David Penny v. El Patio, LLC D/B/A El Patio Motel

Opinion

ACCEPTED 03-11-00420-CV 4949300 THIRD COURT OF APPEALS AUSTIN, TEXAS 4/20/2015 11:22:15 AM JEFFREY D. KYLE CLERK

COURT OF APPEALS . THIRD DISTRICT OF TEXAS AUSTIN, TEXAS FILED IN 3rd COURT OF APPEALS AUSTIN, TEXAS 4/20/2015 11:22:15 AM NO. 03-11-00420-CV JEFFREY D. KYLE Clerk

DAVID PENNY,

Appellant,

vs.

EL PATIO, LLC d/b/a EL PATIO MOTEL

Appellee.

LEITER BRIEF OF APPELLEE EL PATIO, LLC d/b/a EL PATIO MOTEL

Stephen H. Nickey State Bar ID No. 15014225 sn ickey@n ickeylaw .com The Law Offices of Stephen H. Nickey, P.C. 1201 North Mesa Suite B EIPaso, Texas79902 (915) 351-6900 (915) 351-6901 fax Standard of Review

At oral argument held in San Angelo, Texas, Chief Justice Rose asked the

parties to brief whether the standard of review was De Novo or abuse of

discretion. The correct standard of review is abuse of discretion. The Texas

Supreme Court reviewed a trial court's ruling on a motion to show authority

applying an abuse of discretion standard in Urbish v. 127th Judicial Dist. Court,

708 S.W.2d 429 (Tex. 1986). The Dallas Court of Appeals followed Urbish and

reviewed a Rule 12 motion under abuse of discretion in R.H. v. Smith, 339 S.W.3d

756 (Tex.App.-Dallas 2011, no pet.). One year later, the San Antonio Court of

Appeals followed Urbish and Smith and applied abuse of discretion to its review of

a trial court's ruling on a motion to show authority. See In re Guardianship of

Benavides, 403 S.W3d 370, 373 (Tex.App.-San Antonio 2013, no pet.). Even

more recently, the Houston and the Corpus Christi Courts of Appeals have

followed Urbish, Smith and Benavides and adopted an abuse of discretion

standard for reviewing a ruling on a Rule 12 motion. See In re Old Am. County

Mutual Fire Ins. Co., No. 13-13-00644-CV (Tex.App.-Corpus Christi April 23, 2014,

orig. proceeding); Tanner v. Black, No. 01-13-01059-CV, 2015 WL 1122945

(Tex.App.-Houston [1st Dist.] March 12, 2015, no pet.). Abuse of discretion is the

correct standard of review, among other things, because ''when making a

1 determination under rule 12, trial courts consider and weigh the evidence

presented." Benavides, 403 S.W.3d at 376 (citing Smith, 339 S.W.3d at 762-63}.

As such, to succeed on appeal, the appellant is ((required to establish that the trial

court could have reached only one decision on the motion to show authority."

/d. at 377.

There is contrary but reconcilable authority. The Austin Court of Appeals

applied a de novo standard of review to a ruling on a Rule 12 motion in Metz v.

Lake LBJ Municipal Utility Dist., No. 13-01-00312-CV, 2002 WL 31476887

(Tex.App.-Austin Nov. 7, 2002, no pet.}. Without considering Urbish or its

progeny, the Court stated that, ((The district court's finding that _an attorney lacks

authority to file or maintain a suit is a conclusion of law ... ," and, u[a]s a conclusion

of law, we review de novo the district court's findings." /d. at *3. The Court cited

to State v. Evangelical Lutheran Good Samaritan Society, 981 S.W.2d 509

(Tex.App.-Austin 1998, no pet.} for this proposition, which in turn relies on Golf

Reg'/ Educ. Television v. University of Houston, 746 S.W.2d 803 (Tex.App.-

Houston [14th Dist.] 1988, writ denied}. However, neither of the three cases

addressed Urbish and they are therefore contrary to Texas Supreme Court

precedent. Further, the holdings in Metz, Evangelical and Golf can be reconciled

with Urbish, Smith and Benavides. For example, the court in Metz found that the

2 attorney had failed to appear at the hearing on the motion to show authority and

therefore did not meet his burden under Rule 12. Metz, 2002 WL 3147688 at *4.

The court noted that the trial court had taken judicial notice of evidence

presented in the underlying proceeding, but the court did not conduct a de novo

review of such evidence. /d. The court in Evangelical applied a de novo standard

of review, because the Rule 12 motion in that case turned on purely legal

question. The question before the court was whether the Texas Attorney General

had the statutory authority to enforce Chapter 242 of the Texas Health and Safety

Code. See Evangelical, 981 S.W.2d at 511-12. De novo review of purely legal

questions is consistent with abuse of discretion review. See Old American, 2014

WL 1633098 at *6 ("A trial court also abuses its discretion by failing to analyze or

apply the law correctly.") (citing Lliff v. Lliff, 339 S. W.3d 74 (Tex. 2011)). Finally,

the Court in Gulf did not address the standard of review in a Rule 12 motion and

instead gave deference to the fact findings of the trial court similar to an abuse of

discretion analysis. See Gulf, 746 S.W.2d at 808-09 (reviewing the evidence

before the trial court and concluding that "[w]ithout an exhaustive analysis, we

find support for the trial court's conclusions."). As such, the correct standard of

review of a trial court's ruling on a Rule 12 motion is abuse of discretion.

3 Evidence attached to El Patio's Response to Motion to Show Authority

The Court asked during oral argument whether El Patio had filed any

evidence with its original response to the motion to show authority. Counsel

advised the Justices that he was not sure at oral argument and in an abundance of

caution, El Patio hereby directs to the Court to the record citations for such

evidence. El Patio filed its Response on November 1, 2010. CR 700-709. El Patio

attached to its Response the affidavit of Steven Hyde (CR 710-718), which in turn

included multiple exhibits, such as the Operating Agreement (CR 719-734} and the

three unanimous consents (CR 754-765} .

Respectfully Submitted, The Law Offices of Stephen H. Nickey P.C. 1201 N. Mesa Suite B El Paso, Texas 79902 (915} 351-6900 (915} 35106901 snickey@ nickeylaw.com

/s/ Stephen H. Nickey Attorneys for Appellee, El Patio, LLC d/b/a El Patio Motel

CERTIFICATE OF SERVICE

I, Stephen H. Nickey, hereby certify that on this 20th day of April, 2015, the foregoing letter brief was electronically filed with the Clerk of the Court using the e-filing system provider, which will provide notice to lead counsel for Appellant, Greg Gossett, Esq. (gregg@ghtxlaw.com) and all other counsel of record. /sf Stephen H. Nickey Stephen H. Nickey