Opinion

CV1-003

IN THE COURT OF APPEALS, THIRD DISTRICT OF TEXAS,

AT AUSTIN

NO. 3-91-003-CV

TEXAS COMMISSIONER OF INSURANCE GEORGIA D. FLINT,

PERMANENT RECEIVER OF STANDARD FINANCIAL INDEMNITY CORPORATION,

APPELLANT

vs.

AETNA CASUALTY & SURETY COMPANY, EMPLOYERS INSURANCE OF WAUSAU,

A MUTUAL COMPANY, THE HARTFORD ACCIDENT AND INDEMNITY COMPANY,

HOUSTON GENERAL INSURANCE COMPANY, CIGNA INSURANCE COMPANY

OF TEXAS, LIBERTY MUTUAL FIRE INSURANCE COMPANY, ET AL.,

APPELLEES

FROM THE DISTRICT COURT OF TRAVIS COUNTY, 345TH JUDICIAL DISTRICT

NO. 475,263, HONORABLE PETE LOWRY, JUDGE PRESIDING

PER CURIAM

Standard Financial Indemnity Corporation (SFIC) (1) appeals from the Travis County

district court's judgment dismissing its suit for lack of subject matter jurisdiction. SFIC brings two points of error: (1) the Hidalgo County district court erred in transferring venue to

Travis County; and (2) the Travis County district court erred in its dismissal because the court

had jurisdiction of SFIC's antitrust and tortious interference claims.

The Controversy

The former Workers' Compensation Assigned Risk Pool (2) (the "Pool") provided

insurance for persons unable to purchase it on the open market ("rejected risks"). All insurance

companies that wrote workers' compensation insurance in Texas were Pool members who elected

a twelve member governing committee. Workers' Compensation Assigned Risk Pool, 68th Leg.,

R.S., ch. 534, sec. 1, § 5.76(b), 1983 Tex. Gen. Laws, 3114, 3115. A "servicing company" was

a member of the Pool designated to issue a policy and service a rejected risk. Id. at § 5.76(a)(8),

1983 Tex. Gen. Laws, 3114, 3115. Policies issued to rejected risks were reinsured by the Pool.

Id. at § 5.76(d), 1983 Tex. Gen. Laws, 3114, 3117. Assessments levied against all member

companies compensated for Pool losses. Actions of the Pool could be appealed to the State Board

of Insurance. Id. at § 5.76(j), 1983 Tex. Gen. Laws, 3114, 3119. Members of the Pool

who wanted to become servicing companies applied to the governing committee, whose decision

was subject to review by the State Board of Insurance. SFIC's application for servicing company

status was first referred to a subcommittee made up exclusively of governing committee members

who were not themselves servicing companies. In anticipation of legislative changes, the

subcommittee delayed action pending the conclusion of the legislative session. After being

notified of the delay, SFIC requested a hearing, at which the governing committee, on February

23, 1989, again declined to rule on the application. On March 2, 1989, SFIC filed suit in the

92nd Judicial District Court in Hidalgo County, Texas.

SFIC first pleaded claims under the Texas Free Enterprise and Antitrust Act of

1983, Tex. Bus. & Com. Code Ann. §§ 15.01 -.51 (West 1987 & Supp. 1993) (Texas Antitrust

Act) (the "antitrust claim"), alleging that appellees conspired to monopolize the workers' compensation market; SFIC complained in particular of the treatment of its servicing company

application. Later, in its first amended petition, SFIC added claims of tortious interference with

prospective business relationships (the "tortious interference" claim). (3) Appellees responded with

pleas to the jurisdiction, motions to transfer venue, and general denials. After a hearing on

October 27, 1989, the Hidalgo County district court granted the motions to transfer venue to

Travis County.

While appellees' pleas to the jurisdiction were pending in the Travis County district

court, SFIC filed a second amended petition (4) alleging that the Pool levied unduly high assessments

to force SFIC out of the workers' compensation market. On March 2, 1990, the district court

heard appellees' pleas to the jurisdiction. Appellees argued that the district court lacked subject

matter jurisdiction because SFIC's claims, however labeled, derived solely from a statute and the

correct statutory procedures had not been followed. On June 6, 1990, the district court signed

an interlocutory order of partial dismissal holding that it lacked subject matter jurisdiction to hear

any of SFIC's claims that derived in whole or in part from the treatment of SFIC's application to

become a servicing company.

Appellees then argued that the only specific allegation remaining in SFIC's second

amended petition was the assessment claim over which the district court lacked subject matter

jurisdiction for the same reason that it lacked jurisdiction over SFIC's claims arising from its

servicing company application. On September 4, 1990, all of SFIC's remaining claims were

dismissed for lack of subject matter jurisdiction. On November 6, 1990, the trial court rendered

a final judgment when it severed SFIC's claims from appellees' counterclaims. SFIC then brought

this appeal.

In our discussion of this appeal, we will begin with SFIC's point of error two: the

Travis County district court erred in its dismissal for lack of subject matter jurisdiction. In

essence, this point consists of two parts: (1) whether SFIC's pleadings alleged causes of action

that were purely statutory and subject to dismissal for failure to comply with the procedures

prescribed by the statute; and (2) the effect of a recital appearing in the judgment that dismissed

SFIC's cause. We will initially discuss the first aspect of point two in order to establish whether

any district court had subject matter jurisdiction. If at any time, a court discovers it lacks

jurisdiction, it has no authority to take any action other than dismiss the cause. See, e.g., Lopez

v. Public Util. Comm'n, 816 S.W.2d 776, 783-84 (Tex. App.--Austin 1991, writ denied) (once

court found it lacked jurisdiction, court could not order that plaintiff take nothing); Protestants

v. American Pubs, Inc., 787 S.W.2d 111, 113 (Tex. App.--Houston [1st Dist.] 1990, no writ).

Subject Matter Jurisdiction

If a cause of action derives from a statute rather than the common law, then the

statutory provisions are mandatory and exclusive and must be complied with in all respects to

maintain the action. Texas Catastrophe Property Ins. Ass'n v. Council of CoOwners of Saida II

Towers Condominium Ass'n, 706 S.W.2d 644, 646 (Tex. 1986) (Saida); Mingus v. Wadley, 285

S.W. 1084, 1087 (Tex. 1926). In Saida, the plaintiffs attempted to distinguish claims based on

a denial of contract benefits under their insurance policies from claims controlled by the Insurance

Code procedures governing the Catastrophe Property Insurance Pool. The Texas Supreme Court,

in affirming the trial court's dismissal for lack of subject matter jurisdiction, held that the

plaintiffs' claims under their insurance contracts were based on a denial of a benefit derived from

the Catastrophe Property Pool Act and therefore were governed exclusively by the Act's

procedures. See also Linick v. Employers Mut. Casualty Co., 822 S.W.2d 297 (Tex. App.--San

Antonio 1991, no writ); Stephanou v. Texas Medical Liab. Ins. Underwriting Ass'n (JUA), 792

S.W.2d 498 (Tex. App.--Houston [1st Dist.] 1990, writ denied); Rowden v. Texas Catastrophe Ins.

Ass'n, 677 S.W.2d 83 (Tex. App.--Corpus Christi 1984, writ ref'd n.r.e.).

SFIC contends, however, that it has pleaded causes of action not controlled by

Saida . SFIC relies on the principle that, when there is no ruling on special exceptions, the

petition is to be construed liberally in favor of the pleader and is sufficient if it gives fair and

adequate notice of the basic issues in controversy and the relevant testimony. Roark v. Allen, 633

S.W.2d 804, 809-810 (Tex. 1982). Further, SFIC asserts that the plaintiff does not need to plead

the entire case with exactness, as the function of a pleading is to define the issues at trial, not to

state evidence. Bader v. Cox, 701 S.W.2d 677, 686 (Tex. App.--Dallas 1985, writ ref'd n.r.e.).

SFIC contends that it has pleaded antitrust and tortious interference causes of action

based on general allegations that appellees conspired to monopolize the workers' compensation

market, its specific allegations concerning servicing company status and assessments being merely

evidence. We agree that SFIC has pleaded antitrust and tortious interference causes of action in

their general allegations. To the degree, however, that the treatment of its servicing company

application and the level of assessments are serving as causes of action themselves, that is,

complaints about the acts of the Pool's governing committee, those matters are controlled by Saida

and the statutory procedures must be followed.

In support of the trial court's judgment, appellees rely as well on a recital in the

judgment that dismissed SFIC's cause, which they interpret as a stipulation on SFIC's part that

the only causes of action that it pleaded are statutory, and therefore the dismissal for lack of

subject matter jurisdiction was proper as to any or all of SFIC's claims. The recital reads: "[T]he

Plaintiff having stated that no other claims are pleaded in the Second Amended Petition other than

those challenged by the Defendants' First and Second Pleas to the Jurisdiction, [the Court] has

determined that it is also without jurisdiction as to all other claims of SFIC which are pleaded in

its Second Amended Petition."

Appellees' first and second pleas to the jurisdiction challenged SFIC's pleadings

on the basis that all causes of action pleaded first had to be heard by the State Board of Insurance;

that is, SFIC's causes of action, however labeled, were based solely on challenges to the treatment

of its servicing company application and unfair assessments. Appellees contend, therefore, that

the meaning of this recital is that SFIC agrees that all of its causes of action in its pleadings derive

solely from the treatment of its application for servicing company status and its complaints about

unduly high assessments. Because these facts support only statutory causes of action, appellees

in essence contend that SFIC stipulated that the district court lacked subject matter jurisdiction

over any possible causes of action pleaded.

We do not read the stipulation in the way that appellees would have us read it. We

can plausibly interpret the stipulation as a statement by SFIC agreeing only that everything that

it has to plead is pleaded. SFIC's agreement appears analogous to the situation in which a

pleading has been challenged by special exceptions and the pleader chooses to test the adequacy

of the pleadings on appeal rather than amend; that is, SFIC may have been saying that all of its

causes of action have been adequately alleged in the pleadings and it will test that view on appeal.

Because we agree that SFIC has pleaded antitrust and tortious interference causes of action and

because we do not read the recital in the judgment as a stipulation that SFIC has only alleged

statutory causes of action, we sustain point of error two.

Motion to Transfer Venue

In its first point of error, SFIC contends that the Hidalgo County district court

improperly transferred venue to the Travis County district court. In Hidalgo County, appellees

filed a motion to transfer venue based on a provision in the Texas Antitrust Act that allows a

properly filed suit to "be transferred to another county upon order of the court for good cause

shown." Tex. Bus. & Com. Code Ann. § 15.26 (West 1987). Appellees interpret this section

as allowing a "forum non conveniens" transfer comparable to that provided for under federal law. (5)

SFIC contends that forum non conveniens historically has not been a permissible reason to transfer

a cause from one county to another within Texas, and that the language in the Texas Antitrust Act

was not intended to change this basic principle.

Background

Reasons to transfer venue are:

(1) the county in which the action is pending is not a proper county as provided

by this chapter;

(2) an impartial trial cannot be had in the county in which the action is pending;

or

(3) written consent of the parties to transfer to any other county is filed at any

time.

Tex. Civ. Prac. & Rem. Code § 15.063 (West 1986). This section does not provide for a transfer

based on convenience, as does 28 U.S.C. § 1404 (a) (1988). Nor does it contain any general

category that might be interpreted as giving a trial court the flexibility to order transfers based on

convenience.

In general, Texas courts have rejected forum non conveniens as a reason to transfer

venue from county to county within Texas. See, e.g., Cherokee Village v. Henderson, 538

S.W.2d 169, 175 (Tex. Civ. App.--Houston [1st Dist.] 1976, writ dism'd w.o.j.); Perfecto Gas

Co. v. State, 228 S.W.2d 918, 921 (Tex. Civ. App.--1950, no writ) (antitrust); Garrett v. Phillips

Petroleum Co., 218 S.W.2d 238, 240 (Tex. Civ. App.--Amarillo 1949, writ dism'd w.o.j.); see

generally Charles T. Grazier, Jr., Note, Venue Procedure in Texas: An Analysis of the 1983

Amendments to the Rules of Civil Procedure Governing Venue Practice Under the New Venue

Statute, 36 Baylor L. Rev. 241 , 262-63 (comparison of federal and Texas venue practice).

Appellees argue, however, that the general venue provisions do not control in an antitrust case.

In addition to section 15.26, appellees rely on language in the Texas Antitrust Act that its

provisions "[s]hall be construed in harmony with federal judicial interpretations of comparable

federal antitrust statutes to the extent consistent with this purpose." Tex. Bus. & Com. Code

Ann. § 15.04 (West 1987). Appellees argue that the combination of this language with the "good

cause" language in section 15.26 requires that federal venue principles permitting forum non

conveniens transfers be incorporated in Texas antitrust law.

Texas Antitrust Act

The Texas Free Enterprise and Antitrust Act of 1983 was a major reform and

modernization of Texas antitrust law. Texas Free Enterprise and Antitrust Act of 1983, 68th

Leg., R.S., ch. 519, §§ 1-4, 1983 Tex. Gen. Laws 3010 -3040 (codified as amended at Tex. Bus.

& Com. Code Ann. §§ 15.01-15.51 (West 1987 & Supp. 1993)); Caller-Times Publishing Co. v.

Triad Communications, 826 S.W.2d 576, 579 (Tex. 1992); see generally David J. Van Susteren,

Comment, The Texas Free Enterprise and Antitrust Act--Analysis and Implications, 22 Hous. L.

Rev. 1181 (1985). One of the major changes was to model the Texas Act after the Sherman and

Clayton Acts. Caller-Times, 826 S.W.2d at 580 . The Texas Antitrust Act now explicitly says

that its provisions "[s]hall be construed in harmony with federal judicial interpretations of

comparable federal antitrust statutes to the extent consistent with this purpose." Tex. Bus. &

Com. Code Ann. § 15.04 (West 1987).

In addition to the language of the statute, appellees point to the following item of

legislative history as indicating that the "good cause" language was designed to permit

discretionary transfers of venue because the legislature's purpose was to

[r]ewrite the State's antitrust laws in conformance with the federal antitrust laws.

Both the substantive and procedural provisions of the bill are patterned after the

federal laws and the bill specifically instructs Texas courts to find guidance in

application of the new laws from judicial interpretation of the federal laws.

Senate Committee on Business and Commerce, Bill Analysis, S.B. 397, 68th Leg., at 1 (1983).

Appellees assert that section 15.04 mandates the construction of Texas antitrust law

in harmony with federal law. The above-quoted legislative history indicates that procedural law

was to be looked to as well as substantive law. Federal law allows for a transfer based on the

convenience of the parties. Therefore, appellees urge that federal venue principles can provide

"good cause" for transfer.

First, the literal language of the statute does not refer to federal law in general, but

to federal antitrust law. Similarly, the legislative history refers to federal antitrust law, not federal

law in general. Federal antitrust law has a procedural section that governs venue choice. Forum

non conveniens venue transfers, however, occur under a general venue statute, 28 U.S.C. §

1404 (a) (1988), not under federal antitrust statutes.

Appellees argue, however, that to construe the phrase "good cause" as a reference

to general venue practice makes the phrase superfluous, thus violating the principle that the entire

statute is intended to be effective. Tex. Gov't Code Ann. § 311.021 (2) (West 1988). We

disagree, because the phrase in section 15.26 could have been intended to overrule a line of cases

holding that the "plea of privilege" as a mechanism to move a cause from county to county did

not apply to antitrust cases. Cowan v. State, 356 S.W.2d 170, 177 (Tex. Civ. App.--Austin 1962,

writ dism'd w.o.j.); Perfecto, 228 S.W.2d at 220 ; Fairbanks-Morse & Co., 223 S.W.2d 339, 341

(Tex. Civ. App.--El Paso 1949, no writ). The language in section 15.26 would not have been

superfluous to clarify that, under the new antitrust statute, general venue provisions could be used

to transfer a cause; i.e., if a cause were brought in an incorrect county, the court could transfer

it to a correct county, rather than dismiss it. Id. However, given that during the same session

that the antitrust law was undergoing its major revision, the venue statute was undergoing a much-discussed revision as well, a specific reference to "plea of privilege" could have been rendered

obsolete if, as it resulted, venue practice changed and the term "plea of privilege" was no longer

used. See generally Dan R. Price, New Texas Venue Statute: Legislative History, 15 St. Mary's

L.J. 855 (1984).

Appellees also make, in essence, a structural argument. Texas antitrust law now

is intended to parallel federal antitrust law. In federal antitrust cases, forum non conveniens is

available. To parallel federal law, therefore, forum non conveniens should be available in Texas

cases. In fact, Texas law does parallel federal law; Texas looks to its general venue transfer

provisions, as does the Federal antitrust law. The Texas general venue provisions, however,

simply do not include forum non conveniens.

Further, had the legislature intended to incorporate forum non conveniens into

Texas law, either in general venue provisions or in a specific subject area, the legislature could

have referred to an existing model of a statute that included a forum non conveniens transfer

provision. Tex. Fam. Code Ann. § 11.06 (c) (West 1986). (6) The language is similar to that used

in the general federal provision for transfer of venue. Had the legislature intended forum non

conveniens to be available in antitrust cases, it had a model for so doing in specific language,

without needing to resort to the general term "good cause."

We see no compelling reason to read the phrase "good cause" in section 15.26 of

the Texas Antitrust Act as incorporating a venue transfer system generally repudiated in Texas.

We sustain point of error one that the Hidalgo County District Court erroneously transferred

venue.

Effect of Venue Transfer Order

We have determined that the Texas Antitrust Act did not authorize the Hidalgo

County district court to transfer venue on the basis of forum non conveniens. If the Hidalgo

County district court was without authority to transfer the cause, then the transfer order was void.

Robertson v. Gregory, 663 S.W.2d 4, 5 (Tex. App.--Houston [14th Dist.] 1983) (orig.

proceeding). The only action that the Travis County District Court could take pursuant to a void

transfer was to dismiss the cause and return the record to Hidalgo County. State v. Fairbanks-Morse & Co., 223 S.W.2d at 341 .

Were we reviewing a trial on the merits, if the transfer were erroneous as opposed

to void, we would have to determine whether the cause ultimately had been tried in a county of

proper venue. See Tex. Civ. Prac. & Rem. Code § 15.064(b) (West 1986) (if venue improper

in trial on the merits, error cannot be harmless); Ruiz v. Conoco, Inc. , 36 Tex. Sup. Ct. J. 412 ,

417-18 (Dec. 31, 1992) (proper standard of review on appeal is whether the cause was eventually

tried in a county of proper venue); Wilson v. Texas Parks & Wildlife Dept., No. 3-91-232-CV,

slip. op. at 4-5, (Tex. App.--Austin May 5, 1993, n.w.h.) (only question in venue appeals under

15.064 is whether venue proper in ultimate county of suit).

Section 15.064(b) also requires that, in determining whether venue was proper, the

appellate court consider the entire record, including the trial on the merits. The purpose of that

requirement was to prevent fraud, negligence or exaggeration as to venue facts that might not be

discoverable until after a trial on the merits. Humphrey v. May, 804 S.W.2d 328, 330 (Tex.

App.--Austin 1991, writ denied). In this appeal, however, we have not had a trial on the merits

and do not have the benefit of such a record. Inasmuch as our disposition of the subject matter

jurisdiction point means we must reverse and remand, we will reverse the judgment and remand

the cause to the district court with instructions that the cause be returned to the original county

of filing, Hidalgo County, for further proceedings consistent with this opinion.

[Before Justices Jones, Kidd and B. A. Smith]

Reversed and Remanded

Filed: May 19, 1993

[Publish]

1. 1 Appellees are Aetna Casualty & Surety Company; CIGNA Insurance Company of Texas;

Employers Insurance of Wausau; Hartford Accident and Indemnity Co.; Houston General

Insurance Co.; Liberty Mutual Fire Insurance Co.; Lumbermens Mutual Casualty Co.; Texas

Employers Insurance Association; Travelers Indemnity Co. of Rhode Island; and United States

Fire Insurance. We will refer to the appellees throughout as if they acted together at all times.

They filed substantially duplicative answers, motions to transfer venue, and so on. All appellees

joined in one brief on appeal. There are no issues raised in this appeal regarding any company's

particular capacity (member of the Pool, member of the Governing Committee of the Pool,

servicing company) with regard to the Workers' Compensation Pool.

2. 2 The Texas Workers' Compensation Assigned Risk Pool was transferred to the Texas

Workers' Compensation Insurance Facility as part of major changes in workers' compensation

enacted by the 71st Legislature. Texas Worker's Compensation Act, 71st Leg., 2d C.S., ch. 1,

§ 17.09, 1989 Tex. Gen. Laws, 117-18 (now codified at Tex. Ins. Code Ann. art. 5.76--2 (West

Supp. 1993).

3. 3 Appellees filed special exceptions to SFIC's original petition asserting that SFIC failed to

state a cause of action. We find no ruling on that set of special exceptions. After the exceptions

were filed, SFIC amended its petition to add the tortious interference claim.

4. 4 SFIC's second amended petition added Bill Chanslor as a plaintiff on behalf of Preferred

Employers Insurance Company and alleged that the Pool's unduly high assessments forced

Preferred out of the workers' compensation market, rendering it insolvent. Appellees filed special

exceptions challenging Bill Chanslor's standing to bring the claim on behalf of Preferred, which

was in receivership. The special exceptions to the second amended petition did not address the

adequacy of the pleading to state a cause of action. These exceptions were granted. Chanslor did

not replead and does not join in this appeal.

5. 5 "For the convenience of parties and witnesses, in the interest of justice, a district court may

transfer any civil action to any other district or division where it might have been brought." 28

U.S.C. § 1404 (a) (1988).

6. 6 A forum non conveniens transfer may occur in a suit affecting the parent-child relationship:

For the convenience of the parties and witnesses and in the interest of justice, the court,

on the timely motion of any party, may transfer the proceeding to a proper court in any

other county in the state.

Tex. Fam. Code Ann. § 11.06 (d) (West 1986). This section was part of the codification of the

Family Code in 1973. Act of May 25, 1973 , 63rd Leg., R.S., ch. 543, sec. 1, § 11.06(c), 1973

Tex. Gen. Laws 1411 , 1414 (now Tex. Fam. Code Ann. § 11.06 (d)).