. D-S-B Props.,
Inc., 367 S.W.3d 254, 260 (Tex. App.–Tyler 2011) (citing Bonham State Bank v. Beadle, 907
S.W.2d 465, 467 (Tex. 1995)).
In breach of contract cases, this Court has determined that the issue of standing is raised when a
defendant alleges a plaintiff is: (1) not a party to the contract, Hamilton v. Washington, No. 03-11-
00594-CV, 2014 WL 7458988, *9 (Tex. App.–Austin Dec. 23, 2014); (2) not in privity of contract
with the defendant, First-Citizens Bank & Trust Co. v. Greater Austin Telecommunications Network,
318 S.W3d 560, 566 (Tex. App.–Austin 2010); and (3) not a third party beneficiary to the contract,
Hamilton, 2014 WL 7458988 at *9.
The Guaranty Associations Acknowledge Hill Bros. Raised an Issue of Standing
In Appellee’s Brief, Hill Bros. submits the Guaranty Associations are not proper parties to sue for
breach of contract because: (1) they do not stand in the shoes of Legion for purposes of enforcing
the Policy,2 (2) they are not third-party beneficiaries of the Policy,3 (3) they lack statutory authority
to sue Hill Bros.,4 and (4) the cause of action the Guaranty Associations allege is owned by the
Legion Liquidator.5 At oral argument Hill Bros. also alleged the Guaranty Associations cannot sue
because they lack privity of contract with Hill Bros.
Applying a liberal reading to these arguments, the basic premise asserted is that the Guaranty
Associations do not have standing to sue to enforce the Policy because neither the Policy nor any
statute nor any order grants the Guaranty Associations Legion’s the right to sue Hill Bros. to enforce
the Policy. In making these arguments, Hill Bros. specifically raised allegations the Court previously
defined as issues of standing (e.g., lack of privity, lack of third party beneficiary status). Further, in
2
Id. Unless otherwise specified, as used herein, capitalized terms shall having the meaning ascribed in
Appellee’s Brief.
3
Id.
4
Id. at 18.
5
Id.
2
STONE LOUGHLIN & SWANSON, LLP
ATTORNEYS AT LAW
alleging the breach of contract claim is owned by Legion, Hill Bros. alleges Legion suffered the
injury of Hill Bros.’ breach and, therefore, the Guaranty Associations lack a justiciable interest in
the controversy.
Because the Court has previously determined similar allegations to those presented by Hill Bros. on
cross-appeal raised issues of standing, and because Hill Bros. asserts the Guaranty Associations lack
a justiciable interest in the litigation, the Guaranty Associations acknowledge the cross-appeal raised
the jurisdictional issue of standing.6
Conclusion
While Hill Bros.’ cross-appeal raises issues of standing, for the reasons stated in Appellants’ Reply
Brief and as presented at oral argument, the Guaranty Associations respectfully submit that the cross-
appeal lacks merit.
The Guaranty Associations unquestionably have standing and are proper parties to sue for breach
of contract in this case.
Very truly yours,
STONE LOUGHLIN & SWANSON, LLP
Dan Price
DP/rer
G:\SLS\21744\Appeal\Drafts\2015-12-14 GAs' Amended Letter Brief on Authority to Sue (final).wpd
Certificate of Compliance
Relying on the word count program of the computer program used to prepare Appellants’
Amended Letter Brief, the total number of words in this document, excluding words that are not to
be counted under TEX. R. APP. P. 9.4(i)(1), is 783.
Dan Price
6
Please note, although the Guaranty Associations acknowledge the issue on cross-appeal raised the issue
of standing, nothing herein should be construed by the Court as the Guaranty Associations’ agreement to or endorsement of
any argument made by Hill Bros. in support of its cross-appellate issue.
3
STONE LOUGHLIN & SWANSON, LLP
ATTORNEYS AT LAW
cc: Via E-Filing
Marnie McCormick
Adrian Ciechanowicz
DUGGINS WREN MANN & ROMERO, LLP
P.O. Box 1149
Austin, Texas 78767-1149
4