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In re Velvin Oil Co., Inc.

Court of Appeals of Texas, First District

January 23, 2018

IN RE VELVIN OIL COMPANY, INC., Relator

         Original Proceeding on Petition for Writ of Mandamus

          Panel consists of Justices Keyes, Brown, and Lloyd.

          MEMORANDUM OPINION

          PER CURIAM

         Velvin Oil Company, Inc. seeks mandamus relief challenging the trial court's order granting a Rule 202 Petition and its failure to rule on Velvin's motion to transfer venue.[1] We conclude that the trial court abused its discretion in failing to rule on the motion to transfer venue before deciding the Rule 202 Petition. Accordingly, we conditionally grant the petition as it concerns the motion to transfer venue.

         Background

         Velvin distributes diesel fuel, gasoline, and other related products to retailers across Texas, including AJP. AJP originally sued Velvin in Houston County alleging fraud, negligence, and other claims regarding the quality and merchantability of the diesel fuel sold by Velvin. AJP further alleged that Velvin committed fraud by overcharging AJP for fuel taxes and keeping the excess amount for itself.

         Velvin filed a plea to the jurisdiction in the Houston County suit on the overcharge claims, asserting that the trial court lacked subject-matter jurisdiction because AJP failed to exhaust its administrative remedies. Specifically, Velvin argued that AJP's overcharge claims fell under the statutory provisions requiring tax refund claims to be filed with the state comptroller. See Burgess v. Gallery Model Homes, Inc., 101 S.W.3d 550, 558 (Tex. App.-Houston [1st Dist.] 2003, pet. denied) (holding that legislature has created exclusive means for obtaining refund of improperly collected taxes and trial court lacks jurisdiction if plaintiff has not exhausted administrative remedies under this legislative scheme); Tex. Tax Code § 111.104 (procedure for requesting tax refund from comptroller).

         The Houston County trial court granted the plea and dismissed AJP's claims concerning overcharges and its claims for common-law fraud and negligent misrepresentation. The Houston County lawsuit remains pending as to AJP's causes of action regarding the quality and merchantability of the diesel fuel it purchased from Velvin.

         AJP later filed a Verified Rule 202 Deposition Petition in Harris County, seeking to investigate claims "arising out of Velvin's sale of diesel fuel and collection of state diesel fuel taxes." AJP argued that it was entitled to discovery on whether Velvin was collecting and keeping for its own benefit amounts represented to be fuel taxes paid to the refineries, but which included an excess amount that Velvin kept for itself.

         Velvin filed an opposition to the petition, a motion to transfer venue, and a motion to dismiss. Velvin responded that the issues raised in the Rule 202 petition mirrored those dismissed in the Houston County case. Velvin also filed a motion for leave to set the venue motion on the same date as the hearing on the Rule 202 petition, but the trial court denied this motion for leave. After a hearing, the trial court granted the Rule 202 petition. The trial court has not ruled on Velvin's motion to transfer venue.

         Standard of Review

          To be entitled to mandamus relief, a petitioner must show both that the trial court abused its discretion and that there is no adequate remedy by appeal. In re Prudential Ins. Co., 148 S.W.3d 124, 135 (Tex. 2004). Generally, appellate courts will hold that a trial court abuses its discretion if its actions are either "without reference to any guiding rules and principles" or "arbitrary or unreasonable." Downer v. Aquamarine Operators, Inc., 701 S.W.2d 238, 241-42 (Tex. 1985).

         Trial Court Had Subject-Matter Jurisdiction

         Although a person may petition a court for an order authorizing a deposition to investigate a potential claim or suit, see Tex. R. Civ. P. 202.1(b), a petitioner generally may not "obtain by Rule 202 what it would be denied in the anticipated action." In re DePinho, 505 S.W.3d 621, 623 (Tex. 2016). To properly obtain presuit discovery under ...


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