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State v. Cash Auto Sales, Inc.

Court of Appeals of Texas, Fifth District, Dallas

May 23, 2019


          On Appeal from the 134th Judicial District Court Dallas County, Texas Trial Court Cause No. DC-96-11528

          Before Justices Brown, Schenck, and Pedersen, III



         The State of Texas, acting through the Office of the Consumer Credit Commission (OCCC), appeals the trial court's denial of its plea to the jurisdiction and grant of temporary injunction directed to the OCCC. We reverse the trial court's orders denying the State's plea to the jurisdiction and granting temporary injunction and render judgment dismissing this case for lack of subject-matter jurisdiction.


         The OCCC is a state agency charged with enforcing various provisions of the Texas Finance Code. Appellee Cash Auto Sales, Inc. (CAS) is an auto club, and appellee VIP Finance of Texas, Inc. (VIP) makes title loans on cars. CAS and VIP are owned by Jonson Lake or trusts that are controlled by members of the Lake family and both are operated by Lake family members.[1]Both entities came into legal existence in 2010. Before 2010, Kathy Lake and Dale Loyd owned a general partnership known as "Lease for Less," Larry Lake operated a sole proprietorship known as "C.A.S.H. Auto Sales," and Larry's son Travis Lake operated another sole proprietorship known as "VIP Finance."

         In 1991, the State filed suit against Lease for Less, Larry Lake, Kathy Lake, and Dale Loyd[2]in the 134th District Court of Dallas County, alleging various violations of the consumer credit code and the Texas Deceptive Trade Practices Act (DTPA). That suit ended in the entry of an agreed interlocutory injunction against Larry Lake, Kathy Lake, and Dale Loyd (1993 Injunction). In 1996, the State filed a separate suit against Larry Lake d/b/a C.A.S.H. Auto Sales and Travis Lake d/b/a VIP Finance, alleging various violations of the DTPA, consumer credit code, and the 1993 Injunction. After a bench trial, the trial court denied the relief requested by the State (1998 Judgment).

         In October 2012, the OCCC received a consumer complaint about VIP and began an investigation in May 2013. On March 17, 2017, the OCCC, acting pursuant to section 14.208 of the finance code, [3] issued an Order to Cease and Desist, to Take Affirmative Action, and to Make Restitution against VIP (2017 Order). In the 2017 Order, the OCCC found reasonable cause to believe that VIP was in violation of requirements for licensing and auto club memberships provided by Chapters 342 and 348 of the finance code. The 2017 Order also provided that it would become final if VIP did not request a hearing within 30 days. In April 2017, VIP requested a hearing, but asserted its request was subject to the jurisdiction of the 134th District Court to enforce its 1998 Judgment. A hearing was set for April 10, 2018, (2018 Administrative Proceeding) before the State Office of Administrative Hearings.

         After the State served VIP with discovery requests in connection with the 2018 Administrative Proceeding, CAS and VIP filed a post-judgment application for ex parte restraining order, temporary injunction, and permanent injunction in the 134th District Court. In its application, CAS and VIP requested the trial court enjoin the OCCC from continuing the 2018 Administrative Proceeding, "taking any other action that would put into question the validity or proprietary nature of the Auto Club, or the business relationship of VIP and CAS," and "any further duplicative investigations of VIP, CAS, or the Auto Club unless subsequently ordered otherwise" by the trial court. The trial court granted the temporary restraining order and conducted a hearing on the temporary injunction and the State's plea to the jurisdiction. The trial court denied the State's plea to the jurisdiction and granted CAS and VIP's request for a temporary injunction.


         In its first issue, the State argues the trial court did not have jurisdiction to enter an antisuit injunction against it because sovereign immunity prevents trial court interference in administrative actions. Appellees respond that the State waived its sovereign immunity because it invoked the trial court's jurisdiction by filing suit in 1996. Appellees further respond that even if the State did not waive immunity, fact issues exist as to whether this case presents an exception to the general rule of sovereign immunity such that the trial court properly denied the plea to the jurisdiction.

         Sovereign immunity from suit defeats a trial court's subject-matter jurisdiction and thus is properly asserted in a plea to the jurisdiction. Tex. Dep't of Parks & Wildlife v. Miranda, 133 S.W.3d 217, 225-26 (Tex. 2004). Whether a court has subject-matter jurisdiction is a question of law. Id. at 226. Whether a pleader has alleged facts that affirmatively demonstrate a trial court's subject-matter jurisdiction is a question of law reviewed de novo. Id. When, as here, a plea to the jurisdiction challenges the existence of jurisdictional facts, we consider relevant evidence submitted by the parties when necessary to resolve the jurisdictional issues raised, as the trial court is required to do. Id. at 227. If the evidence creates a fact question regarding the jurisdictional issue, then the trial court cannot grant the plea to the jurisdiction, leaving the issue to be resolved by the fact finder. Id. at 227-28. However, if the relevant evidence is undisputed or fails to raise a fact question on the jurisdictional issue, the trial court should rule on the plea to the jurisdiction as a matter of law. Id. at 228.

         Administrative bodies are generally entitled to and should exercise the duties and functions conferred by statute without interference from the courts. Westheimer Indep. Sch. Dist. v. Brockette, 567 S.W.2d 780, 785 (Tex. 1978). Court intervention in administrative proceedings may be proper in certain, limited circumstances, such as when an agency is exercising authority beyond its statutorily conferred powers, or proceedings that amount to nothing more than an attack on prior judiciary judgment. See id. at 785, 788.

         None of the parties disputes that the State had the authority to conduct administrative proceedings here. Instead, the parties dispute whether the 2018 Administrative Proceeding involves different alleged violations by different parties than the 1993 Injunction or the 1998 Judgment such that it is not ...

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