Court Opinion

ID: 9375184
Source: CourtListenerOpinion
Date Created: 2023-02-25 20:09:22.498951+00
Date Added: 2024-06-11T17:16:56.537696
License: Public Domain

NUMBER 13-21-00167-CV

                                   COURT OF APPEALS

                       THIRTEENTH DISTRICT OF TEXAS

                          CORPUS CHRISTI – EDINBURG

STEPHEN PRUSKI,                                                                            Appellant,

                                                        v.

TEXAS WINDSTORM
INSURANCE ASSOCIATION,                                                                     Appellee.

                       On appeal from the 117th District Court
                             of Nueces County, Texas.

                                              OPINION

                     Before Justices Longoria, Silva, and Peña1
                              Opinion by Justice Silva

        1 The Honorable Leticia Hinojosa, former Justice of this Court, did not participate in this decision
because her term of office expired on December 31, 2022. In accordance with the appellate rules, she was
replaced on panel by Justice Lionel Aron Peña Jr.
       Pro se appellant Stephen Pruski sued appellee Texas Windstorm Insurance

Association (TWIA) complaining that appellee “improperly denied portions of [his] claim

for damages from Hurricane Harvey.” See TEX. INS. CODE ANN. §§ 2210.001–.705. TWIA

filed a traditional motion for summary judgment, which the trial court granted. By four

issues, Pruski argues that the trial court (1) “failed to meet requirements of [the] statute

for [a] presiding judge,” (2) denied Pruski “reasonable access to all information relevant”

to the case, (3) improperly excluded Pruski’s “evidentiary filings in opposition to statutory

language,” and (4) abused its discretion in granting TWIA’s motion for summary judgment.

We reverse and remand.

                                   I.     BACKGROUND

       Pruski’s condominium was damaged when Hurricane Harvey struck Corpus Christi

in August 2017. Pruski’s property was insured under a hail and windstorm policy with

TWIA, and Pruski filed a claim with TWIA under the policy on August 28, 2017. Following

another rainstorm which purportedly caused damage to recently repaired areas, Pruski

filed an additional claim with TWIA on December 12, 2017. TWIA issued its notice

accepting coverage in part for both claims. However, TWIA declined coverage for the

reported damages to the drywall on the perimeter walls and ceilings. Pruski served TWIA

with a timely notice of intent to sue and subsequently filed suit, seeking recovery for the

damages denied by TWIA. See id. § 2210.575(a).

       Pruski thereafter filed a motion for traditional summary judgment, which the trial

court denied. Pruski then filed a motion for recusal, questioning the judge’s impartiality

under Texas Rules of Civil Procedure 18b. Pruski’s motion additionally cited to

                                             2
§ 2210.575(e) of the Texas Insurance Code as the “statute that is the genesis of this

motion.” 2 See id. § 2210.575(e) (setting forth requirements for the appointment of a judge

over TWIA Act suits). A judge assigned by the regional administrative judge to consider

Pruski’s motion denied the motion. See TEX. R. CIV. P. 18a(g).

        On March 10, 2021, TWIA filed a traditional summary judgment motion, arguing

that “[a]s a matter of law, no coverage is owed” because Pruski’s “insurance policy only

covers personal property and certain personal property that becomes affixed to his

condominium”—which does not include drywall composing perimeter walls. The trial court

granted TWIA’s motion for summary judgment and ordered that Pruski recover nothing

from TWIA. This appeal followed.

                                         II.     DISCUSSION

        By his first issue, which we find dispositive, see TEX. R. APP. P. 47.1, Pruski

challenges the presiding judge’s authority to preside over this TWIA suit because the

judge was never appointed by the Judicial Panel on Multidistrict Litigation (MDL Panel) in

accordance with § 2210.575(e) of the insurance code. See TEX. INS. CODE ANN.

§ 2210.575(e). This is an issue of first impression and one which requires us to analyze

the Texas Windstorm Insurance Association Act (the TWIA Act) to determine whether

§ 2210.575(e) imposes a judicial exclusivity. See TEX. INS. CODE ANN. §§ 2210.001–.705;

see also TEX. GOV’T CODE ANN. §§ 74.161–.164 (Court Administration Act, Subchapter H,

“Judicial Panel on Multidistrict Litigation”); see generally In re Tex. Windstorm Ins. Ass’n.

        2 TWIA acknowledges in its brief that “[t]he real substance of Pruski’s motion to recuse was that
the presiding judge should have been appointed by the Judicial Panel on Multidistrict Litigation ([MDL
Panel]), as contemplated in [§ 2210.]575(e) of the TWIA Act.” See TEX. INS. CODE ANN. § 2210.575(e).

                                                   3
Harvey Litig., No. 19-0472, at *1 (Tex. Jud. Pan. Mult. Lit. July 10, 2020) (per curiam)

(acknowledging that the MDL Panel has not yet had the opportunity to address the

assignment of judges in cases against TWIA under § 2210.575(e)).

A.     Standard of Review

       “As in any statutory interpretation case, our objective is to ascertain and give effect

to the Legislature’s intent.” Hegar v. Health Care Serv. Corp., 652 S.W.3d 39, 43 (Tex.

2022) (quoting In re D.S., 602 S.W.3d 504, 514 (Tex. 2020)) (cleaned up). We review

matters requiring statutory interpretation de novo, and we “enforce the plain meaning of

statutory text, informed by its context.” Id.; City of Fort Worth v. Pridgen, 653 S.W.3d 176,

183 (Tex. 2022) (“[W]hile we must necessarily construe key terms, we do so in the context

of the statute as a whole, not in isolation.”).

B.     Applicable Law

       In passing the TWIA Act, the legislature created a “quasi-governmental body” to

“provide an adequate market for windstorm and hail insurance in the seacoast territory of

this state.” Hous. & Cmty. Servs., Inc. v. Tex. Windstorm Ins. Ass’n, 515 S.W.3d 906, n.1,

909 (Tex. App.—Corpus Christi–Edinburg 2017, no pet.) (quoting TEX. INS. CODE ANN.

§ 2210.001) (cleaned up). TWIA’s organization, its operations, and all related matters are

governed by Chapter 2210 of the Texas Insurance Code. TEX. INS. CODE ANN.

§ 2210.001. Under this chapter, an insured seeking to file a claim under a TWIA policy

must do so within one year from the date the damage to property occurred. Id.

§ 2210.573(a). Within sixty days of receiving a claim, TWIA must notify the claimant that

                                                  4
it has either accepted coverage for the claim in full, accepted coverage for the claim in

part and denied it in part, or denied coverage for the claim in full. Id. § 2210.573(d).

       Following TWIA’s denial of a claim, in whole or in part, the TWIA Act allows for the

claimant to pursue litigation against TWIA. Id. §§ 2210.571–.582. Section 2210.575,

entitled “Disputes Concerning Denied Coverage,” sets forth a claimant’s notice

requirements for bringing suit. Id. § 2210.575(a). In actions brought pursuant to the TWIA

Act, a claimant is limited to challenging (1) whether TWIA’s denial of coverage was proper,

and (2) the amount of damages to which the claimant is entitled. Id. § 2210.576(a). TWIA

may then require the claimant to submit to alternative dispute resolution, and if that is

unsuccessful, “the claimant may bring an action against [TWIA] in a district court in the

county in which the loss that is the subject of the coverage denial occurred.” Id.

§ 2210.575(b), (e).

       In 2011, the legislature significantly amended the process for bringing claims

against TWIA, adding, in relevant part, subsection (e) in its passage of House Bill 3. See

id. § 2210.575(e); see also Tex. Windstorm Ins. Ass’n v. Boys & Girls Club of Coastal

Bend, Inc., No. 13-19-00429-CV, 2020 WL 6072624, at *2 (Tex. App.—Corpus Christi–

Edinburg Sept. 24, 2020, pet. denied) (mem. op.) (“In 2011, the Texas Legislature passed

House Bill No. 3, which made significant changes to Chapter 2210, including the addition

of restrictions on policyholders’ remedies and specific procedural requirements.”)

(cleaned up). It is language in § 2210.575(e) that the parties dispute the effect and

consequence of: “An action brought under this subsection shall be presided over by a

                                              5
judge appointed by the [MDL Panel] designated under [§] 74.161, Government Code.” 3

TEX. INS. CODE ANN. § 2210.575(e).

        The MDL Panel consists of five members designated by the Texas Supreme Court,

and all actions by the MDL Panel require a concurrence from three of the five members.

TEX. GOV’T CODE ANN. § 74.161(a), (b). The MDL Panel operates in accordance with the

rules of practice and procedures adopted by the supreme court. Id. § 74.163(a); see

generally TEX. GOV’T CODE ANN. § 74.021 (“The supreme court has supervisory and

administrative control over the judicial branch and is responsible for the orderly and

efficient administration of justice.”). One such rule—Rule of Judicial Administration 13—

was promulgated by the Texas Supreme Court in 2003, codified, and imposes a judicial

exclusivity where applicable. TEX. GOV’T CODE ANN. §§ 74.024, 74.163(b); see TEX. R.

JUD. ADMIN. 13.1(a), (b)(1); cf. TEX. CONST. art. V, § 11 (“[T]he District Judges may

exchange districts, or hold courts for each other when they may deem it expedient, and

shall do so when required by law.”); TEX. GOV’T CODE ANN. § 74.094(a); TEX. R. CIV. P.

330(h). Rule 13 sets forth the procedures necessary for the MDL Panel “to transfer

‘related’ cases (i.e.[,] cases involving common questions of fact) from different trial courts

to a single pretrial judge.” In re Deepwater Horizon Incident Litig., 387 S.W.3d 127, 128

        3   Section 2210.575(e) further requires as follows:

        A judge appointed under this section must be an active judge, as defined by [§] 74.041,
        Government Code, who is a resident of the county in which the loss that is the basis of the
        disputed denied coverage occurred or of a first tier coastal county or a second tier coastal
        county adjacent to the county in which that loss occurred.

Id. The TWIA Act defines first and second tier counties, and Nueces County is identified as a first tier county.
See id. § 2210.003(4), (11).

                                                       6
(Tex. Jud. Pan. Mult. Lit. 2011). MDL Panel intervention under Rule 13 is predicated on

the submission of a written motion addressed to the MDL Panel by a party or judge. TEX.

R. JUD. ADMIN. 13.3. Provided that the motion adequately resolves every Rule 13-

enumerated threshold, the MDL Panel will grant the request for transfer, and a judicial

assignment will follow. Id. R. 13.6(a). The judge assigned by the MDL Panel “has

exclusive jurisdiction” over the cause “unless a case is retransferred by the MDL Panel or

is finally resolved or remanded to the trial court for trial.” Id.; see In re Farmers Ins. Co.

Wind/Hail Storm Litig. 2, 506 S.W.3d 803, 804 (Tex. Jud. Pan. Mult. Lit. 2016).

C.     Analysis

       The parties agree that this is a suit brought under the TWIA Act and that the MDL

Panel did not appoint a judge in this case. See TEX. INS. CODE ANN. § 2210.575. Rather,

the parties principally disagree with the import and effect of the language found in

§ 2210.575(e). TWIA urges this Court to conclude that however mandatory the language

in § 2210.575(e) appears, it is still susceptible to waiver principles and not otherwise

restrictive of a trial court’s authority to preside over a § 2210.575 suit. See generally

Perryman v. Spartan Tex. Six Capital Partners, Ltd., 546 S.W.3d 110, 131–32 (Tex. 2018)

(exploring provisions containing mandatory terms which do not carry a mandatory

prescription); see, e.g., Tex. Dep’t of Pub. Safety v. Scanio, 159 S.W.3d 712, 714 (Tex.

App.—Corpus Christi–Edinburg 2004, pet. denied) (concluding a statute requiring that

“the county judge shall transfer the case to a district court for the county on the motion of

either party or of the judge” was a question of venue, and thus, waivable).

                                              7
       The first indication that § 2210.575(e) imposes an obligation is its use of “shall”—

mandatory language: “An action brought under this subsection shall be presided over by

a judge appointed by the [MDL Panel] designated under [§] 74.161, Government Code.”

TEX. INS. CODE ANN. § 2210.575(e) (emphasis added); see Maine Cmty. Health Options

v. United States, 140 S. Ct. 1308, 1320 (2020); Crosstex Energy Servs., L.P. v. Pro Plus,

Inc., 430 S.W.3d 384, 392 (Tex. 2014) (“The Code Construction Act makes clear that the

use of ‘shall’ normally imposes a mandatory requirement.” (citing TEX. GOV’T CODE ANN.

§ 311.016(2))); see also Shall, BLACK’S LAW DICTIONARY (11th ed. 2019) (defining “shall”

as “a duty to”). Additionally, where—as here—a statute “distinguishes between ‘may’ and

‘shall,’ it is generally clear that ‘shall’ imposes a mandatory duty.” See Kingdomware

Techs., Inc. v. United States, 579 U.S. 162, 172 (2016); compare TEX. INS. CODE ANN.

§ 2210.575(b) (“[T]he association may require the claimant, as a prerequisite to filing the

action against the association, to submit the dispute to alternative dispute resolution by

mediation or moderated settlement conference.”) (emphasis added), with id.

§ 2210.575(c) (“The association must request alternative dispute resolution of a dispute

described by Subsection (b) not later than the 60th day after the date the association

receives from the claimant notice of intent to bring an action.”) (emphasis added). We

further find persuasive that we have long held that statutory provisions pertaining to the

creation of statutory causes of action and remedies against an administrative agency,

such as TWIA, are mandatory and exclusive. Hous. & Cmty. Servs., Inc., 515 S.W.3d at

909.

                                            8
       In our determination of whether to depart from the ubiquitous meaning of “shall”—

specifically, to decide whether the Legislature’s use of “shall” constituted a conferment of

exclusive judicial authority—we are confronted with a glaring omission in the statute:

Section 2210.575 contains no guidance regarding the procedure necessary to initiate

MDL Panel assignment. See generally TEX. INS. CODE ANN. § 2210.575 (setting forth a

claimant’s notice requirements, establishing TWIA’s right to seek alternative dispute

resolution, and requiring a court to abate “an action against [TWIA] . . . until the notice of

intent to bring an action has been provided and, if requested by the association, the

dispute has been submitted to alternative dispute resolution, in accordance with this

section”). In contrast to Rule 13.3 proceedings, which places the onus on a party or court

to request MDL Panel-intervention before appointment is considered and ordered,

§ 2210.575 contains no such triggering provision. Compare TEX. R. JUD. ADMIN. 13.3 with

TEX. INS. CODE ANN. § 2210.575(e). Section 2210.575(e) simply appears to necessitate—

without instruction as to how it is to be effectuated or by whom—that the MDL Panel must

appoint a judge in TWIA Act filings. See TEX. INS. CODE ANN. § 2210.575(e); In re Tex.

Windstorm Ins. Ass’n. Harvey Litig., No. 19-0472, at *1 (concluding that a “plain reading”

of § 2210.575 requires that the MDL Panel appoint a judge in TWIA Act proceedings and

explicitly “forecloses the assignment” of judges otherwise authorized to preside under

Rule 13.6(a)). It is in partial consideration of this statutory silence that TWIA advances its

interpretation of the provision as one akin to a venue challenge—i.e., waived if not timely

asserted and otherwise unobstructive on a court’s authority to preside over a cause or

render judgment.

                                              9
       For reasons explored infra, it would be in contravention to the statute’s objectives

and legislative history for us to conclude that § 2210.575(e) does not carry a mandatory

prescription. The legislature has broad authority to restrict a courts’ jurisdictional purview,

and legislative limitations to a trial court’s judicial authority “need not be express.” S.C. v.

M.B., 650 S.W.3d 428, 436 (Tex. 2022); see, e.g., In re Champion Indus. Sales, LLC, 398

S.W.3d 812, 820–21 (Tex. App.—Corpus Christi–Edinburg 2012, orig. proceeding)

(concluding, in an application of Rule 13.6 on a non-TWIA Act proceeding, that “although

the 333rd District Court is a court of general jurisdiction by virtue of the statutes that

created it, when the 333rd District Court is acting pursuant to the MDL panel’s designation

as a pretrial court under MDL rules and legislation, by reference to those rules, it is not a

court of general jurisdiction”). Moreover, the presumption that courts of general

jurisdiction have subject matter jurisdiction over a matter, unless a showing can be made

to the contrary, “does not apply to actions grounded in statute rather than the common

law.” In re Champion Indus. Sales, 398 S.W.3d at 820. It is against this backdrop, that we

analyze the history and purpose of § 2210.575. See S.C., 650 S.W.3d at 436; see also

Hegar, 652 S.W.3d at 43; Hous. & Cmty. Servs., Inc., 515 S.W.3d at 909.

       In 2008, in the aftermath of Hurricanes Dolly and Ike, TWIA received over 100,000

claims and experienced an estimated $2.9 billion in losses. TEX. WINDSTORM INS. ASS’N,

Bi-Monthly    Interim    Report    November/December         2012     (January    31,    2013),

https://www.twia.org/wp-content/uploads/2015/03/Report-Card-Jan-31-2013-Final.pdf. A

review of the Texas House Journal from the tenth day of the 82nd Legislature, First-Called

Session reveals remarks by various state representatives concerning TWIA’s claims

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handling process and the resulting substantial litigation costs which ultimately led to TWIA

being placed under administrative oversight and the passage of House Bill 3 in 2011:

       SMITHEE:                    . . . . [T]here is several things that are intended
                                   to ensure a consistency of result for policy
                                   holders, whether they have a lawyer, or don’t
                                   have a lawyer, or who their lawyer might be.

       ....

       L TAYLOR:                   We’re changing the process with this bill so that
                                   people can get their claims handled more
                                   quickly and fairly. At the end of the day, our
                                   coastal policyholders will be much better taken
                                   care of than they were under Hurricane Ike—
                                   more efficient, quicker. We’re going to save all
                                   TWIA policyholders from unnecessary premium
                                   increases. . . .

       ....

       MARTINEZ FISCHER:           . . . . it’s also fair to say that some of the
                                   underhandedness that was taking place at
                                   TWIA was at the result of discovery and the civil
                                   litigation process that brought this information to
                                   light . . . .

H.J. of Tex., 82nd Leg., 1st R.S. 500, 503, 505 (2011) (remarks by Representatives John

T. Smithee, Larry Taylor, and Trey Martinez Fisher).

       Specifically, House Bill 3 “developed a new claims process for TWIA, including

limitations on when claim issues may be brought to suit and the extent of damages that

may be awarded in any lawsuit against TWIA.” TEX. WINDSTORM INS. ASS’N, Bi-Annual

Report to the 84th Legislature, at 20 (December 30, 2014), https://www.twia.org/wp-

content/uploads/2015/03/TWIA_Biennial_Report_84th_Texas_Legislature.pdf.                 House

Bill 3 additionally limited the remedies available to the insured, making the Deceptive

                                            11
Trades and Practices Act and insurance code chapters 541 (bad faith) and 542 (prompt

pay act) inapplicable to TWIA claims. TEX. WINDSTORM INS. ASS’N, TWIA Annual Report

Card (May 31, 2013), https://www.twia.org/wp-content/uploads/2015/03/Report-Card-

Jan-31-2013-Final.pdf; see Michael S. Wilson, A Procedure for Segregating Damages

from Wind and Flood Water, 16 TEX. TECH ADMIN. L.J. 141, 174 (2014) (“House Bill 3

significantly limited the ability to bring lawsuits against TWIA . . . .”).

       Given the expressed legislative intentions behind the 2011 TWIA Act

amendments—namely, the implementation of greater restrictions on TWIA Act litigation

and imposition of procedures ensuring more uniformity in claims resolutions—it stands to

reason that the legislature intended to limit judicial authority in TWIA Act suits in its

specific inclusion of § 2210.575(e). See S.C., 650 S.W.3d at 436; see also Hegar, 652

S.W.3d at 43; Hous. & Cmty. Servs., Inc., 515 S.W.3d at 909. To conclude otherwise

would render the addition of § 2210.575(e) superfluous. Cf. Off. of the Att’y Gen. of Tex.

v. C.W.H., 531 S.W.3d 178, 183 (Tex. 2017) (concluding, where a statute required

automatic case referral to a specialized associate judge, “[w]e assume that the

Legislature believed that the efficiencies” of those specialized associate judges

“outweigh[ed] any burden that appearing first before [such] associate judge may create

in any particular case”). We therefore conclude § 2210.575(e) denotes mandatory action

inconsistent with discretion. See TEX. INS. CODE ANN. § 2210.575; cf. S.C., 650 S.W.3d at

436; Hous. & Cmty. Servs., Inc., 515 S.W.3d at 909. Because nothing in § 2210.575

requires Pruski to have explicitly requested that the MDL Panel appoint a judge to initiate

                                               12
the statute’s assignment requirement, we reject TWIA’s contention that Pruski’s failure to

timely file a request for appointment constituted a waiver of his complaint.

         Having concluded such provision is mandatory and restrictive of a judge’s authority

to preside over TWIA Act suits, we must also conclude the presiding judge was without

authority to render judgment in this cause. See generally Dubai Petroleum Co. v. Kazi,

12 S.W.3d 71, 74–75 (Tex. 2000) (“A judgment may properly be rendered against a party

only if the court has authority to adjudicate the type of controversy involved in the action.”)

(cleaned up). The judgment is therefore void. See In re D.S., 602 S.W.3d at 512 (“A

judgment is void, rather than voidable, when it is apparent that the court rendering

judgment had no jurisdiction over the parties or property, no jurisdiction over the subject

matter, no jurisdiction to enter the particular judgment, or no capacity to act.”) (cleaned

up); cf. Comm’n for Law. Discipline v. Schaefer, 364 S.W.3d 831, 836 (Tex. 2012) (per

curiam) (“[J]udgments of disqualified trial judges are void.”). We sustain Pruski’s first

issue.

                                     III.   CONCLUSION

         We reverse the trial court’s judgment and remand with instructions to vacate and

set aside the judgment and to conduct further proceedings consistent with this opinion.

See TEX. R. APP. P. 43.2(d); see, e.g., San Patricio County v. Nueces County, 492 S.W.3d

476, 488 (Tex. App.—Corpus Christi–Edinburg 2016, pet. denied) (reversing “the

judgment of the trial court rendered on the merits of the case” and remanding “with

instructions to vacate and set aside that judgment and to transfer the case” to the

appropriate county).

                                              13
                                   CLARISSA SILVA
                                   Justice

Delivered and filed on the
23rd day of February, 2023.

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