Rockwall County is on the edge of the rapidly expanding Dallas-Fort Worth metropolitan area. That surging growth inevitably brings friction, such asCity of McLendon-Chisholm v. City of Heath, in which one Rockwall city sued the other, and the Fifth Court held that the City of Heath had standing to challenge its neighbor’s land-use decision.

Specifically, the Court found that Heath had demonstrated concrete and particularized injuries, including a projected 358% increase in traffic and a significant decrease in property values, which would negatively impact Heath’s tax base and public services. These injuries were enough for standing because they were distinct from general public injuries and directly traceable to McLendon-Chisholm’s actions.

The Court also held that Heath had standing to bring claims under the Texas Open Meetings Act, noting that TOMA ‘broadly confers standing on any person who shares an injury in common with the general public,” and that Heath alleged specific TOMA violations that directly affected it in a way different from the general public—including the adoption of the challenged land-use actions. No. 05-23-00881-CV, Nov. 8, 2024.

In Southwest Airlines Pilots Union v. The Boeing Co., a dispute related to the 737 Max, the Fifth Court held: “[W]e conclude that SWAPA has standing to assert claims on its own behalf, but at the time the suit was filed, lacked standing to assert claims on behalf of its members. Although SWAPA’s subsequently acquired assignments of member interests do not cure the jurisdictional defects in the present case, the assignments might confer standing on SWAPA to file suit in the future. Thus, while the trial court properly dismissed the suit without providing SWAPA an opportunity to amend its pleadings, the dismissal should have been without prejudice. We further conclude that the RLA does not preempt SWAPA’s state law claims.” No. 05-20-01067-CV (March 30, 2022) (mem. op.). (LPHS represented the appellant in this case.)

“’Texas courts have long held that an appealing party may not complain of errors that do not injuriously affect it or that merely affect the rights of others.’ An appellant is not harmed when sanctions are imposed solely against the appellant’s attorney and does not have standing to challenge an order imposing sanctions solely upon his attorney.” On Deck Capital, Inc. v. CWO Designer Landscapes, No. 05-20-00471-CV (Feb. 10, 2022) (mem. op.).

The Fifth Court revisited the borderline between “capacity” and “standing” in the context of a claim acquisition from bankruptcy in Obsidian Solutions, LLC v. KBIDC Investments, LLC, No. 05-19-00440-CV (July 30, 2021) (mem. op.).

Substantively, the Court reminded: “The issue of standing focuses on whether a party has a sufficient relationship with the lawsuit so as to have a ‘justiciable interest’ in its outcome; in contrast, the issue of capacity ‘is conceived of as a procedural issue dealing with the personal qualifications of a party to litigate.’ …  ‘When the issue involves capacity arising from a contractual right, “Texas law is clear, and this court has previously held numerous times, that a challenge to a party’s privity of contract is a challenge to capacity, not standing.”‘” (citations omitted, emphasis added).

Procedurally, the issue was tried by consent, even if the correct label was not applied.   “[A]t trial, the issue of whether KBIDC bought the assets out of bankruptcy and which assets were purchased arose during KBIDC’s direct examination of Kent. … The trial court listened to arguments from both sides on their interpretations of the APA before finding that the APA gave ‘authority to the Plaintiff for … the advancement of this suit.’ Given the parties’ arguments and the trial court’s ruling, we conclude that capacity was tried by consent in the trial court.” (emphasis added).

The Texas Supreme Court heard arguments today in In re: Estate of Johnson, No. 05-18-01193-CV (Nov. 4, 2019) (mem. op.), which presents a fundamental issue in Texas probate law–whether a beneficiary’s acceptance of benefits under a will defeats that beneficiary’s standing to challenge that will.

This is a crosspost from 600Hemphill, which reviews business cases in the Texas Supreme Court. This case originated from the Fifth Court.

In a per curiam opinion issued without argument, the Texas Supreme Court reminded that it really meant its holding in Pike v. Texas EMC Management LLC, about the distinction between standing and capacity, as applied to the question whether a particular injury is suffered by the named plaintiff or the relevant business entity. Cooke v. Karlseng, No. 19-0829 (Jan. 22, 2021).

Bickham v. Dallas County “consider[ed] whether ‘election watchers’—persons appointed to observe the conduct of an election under Chapter 33 of the Texas Election Code— have standing to pursue claims against certain election officials for alleged violations of chapter 33 and the Texas Administrative Code.” The panel majority concluded that they did not: “Appellants are not petition signers, and unlike the petition signers in [other cases], they have not shown an election interest that is distinct from voters at large. Although they allege impurity in the process, that interest is not distinct from voters at large, all of whom are presumed to want the election to be conducted in compliance with the law.”

A dissent saw the issue differently, reasoning: “The Legislature created the office of watcher, at least in substantial part, for the watcher to be available publicly to attest to the process, including in any later contest for office. … Whether one focuses on the right to express one’s opinion on the fairness of the process to the public via the print or electronic media or simply on the right to participate as a witness at a trial, either interest is legally cognizable.” No. 05-20-00560-CV (Oct. 23, 2020).

“'[A] plaintiff’s failure to have a valid [assumed name] certificate on file is not a jurisdictional issue but, rather, a capacity issue that is properly raised in a plea in abatement so that the cause may be suspended while the defect is corrected.’ By failing to file a verified plea in abatement prior to trial, appellees waived their complaint.” Pennington v. Cypress Aviation, No. 05-19-00345-CV (April 9, 2020) (mem. op.); cf. Malouf v. Sterquell PSF Settlement LC, No. 05-17-01343-CV (Nov. 7, 2019, pet. filed) (mem. op.) (finding no waiver when the plaintiffs’ “claimed status as a . . . partner was a primary focus of both sides’ arguments at trial”).

The Fifth Court summarized the current state of its precedent on the difficult interplay between estoppel and standing in probate cases: “In her answer to the will contest, Lisa Jo pled the affirmative defense of estoppel, and was therefore required to demonstrate Tia’s acceptance of the proceeds of the mutual fund was inconsistent with her challenge to the Will. . . . .Rather than satisfy her burden, Lisa Jo relied on a case that disagreed with our holding in Holcomb,and argued Tia was burdened with disproving estoppel. Declining an unacceptable invitation for one panel of this court to disregard the holding of another panel, we hold Lisa Jo failed to satisfy her burden, as the Will’s proponent, by failing to demonstrate that Tia accepted greater benefits than those to which she was entitled under the Will or intestacy laws.” In re Estate of Johnson, No. 05-18-01193-CV (Nov. 4, 2019) (unpubl.)

The Fifth Court reversed the denial of Gattenby’s motion for new trial after a default judgment by a bank, finding that he raised a meritorious defense (the other two Craddock factors not being at issue:  “[T]he record before us does not include evidence of an assignment between these two financial institutions. Rather, the Bank supported its claim for damages with a billing statement from a bank not party to this suit. To the extent the Bank contends ownership is established because the last four digits of theaccount listed in its original petition is identical to the last four digits of the account listed on Town North Bank’s billing statement attached to the Bank’s motion for default judgment, we reject its argument. Separate documents containing the same last four digits of an account is not evidence of an assignment” Gattenby v. TIB, No. 05-18-00168-CV (Feb. 6, 2019).

Defendant challenged plaintiff’s standing in a dispute about nursing home care, arguing: “The plaintiff must be personally injured—he must plead facts demonstrating that he, himself (rather than a third party or the public at large), suffered the injury.” The Fifth Court agreed, focusing on the pleading at the time of the summary judgment hearing: “Patricia and Delois’s original petition was their pleading on file at the time of the hearing. The original petition does not allege the individual injuries Patricia claims on appeal. Although the prayer in the petition requests that a judgment include $5,000 for “Patricia A. Shaw—Agent Fee’s” [sic] and $39,000 for “Home Health Care[,]” the claims in the original petition concern the economic and physical injuries that Delois suffered. Because Patricia did not plead her individual claims in  the original petition, she may not now urge these claims and supporting arguments on appeal.” Shaw v. Daybreak, Inc., No. 05-16-01251-CV (Sept. 20, 2017).

In this partnership dispute, two individual limited partners sued their fellow individual partner (who also signed the limited partnership agreement on behalf of the general partner entity) for, among other things, breach of contract and breach of fiduciary duty.  The jury returned a verdict in favor of the two limited partners, but the trial court granted a JNOV, dismissing those claims for lack of standing.  The Court of Appeals affirmed because “a limited partner does not have standing to sue for injuries to the partnership that merely diminish the value of that partner’s interest” and the plaintiffs’ claims were based solely on their fellow partner’s duties as a partner.

Hodges v. Rajpal

In this restricted appeal, the plaintiff carried out service on the defendant, a bank with a registered agent in New York, solely though service of process upon the Texas Secretary of State.  On appeal, the Court agreed with the defendant that such service was improper because the plaintiff failed to strictly comply with CPRC 17.028, which permits service upon a financial institution by service to “the president or a branch manager at any office located in the state.”

Bank of N.Y. Mellon v. Redbud 115 Land Tr.

Mike Jabary obtained a commercial certificate of occupancy for a restaurant in Allen, Texas.  As it turns out, Mr. Jabary opened a hookah bar instead of a restaurant.  Consequently, the City of Allen revoked his certificate of occupancy.

Mr. Jabary sued the City, alleging both private and public takings.  The City filed a motion for summary judgment on the ground that, because Mr. Jabary had not exhausted his administrative remedies by filing an appeal with the City, his claim was not ripe.  The trial court granted the City’s MSJ, and Mr. Jabary appealed.  On appeal, the Court of Appeals affirmed the trial court’s decision, rejecting Mr. Jabary’s argument that appealing to the city would be futile.

Jabary v. City of Allen

In this breach of contract case, the defendant asserted that the plaintiff lacked standing to pursue its claim because the plaintiff’s owner filed for bankruptcy individually.  According to the defendant, the bankruptcy trustee would have been the only party with standing to prosecute the claim.  The Court rejected this argument, however, because the lawsuit was filed two years before the plaintiff filed for bankruptcy and, more importantly, the plaintiff (a coroporation) never itself filed for bankruptcy.  Thus, the plaintiff could establish standing.

Keane Landscaping v. Divine Group

Family law and medical malpractice aren’t usually our things here at 600 Commerce, but a wrongful death opinion case illustrates a principle of standing that may be of interest to commercial litigators in their own tort and family law-related cases. At issue was whether the plaintiff had standing to sue for wrongful death after her former husband died of cardiac arrest. Husband and wife were formally divorced at the time of his death, but the wife claimed that they had an “informal” or common law marriage even after the divorce. The trial court granted summary judgment for the defendants, and the Court of Appeals affirmed. The wrongful death statute required the plaintiff to have been a surviving spouse. The evidence showed that the divorce had really only happened because the couple wanted to protect their assets from potential creditors, and that they had continued to live together and hold themselves out as husband and wife. Although the couple here held themselves out to be husband and wife and lived together as such after the divorce, the wife had failed to show that they had actually agreed to be married — i.e., that they had a present, immediate, and permanent intent to be married as husband and wife. Instead, the widow testified that they had intended to “legalize the marriage again” only when the couple’s creditors were paid off. Thus, without the required element of a present intent to be married, the plaintiff could not demonstrate the existence of a common law marriage, and she had no standing to sue under the wrongful death statute.

Malik v. Bhargava, No. 05-13-00384-CV

In a breach of contract case, a group of defendants appealed from the district court’s grant of summary judgment in favor of the plaintiff. The defendants argued that the plaintiff lacked standing to sue them because there was no evidence it had privity of contract with any of the defendants. The court of appeals rejected that argument, holding that the defendants were actually challenging the capacity of the plaintiff to sue or be sued. The plaintiff had standing to sue on the contract because it pleaded and proved it was “formerly known as” the party named in the agreement. As to the challenge to the plaintiff’s capacity, the court held that the defendants had been untimely in making that challenge, as the verified denial of capacity required by Rule 93 was only filed the morning of the summary judgment hearing — not 7 days before as required by Rule 63. The trial court’s summary judgment order indicated that it had not considered the amended pleading, stating that it had considered the “pleadings timely filed,” not all of the pleadings in the case. Nor was the issue of capacity tried by consent as part of the summary judgment proceeding, since the response to the summary judgment motion raised no issue of the plaintiff’s capacity to bring suit. Likewise, the court of appeals rejected the claim of one of the individual defendants that he could not be personally liable on the contract because he had signed it as CEO of the defendant corporation. Because the defendant had not timely filed a verified denial of his capacity to be sued individually, that issue was also waived. As a result, the trial court’s judgment was afffirmed.

John C. Flood of DC, Inc. v. SuperMedia, LLC, No. 05-12-00307-CV

Several former Dallas municipal judges brought this lawsuit challenging the 2012 municipal judge selection process, claiming that the Mayor and the City Council violated the city code by asking nominees to comment in writing on legislative proposals by an ad hoc legislative committee and by interviewing additional candidates without justification.  The Court of Appeals, however, concluded that these former judges lack standing to sue because they seek only a declaration that the City Council violated the law.  The Court found that the judges lacked any personal stake in the outcome of the case because (1) they disclaimed any intent to challenge the appointment of their successor judges; (2) they do not seek to be reinstated as judges; and (3) they deny that they are challenging the legitimacy of any ordinance.

Rawlings v. Gonzalez

While the blog has been quiet for a while, the justices at the original 600 Commerce have been clearing out a lot of summary dismissals lately (not to mention handling their usual docket of criminal and family law cases, which we generally don’t blog about here).  Three of those short dismissal opinions today turn on issues that may be of some interest.

In Earth Energy Utility Corp. v. Environmentally Engineered Equipment, Inc., No. 05-10-01610-CV, the court of appeals had previously granted leave for the appellant’s attorneys to withdraw.  The court instructed the appellant corporation that it needed to provide notice of the identity of substitute counsel, and even granted an additional 45 days to do so.  Four months later, the appellant still had not obtained successor counsel, and so the court dismissed the appeal.  The lesson: Corporations still can’t represent themselves pro se.

In Bryant v. US Bank, N.A., No. 05-11-00121-CV, the court of appeals dismissed the appeal due to the appellant’s lack of standing.  The appellant had certainly had standing to defend the case when US Bank sued her in a forcible detainer proceeding, but the trial court subsequently dismissed the bank’s case for want of prosecution.  For some reason, the defendant sought appellate review of the DWOP.  Because her rights were not prejudiced when the trial court dismissed the bank’s case against her, the court of appeals determined that she lacked standing to appeal.

Finally, in Olanya v. U.S. Bank, N.A., No. 05-11-00878, the bank had actually been awarded judgment for possession in another forcible detainer case.  But the defendant did not supercede the judgment pending appeal, and the bank took possession of the property.  Since the entire point of a forcible detainer claim is to obtain immediate possession of the property, and that had already occurred, the issue of immediate possession had been rendered moot.  Accordingly, the court dismissed the appeal.