Michael T. Willis, Francie Willis, Willis Hite Enterprises, Inc. and Urban Retreat of Houston, Inc. v. Dan Donnelly

Opinion

Appellant’s Motion for Rehearing Denied; Affirmed in Part, Reversed and Remanded in Part, and Supplemental Opinion on Rehearin

Appellant’s Motion for Rehearing Denied; Affirmed in Part, Reversed and Remanded in Part, and Supplemental Opinion on Rehearing filed October 30, 2003.

In The

Fourteenth Court of Appeals

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NO. 14-00-00569-CV

MICHAEL T. WILLIS, FRANCIE WILLIS, WILLIS HITE ENTERPRISES, INC.,

and URBAN RETREAT OF HOUSTON, INC., Appellants

V.

DAN DONNELLY, Appellee and Cross-Appellant

MICHAEL T. WILLIS, Cross-Appellee

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On Appeal from the 157th District Court

Harris County, Texas

Trial Court Cause No. 95-36693

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S U P P L E M E N T A L   O P I N I O N   O N   R E H E A R I N G

            Michael T. Willis, Francie Willis, Willis Hite Enterprises, Inc., and Urban Retreat of Houston, Inc., have filed a motion for rehearing and motion for rehearing en banc from our opinion.  While we change nothing in our opinion or disposition of the appeal, we supplement the opinion to address three issues raised in the motion for rehearing.  The motion for rehearing is denied.

                                                               Ratification

            In issue eight of their motion for rehearing, appellants contend ratification by Michael and Francie Willis must also conform to requirements of the statute of frauds because the Letter Agreement was subject to the statute of frauds.  This issue is raised for the first time in the motion for rehearing.  An assignment of error raised for the first time in a motion for rehearing is too late to be considered.  Lee v. Lee, 47 S.W.3d 767, 799 (Tex. App.—Houston [14th Dist.] 2001, pet. denied).  Originally, appellants argued in their ratification issue that a jury finding on both ratification and breach of contract was necessary as to Mike and Francie Willis.  They did not argue statute of frauds under their ratification issue.^[1]  The sole purpose of a motion for rehearing is to provide the court an opportunity to correct any errors on issues already presented.  Phifer v. Nacogdoches County Cent. Appraisal Dist., 45 S.W.3d 159, 166 (Tex. App.—Tyler 2000, pet. denied).  Because this issue is raised for the first time in appellant’s motion for rehearing, we do not address it.

                                                Standing Versus Capacity

            In issue seven of their motion for rehearing, appellants contend that Donnelly lacks standing to sue for Urban Retreat’s damages.  Appellants confuse “capacity,” which has been waived, with “standing,” which we addressed in our original opinion.

            “A plaintiff has standing when it is personally aggrieved, regardless of whether it is acting with legal authority.”  Nootsie, Ltd. v. Williamson County Appraisal Dist., 925 S.W.2d 659, 661 (Tex. 1996).  In contrast, “a party has capacity when it has the legal authority to act, regardless of whether it has a justiciable interest in the controversy.”  Id.  Standing is jurisdictional and cannot be waived, but capacity may be waived.  Tex. Ass’n of Bus. v. Tex. Air Control Bd., 852 S.W.2d 440, 446 (Tex. 1993).  Whether a stockholder may recover damages personally for a wrong done to the corporation is an argument about capacity—that is, whether the stockholder has legal authority.  Mackie v. Guthrie, 78 S.W.3d 462, 465-66 (Tex. App.—Tyler 2001, pet. denied).  It is improper for an appellant to couch such an argument in terms of standing.  Id. at 466.

            Further, to challenge capacity, a party must file a verified denial.  See Tex. R. Civ. P.  93(2); see also Pledger v. Schoellkopf, 762 S.W.2d 145, 146 (Tex. 1989).  If Rule 93 is not followed, the issue of capacity is waived on appeal.  Nootsie, 925 S.W.2d at 662.  In this case, appellants did not file a verified denial of Donnelly’s capacity to recover Urban Retreat’s damages.

                                             Remand of Limitations Issue

            In their tenth issue, appellants contend we must reverse and remand the limitations issue because we reversed and remanded breach of contract and damages questions.  Texas Rule of Appellate Procedure 44.1 permits an appellate court to reverse those portions of a matter in controversy that are affected by the error.  The rule prohibits a separate trial solely on unliquidated damages if liability is contested.  Tex. R. App. P. 44.1(b).  In this case, the trial court erroneously submitted the wrong measure of damages for breach of contract.  Because liability was contested, we reversed and remanded not only the damages question, but also questions about breach of contract, ratification, waiver, and percentages of ownership in the corporations.  We did not reverse and remand the contract statute of limitations issue. 

            Accrual of the statute of limitations is a question of law.  Moreno v. Sterling Drug, Inc., 787 S.W.2d 348, 351 (Tex. 1990); Waxler v. Household Credit Servs., Inc., 106 S.W.3d 277, 279 (Tex. App.—Dallas 2003, no pet.).  Appellants assigned error to the jury’s rejection of the statute of limitations, contending that suit was barred as a matter of law.  We concluded that the cause of action for breach of contract accrued within four years of suit.  On remand, questions of law answered by an appellate court are considered law of the case.  See Briscoe v. Goodmark, Corp., 102 S.W.3d 714, 716 (Tex. 2003).  As there is no issue to relitigate upon remand, we decline to reverse and remand the limitations issue.

            Finding it unnecessary to write regarding the remaining seven points in their motion, we deny appellant’s motion for rehearing.

                                                                        /s/        Charles W. Seymore

                                                                                    Justice

Judgment rendered and Supplemental Opinion on Rehearing filed October 30, 2003.

Panel consists of Justices Yates, Seymore, and Guzman.

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            ^[1]  A brief survey of the law after the motion for rehearing was filed uncovered divergence in whether jurisdictions require ratification to conform with the statute of frauds.  The case law cited in the motion for rehearing was not urged in the appellate briefing, further demonstrating that the issue is newly raised in the motion for rehearing.