In re Texas Windstorm Ins. Ass'n

• Decision Date: 30 October 2003
• Docket Number: No. 09-03-276 CV.,09-03-276 CV.
• Citation: 121 S.W.3d 821
• Parties: In re TEXAS WINDSTORM INSURANCE ASSOCIATION.
• Court: Texas Court of Appeals

121 S.W.3d 821

In re TEXAS WINDSTORM INSURANCE ASSOCIATION.

No. 09-03-276 CV.

Court of Appeals of Texas, Beaumont.

Submitted August 12, 2003.

Decided October 30, 2003.

Peter R. Meeker, Michael S. Wilson, Davis & Wilkerson, P.C., Austin, for relator.

Leo John Jordan, Jennifer Kenchel, Cozen and O'Connor, P.C., Dallas, Tom Kiehnhoff, Reaud, Morgan & Quinn, LLP, Beaumont, for real parties in interest.

Before McKEITHEN, C.J., BURGESS and DAVID B. GAULTNEY, JJ.

OPINION

DAVID B. GAULTNEY, Justice.

After the Texas Windstorm Insurance Association denied Joe D. Malley's water and mold claim on his Galveston County beach house, he sued the Association and his homeowner's insurance carriers, Evanston Insurance Company and Markel American Insurance Company, in Jefferson County, Malley's county of residence. The Association moved to transfer venue from Jefferson County to Travis County under the venue provision contained in the statute governing the legislatively-created Association. See Tex. Ins.Code Ann. art. 21.49 (Vernon Supp.2003). The trial court denied the motion, and the Association filed this petition for writ of mandamus asserting the venue provision is mandatory. See Tex. Civ. Prac. & Rem.Code Ann. § 15.016 (Vernon 2002)("An action governed by any other statute prescribing mandatory venue shall be brought in the county required by that statute."). See also Tex. Civ. Prac. & Rem.Code Ann. § 15.0642 (Vernon 2002) ("A party may apply for a writ of mandamus with an appellate court to enforce the mandatory venue provisions of this chapter.").

Malley contends Article 21.49 is not a mandatory venue provision. He also argues that, even if it is, Section 15.005 of the Texas Civil Practice and Remedies Code operates to defeat mandatory statutory venue when the plaintiff establishes permissive venue as to another defendant. See Tex. Civ. Prac. & Rem.Code Ann. § 15.005 (Vernon 2002). The section he cites, Section 15.005, provides:

In a suit in which the plaintiff has established proper venue against a defendant, the court also has venue of all the defendants in all claims or actions arising out of the same transaction, occurrence, or series of transactions or occurrences.

Malley contends the two other defendants in the action, Evanston and Markel, are subject to suit in Jefferson County, the plaintiff's county of residence, under the general venue statute. See TEX. CIV. PRAC. & REM.CODE ANN. § 15.002(a) (Vernon 2002). Therefore, he reasons, Section 15.005 creates venue in Jefferson County for the claim against the Association. See TEX. CIV. PRAC. & REM.CODE ANN. § 15.005 (Vernon 2002).

Texas Windstorm Insurance Association is composed of insurance companies required by statute to join the Association as a condition of their authority to transact business in Texas. See Tex. Ins.Code Ann. art. 21.49, § 4 (Vernon Supp.2003). The statute creating and governing the Association, and governing claims made against the Association, was intended to make windstorm insurance available in designated portions of Texas where the risk of hurricane is great. See Texas Catastrophe Property Ins. Ass'n v. Council of Co-Owners of Saida II Towers Condominium Ass'n, 706 S.W.2d 644, 645 (Tex.1986). Where a cause of action and the remedy for its enforcement are derived from a statute, as here, the statutory provisions are mandatory and must be complied with in all respects, or the action is not maintainable. See Mingus v. Wadley, 115 Tex. 551, 285 S.W. 1084, 1087 (1926)¹; Rowden v. Texas Catastrophe Property Ins. Ass'n, 677 S.W.2d 83, 87 (Tex.App.-Corpus Christi 1984, writ ref'd n.r.e.).

Article 21.49 of the Texas Insurance Code establishes the Association's organization and operations, and also provides a mechanism through which an aggrieved person may appeal a decision of the Association or file a suit to resolve a dispute related to the payment or denial of a claim by the Association. See Tex. Ins.Code Ann. art. 21.49 (Vernon Supp.2003). Section 9A of Article 21.49 provides:

(a) Except as provided by Section 10 of this Article, [Immunity from Liability], 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, [Unfair Competition and Unfair Practices], against the Association in a court of competent jurisdiction or to appeal the act, ruling, or decision under Section 9 of this Article [Appeals]. 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 Travis 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.

We first address Malley's statutory construction argument that subsection 9A(b) is not a mandatory venue provision. He argues that the addition in 1991—of the Section 9A remedy of filing suit against the Association—established mandatory venue only for suits in which the State Board of Insurance is a party.

The primary objective of statutory construction is to determine and give effect to the intent of the Legislature. National Liab. & Fire Ins. Co. v. Allen, 15 S.W.3d 525, 527 (Tex.2000); see Tex. Gov't Code Ann. § 311.021 (Vernon 1998). Unambiguous statutory language is interpreted according to its plain meaning. Moreno v. Sterling Drug, Inc., 787 S.W.2d 348, 352 (Tex.1990). Courts presume the Legislature intended each word contained in a statute to have a purpose. In re Vorwerk, 6 S.W.3d 781, 783 (Tex.App.-Austin 1999, orig. proceeding). The words in question cannot be viewed in isolation; the statute is to be considered as a whole. Id.

Prior to the amendment of Article 21.49 in 1991, the Travis County venue provision was held to be mandatory. Texas Catastrophe Property Ins. Ass'n v. Miller, 625 S.W.2d 343, 347 (Tex.Civ.App.-Houston [14th Dist.] 1981, writ dism'd w.o.j.).² Malley contends that in its current form, however, Section 9A of Article 21.49 describes permissive venue. The current statute, he argues, lacks words of mandatory meaning such as "shall" or "must," and the only mandatory language addresses instances in which the State Board of Insurance is joined as a party to the action. We disagree. The Legislature added "the county in which the property is located" to the Travis County venue provision, but there is no indication the Legislature intended to change the mandatory nature of the provision.

In Wichita County, Tex. v. Hart, 917 S.W.2d 779, 781 (Tex.1996), the Court construed a statute that provided "a public employee may sue under this chapter in a district court of the county in which the employee resides or in a district court of Travis County." The Court reasoned that "the permissive term `may' in the Whistleblower Act's venue provision, in light of its contemporaneous reorganization of the venue statute, strongly suggests that the Act's venue provision is permissive." Hart, 917 S.W.2d at 782. Section 9A, in contrast, separates the right to sue in subsection (a), which contains the permissive term "may," from the venue provisions in subsection (b). The language in subsection (b) of Article 21.49, Section 9A—"venue... is in"—articulates a mandatory venue provision.

Having determined that the statute under which the plaintiff filed his suit against the Association contains a mandatory venue provision, we must decide whether the mandatory venue provision controls over the permissive venue provision on which Malley relies. Malley reasons that, had the Legislature intended to provide that a mandatory venue provision as to any one defendant would control as to all defendants, the Legislature would have included mandatory venue language, similar to language found in Section 15.004, in Section 15.005. See TEX. CIV. PRAC. & REM.CODE ANN. §§ 15.004-.005 (Vernon 2002). In effect, under this construction, Section 15.005 would be inconsistent with, and would control, Section 15.004. We decline to adopt this statutory construction.

The two sections are part of a single procedure for determining venue, were enacted simultaneously, and must be considered as a whole and in connection with other provisions in the general venue statute. As originally codified, Chapter 15 of the Civil Practice and Remedies Code addressed joinder of defendants and joinder of claims in a single section, which read:

Sec. 15.061. JOINDER OF DEFENDANTS OR CLAIMS.

When two or more parties are joined as defendants in the same action or two or more claims or causes of action are properly joined in one action and the court has venue of an action or claim against any one defendant, the court also has venue of all claims or actions against all defendants unless one or more of the claims or causes of action is governed by one of the provisions of Subchapter B requiring transfer of the claim or cause of action, on proper objection, to the mandatory county.

Act of May 17, 1985, 69th Leg., R.S., ch. 959, § 1, sec. 15.061, 1985 Tex. Gen. Laws 3249. In 1995, the Legislature repealed Section 15.061 and added Sections 15.004 and 15.005, which provide:

§ 15.004. Mandatory Venue Provisions Governs Multiple Claims.

In a suit in which a plaintiff properly joins two or more claims or causes of action arising from the same transaction, occurrence, or series of transactions or occurrences, and one of the claims or causes of action is governed by the mandatory venue provisions of Subchapter B [§§ 15.011-.020], the suit shall be brought in the county required by the mandatory venue provision.

§ 15.005. Multiple Defendants.

In a suit in which the...