VERTICAL NORTH AMERICA, INC. N/K/A RAIZEN NORTH AMERICA, INC., Appellant
VOPAK TERMINAL DEER PARK, INC., Appellee
Appeal from the 61st District Court Harris County, Texas
Trial Court Cause No. 2012-33666
consists of Justices Jamison, Donovan, and Jewell.
issued our opinion in this case on May 23, 2017. Thereafter,
appellee Vopak Terminal Deer Park, Inc. ("Vopak")
filed a motion for rehearing and motion for en banc
reconsideration. Appellant Vertical North America, Inc.,
n/k/a Raizen North American, Inc. ("Vertical NA")
filed a response. We withdraw our previous opinion, vacate
our previous judgment, and issue this substitute opinion and
judgment. We deny Vopak's motion for rehearing and deny
as moot Vopak's motion for en banc reconsideration.
NA brings this appeal from an order in favor of Vopak
dismissing Vertical NA's suit for want of jurisdiction.
We reverse and remand.
NA, a Houston-based ethanol trader and distributor, entered
into a series of contracts with Vopak, a terminaling company
that provides bulk tank storage service. At the time those
agreements were signed, Vertical NA was a corporate
subsidiary of Vertical UK LLP. On August 25, 2011, Vertical
UK entered into a Purchase and Sale Agreement
("PSA"), selling all shares of Vertical NA to
Raizen Trading LLP. Vertical NA filed suit against Vopak in
June 2012 for breach of contract and fraud. In July 2015,
Vopak moved to dismiss the suit on the basis Vertical NA
lacked standing "because it does not own the claims it
is asserting." The trial court granted Vopak's
motion and dismissed the suit for want of jurisdiction.
first issue, Vertical NA contends the trial court erred in
concluding it lacked standing. In the trial court, Vopak
asserted Vertical NA lacked standing to assert its claims
because after execution of the PSA those claims were owned by
Vertical UK. Vertical NA countered that Vopak's complaint
was one of capacity rather than standing. In the hearing on
Vopak's motion to dismiss, Vertical NA again urged this
argument, stating "there is a very serious issue as to
whether this is a question of standing or a question of
capacity. . . . It's an issue of capacity. And
they've long since waived their right to raise an issue
of capacity." In its brief, Vertical NA notes that if
the issue were treated as a question of capacity, rather than
standing, the trial court's judgment must be vacated
because Vopak did not file a verified answer challenging
Vertical NA's capacity to bring this suit. See
Tex. R. Civ. P. 93.
plaintiff must have both standing and capacity to bring a
lawsuit. Austin Nursing Ctr., Inc. v. Lovato, 171
S.W.3d 845, 848 (Tex. 2005). "A plaintiff has
standing when it is personally aggrieved, regardless
of whether it is acting with legal authority; a party has
capacity when it has the legal authority to act,
regardless of whether it has a justiciable interest in the
controversy." Lovato, 171 S.W.3d at 848-49
(quoting Nootsie, Ltd. v. Williamson Cty. Appraisal
Dist., 925 S.W.2d 659, 661 (Tex. 1996) (emphasis in the
original)). A plaintiff may have capacity even if it has no
legally cognizable interest in the outcome of the case.
AVCO Corp., Textron Lycoming Reciprocating Engine Div. of
AVCO Corp. v. Interstate Sw., Ltd., 251 S.W.3d 632, 649
(Tex. App.-Houston [14th Dist.] 2007, pet. denied).
challenge to who owns a claim raises the issue of capacity,
not standing, and requires compliance with Rule 93, including
the requirement to file a verified pleading. Tex.R.Civ.P.
93(1); Pledger v. Schoellkopf, 762 S.W.2d 145,
145-46 (Tex. 1988) (concluding contention that corporation
rather than plaintiff shareholder owned fraud and tortious
interference claims challenged capacity to sue and was
waived); Town Ctr. Mall, L.P. v. Dyer, No.
02-14-00268-CV, 2015 WL 5770583, *3 (Tex. App.-Fort Worth
Oct. 1, 2015, pet. denied) (mem. op.) ("[a] challenge to
who owns a claim raises the issue of capacity, not
standing."); Rhey v. Redic, 408 S.W.3d 440, 456
(Tex. App.-El Paso 2013, no pet.); Dakil v. Lege,
408 S.W.3d 9, 11 (Tex. App.-El Paso 2012, no pet.); Haase
v. GIM Res., Inc., No. 01-09-00696-CV, 2010 WL 3294247,
*3 (Tex. App.-Houston [1st Dist.] Aug. 19, 2010, no pet.)
(mem. op.); Prostok v. Browning, 112 S.W.3d 876, 921
(Tex. App.-Dallas 2003), aff'd in part, rev'd in
part on other grounds, 165 S.W.3d 336 (Tex. 2005);
Southwest Indus. Inv. Co. v. Berkeley House
Inv'rs, 695 S.W.2d 615, 617 (Tex. App.-Dallas 1985,
writ ref'd n.r.e.) (appellant waived issue of whether
plaintiff owned the asserted contract claim by failing to
comply with Rule 93). In Pledger, the plaintiff was
an individual shareholder who sued other shareholders of the
same company. Pledger, 762 S.W.2d at 145. The
defendants contended the claims belonged to the company, not
to the individual plaintiff. Id. at 145-46. Although
the Supreme Court did not decide who owned the claims, it
nonetheless held that the defendant's argument was
foreclosed by their failure to comply with Texas Rule of
Civil Procedure 93(2). Id. at 146. Like the
defendants in Pledger, Vopak is contending that
Vertical NA cannot assert claims that allegedly belong to
standing can never be waived, the issue of capacity to sue is
waived both at trial and on appeal if it is not challenged by
a verified pleading. See Tex. Ass'n of Bus. v. Tex.
Air Control Bd., 852 S.W.2d 440, 445-46 (Tex. 1993);
see also Nootsie, 925 S.W.2d at 662. "The Texas
Rules of Civil Procedure require that a defendant challenging
a plaintiff's capacity to sue raise the matter by
verified pleading, if lack of capacity is not evident from
the petition." Intracare Hosp. N. v. Campbell,
222 S.W.3d 790, 793 n. 2 (Tex. App.-Houston [1st Dist.] 2007,
no pet.)); Tex.R.Civ.P. 93. The defendant bears the burden to
challenge a plaintiff's capacity to sue. Lovato,
171 S.W.3d at 853 n. 7; Intracare Hosp. N., 222
S.W.3d at 793 n. 2.
NA's lack of capacity, if any, is not evident from its
first amended petition. The record does not reflect, and
Vopak does not assert, that it satisfied the requirements of
Rule 93. Accordingly, we do not address that issue on its
merits. See Fitness Evolution, L.P. v. Headhunter
Fitness, L.L.C., No. 05-13-00506-CV, 2015 WL 6750047, at
*1, 18 (Tex. App.-Dallas Nov. 4, 2015, no pet.) (mem. op.).
sole challenge to Vertical NA's standing was its lack of
ownership of the claims brought. Because Vopak's
ownership argument goes to capacity, not standing, it does
not raise a question of subject matter jurisdiction. See
Prostok, 112 S.W.3d at 921.
whether Vopak's argument that the claims are owned by
Vertical UK presents an issue of capacity or standing is not
outcome determinative because we conclude that Vertical NA
retains a sufficient interest in the suit to confer standing.
Because standing is a component of subject matter
jurisdiction and may be raised at any time, we address the
question of Vertical NA's standing. See Tex.
Ass'n of Bus., 852 S.W.2d at 443. The question of
standing centers on whether a party has a sufficient
relationship with the lawsuit so as to have a
"justiciable interest" in its outcome.
Lovato, 171 S.W.3d at 848. The standing doctrine in
Texas requires a real controversy between the parties that
will be actually determined by the judicial declaration
sought. Nootsie, 925 S.W.2d at 662 (citing Tex.
Ass'n of Bus. 852 S.W.2d at 443-44). A plaintiff has
standing when it is personally aggrieved, Lovato,
171 S.W.3d at 848, or has a personal stake in the
controversy. Nootsie, 925 S.W.2d at 661.
determine Vertical NA's standing, and hence the trial
court's jurisdiction, we consider the facts alleged in
the petition and any evidence submitted to the trial court
which is pertinent to the jurisdictional issue. See Tex.
Natural Res. Conservation Comm'n v. White, 46 S.W.3d
864, 868 (Tex. 2001). Vertical NA's pleadings claim that
it was the party injured by Vopak's alleged breach of
contract and fraud because it entered into a contractual
relationship with Vopak in reliance upon Vopak's alleged
misrepresentations. Vopak has not disputed that it entered
into contracts with Vertical NA. As the personally aggrieved
party, Vertical NA has standing to assert the claims against
Vopak unless the record shows that it is completely divested
of any justiciable interest. See Lovato, 171 S.W.3d
at 848; see generally River Consulting, Inc. v.
Sullivan, 848 S.W.2d 165, 169 (Tex. App.- Houston [1st
Dist.] 1992, writ denied) ("An assignee may maintain in
its own name any action that the assignor may have ...