law-standing (doctrine)

TEXAS SUPREME COURT CASES

The Standing Doctrine in the Texas Supreme Court (Tex 2008)

Frymire Engineering Co. v. Jomar International, No. 06-0755 (Tex. June 13, 2008)(Willett)(indemnity, equitable
subrogation standing, construction law)          
FRYMIRE ENGINEERING COMPANY, INC. BY AND THROUGH REAL PARTY IN INTEREST, LIBERTY MUTUAL
INSURANCE COMPANY v. JOMAR INTERNATIONAL, LTD. AND MIXER S.R.L.; from Dallas County; 5th district (05-04-
01717-CV, 194 SW3d 713, 05-30-06)
The Court reverses the court of appeals' judgment and remands the case to that court.
Justice Don R. Willett delivered the opinion of the Court.

Daimler Chrysler Corp. v. Inman, No. 03-1189 (Tex. Feb. 1, 2008)(Opinion by Justice Nathan Hecht)
(consumer law, product liability, class action dismissed on standing grounds, jurisdictional dismissal, DWOJ)
DAIMLERCHRYSLER CORPORATION v. BILL INMAN, DAVID CASTRO, AND JOHN WILKINS, EACH INDIVIDUALLY
AND ON BEHALF OF ALL OTHERS SIMILARLY SITUATED; from Nueces County; 13th district (13-02-00415-CV, 121
S.W.3d 862, 11/20/03)
The Court reverses the court of appeals' judgment and dismisses the case for want of jurisdiction. Justice Hecht
delivered the opinion of the Court, in which Justice Wainwright, Justice Brister, Justice Medina, and Justice Willett
joined.
Chief Justice Wallace Jefferson delivered a dissenting opinion, in which Justice Harriet O'Neill, Justice
Paul Green, and Justice Phil Johnson joined.


TEXAS COURTS OF APPEALS CASES

08-0640          
R2 ENTERPRISES, INC. AND TED REEVES v. VERNON WHIPPLE; from Denton County; 2nd district
(02-07-00257-CV, ___ SW3d ___, 06-26-08, pet. denied Sep 2008)(JNOV, partnership dispute, no standing)
This case involves a dispute between one of the limited partners of a limited partnership and the other limited partner
and the general partner of the limited partnership.
As the party with the primary legal right to recover, Rivendell is the exclusive party with a justiciable interest;
therefore, Reeves and R2 Enterprises did not have standing to recover the future damages awarded by the jury, and
the trial court did not err by granting the JNOV and entering a take nothing judgment in Whipple=s favor

08-0406  
HENRY MELVYN RICHARDSON, STEPHANY HARRIS, KLAREE BOOSE, SARAH, KEELI, IVY, SHEBA, DARRELL,
HARPER, EMMA, RAIN, AND ULYSSES v. PRIMARILY PRIMATES, INC.; from Bexar County; 4th district (04-06-00868-
CV, ___ SW3d ___, 01-16-08, pet. denied)(animal law, standing to sue)

08-0095
FINLEY OIL WELL SERVICE, INC. v. RETAMCO OPERATING, INC.; from Bexar County; 4th district
(04-06-00346-CV, 248 SW3d 314, 10-17-07, pet. denied Jun 2008) (sanctions, standing, unliquidated damages)

07-0588  
NACOGDOCHES COUNTY HOSPITAL DISTRICT, D/B/A NACOGDOCHES MEMORIAL HOSPITAL v. CHARLES RAY
NEWMAN AND JIMMY WAYNE CURTIS; from Nacogdoches County; 12th district
(12-06-00375-CV, ___ S.W.3d ___, 05-23-07, pet. denied)(District lacked standing to bring suit against Newman
under Chapter 55 and a suit to enforce a Chapter 55 lien was not ripe)

07-0148  AIRCRAFT NETWORK, LLC v. ASSOCIATED AVIATION UNDERWRITERS, INC. AND CESSNA AIRCRAFT
COMPANY; from Dallas County; 5th district (05-04-01056-CV, 213 SW3d 455, 11-29-06, pet. denied March 2008)
(breach of bailment agreement, no standing) We sustain AAU's first point of error and hold that Aircraft Network
lacked standing to sue AAU.

Standing to Sue AAU

Initially, we address AAU's assertion that Aircraft Network lacks standing to sue AAU because a third-party claimant
cannot sue an insurer.
Potential conflicts arise with respect to an insurer's duty to its insured when a third-party sues the insurer directly.
The supreme court has addressed these concerns when considering whether a third-party claimant has standing to
sue an insurer. See Transport Ins. Co. v. Faircloth, 898 S.W.2d 269 (Tex. 1995); Allstate Ins. Co. v. Watson, 876 S.
W.2d 145 (Tex. 1994). In Faircloth, a woman was killed in a car accident involving Allied Van Lines. Allied's insurer,
Transport Insurance Company, entered into a $250,000 settlement agreement with Paula Faircloth, a minor thought
to be the daughter of the deceased. Upon reaching the age of majority, Faircloth sued Transport for unfair
settlement practices. The supreme court held that third-party claimants lack standing to sue an insurer for a claim for
breach of the duty of good faith and fair dealing. Id. at 279. The supreme court noted that the insured's interests are
adverse to those of a third-party claimant. If an insurer owes duties to a third-party, the insurer's duties to its insured
would necessarily be compromised. Id.
Watson also involved a car accident. Watson sued Allstate, the other driver's insurer, alleging claims for unfair
settlement practices under the insurance code. Watson, 876 S.W.2d at 146. The supreme court held that a third-
party claimant cannot sue an insurer for unfair settlement practices under the insurance code. Id. at 149. In so
holding, the supreme court explained that allowing a third-party claimant to sue insurers would undermine the duties
that insurers owe to their insureds. “An insurance company owes to its insured a duty to defend against the claims
asserted by a third party.” Id. at 150 (emphasis in original).
Aircraft Network relies primarily on one case to support its contention that it does have standing to sue AAU. See
Webb v. International Trucking Co., Inc., 909 S.W.2d 220 (Tex. App.-San Antonio 1995, no writ). Webb involved an
accident between two truck drivers. One truck was owned by International Trucking (Trucking). The other truck
involved in the accident was owned by Williams Drilling Company (Williams). Prior to liability being determined, the
adjuster for Williams's insurer told Trucking that the insurer would pay for the damages to its truck and instructed
Trucking to have it repaired at a certain service facility. Id. at 223. Relying on the insurer's statement, Trucking had
its truck repaired. Subsequently, the insurer determined that its driver was not at fault and, therefore, refused to pay
Trucking's repair bill. Trucking sued the insurer for DTPA and insurance code violations. Summary judgment was
granted on the insurance code violations and the jury found in favor of Trucking on the DTPA claims. Id. at 224.
On appeal, the insurer asserted that Trucking, a third-party claimant, lacked standing to sue it. The court of appeals
distinguished Watson and Faircloth on the ground that the claims in both of those cases were based on unfair claim
settlement practices. Id. at 224-25. Significantly, the facts giving rise to the claims in Webb occurred prior to liability
being either determined or reasonably clear and, therefore, outside the context of settlement negotiations. An insurer
does not settle a claim for which its insured is not liable. An insurer engages in settlement practices at the point that
liability is determined or becomes reasonably clear.
In our case, liability was determined at the point of the accident. Cessna admitted its fault and never wavered from
that position. Responsibility for the accident was never an issue. From the beginning, AAU was trying to settle a claim
for which Cessna, its insured, was liable. In an effort to fit this case into the Webb analysis, Aircraft Network couches
its claims as a separate agreement between itself and AAU outside the context of any settlement negotiations. The
facts, however, are against such assertion. Aircraft Network's claims arose from AAU's attempts to settle those claims
on behalf of Cessna, AAU's insured. Loss of use was one of the claims AAU was attempting to settle. Aircraft Network
and AAU did not reach an agreement on the loss of use claim during the negotiation process.   See Footnote 2
We hold that, under these circumstances, Aircraft Network lacked standing to sue AAU. Accordingly, we sustain
AAU's first point of error. We reverse the trial court's judgment with respect to AAU and render judgment that Aircraft
Network take nothing on its claims against AAU.

07-0993  OAIC COMMERICAL ASSETS, LLC v. STONEGATE VILLAGE, LP AND CAWC FINANCIAL, INC.; from Dallas
County; 5th district (05-05-01471-CV, 234 SW3d 726, 08-16-07, pet. denied March 2008) (partnership dispute,
standing)

III. DETERMINATION OF STANDING

Because the determination of OAIC's issues is dependent on our resolution of appellees' first cross-point respecting
whether OAIC has standing to bring its claims, we address that cross-point at the outset.
A. Standard of Review

Standing, a necessary component of subject-matter jurisdiction, is a constitutional prerequisite to maintaining a suit
under Texas law. Tex. Ass'n of Bus. v. Tex. Air Control Bd., 852 S.W.2d 440, 444 (Tex. 1993). As a necessary
component of a court's subject-matter jurisdiction, standing cannot be waived and can be raised for the first time on
appeal. Id. at 445-46. Appellate courts are obligated to review sua sponte issues affecting jurisdiction. M.O. Dental
Lab v. Rape, 139 S.W.3d 671, 673 (Tex. 2004). See also Bowles v. Wade, 913 S.W.2d 644, 647 (Tex. App.-Dallas
1995, writ denied); Centurion Planning Corp., Inc. v. Seabrook Venture II, 176 S.W.3d 498, 508 (Tex. App.-Houston
[1st Dist.] 2004, no pet.).
Whether a trial court has subject-matter jurisdiction is a question of law that is reviewed de novo. See Mayhew v.
Town of Sunnyvale, 964 S.W.2d 922, 928 (Tex. 1998). To have standing, the pleader bears the burden of alleging
facts that affirmatively demonstrate the court's jurisdiction to hear the cause. Tex. Air Control Bd., 852 S.W.2d at 446.
We review the pleadings and the entire record to determine if there is evidence establishing subject-matter
jurisdiction. Dallas County Appraisal Dist. v. Funds Recovery, 887 S.W.2d 465, 469 (Tex. App.-Dallas 1994, writ
denied).
In an appeal from a bench trial, findings of fact carry the same weight as a jury verdict. Walker v. Cotter Prop., Inc.,
181 S.W.3d 895, 899 (Tex. App.-Dallas 2006, no pet.). Unchallenged findings of fact are conclusive on appeal unless
the contrary is established as a matter or law or there is no evidence to support the findings. Toles v. Toles, 45 S.W.
3d 252, 265 n.6 (Tex. App.-Dallas 2001, pet. denied) (citing McGalliard v. Kuhlmann, 722 S.W.2d 694, 696 (Tex.
1986)). Where an appellant attacks the trial court's findings of fact on legal or factual sufficiency grounds, the
applicable standard of review is the same as that to be applied in the review of jury findings. Walker, 181 S.W.3d at
899. In evaluating the legal sufficiency of the evidence to support a finding, we must determine whether the evidence
as a whole rises to a level that would enable reasonable and fair-minded people to differ in their conclusions.
Columbia Med. Ctr. Subsidiary, L.P. v. Meier, 198 S.W.3d 408, 414 (Tex. App.-Dallas 2006, pet. denied) (citing City
of Keller v. Wilson, 168 S.W.3d 802, 822 (Tex. 2005)). Anything more than a scintilla of evidence is legally sufficient
to support a challenged finding. Walker, 181 S.W.3d at 899. More than a scintilla of evidence exists if the evidence
furnishes some reasonable basis for differing conclusions by reasonable minds about the existence of some vital
fact. Id.
We review the trial court's conclusions of law de novo to determine whether they are correct. See McIntyre v. Comm'n
for Lawyer Discipline, 169 S.W.3d 803, 806 (Tex.App.-Dallas 2005, pet. denied); Travelers Indem. Co. of Rhode
Island v. Starkey, 157 S.W.3d 899, 906 (Tex. App.-Dallas 2005, pet. denied). Conclusions of law must be upheld on
appeal if any legal theory supported by the evidence sustains the judgment, and will be reversed only if the
conclusions are erroneous as a matter of law. See McIntyre, 169 S.W.3d at 807.

B. Applicable Law

1. Standing, Generally

In Texas, the standing doctrine requires that (1) there be “a real controversy between the parties,” and (2) that real
controversy “will be actually determined by the judicial declaration sought.” Nootsie, Ltd. v. Williamson County
Appraisal Dist., 925 S.W.2d 659, 662 (Tex. 1996) (quoting Tex. Air Control Bd., 852 S.W.2d at 446). “The issue of
standing focuses on whether a party has a sufficient relationship with the lawsuit so as to have a 'justiciable interest'
in its outcome.” Austin Nursing Ctr. v. Lovato, 171 S.W.3d 845, 848 (Tex. 2005) (quoting 6A Charles Alan Wright,
Arthur R. Miller, and Mary Kay Kane, Wright, Miller & Kane, Federal Practice and Procedure: Civil 2d § 1559, 441 (2d
ed. 1990)). “The determination of whether a plaintiff possesses standing to assert a particular claim depends on the
facts pleaded and the cause of action asserted.” Everett v. TK-Taito, L.L.C., 178 S.W.3d 844, 853 (Tex. App.-Fort
Worth 2005, no pet.). See also M.D. Anderson Cancer Ctr. v. Novak, 52 S.W.3d 704, 707-08 (Tex. 2001) (analyzing
standing in the context of asserted claim).
When standing has been statutorily conferred, the statute itself serves as the proper framework for a standing
analysis. Everett, 178 S.W.3d at 851. The plaintiff must allege and show how he has been injured or wronged within
the parameters of the language used in the statute. Id.

2. Construction of the Agreement

The agreement provides that “[t]he laws of the State of Georgia (without regard to its conflicts of law principles) and
any applicable Federal Laws shall govern the validity of this Agreement, the construction of its terms, the
interpretation of the rights and duties of the Partners and any claims, counterclaims or any other matters relating
hereto or in connection herewith (whether based on contract, tort or otherwise).” Georgia law provides that
construction of a contract, at the outset, is a question of law. RLI Ins. v. Highlands on Ponce, LLC, 635 S.E.2d 168,
171 (Ga. Ct. App. 2006); Woody's Steaks, LLC v. Pastoria, 584 S.E.2d 41, 43 (Ga. Ct. App. 2003). If the language of
a contract is unambiguous, the court simply enforces the contract according to its clear terms, and looks to the
contract alone for meaning. RLI, 635 S.E.2d at 171; Caswell v. Anderson, 527 S.E.2d 582, 582 (Ga. Ct. App. 2000).
“Ambiguity” is defined as duplicity, indistinctness, or an uncertainty of meaning or expression. RLI, 635 S.E.2d at 171.

07-0042  JULIE HOBBS v. KATHLEEN VAN STAVERN; from Galveston County; 1st district
(01-05-00632-CV, ___ SW3d ___, 11-02-06, pet. denied Feb 2008)(family law, SAPCR, same sex relationship,
adoption, standing as (non) parent)

07-0990          
LUBRICANTS USA, LP., LUBRICANTS MANAGEMENT GROUP, LP., APL MANAGEMENT, LLC, CHRIS HAIRE, AND
ROBERT BLAKE SHAW v. GREGORY A. BIRD AND MICHAEL G. RADLER; from Tarrant County; 2nd district (02-06-
00061-CV, ___ SW3d ___, 08-31-07, pet. denied Jan 2008) (partnership law, standing)
we hold that the trial court erred by granting appellees' plea to the jurisdiction and dismissing appellants' claims
based on lack of standing