Webworld Marketing Group, L.L.C. v. Thomas

EVELYN V. KEYES, Justice,

concurring and dissenting on third motion for rehearing and dissent from denial of en banc reconsideration.

This is the panel’s fourth opinion in this case and the first in favor of Sheriff Tommy Thomas (“the Sheriff”). Because the majority fails to address the serious legal issues involving the interpretation of the regulations governing a sexually oriented business (“SOB”) that are at the heart of this case and that are raised by the Sheriff’s cross-points and each of his motions for rehearing, and, instead, it decides the case sua sponte on unassigned error, incorrectly justifying its arguments as “jurisdictional,” I dissent from the opinion on *27rehearing. I concur solely in the judgment affirming the judgment notwithstanding the verdict (JNOV) entered by the trial court in favor of the Sheriff. Because of the importance of this case for the regulation of SOB’s, I likewise dissent from the Court’s denial of the Sheriffs motion for en banc reconsideration.1 I would affirm the JNOV entered in favor of the Sheriff by the trial court for the reasons urged by the Sheriff in his cross-points on appeal and in each of his motions for rehearing.

DISSENT FROM DENIAL OF EN BANC RECONSIDERATION

In response to the Sheriffs third motion for rehearing and motion for en banc reconsideration, the majority reverses itself sua sponte on grounds not raised by appellant Webworld Marketing Group, L.L.C. (“Webworld”) in its appeal or by the Sheriff in his cross-points on appeal or in his Third Motion for Rehearing. The majority incorrectly claims that this case should have been decided under the “substantial evidence” standard used to review an administrative’s agency’s factual findings on appeal and that this is a jurisdictional issue it is permitted to raise sua sponte. See Webworld Marketing Group, L.L.C. v. Tommie Thomas, 01-04-00749-CV, op. at 24 (Tex.App.-Houston [1st Dist.] Aug. 2, 2007, no pet. h.) (op. on reh’g) (citing City of Dallas v. Furrh, 541 S.W.2d 271, 273 (Tex.Civ.App.-Texarkana 1976, writ refd n.r.e.), City of Dallas v. Stevens, 310 S.W.2d 750, 755 (Tex.Civ.App.-Dallas 1958, writ refd n.r.e.), and Thomas v. Stanolind Oil & Gas Co., 198 S.W.2d 420, 421 (Tex. 1946) (stating that “courts are not clothed with authority to set aside fact findings of an administrative agency made within the scope of its statutory powers [if] there is any substantial evidence affording reasonable support for such findings and the orders entered thereunder”) (emphasis added)); see also Public Util. Comm’n v. AT & T Communications, 777 S.W.2d 363, 365 (Tex.1989) (“The reviewing appellate court is not to make independent findings of fact; the right to find facts rests with the administrative agency.”). I disagree.

Webworld did not ask the trial court to review and set aside the Sheriff’s factual findings from the administrative proceedings regarding Webworld’s application for a SOB permit (“SOBP”). Webworld filed suit seeking a declaratory judgment interpreting the law in its favor. It asked the trial court to hold that its application “met all required criteria” for an SOBP and to order the Sheriff to issue the permit. The Sheriff responded that he was not required to issue the permit because Webworld did not satisfy the legal criteria for issuance of a permit. The facts were essentially undisputed. What was disputed was whether the legal criteria for issuance of a permit were satisfied under a correct interpretation of the county ordinances regulating SOB’s, given the facts of the case.

The trial court “error” the majority addresses — the failure to use a “substantial evidence” standard of review to review the Sheriff’s factual findings — was not raised by any party at any point in this case. Rather, Webworld, the appellant, complained on appeal that the trial court erred in entering JNOV in its favor because, it contended, the evidence was legally and factually sufficient to support the verdict. The Sheriff maintained, in his objections to the charge, in his motion for JNOV, and in *28his cross-points on appeal, that the trial court’s charge improperly required the jury to make legal determinations and that the evidence, when viewed under a legally correct interpretation of the law, did not support the jury’s findings that Webworld satisfied the regulatory requirements for an SOBP. Therefore, the Sheriff argued that the trial judge correctly, if belatedly, took the case away from the jury and correctly entered a directed verdict in his own favor.

The majority ignores both Webworld’s legal and factual sufficiency claims and the Sheriffs cross-points and, instead, crafts its own standard of legal and factual sufficiency of the evidence for this jury trial from the legal standard of review of administrative agency findings, justifying its addressing this issue on the ground that it is a jurisdictional issue. The trial court clearly had subject matter jurisdiction to entertain Webworld’s declaratory judgment suit, and it clearly had jurisdiction to submit the factual questions in the case to the jury. It even had subject matter jurisdiction to submit the legal questions in the case to the jury (although the Sheriff complained that it did so erroneously). Thus, the “error” the majority addresses — both parties’ and the trial court’s purported failure to use the correct standard to review the Sheriffs administrative fact findings— is merely unassigned error.

The law is clear that the Texas rules of civil and appellate procedure require a party to apprise a trial court of its error before that error can become the basis for reversal of a judgment. In the Matter of C.O.S., 988 S.W.2d 760, 764-65 (Tex.1999); see Tex.R.App. P. 33.1. Unlike criminal cases, there is no “fundamental error” in purely civil, non-quasi-criminal, cases, like this one, that cannot be forfeited by inaction unless the record shows that the court lacked jurisdiction or the public interest as declared in statutes or the Texas Constitution is “directly and adversely affected.” In the Matter of C.O.S., 988 S.W.2d at 765; see also In the Interest of B.L.D. and B.R.D., 113 S.W.3d 340 (Tex.2003) (discussing preservation of error and fundamental error in context of termination of parental rights). In all other cases, including this one, it is error for an appellate court to decide an appeal on the basis of unassigned error, or error that has not been preserved in accordance with the rules of civil and appellate procedure because “[a] point of error not preserved is not before the appellate court for review.” Allright v. Pearson, 735 S.W.2d 240, 241 (Tex.1987) (per curiam); American Gen. Fire & Cas. Co. v. Weinberg, 639 S.W.2d 688, 688 (Tex.1982); see also Western Steel Co. v. Altenburg, 206 S.W.3d 121,124 (Tex. 2006) (absent fundamental error, appellate court should refrain from deciding cases on legal errors not assigned by parties).

In this case, the panel had two choices. Either it could reverse the trial court’s judgment on the basis of legal and factual sufficiency of the evidence to support the jury verdict — the error alleged by Web-world — distinguishing the Sheriffs cross-points as without merit, or it could affirm the trial court’s judgment on the ground that JNOV was justified because the Sheriffs cross-points established that the case had proceeded to a jury trial under an incorrect charge that required the jury to interpret and then apply the law and, under a correct construction of the law, the Sheriff is not required to issue an SOBP to Webworld. See Trinity Universal Ins. Co. v. Ponsford Bros., 423 S.W.2d 571, 575 (Tex.1968); City of Houston v. Savely, 708 S.W.2d 879, 883 (Tex.App.-Houston [1st Dist.] 1986, no writ) (question of whether city complied with statutory provisions was question of construction for court that should not have been submitted to jury and should have been disregarded); Cain *29v. Tennessee-Louisiana Oil Co., 382 S.W.2d 794, 799 (Tex.Civ.App.-Tyler 1964), ajfd, 400 S.W.2d 318 (Tex.1966) (issue that involves construction of legal instrument or that calls for determination of question of law should not be submitted to jury for their determination).

The majority’s first three opinions decided the case in favor of Webworld on the ground that the evidence was legally and factually sufficient to support the verdict. In each case, however, the opinion reversed the JNOV in favor of the Sheriff without addressing his cross-points, leading to each of his motions for rehearing and his motion for en banc review. The majority’s fourth opinion introduces a point of error raised by no one — namely, that the trial court erred by failing to review the Sheriffs administrative findings under a substantial evidence standard— but it still fails to address the issues raised by the Sheriffs cross-points and by his motions for rehearing and en banc reconsideration, which are necessary to final disposition of this appeal. Thus the opinion contravenes Texas Rule of Appellate Procedure 47.1’s mandate that the court of appeals hand down a written opinion “that addresses every issue raised and necessary to final disposition of the appeal.”2 Tex.R.App. P. 47.1.

Because I do not agree that the panel has authority to decide this case in favor of the Sheriff on unassigned error, and because the majority opinion does not address the correct interpretation of the City’s ordinances regulating SOB’s-the central issue raised by Webworld’s suit for a declaratory judgment and by the Sheriffs cross-points, motions for rehearing, and motion for en banc reconsideration, and because the resolution of this legal issue is important to the county’s exercise of its power to regulate SOB’s, I re-urge my previous dissent on the merits of this case.

SHERIFF’S CROSS-POINTS BROUGHT FORWARD ON APPEAL

The Sheriff argues in his Third Motion for Rehearing and Motion for En Banc Reconsideration that the majority did not properly consider his cross-points in overturning the JNOV rendered in his favor in its March 22, 2007 opinion and remanding the case to the trial court to enter judgment in accordance with the verdict in favor of appellant, Webworld. The majority expressly states in its current opinion in response to that motion and the motion for en banc reconsideration that it remains unnecessary for it to reach the Sheriffs cross-points. As I stated in my March 22, 2007 dissent, I agree with the Sheriff. I, therefore, re-urge that dissenting opinion, as set forth below.

The Sheriff argues that, as a matter of law, Webworld failed to comply with the applicable regulations for obtaining a Class I SOBP for 22562 Interstate 1-45 North in response to its March 16, 2001 application and, therefore, he, as Sheriff, had no duty to issue the permit. The Sheriff contends that this Court should have considered his no-evidence objections not on the basis of whether there was sufficient evidence to support the jury’s answers to the questions in the jury charge — to which he had objected at trial — but on the basis of the proper application of the law to the facts.

Relevant Regulations

The applicable regulations are “The Regulations for Sexually Oriented Busi*30nesses in the Unincorporated Area of Harris County, Texas and Application for a CLASS I Permit” adopted August 6, 1996. HARRIS County, TX., Ordinance 83-1812 (Aug. 6, 1996) (hereinafter referred to as “Harris County Regulations”). A Class I sexually oriented business enterprise is “a commercial enterprise the primary business of which is the offering of a service or the selling, renting or exhibiting of devices or any other items intended to provide sexual stimulation or sexual gratification to the customer” that “conduct[s] business regularly at a specific location.”

As the Sheriff points out, section YIH(a) of the Harris County Regulations requires that “[t]o obtain a Class I ... SOBP, a complete application shall be filed with the Sheriff,” in the form provided by the Sheriff, whose contents are specified for a Class I SOBP in sections VIII(b) and (e). Section XII(e)(2) of the regulations states that “[t]he SOBP shall be denied upon the finding by the Sheriff of any of the following facts,” including a finding that “the enterprise does not meet all the requirements of these regulations” or a finding that “[t]he applicant has knowingly made a misleading statement of a material fact by omitting or falsifying information in the application for the SOBP.”

Section VIII(b)(2) requires that an applicant for a Class I SOBP provide, in relevant part:

(2) A general description of the enterprise, which shall include the address of the enterprise and the services and products which will be offered.
(i) A Class I SOBP shall be valid only for the address provided in the application.

Section VIII(e) requires that an applicant for a Class I SOBP also provide, in relevant part:

(4) A certification that the proposed enterprise will be located:
(i) a minimum of one thousand five hundred (1,500) feet from any child care facility, school, dwelling, hospital, public building, public park, or church or place of religious worship;
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(iv) This subsection shall apply only to property uses in existence at that location at least thirty (30) days prior to the date of application.

Preservation of Error

The Sheriff pled, inter alia, that Web-world had knowingly made a misleading statement of material fact by providing an incorrect address for the SOBP it sought on its March 19, 2001 application and by falsely certifying that the SOB was a minimum of 1,500 feet from a dwelling, namely the residence over the Melvins’ parrot shop, for whose use as dwelling permits had been sought and plans developed, and where the Melvins had stayed from time to time.

The jury was asked (1) whether Web-world’s proposed enterprise was located a minimum of 1,500 feet from “any dwelling in existence at that location at least (30) days prior to Webworld’s application dated March 19, 2001” when “residence” was defined as “personal presence at some place of abode....”; (2) whether Webworld “knowingly made a misleading statement of material fact by omitting or falsifying information” in its March 19, 2001 application for an SOB; (3) whether the Sheriff “arbitrarily” denied Webworld’s March 19, 2001 application; and (4) “whether the Sheriff acted in good faith in denying Web-world’s March 19, 2001 application.”

The Sheriff objected that jury questions 1, 3, and 4 improperly applied the law, there was no evidence to support the sub*31mission of the questions to the jury, and the questions would lead to inconsistent answers. Additionally, the Sheriff specifically argued that question 1 was “incorrect because it doesn’t explain that a dwelling also includes intended or planned use of property” and that questions 3 and 4 were not supported by the pleadings. In short, the Sheriff complained that the jury charge got the law wrong in a case where the jury was being improperly asked to construe the applicable ordinances and apply the legal and factual criteria for issuance of an SOBP. The trial court overruled each of the Sheriffs objections. The Sheriff also requested an instructed verdict at the conclusion of the case, which was likewise overruled. Finally, in his motion for JNOV, the Sheriff urged, “[Tjhere is no evidence that the Sheriff arbitrarily denied Webworld’s permit or acted in bad faith in light of the fact that the Melvins had indicated in 1996 that they would use the property as a residence.” The trial court granted the motion for JNOV.

The Sheriff argues on appeal that the trial court properly took the case away from the jury after the verdict because, having been given an erroneous charge over counsel’s objections, the jury responded with erroneous answers. The Sheriff contends he preserved error, and he urges us to apply the law the jury should have applied and the trial court ultimately did apply. I agree with the Sheriffs position.

Texas Rule of Civil Procedure 324(c) provides:

When judgment is rendered non ob-stante verdicto or notwithstanding the findings of a jury on one or more questions, the appellee may bring forward by cross-point contained in his brief filed in the Court of Appeals any ground which would have vitiated the verdict or would have prevented an affirmance of the judgment had one been rendered by the trial court in harmony with the verdict, including although not limited to the ground that one or more of the jury’s findings have insufficient support in the evidence or are against the overwhelming preponderance of the evidence as a matter of fact....
The failure to bring forward by cross-points such grounds as would vitiate the verdict shall be deemed a waiver thereof....

Tex.R. Civ. P. 324(c); accord Tex.R.App. P. 38.2(b).

The Sheriff objected to the charge, moved for an instructed verdict, and moved for judgment notwithstanding the verdict. He then brought forth by cross-points his grounds for vitiating the verdict, namely the legal insufficiency of the evidence and the factual insufficiency of the evidence to support the jury’s answers to questions 1, 3, and 4. I would hold that the Sheriff preserved his legal sufficiency issues. See Cecil v. Smith, 804 S.W.2d 509, 510 (Tex.1991) (legal sufficiency challenge may be preserved by objection to charge and motion for instructed verdict). Therefore, I would address the Sheriffs argument that the evidence was legally insufficient to prove that he had a duty to issue an SOB to Webworld.

Legal Sufficiency of the Evidence to Support the Verdict

Standard of Review

A “no evidence,” or legal insufficiency, point of error is a question of law that challenges the legal sufficiency of the evidence to support a particular fact finding. County of El Paso v. Dorado, 180 S.W.3d 854, 862 (Tex.App.-El Paso 2006, pet. denied). Because “no evidence” points are questions of law, they are reviewed de novo. State Dep’t of Highways & Pub. Transp. v. Gonzales, 82 S.W.3d 322, 327 *32(Tex.2002). In conducting a legal-sufficiency review, “we must view the evidence in a light that tends to support the finding of disputed fact and disregard all evidence and inferences to the contrary.” Walr-Manrt Stores, Inc. v. Miller, 102 S.W.3d 706, 709 (Tex.2003). However, “[t]he final test for legal sufficiency must always be whether the evidence at trial would enable reasonable and fair-minded people to reach the verdict under review.... [L]egal-suf-ficiency review in the proper light must credit favorable evidence if reasonable jurors could, and disregard contrary evidence unless reasonable jurors could not.” City of Keller v. Wilson, 168 S.W.3d 802, 827 (Tex.2005). Thus, a no-evidence challenge will be sustained when “ ‘(a) there is a complete absence of evidence of a vital fact, (b) the court is barred by rules of law or of evidence from giving weight to the only evidence offered to prove a vital fact, (c) the evidence offered to prove a vital fact is no more than a mere scintilla, or (d) the evidence conclusively establishes the opposite of the vital fact.’ ” King Ranch, Inc. v. Chapman, 118 S.W.3d 742, 751 (Tex.2003) (quoting Merrell Dow Pharms., Inc. v. Hamer, 953 S.W.2d 706, 711 (Tex. 1997)).

Webworld’s Compliance with Applicable Regulations

On May 15, 2001, Webworld received a letter from the Sheriff denying its SOBP because (1) the SOB was within 1,500 feet of a dwelling; (2) Webworld had knowingly made a misleading statement by providing an incorrect address for the SOB; and (3) Webworld had knowingly made a misleading statement because the proposed building would not fit in the lot area.

Webworld had to prove that it complied with all applicable regulations to prevail in the trial court on its demand that the Sheriff be ordered to issue a Class I permit for an SOB at 22562 Interstate 1-45 North in response to its March 19, 2001 application. See Harris County Regulations §§ XII(a), (e)(2). Therefore, I would inquire whether the evidence established Webworld’s compliance with the applicable Harris County Regulations cited by the Sheriff as grounds for denial of the SOBP.

Address

Section VIII(b)(2)(I) of the county regulations provides, “A Class I SOBP shall be valid only for the address provided in the application.” It is undisputed that both Webworld’s original March 16, 2001 application and its amended April 25, 2001 application certified the address for which the permit was sought as “22562 Interstate 1-45 N.” Subsequently, Webworld obtained an address for the enterprise, 22565 Interstate North. On June 19, 2001, Web-world wrote the Sheriff acknowledging that the address was wrong on its SOB application, and it advised the Sheriff of the new address. However, it did not file an amended application for an SOBP for 22565 Interstate 1-45 North.

I would hold that Webworld failed to comply with the regulatory requirement that it list a correct address in its SOBP application and that the Sheriff had no duty to issue a permit for construction of an SOB at an admittedly incorrect address. Webworld filed no application for an SOBP listing the correct address. For this reason alone, I would sustain the JNOV. To hold otherwise, in my view, is to impose an extra-statutory — and indeed contra-statutory — burden of due diligence on the Sheriff to ascertain the correct address for which an SOBP is sought and to issue the permit if an SOB at that address would satisfy county regulations. I do not believe the Harris County Regulations impose such a duty on the Sheriff; I believe its plain language imposes a duty of strict compliance on the applicant for an SOBP.

*33 Location Within 1,500 Feet of a “Residence”

Section VIII(e)(4) of the regulations provides that an applicant for a Class I SOBP must provide a certification that the proposed enterprise will be located “a minimum of one thousand five hundred (1,500) feet from any child care facility, school, dwelling, hospital, public building, public park, or church or place of religious worship.” Section VHI(e)(4) also provides, however, that “[t]his subsection shall apply only to property uses in existence at that location at least thirty (30) days prior to the date of application.” Section III(o) provides that a “dwelling” is “a house, duplex, apartment, townhouse, condominium, mobile home or any other building used as a residence.” (Emphasis added).

Webworld certified that the proposed enterprise would be located a minimum of 1,500 feet “from any child care facility, school, dwelling, hospital, public building, public park, or church or place of religious worship.” Since this requirement applies only to property uses in existence at least 30 days prior to the date of application, and since the Melvins had obtained a permit to develop the space over their parrot shop for a dwelling in 1996, had used the space as a dwelling from time to time, and had commenced plans for the development of the property as a dwelling more than 30 days before Webworld applied for a SOBP, Webworld’s certification that the enterprise would be located a minimum of 1,500 feet from a dwelling necessarily implied that it did not consider the Melvins’ activities sufficient to constitute the “use” of the property as a dwelling.

The Sheriff argues that, because the word “use” is not defined in the regulations, the ordinary meaning of the word should be applied. See Monsanto Co. v. Cornerstones Mun. Util. Dist., 865 S.W.2d 937, 939 (Tex.1993). He further argues that the term “use” is broad and means to “put or bring into action or service; to employ for or apply to a given purpose.” Mount Pleasant I.S.D. v. Lindburg, 766 S.W.2d 208, 211 (Tex.1989); see also U.S. Steel Corp. v. Fiberglass Specialties, Inc., 638 S.W.2d 950, 954 (Tex.App.-Tyler 1982, no writ). Therefore, he argues that the term extends to a property owner’s present activities to develop a property for a planned or intended use, including the Melvins’ seeking permits and developing plans for using the space over their parrot shop as a residence. He also contends, as he did below, that the instruction to Jury Question 1 was improper because it did not instruct the jury to consider that a dwelling includes activities undertaken pursuant to an intended or planned use of property. Webworld responds that the Melvins’ intent to create a dwelling is not an element of the Ordinance and is thus irrelevant to the inquiry of whether the parrot shop was a dwelling whose use as a residence was in existence at least 30 days before the date of the SOB application.

I agree with the Sheriff that the prohibition against issuing a permit for an SOB within 1,500 feet of property used for certain specified purposes that are “in existence at that location at least thirty (30) days prior to the date of application” applies not only to fully realized uses of the property but also to property whose plans for an intended use are “in existence” at least 30 days prior to the date of the application for an SOB. Otherwise, as the Sheriff points out, the County could be required to issue a permit for an SOB within 1,500 feet of a school that had been in construction for two years but that was not complete 30 days prior to the date of application.

However, I would hold that there must be objective proof of the intended ultimate use of the property for a purpose specified *34in section VHI(e)(4) of the Harris County Regulations and objective proof that, at least 30 days prior to the date of the application for an SOBP, activities were underway to prepare the location for the intended ultimate use. In other words, there must be objective proof that an intended use of the property was actually “in existence” for a given purpose 30 days before the SOBP was sought and that a putative intended use is not a mere pretext for denial of a SOBP. The requirement that the use be “in existence” 30 days prior to the application for an SOBP seems clearly to have been intended to preclude the use of a pretext to deny an SOBP, but there is nothing in the language or the purpose of the regulation to suggest that the Commissioners intended that a use “in existence” must be a fully realized use, and, indeed, any such construction of the term would lead to the absurd results posited by the Sheriff.

The evidence is undisputed that the Mel-vins applied for a permit expressing their written intention to construct their residence and business in the building in 1996 and that they employed active means towards that intent by constructing plans for the building and by residing over the parrot shop from time to time. Webworld, not the Sheriff, had the burden of proof that the SOBP it sought complied with all regulations. I would hold that Webworld failed to bear its burden of proof that the application it sought was not within 1,500 feet of a residence whose use was in existence 30 days prior to Webworld’s application and that Webworld therefore, failed to satisfy the requirements for obtaining the Class I SOBP it sought.

Because I would hold that Webworld failed to comply with the Harris County Regulations both by listing an incorrect address in its March 19, 2001 SOBP application and by falsely certifying that the proposed enterprise would not be located within 1,500 feet of property whose planned use as a. dwelling had been in existence for at least 30 days prior to the date of the application, I would also hold that the Sheriff had no duty to issue the SOBP and, indeed, was required to deny it. See Harris County Regulations §§ XII(e)(2),(3). Therefore, I would not reach the Sheriffs third cross-point, i.e., whether the proposed enterprise would fit on the property for which the permit was sought.

Conclusion

I would affirm the judgment of the trial court.

. See Tex.R.App. P. 41.2 (providing, “En banc consideration of a case is not favored and should not be ordered unless necessary to secure or maintain uniformity of the court's decisions or unless extraordinary circumstances require en banc consideration”). This Court previously denied en banc reconsideration on May 11, 2007.

. "The court of appeals must hand down a written opinion that is as brief as practicable but that addresses every issue raised and necessary to final disposition of the appeal.” Tex.R.App. P. 47.1 (emphasis added).