Court of Appeals of Texas, Third District, Austin
THE 353RD DISTRICT COURT OF TRAVIS COUNTY NO.
D-1-GN-17-002896 THE HONORABLE AMY CLARK MEACHUM, JUDGE
Chief Justice Rose, Justices Kelly and Smith
Cherry Knoll, LLC (Cherry Knoll) filed a motion to stay this
appeal pending resolution of a federal lawsuit concerning the
same parties and subject matter. The federal district court
had dismissed Cherry Knoll's federal lawsuit, but the
Fifth Circuit reversed and reinstated the lawsuit. In
applying the doctrine of comity, we find that the facts
support granting Cherry Knoll's motion. Therefore, we
grant the motion to stay and abate proceedings pending
litigation of the federal suit.
August 17, 2016, Cherry Knoll filed a federal civil rights
suit against the City of Lakeway (the City) and others in the
U.S. District Court for the Western District of Texas. That
lawsuit arises out of the City's effort to acquire a
portion of Cherry Knoll's land for a roadway expansion,
which culminated in a 2015 settlement agreement between the
City and Cherry Knoll. The claims asserted against the City
in the federal lawsuit include federal constitutional claims
under 42 U.S.C. § 1983, a claim for equitable rescission
of the 2015 settlement agreement, and other claims arising
under Texas law.
23, 2017, the City filed the instant breach of contract
action in Travis County District Court. In this lawsuit, the
City seeks to recover its attorney fees and other costs of
litigation in the federal lawsuit on the theory that Cherry
Knoll's filing and prosecution of the federal lawsuit
violates the 2015 settlement agreement. Cherry Knoll moved
for a stay of the Travis County litigation so that the
federal lawsuit could proceed, which the Travis County
district court granted.
16, 2018, the federal district court dismissed Cherry
Knoll's complaint. The Section 1983 claims were dismissed
for substantive reasons and the state-law claims were
dismissed for lack of subject-matter jurisdiction. Under the
terms of the stay granted by the state district court, the
federal district court's dismissal triggered an end to
the stay of the Travis County litigation, and the parties
began litigating in Travis County. Cherry Knoll filed an
amended answer in which it asserted, as counterclaims, the
same state-law claims that the federal court had dismissed
for lack of federal subject-matter jurisdiction. The City
filed a plea to the jurisdiction, seeking dismissal of Cherry
Knoll's state-law claims on grounds of sovereign immunity
and mootness. The state district court denied the City's
plea to the jurisdiction, and this interlocutory appeal
followed. See Tex. Civ. Prac. & Rem. Code §
51.014(a)(8) (authorizing interlocutory appeal of order that
grants or denies plea to jurisdiction filed by governmental
April 22, 2019, the Fifth Circuit reversed the federal
district court and reinstated the federal lawsuit, including
Cherry Knoll's state and federal claims. Cherry
Knoll, L.L.C. v. Jones, 922 F.3d 309 (5th Cir.
2019). Cherry Knoll now requests that this Court stay this
appeal before this Court pending adjudication of the federal
action is pending in a federal court, a party can move to
stay a later-filed state-court case under the doctrine of
comity. In re Old Am. Cty. Mut. Fire Ins., No.
03-12-00588-CV, 2012 WL 6699052, at *2 (Tex. App.-Austin,
Dec. 20, 2012, orig. proceeding) (mem. op.) (citing
Ashton Grove L.C. v. Jackson Walker, L.L.P., 366
S.W.3d 790, 794 (Tex. App.-Dallas 2012, no pet.)). In
applying the doctrine of comity, the Texas court in which the
subsequent action is instituted will generally stay the
proceedings pending adjudication of the federal suit. See
Griffith v. Griffith, 341 S.W.3d 43, 54 (Tex. App.-San
Antonio 2011, no pet.). However, staying a proceeding under
the doctrine of comity rests within the sound discretion of
the court. Ashton Grove, 366 S.W.3d at 794.
obtain a stay of a later-filed case under the doctrine of
comity, it is generally necessary that the two suits concern
the same subject matter, involve the same issues, seek the
same relief, and involve the same causes of action.
Griffith, 341 S.W.3d at 54 (citing In re State
Farm Mut. Auto. Ins., 192 S.W.3d 897, 901 (Tex.
App.-Tyler 2006, orig. proceeding)). "One test to
determine whether the causes of action are identical is to
ascertain whether the parties could obtain all the relief in
the prior suit that they would be entitled to in the
subsequent action." Nowell v. Nowell, 408
S.W.2d 550, 553 (Tex. App.-Dallas 1966, writ dism'd).
Courts may also consider additional factors such as which
action was filed first, whether the parties are the same in
both actions, and the effect of a judgment in a later action
on any order or judgment entered in the prior action. In
re BP Oil Supply Co., 317 S.W.3d 915, 919 (Tex.
App.-Houston [14th Dist.] 2010, orig. proceeding).
conclude that these factors weigh in favor of granting Cherry
Knoll's motion to stay the proceedings before our Court.
The suit filed in federal court and the suit filed in state
court concern the same subject matter, involve the same
issues, and seek the same relief. In its brief before this
Court the City acknowledges as much, stating that
"Cherry Knoll asserted these same [state law claims]
… in its federal lawsuit." The City has also
asserted its state-law claims as counterclaims in the federal
lawsuit. Further, Cherry Knoll and the City could obtain all
relief in the federal suit to which they would be entitled in
the state-court suit, and the federal court is fully
competent to address the City's jurisdictional issues.
See, e.g., GLF Constr. Corp. v. LAN/STV,
414 F.3d 553, 556-58 (5th Cir. 2005) (applying governmental
immunity under Texas law).
factors weigh in favor of granting Cherry Knoll's motion
to stay the proceedings before our Court. The federal lawsuit
is the first-filed suit. Further, a decision from our Court
regarding the City's plea to the jurisdiction could
impact the first-filed federal lawsuit. As we have noted, the
state-court suit is merely a subset of the federal lawsuit. A
resolution of the state-court suit would not fully resolve
the federal ...