Twenty First Century Holdings, Inc. D/B/A American Geothermal Systems, Inc. Victor DeMarco And N. West Short v. Precision Geothermal Drilling, L.L.C. ( 2015 )

TEXAS COURT OF APPEALS, THIRD DISTRICT, AT AUSTIN
NO. 03-13-00081-CV
Twenty First Century Holdings, Inc. d/b/a American Geothermal Systems, Inc.;
Victor DeMarco; and N. West Short, Appellants
v.
Precision Geothermal Drilling, L.L.C., Appellee
FROM THE COUNTY COURT AT LAW NO. 2 OF TRAVIS COUNTY,
NO. C-1-CV-12–12503, HONORABLE ERIC SHEPPERD, JUDGE PRESIDING
MEMORANDUM OPINION
In this interlocutory appeal, Twenty First Century Holdings, Inc. d/b/a American
Geothermal Systems, Inc. (AGSI); Victor DeMarco; and N. West Short appeal the county court’s
denial of their Petition for Writ of Mandamus and Interlocutory Appeal. In the petition, appellants
sought a writ of mandamus compelling the justice court to rescind its order vacating dismissal of the
suit, to vacate its sanctions award, and to order arbitration and, in the alternative, sought
interlocutory appeal of the justice court’s order denying the motion to compel arbitration. For the
reasons that follow we affirm in part and dismiss in part for want of jurisdiction.
FACTUAL AND PROCEDURAL BACKGROUND
AGSI is a geothermal HVAC company owned by DeMarco.1 DeMarco formed a
drilling company named Precision Geothermal Drilling (PGD) with Patricia Denny to perform
drilling work for companies like AGSI. PGD was formed as a limited liability company (LLC), with
Denny as 51% owner, DeMarco as 49% owner, and both as managers. See generally Tex. Civ. Prac.
& Rem. Code §§ 101.001–.621 (governing limited liability companies). AGSI contracted with PGD
for its drilling work, and disputes soon arose between DeMarco and Denny over the drilling work
and payment. Denny filed suit in justice court on behalf of PGD for breach of contract against AGSI
seeking to recover approximately $8,000.00.2 DeMarco filed an answer on behalf of AGSI. A trial
was held, and the justice court granted judgment for PGD. AGSI filed a motion for new trial, which
was granted.
The parties subsequently reached a settlement agreement in principle, which included
mutual releases and called for AGSI to pay PGD $5,100. During negotiations over the final details
of the settlement, a dispute arose between Denny and DeMarco over the operation of PGD, and
DeMarco accused Denny of unauthorized acts. DeMarco requested certain records from Denny,
some of which she withheld pending his agreement to release his personal claims against her. Based
on the records Denny did provide to DeMarco, DeMarco concluded she had mishandled the business
and engaged in self-dealing. When DeMarco continued to refuse to release his personal claims
1
Geothermal HVAC systems involve drilling multiple ground loops that extend several
hundred feet into the earth through which liquid is circulated in order to cool the air using the
temperature of the earth rather than the outside air.
2
Although it appears that Denny—not PGD counsel—filed the suit, the record reflects that
PGD was represented by counsel both before and after suit was filed.
2
against Denny in the settlement agreement, Denny set the case for trial. Prior to trial, DeMarco or
Short, AGSI’s counsel, drafted a settlement agreement releasing all claims against both companies
and DeMarco, and DeMarco signed it on behalf of both companies and himself and filed a nonsuit
on behalf of PGD. The settlement agreement included a clause providing that any disputes arising
out of the settlement agreement “shall be first submitted to mediation . . . [and] in the event such
mediation is unsuccessful . . . the dispute shall be settled by binding arbitration.” Both the settlement
agreement and the nonsuit were signed by DeMarco only, and not by Short, although the record
reflects that Short represented DeMarco in virtually all other matters related to this dispute and suit.
PGD filed a motion to set aside the nonsuit or in the alternative motion for new trial,
and the justice court vacated the dismissal it had entered after DeMarco filed the nonsuit. PGD
subsequently filed a motion to show authority and for sanctions, stating it had reason to believe Short
had drafted the settlement agreement and nonsuit, which was groundless, and instructed DeMarco
to sign and file them. The motion sought to have Short show his authority to act on behalf of PGD
when PGD was represented by other counsel and sought sanctions against both DeMarco and Short.
AGSI responded to the motion, attempted to initiate arbitration, filed a letter to that effect in the
justice court, and sought dismissal so that the arbitration could proceed. In denying AGSI’s motion
for arbitration, the justice court stated that the settlement agreement was not valid and any arbitration
clause would be ineffective. The justice court also ordered DeMarco and Short each to pay $3,000
in sanctions “for their involvement in filing a nonsuit with prejudice of this lawsuit when they were
principal and counsel for the Defendant respectively.” AGSI filed a Petition for Writ of Mandamus
and Interlocutory Appeal with the county court, seeking mandamus relief compelling the justice
3
court to rescind the order awarding sanctions, enter an order of nonsuit, and order arbitration or, in
the alternative, seeking interlocutory appeal of the justice court’s order denying the motion to compel
arbitration. The county court denied the petition, and this appeal followed.3
DISCUSSION
As an initial matter, we address the nature of this case. Although appellants style this
case as an appeal and seek interlocutory review of the county court’s ruling on AGSI’s motion to
compel arbitration, they also challenge the county court’s denial of mandamus relief and ask us to
“mandamus the County Court at Law” and order it to vacate the orders entered by the justice court
vacating the dismissal, denying AGSI’s motion to compel arbitration, and awarding sanctions. Thus,
appellants seek interlocutory appeal and, in the alternative, mandamus relief as to the county court’s
ruling on arbitration and mandamus relief only as to the county court’s rulings on vacation of the
dismissal and sanctions. We will separately address the interlocutory appeal and the request for
mandamus relief. See CMH Homes v. Perez, 340 S.W.3d 444, 452–54 (Tex. 2011) (explaining
procedural and policy reasons why court may address both interlocutory appeal and alternative
petition for mandamus raised in same filing styled as appeal without requiring appellant to file
separate document with title “petition for writ of mandamus”); Watkins v. Jones, 192 S.W.3d 672,
673–75 (Tex. App.—Corpus Christi 2006, orig. proceeding) (where party filed joint petition for writ
3
Appellants also previously filed a Petition for Writ of Mandamus with this Court seeking
mandamus relief against the justices of the peace who issued the orders in the justice court. That
petition was denied for want of jurisdiction. See In re Twenty First Century Holdings, Inc.,
No. 03-13-00310-CV, 2013 Tex. App. LEXIS 6430, at *1 (Tex. App.—Austin May 24, 2013, orig.
proceeding) (mem. op.); see also Tex. Gov’t Code § 22.221 (writ power of court of appeals).
4
of mandamus and interlocutory appeal, court addressed both requests for relief, dismissing
interlocutory appeal for want of jurisdiction and denying mandamus relief); see also In re Valero
Energy Corp., 968 S.W.2d 916, 916–17 (Tex. 1998) (per curiam) (better course of action for court
of appeals when confronted with parallel interlocutory appeal and mandamus proceeding is to
consolidate and dispose of both simultaneously to conserve judicial resources).
Interlocutory Jurisdiction
We first address our jurisdiction over the county court’s interlocutory ruling
concerning arbitration. Generally, we have jurisdiction over final judgments rendered by a county
court in a matter originating in justice court. See Tex. Gov’t Code §§ 22.220(a) (appellate court has
jurisdiction over civil cases within its district of which county court has jurisdiction), 28.052
(repealed) (final judgment in justice court may be appealed to county court in manner provided by
law for appeal from justice court to county court), 28.053(d) (repealed) (giving courts of appeal
jurisdiction to consider appeals from de novo trials in county court on claims originating in justice
court).4 Further, a denial of a motion to compel arbitration is subject to interlocutory appeal. See
Tex. Civ. Prac. & Rem. Code §§ 51.016 (in matter subject to Federal Arbitration Act, appeal may
be taken to court of appeals from interlocutory order of county court at law under same
circumstances as allowed under 9 U.S.C. section 16, which includes order denying petition to order
arbitration); 171.098 (under Texas Arbitration Act, party may appeal interlocutory order denying
4
Government Code sections 28.052 and 28.053 were repealed by Act of June 27, 2011,
82d Leg., 1st C.S., ch. 3, §§ 5.06, 5.09, 2011 Tex. Gen. Laws 5206, 5225, effective May 1, 2013,
which abolished justice courts.
5
arbitration in same manner and to same extent as appeal from order or judgment in civil action);
CMH Homes, 340 S.W.3d at 448–49 (explaining that legislature amended TAA, which already
allowed interlocutory appeal of order denying arbitration, to also allow interlocutory appeal of same
under FAA).5 Although the validity of the settlement agreement is in question here, “whether the
parties have entered into a binding agreement to arbitrate is one of the inquiries we undertake in an
interlocutory appeal of the denial of a motion to compel arbitration.” Weekley Homes, L.P. v. Rao,
336 S.W.3d 413, 418 (Tex. App.—Dallas 2011, pet. denied). Therefore, we conclude that we have
jurisdiction over the county court’s interlocutory order refusing to compel arbitration. See Tex. Civ.
Prac. & Rem. Code §§ 51.016, 171.098; Tex. Gov’t Code §§ 22.220(a), 28.052 (repealed), 28.053(d)
(repealed). We turn then to the merits of appellants’ first issue.
Interlocutory Appeal of Denial of Motion to Compel Arbitration
In their first issue, appellants seek interlocutory appeal of the county court’s refusal
to compel arbitration pursuant to the settlement agreement. They contend that DeMarco had
authority to execute the settlement agreement, the arbitration provision in the settlement agreement
was therefore valid, and the county court abused its discretion in not compelling arbitration. PGD
disputes DeMarco’s authority to execute the agreement and the validity of the settlement agreement
and argues that the county court did not abuse its discretion.
5
Although appellants invoke the Texas Arbitration Act in their brief, see generally Tex. Civ.
Prac. & Rem. Code §§ 171.001–.098, the settlement agreement does not refer to either the TAA or
the Federal Arbitration Act, see generally 9 U.S.C. §§ 1–16.
6
Standard of Review
We review a denial of a motion to compel arbitration for an abuse of discretion.
In re Labatt Food Serv., L.P., 279 S.W.3d 640, 642–43 (Tex. 2009); Weekley Homes, 336 S.W.3d
at 418. Under this standard we defer to the trial court’s factual determinations if they are supported
in the evidence but review the trial court’s legal determinations de novo. Rachal v. Reitz,
403 S.W.3d 840, 843 (Tex. 2013); In re Labatt Food Serv., 279 S.W.3d at 643; Weekley Homes,
336 S.W.3d at 418. “Although there is a strong presumption favoring arbitration, that presumption
arises only after the party seeking to compel arbitration proves a valid arbitration agreement exists.”
VSR Fin. Servs. v. McLendon, 409 S.W.3d 817, 827 (Tex. App.—Dallas 2013, no pet.). Whether
a valid arbitration agreement exists is a question we review de novo. Rachal, 403 S.W.3d at 843;
In re Labatt Food Serv., 279 S.W.3d at 643.
This issue also involves matters of statutory construction, which is a question of law
that we review de novo. See Texas Mun. Power Agency v. Public Util. Comm’n of Tex., 253 S.W.3d
184, 192 (Tex. 2007); State v. Shumake, 199 S.W.3d 279, 284 (Tex. 2006). Our primary concern
is the express statutory language. See Galbraith Eng’g Consultants, Inc. v. Pochucha, 290 S.W.3d
863, 867 (Tex. 2009). We apply the plain meaning of the text unless a different meaning is supplied
by legislative definition or is apparent from the context, or the plain meaning leads to absurd results.
Marks v. St. Luke’s Episcopal Hosp., 319 S.W.3d 658, 663 (Tex. 2010).
Analysis
Appellants contend that DeMarco, as a manager of PGD, had authority to act on
behalf of PGD in drafting and signing the settlement agreement that included the arbitration
7
provision. They cite Business Organizations Code section 101.251, which provides that managers
of an LLC are its “governing authority,” and section 101.254, which provides that each governing
person vested with actual or apparent authority by the governing authority is an agent of company
for purposes of carrying out the company’s business. See Tex. Bus. Orgs. Code §§ 101.251, .254.
Because DeMarco was a manager of PGD, appellants argue, he had authority to sign the settlement
agreement on behalf of PGD, as well as on behalf of AGSI and himself individually, and the
arbitration provision in the settlement agreement is enforceable and binding.
PGD argues that DeMarco’s actions are controlled by section 101.255 of the Business
Organizations Code. See id. § 101.255 (“Contracts or Transactions Involving Interested Governing
Persons”). Section 101.255 provides, in relevant part, that an otherwise valid and enforceable
contract or transaction between an LLC and a governing person or an entity in which a governing
person is a managerial official or has a financial interest “is valid and enforceable, and is not void
or voidable” if it is (1) known by or disclosed to and authorized by the “governing authority,” i.e.,
the managers, or (2) fair to the company. See id. § 101.255(a), (b)(1)(A), (b)(2). PGD contends that
DeMarco, as the sole owner of AGSI, is an “interested governing person” under section 101.255 and,
consequently, the settlement agreement between AGSI and PGD had to be (1) known by or disclosed
to and authorized by the managers, which included Denny, or (2) fair to PGD. PGD contends, and
DeMarco does not dispute, that DeMarco entered the settlement agreement without informing Denny
and that Denny did not otherwise know of the agreement. PGD also contends that on its face, the
settlement agreement is not fair to PGD because it settles PGD’s breach of contract claim for no
8
payment of money, when the prior settlement agreement had called for payment of $5,100 to PGD.
Thus, PGD argues, the settlement agreement fails to meet either condition.
We agree with PGD that the settlement agreement, in which the arbitration provision
was embedded, did not meet either of the requirements under section 101.255. As the sole owner
of AGSI, DeMarco was a managerial official with a financial interest and thus was an “interested
governing person” under the plain language of section 101.255. See id. § 101.255(a)(2); Marks,
319 S.W.3d at 663. It is undisputed that in drafting and signing the settlement agreement, and
including an arbitration provision, DeMarco acted independently, without consulting or even
informing Denny. Thus, it is undisputed that the “managers” of PGD were not aware of the
agreement. See id. § 101.255(b)(1)(A). Further, unbeknownst to Denny, the settlement agreement
released PGD’s claims against AGSI and DeMarco in return for no consideration other than AGSI’s
release of claims against PGD, despite a prior offer of $5,100. Thus, the settlement agreement, with
the arbitration clause, cannot be construed as “fair” to PGD applying the plain meaning of the term.
See id. § 101.255(b)(2); Webster’s Third New Int’l Dictionary 815 (2002) (defining “fair” as
“characterized by honesty and justice” or “free from fraud, injustice, prejudice, or favoritism”). On
this record, we cannot conclude that the parties entered into a valid and enforceable agreement to
arbitrate. See Weekley Homes, 336 S.W.3d at 415, 421 (where promise to arbitrate in employment
agreement was illusory, arbitration agreement not enforceable). We therefore conclude that the
county court did not abuse its discretion in refusing to compel the parties to arbitrate.6 See Big Bass
6
In addition, there is no evidence in the record that the dispute was “first submitted to
mediation,” as required by the settlement agreement. Thus, even if we were to conclude that the
settlement agreement was fair and the arbitration clause was valid and enforceable, appellants’
attempt to enforce arbitration was premature, and we would conclude that the county court did not
9
Towing Co. v. Akin, 409 S.W.3d 835, 840–42 (Tex. App.—Dallas 2013, no pet.) (trial court did not
abuse discretion in denying motion to compel arbitration where party did not sign arbitration
agreement, had no notice of it, and did not ratify it). We overrule appellants’ first issue as to their
interlocutory appeal.
Mandamus
In the second part of their first issue, and in their second and third issues, appellants
contend the county court abused its discretion in denying mandamus relief as to arbitration, vacation
of the dismissal, and sanctions. As we have previously observed, this request for relief is contained
in what is styled as an appeal. However, appellants expressly challenge the county court’s denial of
mandamus relief against the justice court and seek mandamus relief here under a clear abuse of
discretion standard. See In re Prudential Ins. Co. of Am., 148 S.W.3d 124, 135 (Tex. 2004)
(orig. proceeding) (one requirement relator must meet to be entitled to mandamus relief is
to show trial court’s clear abuse of discretion); cf. Walden v. Baker, No. 03-03-00253-CV,
2005 Tex. App. LEXIS 10446, at *1, *8 (Tex. App.—Austin Dec. 15, 2005, no pet.) (mem. op.)
(appeal challenged county court’s denial of writ of mandamus to justice court on grounds justice
court lacked jurisdiction and did not seek mandamus relief in court of appeals).
Further, appellants do not appeal from a final judgment or order. The general rule
is that an appeal may be taken only from a final judgment except where an interlocutory order is
appealable by statute. Lehmann v. Har-Con Corp., 39 S.W.3d 191, 195 (Tex. 2001). A judgment
is final for purposes of appeal if it disposes of all pending parties and claims in the record, except
abuse its discretion in refusing to compel arbitration on this additional ground.
10
as necessary to carry out the decree. Id. Here, appellants sought mandamus against the justice
court—the trial court—from the county court—sitting as the appellate court, putting this case in a
different procedural posture from a final judgment in an original proceeding for mandamus initiated
in the trial court, which is subject to appeal. See Anderson v. City of Seven Points, 806 S.W.2d 791,
792 & n.1 (Tex. 1991) (distinguishing between appeal from final judgment in original proceeding
for writ of mandamus initiated in trial court and original proceeding for writ of mandamus filed in
appellate court, and noting that former is civil action “subject to trial and appeal on substantive law
issues and the rules of procedure as any other civil suit,” while latter is governed by appellate
rule 121, is not appealable to supreme court, but is reviewable by writ of mandamus in supreme
court); Simmons v. Kuzmich, 166 S.W.3d 342, 345–46 (Tex. App.—Fort Worth 2005, no pet.) (abuse
of discretion standard applicable to mandamus actions that originate in appellate courts not applied
in appeals of mandamus action initiated in trial court).
The denial of mandamus relief that is sought ancillary to a pending proceeding,
as appellants sought here, is not an adjudication on the merits. See Chambers v. O’Quinn,
242 S.W.3d 30, 32 (Tex. 2007) (per curiam) (citing In re AIU Ins. Co., 148 S.W.3d 109, 119 (Tex.
2004) (noting that “failure to grant a petition for writ of mandamus is not an adjudication of, nor
even a comment on, the merits of a case in any respect, including whether mandamus relief was
available”)). Thus, the parties’ claims remain pending in justice court, and the record contains no
final order or judgment over which we have appellate jurisdiction. See id.; Lehmann, 39 S.W.3d at
195; cf. City of Fort Worth v. Abbott, 258 S.W.3d 320 (Tex. App.—Austin 2008, no pet.) (appeal
from final order in mandamus proceeding initiated in trial court); Simmons, 166 S.W.3d 342 (appeal
11
from final judgment in original proceeding for writ of mandamus initiated in trial court); see
also Senter v. Hudson, 28 S.W.3d 153 (Tex. App.—Fort Worth 2000, no pet.) (appeal from
county criminal court of appeals’ denial of post-conviction petition for writ of mandamus
compelling municipal judge to accept appeal bond); but see In re Shea, No. 01-98-01088-CV,
1998 Tex. App. LEXIS 6493, at *1–2 (Tex. App.—Houston [1st Dist.] Oct. 9, 1998, orig.
proceeding) (if county court denies petition for writ of mandamus against justice of peace, relief is
to appeal from denial) (citing Crowder v. Franks, 870 S.W.2d 568, 571 (Tex. App.—Houston [1st
Dist.] 1993, no writ) (involving appeal from final judgment)).
Accordingly, because appellants do not appeal from a final order or judgment and
seek mandamus relief in this Court, to the extent of appellants’ request for mandamus relief, we treat
this case as a petition for writ of mandamus. See CMH Homes, 340 S.W.3d at 454 (remanding
interlocutory appeal of appointment of arbitrator to court of appeals for consideration as petition for
writ of mandamus where there was no interlocutory jurisdiction and appellant requested mandamus
relief in court of appeals and preserved issue in supreme court); Powell v. Stover, 165 S.W.3d 322,
324 n.1 (Tex. 2005) (orig. proceeding) (treating case styled as appeal as petition for writ of
mandamus where relator challenged denial of mandamus relief and did not appeal from final order);7
Westbrook v. Fondren, No. 02-09-00173-CV, 2009 Tex. App. LEXIS 7198, at *5 (Tex. App.—Fort
Worth Sept. 10, 2009, no pet.) (mem. op.) (per curiam) (where court had no statutory authority to
7
In Powell, the trial court denied relator’s plea in abatement and motion to dismiss for
lack of jurisdiction, and the court of appeals denied mandamus relief. See Powell v. Stover,
165 S.W.3d 322, 324 (Tex. 2005). The relator “appealed” the decision, and the supreme court
treated the case as a petition for writ of mandamus and granted writ of mandamus against the trial
court. See id. at 324 n.1, 328.
12
review trial court’s interlocutory order denying temporary restraining order, appeal dismissed for
want of jurisdiction and case considered as petition for writ of mandamus); see also Texas Comm’n
on Human Rights v. Morrison, 381 S.W.3d 533, 536–37 (Tex. 2012) (observing supreme court has
long favored common sense application of rules over technical approach that promotes form over
substance); In re Cavazos, No. 03-15-00005-CV, 2015 Tex. App. LEXIS 633, at *1 (Tex.
App.—Austin Jan. 23, 2015, orig. proceeding) (mem. op.) (looking to substance of motion rather
than title and construing “Nunc Pro Tunc Request for Order to Correct Records” as petition
for mandamus).
Although neither party has raised the issue, we next consider our
mandamus jurisdiction over this matter sua sponte. See Bison Bldg. Materials, Ltd. v. Aldridge,
422 S.W.3d 582, 587 (Tex. 2012) (op. on reh’g). “[A] court is obliged to ascertain that subject
matter jurisdiction exists regardless of whether the parties have questioned it.” University of Tex.
Sw. Med. Ctr. At Dallas v. Loutzenhiser, 140 S.W.3d 351, 358 (Tex. 2004), superceded on other
grounds, Act of May 25, 2005, 79th Leg. R.S., ch. 1150, § 1, 2005 Tex. Gen. Laws 3783, 3783
(codified at Tex. Gov’t Code § 311.034). Because it is a legal question, we review de novo whether
this Court has jurisdiction. University of Hous. v. Barth, 403 S.W.3d 851, 854 (Tex. 2013) (per
curiam); Weekley Homes, 336 S.W.3d at 417. If the record does not affirmatively demonstrate our
jurisdiction, we must dismiss the petition. Weekley Homes, 336 S.W.3d at 417; IFS Sec. Grp., Inc.
v. American Equity Ins. Co., 175 S.W.3d 560, 562 (Tex. App.—Dallas 2005, no pet.).
Appellants ask this Court to “mandamus the County Court at Law” and order it to
vacate the orders entered by the justice court vacating dismissal, denying AGSI’s motion to compel
13
arbitration, and awarding sanctions against DeMarco and Short. In considering appellants’ petition
for writ of mandamus, we are required to focus on the ruling of the justice court. See Powell,
165 S.W.3d at 324 (in considering relator’s petition, court focuses on trial court’s ruling). Our focus
must remain on the justice court’s orders regardless of the county court’s decision on mandamus.
See Johnson v. Fourth Court of Appeals, 700 S.W.2d 916, 918 (Tex. 1985) (orig. proceeding) (“Our
focus remains on the trial court’s order regardless of the court of appeals’ decision on mandamus.”).
“We make an independent inquiry whether the trial court’s order is so arbitrary, unreasonable, or . . .
prejudicial . . . as to establish abuse of discretion.” Id.; see In re Lee, 411 S.W.3d 445, 461 (Tex.
2013) (orig. proceeding) (granting mandamus relief ordering trial court to withdraw orders denying
entry of judgment based on mediated settlement agreement and setting matter for trial where court
of appeals denied petition for mandamus); In re Dean, 393 S.W.3d 741, 750–51 (Tex. 2012) (orig.
proceeding) (granting writ of mandamus ordering trial court to confer with New Mexico Court of
Appeals pursuant to Family Code where court of appeals denied mandamus relief); In re United
Scaffolding, Inc., 377 S.W.3d 685, 690 (Tex. 2012) (orig. proceeding) (granting writ of mandamus
ordering trial court to vacate judgment where court of appeals denied mandamus relief). Thus, in
seeking relief from the county court’s denial of mandamus, appellants are in essence asking us to
issue mandamus against the justices of the peace who issued the challenged orders while sitting as
judge of the justice court. See Tex. Gov’t Code § 28.002, repealed by Act of June 27, 2011,
82d Leg., 1st C.S., ch. 3, § 5.06, 2011 Tex. Gen. Laws 5206, 5225 (justice of peace sits as judge of
justice court).
14
We lack jurisdiction to issue a writ of mandamus against a justice of the peace or
justice court unless it is necessary to preserve our jurisdiction. See id. § 22.221 (writ power of court
of appeals); Mullins v. Holt, No. 10-13-00114-CV, 2013 Tex. App. LEXIS 6128, at *8 (Tex.
App.—Waco May 9, 2013, no pet.) (mem. op.) (court of appeals has no jurisdiction to issue writ of
mandamus against judge of justice court unless necessary to preserve jurisdiction); Rodriguez
v. Womack, No. 14-10-01213-CV, 2012 Tex. App. LEXIS 49, at *5 (Tex. App.—Houston [14th
Dist.] Jan. 5, 2012, pet. denied) (mem. op.) (noting court of appeals’ lack of jurisdiction to issue
mandamus against justice court). Appellants do not argue or show that a writ of mandamus is
necessary to preserve our jurisdiction. Therefore, we lack jurisdiction to issue a writ of mandamus
against the justice of the peace or justice court. See In re Smith, 355 S.W.3d 901, 901–02 (Tex.
App.—Amarillo 2011, orig. proceeding) (per curiam) (where appellants did not argue or show writ
was necessary to preserve jurisdiction, appellate court lacked jurisdiction to issue writ of mandamus
against justice of peace). Where we have no jurisdiction to issue mandamus against the justice of
the peace or justice court directly, we cannot conclude that the record affirmatively demonstrates that
we have jurisdiction to do so indirectly by way of the county court, as appellants ask us to do. See
Weekley Homes, 336 S.W.3d at 417; IFS Sec. Grp., 175 S.W.3d at 562. We therefore dismiss for
15
want of jurisdiction appellants’ request for mandamus relief as stated in issues one through three.8
See Weekley Homes, 336 S.W.3d at 417; IFS Sec. Grp., 175 S.W.3d at 562.
Frivolous Appeal
As a final matter, PGD contends that this appeal is frivolous and asks this Court to
sanction appellants pursuant to Texas Rule of Appellate Procedure 45. See Tex. R. App. P. 45
(appellate court may award prevailing party just damages if it determines appeal is frivolous). To
determine if an appeal is frivolous, we apply an objective test, review the record from the appellant’s
point of view, and decide whether he had reasonable grounds to believe the judgment could be
reversed. Elm Creek Villas Homeowner Ass’n, Inc. v. Beldon Roofing & Remodeling Co.,
940 S.W.2d 150, 155 (Tex. App.—San Antonio 1996, no writ); Hunt v. CIT Group/Consumer Fin.,
Inc., No. 03-09-00046-CV, 2010 Tex. App. LEXIS 2767, at *27 (Tex. App.—Austin Apr. 15, 2010,
pet. denied) (mem. op.). “The decision to grant appellate sanctions is a matter of discretion that an
appellate court exercises with prudence and caution and only after careful deliberation.” Ackel
v. Ackel, No. 01-11-00061-CV, 2011 Tex. App. LEXIS 8958, at *5 (Tex. App.—Houston [1st Dist.]
Oct. 6, 2011, no pet.) (mem. op.). Having fully considered PGD’s request for sanctions, we deny
that request. See Tex. R. App. P. 45.
8
Even if we were to conclude we have jurisdiction, mandamus relief would not be proper.
This cause is still pending in justice court. Once the justice court has ruled, appellants may then
appeal to the county court. See Tex. Gov’t Code § 28.052, repealed by Act of June 27, 2011,
82d Leg., 1st C.S., ch. 3, § 5.06, 2011 Tex. Gen. Laws 5206, 5225. Since appeal to the county court
is trial do novo, appellants can re-urge their arguments in the county court. See id.; Tex. R. Civ.
P. 574b, repealed 2013. Therefore, appellants have an adequate remedy at law, and mandamus
relief is not proper. See Grimm v. Garner, 589 S.W.2d 955, 955, 957 (Tex. 1979); In re A.F.
No. 05-05-01435-CV, 2006 Tex. App. LEXIS 5483, at *2, *4–5 (Tex. App.—Dallas June 13, 2006,
pet. denied) (mem. op.).
16
CONCLUSION
We affirm the trial court’s order refusing to compel arbitration and dismiss the
mandamus petition for want of jurisdiction in all other respects.9
_____________________________________________
Melissa Goodwin, Justice
Before Chief Justice Rose, Justices Puryear and Goodwin
Affirmed in Part; Dismissed in Part for Want of Jurisdiction
Filed: April 23, 2015
9
Appellants have filed a motion to abate this appeal pending this Court’s ruling on its prior
petition for writ on mandamus. We dismiss the motion as moot.
17