Opinion issued December 23, 2014.
In The
Court of Appeals
For The
First District of Texas
————————————
NO. 01-14-00059-CV
———————————
IN RE HOA HAO BUDDHIST CONGREGATIONAL CHURCH
TEXAS CHAPTER AND DUNG ANH NGUYEN, Relators
Original Proceeding on Petition for Writ of Mandamus
MEMORANDUM OPINION
Relators, Hoa Hao Buddhist Congregational Church Texas Chapter (Hoa
Hao) and Dung Anh Nguyen, have filed a petition for writ of mandamus,
challenging the trial court’s order denying their motion for protective order,
requiring them to comply with real party in interest Sarah Huynh’s discovery
demands, and abating their motion for summary judgment until thirty days after the
completion of discovery.1 We conditionally grant the petition for writ of
mandamus in part.
Background
After a dispute arose between the parties, Huynh, through her attorney, made
a written request to Hoa Hao to inspect books, records, and documents pertaining
to Hoa Hao’s operation and governance since its formation in 2007. See TEX. BUS.
ORGS. CODE ANN. § 22.351 (West 2012). Huynh also filed a petition for writ of
mandamus in the trial court, naming Hoa Hao and Nguyen, as President and/or
custodian of records for Hoa Hao, as defendants and seeking to compel them to
permit examination of the corporation’s books and records. Huynh alleged that
Hoa Hao was a non-profit corporation organized under Texas law and she had been
a member and director of the non-profit corporation at all times since its
incorporation. By letter addressed to Huynh’s counsel, relators, through their
counsel, responded to Huynh’s request to inspect Hoa Hao’s records, asking for
documents to support her authority to inspect the records. Huynh then amended her
original petition to add claims for breach of fiduciary duty against Nguyen,
asserting that he was “personally responsible for denying [her] lawful rights by
directing counsel ‘representing Hoa Hao’ to refuse the requested examination” and
1
The underlying case is Sarah Huynh v. Dung Anh Nguyen and Hoa Hao Buddhist
Congregational Church-Texas Chapter, cause no. 1035611, in the County Civil Court at
Law No. 4 of Harris County, Texas, the Honorable Roberta Lloyd presiding.
2
his actions constituted a breach of the fiduciary duty he owed to Hoa Hao’s
members.
Soon after she amended her petition, relators served Huynh with
interrogatories, requests for production, and requests for admission. The
mandamus record reflects that Huynh responded to at least some of relators’
requests. Huynh also propounded discovery to relators, including requests for
production, interrogatories, and requests for admission. Relators responded to all
the discovery requests with general objections, including “[o]verly broad,” “not
limited in time and scope,” and “seeks information that is not relevant and that is
not reasonably calculated to the discovery of admissible evidence.” Relators did
not answer any interrogatories or requests for admission, or provide documents to
Huynh.
Instead, realtors filed a motion for a protective order, seeking a stay of
discovery “pending the resolution of the central issue of whether [the trial court]
has jurisdiction to determine ‘who ought to be members of the church.’”2 Relators
challenged Huynh’s membership in Hoa Hao and contended that she was not
entitled to review its records without a determination that she is a member and the
trial court was “constitutionally prohibited and deprived of subject matter
2
In her response in this Court, Huynh asserts that Hoa Hao served Huynh with the motion
for protective order but did not file it with the trial court. Hoa Hao’s supplemental record
in this proceeding includes a file-stamped copy of the motion for protective order.
3
jurisdiction to make that determination.” Relators further contended that the
discovery Huynh sought “was the ultimate relief” sought by her mandamus
petition. Shortly thereafter, relators filed their plea to the jurisdiction and,
alternatively, motion for summary judgment, supported by affidavits and other
exhibits. Realtors sought dismissal of the case, asserting that the trial court did not
have jurisdiction to determine Huynh’s membership in Hoa Hao. As to Nguyen,
relators further asserted that Section 22.152 of the Business Organizations Act
precluded a claim for damages against him and, alternatively, moved for summary
judgment as a matter of law on Huynh’s breach of fiduciary duty claim against
him. See TEX. BUS. ORGS. CODE ANN. § 22.152 (West 2012).
Huynh then filed her motion to compel realtors’ responses to her discovery
requests. Huynh contended, in sum, that the trial court had jurisdiction because it
could decide the disputed matters under neutral principles of law; all of the
disputed issues, including the jurisdictional issue, involved questions of fact; and
discovery was appropriate to answer a plea to the jurisdiction or summary
judgment motion and support her “already pleaded” and “potentially available”
claims against relators. Specifically, according to Huynh, the trial court had
jurisdiction because relators operated by and through a corporation and “identity
and interests of the Church membership are co-extensive with those of the
defendant corporation . . . .” Realtors responded, contending that the trial court
4
should continue the hearing on Huynh’s motion until the court determined the
jurisdiction issue; the requested discovery was overly broad, unduly burdensome,
and exceeded the bounds of permissible discovery; and Huynh was not entitled “by
way of discovery [to] what she would not be entitled by way of a final judgment
from [the trial court.]”
The trial court held a hearing on Huynh’s motion to compel at which no
evidence was offered or admitted. At the end of the hearing, the trial court
indicated that it would grant Huynh’s motion, and would “put everything off” and
“roll it forward” to allow Huynh time to review relators’ discovery responses
before responding to their plea to the jurisdiction. Several days later, the trial court
signed an order (1) requiring relators to comply fully with Huynh’s discovery
demands, (2) denying relators’ motion for protective order, and (3) carrying their
summary judgment motion until thirty days after completion of the discovery
required by the order. Relators then filed their petition for writ of mandamus and a
motion for temporary relief. We issued an order staying the trial court order
requiring relators to comply with Huynh’s discovery demands pending resolution
of this mandamus proceeding. See TEX. R. APP. P. 52.10(a).
5
Discussion
Relators contend that the trial court abused its discretion in denying their
motion for protective order and abating their plea to the jurisdiction because the
trial court was obligated to determine the threshold issue of its own subject-matter
jurisdiction before requiring them to respond to Huynh’s discovery requests.3
Relators further contend that the irrelevant and overbroad discovery that the trial
court ordered “bore no utility to the legal issues raised by Relators’ plea to the
jurisdiction and motion for summary judgment . . . .”
A. Standard of review
Mandamus will issue only to correct a clear abuse of discretion when there is
no adequate remedy at law. In re Prudential Ins. Co. of Am., 148 S.W.3d 124, 135–
36 (Tex. 2004) (orig. proceeding); Walker v. Packer, 827 S.W.2d 833, 839–40
(Tex. 1992) (orig. proceeding). A trial court abuses its discretion if it reaches a
decision so arbitrary and unreasonable as to constitute a clear and prejudicial error
of law, or if it clearly fails to correctly analyze or apply the law. In re Cerberus
Capital Mgmt., L.P., 164 S.W.3d 379, 382 (Tex. 2005) (orig. proceeding). A trial
court has no discretion in determining what the law is or in applying the law to the
3
We do not reach the issue whether the trial court abused its discretion in abating relators’
plea to the jurisdiction. The order that relators challenge states that relators’ “motion for
summary judgment, presently noticed for January 28, 2014, shall be carried” until thirty
days after the ordered discovery is completed and does not mention relators’ plea to the
jurisdiction.
6
facts. In re Prudential Ins., 148 S.W.3d at 135. Mandamus relief is available when
a trial court compels discovery beyond the permissible bounds of discovery. In re
Weekley Homes, L.P., 295 S.W.3d 309, 322 (Tex. 2009) (orig. proceeding). An
appeal from a trial court’s discovery order is not adequate if the appellate court
would not be able to cure the trial court’s error on appeal. In re Lumsden, 291
S.W.3d 456, 459 (Tex. App.—Houston [14th Dist.] 2009, orig. proceeding)
(citations omitted).
B. The trial court abused its discretion by requiring relators to comply
fully with Huynh’s discovery demands
Realtors assert that resolution of Huynh’s claims asserted against them
requires a determination that Huynh is Hoa Hao member, a determination that the
trial court lacks jurisdiction to make. Thus, according to relators, the trial court’s
order “violates the separation between church and state guaranteed by the First
Amendment” and “places the cart before the horse . . . .” By their plea to the
jurisdiction, relators challenged Huynh’s membership in Hoa Hao and the trial
court’s jurisdiction to determine whether she is member of the church. See
Westbrook v. Penley, 231 S.W.3d 389, 394 (Tex. 2007) (stating that lack of
jurisdiction may be raised by plea to jurisdiction when religious-liberty grounds are
basis for jurisdictional challenge). By their motion for protective order, relators
sought a stay of discovery pending resolution of subject-matter jurisdiction, also
7
contending that the trial court did not have jurisdiction to make an independent
determination of Huynh’s membership and the discovery sought was the “ultimate
relief” Huynh sought by her mandamus proceeding in the trial court.
Relators do not dispute that Hoa Hao is a nonprofit corporation organized
under Texas law, the Texas Nonprofit Corporation Act (the Act). See TEX. BUS.
ORGS. CODE ANN. §§ 22.001–.365 (West 2012). A “member” of a nonprofit
corporation is “a person who has membership rights in the nonprofit corporation
under its governing documents[.]” Id. § 1.002(53)(B) (West Supp. 2014). The
“governing documents” are “the certificate of formation for a domestic filing entity
or the document or agreement under which a domestic filing entity is formed” and
“the other documents or agreements adopted by the entity under this code to
govern the formation or the internal affairs of the entity[.]” Id. § 1.002(36)(A)(i),
(ii) (West Supp. 2014). A member of a nonprofit corporation has a right, “on
written demand stating the purpose of the demand . . . at any reasonable time and
for any proper purpose” to examine and copy books and records relevant to that
purpose, at the member’s expense. Id. § 22.351 (West 2012); see Lacy v. Bassett,
132 S.W.3d 119, 124 (Tex. App.—Houston [14th Dist.] 2004, no pet.).
In the trial court, realtors disputed Huynh’s assertion that she was a
“member” of Hoa Hao at the time she requested inspection of Hoa Hao’s books
and records. See Citizens Ass’n for Sound Energy v. Boltz, 886 S.W.2d 283, 289–
8
90 (Tex. App.—Amarillo 1994, writ denied) (recognizing that plaintiff requesting
inspection of records of nonprofit corporation had to establish membership at time
of request). Relators sought protection from discovery, contending that the trial
court did not have subject-matter jurisdiction to determine whether Huynh was or
was not a member of Hoa Hao.
The Free Exercise Clause of the First Amendment prohibits civil courts from
interfering in a church’s purely ecclesiastical or administrative affairs. See
Westbrook, 231 S.W.3d at 398–99; Windwood Presbyterian Church, Inc. v.
Presbyterian Church (U.S.A.), 438 S.W.3d 597, 600 (Tex. App.—Houston [1st
Dist.] 2014, no pet.). In Texas, this doctrine has been referred to as “ecclesiastical
abstention” or “ecclesiastical exemption.” See Windwood Presbyterian, 438
S.W.3d at 600 (citing Lacy, 132 S.W.3d at 123). The ecclesiastical-abstention
doctrine stands for the proposition that the First Amendment prohibits civil courts
from exercising jurisdiction over matters concerning “‘theological controversy,
church discipline, ecclesiastical government, or the conformity of the members of a
church to the standard of morals required of them.’” Thiagarajan v. Tadepalli, 430
S.W.3d 589, 594 (Tex. App.—Houston [14th Dist.] 2014, pet. filed) (quoting
Serbian E. Orthodox Diocese v. Milivojevich, 426 U.S. 696, 713–14, 96 S. Ct.
2372, 2382 (1976)). “But Texas courts are bound to exercise jurisdiction vested in
them by the Texas Constitution and cannot delegate their judicial prerogative
9
where jurisdiction exists.” Masterson v. Diocese of Nw. Tex., 422 S.W.3d 594, 606
(Tex. 2013). However, “the line between required judicial action and forbidden
judicial intrusion ‘will not always be distinct’ because many disputes ‘require
courts to analyze church documents and organizational structures to some
degree.’” Thiagarajan, 430 S.W.3d at 595 (quoting Masterson, 422 S.W.3d at
606)).
To properly exercise jurisdiction, courts are “to apply neutral principles of
law to non-ecclesiastical issues involving religious entities in the same manner as
they apply those principles to other entities and issues.” Thiagarajan, 430 S.W.3d
at 595 (citing Masterson, 422 S.W.3d at 606). Thus, courts “apply neutral
principles of law to issues such as land titles, trusts, and corporate formation,
governance, and dissolution, even when religious entities are involved.”
Masterson, 422 S.W.2d at 606. Under such an approach, a court may interpret
church documents in purely secular terms without relying on religious precepts in
resolving the conflict. See Hawkins v. Friendship Missionary Baptist Church, 69
S.W.3d 756, 758–59 (Tex. App.—Houston [14th Dist.] 2002, no pet.) (citing Jones
v. Wolf, 443 U.S. 595, 604, 99 S. Ct. 3020, 3026 (1979)); see also Anderson v.
Truelove, No. 01-13-00872-CV, 2014 WL 3747604, at *5 (Tex. App.—Houston
[1st Dist.] July 31, 2014, no pet. h.) (noting possible application of neutral
10
principles of law in cases in which question turns on substance of document to
which neutral principles may be applied, such as incorporated church’s bylaws).
In Lacy v. Bassett, the Fourteenth Court of Appeals considered the
application of the Act to a church member’s request for access to a church’s
financial records. 132 S.W.3d at 121. Lacy, a church member, sued the church and
church personnel after the church did not comply with her request to inspect
church records. Id. The church moved to dismiss the suit, asserting that the court
did not have subject-matter jurisdiction because the court would be required to
involve itself in matters of church governance. Id. The trial court dismissed Lacy’s
claims. Id. at 121–22. The court of appeals disagreed. It concluded that, by
incorporating under the Act, the church had become amenable to the Act’s
provisions; and the member’s “request to review the Church’s records merely
require[d] the trial court to enforce a neutral principle of law.” Id. at 126; see Chen
v. Tseng, No. 01-02-01005-CV, 2004 WL 35989, at *6 (Tex. App.—Houston [1st
Dist.] Jan. 8, 2004, no pet.) (mem. op.) (affirming trial court judgment based on
application of neutral principles to interpret and apply corporation’s bylaws that
“governed the Corporation, not the religious group”). The court of appeals reversed
the trial court judgment “[b]ecause under these circumstances the court is not
required to involve itself with any religious doctrine or principles . . . .” Lacy, 132
11
S.W.3d at 126. Notably, the parties did not dispute that Lacy was a member of the
church. See id. at 124 n.6.
Here, unlike in Lacy, relators dispute Huynh’s membership in Hoa Hao.
Huynh asserts that membership in the church and the corporation are co-extensive
and “the corporation had no lawful means to exclude any Church member from
corporate membership.”4 Accordingly, relators’ challenge to Huynh’s membership
in Hoa Hao raised a question of the trial court’s jurisdiction over Huynh’s claims
against relators. See Fesseha v. Ethiopian Orthodox Tewahedo Debre Meheret St.
Michael’s Church in Dallas, No. 05-10-00202-CV, 2011 WL 2685969, at *3 (Tex.
App.—Dallas July 12, 2011, no pet.) (mem. op.) (citing Westbrook, 231 S.W.3d at
398–99; Retta v. Mekonen, 338 S.W.3d 72, 77 (Tex. App.—Dallas 2011, no pet.))
(stating courts do not have jurisdiction “to decide who may or may not be members
of the church”); see also Cherry Valley Church of Christ/Clemons v. Foster, No.
05-00-01798-CV, 2002 WL 10545, at *3 (Tex. App.—Dallas Jan. 4, 2002, no pet.)
(not designated for publication) (concluding that court could not apply neutral
principles when church’s articles of incorporation provided for selection of
directors “according to the custom and practices of the church”).
Before determining the jurisdiction question, the trial court required relators
to comply with Huynh’s discovery demands. In her response to relators’ petition in
4
In her motion to compel, Huynh asserted that she was, and continues to be, a member of
the corporation “by virtue of her membership in the Church . . . .”
12
this Court, Huynh suggests that requiring compliance was proper so that she could
respond to relators’ plea to the jurisdiction. Some tailored or limited discovery may
be appropriate when an evidence-based jurisdiction challenge is asserted. See, e.g.,
Diocese of Galveston-Houston v. Stone, 892 S.W.2d 169, 178 (Tex. App.—
Houston [14th Dist.] 1994, orig. proceeding) (concluding that “discovery limited to
ascertaining facts related to the jurisdictional plea” was proper in suit asserting
claims arising from termination of teacher’s employment with diocese);5 see also
Tex. Dep’t of Parks & Wildlife v. Miranda, 133 S.W.3d 217, 227 (Tex. 2004)
(recognizing that trial courts must exercise discretion with regard to timing of
evidence-based jurisdictional challenges to ensure claimant has opportunity to
develop and present contrary evidence). Here, however, review of Huynh’s
discovery requests reflects that the requests were not limited to the disputed issue
of Huynh’s membership in Hoa Hao.
5
In Diocese of Galveston-Houston v. Stone, 892 S.W.2d 169 (Tex. App.—Houston [14th
Dist.] 1994, writ denied), the diocese challenged the trial court’s jurisdiction to review a
“religious-based” decision to terminate the plaintiff’s employment at a diocesan school.
The plaintiff contended that the diocese’s actions were not religious-based and did not
involve an ecclesiastical matter. Id. at 174. The trial court withheld a ruling on the
diocese’s plea to the jurisdiction, allowed plaintiff limited discovery to discover the
reasons for his termination and whether the decision was motivated by religious
concerns, and provided for presentation of the jurisdictional question by summary
judgment motion. Id. at 171. In reaching its decision, the court of appeals noted that
“[t]here is nothing to show the decision to terminate [plaintiff] in fact involved religious
concerns so that excessive entanglement will result from discovery . . . .” Id. The court
concluded that it could not conclude that the trial court abused its discretion in allowing
plaintiff “to prove his case while at the same time tailoring the inquiry to avoid
entanglement.” Id. at 175–76.
13
Moreover, requiring relators to comply with Huynh’s discovery demands
will provide Huynh with the relief sought through her petition seeking to compel
relators to allow an inspection of Hoa Hao’s books and records. “Allowing
discovery that provides a party the relief sought in the main suit severely
compromises or vitiates the other party’s ability to present his claim or defense
during a trial because the issue would be moot.” In re Kimberly-Clark Corp., 228
S.W.3d 480, 490 (Tex. App.—Dallas 2007, orig. proceeding) (citing In re Dyer
Custom Installation, Inc., 133 S.W.3d 878, 883 (Tex. App.—Dallas 2004, orig.
proceeding)).
Huynh also responds that the First Amendment does not protect tortious
conduct and that she may obtain discovery that will lead to discovery of “relevant
and admissible information about Mr. Nguyen’s tortious conduct.”6 We understand
Huynh to contend that the requested discovery is appropriate to test her potential
claims against Nguyen, but merits discovery should wait until a ruling on the
jurisdictional plea. Although the scope of discovery is “‘quite broad,’ it remains
confined by the subject matter of the case and the reasonable expectations of
gathering information that will aid in the resolution of the dispute.” In re Mem’l
6
Texas courts have concluded that tort claims necessitated involvement with religious
doctrine, requiring application of the ecclesiastical doctrine. See, e.g., In re Godwin, 293
S.W.3d 742, 749–50 (Tex. App.—San Antonio 2009, orig. proceeding [mand. denied]);
Patton v. Jones, 212 S.W.3d 541, 552 (Tex. App.—Austin 2006, pet. denied); Turner v.
Church of Jesus Christ of Latter-Day Saints, 18 S.W.3d 877, 897–98 (Tex. App.—Dallas
2000, pet. denied).
14
Hermann Healthcare Sys., 274 S.W.3d 195, 202 (Tex. App.—Houston [14th Dist.]
2008, orig. proceeding) (citing TEX. R. CIV. P. 192.1). Discovery requests,
therefore, must be reasonably tailored to include only matters relevant to the case.
Id. (citing In re CSX Corp., 124 S.W.3d 149, 152 (Tex. 2003)).
We conclude that the trial court abused its discretion in requiring relators to
comply fully with Huynh’s discovery demands before determining the jurisdiction
question raised in relators’ motion for protective order and plea to the jurisdiction.
See City of Anson v. Harper, 216 S.W.3d 384, 390 (Tex. App.—Eastland 2006, no
pet.) (“If the trial court does not have jurisdiction to enter a judgment, it does not
have jurisdiction to allow plaintiffs to conduct discovery.”) Further, mandamus
relief is appropriate in this case. See In re Weekley Homes, 295 S.W.3d at 322
(stating mandamus relief is available when trial court compels discovery beyond
permissible bounds of discovery); see also In re Godwin, 293 S.W.3d 742, 747
(Tex. App.—San Antonio 2009, orig. proceeding [mand. denied]) (citing Tilton v.
Marshall, 925 S.W.2d 672, 682 (Tex. 1996)) (“[A]ppeal is often inadequate to
protect the rights of religious organizations when there are important issues
relating to the constitutional protections afforded by the First Amendment.”).
Conclusion
Accordingly, we grant relators’ petition for writ of mandamus in part, and
direct the trial court to vacate the portion of its order denying relators’ motion for
15
protective order and requiring relators to comply fully with Hyunh’s discovery
demands. The writ will issue only if the trial court does not do so. We deny
Huynh’s request for sanctions against relators’ counsel, and dismiss all other
pending motions as moot. Finally, we vacate our order, issued on January 22,
2014, staying the trial court’s order requiring relators “to comply fully with
Plaintiff’s discovery demands, as initially served on November 13, 2013.”
Jim Sharp
Justice
Panel consists of Justices Higley, Bland, and Sharp.
16