Ullico Casualty Company and the Honorable Karen Weldin Stewart, CIR-ML, Insurance Commissioner of the State of Delaware v. Pelco Construction Company, Inc., Pelco Commercial Construction, Inc., Mattew G. Harris and Kimberly A. Harris ( 2018 )


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  • Opinion issued June 14, 2018.
    In The
    Court of Appeals
    For The
    First District of Texas
    ————————————
    NO. 01-17-00034-CV
    ———————————
    ULLICO CASUALTY COMPANY AND THE HONORABLE KAREN
    WELDIN STEWART, CIR-ML, INSURANCE COMMISSIONER OF THE
    STATE OF DELAWARE, Appellants
    V.
    PELCO CONSTRUCTION COMPANY, INC., PELCO COMMERCIAL
    CONSTRUCTION INC., MATTHEW G. HARRIS, AND
    KIMBERLY A. HARRIS, Appellees
    On Appeal from the 334th Judicial District
    Chambers County, Texas
    Trial Court Case No. CV-28808
    MEMORANDUM OPINION
    Appellants Ullico Casualty Company and the Honorable Karen Weldin
    Stewart, CIR-ML, Insurance Commissioner of the State of Delaware (“Appellants”),
    sued appellees Pelco Construction Company, Pelco Commercial Construction, Inc.,
    Matthew Harris, and Kimberly Harris, alleging breach of the terms of an indemnity
    agreement and seeking indemnification for attorneys’ fees incurred in another
    lawsuit. The parties filed cross-motions for summary judgment and the trial court
    granted summary judgment in appellees’ favor. Appellants contend that the trial
    court erred in denying their motion for summary judgment and instead granting
    appellees’ motion.
    Before we address the merits of any case, we first must have jurisdiction. See,
    e.g., Tex. Dep’t of Parks & Wildlife v. Miranda, 
    133 S.W.3d 217
    , 228 (Tex. 2004).
    (“We adhere to the fundamental precept that a court must not proceed on the merits
    of a case until legitimate challenges to its jurisdiction have been decided.”). Subject
    matter jurisdiction “cannot be waived” and “may thus be raised at any time.” W.
    Orange-Cove Consol. I.S.D. v. Alanis, 
    107 S.W.3d 558
    , 583 (Tex. 2003) (citing Tex.
    Ass’n of Bus. v. Tex. Air Control Bd., 
    852 S.W.2d 440
    , 445–46 (Tex. 1993)).
    Appellees raise a colorable argument that Ullico Casualty Company lacks
    standing to seek indemnity for a loss (attorneys’ fees) incurred by Ullico Casualty
    Group—a distinct entity. This question implicates the trial court’s and our
    jurisdiction. See, e.g., DaimlerChrysler Corp. v. Inman, 
    252 S.W.3d 299
    , 304 (Tex.
    2008) (“A court has no jurisdiction over a claim made by a plaintiff without standing
    to assert it.”); Cadle Co. v. Lobingier, 
    50 S.W.3d 662
    , 670 (Tex. App.—Fort Worth
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    2001, pet. denied) (“Without a breach of a legal right belonging to a plaintiff, . . . he
    has no standing to litigate.”); see also PHC-Minden, L.P. v. Kimberly-Clark Corp.,
    
    235 S.W.3d 163
    , 173 (Tex. 2007) (“Texas law presumes that two separate
    corporations are distinct entities”); BMC Software Belgium, N.V. v. Marchand, 
    83 S.W.3d 789
    , 799 (Tex. 2002) (quoting Conner v. ContiCarriers and Terminals, Inc.,
    
    944 S.W.2d 405
    , 418–19 (Tex. App.—Houston [14th Dist.] 1997, no pet.)) (“To
    ‘fuse’ the parent company and its subsidiary for jurisdictional purposes, the plaintiffs
    must prove the parent controls the internal business operations and affairs of the
    subsidiary. . . . the evidence must show that the two entities cease to be separate so
    that the corporate fiction should be disregarded to prevent fraud or injustice.”);
    Abdel-Fattah v. PepsiCo, Inc., 
    948 S.W.2d 381
    , 384 (Tex. App.—Houston [14th
    Dist.] 1997, no writ) (“Courts simply will not disregard the separate legal identities
    of corporations on the basis of stock ownership or interlocking directorship. With
    the corporate veil intact, the two corporations are legally separate entities . . . .”)
    (internal citations omitted).
    Appellees raised this particular jurisdictional challenge for the first time on
    appeal. We cannot resolve the issue as a matter of law because there is at least one
    outstanding factual question: who paid the attorneys’ fees underlying this dispute.
    Appellants argue that Ullico Casualty Company paid the fees, and they rely on an
    affidavit that refers to Ullico Casualty Company as the “surety” and later states that
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    the surety paid these fees. Conversely, Pelco emphasizes that Ullico Casualty Group
    was the defendant in the Chambers County lawsuit in which the fees at issue were
    incurred, and the invoices in the record are addressed to Ullico Casualty Group—
    and not Ullico Casualty Company.
    The trial court must decide its subject matter jurisdiction before it or we can
    address the merits of the case. We thus remand for consideration of the trial court’s
    subject matter jurisdiction.
    Conclusion
    We vacate the trial court’s judgment and remand this case for further
    proceedings consistent with this opinion.
    Jennifer Caughey
    Justice
    Panel consists of Justices Bland, Lloyd, and Caughey.
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