Carlos Peniche v. Texas Department of Public Safety & Doug Walker

• Court: Court of Appeals of Texas
• Decided: April 27, 2023
• Docket: 01-21-00675-CV
• Status: Published

Opinion

Opinion issued April 27, 2023

In The

Court of Appeals For The

First District of Texas ———————————— NO. 01-21-00675-CV ——————————— CARLOS A. PENICHE, Appellant V. TEXAS DEPARTMENT OF PUBLIC SAFETY, Appellee

On Appeal from the 157th District Court Harris County, Texas Trial Court Case No. 2019-19445

MEMORANDUM OPINION

The Texas Department of Public Safety moved to dismiss Carlos A. Peniche’s

lawsuit under Rule 91a of the Texas Rules of Civil Procedure. The trial court granted

the Department’s motion and dismissed the suit. Peniche appeals. We affirm. BACKGROUND

Peniche sued the Department of Public Safety for declaratory relief under the

Declaratory Judgments Act. See TEX. CIV. PRAC. & REM. CODE §§ 37.001–.011.

In his live pleading, Peniche alleges he is a lawyer with a practice including a

number of property-damage lawsuits against uninsured motorists. In these suits,

Peniche is retained by insurance companies who have paid for the damages that their

own insureds suffered in automobile accidents caused by uninsured motorists. On

behalf of the insurance companies, Peniche seeks to recover the amounts they paid

from the uninsured motorists who were at fault.

Peniche, in turn, only recovers the attorney’s fees he is due when he collects

the amounts uninsured motorists owe the insurance companies. But according to

Peniche, collecting from uninsured motorists is difficult due to the debtor-friendly

nature of Texas law. Thus, Peniche tries to use the license-suspension provisions of

the Texas Motor Vehicle Safety Responsibility Act as a lever for collecting

judgments rendered against uninsured motorists.

Under the Act, Peniche alleges, motorists must maintain a certain minimum

amount of liability insurance. If an uninsured motorist is in an automobile accident

resulting in property damage and does not satisfy a corresponding final judgment

within 60 days, the Act requires the Department to suspend his license and vehicle

registration on receipt of a certified copy of the judgment.

2 Peniche alleges the Department and the employee it has put in charge of

suspending licenses “have adopted policies which make getting relief under the

statute on the part of a judgment creditor unduly and unreasonably cumbersome,

costly, and restrictive and outside the scope of the statute.” In particular, Peniche

complains about the four submission requirements that the Department imposes on

judgment creditors before it will suspend a license: (1) a certified copy of the

judgment; (2) a notice of unsatisfied judgment; (3) a transcript of civil proceedings

or certificate of no appeal; and (4) a copy of the crash report.

Peniche alleges that the Act does not provide that a certified copy of the

judgment is the sole or exclusive means of proving the existence of a judgment.

Thus, he seeks a declaration that the Act does not require a judgment creditor to

submit a certified copy of the judgment, provided that a lawyer submits an

uncertified copy accompanied by an affidavit or declaration.

Peniche alleges that the Department’s form for providing notice of an

unsatisfied judgment limits qualifying accidents to those occurring on public

highways but that the Act imposes no such public-highway requirement. Thus, he

seeks a declaration that the Act does not require an accident to have occurred on a

public highway to qualify for license suspension.

Peniche alleges that the Department’s form for a transcript of civil

proceedings or certificate of no appeal is too troublesome to complete because doing

3 so requires the timely cooperation of court employees. Thus, he seeks a declaration

that his own form, which he created to replace the one required by the Department,

satisfies the Act and must be accepted by the Department.

Peniche alleges that the Act does not require the submission of the crash

report, also known as an accident or police report. Thus, he seeks a declaration that

the Act does not require a judgment creditor to submit this report.1

The Department moved to dismiss Peniche’s suit under Rule 91a of the Texas

Rules of Civil Procedure on the basis that his claims are barred by sovereign

immunity. The Department argued that Peniche did not challenge the Act itself, but

rather challenged the Department’s rules implementing the Act. Because the

Declaratory Judgments Act does not waive sovereign immunity when a party merely

seeks a declaration of his or her rights under the law, the Department reasoned,

Peniche’s suit is barred by sovereign immunity.

The trial court granted the Department’s Rule 91a motion to dismiss.

1 Peniche also alleges an employee of the Department violated the Act by enforcing the Department’s four submission requirements. Our court resolved these ultra vires claims against Peniche in a separate appeal. See Wilker v. Peniche, No. 01-20-00596-CV, 2021 WL 4995513, at *2–6 (Tex. App.—Houston [1st Dist.] Oct. 28, 2021, no pet.) (mem. op.) (rejecting ultra vires claims against employee and dismissing suit against employee for lack of subject-matter jurisdiction). Accordingly, Peniche’s allegations against the Department’s employee are not at issue in the present appeal.

4 DISCUSSION

Peniche appeals. He contends the trial court erred in granting the

Department’s motion to dismiss because sovereign immunity does not bar his suit.

Standard of Review

Whether a defendant is entitled to dismissal under the facts alleged by the

plaintiff is a question of law. In re Farmers Tex. Cty. Mut. Ins. Co., 621 S.W.3d 261,

266 (Tex. 2021). We therefore review de novo the merits of a trial court’s ruling on

a motion to dismiss under Rule 91a of the Texas Rules of Civil Procedure. Id.

Likewise, whether the doctrine of sovereign immunity deprives the trial court of

subject-matter jurisdiction and therefore bars a lawsuit is a question of law that we

review de novo. Tex. S. Univ. v. Villarreal, 620 S.W.3d 899, 904–05 (Tex. 2021).

Applicable Law

The Department of Public Safety is a state agency. TEX. GOV’T CODE

§ 411.002(a). State agencies have sovereign immunity, which deprives a trial court

of subject-matter jurisdiction, unless the legislature has waived their immunity. Tex.

Parks & Wildlife Dep’t v. Sawyer Tr., 354 S.W.3d 384, 388 (Tex. 2011).

The Declaratory Judgments Act does not include a general waiver of

sovereign immunity. Town of Shady Shores v. Swanson, 590 S.W.3d 544, 552 (Tex.

2019). The Act does contain a limited waiver of sovereign immunity regarding

challenges to the validity of franchises, ordinances, and statutes. See TEX. CIV. PRAC.

5 & REM. CODE § 37.006(b) (providing that municipality must be made party to suit

challenging validity of municipal ordinance or franchise and attorney general must

be served with copy of suit challenging constitutionality of statute, ordinance, or

franchise); Swanson, 590 S.W.3d at 552 (noting Declaratory Judgments Act includes

only limited waiver for challenges to validity of ordinance or statute). But this waiver

of sovereign immunity is a narrow one, and it does not allow a litigant to sue the

state or its agencies seeking a declaration of his or her rights under a statute or other

law or an interpretation of a statute or other law in general. Tex. Dep’t of Transp. v.

Sefzik, 355 S.W.3d 618, 621 (Tex. 2011) (per curiam); Fallon v. Univ. of Tex. MD

Anderson Cancer Ctr., 586 S.W.3d 37, 56 (Tex. App.—Houston [1st Dist.] 2019, no

pet.). Excepting challenges to the validity of franchises, ordinances, and statutes,

suits requesting declaratory relief against the state or its agencies are barred—unless

the legislature has waived their sovereign immunity for the particular claim at issue

in a statute other than the Declaratory Judgments Act. Swanson, 590 S.W.3d at 553;

see also Sefzik, 355 S.W.3d at 621 (observing that while sovereign immunity

originated to protect the public fisc from unforeseen expenditures, doctrine has

expanded to shield the state from other forms of relief, including declaratory relief).2

2 Sovereign immunity does not bar a litigant from bringing suit against a state official seeking a declaration that the official is acting outside his authority or in conflict with the law. Hall v. McRaven, 508 S.W.3d 232, 238 (Tex. 2017). But claims of this kind— known as ultra vires claims—must be asserted against the state official in his official capacity, not against the state or state agency itself. Id. at 238–39. As noted in the 6 Analysis

Peniche seeks various declarations either interpreting the Texas Motor

Vehicle Safety Responsibility Act in general or his rights under it in particular.

Specifically, he seeks declarations that the Act’s license-suspension provisions do

not require submission of a certified copy of a court judgment against an uninsured

motorist, apply solely to accidents occurring on public highways, or require

submission of a crash report. In addition, Peniche seeks a declaration that his own

substitute form for the Department’s transcript of civil proceedings or certificate of

no appeal satisfies the Act and therefore must be accepted by the Department.

None of Peniche’s claims challenge the validity of the license-suspension

provisions of the Texas Motor Vehicle Safety Responsibility Act or any other

provisions of the Act. The sole basis for subject-matter jurisdiction asserted by

Peniche is the Declaratory Judgments Act, which only waives sovereign immunity

when a litigant challenges the validity of a franchise, ordinance, or statute. Swanson,

590 S.W.3d at 552. Therefore, unless some other statutory waiver of sovereign

immunity exists and applies, there is no subject-matter jurisdiction to hear his claims.

See id. at 553. Peniche has not invoked any other statutory waiver of immunity. Nor

are we aware of any waiver that would have allowed the trial court to proceed.

previous footnote, our court in a separate appeal rejected Peniche’s ultra vires claims against one of the Department’s employees. See Wilker, 2021 WL 4995513, at *2–6. 7 It is conceivable that some of Peniche’s claims could be reframed as

challenges of the validity of the Department’s rules implementing the Texas Motor

Vehicle Safety Responsibility Act, rather than challenges seeking an interpretation

of the Act. For example, Peniche’s claim that the Act does not contain a public-

highway requirement could be construed as a challenge to the validity of the

Department’s form for providing notice of an unsatisfied judgment, which he alleges

imposes this requirement. But the Declaratory Judgments Act, which refers only to

franchises, ordinances, and statutes in its waiver provision, does not waive sovereign

immunity for challenges of agency rules. See, e.g., Machete’s Chop Shop v. Tex.

Film Comm’n, 483 S.W.3d 272, 285 (Tex. App.—Austin 2016, no pet.) (holding

that challenges of agency rules fall outside of Declaratory Judgments Act).

Another statute does waive sovereign immunity with respect to challenges of

the validity or applicability of an agency rule when “it is alleged that the rule or its

threatened application interferes with or impairs, or threatens to interfere with or

impair, a legal right or privilege of the plaintiff.” GOV’T § 2001.038(a). But that

statute also contains an exclusive-jurisdiction provision specifying that an action

seeking this kind of declaratory relief “may be brought only in a Travis County

district court.” Id. § 2001.038(b); see also Gordon v. Jones, 196 S.W.3d 376, 383 &

n.5 (Tex. App.—Houston [1st Dist.] 2006, no pet.) (characterizing § 2001.038(b) as

being jurisdictional in nature). Thus, even if one or more of Peniche’s claims were

8 reframed as a challenge of the Department’s rules, the trial court below still would

have lacked subject-matter jurisdiction to hear these claims.

We hold the trial court did not err in dismissing Peniche’s claims on the basis

that it lacked subject-matter jurisdiction because the legislature did not waive the

Department’s sovereign immunity. As the trial court lacked subject-matter

jurisdiction to hear Peniche’s claims altogether, we need not consider the parties’

additional arguments as to whether Peniche has standing to assert these claims. See

TEX. R. APP. P. 47.1 (court of appeals must write opinion that is as brief as

practicable that addresses every issue raised and necessary to final disposition).

CONCLUSION

We affirm the trial court’s judgment.

Gordon Goodman Justice

Panel consists of Chief Justice Adams and Justices Kelly and Goodman.