Court Opinion

ID: 9385772
Source: CourtListenerOpinion
Date Created: 2023-04-09 08:11:46.5869+00
Date Added: 2024-06-11T17:17:31.616469
License: Public Domain

Vacated in Part, Appeal Dismissed, and Opinion filed April 6, 2023.

                                       In The

                     Fourteenth Court of Appeals

                               NO. 14-22-00295-CV

                      PREMIER TOWERS, LP, Appellant

                                         V.
 BARBARA CARMICHAEL, HUGH CARMICHAEL, MARY DOYLE, ED
  KIEKE, JOY BLEVINS, CHARLIE SCOTT, ANGELA SOLCE, DAVID
  SOLCE, DONNA YACOE, PETER YACOE, AND NICOLE MCNALLY,
     INDIVIDUALLY AND ON BEHALF OF COMMERCE TOWERS
    CONDOMINIUM ASSOCIATION, INC., AS WELL AS ANTHONY
  TARANTINO, JOHN P. FRESE, AND CHARLES VICKERS, Appellees

                    On Appeal from the 270th District Court
                            Harris County, Texas
                      Trial Court Cause No. 2017-73895

                                  OPINION

      In an earlier appeal in this case, we affirmed appellant Premier Towers, LP’s
dismissal from the lawsuit for lack of subject-matter jurisdiction. In this appeal, we
are asked whether, on remand, the trial court had subject-matter jurisdiction to
effectively render judgment against Premier. The answer is no. Because the
judgment against the dismissed party is void, we vacate that portion of the judgment
and dismiss the appeal.

                                   I. BACKGROUND1

      Premier owned and developed a former office building to include a
condominium regime. Premier excepted from the condominium regime certain areas
designated as retail space, which Premier leased for its own benefit. All
condominium owners are members of the Commerce Towers Condominium
Association, Inc. (the Association). The plaintiffs—collectively, “the Members”—
are present or former members of the Association.2

      Premier appointed Anthony Tarantino, Charles L. Vickers, and John Patrick
Frese to the Association’s board of directors. Frese was both the president of the
Association and the vice president of Premier’s sole general partner. We refer to
Tarantino, Vickers, and Frese collectively as “the Officers.”

      At Premier’s direction, Premier and the Association entered into a “Joint Use
and Reciprocal Easements Agreement,” which the parties generally refer to as “the
JUA.” The JUA granted Premier a non-exclusive easement to use certain general
common elements of the building for the benefit of Premier, Premier’s tenants, and
the agents, suppliers, employees, patrons, and invitees of Premier or its tenants.
Although condominium owners were required to contribute to the cost of
maintaining these areas, Premier and its tenants were not.

      1
         We include in this section material taken from the Members’ and Officers’ agreed
statement of facts.
      2
         The plaintiffs are Barbara Carmichael, Hugh Carmichael, Mary Doyle, Ed Kieke, Joy
Blevins, Charlie Scott, Angela Solce, David Solce, Donna Yacoe, Peter Yacoe, and Nicole
McNally.

                                            2
       Frese signed the JUA on behalf of the Association. The Association’s articles
of incorporation allow the Association to contract or transact business with affiliates
of its directors and officers provided the act is approved or ratified by a majority of
disinterested directors. No disinterested officers or directors of the Association
approved the JUA.

A.     The First Trial Proceedings and Appeal

       The Members, both individually and derivatively on behalf of the Association,
sued Premier, the Officers, and the property-management company that provided
services to the building. The Officers and the property-management company filed
a plea to the jurisdiction challenging the Members’ standing to bring derivative
claims. The trial court granted the plea and dismissed all of the Members’ derivative
claims, including the claims against Premier. The Members then filed a notice of
non-suit of the claims they brought in their individual capacities,3 and the trial court
signed an order of dismissal finally disposing of “all remaining parties and claims.”

       On appeal, we held that the Members have derivative standing to assert only
the Association’s claims against the Officers for their allegedly ultra vires acts. See
Carmichael v. Tarantino Props., Inc., 604 S.W.3d 469, 475–81 (Tex. App.—
Houston [14th Dist.] 2020, no pet.). We affirmed the remainder of the judgment,
including the dismissal of the Members’ derivative claims against Premier and the
property management company. See id. at 481–82.

B.     Trial Proceedings on Remand

       On remand, the Members and the Officers submitted an agreed statement of
facts. Based on their contention that the Officers’ conduct in entering into or

       3
         Henceforth, we refer to the Members only in their derivative capacities as representatives
of the Association.

                                                3
approving the JUA was ultra vires, the Members moved for rendition of judgment
declaring the JUA ultra vires and void. In their proposed judgment, the Members
also added language stating that the JUA is rescinded. The Officers filed no
opposition to the motion, and the trial court signed the proposed judgment two weeks
later.

         Within thirty days of the judgment, Premier filed a petition in intervention
“for the limited purpose of moving to set aside the Final Judgment.” In the petition,
Premier moved to set aside the final judgment and for “a new trial between Plaintiffs
and the Officers (as Plaintiffs still have no standing to assert derivative claims
against Premier).” The Members moved to strike the petition on the ground that
Premier cannot properly be an intervenor because it is already a party.4 The trial
court granted the Members’ motion and expressly stated in its order that Premier is
a party to the final judgment. The trial court denied Premier’s motion for new trial,
and Premier appealed.

                                         II. JURISDICTION

         Before reaching the merits of an appellant’s issues,5 an appellate court first
must determine whether it has jurisdiction to do so. Freedom Commc’ns, Inc. v.

         4
           The Officers moved to strike the petition as well, they but did so on grounds that
acknowledged Premier is a non-party, arguing, for example, that Premier is not bound by the
judgment and waited too long to intervene. The Officers do not re-urge these arguments on appeal,
affirmatively stating that they express no position on such issues. They ask only that this Court
leave intact that part of the judgment declaring that the Officers and the Association “have no
liability for damages as the result of the events that form the basis” of the suit.
         5
          In four issues, Premier argues that (1) Premier was not a party to the final judgment, and
thus, the trial court erred in striking its petition in intervention; (2) if Premier was a party, then the
trial court erred in rendering judgment on an “agreed statement of facts” that was not agreed upon
by all of the parties; (3) the trial court applied the law incorrectly to the agreed statement of facts
because, as a matter of law, a corporation’s act is not invalid simply because the act was beyond
the scope of the corporation’s purposes or was inconsistent with a limitation on an officer’s or
director’s authority; and (4) the trial court erred in denying Premier’s motion for new trial.

                                                    4
Coronado, 372 S.W.3d 621, 624 (Tex. 2012). Under the circumstances presented
here, that determination turns on the answers to two questions of law, which we
review de novo. See Harris Cnty. v. Annab, 547 S.W.3d 609, 612 (Tex. 2018).

      First, does Premier have standing to appeal the challenged parts of the
judgment? We must determine this because “[s]tanding is implicit in the concept of
subject-matter jurisdiction, and subject-matter jurisdiction is essential to the
authority of a court to decide a case.” In re Abbott, 601 S.W.3d 802, 807 (Tex. 2020)
(orig. proceeding) (citing Tex. Ass’n of Bus. v. Tex. Air Control Bd., 852 S.W.2d
440, 443 (Tex. 1993)). Thus, if Premier lacks standing to appeal the judgment, then
this Court lacks subject-matter jurisdiction to address the merits of that appeal.

      Second, did the trial court have jurisdiction to render the challenged parts of
the judgment? This, too, is an essential determination because “[i]f a trial court lacks
subject-matter jurisdiction to make the challenged ruling, then the ruling is void.”
Doan v. TransCanada Keystone Pipeline, LP, 542 S.W.3d 794, 806 (Tex. App.—
Houston [14th Dist.] 2018, no pet.) (citing Mapco, Inc. v. Forrest, 795 S.W.2d 700,
703 (Tex. 1990) (orig. proceeding) (per curiam)). “And if a ruling is void, then the
appellate court lacks jurisdiction to review the ruling’s merits.” Id. (citing Phillips
v. Bramlett, 407 S.W.3d 229, 236 (Tex. 2013) and Waite v. Waite, 150 S.W.3d 797,
800 (Tex. App.—Houston [14th Dist.] 2004, pet. denied)).

A.    Premier Has Standing to Appeal.

      We need not consider Premier’s virtual-representation arguments to
determine that Premier has standing to appeal. Quite simply, Premier has standing
to appeal because it had been a named defendant, and it is aggrieved by the judgment
against it. That is enough. Cf. City of San Benito v. Rio Grande Valley Gas Co., 109
S.W.3d 750, 754 (Tex. 2003) (“[A]n appeal can generally only be brought by a
named party to the suit.”); Reyes v. S. Vanguard Ins. Co., No. 14-19-00728-CV,
                                           5
2020 WL 6741942, at *3 (Tex. App.—Houston [14th Dist.] Nov. 17, 2020, no pet.)
(“A person generally has standing to appeal a ruling only if the person is personally
aggrieved by it.”). While it is true that in the interval between those two events,
Premier was dismissed from the suit for lack of subject-matter jurisdiction (and we
affirmed that dismissal), that fact goes to whether the trial court’s judgment against
Premier is void, not to Premier’s standing to appeal the judgment.

B.     The Judgment Against Premier Is Void for Lack of Jurisdiction.

       Although the parties focus their appellate arguments on whether Premier was
still a party to the case when judgment was rendered, such arguments can be
misleading given the many senses in which the word “party” can be used. In one
sense, a person is “party” simply by being named in a lawsuit, regardless of whether
the trial court can exercise personal or subject-matter jurisdiction over that person.
See, e.g., Zanchi v. Lane, 408 S.W.3d 373, 377 (Tex. 2013). In that sense, Premier
is a party, and it is in that sense of the word that Premier is a “party” with standing
to appeal. On the other hand, a person named as a defendant and who seeks no
affirmative relief effectively ceases to be a party to the lawsuit when all of the claims
against it have been voluntarily or involuntarily dismissed.6 In that sense, Premier is
not a party because it asserted no claims and was dismissed from the case over a year
before the trial court rendered the challenged judgment.

       6
          See, e.g., TEX. R. CIV. P. 41 (“Parties may be dropped . . . by order of the court on motion
of any party or on its own initiative at any stage of the action, before the time of submission to the
jury or to the court if trial is without a jury, on such terms as are just.”); TEX. R. CIV. P. 163
(“Dismissal as to Parties Served”) (emphasis added); Darden v. Kitz Corp., 997 S.W.2d 388, 392–
93 (Tex. App.—Beaumont 1999, pet. denied) (“[A]n order of dismissal effectively removes the
dismissed party from the litigation.”); cf. Johnson v. Coca-Cola Co., 727 S.W.2d 756, 758 (Tex.
App.—Dallas 1987, writ ref’d n.r.e.) (“The filing of an amended petition omitting an individual or
entity as a party defendant has the effect of dismissing such party the same as if a formal dismissal
order had been entered.”).

                                                  6
      Stripped of these semantics, the crux of the matter is this: In granting the
Members declaratory and equitable relief concerning the JUA (i.e., declaring the
JUA ultra vires, null, and void, and in rescinding it), did the trial court render
judgment against Premier or against the Officers? If such declaratory and equitable
relief is a judgment against Premier, then those parts of the judgment are void for
lack of subject-matter jurisdiction. On the other hand, if this declaratory and
equitable relief is instead a judgment only against the Officers, then the award of
declaratory and equitable relief is not void, and we must go on to decide whether
those portions of the judgment bind Premier, and if so, whether those portions of the
judgment are voidable. We conclude, however, that this declaratory and equitable
relief was rendered against Premier, and that those portions of the judgment are
accordingly void.

      As we explained in the first appeal, the Members lack standing to assert any
derivative claims against Premier. See Carmichael, 478–81. The sole claims
remaining on remand were the Members’ claims that the Officers breached fiduciary
duties to the Association by committing ultra vires acts.

      But the trial court did not render judgment that the Officers breached any
fiduciary duties. The trial court said of the Officers only that,

      [i]t is further ORDERED, ADJUDGED, AND DECREED that
      DEFENDANTS and the Commerce Towers Condominium
      Association, Inc. have no liability for damages as the result of the
      events that form the basis of the above-styled lawsuit.
This part of the judgment is unchallenged.

      But the trial court nevertheless had this to say about the JUA:

      The Court, after hearing the evidence and arguments of counsel, is of
      the opinion that Plaintiffs have prevailed on their claim for rescission
      of ultra vires acts.

                                           7
              IT IS THEREFORE, ORDERED, ADJUDGED, AND
       DECREED that the Joint Use and Reciprocal Easements Agreement,
       dated October 21, 2003, by and between Premier Towers LP and the
       Commerce Towers Condominium Association, Inc. and recorded in the
       Harris County Clerk’s Official Public Records of Real Property, File
       Number X209616 and Film Code XXX-XX-XXXX (the “JUA”), is ultra
       vires pursuant to Tex. Bus. Org. Code 20.002.
             It is further ORDERED, ADJUDGED, AND DECREED that the
       JUA is rescinded and is null and void, ab initio.7
In these parts of the judgment, the trial court purported to rescind, and to render
declaratory relief concerning, the JUA, that is, concerning Premier’s easement. The
Members do not dispute that this part of the judgment is a judgment against Premier.

       That the declaratory and equitable relief is a judgment against Premier rather
than a judgment against the Officers is supported by the agreed statement of facts,
which is binding on the Members and the Officers. See Panther Creek Ventures, Ltd.
v. Collin Cent. Appraisal Dist., 234 S.W.3d 809, 811 (Tex. App.—Dallas 2007, pet.
denied). And because judgment was rendered on an agreed statement of facts, we
conclusively presume that the Members and the Officers included in it all facts
necessary for the presentation and adjudication of the Members’ claims against the
Officers. See id. Unlike a typical bench trial, there are no presumed findings in favor
of a judgment rendered on an agreed statement of facts. Id; cf. Members Mut. Ins.
Co. v. Cutaia, 460 S.W.2d 493, 496 (Tex. App.—Houston [14th Dist.] 1970, writ
granted) (“The trial court had no authority to find a fact not included in or compelled
by the agreed statement of facts.”), rev’d on other grounds, 476 S.W.2d 278 (Tex.
1972). But the agreed statement of facts connects the Officers to the JUA only in
that, at the time Frese signed the JUA on behalf of the Association, Frese was also
the vice president of Premier’s general partner, and he signed the JUA at Premier’s

       7
         This portion of the trial court’s judgment is the “declaratory and equitable relief
concerning the JUA” to which we refer in section III, infra.

                                             8
direction. The Officers are neither parties to, nor third-party beneficiaries of, the
JUA, and as far as the judgment and the agreed statement of facts show, the
declaratory and equitable relief awarded by the trial court has no effect whatsoever
on the Officers.

      The same cannot be said of Premier. In the challenged portions of the
judgment, the trial court purported to review, nullify, and rescind an instrument that
created and conveyed to Premier a dominant estate twenty years ago—even though
Premier has been dismissed from the suit and there are no claims against it.

      In response to Premier’s arguments that the trial court lacked jurisdiction to
render judgment against a non-party, the Members contend that Premier remained a
party and that the trial court properly continued to exercise jurisdiction over Premier,
despite the Members’ acknowledged lack of standing to assert any claims against
Premier. According to the Members, the trial court’s dismissal of Premier—and our
affirmance of that dismissal—“did not sever the court’s jurisdiction over Premier.”

      As a matter of law, this is simply wrong. Because standing is “a constitutional
prerequisite to maintaining suit,”8 lack of standing does not merely divest the trial
court of jurisdiction; rather, the absence of standing means that the trial court never
acquired subject-matter jurisdiction in the first place. Because “[c]ourts lack subject-
matter jurisdiction to adjudicate disputes initiated by parties lacking standing,”9 none
of the Members’ complaints about Premier were properly before the trial court for
adjudication. Due to the absence of subject-matter jurisdiction, a trial court cannot
grant relief to plaintiffs who lack standing. See In re Abbott, 601 S.W.3d 802, 805
(Tex. 2020) (orig. proceeding) (per curiam) (“[W]e conclude the judges lack

      8
          Williams v. Lara, 52 S.W.3d 171, 178 (Tex. 2001) (emphasis added).
      9
          Vernco Constr., Inc. v. Nelson, 460 S.W.3d 145, 149 (Tex. 2015).

                                                9
standing, which means the trial court lacked jurisdiction to order their requested
relief, even temporarily.”). An order that purports to do so is void as a matter of law.
See Gilbreath v. Horan, __S.W.3d__, No. 01-17-00316-CV, 2022 WL 2720680, at
*11 (Tex. App.—Houston [1st Dist.] July 14, 2022, no pet. h.) (“A party’s lack of
standing deprives a court of subject matter jurisdiction and renders any trial court
action void.”).

                                  III. CONCLUSION

      Because the trial court lacked subject-matter jurisdiction to grant the Members
declaratory and equitable relief concerning the JUA, we vacate that portion of the
judgment10 as void and dismiss the appeal.

                                        /s/    Tracy Christopher
                                               Chief Justice

Panel consists of Chief Justice Christopher and Justices Bourliot and Hassan.

      10
           See note 7, supra.

                                          10