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Eckman v. Northgate Terrace Apartments, LLC

Court of Appeals of Texas, Third District, Austin

June 28, 2018

Anthony Eckman, Appellant
Northgate Terrace Apartments, LLC, Appellee


          Before Justices Puryear, Pemberton, and Bourland



         Anthony Eckman appeals the trial court's judgment granting possession of an apartment he occupies (the Premises) to appellee Northgate Terrace Apartments, LLC. Eckman contends that the trial court did not have jurisdiction over this forcible-detainer action because the original plaintiff-denoted in the record as "Northgate Terrace Apartments"-was a "non-existent entity" at the time suit was filed and, therefore, lacked standing. He additionally complains about the trial court's failure to submit a jury question on the issue of whether appellee properly provided him a lease-termination notice and about a sanction the trial court imposed against his attorney. We will vacate the trial court's July 12, 2016 sanction order and affirm its judgment granting possession of the Premises to appellee.

         DISCUSSION [2]

         In his first two issues, Eckman contends that the trial court lacked subject-matter jurisdiction over this cause because the original plaintiff-"Northgate Terrace Apartments"-"did not exist and lacked standing, and therefore could not bring or sustain a cause of action." See Texas Ass'n of Bus. v. Texas Air Control Bd., 852 S.W.2d 440, 445-46 (Tex. 1993) (holding that lack of standing deprives court of subject-matter jurisdiction). Specifically, he cites evidence attached to his "Motion to Dismiss Cause for Lack of Standing & Notice" as proof that Northgate Terrace Apartment's "corporate status and assumed name" had "long since elapsed at the time of filing of the underlying forcible detainer suit" and that it, therefore, "lacked capacity and standing" to bring suit. See El T. Mexican Rests., Inc. v. Bacon, 921 S.W.2d 247, 250 (Tex. App.-Houston [1st Dist.] 1995, writ denied) (noting that "standing is a party's justiciable interest in the suit," "capacity is a party's legal authority to go into court to prosecute or defend a suit," and "plaintiff must have both standing and capacity" to bring suit); see also Tex. Bus. & Com. Code § 71.201(a) (providing that "person may not maintain in a court of this state an action or proceeding arising out of a contract or act in which an assumed name was used until an original, new, or renewed certificate [of assumed name] has been filed as required by this chapter").

         The lease at issue was entered into by Eckman and "Northgate Terrace Apartments," which was designated as the "owner" of the Premises. Jelita Mills signed the lease on behalf of Northgate Terrace Apartments. The evidence conclusively shows that Jelita Mills and her husband, Ronald Mills, owned the Premises at the time the lease was signed. The evidence that Eckman cites includes public records indicating that in 1996 Ronald Mills filed an assumed name certificate listing "Northgate Terrace Apartments" as his assumed name. See id. § 71.051 ("A person must file a certificate under this subchapter if the person regularly conducts business . . . under an assumed name other than as a corporation, limited partnership, limited liability partnership, limited liability company, or foreign filing entity."). Other evidence attached to Eckman's motion to dismiss shows that the Millses sold the Premises to third party "Northgate Terrace Apartments, LLC" in February 2016, while this cause was pending below.

         Eckman contends that Ronald Mills's assumed name certificate lapsed after ten years when it was not renewed and, therefore, the entity "Northgate Terrace Apartments" had no standing to file this forcible-detainer action. See id. §§ 71.151(a), (b) (providing that certificate of assumed name "is effective for a term not to exceed 10 years from the date the certificate is filed" and "is void at the end of the certificate's stated term, unless within six months preceding the certificate's expiration date the registrant files . . . a renewal certificate . . . ."), .201(a) (providing that "person may not maintain in a court of this state an action or proceeding arising out of a contract or act in which an assumed name was used until an original, new, or renewed certificate has been filed as required by this chapter"). We disagree.

         While the Assumed Business or Professional Name Act prohibits the maintaining of a lawsuit until an assumed-name certificate has been filed or renewed, see id. § 71.201, a plaintiff's failure to have a valid certificate on file is not a jurisdictional issue but, rather, a capacity issue that is properly raised in a plea in abatement so that the cause may be suspended while the defect is corrected. See Continental Contractors, Inc. v. Thorup, 578 S.W.2d 864, 865-66 (Tex. Civ. App.-Houston [1st Dist.] 1979, no writ) (affirming trial court's denial of motion to dismiss based on plaintiff's failure to file assumed name certificate); see also M & M Constr. Co. v. Great Am. Ins. Co., 747 S.W.2d 552, 554 (Tex. App.-Corpus Christi-Edinburg 1988, no writ) ("A challenge to a plaintiff's legal capacity to sue is properly raised by a verified plea in abatement and not by a motion to dismiss."). Furthermore, it is well settled that an assumed name is not a legal entity and that the holder of an assumed name is liable personally for the assumed name's debts, judgments, or other liabilities. See Tex. R. Civ. P. 28 (providing that "[a]ny individual . . . doing business under an assumed name may sue or be sued in its . . . assumed or common name for the purpose of enforcing for or against it a substantive right, but on a motion by any party or on the court's own motion the true name may be substituted"). Therefore, the Millses' failure to maintain a valid assumed name certificate did not constitute lack of standing but was, at best, a defect of capacity, which could have been corrected by a plea in abatement.

         However, Eckman did not file a plea in abatement until after the Millses had sold the Premises to Northgate Terrace Apartments, LLC. Upon that change in ownership, appellee was entitled to amend its pleading to substitute "Northgate Terrace Apartments, LLC" as plaintiff to reflect the Premises' new ownership, obviating the need to abate the proceedings. See Reddy P'ship/5900 N. Freeway LP v. Harris Cty. Appr. Dist., 370 S.W.3d 373, 376 (Tex. 2012) (holding that amended pleading correcting misnomer of plaintiff did not deprive court of subject-matter jurisdiction); In re Greater Hous. Orthopaedic Specialists, Inc., 295 S.W.3d 323, 325 (Tex. 2009) (orig. proceeding) (per curiam) (noting distinction between misnomer-when plaintiff misnames itself or another party in petition, but correct parties are involved-and misidentification-when two separate legal entities exist and plaintiff mistakenly sues entity with name similar to that of correct entity); Sheldon v. Emergency Med. Consultants, I, P.A., 43 S.W.3d 701, 702 (Tex. App.-Fort Worth 2001, no pet.) (when correct party sues or is sued under incorrect name, "the court acquires jurisdiction after service with the misnomer if it is clear that no one was misled or placed at a disadvantage by the error"). "Courts generally allow parties to correct a misnomer so long as it is not misleading." Id.

         The record clearly demonstrates that the correct plaintiff-the owner of the Premises-has been involved since the filing of the original petition and that this case involves an assumed name and the individual who held the assumed name, followed by the substitution of the new owner of the Premises as plaintiff. Eckman cites no evidence that at the time the lawsuit was filed "Northgate Terrace Apartments" was a legal entity with its own existence separate and apart from being an assumed name of the Millses. That misnomer issue was resolved when the Mills sold the property to third party Northgate Terrace Apartments, LLC, and appellee amended its pleadings to reflect the new ownership. Because the Millses were the owners of the Premises at the time the lease was executed and at the time the suit was filed, they had standing to maintain the suit, despite the misnomer, which did not deprive the trial court of subject-matter jurisdiction. Furthermore, the record in this case does not support any claim that Eckman was misled as to who the plaintiff was or was placed at a disadvantage by the misnomer. Accordingly, we overrule Eckman's first two issues.

         In his third issue, Eckman contends that the trial court erred in refusing to submit a jury question on the issue of whether appellee provided him with proper notice of lease termination. He contends that appellee did not provide him with "specific notice that the lease was being terminated" within the 30-day "notice to vacate" that he admitted he did timely receive. He further argues that the lease required him to give appellee written acknowledgment of his receipt of the 30-day notice and that, because he did not provide such acknowledgment, the termination notice was ineffective. We reject these arguments because they are not supported by the record or the plain language of the lease.

         Eckman's testimony at trial, as well as the exhibits admitted, conclusively established that on October 16, 2015, he received a document entitled "Advance Notice of Lease Termination at End of Lease Term or Renewal Period." The notice requested that Eckman vacate the Premises upon the termination of the lease's term on November 30, 2015. The notice further provided that, "[a]ccording to the advance notice provision of your lease, we are writing this letter to give you sufficient notice of our request for possession of your dwelling unit on December 1, 2015. Please consider this letter as lawful notice to vacate on that date." The lease provided for automatic renewal on a month-to-month basis at the end of the lease term "unless either party gives at least 30 days written notice of termination or intent to move-out as required by paragraph 37 [pertaining to move-out notice that tenant must provide]." (Emphasis added.) While paragraph 37 requires a tenant to obtain from appellee written acknowledgment of receipt of the tenant's 30-day notice of intent to move out-"You [tenant] must obtain from us [landlord] written acknowledgment that we received your move-out notice"-it does not impose the same burden on the landlord. The lease requires of the landlord only that it provide the tenant with a 30-day notice of lease termination; the evidence conclusively shows that appellee provided such notice and, moreover, that Eckman timely received it. Accordingly, the trial court properly refused to submit to the jury the question of whether appellee provided Eckman with proper notice of lease termination. See Tex. R. Civ. P. 278 ("The court shall submit the questions, instructions and definitions . . . which are raised by the written pleadings and the evidence."); Elbaor v. Smith, 845 S.W.2d 240, 243 (Tex. 1992) (holding that trial court does not err in refusing to submit jury question when there is no evidence to warrant its submission). We overrule Eckman's third issue.

         In his fourth issue, Eckman contends that the trial court abused its discretion in ordering that his attorney pay appellee $1, 250 in sanctions because he had no notice of the sanction ...

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