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In re Lowe's Home Centers, L.L.C.

Court of Appeals of Texas, Thirteenth District, Corpus Christi-Edinburg

July 28, 2017


         On Petition for Writ of Mandamus.

          Before Chief Justice Valdez and Justices Rodriguez and Benavides.


          NELDA V. RODRIGUEZ Justice.

         By petition for writ of mandamus, Lowe's Home Centers, L.L.C. (Lowe's) asserts that the plaintiffs in the underlying suit cannot "fraudulently secure venue in one county and then, once the fraud is discovered, nonsuit and refile the same claims against the same parties in another county."[1] The underlying wrongful death and personal injury case was originally filed against Lowe's and other defendants in Starr County. Lowe's moved to transfer venue to Cameron County; however, the trial court denied the motion to transfer. During subsequent discovery, Lowe's discovered that the plaintiffs' venue pleadings and affidavit were at best, incorrect, and at worst, fraudulent. Lowe's notified counsel for the plaintiffs and proposed that they agree to transfer venue to Cameron County. Instead, the plaintiffs nonsuited the case in Starr County and refiled a substantially similar case in Hidalgo County.

         In Hidalgo County, Lowe's moved to dismiss the lawsuit, or alternatively, to transfer the case back to Starr County. The trial court denied both motions, and this original proceeding ensued. Lowe's contends that the Hidalgo County trial court should either dismiss the suit, or alternatively, transfer the case to Starr County for a determination regarding whether, because venue was procured by fraud, the case should be heard in a county of indisputably proper venue. We conditionally grant the petition for writ of mandamus.

         I. Background

         According to the pleadings, this case arises from a propane explosion that occurred during the early morning hours of Christmas Day in 2015 at a home owned by Sandra Leos in Cameron County. In their original petition, the plaintiffs alleged that "uncontrolled propane leaked via a defective regulator from [a] propane tank through a defective and improperly capped propane line in the family home. The explosion was of such magnitude that it blew the roof from the house, and left little more than a shell of the home remaining." Two of the family members died as a result of the explosion, and four others suffered extensive and catastrophic burn injuries.

         In their third amended original petition filed in Starr County, Mirna Trevino, as next friend of J.T. and J.T., minors; Blanca Moreno Garcia, individually and as next friend of S.L. and R.L., minors, and on behalf of the estate of Genesis Gonzalez Moreno De Leos; Olivia Pulido, individually and on behalf of the estate of Juan Ramon Leos; Maria Angelica Palacios Obregon; Salvador Torres Morales; and Sandra Leos, brought suit against Lowe's, Hino Gas Sales, Inc. (Hino), Rego Products, Inc. (Rego), Engineered Controls, International, L.L.C. (ECI), Thompson Tank, Inc. (Thompson), La Pulga de Rio, L.L.C. (La Pulga de Rio), La Gran Pulga, and Ramon De La Cruz.[2]

         According to the petition, Hino provided the propane to the home in question and acted negligently regarding its duties to inspect and maintain the propane tank. Lowe's removed a gas dryer and gas water heater from the home and replaced them with electric appliances, but acted negligently in failing to properly cap off the gas lines to the old appliances. Rego and ECI designed, manufactured, and sold the allegedly defective regulator, and Thompson designed, manufactured, distributed, or sold the propane tank. La Pulga De Rio, La Gran Pulga, and De La Cruz sold the tank. According to the petition, De La Cruz "does business under the name" La Gran Pulga. In sum, the plaintiffs' causes of action included: negligence against Hino, Lowe's, Rego, ECI, Thompson, La Pulga, and De La Cruz; negligent misrepresentation against La Pulga, La Gran Pulga, and De La Cruz; negligence per se against Hino and Lowe's; strict products liability against Rego, ECI, Thompson, La Pulga, La Gran Pulga, and De La Cruz; and gross negligence against Hino, Rego, ECI, Thompson, and Lowe's.

         The plaintiffs alleged venue was proper in Starr County as follows: "At least one of the Defendants is headquartered or resides in this County, and all or a significant portion of the events giving rise to Plaintiffs' claims arose in this County. Venue is therefore proper in Starr County."

         Various defendants, including Lowe's, Hino, ECI, Rego, De La Cruz, and La Gran Pulga, filed motions to transfer venue to Cameron County. Lowe's filed both a motion to transfer venue and a first amended motion to transfer venue. In summary, Lowe's argued that all or substantially all of the events or omissions giving rise to the lawsuit occurred in Cameron County rather than Starr County. According to Lowe's first amended motion to transfer venue: the majority of the plaintiffs reside in Cameron County; the plaintiffs' home where the explosion occurred is in Cameron County; plaintiffs allege that Hino came to plaintiff's home in Cameron County to fill the propane tank that allegedly leaked; plaintiffs allege that Lowe's removed two gas appliances from plaintiffs' home in Cameron County, replaced the gas appliances with electric appliances, and failed to cap the gas lines which allegedly leaked in the home; and Hino's principal office is in Cameron County. Lowe's asserted that the "only factual allegation related to Starr County" was that the plaintiffs allegedly purchased the tank and regulator from La Pulga in Rio Grande City, Texas. Lowe's specifically denied this venue allegation and all other allegations against La Pulga, stating that "discovery will reveal that Plaintiffs' claims against La Pulga have no basis in law or fact, and were improperly asserted in an attempt to maintain venue in Starr County." Lowe's further argued that La Pulga was not a resident of Starr County. Finally, Lowe's argued that the case should be transferred to Cameron County for the convenience of the parties and in the interest of justice.

         On April 18, 2016, the plaintiffs filed a response to the defendants' motions to transfer venue. The plaintiffs specifically argued that two of the defendants-La Gran Pulga and Ramon De La Cruz-resided in Starr County, and both the tank and the regulator were purchased in Starr County. According to the plaintiffs, La Gran Pulga was located in Starr County, and even if it was "an unorganized business, " venue in Starr County was still proper because De La Cruz, the owner and operator of La Gran Pulga, resided in Starr County. The plaintiffs' response asserted that "Moreover, Plaintiffs attest, under oath, that they purchased the deficient propane tank and regulator from La Gran Pulga in Starr County." The response further asserted that "this same propane tank, regulator, and component system malfunctioned on Christmas Day 2015, and, in conjunction with numerous other factors, caused propane gas to accumulate in Plaintiffs' home." The response stated that:

Sandra Leos, owner of the now destroyed house, purchased and had installed at her house a propane tank and regulator from La Gran Pulga. Before Sandra Leos purchased the tank and regulator from La Gran Pulga, agents or employees from La Gran Pulga misrepresented to her that the tank and regulator were in good working condition. After purchasing the new propane tank from La Gran Pulga, Sandra coordinated the removal of the propane tank that had previously supplied gas to her house. Once installed at her home, the new propane tank was serviced and filled by Hino Gas. The new propane tank released gas through a defective regulator that was manufactured by Rego Products/Engineered Controls. The new propane tank was the point of origination for the gas that flowed through lines that were improperly sealed by Lowe's employees. The propane system, including the tank and regulator-both purchased in Starr County-is the nexus connecting all Defendants, and Plaintiffs' purchase of the propane tank is the first chapter in the series of transactions or occurrences that resulted in this incident. That story begins in Starr County. And because Starr County is "where the principal office of at least one Defendant is located, " and because Starr County is where "a substantial part of the events or omissions giving rise to the claim occurred"; and because the propane system is the nexus connecting all alleged events into the same "series of transactions or occurrences, " the story should end where it began-in Starr County.

(Footnotes omitted). The plaintiffs' response to the motion to transfer venue was supported by an affidavit furnished by Sandra Leos which provided in relevant part:

3. I am the owner of the property located at 1682 Calle San Pedro, San Benito, TX;
4. I purchased a propane tank and a propane regulator (collectively the "Propane Equipment") from La Gran Pulga in Starr County, TX. La Gran Pulga was involved in this transaction. La Gran Pulga is located in Starr County.
5. Before purchasing the Propane Equipment, employees working on the premises of La Gran Pulga told me that the Propane Equipment was in good working condition and the tank had no problems. Relying on the representations of these individuals, I purchased the Propane Equipment at La Gran Pulga.
6. After purchasing the Propane Equipment from La Gran Pulga, I had the propane tank that was already at my property removed. I had a concrete slab poured on the property, and the new tank placed on that slab. Previously the tank was just resting on blocks on the yard.
7. The individuals that I believe to be employees of La Gran Pulga that were on the premises of La Gran Pulga misrepresented facts to me regarding the tank and regulator. Specifically, these individuals told me that the tank and regulator were in good working order and had no problems.

         Lowe's filed a reply to the plaintiffs' response, generally alleging that the plaintiffs had not pleaded any "tenable" cause of action against the Starr County defendants because, inter alia, La Gran Pulga is a "flea market, " and Cruz rented "slots" to vendors who then offered consumers items for sale.

         On May 18, 2016, the Starr County trial court held a hearing on the motions to transfer venue. That same day, the Starr County court denied the defendants' motions to transfer venue. Thereafter, Lowe's pursued an interlocutory appeal of this ruling in the San Antonio Court of Appeals. See Lowe's Home Ctrs, LLC. v. Trevino, No. 04-16-00357-CV, 2016 WL 3773589, at *1 (Tex. App.-San Antonio July 13, 2016, no pet.) (per curiam mem. op.); see also Tex. R. App. P. 28.1; Tex. Civ. Prac. & Rem. Code Ann. § 15.003 (West, Westlaw through Ch. 49, 2017 R.S.).

         On June 16, 2016, the plaintiffs filed a fourth amended petition in Starr County. In addition to other minor changes, this petition eliminated the plaintiffs' claims against Thompson.

         During discovery in the Starr County case, Lowe's obtained evidence that it asserts shows that the plaintiffs' allegations placing venue in Starr County and the sworn proof supporting those allegations were "fraudulent." During discovery, Lowe's interviewed Manuel Sierra, who was the previous owner of Leos's home. Sierra told Lowe's that when he sold the home to Leos, he left at the home a propane tank and regulator that he had purchased from Lone Star Gas in Harlingen, Texas. Records from Lone Star Gas confirmed that Sierra purchased a propane tank and regulator from them. A post-accident investigation by the Texas Railroad Commission confirmed that the tank and regulator in use at the Leos home at the time of the explosion were the same products that Sierra had purchased and installed at the residence. Thus, the tank and regulator at the Leos home were not purchased at a Starr County flea market, but were instead the tank and regulator that the former owner of Sandra Leos's home had installed nine years earlier.

         On June 24, 2016, after discovering these facts, Lowe's counsel contacted one of the attorneys representing the plaintiffs by telephone and informed that attorney that Lowe's had discovered that his clients had misrepresented facts regarding the purchase of the tank and regulator that affected the trial court's venue determination. Lowe's counsel advised plaintiffs' counsel that Lowe's would seek sanctions unless the plaintiffs agreed to transfer the case to the proper venue, Cameron ...

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