Ofelia Hernandez v. Texas Department of Insurance and Commissioner of Insurance

hernandez

TEXAS COURT OF APPEALS, THIRD DISTRICT, AT AUSTIN

NO. 03-95-00503-CV

Ofelia Hernandez, Appellant

v.

Texas Department of Insurance and Commissioner of Insurance, Appellees

FROM THE DISTRICT COURT OF TRAVIS COUNTY, 200TH JUDICIAL DISTRICT

NO. 95-02652, HONORABLE SUZANNE COVINGTON, JUDGE PRESIDING

This appeal requires us to decide whether a state agency must promptly notify a

party when the party's motion for rehearing is overruled by operation of law. We conclude that

there is no such obligation. Accordingly, Hernandez's petition for judicial review was untimely

and we will affirm the trial court's order of dismissal for want of jurisdiction.

BACKGROUND

Hernandez, an insurance agent, has held a local recording agent's license for twelve

years. In April 1994, the Department of Insurance began hearings in response to customer

complaints about Hernandez, and the Commissioner of Insurance revoked her license on

November 29, 1994. The order was sent to Hernandez on November 30 and she timely filed a

motion for rehearing on December 20, 1994. Forty-five days after Hernandez received notice of

the revocation order, the Commissioner had not acted on the motion for rehearing. Pursuant to

the Administrative Procedure Act (the "APA") the motion was overruled by operation of law at

that time. See Tex. Gov't Code Ann. § 2001.144 (West 1996). Thus, the Commissioner's order

became final and appealable on January 16, 1995, the day the motion for rehearing was overruled

by operation of law. See id. § 2001.171.

Hernandez had thirty days from January 16 to file a petition to initiate judicial

review. See id. § 2001.176(a). Although her petition was due on February 15, she did not file

it until March 3, the day that she received a letter from the Commissioner of Insurance notifying

her that her motion had been overruled by operation of law. Because of this late filing, the trial

court determined that her petition for judicial review of the Commissioner's decision was untimely

and dismissed it for want of jurisdiction.

DISCUSSION

On appeal, Hernandez asserts that her delay in filing her petition for judicial review

was caused by the Insurance Department's delay in advising her that her motion for rehearing had

been overruled by operation of law. According to Hernandez, the agency had a duty to notify her

that forty-five days had passed since she received notice of the revocation order; she further

contends that until the agency did provide notice of the forty-five day lapse, she was not required

to comply with the appellate deadlines for seeking judicial review.

Before reaching the merits of the timeliness of Hernandez's petition for judicial

review in the trial court, we must decide whether she conferred jurisdiction on this Court by

timely filing the cost bond to perfect her appeal. Texas Rule of Appellate Procedure 41(a)(1)

requires that a cost bond be filed within thirty days of the trial court's final judgment or within

ninety days "if any party has timely filed a request for findings of fact and conclusions of law in

a case tried without a jury."

The trial court issued its final order of dismissal on May 2, 1995. Hernandez

perfected her appeal on July 5th, beyond the thirty-day limit, but within ninety days of the order.

She also timely requested findings of fact and conclusions of law. If that request was proper in

this proceeding, it served to extend the time for perfecting the appeal and this appeal was timely.

See Tex. R. Civ. P. 296.

In Linwood v. NCNB Texas , 885 S.W.2d 102, 103 (Tex. 1994), the supreme court

held that because findings of fact and conclusions of law have no place in a summary judgment

proceeding, a request for them did not serve to extend the appellate timetable under Texas Rule

of Appellate Procedure 41(a)(1). Appellees contend that Hernandez's request for findings of fact

was improper, noting that judicial review of an administrative ruling is subject to the substantial

evidence rule, and findings of fact are generally not proper in a substantial evidence appeal. See

Tex. Ins. Code Ann. art. 1.04 (West Supp. 1996). If improper, such a request did not extend the

thirty-day filing deadline and we do not have jurisdiction to hear this appeal.

In this case, the trial court conducted an evidentiary hearing on the plea to the

jurisdiction and the order of dismissal refers to evidence presented on that issue. The evidentiary

hearing distinguishes this case from our recent decision holding a request for findings of fact and

conclusions of law ineffective to extend the appellate timetable in a dismissal for want of

jurisdiction on the pleadings where there was no evidentiary hearing. See Lusk v. Service Lloyds

Insurance Company & Texas Workers' Compensation Comm'n , No. 03-96-00081-CV, slip op.

at 3 (Tex. App.--Austin May 8, 1996, no writ h.); see also Waco Indep. School Dist. Taxpayers

Ass'n v. Waco Indep. School Dist. , 912 S.W.2d 392, 394 (Tex. App.--Waco 1995, no writ);

O'Donnell v. McDaniel , 914 S.W.2d 209, 210 (Tex. App--Fort Worth 1995, writ requested).

Because there was an evidentiary hearing on the jurisdictional plea and the cause was dismissed

based upon evidence presented and facts determined at the hearing, the holding in Linwood is not

applicable to this appeal. (1) Hernandez's request for findings of fact and conclusions of law were

appropriate and did serve to extend the appellate timetable under Texas Rule of Appellate

Procedure 41(a)(1). We hold that Hernandez's cost bond, filed within ninety days of the order

of dismissal, timely invoked this court's jurisdiction.

We now turn to the merits of Hernandez's argument. Hernandez contends that the

following APA provision required the Commissioner to provide notice that the motion for

rehearing had been overruled by operation of law:

On issuance in a contested case of a decision that may become final under

2001.144 or an order ruling on a motion for rehearing, a state agency shall send

a copy of the decision or order by first class mail to the attorneys of record . . . .

Tex. Gov't Code Ann. § 2001.142 (b) (West 1996). In further support of her position Hernandez

cites the supreme court's observation that a party's ability to seek judicial review of agency orders

should not be compromised by the agency's failure to give notice of its orders. See Commercial

Life Ins. v. Board of Insurance , 774 S.W.2d 650, 652 (Tex. 1989).

Commercial Life concerned the Insurance Board's failure to notify a party of its

final order in a contested case. Commercial Life did not learn of the order until seventeen days

after its rendition, which was beyond the deadline for filing a motion for rehearing. When

Commercial Life sought judicial review of the Board's decision, an intervening party asserted that

Commercial Life waived its right to appeal because of the untimely motion for rehearing. See

Tex. Gov't Code Ann. § 2001.146 (a) (West 1996) (formerly Tex. Rev. Civ. Stat. Ann. art. 6252-13a, § 16(e), since repealed and codified). The supreme court disagreed, holding that the

agency's failure to provide notice, which caused the delay in filing the motion for rehearing, could

not defeat Commercial Life's right to appeal. Id. at 652.

Because Commercial Life dealt with notice of a final order, its holding does not

directly control the outcome of this case. We find Commercial Life's elaboration on the purpose

behind the APA notice requirement (2) instructive, however:

[T]he duty of the agency to provide notice serves the critical function of informing

the aggrieved party of the date on which the time period for filing the motion for

rehearing begins to run. For this reason, we interpret the notice provision . . . to

ensure that a party's ability to seek judicial review of agency orders and decisions

will not be compromised solely because of the agency's failure to give notice of the

order.

Id. at 652. We conclude that the Commissioner's failure to provide notice that Hernandez's

motion was overruled by operation of law did not violate this purpose. The Commissioner

complied with the APA notice provision when it sent notice of its revocation order to Hernandez

on November 30, 1994. See Tex. Gov't Code Ann. § 2001.142 (b) (West 1996). From the plain

language of APA section 2001.146(c) Hernandez knew or was charged with knowledge that if the

agency did not act on her motion by January 16, 1995, forty-five days after the notice of

November 30, (3) it would be overruled by operation of law. See id. § 2001.146(c). When she had

not received notice of agency action within that forty-five days, Hernandez should have concluded

that the motion was overruled pursuant to the express terms of this statute. See id. The agency

was in no better position than Hernandez to recognize that forty-five days had passed since it had

given her notice of the revocation order. Thus, Hernandez's own failure to note the passage of

forty-five days, not the agency's failure to provide notice, compromised Hernandez's ability to

seek judicial review.

Having determined that the agency's failure to provide notice does not implicate

the purpose of the APA notice requirement, we next consider whether this failure violates the

express terms of the notice requirement. We hold that it does not. The statute requires an agency

to provide notice of " an order ruling on a motion for rehearing . . . ." Id. § 2001.142(b). No

order was rendered on the motion for rehearing because the terms of the statute, not the action

of the agency, operated to overrule the motion. See id. § 2001.146(c).

CONCLUSION

The agency's failure to provide notice to Hernandez violates neither the terms nor

the purpose of the APA notice requirement. We therefore hold that the Commissioner was not

required to notify Hernandez that her motion for rehearing was overruled by operation of law.

It follows that the Commissioner's failure to notify Hernandez does not excuse her failure to

comply with statutory deadlines for seeking judicial review of the Commissioner's revocation

order. Because she filed her petition for judicial review beyond the statutory deadline for doing

so, the trial court properly dismissed her petition for want of jurisdiction. See Tex. Gov't Code

Ann. § 2001.176 (West 1996). Accordingly, we overrule Hernandez's points of error and affirm

the trial court's order of dismissal.

Bea Ann Smith, Justice

Before Justices Powers, Jones and B. A. Smith

Affirmed

Filed: May 22, 1996

Publish

1. To the extent it applies to dismissals for lack of jurisdiction, we decline to follow the

rationale of the Fort Worth Court of Appeals that Rule 41(a)(1) contemplates an evidentiary

hearing on the merits of the underlying action before a request for findings of fact will extend

the appellate timetable. Phillips v. Beavers , 906 S.W.2d 254, 256 (Tex. App.--Fort Worth

1995, writ requested) (dismissal for want of prosecution is not "case tried without a jury" as

contemplated by Rule 41(a)(1) and therefore request for findings of fact and conclusions of law

did not extend appellate timetable). We are more persuaded by the reasoning expressed in

dicta in Chavez v. Housing Authority of El Paso , 897 S.W.2d 523, 525 (Tex. App.--El Paso

1995, writ denied), that a request for findings of fact and conclusions of law extends the

appellate timetable in any case disposed of by an evidentiary hearing. In Davis v. State , 904

S.W.2d 946 (Tex. App.--Austin 1995, no writ), we held that a request for findings of fact and

conclusions of law will serve to extend the appellate timetable unless findings of fact are

unqualifiedly inappropriate in such a proceeding. Id. at 951 . Like the other intermediate

appellate courts, we await further guidance from the supreme court in the application of

Linwood to proceedings other than summary judgments. See IKB Indus. (Nigeria) Ltd. v. Pro-Line Corp. , 901 S.W.2d 568, 569 (Tex. App.--Dallas 1995, writ requested) (hearing on motion

for sanctions is not case tried without jury for purposes of Rule 41(a)(1)); West Columbia

Nat'l Bank v. Griffith , 902 S.W.2d 201, 205 (Tex. App.--Houston 1995, writ denied) (hearing

on petition for bill of review is a case tried without jury under Rule 41(a)(1)); Chavez , 897

S.W.2d at 525 (dictum stating that case is tried under Rule 41(a)(1) when there is evidentiary

hearing on conflicting evidence).

2. At the time of Commercial Life the notice requirement was found at Texas Revised Civil

Statutes Annotated article 6252-13a, § 16(b). This provision has since been repealed and

codified at Texas Government Code section 2001.142(b) (West 1996). Because the substance

and the underlying purpose of this notice requirement did not change with its codification, we

look to Commercial Life for guidance. For convenience we will refer to the current code.

3. The forty-fifth day after the notice of revocation fell on January 14, 1995, a

Saturday. The forty-five day period is therefore considered to have lapsed on Monday,

January 16, 1996. See Tex. R. Civ. P. 4.