Star Houston, Inc., D/B/A Star Motor Cars v. Brett Bray in His Official Capacity as Director of the Motor Vehicle Division of the Texas Department of Transportation And Mercedes-Benz USA, LLC

TEXAS COURT OF APPEALS, THIRD DISTRICT, AT AUSTIN

NO. 03-09-00508-CV

Star Houston, Inc., d/b/a Star Motor Cars, Appellant

v.

Brett Bray in his Official Capacity as Director of the Motor Vehicle Division of the
Texas Department of Transportation; and Mercedes-Benz USA, LLC, Appellees

FROM THE DISTRICT COURT OF TRAVIS COUNTY, 201ST JUDICIAL DISTRICT
NO. D-1-GN-08-003710, HONORABLE LORA J. LIVINGSTON, JUDGE PRESIDING

OPINION

The motor vehicle division of the Texas Department of Transportation (the

“Division”) entered a final order in a contested case brought by appellant Star Houston, Inc.,

d/b/a Star Motor Cars (“Star”) against appellee Mercedes-Benz USA, LLC (“MBUSA”). Star filed

a motion for rehearing with the Division. The Division denied Star’s motion for rehearing. Star

filed a petition for judicial review in district court against MBUSA and appellee Brett Bray in his

official capacity as director of the Division. However, Star’s petition was not filed within 30 days

of the date on which the Division’s order denying Star’s motion for rehearing was rendered. As a

result, the district court dismissed Star’s suit as untimely under the Administrative Procedure Act

(the “APA”). Star argues that its petition was timely because it was filed within 30 days of the

date on which Star received notice of the Division’s order. Alternatively, Star argues that the district
court should have remanded the case to the Division to obtain new evidence regarding when the

Division’s order was, in fact, rendered. We affirm the judgment of the district court.

Factual and Procedural Background

Star is a licensed, enfranchised dealer of new and used Mercedes-Benz motor vehicles

in Houston, Texas. Star filed with the Division a series of complaints against its franchisor MBUSA

regarding various franchise provisions Star contended were unlawful. The Division issued a

final order in the agency proceeding on July 10, 2008. Star timely filed a motion for rehearing with

the Division. The Division rendered an order—signed by Bray as director of the Division—denying

Star’s motion for rehearing.

The order denying Star’s motion for rehearing was dated Friday, September 12, 2008.

The order was faxed and mailed to Star the following Monday, September 15, 2008, along with

a cover letter dated September 15, 2008. The cover letter stated that judicial review could be

sought by filing in the district court “within thirty (30) days from the date the motion for rehearing

was denied.”

Star filed a petition for judicial review of the Division’s final decision in district court

on October 14, 2008. Appellees filed a plea to the jurisdiction on the basis that Star failed to file its

petition for judicial review within the statutory time frame and, therefore, the district court did not

have jurisdiction over Star’s lawsuit. On July 30, 2009, the district court granted appellees’ plea and

dismissed the suit for lack of subject-matter jurisdiction.

2
Deadline for Filing under APA Section 2001.176(a)

The primary issue in this case is whether the APA’s 30-day deadline for filing a

petition for review, where the agency renders an order denying a motion for rehearing, begins to run

on the date the order was rendered or on the date the party seeking judicial review received notice

of the order.1 In this case, if the 30-day period commences on the date the party receives notice,

Star’s petition for judicial review was timely, but if the 30-day period commences on the date

the order is rendered, Star’s petition was not timely and Star’s lawsuit was properly dismissed. See

HCA Healthcare Corp. v. Texas Dep’t of Ins., 303 S.W.3d 345, 352 (Tex. App.—Austin 2009,

no pet.) (30-day deadline is jurisdictional). We review issues of statutory construction de novo. See

State v. Shumake, 199 S.W.3d 279, 284 (Tex. 2006). We must adhere strictly to the rules as set

out by the legislature. See Marble Falls Indep. Sch. Dist. v. Scott, 275 S.W.3d 558, 566 n.4

(Tex. App.—Austin 2008, pet. denied).

The administrative hearing in this case was subject to chapter 2301 of the occupations

code. See Tex. Occ. Code Ann. § 2301.703(a) (West 2004). The provisions of chapter 2301 make

the APA applicable except in cases where the APA conflicts with chapter 2301. See id. §§ 2301.702,

.751(c) (West 2004). Here, there is no dispute that the provisions of the APA relevant to the issue

in this case do not conflict with chapter 2301. See, e.g., id. § 2301.713 (West 2004) (“A party

1
Star also argues that the rebuttable presumption applies that Star was notified “on the
third day after the date on which the notice is mailed.” See Tex. Gov’t Code Ann. § 2001.142(c)
(West 2008). We need not address this issue because, with or without such a presumption, it is
undisputed that Star’s petition for judicial review would be timely if the 30-day period commenced
from the date Star received notice.

3
who seeks a rehearing of an order shall seek the rehearing in accordance with Chapter 2001,

Government Code.”).

Under the APA, a person who has exhausted the available administrative remedies

and who is aggrieved by a final decision in a contested case is entitled to judicial review. See

Tex. Gov’t Code Ann. § 2001.171 (West 2008). APA section 2001.176 requires that the petition for

judicial review be filed not later than the 30th day after the date on which the administrative decision

is “final and appealable.” See id. § 2001.176(a) (West 2008); see also Tex. Occ. Code Ann.

§ 2301.752(a) (West 2004) (“A petition for judicial review under this chapter must be filed not later

than the 30th day after the date on which the action, ruling, order, or decision becomes final and

appealable.”). Star filed its motion for rehearing on time, and the Division rendered an order denying

Star’s motion for rehearing. Under APA section 2001.144(a)(2)(A), when the agency renders an

order denying a timely-filed motion for rehearing, the date on which the contested case becomes

“final” is not tied to the date of the initial order in response to which the motion for rehearing was

filed, but is the date the order denying the motion for rehearing is rendered. See Tex. Gov’t Code

Ann. § 2001.144(a)(2)(A) (West 2008). An order is “rendered” on the date it is signed. See Meador-

Brady Mgmt. Corp. v. Texas Motor Vehicle Comm’n, 866 S.W.2d 593, 595 (Tex. 1993);

Young Chevrolet, Inc. v. Texas Motor Vehicle Bd., 974 S.W.2d 906, 910 (Tex. App.—Austin 1998,

pet. denied). When the order denying the motion for rehearing is rendered, the agency’s decision

is also “appealable.” See Tex. Gov’t Code Ann. § 2001.145(b) (West 2004). In sum, pursuant to

the relevant statutes, the Division’s decision in the administrative proceeding was final and

appealable on September 12, 2008—the date the order denying the motion for rehearing was

4
rendered—and Star was required to file its petition for judicial review by October 13, 2008.2 Star’s

petition was filed on October 14, 2008, and was, therefore, untimely.

Star contends that the 30-day deadline of section 2001.176 is subject to and modified

by the notice provisions of APA section 2001.142. Section 2001.142(a) requires that parties in a

contested case be notified either personally or by first class mail of any decision or order. See id.

§ 2001.142(a) (West 2008). Section 2001.142(b) provides as follows:

On issuance in a contested case of a decision that may become final under
Section 2001.144 or an order ruling on a motion for rehearing, a state agency shall
send a copy of the decision or order by first class mail to the attorneys of record and
shall keep an appropriate record of the mailing.

Id. § 2001.142(b). Star contends that because notice is required for both a decision in a contested

case (triggering, initially, the deadline for filing a motion for rehearing) and an order ruling on a

motion for rehearing (triggering the deadline for filing a petition for judicial review), both notices

should have identical impacts on the applicable deadlines—specifically, postponing the applicable

deadlines until notice is received, actually or constructively.

Star’s statutory interpretation of section 2001.142, however, is not supported by the

plain language of the applicable statutes. Section 2001.142 does not state that failure to comply

with its notice requirement has any impact on the applicable statutory deadlines. As to the deadline

for filing a motion for rehearing, APA section 2001.146 provides that the filing must be made not

2
“If the last day of any period is a Saturday, Sunday, or legal holiday, the period is extended
to include the next day that is not a Saturday, Sunday, or legal holiday.” Tex. Gov’t Code Ann.
§ 311.014(b) (West 2005); see 43 Tex. Admin. Code § 8.29 (2009) (Tex. Dep’t of Transp.,
Computing Time). October 12, 2008, the 30th day from September 12, 2008, was a Sunday, and
October 13 was not a legal holiday.

5
later than the 20th day after “the date on which the party or the party’s attorney of record is notified

as required by Section 2001.142.” Id. § 2001.146(a) (West 2008). In contrast, section 2001.176

provides that the deadline for filing a petition for judicial review is the 30th day after “the date on

which the decision that is the subject of complaint is final and appealable,” and section 2001.144

clarifies that “final and appealable,” under the facts of this case, occurred on the date on which the

order denying the motion for rehearing was rendered. See id. §§ 2001.144(a)(2)(A), .176(a). The

plain language of section 2001.142 does not establish or modify any filing deadlines. Rather,

sections 2001.146 and 2001.176 establish the deadlines, and only section 2001.146 makes its

deadline contingent on compliance with the notice requirement of section 2001.142. See Meritor

Auto., Inc. v. Ruan Leasing Co., 44 S.W.3d 86, 90 (Tex. 2001) (“Ordinarily when the Legislature

has used a term in one section of a statute and excluded it in another, we will not imply the term

where it has been excluded.”).

Star relies on the Texas Supreme Court’s opinion in Commercial Life Insurance Co.

v. Texas State Board of Insurance, 774 S.W.2d 650 (Tex. 1989). That case involved an insurance

company’s petition for judicial review of a state board’s administrative decision—under the

statutory predecessor to the APA, the Administrative Procedure and Texas Register Act

(“APTRA”)—denying the company’s application to change its name of operation in Texas. See

774 S.W.2d at 651. Similar to the current version of the APA, the APTRA required the board to

notify the parties of its order in a contested case, and required the insurance company, as a

prerequisite to judicial review, to file a motion for rehearing within 15 days after the date of the

order’s rendition. See id. The state board in Commercial Life, however, did not give the insurance

company any notice of its order. As a result, the company did not learn of the agency order until

6
17 days after its rendition, at which time the company immediately filed a motion for rehearing. The

district court dismissed the insurance company’s suit for lack of jurisdiction. See id. However, the

supreme court held that the motion for rehearing was timely. See id. at 652. The supreme court

observed that the provision of notice served the “critical function” of informing the aggrieved party

of the applicable time period for filing a motion for rehearing. The court further recognized that if

the board’s failure to give notice did not toll the applicable deadline, the aggrieved party’s right to

appeal could be precluded, and the court concluded that “the legislature could not have intended”

such a result. See id. The supreme court held, therefore, that “the time period for filing a motion

for rehearing does not commence until the agency complies with its statutory duty to notify the

parties of the order or decision.” Id.

Star argues that the same approach should be followed here. As with the

statutory framework at issue in Commercial Life, if the Division fails to give notice under

APA section 2001.142 and such failure does not toll APA section 2001.176’s 30-day deadline, any

right to appeal held by Star could be precluded. Thus, similar to the notice at issue in Commercial

Life, the Division’s notice of its denial of Star’s motion for rehearing served the “critical function”

of informing the aggrieved party of the applicable time period for filing a petition for judicial review.

Therefore, Star contends, the time period for filing a petition for judicial review under

section 2001.176 should not commence until the agency complies with its statutory duty to notify

the parties of the order denying the motion for rehearing.

We do not believe the supreme court’s reasoning in Commercial Life applies in

this case. The court limited its holding in Commercial Life to “the time period for filing a motion for

7
rehearing.” See id.3 Moreover, in reaching its holding, the supreme court identified its responsibility

to “construe” the applicable statutes, considered what the legislature must have intended, and was

“mindful” of recent legislative amendments to the applicable statutes.4 See id. In other words, the

supreme court began, as we must, with the statutory language. See Shumake, 199 S.W.3d at 284.

We cannot extend Commercial Life’s holding to the time period under the APA for filing a

petition for judicial review when the applicable statutes, here, plainly provide to the contrary. APA

section 2001.146 expressly applies to the time period for filing a motion for rehearing, and expressly

provides that the time period does not commence until notice is received (this is consistent with the

holding in Commercial Life). See Tex. Gov’t Code Ann. § 2001.146(a). APA section 2001.176,

on the other hand, expressly provides that the time period for filing a petition for judicial review

commences when the order becomes “final and appealable.” See id. § 2001.176(a). This date, in

a case such as this where the agency renders an order denying the motion for rehearing, is

statutorily defined as the date the order denying the motion for rehearing is rendered. See id.

§ 2001.144(a)(2)(A). There is nothing in this statutory scheme tying this date to notice of the order

3
Likewise, the supreme court’s application of Commercial Life’s reasoning in Meador-
Brady Management Corp. v. Texas Motor Vehicle Commission to provisions of the Texas Motor
Vehicle Commission Code was in the context of a 15-day period for filing a motion for rehearing.
See 866 S.W.2d 593, 595-96 (Tex. 1993).
4
Specifically, the supreme court in Commercial Life, in reaching its holding that the time
period for filing a motion for rehearing commences when the agency provided notice of its order,
stated that it was mindful of the fact that the legislature had recently amended the APTRA to provide
that the time period for filing a motion for rehearing commences when the aggrieved party is notified
of the agency’s order. See Commercial Life Ins. Co. v. Texas State Bd. of Ins., 774 S.W.2d 650, 652
& n.1 (Tex. 1989). The legislature has not amended the APA to provide that the time period for
filing a petition for judicial review does not commence until the agency provides notice of its order
denying the motion for rehearing.

8
on the motion for rehearing or even allowing a court to infer that notice is a prerequisite to the

commencement of the 30-day period.

The supreme court did not hold in Commercial Life that, regardless of the applicable

statutory language, any agency order or decision of which an agency is required to provide notice

will become final only when the notice is given. Therefore, absent an amendment by the legislature,

we cannot depart from the plain language of sections 2001.144(a)(2)(A) and 2001.176.5 Under those

statutes, the Division’s September 12, 2008 rendition of its order—not Star’s receipt of notice

thereof—triggered the 30-day period for Star to file a petition for judicial review. Star’s petition for

judicial review was untimely.

Remand under APA Section 2001.175(c)

Star also argues that it should have been given the opportunity to obtain new evidence

relating to the issue of whether the Division’s order denying Star’s motion for rehearing was, in fact,

5
In fact, this Court has previously held that after an agency denied a party’s motion for
rehearing, the agency’s non-compliance with its notice requirement under the APTRA did not excuse
the aggrieved party’s failure to timely file a petition for judicial review. See Navarro Indep. Sch.
Dist. v. Brockette, 566 S.W.2d 699, 700-01 (Tex. Civ. App.—Austin 1978, no writ). Star points out
that the supreme court in Commercial Life “disapproved” Navarro. See Commercial Life,
774 S.W.2d at 652. However, such disapproval was only to the extent Navarro was “inconsistent
with this opinion,” and the supreme court limited its holding in Commercial Life to the time period
for filing a motion for rehearing. See id.

Star contends that our holding makes the notice requirement of APA section 2001.142 as
to orders denying motions for rehearing superfluous. However, our holding is not that notice is not
required. Our holding is merely that, when such an order is rendered, the provision of notice does
not affect APA section 2001.176’s 30-day deadline. See Edwards Aquifer Auth. v. Chemical Lime,
Ltd., 291 S.W.3d 392, 404 (Tex. 2009) (observing that although a noncompliance penalty indicates
statute is mandatory, “this does not suggest that when no penalty is prescribed, ‘must’ is non-
mandatory”).

9
signed—and, thus, rendered—on Friday, September 12.6 Star’s contention is that there is a

possibility that the order was actually signed on a date after the date reflected on the order. If such

were the case, Star argues that its petition may, in fact, be timely. In Star’s response to appellees’

plea to the jurisdiction, Star’s prayer for relief requested that the plea be denied or, as an alternative,

that the court remand to the Division to allow Bray’s deposition to be taken on the question of when

he actually signed the order denying the motion for rehearing and on unidentified “related issues.”

Section 2001.175(c) of the APA provides that the trial court may order that additional

evidence be taken before the agency if a party applies to the court to present additional evidence

and the court “is satisfied that the additional evidence is material and that there were good

reasons for the failure to present it in the proceeding before the state agency.” Id. § 2001.175(c)

(West 2008). We review the district court’s decision to grant or deny such a remand request

under an abuse of discretion standard. Langford v. Employees Ret. Sys., 73 S.W.3d 560, 565

(Tex. App.—Austin 2002, pet. denied). A trial court abuses its discretion when it reaches a decision

so arbitrary and unreasonable as to amount to a clear and prejudicial error of law. BMC Software

Belg., N.V. v. Marchand, 83 S.W.3d 789, 800 (Tex. 2002).

In Star’s filings with the district court, Star’s only reference to a request for remand

to the agency to develop new evidence was in its prayer for relief in its response to appellees’ plea to

the jurisdiction. At the hearing before the district court on appellees’ plea to the jurisdiction, Star’s

counsel agreed at the outset that the only issues before the court were appellees’ plea to the

jurisdiction and Star’s motion to consolidate (in the event the plea was not granted). It was not until

6
The order contains the phrase “Date: September 12, 2008” in typewritten, bold font next
to Bray’s signature.

10
the court announced its determination that the plea to the jurisdiction would be granted that Star’s

counsel referred to the request for remand, stating “I had a motion coupled with my response.” The

district court responded that Star’s request would be denied because the court had already ruled

that it had no subject-matter jurisdiction. See State v. Morales, 869 S.W.2d 941, 949 (Tex. 1994)

(“When a court lacks jurisdiction, its only legitimate choice is to dismiss.”). If Star wanted an

opportunity to go back to the agency to develop additional evidence, it was incumbent on Star to

bring such a request to the trial court’s attention in a timely fashion. In addition, there is nothing in

the record to suggest that the Division’s order denying the motion for rehearing was signed on any

date other than the date reflected on its face. Any attempt to go behind the face of the order on

this record would be purely speculative. Under these circumstances, we hold that the district court

did not abuse its discretion in denying Star’s request for remand to the Division under APA

section 2001.175(c).

Conclusion

Having overruled Star’s points on appeal, we affirm the judgment of the district court.

__________________________________________

G. Alan Waldrop, Justice

Before Chief Justice Jones, Justices Pemberton and Waldrop

Affirmed

Filed: April 28, 2010

11