Court of Appeals of Texas, Third District, Austin
COUNTY COURT AT LAW NO. 1 OF TRAVIS COUNTY NO.
C-1-CV-10-007442, HONORABLE ERIC SHEPPERD, JUDGE PRESIDING
Chief Justice Rose, Justices Goodwin and Bourland
OLSON BOURLAND, JUSTICE.
Veigel appeals from a summary judgment rendered in favor of
the Texas Boll Weevil Eradication Foundation, Inc., in its
suit to collect assessments for the operation of
pest-eradication programs for the years 1999 and 2001. In
2010, after obtaining two default judgments against Veigel
Farms, Inc., on August 10, 2000, and September 29, 2004, the
Foundation sued Veigel personally as Secretary and Director
of Veigel Farms, Inc., which had forfeited its corporate
privileges at the time the debts were incurred. On
cross-motions for summary judgment, the district court
granted the Foundation's motion and denied Veigel's.
Veigel appeals,  arguing that the suit is time-barred by
the statute of limitations or, alternatively, by laches, res
judicata, and collateral estoppel, and that he raised a
genuine issue of material fact that defeated the
Foundation's motion for summary judgment. For the reasons
that follow, we will reverse the trial court's orders and
render judgment in favor of Veigel.
and Procedural Background
Texas Legislature created the Foundation to manage programs
aimed at eradicating the boll weevil and the pink bollworm
from cotton crops in Texas. See Tex. Agric. Code
§ 74.1011(a). The Foundation is a
"quasi-governmental entity" operating under the
supervision and control of the commissioner of agriculture
and is authorized, subject to referendum approval by affected
cotton growers, to collect assessments that it uses to
operate its eradication programs. See id.
§§ 74.101, .113. Veigel Farms, Inc., is a Texas
corporation that farmed cotton for commercial production from
1999 to 2002. During that time, Steve Veigel was Secretary
and Director of Veigel Farms. Alleging failure to pay
assessments levied in 1999 and 2001, the Foundation sued
Veigel Farms and obtained default judgments against the farm
in 2000 and 2004.
Farms's corporate privileges were forfeited for failure
to pay franchise taxes from August 1996 to September 2002 and
again from October 2003 to January 2006. See Tex.
Tax Code § 171.251(2). The parties agree that it was
during these periods of forfeiture that the assessments at
issue were incurred, the suits to collect them were filed,
and the default judgments against Veigel Farms were signed.
In August 2010, the Foundation initiated the underlying suit
against Veigel personally seeking to collect on the default
judgments under a tax statute that provides that officers and
directors are personally liable for corporate debts incurred
during forfeiture periods. See id. §
171.255(a). The Foundation sought a total of $26, 158.22 for
the two judgments or, in the alternative, $14, 726.06 for the
two assessments alone. On August 30, 2010, Veigel filed
special exceptions, an answer, a motion to dismiss, and a
motion for summary judgment. Veigel asserted as affirmative
defenses payment, laches, res judicata, collateral estoppel,
and limitations. In his motion for summary judgment, Veigel
sought judgment based on limitations, noting that the
Foundation's lawsuit was filed more than four years after
the underlying 1999 and 2001 assessments were due or the
default judgments related to those assessments were signed.
He further argued he was entitled to judgment on his defenses
of "res judicata and/or collateral estoppel."
happened in the case for about five years, until the
Foundation filed a motion to retain the suit on November 25,
2015. The trial court denied that motion and dismissed the
suit for want of prosecution on December 15, 2015, but on
January 4, 2016, the court granted the Foundation's
motion to reconsider and reinstated the case on its docket.
The Foundation then responded to Veigel's motion for
summary judgment and filed its own traditional and
no-evidence motion for summary judgment. In its response to
Veigel's motion for summary judgment, the Foundation
asserted (1) that it was a political subdivision and
therefore not subject to limitations, see Tex. Civ.
Prac. & Rem. Code § 16.061 (political subdivision is
exempt from statute of limitations), and (2) that Veigel had
not conclusively established collateral estoppel or res
judicata. The Foundation moved for traditional summary
judgment on the grounds that Veigel was personally liable for
the assessments levied against Veigel Farms and for the
judgments obtained against Veigel Farms in 2000 and 2004, and
for no-evidence summary judgment as to Veigel's
affirmative defenses of payment and laches. The trial court
denied Veigel's motion for summary judgment. In a
separate order, without specifying the grounds, the court
granted the Foundation's motion for summary judgment,
finding that "all relief requested" by the
Foundation should be granted and awarding the Foundation $32,
179.16, post-judgment interest, and costs of court. Veigel
appeals from those orders.
review the trial court's granting of summary judgment de
novo. Valence Operating Co. v. Dorsett, 164 S.W.3d
656, 661 (Tex. 2005). Where, as here, both parties move for
summary judgment, "we determine all issues presented and
render the judgment the trial court should have
rendered." Colorado Cty., Tex. v. Staff, 510
S.W.3d 435, 444 (Tex. 2017). To prevail on a motion for
traditional summary judgment, a movant must show that there
is no genuine issue of material fact and that he is entitled
to judgment as a matter of law. Tex.R.Civ.P. 166a(c). The
movant must therefore establish each element of his claim or
defense as a matter of law or negate an element of the
respondent's claim or defense as a matter of law. See
M.D. Anderson Hosp. & Tumor Inst. v. Willrich, 28
S.W.3d 22, 23 (Tex. 2000). Thus, a defendant seeking summary
judgment on an affirmative defense must plead and
conclusively prove each element of his defense.
Montgomery v. Kennedy, 669 S.W.2d 309, 310-11 (Tex.
1984); Ellard v. Ellard, 441 S.W.3d 780, 781 (Tex.
App.-San Antonio 2014, no pet.); see Tex. R. Civ. P.
first argues that the trial court erred in denying his motion
for summary judgment based on limitations because the
Foundation is not a political subdivision under the Texas
Civil Practice and Remedies Code. See Tex. Civ.
Prac. & Rem. Code § 16.061. Veigel also contends
that the Foundation's claims are barred by laches, res
judicata, and collateral estoppel and that he raised genuine
issues of material fact that defeated the Foundation's
motion for summary judgment. Because Veigel's limitations
defense is dispositive of this appeal, we limit our
discussion to his first issue.
and Nature of the Foundation
74, subchapter D, of the agriculture code governs the
Foundation, which is the entity recognized by the department
of agriculture as "the entity to plan, carry out, and
operate programs to eliminate" boll weevils and
bollworms, subject to the control of the commissioner of
agriculture. Tex. Agric. Code § 74.1011; see
generally id. §§ 74.101-.131 ("Official
Cotton Growers' Boll Weevil Eradication
Foundation"). The Foundation operates throughout the
entire state, which is divided into "eradication
zones" due to regional differences in "soil
conditions, growing seasons, farming techniques, and climate
conditions." Id. § 74.101(a)(2).
Subchapter D defines six "statutory zones, "
specifying which counties fall into which zones. Id.
§ 74.1021. Further, the commissioner may designate
proposed non-statutory eradication zones by rule if the area
is not within a statutory zone that has approved an
eradication program. Id. § 74.1042. The
commissioner must conduct a referendum in each proposed
eradication zone to determine whether cotton growers in the
area approve of establishing the zone. Id. §
74.105(a); see id. § 74.114 (describing how
referenda are to be conducted). The Foundation is governed by
a board composed of members elected from each approved
eradication zone; board members appointed by the commissioner
because they are located in zones that were not approved by
referenda; and certain mandated board members from around the
state-an agricultural lender, an entomologist who specializes
in integrated pest management, two representatives from
industries allied with cotton production, and a
representative from the pest-control industry. Id.
each approved eradication zone, the commissioner shall
propose an assessment necessary to eradicate boll weevils,
and that proposed assessment is submitted to the cotton
growers in the area for approval through a referendum.
Id. § 74.113. The Foundation has the authority
to collect approved assessments, and those assessments may
only be used for eradication, the Foundation's operating
costs, and programs consistent with the Foundation's
purpose. Id. § 74.113(e), (f). The Foundation
is responsible for all expenses incurred in conducting a
referendum or a board election. Id. §
Foundation is "a Texas nonprofit corporation chartered
by the secretary of state." Id. § 74.1011;
see also id. § 74.102(8)
("'Foundation' means the Texas Boll Weevil
Eradication Foundation, Inc., a Texas nonprofit
corporation."). Subchapter D specifies that the
Foundation and its board "are state agencies" only
for purposes of being exempt from taxation and for
indemnification under chapter 104 of the civil practice and
remedies code.Id. § 74.109(d). Subchapter
D also states that the Foundation "is a governmental
unit under Section 101.001, Civil Practice and Remedies Code,
is entitled to governmental immunity, " and that any
tort claim leveled against the Foundation must be made under
the Tort Claims Act. Id. § 74.109(f). Section
74.129 states that the Foundation is "a
quasi-governmental entity" that "is carrying out an
important governmental function" and must thus "be
immune from lawsuits and liability except to the extent
provided in [the Tort Claims Act] and as provided by this
section." Id. § 74.129; see also
id. § 74.101(a)(3) (noting need for
"quasi-governmental entity" to eradicate pests
subject to commissioner's supervision and control). The
Foundation is subject to the Open Meetings Act and the Open
Records Act, id. § 74.109(i); each board
member must be sworn into office by a representative of the
commissioner by taking the same oath of office required for
elected state officials, id. § 74.106(h); and
board members are subject to the same ...