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LMV-AL Ventures, LLC v. Texas Department of Aging and Disability Services

Court of Appeals of Texas, Third District, Austin

April 6, 2017

LMV-AL Ventures, LLC, Cross-Appellants,
v.
Texas Department of Aging and Disability Services and Commissioner Jon Weizenbaum, in his Official Capacity, Cross-Appellee, Texas Department of Aging and Disability Services and Commissioner Jon Weizenbaum, in his Official Capacity Appellant, LMV-AL Ventures, LLC Appellees,

         FROM THE DISTRICT COURT OF TRAVIS COUNTY, 98TH JUDICIAL DISTRICT NO. D-1-GN-15-001219, HONORABLE STEPHEN YELENOSKY, JUDGE PRESIDING

          Before Justices Puryear, Pemberton, and Field

          OPINION

          David Puryear, Justice.

         Appellant and cross-appellee LMV-AL Ventures, LLC sued appellees and cross-appellants Texas Department of Aging and Disability Services and Commissioner Jon Weizenbaum, in his official capacity (collectively "DADS"), for declaratory judgment under the Uniform Declaratory Judgments Act ("UDJA") and the Administrative Procedures Act ("APA"). See Tex. Civ. Prac. & Rem. Code §§ 37.001-.011 (UDJA); Tex. Gov't Code § 2001.038 (suit for declaratory judgment under APA). LMV sought declarations that would compel DADS to license thirty rooms in LMV's recently constructed memory-care facility for double-occupancy use. DADS filed a plea to the jurisdiction, and DADS and LMV filed competing motions for summary judgment. The trial court granted summary judgment in favor of DADS. LMV appeals from the trial court's order granting summary judgment for DADS. DADS filed a cross-appeal complaining of the trial court's implied denial of its plea to the jurisdiction. We reverse and render judgment dismissing LMV's claims for declaratory judgment under the APA and the UDJA for want of jurisdiction. We affirm the trial court's granting of summary judgment on LMV's constitutional due process claims.

         Factual and Procedural Background

         LMV built an assisted living and memory-care facility, known as a "Type B" facility, [1] 40 Tex. Admin. Code § 92.3(c) (2016) (Tex. Dep't of Aging & Disability Servs., Types of Assisted Living Facilities), seeking approval for seventy-three beds in the memory-care portion of the facility.[2] Rule 92.62 sets out the general requirements for a Type B assisted living facility, such as evacuation procedures, construction elements, fire alarm and sprinkler systems, sanitation requirements, and details about the residential accommodations. See id. § 92.62 (2016) (General Requirements). Central to this case is Rule 92.62(m)(1)(B) ("Rule 92.62"), which governs the size of bedrooms in a Type B facility and provides:

Bedroom usable floor space for Type B facilities must be not less than 100 square feet per bed for a single-bed room and not less than 80 square feet per bed for a multiple-bed room. A bedroom for a person with a physical disability or mobility impairment must meet accessibility standards for access around the bed or beds, which is a minimum of 3'-0" clear width for access aisles. A bedroom must not be less than ten feet in the smallest dimension unless specifically approved by DADS.

Id. § 92.62(m)(1)(B).

         LMV sought to place seventy-three beds in the forty-three rooms in the memory-care portion of its facility, making thirty rooms double-occupancy rooms. DADS denied double-occupancy for the thirty rooms in question and instead approved all the rooms for single occupancy, allowing forty-three beds total instead of the requested seventy-three. Each of the thirty rooms that received approval for single occupancy rather than double occupancy had substantially the same configuration (or the mirror image of it), as illustrated by this drawing from the record:

         (Image Omitted)

         The drawing depicts a bathroom in the lower left-hand corner and an entryway in the lower right. In the upper left corner of each room is a two-foot, ten-inch square “niche, ” marked on the drawing with an "X, " in which LMV installed a vertical heating and air conditioning unit ["HVAC"].[3]Although some areas of the room, such as the entryway or the eight-foot, ten-inch[4] portion underneath the HVAC unit in the drawing above, are less than ten feet long, the main area of the room, excluding those areas, is a rectangle eleven-feet, eight-inches by eleven-feet, ten-inches, amounting to 138.8 square feet, which would independently satisfy the requirement that a "bedroom must not be less than ten feet in the smallest dimension." See id.

         DADS viewed the 138.8 square-foot rectangle both as satisfying the minimum dimensions for a "bedroom" and as the only space in the room that can be considered "bedroom usable floor space." See id. Under its calculation, the square footage of the rooms exceeded the minimum for single occupancy (100 square feet) but did not meet the minimum for double occupancy (80 square feet per bed), and, therefore, DADS refused to approve the rooms for anything other than single occupancy.

         LMV, on the other hand, insisted that Rule 92.62's ten-foot minimum dimension requirement should be considered independently from DADS's calculation of "bedroom usable floor space minimum" and that DADS was thus obligated to include in its calculation additional portions of the room that LMV would consider "usable" floor space. LMV argued that the two-foot, ten-inch by eight-foot, ten-inch portion below the HVAC niche in the drawing above (referred to as "the inset" and comprising 25.1 square feet), was "usable floor space" because it was large enough to accommodate furniture like a couch or a dresser and, therefore, should have been included in DADS's calculations. Were that additional space included in the "usable floor space" calculation, LMV observed, it would result in each room having slightly more than the minimum floor space for double occupancy. In the alternative, LMV asked DADS to exercise its discretion to include the insets in its calculations.

         When DADS declined to include the insets' square footage, LMV sued, asserting chiefly: that DADS exceeded its authority in excluding the insets; that DADS's interpretation excluding the floor space amounted to an improperly promulgated rule; that hewing to such an improper rule amounted to an ultra vires act; and that DADS's interpretation violated LMV's due process rights. LMV moved for summary judgment, arguing that the phrase "usable floor space" was unambiguous and should be given its ordinary meaning and, alternatively, that if the phrase was ambiguous, DADS's interpretation was arbitrary and capricious. LMV continued to insist that DADS's interpretation amounted to a rule that had not been promulgated in compliance with the APA's rulemaking process and that it violated LMV's due process rights.

         DADS filed a plea to the jurisdiction, asserting that LMV had not established jurisdiction through a waiver of sovereign immunity. DADS contended that LMV did not have a protected interest in obtaining double-occupancy licensing, that LMV was not complaining of ultra vires acts but was seeking to control DADS's exercise of its discretionary authority, that LMV's UDJA claims sought a redundant remedy, that DADS's interpretation of its rule was proper and not an ultra vires act, and that section 2001.038 of the government code did not waive DADS's sovereign immunity over these claims. In addition to its plea to the jurisdiction, DADS also sought summary judgment on the merits, arguing that its interpretation and application of its rule governing the minimum dimensions and "bedroom usable floor space" for a memory-care room were consistent with the rule's plain language and the governing statutes and not plainly erroneous and thus entitled to the trial court's deference.

         Following a hearing, the trial court signed an order denying LMV's motion for summary judgment, granting DADS's motion for summary judgment, sustaining DADS's objections to an affidavit by Paul DeNucci, managing member of LMV, as to three specific paragraphs, and overruling DADS's objections to three other paragraphs. This appeal and cross-appeal followed.

         Standard of Review

         Because it implicates jurisdiction and is dispositive of the appeal, we first consider DADS's cross-appeal, in which it asserts that the trial court should have granted its plea to the jurisdiction on LMV's claims under the UDJA and the APA.

         A plea to the jurisdiction challenges the trial court's subject-matter jurisdiction to decide claims for relief. Texas Dep't of Parks & Wildlife v. Miranda, 133 S.W.3d 217, 225-26 (Tex. 2004). In reviewing a trial court's decision on a plea to the jurisdiction, we look to the claimant's live pleadings to see whether the claimant carried its burden of alleging facts affirmatively demonstrating the trial court's jurisdiction to hear the cause. Id. at 226. When a governmental entity's plea to the jurisdiction challenges the existence of jurisdictional facts, the trial court and the appellate courts should "consider relevant evidence submitted by the parties when necessary to resolve the jurisdictional issues raised." Id. at 227. This is true even when the merits of a claimant's claims overlap with the jurisdictional issues. See Slay v. Texas Comm'n on Envtl. Quality, 351 S.W.3d 532, 545 (Tex. App.-Austin 2011, pet. denied) (overlap between merits and jurisdictional inquiry does not bar decision of jurisdictional issues, "although the existence of such overlap may impact the procedures courts use" in examining evidence).

         As a general rule, the judiciary lacks the authority to review administrative agency actions:

For well over 150 years, we have recognized the Legislature's authority to limit judicial review of executive actions. In 1859, we explained: "No principle is more firmly established, than that where a special and exclusive authority, is delegated to any tribunal or officer of the government, and no mode of revising his decision, by appeal or otherwise, is provided by law, ...

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