F. Don Lacy and Homes and More v. Luis A. Castillo ( 2019 )

Affirmed and Majority and Concurring Opinions filed July 25, 2019.
In The
Fourteenth Court of Appeals
NO. 14-17-00766-CV
F. DON LACY AND HOMES AND MORE, Appellants
V.
LUIS A. CASTILLO, Appellee
On Appeal from the 410th District Court
Montgomery County, Texas
Trial Court Cause No. 16-05-06328-CV
CONCURRING OPINION
A plaintiff took a nonsuit without prejudice three days before the defendants’
summary-judgment motion was to be submitted to the trial court for ruling. This
appeal presents a straightforward question of law:
If a plaintiff takes a nonsuit without prejudice to avoid an unfavorable ruling
on the merits, may the trial court rule that the nonsuit was with prejudice even
though denominated as a nonsuit without prejudice?
The answer is “no.” So, the trial court did not err in declining to rule that the
plaintiff’s nonsuit was with prejudice.
The Lawsuit
Appellee/plaintiff Luis A. Castillo filed suit against appellants/defendants F.
Don Lacy and Homes and More (the “Lacy Parties”) asserting various claims. The
Lacy Parties did not assert a counterclaim, although they alleged in their answer that
Castillo’s suit was groundless, brought in bad faith, and brought to harass the Lacy
Parties. The Lacy Parties sought to recover reasonable and necessary attorney’s fees
under Texas Business and Commerce Code section 17.50(c).1 The Lacy Parties did
not seek attorney’s fees under any contract clause providing that a prevailing party
has a right to recover its attorney’s fees.
The Nonsuit
The Lacy Parties moved for summary judgment as to all of Castillo’s claims.
Three days before the submission date, Castillo took a nonsuit without prejudice.
The trial court signed an order granting the nonsuit without prejudice. The Lacy
Parties then filed a motion in which they asked the trial court for a ruling that (1)
Castillo took a nonsuit without prejudice to avoid an unfavorable ruling on the
merits, and (2) because of this action by Castillo, the nonsuit was with prejudice
even though Castilllo had dubbed it a nonsuit without prejudice. The trial court
denied the motion without specifying its reasons.
The Analysis on Appeal
In a single appellate issue, the Lacy Parties ask whether the trial court erred
in denying their motion to declare Castillo’s notice of nonsuit without prejudice to
be a notice of nonsuit with prejudice. This court should overrule the issue because,
as a matter of law, even if a plaintiff takes a nonsuit without prejudice to avoid an
1
See Tex. Bus. & Com. Code § 17.50(c).
2
unfavorable ruling on the merits, the trial court may not declare that the nonsuit was
with prejudice.2
The parties have not cited and research has not revealed any case in which a
court holds or states that if a plaintiff takes a nonsuit without prejudice to avoid an
unfavorable ruling on the merits, the trial court may declare that the nonsuit was with
prejudice even though the plaintiff denominated it as a nonsuit without prejudice.
The case the Lacy Parties cite for this proposition, Epps v. Fowler,3 does not support
it.4
In Epps, the defendants sought attorney’s fees from the plaintiffs based on a
contractual provision entitling the prevailing party in any legal proceeding relating
to the contract to recover its reasonable attorney’s fees.5 The defendants filed a
motion for summary judgment.6 The day after the plaintiffs filed their response, they
filed a notice of nonsuit without prejudice.7 The parties proceeded to trial on the
defendants’ requests for attorney’s fees.8 After trial, rather than sign an order
granting the plaintiffs’ nonsuit without prejudice, the trial court rendered judgment
that the plaintiffs take nothing and ordered the plaintiffs to pay the defendants’
2
See Epps v. Fowler, 351 S.W.3d 862, 865–70 (Tex. 2011); Klein v. Dooley, 949 S.W.2d 307, 308
(Tex. 1997) (per curiam); Solum Engineering, Inc. v. Starich, No. 14-13-00428-CV, 2014 WL
4262175, at *3-4 (Tex. App.—Houston [14th Dist.] Aug. 28, 2014, pet. denied)(mem. op.); In re
Strachan, No. 14-08-00299-CV, 2008 WL 4394734, at *1 & n.1 (Tex. App.—Houston [14th Dist.]
Sep. 11, 2008, orig. proceeding)(mem. op.).
3
Epps, 351 S.W.3d at 865–70.
4
See id.
5
See id. at 865.
6
See id.
7
See id.
8
See id.
3
reasonable attorney’s fees under the prevailing-party provision of the contract.9 The
court of appeals held that the plaintiffs had the right to take a nonsuit without
prejudice and that the trial court erred in rendering judgment on the merits. 10 The
court of appeals modified the trial court’s judgment to reflect that the plaintiffs’
claims were dismissed without prejudice.11 The court of appeals reversed the award
of attorney’s fees, concluding that the defendants could not be prevailing parties if
the claims against them were dismissed without prejudice, without an adjudication
on the merits.12
The Supreme Court of Texas granted review in Epps to decide whether a
defendant may be a prevailing party when the plaintiff takes a nonsuit without
prejudice.13 The high court held that a defendant may be a prevailing party for the
purposes of a prevailing-party attorney’s-fees provision if the plaintiff takes a
nonsuit without prejudice and if the trial court determines, on the defendant’s
motion, that the defendant took the nonsuit without prejudice to avoid an
unfavorable ruling on the merits.14 The high court did not say that if the trial court
makes this determination, the nonsuit without prejudice would be transformed into
a nonsuit with prejudice.15 Indeed, the premise of the Epps court’s inquiry was that
the plaintiffs had taken a nonsuit without prejudice. 16
9
See id.
10
See id.; Fowler v. Epps, 352 S.W.3d 1, 3 (Tex. App.—Austin 2010), vacated, 351 S.W.3d 862,
872 (Tex. 2011).
11
See id. at 865.
12
See id.
13
See id.
14
See id. at 870.
15
See id. at 865–70.
16
See id.
4
In Epps, the supreme court addressed the circumstances under which a
defendant may recover attorney’s fees as a prevailing party in a lawsuit even though
the plaintiff took a nonsuit without prejudice.17 In today’s case, the Lacy Parties did
not seek to recover attorney’s fees under a contract providing that a prevailing party
may recover attorney’s fees; rather, they sought to have the trial court declare that
Castillo’s nonsuit without prejudice was with prejudice even though Castillo
denominated it as a nonsuit without prejudice. Neither Epps nor any other case the
Lacy Parties have cited supports this notion.18
In Texas, a plaintiff may take a nonsuit without prejudice as a matter of right
at any time before the plaintiff has introduced all of plaintiff’s evidence at trial, other
than rebuttal evidence.19 If a plaintiff takes a nonsuit after the trial court has
adjudicated the merits of some of the plaintiff’s claims, for example by granting a
partial summary judgment, a nonsuit without prejudice results in a dismissal with
prejudice of the already-adjudicated claims and a dismissal without prejudice of the
plaintiff’s other claims.20
In today’s case, when Castillo took a nonsuit without prejudice, the trial court
had not ruled on the merits of any claims; so, this exception does not apply, and
Castillo had the right to take a nonsuit without prejudice, resulting in the dismissal
without prejudice of all of Castillo’s claims.21 To the extent the statute of limitations
17
See id.
18
See id.
19
See Tex. R. Civ. P. 162; Klein v. Dooley, 949 S.W.2d 307, 308 (Tex. 1997) (stating that plaintiffs
have a “right to nonsuit without prejudice under Rule 162”).
20
See Hyundai Motor Co. v. Alvarado, 892 S.W.2d 853, 855 (Tex. 1995)(per curiam); see also
Harris County v. Sykes, 136 S.W.3d 635, 642 n.13 (Tex. 2004) (Brister, J., concurring) (stating
that Hyundai Motor Co. court held “that nonsuit without prejudice nevertheless operates as a
dismissal with prejudice as to issues decided in earlier partial summary judgment”).
21
See Epps, 351 S.W.3d at 868–70; Klein, 949 S.W.2d at 308; In re Strachan, 2008 WL 4394734,
at *1 & n.1. A plaintiff who takes a nonsuit without prejudice is also subject to the preclusive
5
might bar Castillo’s claims if he re-filed them in a second lawsuit, statute of
limitations is an affirmative defense that the Lacy Parties would have to raise in the
second suit.22 The possibility that limitations might bar these claims does not
convert the nonsuit without prejudice in this case into a nonsuit with prejudice.23 If
Castillo had no plans to re-file his claims, Castillo had the option to take a nonsuit
with prejudice, which amounts to an adverse judgment on the merits.24 But Castillo
did not make this election, and, under the facts of today’s case, Castillo had an
absolute right to take a nonsuit without prejudice.25
Presuming for the sake of argument that Castillo took a nonsuit without
prejudice to avoid an unfavorable ruling on the merits, that action would not allow
the trial court to declare Castillo’s notice of nonsuit without prejudice to be a notice
of nonsuit with prejudice.26 The majority does not state that the trial court properly
could make this declaration if Castillo took a nonsuit without prejudice to avoid an
unfavorable ruling on the merits. Instead, the majority determines that the trial court
did not err in implicitly finding that Castillo did not take a nonsuit without prejudice
to avoid an unfavorable ruling on the merits. Thus, the majority appears to conclude
effect of any prior venue determination by the trial court. See In re Team Rocket, L.P., 256 S.W.3d
257, 260 (Tex. 2008). But, this preclusive effect does not result in a dismissal with prejudice;
rather, it means that the plaintiff must file any later suit in the venue determined by the trial court
in the first case, and if the plaintiff does not do so, the case will be transferred to that venue. See
id. at 259–61. In today’s case, the trial court did not make any venue determination.
22
See Epps, 351 S.W.3d at 869, n.8.
23
See id.
24
See id. at 868–69.
25
See In re Marriage of Montgomery, No. 14-15-00203-CV, 2016 WL 1533930, at *1 (Tex.
App.—Houston [14th Dist.] Apr. 14, 2016, no pet.) (mem. op.) (holding plaintiff had absolute
right to take nonsuit before the hearing on the defendants’ summary-judgment motion and thus to
avoid an adjudication of her claims on the merits by summary judgment).
26
See Epps, 351 S.W.3d at 868–70; Klein, 949 S.W.2d at 308; In re Marriage of Montgomery,
2016 WL 1533930, at *1; In re Strachan, 2008 WL 4394734, at *1 & n.1.
6
that, even if the law were as the Lacy Parties assert, the trial court did not err based
on the facts. I respectfully disagree with the majority’s analysis as to how the trial
court properly could have found that Castillo did not take a nonsuit without prejudice
to avoid an unfavorable ruling on the merits. The better course would be to affirm
the trial court’s ruling on the legal basis set forth above. For this reason, I join the
court’s judgment but respectfully decline to join the majority opinion.
/s/ Kem Thompson Frost
Chief Justice
Panel consists of Chief Justice Frost and Justices Zimmerer and Hassan (Hassan, J.,
majority).
7