Court Opinion

ID: 6339357
Source: CourtListenerOpinion
Date Created: 2022-05-11 06:12:43.677671+00
Date Added: 2024-06-11T15:49:11.426569
License: Public Domain

Affirmed and Opinion Filed May 5, 2022

                                      In The
                            Court of Appeals
                     Fifth District of Texas at Dallas
                                No. 05-21-00294-CV

        JALEN BELL AND CHESTER SMITH, Appellants
                             V.
XTC CABARET (DALLAS), INC., RCI HOSPITALITY HOLDINGS, INC.,
             AND RCI HOLDINGS, INC., Appellees

               On Appeal from the 162nd Judicial District Court
                            Dallas County, Texas
                    Trial Court Cause No. DC-20-06269

                        MEMORANDUM OPINION
                   Before Justices Myers, Carlyle, and Goldstein
                            Opinion by Justice Myers
      Jalen Bell and Christopher Smith appeal the trial court’s judgment dismissing

with prejudice their claims against XTC Cabaret (Dallas), Inc., RCI Hospitality

Holdings, Inc., and RCI Holdings, Inc. Appellants bring three issues contending the

trial court erred by granting appellees’ motion for summary judgment on limitations

and that the trial court erred by dismissing appellants’ claims with prejudice. We

affirm the trial court’s judgment.
                                  BACKGROUND

      Appellants alleged that on May 5, 2018, they went to an XTC Cabaret

gentlemen’s club in Dallas. Appellants were involved in an altercation with other

people at the club, and appellants were asked to leave. Appellants alleged that they

were assaulted and injured by appellees’ employees and security personnel.

      On May 1, 2020, appellants brought suit against “XTC Cabaret Inc.” and

“John Does 1 – 5” alleging assault and battery and negligent hiring, supervision, and

retention of employees. XTC Cabaret, Inc. was served on May 11, 2020, by service

on its registered agent, Robert Axelrod.

      On June 1, 2020, XTC Cabaret, Inc. filed its answer including verified denials

to appellants’ allegations (1) that it was liable to appellants in the capacity in which

it was sued, (2) that it does business as “XTC Cabaret Dallas,” (3) that it operates a

gentleman’s club at a particular address in Dallas, and (4) that it had any employees

acting within the course and scope of their employment at the location where the

alleged acts and omissions occurred.

      On November 30, 2020, more than two years and six months after the incident,

appellants filed an amended petition adding as defendants XTC Cabaret (Dallas),

Inc., RCI Hospitality Holdings, Inc., and RCI Holdings, Inc., who are the appellees

in this case. This petition also added a claim for intentional infliction of emotional

distress. Appellees answered alleging the affirmative defense that appellants’ claims

were barred by the statute of limitations (as well as many other affirmative defenses).

                                           –2–
      Appellees moved for summary judgment contending appellants’ suit was

barred because appellants did not bring suit against them within two years after the

claims accrued. Appellants responded, asserting their failure to timely sue appellees

was due to a misnomer or misidentification that did not prejudice appellees and that

the amended petition related back to the timely filed original petition. The trial court

granted appellees’ motion for summary judgment and ordered that appellants take

nothing by their claims and that appellees “be dismissed with prejudice from this

suit.” The trial court then ordered appellants’ claims against appellees severed from

the rest of the proceedings.

                               SUMMARY JUDGMENT

      Appellants’ first and second issues contend the trial court erred by granting

appellees’ motion for summary judgment on the affirmative defense of limitations.

                                 Standard of Review

      The standard for reviewing a traditional summary judgment is well

established. McAfee, Inc. v. Agilysys, Inc., 316 S.W.3d 820, 825 (Tex. App.—Dallas

2010, no pet.). The movant has the burden of showing that no genuine issue of

material fact exists and that it is entitled to judgment as a matter of law. TEX. R. CIV.

P. 166a(c). In deciding whether a disputed material fact issue exists precluding

summary judgment, evidence favorable to the nonmovant will be taken as true. In

re Estate of Berry, 280 S.W.3d 478, 480 (Tex. App.—Dallas 2009, no pet.). Every

reasonable inference must be indulged in favor of the nonmovant and any doubts

                                          –3–
resolved in its favor. City of Keller v. Wilson, 168 S.W.3d 802, 824 (Tex. 2005).

We review a summary judgment de novo to determine whether a party’s right to

prevail is established as a matter of law. Dickey v. Club Corp., 12 S.W.3d 172, 175

(Tex. App.—Dallas 2000, pet. denied).

                                     Statute of Limitations

        “A person must bring suit for . . . personal injury . . . not later than two years

after the day the cause of action accrues.” TEX. CIV. PRAC. & REM. CODE ANN. §

16.003(a). In this case, it is undisputed that appellants’ causes of action accrued on

the day of the incident, May 5, 2018. Although appellants filed suit against XTC

Cabaret, Inc.1 on May 1, 2020, four days before limitations expired, they did not file

suit against any of the appellees until November 30, 2020, more than six months

after the two-year limitations period expired.

        A defendant moving for summary judgment on the affirmative defense of

limitations has the burden to conclusively establish that defense. Velsicol Chem.

Corp. v. Winograd, 956 S.W.2d 529, 530 (Tex. 1997). If the movant establishes that

the statute of limitations bars the action, the nonmovant must then adduce summary

judgment proof raising a fact issue in avoidance of the statute of limitations. KPMG

Peat Marwick v. Harrison Co. Hous. Fin. Corp., 988 S.W.2d 746, 748 (Tex. 1999).

    1
       XTC Cabaret, Inc. was not a party to the motion for summary judgment and is not before this Court
in this appeal.
                                                 –4–
       In this case, appellees met their summary judgment burden by presenting

uncontroverted evidence that appellants first filed suit against them more than two

years after the causes of action accrued. To overcome the motion for summary

judgment, appellants must have presented some evidence raising a fact issue in

avoidance of limitations. Appellants argue that the amended petition “related back”

to the original petition under a statutory provision and under the doctrines of

misnomer and misidentification.2

       Appellants argue the relation-back doctrine of section 16.068 of the Texas

Civil Practice and Remedies Code applies. Section 16.068 provides:

       If a filed pleading relates to a cause of action, cross action,
       counterclaim, or defense that is not subject to a plea of limitation when
       the pleading is filed, a subsequent amendment or supplement to the
       pleading that changes the facts or grounds of liability or defense is not
       subject to a plea of limitation unless the amendment or supplement is
       wholly based on a new, distinct, or different transaction or occurrence.
CIV. PRAC. § 16.068. Appellants argue that under section 16.068, their amended

petition is not subject to the defense of limitations because the original petition was

filed before limitations expired and the amended petition changes the grounds of

liability by asserting a new cause of action. However, section 16.068 does not apply

to adding new parties. See Alexander v. Turtur & Assocs., Inc., 146 S.W.3d 113,

121 (Tex. 2004) (“Ordinarily, an amended pleading adding a new party does not

   2
      Appellants did not assert in the trial court and do not argue on appeal that the Supreme Court of
Texas’s Emergency Orders Regarding the COVID-19 State of Disaster affected the running of the statute
of limitations. Accordingly, we do not consider whether those orders may have extended the limitations
period in this case.
                                                 –5–
relate back to the original pleading.”); Chavez v. Andersen, 525 S.W.3d 382, 387

(Tex. App.—Houston [14th Dist.] 2017, no pet.) (“Unless an exception applies, an

amended pleading adding a new party does not relate back to the original pleading.”).

We conclude the relation-back doctrine under section 16.068 does not apply to

appellants’ amended petition adding appellees as defendants.

      Appellants also argued that under the doctrine of misnomer, the first amended

petition related back to the original petition. Misnomer occurs when a plaintiff

serves the correct defendant but misnames it. Ensearch Corp. v. Parker, 794 S.W.2d

2, 4. (Tex. 1990). If misnomer occurs, then the petition “is nonetheless effective,

for limitations purposes, when filed, with any subsequent amendment relating back

to the date of the original filing.” In re Greater Houston Orthopaedic Specialists,

Inc., 295 S.W.3d 323, 326 (Tex. 2009). “Courts are flexible in these cases because

the party intended to be sued has been served and put on notice that it is the intended

defendant.” Id.

      Appellants argue the doctrine of misnomer applies because they served the

correct defendant, XTC Cabaret (Dallas), Inc., but misnamed it as XTC Cabaret, Inc.

XTC Cabaret, Inc., is a real existing corporation, and appellants served it by serving

its registered agent. Appellants presented Franchise Tax Account Status reports for

XTC Cabaret, Inc., XTC Cabaret (Dallas), Inc., and the two RCI corporations. These

reports showed that all four corporations had the same registered agent, Robert

Axelrod, and the same mailing address. Appellants also presented evidence that all

                                         –6–
four corporations were represented by the same attorneys in this litigation. However,

appellants presented no evidence that appellees were the parties sued in the original

petition but were misnamed.3 Appellants state in their brief, “The nightclub and the

correctly named Defendant and its attorneys always had notice of the claims being

brought against them and were aware of who Appellants were attempting to sue,”

but appellants did not cite or present any evidence in the record supporting these

statements. The fact that businesses have the same registered agent and the same

attorneys is not evidence that they were aware of whom appellants intended to sue.

We conclude appellants have not shown that the doctrine of misnomer applies.

        Rather than misnomer, this case is one of misidentification:

        “A misnomer differs from a misidentification.” In re Greater Houston
        Orthopaedic Specialists, Inc., 295 S.W.3d 323, 325 (Tex. 2009) (per
        curiam) (citing Enserch Corp. v. Parker, 794 S.W.2d 2, 4 (Tex. 1990)).
        “Misidentification—the consequences of which are generally harsh—
        arises when two separate legal entities exist and a plaintiff mistakenly
        sues an entity with a name similar to that of the correct entity.” Id.
        (citing Chilkewitz v. Hyson, 22 S.W.3d 825, 828 (Tex. 1999)). If a
        “plaintiff is mistaken as to which of two defendants is the correct one
        and there is actually existing a corporation with the name of the
        erroneously named defendant (misidentification), then the plaintiff has
        sued the wrong party and limitations is not tolled.” Enserch, 794
        S.W.2d at 5.

Exxon Mobil Corp. v. Rincones, 520 S.W.3d 572, 594 (Tex. 2017). There is an

exception under which limitations is tolled: “The statute of limitations will be tolled

in misidentification cases if there are two separate, but related, entities that use a

    3
      Appellants state in their reply brief, “The naming of the incorrect defendant was done by mistake.”
But they did not cite or present any evidence that it was “done by mistake.”
                                                  –7–
similar trade name and the correct entity had notice of the suit and was not misled

or disadvantaged by the mistake.” Flour Bluff Indep. Sch. Dist. v. Bass, 133 S.W.3d

272, 274 (Tex. 2004) (per curiam). The defendant must have received notice during

the limitations period for limitations to be tolled. Univ. of Tex. Sw. Med. Ctr. v.

Taylor, No. 05-17-01221-CV, 2018 WL 3322939, at *3 (Tex. App.—Dallas July 6,

2018, pet. denied) (mem. op.); Cooper v. D & D G.C. of Gilmer, Inc., 187 S.W.3d

717, 720 (Tex. App.—Tyler 2006, no pet.). Appellants did not assert this exception

to the doctrine of misnomer in the trial court. We cannot address appellants’

argument on appeal because it was not raised below in response to the motion for

summary judgment. See TEX. R. CIV. P. 166a(c) (“Issues not expressly presented to

the trial court by written motion, answer or other response shall not be considered

on appeal as grounds for reversal.”); Affordable Motor Co., Inc. v. LNA, LLC, 351

S.W.3d 515, 522 (Tex. App.—Dallas 2011, pet. denied); see also McConnell v.

Southside Indep. Sch. Dist., 858 S.W.2d 337, 341 (Tex. 1993) (“issues a non-movant

contends avoid the movant’s entitlement to summary judgment must be expressly

presented by written answer to the motion or by other written response to the

motion”).4

    4
      Even if appellants had preserved for appellate review the issue of the exception to non-tolling of
limitations following misidentification of a defendant, appellants’ arguments on appeal lack merit.
Although appellants presented evidence that XTC Cabaret (Dallas), Inc. owned the XTC Cabaret club in
Dallas, appellants presented no evidence that XTC Cabaret, Inc. and appellees are related entities or that
XTC Cabaret, Inc. and the two RCI corporations used any trade names. Nor did appellants present evidence
that appellees “were not misled or disadvantaged” by the mistake.” See Flour Bluff ISD, 133 S.W.3d at
274. Because the original petition was not served until after limitations had expired, neither XTC Cabaret,

                                                   –8–
        Appellants state in their brief that there is no evidence to establish that the

corporations had different officers, agents, or employees.                           However, it was

appellants’ burden to bring forward evidence that appellees were not misled or

disadvantaged by appellants initially suing the wrong entity. Even if we assumed

appellees would not have been misled or disadvantaged if they shared the same

officers, agents, and employees with one another and XTC Cabaret, Inc., appellants

presented no evidence that was the case.

        Appellants assert, “appellees never introduced summary judgment evidence

or otherwise cited evidence seeming to demonstrate that XTC Cabaret, Inc. and XTC

Cabaret (Dallas), Inc. were not related or did not operate for the same nightclub

located in Dallas.” However, appellees’ only burden was to present evidence that

they were not sued during the limitations period, which they proved. The burden

then switched to appellants to present evidence of a defense to limitations. Appellees

had no burden to present evidence that the two corporations did not operate the same

nightclub.

        Appellants state in their reply brief, “Appellees appear to mislead the Court

by seeming to suggest that XTC Cabaret, Inc. and XTC Cabaret (Dallas), Inc. are

different although in reality both parties function on behalf of this one particular

Inc. nor any of the appellees had notice of the suit during the limitations period. See Taylor, 2018 3322939,
at *3; Cooper, 187 S.W.3d at 720.

                                                    –9–
Dallas nightclub.”       Appellants presented evidence that appellee XTC Cabaret

(Dallas), Inc. is the owner of the club where appellants were allegedly injured, but

they presented no evidence that XTC Cabaret, Inc. “functions on behalf of this one

particular nightclub.”

      Appellants assert we should reverse the summary judgment pursuant to

Continental Southern Lines, Inc. v. Hilland, 528 S.W.2d 828 (Tex. 1975). In that

case, Continental Southern Lines was one of many bus companies operating under

the trade name “Continental Trailways.” Id. at 829. Hilland purchased a ticket and

rode on a “Continental Trailways” bus operated by Continental Southern Lines, and

she was injured as she was getting off the bus. Hilland sued “Continental Trailways,

Inc.,” which was a real corporation, and not Continental Southern Lines, Inc. After

limitations expired, Hilland sued Continental Southern Lines.           The trial court

overruled Continental Southern Lines’s plea of limitations, and after a jury trial,

rendered judgment in favor of Hilland for $7,800. The court of appeals affirmed.

The supreme court, however, “reverse[d] on the limitations question” but remanded

the case for a new trial “in the interest of justice.” Id. The supreme court remanded

in the interest of justice because there was an indication that service of citation might

have been forwarded to Continental Southern Lines, and because the bus driver had

prepared an accident report for Continental Southern Lines about Hilland’s accident.

Id. at 830–31. “From the above it might be inferred that its people became alerted

and that its investigative people had prompt notice of the accident.” Id. at 831. In

                                         –10–
this case, there is no evidence that the service of citation was promptly forwarded to

appellees after service on XTC Cabaret, Inc. Moreover, although not described by

the supreme court in terms of “misnomer” or “misidentification,” Hilland appears to

involve misidentification, not misnomer, because Hilland sued the wrong existing

company, Continental Trailways, Inc., and not the right defendant using the wrong

name. See id. at 830 (“The suit was not brought against an entity in its assumed or

trade name, ‘Continental Trailways.’ It was brought against a Texas corporation,

Continental Trailways, Inc., upon which service was had. Service was not had upon

Continental Southern Lines, Inc.”). As discussed above, appellants did not raise

misidentification in their response to the motion for summary judgment.

      Appellants assert in their reply brief, “This is not a case dealing with

identification of a wrong party or wrong individual. Appellants correct[ly] identified

the party they intended to sue, which was the nightclub, although they sued the

wrong trade name.” This argument appears to be an assertion that appellants brought

suit under Rule 28, which provides that a “private corporation” “may sue or be sued

in its partnership, assumed or common name . . . .” See TEX. R. CIV. P. 28.

Appellants did not present this argument for avoidance of limitations in their

response to the motion for summary judgment; therefore, the argument is not

preserved for appellate review. TEX. R. CIV. P. 166a(c); McConnell, 858 S.W.2d at

341; Affordable Motor Co, 351 S.W.3d at 522. However, even if it were preserved,

the argument lacks merit.      Appellants presented no evidence that appellees’

                                        –11–
“partnership, assumed or common name” was “XTC Cabaret, Inc.” Appellants do

not specifically identify appellees’ assumed or trade name. But, when they refer to

the club (as opposed to the business entity or entities that might own or operate the

club) they call it “XTC Cabaret.” In Hilland, the supreme court concluded that

Hilland’s suit against “Continental Trailways, Inc.” was not a suit in Continental

Southern Lines, Inc.’s assumed or trade name, which was “Continental Trailways.”

See Hilland, 528 S.W.2d at 830.        Just as Hilland’s suit against “Continental

Trailways, Inc.” was not a suit in the assumed or trade name “Continental

Trailways,” so also is appellants’ suit against “XTC Cabaret, Inc.” not a suit in the

assumed or trade name “XTC Cabaret.” No evidence shows appellants did not

intend to sue XTC Cabaret, Inc., nor does any evidence show that they actually filed

suit against XTC Cabaret (Dallas), Inc. but misnamed it.

      We conclude the trial court did not err by granting appellees’ motion for

summary judgment. We overrule appellants’ first and second issues.

                             Dismissal with Prejudice

      In their third issue, appellants ask, “Did the trial court abuse its discretion in

dismissing Appellants’ case ‘with prejudice?’” “[I]t is well established that a

dismissal with prejudice functions as a final determination on the merits.” Mossler

v. Shields, 818 S.W.2d 752, 754 (Tex. 1991) (per curiam). A dismissal of a case

barred by a statute of limitations involves the final disposition of a case. Tex.

Underground, Inc. v. Tex. Workforce Comm’n, 335 S.W.3d 670, 675 (Tex. App.—

                                        –12–
Dallas 2011, no pet.). Therefore, dismissal with prejudice was appropriate. See

Harrell v. Brinson, No. 01-18-00031-CV, 2019 WL 1284926, at *5 (Tex. App.—

Houston [1st Dist.] Mar. 21, 2019, pet. denied) (“The trial court did not err in

dismissing Harrell’s claims with prejudice because the failure to establish an

arguable basis in law for asserting a counter-defense to an already successfully

adjudicated limitations defense cannot be remedied through pleading amendment”).

We overrule appellants’ third issue.

                                 CONCLUSION

      We affirm the trial court’s judgment.

                                          /Lana Myers//
210294f.p05                               LANA MYERS
                                          JUSTICE

                                       –13–
                            Court of Appeals
                     Fifth District of Texas at Dallas
                                   JUDGMENT

JALEN BELL AND CHESTER                         On Appeal from the 162nd Judicial
SMITH, Appellants                              District Court, Dallas County, Texas
                                               Trial Court Cause No. DC-20-06269.
No. 05-21-00294-CV           V.                Opinion delivered by Justice Myers.
                                               Justices Carlyle and Goldstein
XTC CABARET (DALLAS), INC.;                    participating.
RCI HOSPITALITY HOLDINGS,
INC.; and RCI HOLDINGS, INC.,
Appellees

       In accordance with this Court’s opinion of this date, the judgment of the trial
court is AFFIRMED.

       It is ORDERED that appellees XTC CABARET (DALLAS), INC.; RCI
HOSPITALITY HOLDINGS, INC.; and RCI HOLDINGS, INC. recover their
costs of this appeal from appellants JALEN BELL AND CHESTER SMITH.

Judgment entered this 5th day of May, 2022.

                                        –14–