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In re Philadelphia Indemnity Insurance Company

Court of Appeals of Texas, Twelfth District, Tyler

July 31, 2017

IN RE: PHILADELPHIA INDEMNITY INSURANCE COMPANY, RELATOR

         ORIGINAL PROCEEDING

          Panel consisted of Worthen, C.J., Hoyle, J., and Neeley, J.

          MEMORANDUM OPINION

          Brian Hoyle Justice

         Red Dot Buildings has filed a motion for rehearing, which is granted. We withdraw our June 7, 2017 opinion and judgment and substitute the following opinion and corresponding judgment in their place.

         Philadelphia Indemnity Insurance Company seeks mandamus relief from the trial court's order denying its motion to transfer venue.[1] We dismiss this original proceeding as moot.

         Background

         In 2014, Red Dot Buildings and Rigney Construction and Development, L.L.C. entered into a subcontract related to the construction of a school in Brooks County, Texas. Red Dot secured a payment bond from Philadelphia for the project in accordance with Chapter 2253 of the Texas Government Code.

         When a dispute subsequently arose between Red Dot and Rigney, Red Dot sued for breach of contract. Rigney moved to transfer venue to Hidalgo County. The trial court denied the motion. Red Dot also made a payment bond claim with Philadelphia. In its first amended petition, Red Dot brought Philadelphia into the lawsuit under Chapter 2253 of the Texas Government Code. Philadelphia filed a motion to transfer venue with its original answer, asserting that the case must be transferred to Brooks County under section 2253.077 of the government code. Citing that venue had been determined before Philadelphia was a party, the trial court denied Philadelphia's motion to transfer. This original proceeding followed.

         Mootness

         We first address Red Dot's argument that this proceeding is moot. Following the filing of Philadelphia's mandamus petition, Red Dot nonsuited its case against Philadelphia. Nevertheless, Philadelphia argues that its petition is not moot because the claims against it can be refiled, the case presents an issue of public importance, and venue is still mandatory in Brooks County because Brooks County Independent School District is now a party to the lawsuit.

         "[C]ourts have an obligation to take into account intervening events that may render a lawsuit moot." Heckman v. Williamson Cnty., 369 S.W.3d 137, 166-67 (Tex. 2012). Appellate courts lack jurisdiction to decide moot controversies and render advisory opinions. See Nat'l Collegiate Athletic Ass'n v. Jones, 1 S.W.3d 83, 86 (Tex. 1999). A justiciable controversy between the parties must exist at every stage of the legal proceedings, including the appeal, or the case is moot. Williams v. Lara, 52 S.W.3d 171, 184 (Tex. 2001). "If a controversy ceases to exist-the issues presented are no longer 'live' or the parties lack a legally cognizable interest in the outcome-the case becomes moot." Id.; see Tex. Health Care Info. Council v. Seton Health Plan, 94 S.W.3d 841, 846 (Tex. App.-Austin 2002, pet. denied). The same is true if an appellate court's judgment cannot have any practical legal effect upon a then existing controversy. Zipp v. Wuemling, 218 S.W.3d 71, 73 (Tex. 2007) ("An appeal is moot when a court's action on the merits cannot affect the rights of the parties.").

         There are two exceptions which will allow an appellate court to address issues that are otherwise moot: (1) capable of repetition yet evading review; and (2) collateral consequences. In re S.J.C., 304 S.W.3d 563, 568 (Tex. App.-El Paso 2010, no pet.) (citing Gen. Land Office of the State of Tex. v. OXY U.S.A., Inc., 789 S.W.2d 569, 571 (Tex. 1990). The "capable of repetition, yet evading review" exception applies only in rare circumstances. Tex. A & M Univ.-Kingsville v. Yarbrough, 347 S.W.3d 289, 290-91 (Tex. 2011); Williams, 52 S.W.3d at 184. To invoke the exception, a plaintiff must prove that: (1) the challenged action was too short in duration to be litigated fully before the action ceased or expired; and (2) a reasonable expectation exists that the same complaining party will be subjected to the same action again. Yarbrough, 347 S.W.3d at 290; Williams, 52 S.W.3d at 184-85; Blum v. Lanier, 997 S.W.2d 259, 264 (Tex. 1999); OXY U.S.A., 789 S.W.2d at 571 (Tex. 1990); In re Fort Worth Star Telegram, 441 S.W.3d 847, 852 (Tex. App.-Fort Worth 2014, orig. proceeding). An issue does not evade appellate review if appellate courts have addressed the issue on the merits. Meeker v. Tarrant Cnty. Coll. Dist., 317 S.W.3d 754, 762 (Tex. App.-Fort Worth 2010, pet. denied). The mere physical or theoretical possibility that the same party may be subjected to the same action again is not sufficient. City of Dallas v. Woodfield, 305 S.W.3d 412, 419 (Tex. App.-Dallas 2010, no pet.); see Coburn v. Moreland, 433 S.W.3d 809, 826 (Tex. App.-Austin 2014, no pet.).

         The "collateral consequences" exception has been applied when prejudicial events have occurred "whose effects continued to stigmatize helpless or hated individuals long after the unconstitutional judgment had ceased to operate." In re Salgado, 53 S.W.3d 752, 757 (Tex. App.-El Paso 2001, orig. proceeding) (quoting OXY U.S.A., 789 S.W.2d at 571). The exception is "invoked only under narrow circumstances when vacating the underlying judgment will not cure the adverse consequences suffered by the party seeking to appeal that judgment." Marshall v. Housing Auth. of the City of San Antonio, 198 S.W.3d 782, 789 (Tex. 2006). "Such narrow circumstances exist when, as a result of the judgment's entry, (1) concrete disadvantages or disabilities have in fact occurred, are imminently threatened to occur, or are imposed as a matter of law; and (2) the concrete disadvantages and disabilities will persist even after the judgment is vacated." Id.

         In this case, the trial court's denial of Philadelphia's motion to transfer venue became irrelevant when Red Dot nonsuited Philadelphia in the underlying proceeding. As a result, the controversy underlying this original proceeding has become moot. See Nat'l Collegiate Athletic Ass'n, 1 S.W.3d at 86. Further, the capable of repetition yet evading review exception does not apply because the record does not indicate that the challenged ...


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