In Re Texas Windstorm Insurance Ass'n

DON BURGESS, Justice,

dissenting.

I respectfully dissent. The majority holds Article 21.49, section 9A(b) is a mandatory venue statute. Tex. Ins.Code Ann. art. 21.49, § 9A(b) (Vernon Supp.2003). I disagree. In 1991, the Legislature amend*826ed the Catastrophe Property Insurance Pool Act (Act) by amending Section 9 and adding Section 9A (the new section includes the provision at issue in this case). Act of June 6, 1991, 72nd Leg., R.S., ch. 242, § 11.37, 1991 Tex. Gen. Laws 939, 1070.

In relevant part, prior to the 1991 amendments a party aggrieved by a decision under the Act had the following remedies:

Sec. 9. Any person insured pursuant to this Act; or his duly authorized representative, or any affected insurer who may be aggrieved by an act, ruling or decision of the Association, may, within 30 days after such act, ruling or decision, appeal to the Board.... The Association, or the person aggrieved by any order or decision of the Board may thereafter appeal to the District Court of Travis County, Texas, and not elsewhere, in accordance with Article 1.04(f) of the Insurance Code of Texas, (emphasis supplied)

Act of April 29, 1971, 62nd Leg., R.S., ch. 100, 1971 Tex. Gen. Laws 843 (amended 1991) (current version at Tex. Ins.Code Ann. art. 21.49, § 9 (Vernon Supp.2003)).

Prior to the 1991 amendments, failure to bring an appeal in Travis County (“and not elsewhere”) was a jurisdictional defect. Rowden v. Tex. Catastrophe Property Ins. Ass’n, 677 S.W.2d 83, 88 (Tex.App.-Corpus Christi 1984, writ ref'd n.r.e.)(“This statutory provision for place of trial is jurisdictional and not merely a permissive venue provision.”); Tex. Catastrophe Property Ins. Ass’n v. Miller, 625 S.W.2d 343, 346 (Tex.App.-Houston [14th Dist.] 1981, writ dism’d)(“This statutory provision for place of trial is jurisdictional.”)

The 1991 amendments to Section 9 eliminated the language on which these earlier decisions were based:

Sec. 9. Any person insured pursuant to this Act, or his duly authorized representative, or any affected insurer who may be aggrieved by an act, ruling or decision of the Association, may, within 30 days after such act; ruling or decision appeal to the commissioner.... The Association, or the person aggrieved by any order or decision of the commissioner, may thereafter appeal to either a District Court of Travis County, Texas, or a District Court in the county in which the covered property is located. An action brought under this section is subject to the procedures established under Article 1.04(f) of this Civil Practice and Remedies Code, (emphasis supplied).

Tex. Ins.Code Ann. art. 21.49, § 9 (Vernon Supp.2003).

The 1991 amendments added Section 9A, subparagraph (b) of which is the venue provision at issue in this case. Section 9A gave policyholders the option of appealing an administrative decision of the Association or bringing an action on their coverage claims:

Sec. 9A. (a) Except as provided by Section 10 of this Article, any person insured under this Act who is aggrieved by an act, ruling, or decision of the Association relating to the payment of, the amount of, or the denial of a claim may elect to bring an action, including an action under Article 21.21 of this code, against the Association in a court of competent jurisdiction or to appeal the act, ruling, or decision under Section 9 of this Article. A person may not proceed under both Section 9 of this Article and this section for the same act, ruling, or decision, (b) Except as otherwise provided by this subsection, venue in a proceeding action against the Association under this section, including an action under Article 21.21 of this code, is in the county in which the covered property is located or in a District Court of *827Travis County. Venue is only in the District Court of Travis County if the claimant joins the State Board of Insurance as a “party to the action, (emphasis supplied)

Tex. Ins.Code Ann. ait. 21.49, § 9A(a)(b) (Vernon Supp.2003).

Mandatory venue provisions are strictly construed. Maranatha Temple, Inc. v. Enter. Prod. Co., 883 S.W.2d 736, 739 (Tex.App.-Houston [1st Dist] 1992, writ denied). The words “shall be” in a venue statute are some evidence that the statute is mandatory. Allied Artists Pictures Corp. v. Transcontinental Theatres, Texas, Inc., 573 S.W.2d 871, 872 (Tex.App.-Eastland 1978, writ dism’d). However, in other instances, use of the word “shall” is merely permissive. Langdeau v. Burke Inv. Co., 163 Tex. 526, 358 S.W.2d 553, 554 (1962)(language in a venue statute that county in which delinquency proceedings are pending “shall have venue” creates a permissive venue statute); Mutual Fire & Automobile Ins. Co. v. Kirkman, 231 S.W.2d 459, 460 (Tex.App.-Eastland 1950, no writ)(language that “venue shall lie” in county where the cause of action arose is permissive and is not equivalent to command that action “must be brought” in a particular county).

The word “must” is given a mandatory meaning when followed by a noncompliance penalty. Helena Chemical Co. v. Wilkins, 47 S.W.3d 486, 493-94 (Tex.2001)(quoting Harris County Appraisal Dist. v. Consolidated Capital Properties TV, 795 S.W.2d 39, 41 (Tex. App.-Amarillo 1990, writ denied)). The words “shall” and “must” are notably absent from that part of Section 9A(b) that applies to actions against the TWIA. The only instance in which a mandatory word is used is when an action also names the State Board of Insurance as a party. Tex. Ins.Code Ann. art. 21.49 § 9A(b)(“Venue is only in the District Court of Travis County if the claimant joins the State Board of Insurance as a party to the action.”).

When determining whether a statute is mandatory or permissive, a Court may look to other factors including: “the object sought to be obtained; the circumstances of the statute’s enactment; the legislative history; the common law or former statutory provisions, including laws on the same or similar subjects; the consequences of a particular construction; administrative construction of the statute; and the title, preamble, and emergency provisions.” Helena Chemical, 47 S.W.3d at 493. These additional tests do not advance the claim that Section 9A(b) is mandatory. The drafters of the Insurance Code surely knew how to create a mandatory venue provision. In addition to the requirement in section 9A(b) of article 21.49 that actions in which the State Board of Insurance is a party can “only” be brought in Travis County, there are other mandatory venue provisions elsewhere in the Texas Insurance Code. However, such mandatory provisions are not the rule and tend to apply in situations in which the State is involved either as a party or is playing an enforcement role.

A person alleging “economic damages as a result of another’s engaging in unfair discrimination, as defined in Section 2 of this article may maintain an action against the person or persons engaging in such acts or practices in a district court in Travis County, Texas, and not elsewhere.” Tex. Ins.Code Ann. art. 21.21-8, § 3(a) (Vernon Supp.2003). Venue “shall” lie in the District Court of Travis County, Texas for administrative class actions to recover premium refunds. Tex. Ins.Code Ann. art. 21.21, § 14(b) (Vernon Supp.2003). Venue “shall” lie in Travis County for actions under Article 21.21 (“Unfair Competition and Unfair Practices”) if the State Board *828of Insurance is a party. Tex. Ins.Code Ann. art. 21.21, § 21 (Vernon 1981).

Private property insurers, like Evanston and Markel, have been subject to a permissive venue statute since 1983. Under that venue statute, venue is proper in the county in which the insured property is located. Act of June 17, 1983, 68th Leg. R.S., ch. 385, 1983 Tex. Gen. Laws 2119, 2120-23 (amended 1985, 1995)(eurrent version at Tex. Civ. Prac. & Rem.Code Ann. § 15.032 (Vernon 2002)). That venue rule is expressly defined as a permissive venue under Subchapter C of the venue statutes in the Civil Practice and Remedies Code. Tex. Civ. Prac. & Rem.Code § 15.032; Chiriboga v. State Farm Mut. Auto. Ins. Co., 96 S.W.3d 673, 682 n. 5 (Tex.App.-Austin 2003)(Section 15.032 is a “permissive venue scheme”).

TWIA is nothing more than a property insurer created by statute. Tex. Ins.Code Ann. art. 21.49, § 1 (Vernon 1981)(Purpose of the Act is to “provide a method whereby adequate windstorm, hail and fire insurance may be obtained in certain designated portions of the State of Texas.”) The members of the TWIA “consist of all property insurers authorized to transact property insurance in this State, except those companies that are prevented by law from writing coverages available through the pool on a Statewide basis.” Tex. Ins.Code Ann. art. 21.49, § 4 (Vernon Supp.2003). Member insurers who write policies for residential property in a “first tier coastal county” are assessed a fee to pay for the inspection program required by the Act. Tex. Ins.Code Ann. art. 21.49, § 6B(a) (Vernon Supp.2003). Jefferson County is one of the first tier coastal counties. Tex. Ins. Code Ann. art. 21.49, § 3(7)(Vernon Supp. 2003).

The single requirement in Section 9A(b) in Article 21.49 of the Insurance Code that suits naming the State Board of Insurance can “only” be brought in Travis County mirrors the mandatory venue provision that applies to actions against the head of a department of the State of Texas. Tex. Civ. Prac. & Rem.Code Ann. § 15.014 (Vernon 2002). TWIA was expressly not included in this mandatory language.

Section 9A of the Act was enacted after the 1983 permissive venue statute governing private property insurers. As relevant to this claim, the language in section 9A does not employ the language used to create mandatory venue in other parts of the Insurance Code and in that part of section 9A(b) that applies to actions in which the State Insurance Board is a party. The State Board of Insurance is not a party to this case. Section 9 of the Act was amended to remove language that had made fifing in Travis County jurisdictional.

There is no legal reason for interpreting the venue provision found in section 9A(b) of the Act as it applies to TWIA any differently than the permissive venue provision in the Civil Practice and Remedies Code .that applies to coverage actions against the private insurers that comprise its membership.

Next the majority holds that section 15.005 is somehow governed by the mandatory venue provisions set out in section 15.004. Tex. Civ. Prac. & Rem.Code § 15.004-.005 (Vernon 2002). I also disagree. I can not express it any better than the trial judge3:

Section 15.005 Tex.Civ.Prac.Rem.Code provides that, where multiple defendants are sued and plaintiff establishes proper venue against a defendant, the venue is proper as to all defendants. Defendant argues, however, that the definition of proper venue [set forth in § 15.001(b) Tex.Civ.Prac.Rem.Code] is defined in *829descending order as venue required by any mandatory provision or, in absence of such, permissive venue. Thus, mov-ant seems to argue that, in order for there to be “proper venue” against a defendant (before Section 15.005 would be applicable), it must be mandatory venue if there is a mandatory provision applicable to any defendant.
Section 15.005, however, establishes that the “proper venue” should be against “a defendant” not exclusively a defendant that enjoys mandatory venue. In the instant case, there is no mandatory venue provision as to the other defendants and, thus, pursuant to Section 15.005(b) “proper venue” may be anywhere there is permissive venue as to those defendants. Significantly, the legislature has specifically stated in instances where the plaintiff joins multiple claims or causes of action, if one of those claims or causes of action is subject to a mandatory venue provision, the suit must be brought in the county required by the mandatory venue provision. See; Section 15.004 Tex.Civ.Prac.Rem.Code. Conversely, the legislature did not place any such restriction in 15.005 as it pertains to multiple defendants (versus multiple claims). Had the legislature sought to mandate that the mandatory venue provision as to any one defendant would control as to all defendants, it could have put a similar provision in Section 15.005.

I would deny the mandamus; since the majority holds otherwise, I respectfully dissent.

. Letter dated April 1, 2003.