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Smith v. Smith

Court of Appeals of Texas, Fourteenth District

November 9, 2017

DAVID SMITH, Appellant
v.
BRIAN SMITH, CASH REGISTER SALES AND SERVICE OF HOUSTON D/B/A CRS TEXAS AND POS CARD SERVICES, LLC, Appellees

         On Appeal from the 189th District Court Harris County, Texas Trial Court Cause No. 2013-36112

          Panel consists of Justices Boyce, Jamison, and Brown.

          OPINION

          Martha Hill Jamison, Justice.

         In two issues in this contractual dispute, appellant David Smith challenges the trial court's denial of his motion to transfer venue and grant of final summary judgment in favor of appellees, Brian Smith, Cash Register Sales and Service of Houston d/b/a CRS Texas, and POS Card Services, LLC. The trial court rendered summary judgment against David on his breach of contract claim and in favor of appellees on their declaratory judgment claims. In a cross appeal, appellees challenge the trial court's denial of their motion for costs and attorney's fees under the Texas Declaratory Judgment Act.[1] Concluding that David presented evidence raising fact questions regarding the existence and enforceability of a contract between himself and appellees, we reverse and remand the portion of the trial court's judgment granting a declaration that there was no agreement between the parties. We affirm the trial court's judgment in all other respects.

         Background

         David and Brian Smith are brothers. Brian owns CRS and POS. CRS sells point of sale and video surveillance equipment, software, and related services to merchants. POS sells credit card processing services provided by banks and financial institutions to retail merchants. David was a sales agent for CRS and POS.[2]

         After leaving that position, David sent a demand letter to CRS seeking unpaid commissions on four accounts. David contends that the parties had an oral agreement that he would be entitled to a commission on "all sales that are ever paid at any time to the merchants that he considered to be his, " without regard to whether David made the sale or still worked for CRS or POS.

         After receiving the demand letter, appellees filed this declaratory judgment action in Harris County, Texas seeking six declarations establishing that David is not (1) an employee of any of appellees; (2) entitled to commissions for any merchant accounts under any agreement or Texas law;[3] or (3) entitled to recover attorney's fees from appellees.[4] David filed an answer, motion to transfer venue, and counterclaim for unpaid commissions. Appellees filed a motion for summary judgment seeking judgment on David's breach of contract counterclaim and their declaratory judgment claims. The trial court denied the motion to transfer venue and granted the motion for summary judgment.[5] Appellees then filed a motion for costs and attorney's fees and entry of final judgment. The trial court rendered final judgment in favor of appellees, but did not award costs or fees to appellees.[6]

         Discussion

         In two issues, David challenges the trial court's denial of his motion to transfer venue and grant of summary judgment in favor of appellees. Appellees bring one issue in their cross appeal challenging the trial court's denial of their motion for costs and attorney's fees.

         I. Venue Objection Waived

         In his first issue, David contends that the trial court erred in denying his motion to transfer venue because, according to David, the events giving rise to the parties' claims occurred in San Antonio, Texas. Appellees argue that David waived his venue objection in the trial court by taking "multiple actions that were inconsistent with an intent to pursue his venue motion or that invoked the judicial power of the [trial] court."[7]

         The trial court's order denying the venue motion does not indicate whether it was denied because the court deemed the venue objection waived or concluded venue was proper in Harris County. Thus, we address the waiver issue first. See Duran v. Entrust, Inc., No. 01-08-00589-CV, 2010 WL 1241093, at *4 (Tex. App.- Houston [1st Dist.] Mar. 25, 2010, pet. denied) (mem. op.); Carlile v. RLS Legal Sols., Inc., 138 S.W.3d 403, 406 (Tex. App.-Houston [14th Dist.] 2004, no pet.). We review a trial court's determination of waiver for an abuse of discretion. Carlile, 138 S.W.3d at 406.

         By filing a lawsuit, the plaintiff has the first choice regarding venue. Id. (citing In re Masonite Corp., 997 S.W.2d 194, 197 (Tex. 1999), and Wilson v. Tex. Parks & Wildlife Dep't, 886 S.W.2d 259, 260 (Tex. 1994)). If the plaintiff's choice is not properly challenged through a motion to transfer venue, venue is fixed in the county in which the plaintiff filed suit. Id.

         A venue objection can be waived in several ways. At issue here is whether David impliedly waived his venue objection through actions inconsistent with an intent to pursue the venue motion. See id. Generally, such actions invoke the judicial power of the courts. Id. Appellees argue that David impliedly waived his venue objection by not diligently requesting a setting or obtaining a ruling on the venue motion and by participating in discovery, joining a motion for continuance, and filing a jury demand.[8]

         A. Delay in Requesting Setting and Obtaining Ruling

         A party filing a venue motion has the burden to diligently request a setting on the motion and obtain a ruling prior to a trial on the merits. Id. at 408 (citing Tex.R.Civ.P. 87(1)). A delay in obtaining a hearing provides a basis for the trial court to deny a venue motion. Id.

         David filed his combined answer, counterclaim, and motion to transfer venue on September 25, 2013. The venue motion was heard approximately eleven months later on August 8, 2014.[9] The trial court did not rule on the motion at the time of the hearing. On September 12, 2014, David filed a combined amended answer, counterclaim, and motion to transfer venue.[10] The trial court denied the venue motion on February 9, 2015.[11] In the order, the trial court noted the motion was heard on August 8, 2014, one month before the amended pleading was filed.

         We first address appellees' contention that David waived his venue objection because the trial court ruled on the original motion and thus David apparently failed to obtain a ruling on his "live" motion. According to appellees, David obtained a ruling only on his original motion, which was superseded by the amended "live" motion.

         The language in the "motion to transfer venue" section of the two pleadings is identical. Thus, we do not agree with appellees that David amended his motion to transfer venue. Even if he had, an amended motion to transfer venue that is filed before the trial court rules on a timely original motion relates back to the original motion. In re Pepsico, Inc., 87 S.W.3d 787, 794 (Tex. App.-Texarkana 2002, no pet.). Here, the trial court ruled on the motion to transfer venue after David filed his amended pleading, so even if the motion to transfer venue section of the pleading properly could be construed as an amended motion, it would relate back to the original. Therefore, we do not agree that David failed to obtain a ruling on his "live" motion to transfer venue.

         David, however, waited nearly a year to have his motion to transfer venue heard and then waited approximately six more months more to file a proposed order. This delay indicates a lack of diligence in securing the hearing and obtaining a ruling.[12] See Carlile, 138 S.W.3d at 408 (noting that a delay of 14 months indicated a lack of diligence); see also CMH Set & Finish, Inc. v. Taylor, No. 05-14-01407- CV, 2016 WL 1254063, at *6 (Tex. App.-Dallas Mar. 31, 2016, pet. denied) (mem. op.) (collecting cases involving delays between one year and 32 months); Whitworth v. Kuhn, 734 S.W.2d 108, 111 (Tex. App.-Austin 1987, no writ) (noting trial court could have denied motion to transfer venue because movant waited more than a year to request a hearing).

         B. Inconsistent Actions

         A movant also may impliedly waive his venue objection through actions that are inconsistent with an intent to pursue it. Taylor, 2016 WL 1254063, at *6; Carlile, 138 S.W.3d at 408-09. When a movant seeks relief that is ancillary to the merits or inherently preliminary, courts are reluctant to find waiver. Taylor, 2016 WL 1254063, at *6; Carlile, 138 S.W.3d at 406. However, if the movant seeks relief that invokes the general jurisdiction of the court to rule on the merits of the parties' claims, courts may find waiver. See, e.g., Gentry v. Tucker, 891 S.W.2d 766, 768 (Tex. App.-Texarkana 1995, no writ) ("The motion [to transfer venue] will be waived if the defendant who is filing it, without first insisting upon its disposition, tries the case on the merits."); Grozier v. L-B Sprinkler & Plumbing Repair, 744 S.W.2d 306, 310 (Tex. App.-Fort Worth 1988, writ denied) ("[I]nconsistent action resulting in waiver is one which invokes the general jurisdiction of the court without reservation of rights asserted by the filing of the plea of privilege."). Courts review the record as a whole to determine whether the movant's actions and delay collectively establish waiver. Taylor, 2016 WL 1254063, at *6; Carlile, 138 S.W.3d at 409.

         David filed a response to plaintiffs' summary judgment motions and joined a motion for continuance in which the parties asserted that they needed "more time to prepare for trial so that they [could] present their claims and defenses." David did not condition his response or the continuance motion on his venue motion, and he did not reurge his venue objection.[13] These facts-asking the court to deny motions for summary judgment and requesting a trial continuance to prepare for trial-do not reflect issues that are ancillary to the merits or preliminary. See Taylor, 2016 WL 1254063, at *7 (holding that a scheduling order signed by the movant addressing deadlines for "supplemental witness lists, supplemental objections to designation of deposition testimony, objections to trial exhibits, and the date of trial" did not involve ancillary or preliminary matters for purposes of determining waiver of venue motion). In failing to make the summary judgment response and continuance motion subject to his venue motion or to reurge his venue objection in these filings, David acted inconsistently with an intent to urge his venue motion and invoked the jurisdiction of the trial court. See Carlile, 138 S.W.3d at 408-09 (holding that in filing a motion to compel discovery, motion for continuance, and response to no-evidence motion for summary judgment not subject to his venue motion, defendant "invoked the jurisdiction of the trial court and acted inconsistently with an intent to insist upon his venue motion").

         David argues Carlile is distinguishable from the facts of this case because the defendant in that case filed a motion for new trial addressing the merits of the case. 138 S.W.3d at 406-07. But the Carlile court considered that filing in conjunction with other actions constituting waiver: delay in securing a hearing and filing a motion to compel discovery responses, motion for continuance, and response to no-evidence motion for summary judgment "not conditioned upon [the] venue motion." Id. at 408-09. Considering all these things together, the court concluded that the defendant waived his venue objection. Id. The Dallas Court of Appeals in Taylor analyzed the issue similarly and held that the movant waived its venue objection by delaying eighteen months to seek a hearing and "by agreeing to a scheduling order that set the case for trial without making such agreement subject to its venue objection." 2016 WL 1254063, at *7. Both Carlile and Taylor are helpful to our analysis because, as in this case, both cases deal with multiple actions by the movant indicating, when considered together, that the movant waived the venue objection.

         We conclude that the trial court reasonably could have determined that David's delay in seeking a hearing and a ruling on his venue motion, along with his filings that were not subject to his venue objection, amounted to a waiver of his venue objection.[14] See id. Thus, the trial court did not abuse its discretion in denying the venue motion. See id. We overrule David's first issue.

         II. Fact Questions as to Existence and Enforceability of Contract, Waiver of Other Issues

         In his second issue, David challenges the trial court's grant of summary judgment in favor of appellees. In their hybrid no-evidence and traditional motion for summary judgment, appellees argued that there was no evidence of any element of David's breach of contract claim and that they conclusively established ...


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