Stedfast Baptist Church v. Fellowship of the Sword, Inc. ( 2022 )

In the
Court of Appeals
Second Appellate District of Texas
at Fort Worth
___________________________
No. 02-21-00436-CV
___________________________
STEDFAST BAPTIST CHURCH, Appellant
V.
FELLOWSHIP OF THE SWORD, INC., Appellee
On Appeal from the 96th District Court
Tarrant County, Texas
Trial Court No. 096-327677-21
Before Birdwell, Womack, and Wallach, JJ.
Memorandum Opinion by Justice Birdwell
MEMORANDUM OPINION
Seeking declaratory relief construing the default provisions of a commercial
lease to exclude constitutionally protected religious speech, as well as an award of
damages for breach of the lease by wrongful eviction, Stedfast Baptist Church sued
Fellowship of the Sword, Inc., a Texas non-profit corporation operating as a
Christian ministry in district court. Fellowship thereafter challenged the district
court’s jurisdiction in a plea arguing that because Fellowship had previously won its
forcible detainer suit in justice court, the merits of the protected speech and breach
of lease claims urged by Stedfast in the district court had already been determined
adversely in the justice court, thereby depriving the district court of subject matter
jurisdiction. The district court granted Fellowship’s plea.
Stedfast appeals and raises the following two issues:
(1) Did the district court abuse its discretion in dismissing with
prejudice claims of declaratory judgment and breach of contract
because of a justice court judgment in a forcible entry and detainer suit?
(2) Did the district court abuse its discretion in dismissing with
prejudice claims on the basis of lack of subject[ ]matter jurisdiction
since a dismissal with prejudice is a merits determination that a court
without jurisdiction has no power to make?
Because we hold that the justice court proceedings in Fellowship’s forcible detainer
suit1 could not, as a matter of law, declare the rights of the parties under the
1
Chapter 24 of the Texas Property Code is entitled, “Forcible Entry and
Detainer.” Tex. Prop. Code Ann. Ch. 24, §§ 24.001–.011. Chapter 24, however,
distinguishes between a “forcible entry and detainer” and a “forcible detainer.” See id.
2
commercial lease, including whether its default provisions contemplated a tenant’s
breach via its exercise of constitutionally protected religious speech, we sustain both
of Stedfast’s issues, reverse the district court’s judgment, and remand this matter for
proceedings consistent with this opinion.
I. Background
A. The Lease
In July of 2020, Stedfast, through its president and pastor Jonathan Shelley,
executed a 63-month commercial lease with Fellowship, as one of several tenants in a
multi-tenant commercial property on West Bedford–Euless Road in Hurst, Texas.
The lease itself consisted of standard forms promulgated by the Texas Association of
Realtors, Inc. and expressly acknowledged the leased premises would be used for
religious purposes as a church, with contemplated hours of operation from 6:00 a.m.
through 10:00 p.m., Sunday through Saturday. Beginning August 1, 2020, the term of
the lease ended on October 31, 2025.
§§ 24.001 (“Forcible Entry and Detainer”), 24.002 (“Forcible Detainer”). Generally, a
“forcible entry and detainer” entails someone who enters and possesses the premises
without consent and who, after demand, refuses to surrender the premises to the
lawful possessor. See id. § 24.001. And a “forcible detainer” involves someone who
enters and possesses the premises with permission but who, after demand, refuses to
surrender possession. See id. § 24.002.
3
1. Section 10(A)
Crucial to the dispute that eventually arose, Section 10(A) of the lease
expressly prohibited the following activities on any part of the leased premises or the
multi-tenant property generally:
A. Tenant may not use or permit any part of the leased premises or the
Property to be used for:
(1) any activity which is a nuisance or is offensive, noisy, or dangerous;
(2) any activity that interferes with any other tenant’s normal business
operations or [Fellowship’s] management of the Property;
(3) any activity that violates any applicable law, regulation, zoning
ordinance, restrictive covenant, governmental order, owners’
association rules, tenants’ association rules, [Fellowship’s] rules or
regulations, or this lease;
(4) any hazardous activity that would require any insurance premium on the
Property or leased premises to increase or that would void any such
insurance;
(5) any activity that violates any applicable federal, state, or local law,
including but not limited to those laws related to air quality, water
quality, hazardous materials, wastewater, waste disposal, air emissions or
other environmental matters; [or]
(6) the permanent or temporary storage of any hazardous material . . . .
2. Section 20(B)
Addressing what constitutes an actionable default by a tenant under the lease,
Section 20(B) provided:
B. If [Fellowship] does not actually receive at the place designated for
payment any rent due under this lease within 5 days after it is due,
[Stedfast] will be in default. If [Stedfast] fails to comply with this
4
lease for any other reason within 10 days after [Fellowship] notifies
[Stedfast] of its failure to comply, [Stedfast] will be in default.
3. Section 20(C)
In the event of a default by Stedfast, under Section 20(C), remedies available
to Fellowship included (1) termination of the lease or (2) termination of Stedfast’s
right to occupy the leased premises without terminating the lease and acceleration of
all rent payable during the remainder of the lease.
B. The Dispute over the Lease
As alleged by Fellowship, the dispute over the lease arose because Shelley
posted sermons online that Fellowship viewed as having advocated for violence
against and celebrated the deaths of members of the gay community.2 In response to
2
Fellowship specifically alleged that mere days after a truck had accidentally
driven through a gay pride parade in southern Florida and killed one person, Shelley
made the following statements during one of his sermons, employing a pejorative
term for members of the gay community:
It’s great when trucks accidentally go through those parades. I think
only one person died so hopefully we can hope for more in the future.
You say, “[W]ell that’s mean.” Yeah, but the Bible says they’re worthy
of death. You say, “[A]re you [sad] when f*gs . . . die?” No, I think it’s
great. I hope they all die. I would love it if every f*g . . . would die right
now. And you say, “[W]ell I don’t think that’s what you really mean.”
That’s exactly what I mean. I really mean it.
Shelley also allegedly urged that to save America, members of the gay
community should be shot and killed:
I mean 95% of America thinks that the most disgusting thing
imaginable is being a f*gg*t . . . . Because it is. I don’t even have to
convince people. And then you have to think about it – why in the
5
the sermons Shelley posted on social media, in June 2021, protesters appeared across
from the leased premises. Not long after the protests started, on July 1, 2021,
Fellowship sent Stedfast a “Notice of Default of Commercial Lease” addressed to
Shelley, stating:
You have violated certain terms of the Lease and accordingly, this is
your notice of default.
world would every single company and our government and the media
and just all the social media be constantly saying like let’s support the
most gross and disgusting thing ever[.] Because f*gs . . . are in control
of the media, because f*gs . . . are in control of the government,
because f*gs . . . are in control of these businesses because they love
money, they love power, they love influence, and they’re a bully. And
you know what, they’re bullying all these companies and they’re bullying
our country and they’re bullying our leaders and they’re doing what?
They’re doing their bidding for them. And you know the right thing to
do to a bully is to put a bullet in his head. It’s not to back down, it’s not
to apologize, it’s to put a bullet in his head. And you want to save
America? Start there.
We do not quote any of this language gratuitously, but simply to demonstrate
the potential constitutional gravity of the issues presented by this dispute that may
eventually require adjudication. See Snyder v. Phelps, 562 U.S. 443, 447–48, 460–61, 131
S. Ct. 1207, 1213, 1220–21 (2011) (holding that the First Amendment shielded
members of the Westboro Baptist Church in Topeka, Kansas, from tort liability to a
grieving military family for publicly expressing their view that the United States is
overly tolerant of the gay community, and particularly of gay service members, and
that God kills American soldiers as punishment, through picketing the funeral
services of the family’s departed loved one in Maryland employing similarly
pejorative language). Although Snyder may ultimately inform a decision on the merits
of this dispute, the language allegedly employed in Shelley’s sermons implicates the
jurisdictional question before us only to the extent we consider below whether, as
urged by Fellowship, the forcible detainer proceeding in justice court finally
adjudicated Stedfast’s First Amendment defense to eviction from the leased
premises.
6
It has come to [Fellowship’s] attention that as the pastor and
President of [Stedfast], your words and behavior have incited violence
against certain members of our society, and that those publicized,
inciteful words and behavior have caused violent protests to occur on
the Property, endangering both the Property and the other tenants.
Accordingly, you have violated Section 10.A of the Lease:
1. Your violent, inciting words and behavior, stated while speaking
to the Stedfast Baptist Church congregation and then later posted
for the general public to witness on YouTube, are a nuisance,
offensive and dangerous to the other tenants and to the public at
large;
2. Your actions have endangered other tenants and caused
interference with their normal business operations, prohibiting
them from the quiet enjoyment of their own suites; and
3. You have invited hazardous activity onto the Property that would
be a detriment to [Fellowship’s] insurance policy and continued
hazardous activity would cause such policy to either increase in
price or be terminated.
Therefore, you have 10 calendar days from the date of this letter
to remedy this default and comply with the terms of the Lease. If you
choose to remain in default after the expiration of 10 calendar days,
[Fellowship] will exercise its rights under the terms of the Lease to
terminate the lease and/or [Stedfast’s] right to occupy the Property.
Due to the nature of your default, there are multiple options that
may be used to rectify the default. It is [Fellowship’s] desire to explore
these options to determine which, if any, are in the best interest of both
parties. Please contact me as soon as possible so that we may discuss
the actions that would be necessary to cure your default. I look forward
to speaking with you.
Fellowship also asserted that other tenants had complained about both the sermons
and the protestors.
7
About six weeks later, on August 13, 2021, Fellowship sent Stedfast a “Notice
to Vacate and Notice of Intent to Accelerate Rent” addressed to Shelley, stating:
Notice is hereby given and demand is hereby made that you vacate the
premises . . . within three (3) days of the delivery of this letter to the
Premises. Fellowship of the Sword has elected to terminate the lease
between you and Fellowship of the Sword because of one or more
violations of Paragraph 10 of the lease.
If you do not vacate the Premises within three (3) days after
receipt of this letter, we will institute a forcible detainer suit against you
three (3) days from the date of this notice and demand is delivered to
the Premises, in which we will seek all relief and damages to which
[Fellowship] is entitled under Paragraph 20 of the lease, including, but
not limited to, attorneys’ fees, costs, expenses, pre- and post-judgment
interest, rents payable during the remainder of the lease, and any and all
other relief to which our client is entitled under Paragraph 20 of the
lease.
Further, notice is hereby given that we intend to accelerate all
rents which are payable during the remainder of the lease, as allowed by
Paragraph 20 of the lease. We reserve the right to seek all accelerated
rents payable during the remainder of the lease.
In response to these notices, Stedfast refused to vacate the leased premises on
the grounds that (1) the default provisions of the lease did not authorize eviction
predicated upon the conduct of the protesting third parties and (2) the messages and
sermons posted on social media did not breach any obligation of the lease. Stedfast
also maintained that because the protests did not occur during the business hours of
the other commercial tenants but solely during the church service hours, the
messages and sermons posted on social media did not interfere with the businesses
of other tenants as alleged by Fellowship.
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C. Concurrent Lawsuits
On August 20, 2021, the parties sued each other. But they sued each other in
different courts.
1. Stedfast and the District Court
Stedfast filed a lawsuit in district court seeking a declaratory judgment that it
had not breached the lease and injunctive relief prohibiting Fellowship from evicting
it from the leased premises. Stedfast also sought “monetary relief of $250,000.00 or
less” for breach of lease. Fellowship filed a general denial on September 13, 2021. On
October 5, 2021, Stedfast filed its first amended petition in which it continued to
seek declaratory relief, injunctive relief, and “monetary relief of $250,000.00 or less”
for breach of lease.
2. Fellowship and the Justice Court
In contrast, Fellowship filed a petition for forcible detainer in justice court,
asserting a superior right of possession in the leased premises and seeking Stedfast’s
eviction therefrom. After a jury trial, the justice court rendered a judgment on
October 22, 2021, awarding Fellowship possession of the leased premises. Stedfast
did not appeal the judgment to the county court at law.
D. District Court Activity after Completion of the Justice Court Proceedings
On November 4, 2021, shortly after the entry of the judgment of possession
by the justice court, Stedfast filed its second amended petition in the district court
9
seeking declaratory judgment, injunctive relief against eviction, and “monetary relief
of $250.000.00 or less” for breach of lease.
On the same date, Fellowship filed a plea to the jurisdiction in which it asked
the district court to dismiss Stedfast’s suit with prejudice. Fellowship argued that the
justice court had already determined the possession issue in its favor, that the justice
court alone had exclusive jurisdiction to determine possession of the leased premises,
and that the district court could not enjoin the justice court’s judgment, citing
McGlothlin v. Kliebert, 672 S.W.2d 231, 232 (Tex. 1984) (denying availability of
injunctive relief against justice court in mere landlord–tenant dispute over possession
of leased premises). The hearing on Fellowship’s plea to the jurisdiction was set for
November 23, 2021.
Before the hearing on Fellowship’s plea to the jurisdiction, on November 15,
2021, Stedfast filed its third amended petition in the district court retaining its claims
for declaratory judgment and “monetary relief of $250.000.00 or less” for breach of
lease. Stedfast withdrew its request for injunctive relief, however, effectively
nonsuiting that portion of its claims. See Rodarte v. Investeco Grp., L.L.C., 299 S.W.3d
400, 408 (Tex. App.—Houston [14th Dist.] 2009, no pet.).
More specifically, Stedfast alleged:
10
Both [Stedfast] and [Fellowship] have an interest in the proper
interpretation of the lease that affects their legal rights respectively.
Suit for Declaratory Relief
14.
The language of Section 10 A of the lease is not ambiguous.
15.
While is it is undisputed that a Justice Court has exclusive
jurisdiction over a forcible detainer suit, a Justice Court does not have
jurisdiction to give declaratory relief to interpret the lease because it is
not a court of record required by Section 37.003(a) of the Texas Civil
Practice & Remedies Code, according to McGloth[l]in v. Kliebert, 672
S.W.2d 231, 233[] (Tex. 1984).
16.
[Stedfast] avers a reasonable interpretation of Section 10 A
cannot include third-party protesters responding to sermons and
messages appearing on any electronic platform because such
information is not a use of property nor does it violate any provision of
the section.
17.
Additionally, the conduct of third-party protesters on the
property across from the leased premises who have allegedly viewed
sermons or messages on these electronic platforms is constitutionally
protected by the free speech and religion clauses of the United States
and Texas Constitutions thereby cannot be declared to violate Section
10 A of the lease.
18.
Therefore, there is no reasonable interpretation of Section 10 A
of the le[a]se that would authorize [Fellowship] to declare a default
under Section 20 of the lease to evict [Stedfast] and authorize
acceleration of the lease payments.
11
Breach of Contract
19.
[Fellowship’s] efforts to evict [Stedfast] are a breach of contract
entitling [Stedfast] to recover all damages it has sustained as a result of
[Fellowship’s] conduct.
Responding to Stedfast’s newly amended pleading, on December 2, 2021,
Fellowship filed its first amended answer in which it pleaded a general denial and
asserted four affirmative defenses with specific application to Stedfast’s breach of
lease cause of action:
2.2 The claims asserted by [Stedfast] are barred or fail, in whole and/or
in part, due to res judicata.
2.3 The claims asserted by [Stedfast] are barred or fail, in whole
and/or in part, due to collateral estoppel.
2.4 The claims asserted by [Stedfast] are barred or fail, in whole
and/or in part, due to [Stedfast’s] prior material breach.
2.5 The claims asserted by [Stedfast] are barred or fail, in whole
and/or in part, because any purported breaches of contract by
[Fellowship] are excused.
Although the record is not clear whether Fellowship filed its amended answer before
or after the hearing on its plea to the jurisdiction, the district court signed an order
granting its plea and dismissing Stedfast’s claims with prejudice on December 6,
2021.
Shortly thereafter, Stedfast filed this appeal, and later still, it vacated the leased
premises.
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II. Discussion
A. Standard of Review
Resolution of a plea to the jurisdiction may be on the pleadings or an
evidentiary record, depending on whether the plea challenges the pleadings, the
existence of jurisdictional facts, or both. Tex. Dep’t of Crim. Just. v. Rangel, 595 S.W.3d
198, 205 (Tex. 2020). If a plea challenges the pleadings, we determine whether the
pleaders allege facts that affirmatively demonstrate the court’s jurisdiction to
adjudicate the cause. Id. In so doing, we liberally construe the pleadings, taking all
assertions of fact as true and looking to the intent of the pleader. Id. “If the pleadings
do not contain sufficient facts to affirmatively demonstrate the trial court’s
jurisdiction but do not affirmatively demonstrate incurable defects in jurisdiction, the
issue is one of pleading sufficiency and the plaintiff[] should be afforded the
opportunity to amend.” Tex. Dep’t of Parks & Wildlife v. Miranda, 133 S.W.3d 217,
226–27 (Tex. 2004). “If the pleadings affirmatively negate the existence of
jurisdiction, then a plea to the jurisdiction may be granted without allowing the
plaintiff[] an opportunity to amend.” Id. at 227.
If, on the other hand, the plea goes beyond the pleadings and the parties offer
evidence to establish or negate jurisdictional facts, we utilize a process that mirrors a
traditional motion for summary judgment:
Initially, the defendant carries the burden to meet the summary
judgment proof standard for its assertion that the trial court lacks
jurisdiction. If it does, the plaintiff is then required to show that a
13
disputed material fact exists regarding the jurisdictional issue. If a fact
issue exists, the trial court should deny the plea. But if the relevant
evidence is undisputed or the plaintiff fails to raise a fact question on
the jurisdictional issue, the trial court rules on the plea as a matter of
law.
Mission Consol. Indep. Sch. Dist. v. Garcia, 372 S.W.3d 629, 635 (Tex. 2012) (footnotes
omitted). “In determining whether a material fact issue exists, we must take as true all
evidence favorable to the plaintiff, indulging every reasonable inference and resolving
any doubts in the plaintiff’s favor.” Alamo Heights Indep. Sch. Dist. v. Clark, 544 S.W.3d
755, 771 (Tex. 2018). “We address the question of whether there is jurisdiction on a
claim-by-claim basis.” Tex. Dep’t of Transp. v. Self, No. 02-21-00240-CV, 2022 WL
1259094, at *6 (Tex. App.—Fort Worth Apr. 28, 2022, pet. filed) (mem. op. on
reh’g).
Since Fellowship challenged the district court’s jurisdiction based upon the
judgment of possession it obtained in the justice court, and Stedfast responded by
denying the jurisdiction of the justice court to adjudicate the claims it asserts in the
district court, we must look to the jurisdictional restrictions of forcible detainer
actions in justice court.
B. The Scope of Forcible Detainer Jurisdiction
Section 24.002 of the Texas Property Code defines a forcible detainer in the
following manner:
14
§ 24.002. Forcible Detainer
(a) A person who refuses to surrender possession of real property on
demand commits a forcible detainer if the person:
(1) is a tenant or a subtenant wil[l]fully and without force holding
over after the termination of the tenant’s right of possession;
(2) is a tenant at will or by sufferance, including an occupant at the
time of foreclosure of a lien superior to the tenant’s lease; or
(3) is a tenant of a person who acquired possession by forcible entry.
(b) The demand for possession must be made in writing by a person
entitled to possession of the property and must comply with the
requirements for notice to vacate under Section 24.005.
Tex. Prop. Code Ann. § 24.002. As indicated by using the term “tenant” to describe
the person in unlawful possession of real property, the parties in a forcible detainer
action are usually in a landlord–tenant relationship. See Ward v. Malone, 115 S.W.3d
267, 270 (Tex. App.—Corpus Christi–Edinburg 2003, pet. denied).
To obtain the removal or eviction of a tenant in possession by forcible
detainer, the party seeking eviction must file an action in a justice court in the
precinct in which the real property is located and, if prevailing, the justice court has
exclusive jurisdiction to enter a judgment of possession and to issue a writ of
possession in execution thereof. Tex. Prop. Code Ann. §§ 24.004(a), .0061(a). The
justice court’s jurisdiction extends to the recovery of unpaid rent from the tenant in
addition to the writ of possession. See id. at § 24.0051(b). An appeal of a judgment of
15
possession (and any award of unpaid rent) takes the form of a trial de novo in county
court. See Tex. R. Civ. P. 510.10(c).
A forcible detainer action is a proceeding specially designed to be a speedy,
simple, and inexpensive means to obtain immediate possession of property.3
Coinmach Corp. v. Aspenwood Apartment Corp., 417 S.W.3d 909, 919 (Tex. 2013);
Marshall v. Hous. Auth. of San Antonio, 198 S.W.3d 782, 787 (Tex. 2006); Fed. Home
Loan Mortg. Corp. v. Pham, 449 S.W.3d 230, 235 (Tex. App.—Houston [14th Dist.]
3
In an antebellum opinion, the Texas Supreme Court explained the policy
underlying the streamlined proceedings employed to adjudicate possession disputes
in forcible entry and detainer and forcible detainer actions, thusly:
But in an action for a forcible entry and detainer, the reason and the
policy of the law show most clearly that the trial should be strictly
confined to the right of possession, without regard to which party had
the title to the land. If one holding title to the land was permitted, by
himself or his agent, with force and arms, to dispossess one in the
peaceable possession, the consequence would be breaches of the peace,
oppression and bloodshed, and trial by the use of the bowie knife and
the revolver would be resorted to instead of the quiet and peaceable
remedy afforded by the due course of law in the judicial tribunals of the
country.
The act of the legislature we have been discussing was designed to
give a summary and peaceable remedy for the violation of every one’s
possession, without stopping to inquire which party had the title to the
land. It declares to the party claiming title, [“]Your title may be good; the
courts of the country are open to you to try your title and obtain
possession if you have the title; but you shall not be permitted to take
the remedy in your own hands, and by violence turn out one who has
the peaceable possession; if you do you will be compelled to restore the
possession and pursue the due course of the law.[”]
Warren v. Kelly, 17 Tex. 544, 551 (1856).
16
2014, no pet.). “To prevail in a forcible detainer action, a plaintiff is not required to
prove title but is only required to show sufficient evidence of ownership to
demonstrate a superior right to immediate possession.” Villalon v. Bank One, 176
S.W.3d 66, 70 (Tex. App.—Houston [1st Dist.] 2004, pet. denied) (citing Rice v.
Pinney, 51 S.W.3d 705, 709 (Tex. App.—Dallas 2001, no pet.)); Dormady v. Dinero Land
& Cattle Co., L.C., 61 S.W.3d 555, 557 (Tex. App.—San Antonio 2001, pet. dism’d
w.o.j.) (op. on reh’g); Goggins v. Leo, 849 S.W.2d 373, 377 (Tex. App.—Houston [14th
Dist.] 1993, no writ).
Moreover, “a forcible-detainer suit in justice court may run concurrently with
another action in another court—even if the other action adjudicates matters that
could result in a different determination of possession from that rendered in the
forcible-detainer suit.” Hong Kong Dev., Inc. v. Nguyen, 229 S.W.3d 415, 437 (Tex.
App.—Houston [1st Dist.] 2007, no pet.) (op. on reh’g). “Matters relating to
possession may overlap in the two proceedings because ‘a judgment of possession in
a forcible detainer action [determines] only . . . the right to immediate possession and
does not determine the [parties’] ultimate rights . . . to any other issue in controversy
relating to the realty in question.’” Id. (quoting Lopez v. Sulak, 76 S.W.3d 597, 605
(Tex. App.—Corpus Christi–Edinburg 2002, no pet.) (emphasis added by Hong Kong
Dev., Inc.)).
Even when this overlap exists, however, courts have consistently recognized
that a judgment of possession in a forcible detainer action determines only the right
17
to immediate possession and not the parties’ ultimate rights regarding any other issue
in controversy relating to the property in question. Fed. Home Loan Mortg. Corp., 449
S.W.3d at 235. As such, no issue in a forcible detainer action other than the right of
immediate possession has preclusive effect in a subsequent suit between the parties.
See Coinmach, 417 S.W.3d at 919; Fed. Home Loan Mortg. Corp., 449 S.W.3d at 235.
In Gibson v. Dynergy Midstream Services, L.P., we highlighted this jurisdictional
restriction when considering a plea to the jurisdiction filed in a justice court:
To prevail in a forcible entry and detainer or forcible detainer
proceeding, the plaintiff must present sufficient evidence of ownership
to demonstrate a superior right to immediate possession. The only issue
that can be litigated in such suits is the right to actual possession; the
right to title cannot be adjudicated. Justice courts may adjudicate
possession when issues related to the title of real property are
tangentially or collaterally related to possession. If, however, the
question of title is so integrally linked to the issue of possession that the
right to possession cannot be determined without first determining title,
then the justice courts and, on appeal, the county courts, lack
jurisdiction over the matter.
138 S.W.3d 518, 522–23 (Tex. App.—Fort Worth 2004, no pet.) (citations omitted).
Critically, we also noted an appellate limitation that, upon reflection, counsels
against the capacity of justice courts to fully and finally adjudicate the constitutional
rights of the parties, particularly when considering a forcible detainer action
predicated upon a commercial lease. Simply put, when considering who possesses the
superior right of possession under a commercial lease, there is ultimately no right of
appellate review, in the traditional sense, from a justice court’s judgment of
possession, even if affirmed by trial de novo in the county court. See id. at 521 (“A
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final judgment of a county court in an eviction suit may not be appealed on the issue
of possession unless the premises in question are being used for residential purposes
only.” (quoting Tex. Prop. Code Ann. § 24.007)); see also Tex. Const. art. V, §§ 3(a)
(providing that constitutional grant of appellate jurisdiction for Texas Supreme Court
is restricted as prescribed by law), 6(a) (same for intermediate appellate courts).
Stated differently, if the constitutional rights of one or more parties to a commercial
lease inform the right to possession to be adjudicated by forcible detainer, Section
24.007 of the Property Code appears to foreclose appeal to this or the supreme court
for their repudiation or vindication. See Gibson, 138 S.W.3d at 520–21.
C. The Judgment of Possession and Stedfast’s Third Amended Petition
When the jury in the justice court determined—whether correctly or
incorrectly—that Fellowship had terminated Stedfast’s lease, Stedfast became a
“tenant at sufferance.” See Coinmach 417 S.W.3d at 915–16; Bockelmann v. Marynick,
788 S.W.2d 569, 571 (Tex. 1990). “A tenancy at sufferance is a lesser possessory
estate.” ICM Mortg. Corp. v. Jacob, 902 S.W.2d 527, 530 (Tex. App.—El Paso 1994,
writ denied). Fellowship was thus adjudicated by the justice court to have the
superior right to possession, and thereafter entered a final judgment of possession in
Fellowship’s favor.
Nevertheless, the judgment of possession did not preclude Stedfast from
asserting that it had been wrongfully evicted in a collateral action in district court. See
Coinmach, 417 S.W.3d at 920; Fed. Home Loan Mortg. Corp., 449 S.W.3d at 235; see also
19
Permison v. Morris, No. 01-18-00392-CV, 2019 WL 5556576, at *7 n.9 (Tex. App.—
Houston [1st Dist.] Oct. 29, 2019, no pet.) (mem. op.); Bankr. Est. of Wilson v. Petty,
No. 05-06-01502-CV, 2008 WL 2068063, at *4 (Tex. App.—Dallas May 16, 2008, no
pet.) (mem. op.). Conversely, had the jury in the justice court determined—whether
correctly or incorrectly—that Stedfast had not breached the lease and was entitled to
possession, a judgment awarding possession to Stedfast would not have precluded
Fellowship from bringing a collateral “suit for trespass, damages, waste, rent, or
mesne profits.” See Tex. Prop. Code Ann. § 24.008; Coinmach, 417 S.W.3d at 919; Fed.
Home Loan Mortg. Corp., 449 S.W.3d at 235; Bankr. Est. of Wilson, 2008 WL 2068063,
at *4. The only issue to be determined by the justice court was the right of immediate
possession, nothing more.
In its plea to the jurisdiction, Fellowship argued to the district court that the
only issue presented by Stedfast’s pleadings was whether it was entitled to possession
of the leased premises, which, according to Fellowship, was the issue exclusively
resolved by the justice court, thereby depriving the district court of subject matter
jurisdiction. Stedfast lent some credence to this argument by seeking injunctive relief
from the district court against Fellowship’s justice court eviction efforts in its
original, first amended, and second amended petitions. In each instance, the
underlying basis for the injunctive relief sought was that Stedfast retained a superior
right to possession under its commercial lease, the very issue subject to the justice
court’s exclusive jurisdiction. Ultimately, however, Stedfast withdrew its claim for
20
injunctive relief when the justice court entered the judgment of possession in favor
of Fellowship. See McGlothlin, 672 S.W.2d at 232 (denying availability of district court
injunctive relief against justice court when adjudication of right of possession
overlaps). Accordingly, when the district court considered Fellowship’s plea, the only
claims remaining were those for declaratory relief and breach of lease, neither of
which were subject to adjudication in the forcible detainer action.
Stedfast’s response to Fellowship’s plea in the district court made this exact
point. And before this court, Stedfast similarly argues: “[Stedfast] amended its
pleading following the motion to dismiss removing all allegations and claims objected
to in the plea to the jurisdiction.” Given we are to consider Fellowship’s plea on a
claim-by-claim basis, see Self, 2022 WL 1259094, at *6, when Stedfast filed its third
amended petition dropping its request for injunctive relief, the entire foundation to
Fellowship’s plea completely vanished.
Nevertheless, Fellowship argues that principles of res judicata and collateral
estoppel support the district court’s dismissal of the remaining claims for declaratory
relief and breach of lease. This contention we reject.
D. Fellowship’s Plea, Res Judicata, and Collateral Estoppel
After reviewing Fellowship’s plea to the jurisdiction, we conclude that it was
not based on principles of res judicata and collateral estoppel. We acknowledge that
Fellowship had some arguments that sounded a great deal like res judicata and
collateral estoppel. For example, Fellowship asserted, “At the jury trial [in the justice
21
court], [Stedfast] was able to put on evidence and argue all its defense[s] to
[Fellowship’s] forcible detainer suit, including that [Stedfast] had not breached the
Lease under the terms of the Lease.” Elsewhere, Fellowship argued, “[A]ll of the
arguments or defenses that [Stedfast] has raised in the Petition have already been
asserted in the Justice Court. Furthermore, [Stedfast] has not pleaded that it was
prevented from arguing or putting forward evidence of its defenses at the justice
court trial.” Those assertions, though, were not in support of res judicata or collateral
estoppel but were in support of Fellowship’s argument that the district court could
not enjoin the justice court because Stedfast could not meet the requirements to
obtain injunctive relief imposed by the supreme court in McGlothlin:
For the district court to enjoin the exercise of the justice court’s
exclusive jurisdiction in a forcible entry and detainer case, there must be
a showing that the justice court is without jurisdiction to proceed in the
cause or the defendant has no adequate remedy at law. There is no
showing that the justice court would be without jurisdiction in this case.
This suit is merely a landlord–tenant dispute over possession of the
leased premises. Kliebert concedes that title to the premises is not an
issue. Therefore, the only way Kliebert could entitle himself to relief in
the district court is to show facts that existed which prevented Kliebert
from making his defense at law in the justice court. Smith v. Ryan, 20
Tex. 661, 665 (1858).
A temporary injunction will not be granted where there is a plain
and adequate remedy at law. . . . Kliebert’s adequate remedy at law is to
defend himself in the justice court suit. The justice court can construe
the lease and hear Kliebert’s arguments to determine who had the right
of possession. Gibson v. Moore, 22 Tex. 611 (1858). Therefore, the
district court erred in granting the temporary injunction because
Kliebert had an adequate remedy at law . . . .
672 S.W.2d at 232–33.
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Indeed, we would not expect res judicata and collateral estoppel to appear in a
plea to the jurisdiction. Those arguments would not deprive the district court of
jurisdiction. They might, however, provide the district court with bases to deny
Stedfast’s claims on their merits. See, e.g., Harrell, Tr. of Sam Minchen Revocable Living Tr.
v. Stovall, No. 14-18-00991-CV, 2020 WL 1922014, at *9 (Tex. App.—Houston [14th
Dist.] Apr. 21, 2020, no pet.) (mem. op.) (affirming trial court judgment based on
res judicata).
E. Fellowship’s First Amended Answer and the Dismissal Order
Res judicata and collateral estoppel first appeared in Fellowship’s first
amended answer, which Fellowship filed after its plea to the jurisdiction but before
the district court signed its dismissal order. The district court’s later dismissal order
makes no mention of either res judicata or collateral estoppel.
The purpose of a plea to the jurisdiction is to defeat a cause of action without
regard to the asserted claim’s merits. Wheelabrator Air Pollution Control, Inc. v. City of San
Antonio, 489 S.W.3d 448, 453 (Tex. 2016). Normally, a court without subject matter
jurisdiction has the power to dismiss the suit, nothing more. See Lopez v. Pub. Util.
Comm’n of Tex., 816 S.W.2d 776, 783–84 (Tex. App.—Austin 1991, writ denied)
(“Having adjudged that it had no jurisdiction over the plaintiffs’ claims, the district
court could not contemporaneously order that they take nothing thereby.”).
“Without subject matter jurisdiction, a court is powerless to render judgment on the
merits of a lawsuit.” Ab-Tex Beverage Corp. v. Angelo State Univ., 96 S.W.3d 683, 686
23
(Tex. App.—Austin 2003, no pet.). Thus, to dismiss Stedfast’s claims with prejudice,
which the district court did, it would have had to assert jurisdiction over them. See
Ritchey v. Vasquez, 986 S.W.2d 611, 612 (Tex. 1999) (stating that a dismissal with
prejudice functions as a final determination on the merits); Ab-Tex Beverage Corp., 96
S.W.3d at 686. Although Fellowship’s plea to the jurisdiction did not provide
grounds for a disposition on the merits, its first amended answer potentially did. See,
e.g., Harrell, 2020 WL 1922014, at *9.
In short, the district court appears to have disposed of the merits while
simultaneously asserting that it had no jurisdiction over them. Contextually,
res judicata and collateral estoppel appear to explain how the district court reached
that result. As noted earlier, Fellowship’s plea to the jurisdiction had arguments that
resembled those presented when arguing res judicata and collateral estoppel:
• “At the jury trial [in the justice court], [Stedfast] was able to put on evidence
and argue all its defense[s] to [Fellowship’s] forcible detainer suit, including
that [Stedfast] had not breached the Lease under the terms of the Lease.”
• “[A]ll of the arguments or defenses that [Stedfast] has raised in the Petition
have already been asserted in the Justice Court. Furthermore, [Stedfast] has
not pleaded that it was prevented from arguing or putting forward evidence of
its defenses at the justice court trial.”
But as also noted earlier, those arguments had nothing to do with res judicata and
collateral estoppel; rather, they supported Fellowship’s argument that, based on the
McGlothlin analysis, the district court should not grant Stedfast injunctive relief.
Fellowship’s first amended answer might have reinforced the idea that its plea to the
24
jurisdiction encompassed res judicata and collateral estoppel, but such was not the
case.
F. Stedfast’s Arguments
Stedfast argues that its claims for declaratory judgment and breach of contract
“are undisputedly within the jurisdiction of a district court and not within the
jurisdiction of a justice court.” Stedfast also argues that “the justice court judgment
could not legally serve as a basis for dismissal of all of the district court claims based
on res judicata or a collateral estoppel of the justice court judgment.” We agree with
both contentions.
Stedfast further argues that a forcible detainer action, by its very function, does
not encompass the scope of any underlying dispute:
[Fellowship’s] argument in the plea to the jurisdiction that the justice
court judgment deprived the district court of jurisdiction is defeated by
several Texas Supreme Court opinions involving suits for wrongful
eviction. [Marshall, 198 S.W.3d at 787; Coinmach, 417 S.W.3d at 919.] As
that court writes in Marshall, “[j]udgment of possession in a forcible
detainer action is not intended to be a final determination of
whether the eviction is wrongful, rather it is a determination of the
right to immediate possession.” [Marshall, 198 S.W.3d at 787.] Or as
written in Coinmach, the “judgment in a forcible detainer action is a final
determination only ‘of the right to immediate possession[’;] it is not ‘a
final determination of whether the eviction is wrongful.’” [Coinmach, 417
S.W.3d at 919.]
Because of the jurisdictional limitations placed upon forcible detainer actions in
justice court, we agree that even if the justice court heard evidence relevant to
Stedfast’s claims for declaratory relief and breach of lease, the justice court’s
25
consideration of such evidence had no claim or issue preclusive consequences on the
subject matter jurisdiction of the district court.
1. Justice Courts and Declaratory Judgments
Stedfast explains that “while a justice court has exclusive jurisdiction over
forcible entry and detainer suits, it is equally undisputed that because it is not a court
of record it cannot entertain a declaratory judgment suit, which is required by Section
37.003(a) of the Texas Civil Practice & Remedies Code.” Stedfast is correct. Suits
seeking declaratory judgment must be filed in a court of record. See Tex. Civ. Prac. &
Rem. Code Ann. § 37.003(a) (“A court of record within its jurisdiction has power to
declare rights, status, and other legal relations whether or not further relief is or could
be claimed.”); Healthelp Servs. Grp., Inc. v. Iskcon Asset Mgmt., No. 14-97-01300-CV,
1999 WL 459770, at *2 (Tex. App.—Houston [14th Dist.] July 8, 1999, pet. dism’d
w.o.j.); Wilson v. Wilson, 378 S.W.2d 156, 160 (Tex. App.—Tyler 1964, no writ) (op.
on reh’g); but see Nash v. Peters, 303 S.W.3d 359, 361–62 (Tex. App.—El Paso 2009,
no pet.) (holding that Section 27.034 of the Texas Government Code, which dealt
with restrictive covenants, trumped Section 37.003(a) of the Texas Civil Practice and
Remedies Code because Section 27.034 was the more specific statute and because
Section 37.003(a) was the general rule).
A justice court is not a court of record. See Warren v. Barron Bros. Millinery Co.,
23 S.W.2d 686, 687 (Tex. [Comm’n Op.] 1930) (“Justices’ courts are not courts of
record; they have no seal to authenticate their process.”); Bumpus v. Fisher, 21 Tex.
26561, 567 (1858) (“The justices’ court has no seal, and, therefore, in some respects, in
relation to the authentication of its records, it cannot be put on a footing with courts
of record.”). As explained by our sister court in Waco:
Due to the fact that justice courts are often presided over by laymen
who are not supposed to be skilled in the technicalities of the science of
the practice of law nor well informed in the forms of judicial
proceedings as observed in courts of records, great liberality and
indulgence are extended to the proceedings in such courts. It is said that
if their proceedings are intelligible and attain the ends of substantial
justice, they are generally sustained. The test of the validity of the
judgments of such courts is their intelligibility, and in pursuance of the
indulgence accorded by the policy of the higher courts, very brief
entries have been held sufficient to sustain their judgments. If this were
not true, the parties might often experience great difficulty in getting
out of the justice court so as to secure a trial in a court of record.
Dagley v. Leeth, 106 S.W.2d 730, 731 (Tex. App.—Waco 1937, no writ) (citations
omitted) (citing Clay v. Clay, 7 Tex. 250, 255 (1851) (“But great liberality and
indulgence are extended to the proceedings of justices of the peace, who are
supposed not to be skilled in the forms of judicial proceedings observed in courts of
record. If their proceedings are intelligible, and attain the ends of substantial justice,
they are generally sustained.”)); see also Dixon v. Bank of New York Mellon, 507 S.W.3d
783, 788 (Tex. App.—El Paso 2015, no pet.) (“At the outset, Justice Courts are not
courts of record such that we would know what documents were or were not before
the court.”); In re McCue, No. 06-09-00044-CV, 2009 WL 1227900, at *2 (Tex.
App.—Texarkana May 7, 2009, orig. proceeding) (mem. op) (“Given that justice
courts are not courts of record and that the Legislature has not required justice courts
27
to permit the transcription of proceedings therein when requested by a party (even if
transcribed at the party’s own expense), we cannot conclude the district court abused
its discretion by denying McCue’s petition for writ of mandamus against the justice
court.”); Hutcherson v. Blewett, 58 S.W. 150, 151 (Tex. App.—Fort Worth 1900, no
writ) (“As the justice court is not a court of record, we are at a loss to determine how
he could have shown that he had made proof of his inability to pay the costs before
the court trying the case, without showing by parol that the court was still in session
when the affidavit was made before and filed with the justice of the peace.”). The
justice court therefore had no jurisdiction over Stedfast’s declaratory judgment
action. See Tex. Civ. Prac. & Rem. Code Ann. § 37.003(a); Healthelp Servs. Grp., 1999
WL 459770, at *2. And “a claim is not barred by res judicata if the court rendering
judgment in the initial suit lacked subject[ ]matter jurisdiction over the claim.” Lopez,
76 S.W.3d at 606; see Bacon v. Jordan, 763 S.W.2d 395, 396 (Tex. 1988).
Neither Stedfast nor Fellowship disputes that the district court was a court of
record. See Dorsey v. Cutbirth, 178 S.W.2d 749, 750 (Tex. App.—Galveston 1944, writ
ref’d w.o.m.) (“In this connection we desire to state that the district court is a court
of record, and speaks only by record.”). Thus, the law did not preclude the district
court from proceeding on Stedfast’s declaratory judgment action for that reason.
2. Justice Courts and the Amount in Controversy
Justice courts are also limited to “civil matters . . . in which the amount in
controversy is not more than $20,000, exclusive of interest.” Tex. Gov’t Code Ann.
28
§ 27.031(a)(1). Stedfast pled an amount in controversy in excess of $20,000. Thus, the
justice court had no jurisdiction over Stedfast’s breach of contract claim. Because the
justice court had no jurisdiction over Stedfast’s breach of contract claim, res judicata
did not bar Stedfast from asserting that claim in the district court. See Lopez, 76
S.W.3d at 606; see also Bacon, 763 S.W.2d at 396. 4
District courts have jurisdiction of civil matters “in which the amount in
controversy is more than $500, exclusive of interest.” Tex. Gov’t Code Ann.
§ 24.007(b). Unlike the justice court, the amount in controversy was not an
impediment to the district court’s jurisdiction.
G. Holding
Without addressing the merits of Stedfast’s claims for declaratory relief and
breach of lease, we hold that the district court had subject matter jurisdiction over
them; thus, the district court erred by dismissing those claims with prejudice. We
4
Although we are unable to find any authority granting courts of record
exclusive jurisdiction to adjudicate the constitutional rights of parties, as observed
above, the absence of a record—particularly by transcription of testimony—in a
justice court, coupled with the absence of intermediate appellate and supreme court
review under these unique circumstances, counsels against the capacity of justice
courts to adjudicate the constitutional rights of the parties before it. See Gibson, 138
S.W.3d at 521. Here, given the assertion of free speech and free exercise rights by
Stedfast in opposition to Fellowship’s interpretation of the default provisions in the
commercial lease, it would be difficult to credit claim and issue preclusion arguments
predicated upon the forcible detainer proceedings in the justice court. See also Freedom
From Religion Found., Inc. v. Mack, No. 21-20279, 2022 WL 4546111, at *1–5, *17
(observing that Texas justice courts are not courts of record, reversing summary
judgment granted in plaintiffs’ favor that was based upon affidavits recounting how
justice court proceedings allegedly violated the Establishment Clause, and rendering
judgment dismissing the plaintiffs’ suit) (5th Cir. Sept. 29, 2022).
29
further hold that the justice court proceedings triggered neither collateral estoppel
nor res judicata principles that defeated Stedfast’s district court claims, so to the
extent that the district court assumed jurisdiction and disposed of Stedfast’s claims
with prejudice because they had previously been litigated in the justice court, the
district court also erred. We sustain both of Stedfast’s issues.
III. Conclusion
Having sustained both of Stedfast’s issues, we reverse the trial court’s
judgment and remand this matter to the trial court for proceedings consistent with
this opinion.
/s/ Wade Birdwell
Wade Birdwell
Justice
Delivered:
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