Haco-Atlantic v. Classic Industries ( 2019 )

Reversed and Remanded; Opinion Filed August 8, 2019.
In The
Court of Appeals
Fifth District of Texas at Dallas
No. 05-18-00806-CV
HACO-ATLANTIC, INC., Appellant
V.
CLASSIC INDUSTRIES, L.P., Appellee
On Appeal from the County Court At Law No. 1
Kaufman County, Texas
Trial Court Cause No. 18C-034
MEMORANDUM OPINION
Before Justices Whitehill, Partida-Kipness, and Pedersen, III
Opinion by Justice Partida-Kipness
Haco-Atlantic, Inc. appeals the county court order dismissing its case against Classic
Industries, L.P. for lack of subject matter jurisdiction. In its sole issue, Haco-Atlantic contends
the county court, sitting in its appellate capacity, erred in dismissing the case because Haco-
Atlantic’s claim against Classic Industries was within the amount in controversy jurisdictional
limit of the justice court at the time it originally filed suit. Because we conclude the amount of
damages specifically pleaded in the justice court did not exceed $10,000 when the action was filed
and there was no evidence that the allegations were fraudulently made to confer jurisdiction, we
reverse the dismissal order and remand the cause to the county court. We issue this memorandum
opinion because the issues are well-settled in law. See TEX. R. APP. P. 47.4.
BACKGROUND
This is a suit on a debt that was originally filed in justice court. Haco-Atlantic sued Classic
Industries alleging it owed $8,168.16 for work Haco-Atlantic performed on some of Classic
Industries’ machinery. In its petition, Haco-Atlantic also requested $1,250 in attorney’s fees for a
total award of $9,418.16. The case proceeded and a discovery order was entered.1 Haco-Atlantic
then filed a motion for summary disposition seeking $8,168.16 plus $2,500 in attorney’s fees. In
response, Classic Industries moved to dismiss the lawsuit for lack of jurisdiction asserting the
amount sought by Haco-Atlantic exceeded the justice court’s $10,000 amount in controversy
jurisdictional limit. The justice court denied Haco-Atlantic’s motion for summary disposition,
granted Classic Industries’ motion, and dismissed the case without prejudice. Haco-Atlantic then
filed a petition for writ of certiorari in the county court at law. In county court, Classic Industries
again filed a motion to dismiss the case arguing the county court lacked jurisdiction over the case
because the justice court lacked jurisdiction based on the amount in controversy. The county court
agreed with Classic Industries and dismissed the case. Haco-Atlantic appeals.
ANALYSIS
Whether a court has subject matter jurisdiction is a question of law that we review de novo.
See Harris Cnty v. Annab, 547 S.W.3d 609, 612 (Tex. 2018). Where, as here, the jurisdictional
challenge is based on the amount in controversy, the plaintiff’s pleadings are generally
determinative unless the defendant specifically alleges and proves the amount pleaded was merely
a sham for the purposes of wrongly obtaining jurisdiction. See Bland Indep. Sch. Dist. v. Blue, 34
S.W.3d 547, 554 (Tex. 2000). In fact, when the amount in controversy alleged in the original
petition is within the jurisdictional limits but is subsequently amended to increase the amount in
controversy above the court’s jurisdictional limits, the court retains jurisdiction if the additional
1
The case was transferred from a Dallas County justice court to a Kaufman County justice court.
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amount accrued because the passage of time. See Cont’l Coffee Prods. Co. v. Cazarez, 937 S.W.2d
444, 449 (Tex. 1996); See also Flynt v. Garcia, 587 S.W.2d 109, 109–10 (Tex. 1979) (per curiam)
(once jurisdiction is lawfully and properly acquired, no later fact or event in the particular case
serves to defeat jurisdiction).
The justice court’s original jurisdiction is limited to those civil matters in which exclusive
jurisdiction is not in the district or county court and “in which the amount in controversy is not
more than $10,000 exclusive of interest.” TEX. GOV’T CODE ANN. § 27.031(a)(1). When a case
originally filed in justice court is appealed to the county court, the appellate jurisdiction is also
restricted to the jurisdictional limits of the justice court because a county court has no jurisdiction
over the appeal unless the justice court had jurisdiction. Rodney R. Elkins & Co. v. Immanivong,
406 S.W.3d 777, 779 (Tex. App.—Dallas 2013, no pet.).
Here, Haco-Atlantic’s petition in justice court sought damages of $8,168.16 plus attorney’s
fees of $1,250 which totaled $9,418.16, less than the $10,000 jurisdictional limit. There is nothing
in the record to reflect the amount of damages or attorney’s fees stated in the original petition were
incorrect at the time the petition was filed. Moreover, the fact that its request for attorney’s fees
had increased to $2,500 by the time it filed its motion for summary disposition in the justice court
did not defeat jurisdiction because such fees are considered additional damages as a result of the
passage of time. See Immanivong, 406 S.W.3d at 779–80.
In reaching our conclusion we necessarily reject Classic Industries’ contention that in its
original petition, Haco-Atlantic pleaded damages in excess of the justice court’s jurisdiction. To
support its position, Classic Industries argues a statement in Haco-Atlantic’s original pleading—
“In this suit Plaintiff seeks monetary relief under $100,000, including damages of any kind,
penalties, costs, expenses, pre-judgment interest and attorney fees”—is an acknowledgment by
Haco-Atlantic that the amount in controversy could approach $100,000. We do not construe the
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above sentence as Haco-Atlantic’s admission that it was seeking damages that would approach
$100,000. On the contrary, the pleading explicitly requests $8,168.16 in damages and $1,250 in
attorney’s fees which is not only under $100,000 but also less than $10,000.
Because Classic Industries failed to establish the amount in controversy pleaded by Haco-
Atlantic exceeded the justice court’s amount in controversy jurisdictional limits when the case was
originally filed or that Haco-Atlantic’s pleading allegations regarding the amount in controversy
were merely a sham for the purposes of wrongfully obtaining jurisdiction 2, the county court erred
in granting Classic Industries’ motion to dismiss for lack of jurisdiction. We therefore resolve
Haco-Atlantic’s sole issue in its favor.
CONCLUSION
Based on the record before us, we reverse the county court’s dismissal order and remand
the cause to the county court for further proceedings consistent with this opinion.
/Robbie Partida-Kipness/
ROBBIE PARTIDA-KIPNESS
JUSTICE
180806F.P05
2
In its appellate brief, Classic Industries asserts that Haco-Atlantic knew Classic Industries had in-house counsel
and had been advised by Classic employees that it disputed its claim before suit was filed. Classic Industries claims
these facts support its contention that Haco-Atlantic’s pleadings were a jurisdictional sham and were contained in an
affidavit attached to its reply to Haco-Atlantic’s response to its dismissal motion. We first note that Classic Industries’
reply and the affidavits are not in our record. Classic Industries acknowledged the absence of these documents in the
record in its appellate brief and indicated that it “is in the process of requesting the County Clerk supplement the
record to include these documents.” To date, no supplement has been filed. Nevertheless, we conclude the facts as
alleged by Classic Industries are insufficient to support a finding that Haco-Atlantic’s pleadings were a jurisdictional
sham.
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Court of Appeals
Fifth District of Texas at Dallas
JUDGMENT
HACO-ATLANTIC, INC., Appellant On Appeal from the County Court At Law
No. 1, Kaufman County, Texas
No. 05-18-00806-CV V. Trial Court Cause No. 18C-034.
Opinion delivered by Justice Partida-
CLASSIC INDUSTRIES, L.P., Appellee Kipness, Justices Whitehill and Pedersen,
III participating.
In accordance with this Court’s opinion of this date, the trial court’s order dismissing this
case for lack of subject matter jurisdiction is REVERSED and this cause is REMANDED to the
trial court for further proceedings consistent with this opinion.
It is ORDERED that appellant Haco-Atlantic, Inc. recover its costs of this appeal from
appellee Classic Industries, L.P.
Judgment entered this 8th day of August, 2019.
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