Court Opinion

ID: 4072404
Source: CourtListenerOpinion
Date Created: 2016-09-30 02:50:57.578713+00
Date Added: 2024-06-11T12:51:42.879548
License: Public Domain

ACCEPTED
                                                                                     03-15-00436-CV
                                                                                             6602220
                                                                          THIRD COURT OF APPEALS
                                                                                     AUSTIN, TEXAS
                                                                                8/21/2015 1:52:35 PM
                                                                                   JEFFREY D. KYLE
                                                                                              CLERK
                          NO. 03-15-00436-CV
         ___________________________________________________
                                                       FILED IN
                                                3rd COURT OF APPEALS
                     IN THE COURT OF APPEALS        AUSTIN, TEXAS
                  THIRD JUDICIAL DISTRICT COURT 8/21/2015 1:52:35 PM
                                                  JEFFREY D. KYLE
                          AUSTIN, TEXAS                 Clerk

         ___________________________________________________

                     CHARLES O. “CHUCK” GRIGSON,
                                         APPELLANT
                                  VS.

  THE STATE OF TEXAS, THE TEXAS DEPARTMENT OF INSURANCE,
           THE TEXAS COMMISSIONER OF INSURANCE;
                and FARMERS GROUP, INC. ET AL.,
                                        APPELLEES
       ___________________________________________________

    On Appeal from the 261st Judicial District Court of Travis County, Texas
                       Cause No. D-1-GV-02-002501
        ___________________________________________________
               APPELLANT GRIGSON’S AMENDED EMERGENCY
              MOTION TO STAY THE SENDING OF CLASS NOTICE
         ___________________________________________________
Joe K. Longley                                   Philip K. Maxwell
LAW OFFICES OF JOE K.                            LAW OFFICE OF PHILIP K.
LONGLEY                                          MAXWELL
State Bar No. 12542000                           State Bar No. 13254000
1609 Shoal Creek Blvd. #100                      1609 Shoal Creek Blvd #100
Austin, Texas 78701                              Austin, Texas 78701
512-477-4444                                     512-947-5434

                    Attorneys for Appellant Grigson
TO THE HONORABLE COURT OF APPEALS:

         COMES NOW, Appellant Charles O. “Chuck: Grigson [“Grigson”] who

files this Amended Emergency Motion to Stay Sending of Class Notice pursuant to

§51.014(a)(3) and (b), Texas Gov’t Code and Rules 9, 10 and 29.5 of the Texas

Rules of Appellate Procedure. Grigson seeks emergency relief pursuant to Rule

10.3(a)(3), Texas Rules of Appellate Procedure, and in support thereof,

respectfully shows the Court the following:

1.       Grigson seeks Emergency Relief based upon a new threat made by Farmers

Appellees.

2.       On Thursday, August 20, 2015 at approximately 4:44 PM, Counsel for

Grigson received an email containing a letter from M. Scott Incerto, lead counsel

for the Farmers Appellees, making the following threat to the status quo of

Grigson’s (and class members’) rights as they currently are pending before this

Court:

         Grigson’s Emergency Motion to Stay the Sending of Class Notice,
         which also seeks a discretionary stay, remains undecided.
         In sum, because no stay (automatic or discretionary) is in effect and
         because Farmers has been expressly ordered to disseminate Class
         Notice by September 4, 2015, Farmers will proceed with the
         issuance of Class Notice. The Settlement administrator, Rust
         Consulting, as Farmers’ agent, will proceed with commencing the
         printing process for the Class Notice on Tuesday, August 25, 2015,
         in order to be in a position to place the Class Notice in the mail on
         September 4, 2015.

Exhibit 1 – Incerto’s letter to counsel for Grigoson (Emphasis added).
APPELLANT GRIGSON’S AMENDED EMERGENCY
MOTION TO STAY CLASS NOTICE                                                  2
3.    Farmers now attempts to disrupt the status quo currently existing in this

appeal by adversely affecting and irreparably harming the rights belonging to

Grigson (and other class members) who seeks to have his appeal decided without

the harm caused by the sending of a class notice. The potential wasting of over

$2.5 million dollars of policyholder funds prior to this Court’s resolution of this

appeal will misinform and confuse the putative class members and interfere with

this Court’s jurisdiction to determine whether the 2015 order before this Court and

the notice that it requires can be sustained:

      When a trial court preliminarily certifies a settlement-only class
      action, the effect on the course of the proceedings is immediate,
      significant, and perhaps irreparable if it is later determined that the
      class cannot be maintained.”

McAllen Medical Center, Inc. v. Cortez, 66 S.W.3d 227, 234 (Tex. 2001).
(Emphasis added).

4.    In July of 2003, this Court issued an order using the exact wording of Cortez

to stop the class notice from being sent in the 2003 settlement. See Exhibit 2.

5.    Here, just as in Cortez, Farmers threatens to send notice bearing the “trial

court’s imprimatur” as a fait accompli to prime the class to participate in a

settlement that has not been subject to the stringent requirements of Rule 42, nor to

the appellate review of the trial court’s July 6, 2015 order.

6.    Grigson, in responding to the State and Farmers’ Joint Motion to Dismiss for

Lack of Jurisdiction, has detailed the State and Farmers’ unlawful agreement to
APPELLANT GRIGSON’S AMENDED EMERGENCY
MOTION TO STAY CLASS NOTICE                                                   3
attempt to abrogate this Court’s statutory jurisdiction to decide this case, and the

extraordinary lengths they’ve already taken to implement it. 1

7.     Now the aim of Farmers is to unilaterally abrogate this Court’s inherent

jurisdiction “to determine its own jurisdiction” by destroying the status quo

through the sending class notice prior to this Court’s determination of its own

jurisdiction. See Texas Gov’t Code, Section 22.220(c) [“each Court of Appeals

may, on affidavit or otherwise, as the Court may determine, ascertain the matters

of fact that are necessary to the proper exercise of its jurisdiction”]; Dallas County

Appraisal District v. Funds Recovery, Inc., 887 S.W.2d 465, 468 (Tex.App.—

Dallas 1994, writ. denied). [“We must inquire into our own jurisdiction even if it

is necessary to do so sua sponte.”] This is the very jurisdiction Farmers and the

State have invoked with the filing of their Joint Motion to Dismiss.

8.     Farmers is likewise attempting to use the trial court’s order in a manner that

“interferes with or impairs the jurisdiction of the appellate court or the

effectiveness of any relief sought or that may be granted on appeal.” Rule 29.5

Texas Rules of Appellate Procedure.

9.     Farmers threat not only interferes with the jurisdiction of this Court, but

likewise interferes with the Court’s briefing schedule. By having Rust Associates
1
  Appellees have contested this Court’s jurisdiction pursuant to a Motion to Dismiss which has
bene fully briefed by the parties and is pending before the Court. See Motion filed July 17,
2015; Grigson’s Response filed July 31, 2015, Appellee’s Reply filed August 12, 2015 and
Grigson’s Sur-Reply filed August 14, 2015.

APPELLANT GRIGSON’S AMENDED EMERGENCY
MOTION TO STAY CLASS NOTICE                                                             4
(Farmers’ agent) begin the printing of the class notices on August 25, 2015 – the

day before Appellant’s brief is due – August 26, 2015, Farmers interferes with

Grigson’s ability to completely brief all of the issues and comply with the briefing

schedule set by the Court.

      Nevertheless, Grigson will endeavor to complete and file his brief on the day

scheduled.

      WHEREFORE, PREMISES CONSIDERED, Grigson prays that Court enter

an appropriate order granting this Amended Emergency Motion to Stay the

Sending of Class Notice and that the Court do so post haste to prevent irreparable

harm caused by the destruction of the status quo now existing prior to notice being

sent. Grigson further requests that this Court grant such other and further relief to

which he may show himself justly entitled.

                                       Respectfully submitted,

                                       CHARLES O. “CHUCK” GRIGSON
                                       APPELLANT

                                       LAW OFFICES OF JOE K. LONGLEY

                                       _______/s/ Joe K. Longley__________
                                       Joe K. Longley
                                       State Bar No. 12542000
                                       1609 Shoal Creek Blvd. #100
                                       Austin, Texas 78701
                                       512-477-4444 PHONE
                                       512-477-4470 FAX

APPELLANT GRIGSON’S AMENDED EMERGENCY
MOTION TO STAY CLASS NOTICE                                                   5
                                      LAW OFFICE OF PHILIP K. MAXWELL

                                      _______/s/ Philip K. Maxwell_________
                                      Philip K. Maxwell
                                      State Bar No. 13254000
                                      1609 Shoal Creek Blvd #100
                                      Austin, Texas 78701
                                      512-947-5434 PHONE

                                      ATTORNEYS FOR APPELLANT,
                                      CHARLES O. “CHUCK” GRIGSON

                         CERTIFICATE OF SERVICE

       The undersigned hereby certifies that a true and correct copy of the above
and foregoing document was served on the following counsel of record
eFile.TXCourts.gov electronic filing system on August 21, 2015.

Joshua Godbey                                Marcy Greer
Office of the Attorney General of            Alexander Dubose Jefferson &
Texas                                        Townsend, LLP
P. O. Box 12548                              515 Congress Ave., Suite 2350
Austin, TX 78711-2548                        Austin, TX 78701

Sara Waitt                                   Michael J. Woods
General Counsel                              8620 N. New Braunfels, Ste. 522
Texas Department of Insurance                San Antonio, TX 78217
P. O. Box 149104
Austin, TX 78714-9104                        Joseph C. Blanks
                                             PO Box 999
M. Scott Incerto                             Doucette, TX 75942
Norton Rose Fulbright
98 San Jacinto Blvd #1100
Austin, TX 78701

                                      _______/s/ Joe K. Longley__________
                                           Joe K. Longley

APPELLANT GRIGSON’S AMENDED EMERGENCY
MOTION TO STAY CLASS NOTICE                                                  6
                      CERTIFICATE OF CONFERENCE
      Grigson’s counsel has conferenced with Scott Incerto, lead counsel for the

Farmers Parties; and Ryan Mindell, counsel for the State of Texas, regarding this

motion. Both oppose granting the emergency relief sought by this motion.

                                      _______/s/ Joe K. Longley__________
                                      Joe K. Longley

      CERTIFICATE OF COMPLIANCE WITH TEX. R. APP. P. 9.4(i)
      I certify that the foregoing document contains 846 words and complies with

the word limit set forth in Texas Rule of Appellate Procedure 9.4(i).

                                      _______/s/ Joe K. Longley__________
                                      Joe K. Longley

APPELLANT GRIGSON’S AMENDED EMERGENCY
MOTION TO STAY CLASS NOTICE                                                7
                                                       VERIFICATION

THE STATE OF TEXAS                                     §

COUNTY OF TRAVIS                                       §

           BEFORE ME, the undersigned authority, on this day personally appeared

Joe K. Longley, a person whose identity is known to me. After I administered an

oath to him, upon his oath, he said the following:

           "My name is Joe K. Longley, and I am capable of making this affidavit, and

the facts in this affidavit are true and within my personal knowledge. I am lead

counsel for Appellant Charles O "Chuck" Grigson. All documents included in the

APPENDIX filed with this Amended Emergency Motion to Stay the Sending of

Class Notice are true and correct copies of documents filed with this Court or

presented to the trial court in this action. I have read the Amended Emergency

Motion to Stay Sending of Class Notice and the factual statements contained

therein that are not otherwise established by this record are within my personal

knowledge and are true and correct."

            "Further, Affiant sayeth not."

                                                                ~~/+-~
                                                            oe K. L o n g l e y · ~

SUBSCRIBED AND SWORN TO before me on this the 21st day of August, 2015.

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  \~·.        ,:~j ~   Notary Public, State of Texas
                         My Commission Expires             Notary~oIT~
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VERIFICATION OF JOE K. LONGLEY                                                               1
                        NO. 03-15-00436-CV
       ___________________________________________________

                      IN THE COURT OF APPEALS
                 THIRD JUDICIAL DISTRICT COURT
                             AUSTIN, TEXAS
       ___________________________________________________

                    CHARLES O. “CHUCK” GRIGSON,
                                        APPELLANT
                                 VS.

  THE STATE OF TEXAS, THE TEXAS DEPARTMENT OF INSURANCE,
 THE TEXAS COMMISSIONER OF INSURANCE; and FARMERS GROUP,
                           INC. ET AL.,
                                        APPELLEES
       ___________________________________________________

   On Appeal from the 261st Judicial District Court of Travis County, Texas
                      Cause No. D-1-GV-02-002501
       ___________________________________________________
 APPELLANT GRIGSON’S APPENDIX IN SUPPORT OF RESPONSE TO APPELLEES’
JOINT MOTION TO DISMISS APPEAL FOR LACK OF JURISDICTION AND REQUEST
              FOR EXPEDITED CONSIDERATION OF MOTION
       ___________________________________________________

EXHIBIT 1       8-20-2015 Letter from M. Scott Incerto to Appellants

EXHIBIT 2       7-7-2003 Third Court of Appeals Order Staying the Sending
                of Class Notice
EXHIBIT 1
                                                                                   A.
                                                                                   NORTON ROSE FULBRIGHT
August 20, 2015
                                                                                   Norton Rose Fulbright US LLP
Via E-Mail                                                                         98 San Jacinto Boulevard, Suite 1100
                                                                                   Austin, Texas 78701-4255
                                                                                   United States

Joe K. Longley                                                                     Direct line +1 512 536 4529
1609 Shoal Creek Blvd. #100                                                        scott.incerto@nortonrosefulbright.com
Austin, TX 75942
Joe@JoeLongley.com                                                                 Tel +1512474 5201
                                                                                   Fax +1 512 536 4598
                                                                                   nortonrosefulbright.com
Joseph C. Blanks
P.O. Box 999
Doucette, TX 75942
blanxlex@gmail.com

Re:        Cause No. D-1-GV-02-002501, State of Texas, et al. v. Farmers Group, Inc., et al., In
           the 261st Judicial District Court of Travis County, Texas; Cause No. 03-15-00436-CV,
           Grigson et al. v. State of Texas et al., In the Third Court of Appeals, Austin, Texas

Dear Mr. Longley and Mr. Blanks:

As you know, the district court's Order of Preliminary Approval requires that Farmers send out
class notice by September 4, 2015. In light of the appellate proceedings that you initiated,
Farmers has already delayed the issuance of the Class Notice as much as possible. The
purpose of this letter is to notify you that, barring an adverse ruling by the court of appeals on
Mr. Grigson's Emergency Motion to Stay the Sending of Class Notice, Farmers will send out
notice on September 4th as ordered.

Farmers' decision to proceed with the issuance of notice is based in the first instance on the
absence of interlocutory appellate jurisdiction in this case to enforce any alleged stay (automatic
or discretionary). As we have pointed out in our briefing papers, the district court's Order of
Preliminary Approval did not "certif[y] or refuseO to certify a class in a suit brought under Rule
    11
42 and instead only preliminarily approved the terms of the Settlement Agreement and
approved class notice-neither of which are subject to the narrow interlocutory jurisdictional
window afforded under Texas law. TEX. Crv. PRAC. & REM. CODE ANN. § 51.014(a)(3); see also
McAllen Med. Ctr., Inc. v. Cortez, 66 S.W.3d 227, 234 (Tex. 2001) ("[T]he trial court's
preliminary approval of the                      a
                                  settlement has no binding force . . . . appellate review is
premature."); Citgo Ref. and Mktg., Inc. v. Garza, 94 S.W.3d 322, 327 (Tex. App.-Corpus
Christi-Edinburg 2002, no pet.) ("[N]o Texas court has held that an order approving the form of
notice to a class is subject to interlocutory appeal. . . . the present attempted appeal is
dismissed for want of jurisdiction."). These and related arguments are laid out in the Joint
Motions to Dismiss Mr. Grigson's and Mr. and Mrs. Hookses' appeals; the Joint Reply in further
support of the Motions to Dismiss; and the Joint Response to Mr. Grigson's Emergency Motion
to Stay.

Moreover, because the automatic stay under Remedies Code§ 51.014(b) is purely statutory in
nature, and not jurisdictional, the court of appeals must first have interlocutory appellate
jurisdiction to trigger or impose any stay, which it does not have here. See Roccaforte v.
Norton Rose Fulbright US LLP is a limited liability partnership registered under the laws of Texas.                                            56179992

Norton Rose Fulbright US LLP, Norton Rose Fulbright LLP, Norton Rose Fulbright Australia, Norton Rose Fulbright Canada LLP and Norton Rose
Fulbright South Africa Inc are separate legal entities and all of them are members of Norton Rose Fulbright Verein, a Swiss verein. Norton Rose
Fulbright Verein helps coordinate the activities of the members but does not itself provide legal services to clients. Details of each entity, with certain
regulatory information, are available at nortonrosefulbright.com.
                                                                         .A
Joe K. Longley                                                           NORTON ROSE FULBRIGHT
Joseph C. Blanks
August 20, 2015
Page 2

Jefferson Cnty. , 341 S.W.3d 919, 923 (Tex. 2011) ("[T]he stay imposed by section 51 .014(b) ...
differs from a situation in which the relevant statute vests 'exclusive jurisdiction' in a particular
forum .... as we have noted, 'a court's action contrary to a statute or statutory equivalent
means the action is erroneous or 'voidable,' not that the ordinary appellate or other direct
procedures to correct it may be circumvented ."').

Even if an automatic stay were in effect (which it is not), the stay would only apply to "all other
proceedings in the trial court" and would not apply to the issuance of Class Notice which, in this
case , does not require any further action in or by the trial court. See TEX. C1v. PRAC. & REM.
CODE ANN. § 51 .014(b). Mr. Grigson concedes this fact by seeking only a discretionary stay
from the court of appeals in his Emergency Motion to Stay the Sending of Class Notice.

There is currently no discretionary stay of class notice in effect either. The district court denied
Mr. Grigson's request for a discretionary stay, and Grigson's Emergency Motion to Stay the
Sending of Class Notice, which also seeks a discretionary stay, remains undecided.

In sum, because no stay (automatic or discretionary) is in effect and because Farmers has been
expressly ordered to disseminate Class Notice by September 4, 2015, Farmers will proceed
with the issuance of Class Notice. The settlement administrator, Rust Consulting, as Farmers'
agent, will proceed with commencing the printing process for the Class Notice on Tuesday,
August 25, 2015, in order to be in a position to place the Class Notice in the mail on September
4, 2015.

;Ja,'s, ~
M. Scott lncerto

MSl/cml
cc:   Joshua Godbey - (via e-mail: joshua.godbey@texasattorneygeneral.gov)
      Ryan S. Mindell - (via email: ryan .mindell@texasattorneygeneral.gov)
      Jennifer S. Jackson - (via email: jennifer.jackson@texasattorneygeneral.gov)

           Michael Woods - (via e-mail: michaeljwoods@sbcglobal.net)

56179992
EXHIBIT 2
7/14/2015   www.search.txcourts.gov/SearchMedia.aspx?MediaVersionID=c6c99f3c­d903­42e2­b690­18de6704d196&coa=coa03&DT=Opinion&MediaID=8a6d891…

                          TEXAS COURT OF APPEALS, THIRD DISTRICT, AT AUSTIN

                                                         NO. 03­03­00374­CV

                             Jan Lubin, Gilberto Villanueva, and Michael Paladino, Appellants

                                                                       v.

            Farmers Group, Inc.; Farmer Underwriters Association; Fire Underwriters Association;

      Farmers Insurance Exchange; Fire Insurance Exchange; Texas Farmers Insurance Company,
                 Mid­Century Insurance Company of Texas; Mid­Century Insurance

                                                      Company; et al, Appellees

            FROM THE DISTRICT COURT OF TRAVIS COUNTY, 261ST JUDICIAL DISTRICT

                   NO. GV202501, HONORABLE SCOTT H. JENKINS, JUDGE PRESIDING

                                                                O R D E R

  PER CURIAM

  Appellants seek an emergency stay of the sending of notices to the class preliminarily certified below by
  the district court until this Court rules in this interlocutory appeal. Because the district court's preliminary
  certification of a settlement­only class will cause immediate, significant and potentially irreparable
  effects in this case and to prevent interference or impairment with this Court's jurisdiction or the
  effectiveness of any appellate relief we may subsequently grant, the Order of Preliminary Approval,
  signed by the district court on June 27, 2003, is hereby stayed in all respects until further order of this
  Court.

  It is ordered on this the 7th day of July, 2003.

http://www.search.txcourts.gov/SearchMedia.aspx?MediaVersionID=c6c99f3c­d903­42e2­b690­18de6704d196&coa=coa03&DT=Opinion&MediaID=8a6d8917­…   1/2
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  Before Justices B. A. Smith, Yeakel and Puryear

http://www.search.txcourts.gov/SearchMedia.aspx?MediaVersionID=c6c99f3c­d903­42e2­b690­18de6704d196&coa=coa03&DT=Opinion&MediaID=8a6d8917­…   2/2