ACCEPTED 03-13-00101-CV 6067747 THIRD COURT OF APPEALS AUSTIN, TEXAS 7/14/2015 6:09:49 PM JEFFREY D. KYLE CLERK NO. 03-13-001 01-CV
IN THE COURT OF APPEALS FILED IN FOR THE THIRD COURT OF APPEALS DISTRICT 3rd COURT OF APPEALS AUSTIN, TEXAS AUSTIN, TEXAS 7/14/2015 6:09:49 PM JEFFREY D. KYLE Clerk RENT-A-CENTER, INC., APPELLANT
V.
GLEN HEGAR, in his capacity as COMPTROLLER OF PUBLIC ACCOUNTS OF THE STATE OF TEXAS; and KEN PAXTON, in his capacity as ATTORNEY GENERAL OF THE STATE OF TEXAS,
APPELLEES
On Appeal from the th 250 Judicial District Court Travis County, Texas
APPELLANTS REPLY IN SUPPORT OF ITS MOTION FOR REHEARING
Daniel L. Butcher Farley P. Katz State Bar No. 03512050 State Bar No. 11108790 P. Michael Jung Forrest M. (Teo) Seger III State Bar No. 11054600 State Bar No. 24070587 Strasburger & Price, LLP Strasburger & Price LLP 901 Main Street, Suite 4300 2301 Broadway Dallas, Texas 75202-3794 San Antonio, Texas 78215 (210) 250-6000 Telephone (210) 250-6100 Facsimile
ATTORNEYS FOR APPELLANT (Additional Counsel on Signature Page)
1898612.2/SPSAl67691/0102/071415 TABLE OF CONTENTS
TABLE OF AUTHORITIES ii ARGUMENT 2 CONCLUSION 4 CERTIFICATE OF SERVICE 6 CERTIFICATE OF COMPLIANCE 6
1898612.2/SPSAl67691/01 02/071415 TABLE OF AUTHORITIES
Page(s) CASES
Bradleys' Elec. v. Cigna Lloyds Ins. Co., 995 S.W.2d 675 (Tex. 1999) 2
Chrismon v. Brown, 246 S.W.3d 102 (Tex. App. - Houston [14th Dist.] 2007, no pet.) 4
Hawkins v. EI Paso First Health Plans, lnc., 214 S.W.3d 709 (Tex. App. - Austin 2007, pet. denied) 4
Q'Carolan v. Hopper, 414 S.W.3d 288,304 (Tex. App. - Austin 2013, no pet.) .4 PUC of Tex. v. City of Harlingen, 311 S.W.3d 610 (Tex. App. - Austin 2010, no pet.) 3
RULES
Tex. R. App. P.
. Rule 43.3 2, 3
ii 1898612.2/SPSAl67691/0102/071415 NO. 03-13-001 01-CV
IN THE COURT OF APPEALS FOR THE THIRD COURT OF APPEALS DISTRICT AUSTIN, TEXAS
RENT-A-CENTER, INC., APPELLANT
V. GLEN HEGAR, in his capacity as COMPTROLLER OF PUBLIC ACCOUNTS OF THE STATE OF TEXAS; and KEN PAXTON, in his capacity as ATTORNEY GENERAL OF THE STATE OF TEXAS,
APPELLEES
On Appeal from the th 250 Judicial District Court Travis County, Texas
APPELLANT'S REPLY IN SUPPORT OF ITS MOTION FOR REHEARING
Appellant Rent-A-Center, Inc. ("Rent-A-Center") respectfully files this
Reply in Support of its Motion for Rehearing.
1 1898612.2/SPSAl67691/0102/071415 ARGUMENT
Texas Rule of Appellate Procedure 43.3 provides in relevant part that
"[w]hen reversing a trial court's judgment, the court must render the
judgment that the trial court should have rendered, except when ... a
remand is necessary for further proceedings ... "
Here the trial court ruled against Rent-A-Center as to whether it was
primarily engaged in selling merchandise. As a result, the court did not
reach the second issue, the total cost of goods sold, even though all the
facts relevant to that issue were stipulated and undisputed.
The Comptroller concedes that the facts relating to cost of goods are
undisputed and that the question presented is purely one of law. See
Petition for Rehearing pp. 4-8 & 7 n. 2. He asserts, however, that in these
circumstances Rule 43.3 nevertheless requires this Court to remand the
case in order to permit the trial court to "address that question in the first
instance." See Appellees' Response in Opposition to Appellant's Motion
for Rehearing p. 2. In other words, the Comptroller argues that Rule 43.3
prohibits an appellate court that has reversed a trial court on an issue from
going on to decide other issues that the trial court did not reach, even
where those remaining issues are purely questions of law.
2 1 898612,2/SPSN67691/01 02/071415 This turns Rule 43.3 on its head and is contrary to a multitude of
appellate decisions. For example, Bradleys' Elec. v. Cigna Lloyds Ins. Co.,
995 S.W.2d 675 (Tex. 1999), presented the question whether a "court of
appeals erred by remanding [a] case to the trial court without considering
and deciding an issue upon which it could have rendered judgment." Id. at
676. The Texas Supreme Court held that the remand violated Rule 43.3,
and that the appellate court should have ruled on the issues presented
"that would afford the party the greatest relief." Id. at 677. The Court noted
that the requirements of Rule 43.3 "are mandatory and that courts of
appeals are not at liberty to disregard them." Id.
Applying this principle, this Court has consistently held that under
Rule 43.3, where it reverses, it will go on to rule on other issues involving
purely legal questions and will not remand those to the trial court. For
example, in PUC of Tex. v. City of Harlingen, 311 S.W.3d 610,625-626
(Tex. App.-Austin 2010, no pet.), this Court stated:
"When reversing a trial court's judgment, the court must render the judgment that the trial court should have rendered, except when: (a) a remand is necessary for further proceedings; or (b) the interests of justice require a remand for another trial." Tex. R. App. P. 43.3. Given that the issue not decided by the district court is a question of law, we consider remand to the district court to be unnecessary, and we will rule on the issue so that we may render the judgment that the district court should have rendered.
3 1898612.2/SPSN67691/0102/071415 Similarly, in Hawkins v. EI Paso First Health Plans, tnc., 214 S.W.3d 709,
719-720 (Tex. App.-Austin 2007, pet. denied), this Court explained:
If reversal is warranted, the material facts are established, and there are no further proceedings necessitating a remand, then this Court has a duty to render the judgment the trial court should have rendered. See Rosen v. Wells Fargo Bank Tex., N.A., 114 S.W.3d 145, 149 (Tex. App.-Austin 2003, pet. filed); McAllen Police Officer's Union v. Tamez, 81 S.W.3d 401,405 (Tex. App.-Corpus Christi 2002, pet. dism'd) (citing Tex. R. App. P. 43.3); City of Galveston v. Giles, 902 S.W.2d 167, 172 (Tex. App.-Houston [1st Dist.] 1995, no writ).
It is only in circumstances where, for example, a party did not have
an "opportunity to present evidence" that remand may be necessary.
O'Carolan v. Hopper, 414 S.W. 3d 288,304 (Tex. App.-Austin 2013, no
pet.).
The sole case cited by the Comptroller, Chrismon v. Brown,
246 S.W.3d 102 (Tex. App.-Houston [14th Dist.] 2007, no pet.), simply
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ACCEPTED 03-13-00101-CV 6067747 THIRD COURT OF APPEALS AUSTIN, TEXAS 7/14/2015 6:09:49 PM JEFFREY D. KYLE CLERK NO. 03-13-001 01-CV
IN THE COURT OF APPEALS FILED IN FOR THE THIRD COURT OF APPEALS DISTRICT 3rd COURT OF APPEALS AUSTIN, TEXAS AUSTIN, TEXAS 7/14/2015 6:09:49 PM JEFFREY D. KYLE Clerk RENT-A-CENTER, INC., APPELLANT
V.
GLEN HEGAR, in his capacity as COMPTROLLER OF PUBLIC ACCOUNTS OF THE STATE OF TEXAS; and KEN PAXTON, in his capacity as ATTORNEY GENERAL OF THE STATE OF TEXAS,
APPELLEES
On Appeal from the th 250 Judicial District Court Travis County, Texas
APPELLANTS REPLY IN SUPPORT OF ITS MOTION FOR REHEARING
Daniel L. Butcher Farley P. Katz State Bar No. 03512050 State Bar No. 11108790 P. Michael Jung Forrest M. (Teo) Seger III State Bar No. 11054600 State Bar No. 24070587 Strasburger & Price, LLP Strasburger & Price LLP 901 Main Street, Suite 4300 2301 Broadway Dallas, Texas 75202-3794 San Antonio, Texas 78215 (210) 250-6000 Telephone (210) 250-6100 Facsimile
ATTORNEYS FOR APPELLANT (Additional Counsel on Signature Page)
1898612.2/SPSAl67691/0102/071415 TABLE OF CONTENTS
TABLE OF AUTHORITIES ii ARGUMENT 2 CONCLUSION 4 CERTIFICATE OF SERVICE 6 CERTIFICATE OF COMPLIANCE 6
1898612.2/SPSAl67691/01 02/071415 TABLE OF AUTHORITIES
Page(s) CASES
Bradleys' Elec. v. Cigna Lloyds Ins. Co., 995 S.W.2d 675 (Tex. 1999) 2
Chrismon v. Brown, 246 S.W.3d 102 (Tex. App. - Houston [14th Dist.] 2007, no pet.) 4
Hawkins v. EI Paso First Health Plans, lnc., 214 S.W.3d 709 (Tex. App. - Austin 2007, pet. denied) 4
Q'Carolan v. Hopper, 414 S.W.3d 288,304 (Tex. App. - Austin 2013, no pet.) .4 PUC of Tex. v. City of Harlingen, 311 S.W.3d 610 (Tex. App. - Austin 2010, no pet.) 3
RULES
Tex. R. App. P.
. Rule 43.3 2, 3
ii 1898612.2/SPSAl67691/0102/071415 NO. 03-13-001 01-CV
IN THE COURT OF APPEALS FOR THE THIRD COURT OF APPEALS DISTRICT AUSTIN, TEXAS
RENT-A-CENTER, INC., APPELLANT
V. GLEN HEGAR, in his capacity as COMPTROLLER OF PUBLIC ACCOUNTS OF THE STATE OF TEXAS; and KEN PAXTON, in his capacity as ATTORNEY GENERAL OF THE STATE OF TEXAS,
APPELLEES
On Appeal from the th 250 Judicial District Court Travis County, Texas
APPELLANT'S REPLY IN SUPPORT OF ITS MOTION FOR REHEARING
Appellant Rent-A-Center, Inc. ("Rent-A-Center") respectfully files this
Reply in Support of its Motion for Rehearing.
1 1898612.2/SPSAl67691/0102/071415 ARGUMENT
Texas Rule of Appellate Procedure 43.3 provides in relevant part that
"[w]hen reversing a trial court's judgment, the court must render the
judgment that the trial court should have rendered, except when ... a
remand is necessary for further proceedings ... "
Here the trial court ruled against Rent-A-Center as to whether it was
primarily engaged in selling merchandise. As a result, the court did not
reach the second issue, the total cost of goods sold, even though all the
facts relevant to that issue were stipulated and undisputed.
The Comptroller concedes that the facts relating to cost of goods are
undisputed and that the question presented is purely one of law. See
Petition for Rehearing pp. 4-8 & 7 n. 2. He asserts, however, that in these
circumstances Rule 43.3 nevertheless requires this Court to remand the
case in order to permit the trial court to "address that question in the first
instance." See Appellees' Response in Opposition to Appellant's Motion
for Rehearing p. 2. In other words, the Comptroller argues that Rule 43.3
prohibits an appellate court that has reversed a trial court on an issue from
going on to decide other issues that the trial court did not reach, even
where those remaining issues are purely questions of law.
2 1 898612,2/SPSN67691/01 02/071415 This turns Rule 43.3 on its head and is contrary to a multitude of
appellate decisions. For example, Bradleys' Elec. v. Cigna Lloyds Ins. Co.,
995 S.W.2d 675 (Tex. 1999), presented the question whether a "court of
appeals erred by remanding [a] case to the trial court without considering
and deciding an issue upon which it could have rendered judgment." Id. at
676. The Texas Supreme Court held that the remand violated Rule 43.3,
and that the appellate court should have ruled on the issues presented
"that would afford the party the greatest relief." Id. at 677. The Court noted
that the requirements of Rule 43.3 "are mandatory and that courts of
appeals are not at liberty to disregard them." Id.
Applying this principle, this Court has consistently held that under
Rule 43.3, where it reverses, it will go on to rule on other issues involving
purely legal questions and will not remand those to the trial court. For
example, in PUC of Tex. v. City of Harlingen, 311 S.W.3d 610,625-626
(Tex. App.-Austin 2010, no pet.), this Court stated:
"When reversing a trial court's judgment, the court must render the judgment that the trial court should have rendered, except when: (a) a remand is necessary for further proceedings; or (b) the interests of justice require a remand for another trial." Tex. R. App. P. 43.3. Given that the issue not decided by the district court is a question of law, we consider remand to the district court to be unnecessary, and we will rule on the issue so that we may render the judgment that the district court should have rendered.
3 1898612.2/SPSN67691/0102/071415 Similarly, in Hawkins v. EI Paso First Health Plans, tnc., 214 S.W.3d 709,
719-720 (Tex. App.-Austin 2007, pet. denied), this Court explained:
If reversal is warranted, the material facts are established, and there are no further proceedings necessitating a remand, then this Court has a duty to render the judgment the trial court should have rendered. See Rosen v. Wells Fargo Bank Tex., N.A., 114 S.W.3d 145, 149 (Tex. App.-Austin 2003, pet. filed); McAllen Police Officer's Union v. Tamez, 81 S.W.3d 401,405 (Tex. App.-Corpus Christi 2002, pet. dism'd) (citing Tex. R. App. P. 43.3); City of Galveston v. Giles, 902 S.W.2d 167, 172 (Tex. App.-Houston [1st Dist.] 1995, no writ).
It is only in circumstances where, for example, a party did not have
an "opportunity to present evidence" that remand may be necessary.
O'Carolan v. Hopper, 414 S.W. 3d 288,304 (Tex. App.-Austin 2013, no
pet.).
The sole case cited by the Comptroller, Chrismon v. Brown,
246 S.W.3d 102 (Tex. App.-Houston [14th Dist.] 2007, no pet.), simply
held that a court of appeals cannot reverse a decision that is not in error,
an indisputable proposition having nothing to do with this issue.
CONCLUSION
For the reasons set forth in the Motion for Rehearing and above, this
Court should rule that Rent-A-Center's cost of goods sold is original cost
not reduced by depreciation taken on its federal tax return.' The
1 Although Rent-A-Center suggested that the Court might remand the case for the limited purpose of calculating the amount of the refund due it (Petition for Rehearing
4 1898612.2/SPSN67691/0102/071415 Comptroller has offered no argument against that proposition in its Brief on
Appeal or in its Response to Rent-A-Center's Motion for Rehearing, tacitly
conceding that it is correct.
Respectfully submitted,
Daniel L. Butcher State Bar No: 03512050 dan. butcher@strasburger.com P. Michael Jung State Bar No. 11054600 michael.jung@strasburger.com Strasburger & Price, LLP 901 Main Street, Suite 4300 Dallas, Texas 75202-3794
lsI Farley P. Katz Farley P. Katz State Bar No. 11108790 farley.katz@strasburger.com Forrest M. (Teo) Seger III State Bar No. 24070587 teo. seger@strasburger.com Strasburger & Price, LLP 2301 Broadway San Antonio, Texas 78215 (210) 250-6000 Telephone (210) 250-6100 Facsimile
And
Robert M. Q'Boyle State Bar No. 15165425 bob. oboyle@strasburger.com Clinton A. Rosenthal
p. 10), that suggestion was only for the convenience of the Court. The calculation of Rent-A-Center's tax refund will be an undisputed matter which the parties could handle by agreement here or in the trial court.
5 1898612.2/SPSAl67691/0102/071415 State Bar No. 24037393 clint. rosenthal@strasburger.com Strasburger & Price, LLP 720 Brazos Street, Suite 700 Austin, Texas 78701 (512) 499-3600 Telephone (512) 499-3660 Facsimile
ATTORNEYS FOR APPELLANT RENT-A-CENTER, INC.
CERTIFICATE OF SERVICE
Pursuant to E-Filing Standing Order, I certify that on July 14, 2015, I electronically filed the foregoing with the Clerk of Court using the EFile.TXCourts.gov electronic filing system which will send notification of such filing to the following:
Matthew H. Frederick, Esq. Jim B. Cloudt, Esq. Charles K. Eldred Assistant Attorney General Financial and Tax Litigation Division P.O. Box 12548 Austin, Texas 78711-2548
/s/ Farley P. Katz Farley P. Katz
CERTIFICATE OF COMPLIANCE
This motion complies with Tex. R. App. P. 9.4(i)(2)(D), because the brief contains 825 words, excluding the parts of the brief exempted by Tex. R. App. P. 9.4(i)(1).
/s/ Farley P. Katz Farley P. Katz
6 1898612.2/SPSAl67691/0102/071415