Veigel v. Tex. Boll Weevil Eradication Found., Inc.

• Decision Date: 29 March 2018
• Docket Number: NO. 03-16-00353-CV,03-16-00353-CV
• Citation: 549 S.W.3d 193
• Parties: Steve VEIGEL, Appellant v. TEXAS BOLL WEEVIL ERADICATION FOUNDATION, INC., Appellee
• Court: Texas Court of Appeals

549 S.W.3d 193

Steve VEIGEL, Appellant

v.TEXAS BOLL WEEVIL ERADICATION FOUNDATION, INC., Appellee

NO. 03-16-00353-CV

Court of Appeals of Texas, Austin.

Filed: March 29, 2018

Mr. Andrew McKeon, Mr. Matt Dow, Mr. Dudley D. McCalla, Austin, for Appellee.

Mr. Steve Veigel, for Appellant.

Before Chief Justice Rose, Justices Goodwin and Bourland

OPINION

Cindy Olson Bourland, Justice

Steve Veigel appeals from a summary judgment rendered in favor of the Texas Boll Weevil Eradication Foundation, Inc., in its suit to collect assessments for the operation of pest-eradication programs for the years 1999 and 2001. In 2010, after obtaining two default judgments against Veigel Farms, Inc., on August 10, 2000, and September 29, 2004, the Foundation sued Veigel personally as Secretary and Director of Veigel Farms, Inc., which had forfeited its corporate privileges at the time the debts were incurred. On cross-motions for summary judgment, the district court granted the Foundation’s motion and denied Veigel’s. Veigel appeals,¹ arguing that the suit is time-barred by the statute of limitations or, alternatively, by laches, res judicata, and collateral estoppel, and that he raised a genuine issue of material fact that defeated the Foundation’s motion for summary judgment. For the reasons that follow, we will reverse the trial court’s orders and render judgment in favor of Veigel.

Factual and Procedural Background

The Texas Legislature created the Foundation to manage programs aimed at eradicating the boll weevil and the pink bollworm from cotton crops in Texas. See Tex. Agric. Code § 74.1011(a). The Foundation is a "quasi-governmental entity" operating under the supervision and control of the commissioner of agriculture and is authorized, subject to referendum approval by affected cotton growers, to collect assessments that it uses to operate its eradication programs. See id. §§ 74.101, .113. Veigel Farms, Inc., is a Texas corporation that farmed cotton for commercial production from 1999 to 2002. During that time, Steve Veigel was Secretary and Director of Veigel Farms.² Alleging failure to pay assessments levied in 1999 and 2001, the Foundation sued Veigel Farms and obtained default judgments against the farm in 2000 and 2004.

Veigel Farms’s corporate privileges were forfeited for failure to pay franchise taxes from August 1996 to September 2002 and again from October 2003 to January 2006. See Tex. Tax Code § 171.251(2). The parties agree that it was during these periods of forfeiture that the assessments at issue were incurred, the suits to collect them were filed, and the default judgments against Veigel Farms were signed. In August 2010, the Foundation initiated the underlying suit against Veigel personally seeking to collect on the default judgments under a tax statute that provides that officers and directors are personally liable for corporate debts incurred during forfeiture periods. See id. § 171.255(a). The Foundation sought a total of $26,158.22 for the two judgments or, in the alternative, $14,726.06 for the two assessments alone. On August 30, 2010, Veigel filed special exceptions, an answer, a motion to dismiss, and a motion for summary judgment. Veigel asserted as affirmative defenses payment, laches, res judicata, collateral estoppel, and limitations.³ In his motion for summary judgment, Veigel sought judgment based on limitations, noting that the Foundation’s lawsuit was filed more than four years after the underlying 1999 and 2001 assessments were due or the default judgments related to those assessments were signed. He further argued he was entitled to judgment on his defenses of "res judicata and/or collateral estoppel."

Nothing happened in the case for about five years, until the Foundation filed a motion to retain the suit on November 25, 2015. The trial court denied that motion and dismissed the suit for want of prosecution on December 15, 2015, but on January 4, 2016, the court granted the Foundation’s motion to reconsider and reinstated the case on its docket. The Foundation then responded to Veigel’s motion for summary judgment and filed its own traditional and no-evidence motion for summary judgment. In its response to Veigel’s motion for summary judgment, the Foundation asserted (1) that it was a political subdivision and therefore not subject to limitations, see Tex. Civ. Prac. & Rem. Code § 16.061 (political subdivision is exempt from statute of limitations), and (2) that Veigel had not conclusively established collateral estoppel or res judicata. The Foundation moved for traditional summary judgment on the grounds that Veigel was personally liable for the assessments levied against Veigel Farms and for the judgments obtained against Veigel Farms in 2000 and 2004, and for no-evidence summary judgment as to Veigel’s affirmative defenses of payment and laches. The trial court denied Veigel’s motion for summary judgment. In a separate order, without specifying the grounds, the court granted the Foundation’s motion for summary judgment, finding that "all relief requested" by the Foundation should be granted and awarding the Foundation $32,179.16, post-judgment interest, and costs of court. Veigel appeals from those orders.

Standard of Review

We review the trial court’s granting of summary judgment de novo. Valence Operating Co. v. Dorsett , 164 S.W.3d 656, 661 (Tex. 2005). Where, as here, both parties move for summary judgment, "we determine all issues presented and render the judgment the trial court should have rendered." Colorado Cty., Tex. v. Staff , 510 S.W.3d 435, 444 (Tex. 2017). To prevail on a motion for traditional summary judgment, a movant must show that there is no genuine issue of material fact and that he is entitled to judgment as a matter of law. Tex. R. Civ. P. 166a(c). The movant must therefore establish each element of his claim or defense as a matter of law or negate an element of the respondent’s claim or defense as a matter of law. See M.D. Anderson Hosp. & Tumor Inst. v. Willrich , 28 S.W.3d 22, 23 (Tex. 2000). Thus, a defendant seeking summary judgment on an affirmative defense must plead and conclusively prove each element of his defense. Montgomery v. Kennedy , 669 S.W.2d 309, 310-11 (Tex. 1984) ; Ellard v. Ellard , 441 S.W.3d 780, 781 (Tex. App.—San Antonio 2014, no pet.) ; see Tex. R. Civ. P. 94, 166(a).

Discussion

Veigel first argues that the trial court erred in denying his motion for summary judgment based on limitations because the Foundation is not a political subdivision under the Texas Civil Practice and Remedies Code. See Tex. Civ. Prac. & Rem. Code § 16.061. Veigel also contends that the Foundation’s claims are barred by laches, res judicata, and collateral estoppel and that he raised genuine issues of material fact that defeated the Foundation’s motion for summary judgment. Because Veigel’s limitations defense is dispositive of this appeal, we limit our discussion to his first issue.

Structure and Nature of the Foundation

Chapter 74, subchapter D, of the agriculture code governs the Foundation, which is the entity recognized by the department of agriculture as "the entity to plan, carry out, and operate programs to eliminate" boll weevils and bollworms, subject to the control of the commissioner of agriculture.⁴ Tex. Agric. Code § 74.1011 ; see generally id. §§ 74.101-.131 ("Official Cotton Growers' Boll Weevil Eradication Foundation"). The Foundation operates throughout the entire state, which is divided into "eradication zones" due to regional differences in "soil conditions, growing seasons, farming techniques, and climate conditions." Id. § 74.101(a)(2). Subchapter D defines six "statutory zones," specifying which counties fall into which zones. Id. § 74.1021. Further, the commissioner may designate proposed non-statutory eradication zones by rule if the area is not within a statutory zone that has approved an eradication program. Id. § 74.1042. The commissioner must conduct a referendum in each proposed eradication zone to determine whether cotton growers in the area approve of establishing the zone. Id. § 74.105(a); see id. § 74.114 (describing how referenda are to be conducted). The Foundation is governed by a board composed of members elected from each approved eradication zone; board members appointed by the commissioner because they are located in zones that were not approved by referenda; and certain mandated board members from around the state—an agricultural lender, an entomologist who specializes in integrated pest management, two representatives from industries allied with cotton production, and a representative from the pest-control industry. Id. § 74.107.

For each approved eradication zone, the commissioner shall propose an assessment necessary to eradicate boll weevils, and that proposed assessment is submitted to the cotton growers in the area for approval through a referendum. Id. § 74.113. The Foundation has the authority to collect approved assessments, and those assessments may only be used for eradication, the Foundation’s operating costs, and programs consistent with the Foundation’s purpose. Id. § 74.113(e), (f). The Foundation is responsible for all expenses incurred in conducting a referendum or a board election. Id. § 74.114(b).

The Foundation is "a Texas nonprofit corporation chartered by the secretary of state." Id. § 74.1011 ; see also id. § 74.102(8) (" ‘Foundation’ means the Texas Boll Weevil Eradication Foundation, Inc., a Texas nonprofit corporation."). Subchapter D specifies that the Foundation and its board "are state agencies" only for purposes of being exempt from taxation and for indemnification under chapter 104 of the civil practice and remedies code.⁵ Id. § 74.109(d). Subchapter D also states that the Foundation "is a governmental unit under Section 101.001, Civil Practice and Remedies Code,⁶ and is entitled to governmental immunity," and that any tort claim leveled against the Foundation must be made under the Tort Claims Act. Id. §...