Opinion issued=20
July 3, 2008
In =
The
Court of=20
Appeals
For =
The
First =
District of=20
Texas
NO. =
01-07-00195-CV
TRANSAMERICA =
OCCIDENTAL LIFE=20
INSURANCE COMPANY AND TRANSAMERICA ANNUITY SERVICE CORPORATION, =
Appellants
V.
RAPID SETTLEMENTS, =
LTD. AND=20
LISA KAMINSKI, Appellees
On Appeal from =
County Civil=20
Court at Law No. 2
Harris County,=20
Texas
Trial Court Cause =
No.=20
875789
MEMORANDUM=20
OPINION
<=
/SPAN>Transamerica=20
Occidental =
Life=20
Insurance Company and Transamerica Annuity Service Corporation=20
(collectively, Transamerica) bring this restricted appeal =
from the=20
trial court=E2=80=99s final judgment confirming an arbitration =
award. The award=20
purports to enforce a transfer agreement between appellees Rapid=20
Settlements, Ltd. (Rapid Settlements) and Lisa Kaminski that =
assigned to=20
Rapid Settlements the right to distributions Kaminski was entitled =
to=20
receive under a structured settlement agreement. According to=20
Transamerica, it never received notice of Rapid =
Settlements=E2=80=99s suit or=20
consented to the judgment. Transamerica contends that the trial =
court=20
further erred by entering the order to aid in the enforcement of =
judgment=20
because: (1) the court lacks subject matter jurisdiction over =
Rapid=20
Settlement=E2=80=99s claim; (2) the arbitrator exceeded his =
authority in making=20
the award; (3) the agreement between Rapid Settlements and =
appellee Lisa=20
Kaminski ![3DFootnote](3D"")
is invalid and unenforceable; (4) =
the=20
judgment violates the Structured Settlements Protection Act, Texas =
Civil=20
Practice and Remedies Code sections141.001=E2=80=93.007; and (5) =
the judgment=20
contains various findings of fact and conclusions of law not =
supported by=20
the record. We reverse and render. BackgroundIn 1994, Kaminski =
entered into=20
a written structured settlement agreement that provides for =
periodic=20
payments to Kaminski. In 2005, Kaminski and Rapid Settlements =
entered into=20
a transfer agreement which provided that Rapid Settlements would =
pay=20
Kaminski a lump sum of $13,000.00 in exchange for her rights to =
future=20
payments due under the settlement agreement.
<=
/SPAN>Rapid=20
Settlements claims that Kaminski, who lives in Iowa, represented =
that the=20
proposed payments were free and clear of any encumbrances and were =
readily=20
available for transfer, even though Kaminski had previously =
granted a=20
security interest in the proposed transfer payments to another =
entity, and=20
had sold ten of the payments to an undisclosed party. Rapid =
Settlements=20
instituted an arbitration proceeding in Texas against Kaminski =
asserting=20
breach of the transfer agreement. In October 2006, the arbitrator =
entered=20
an agreed amended award in favor of Rapid Settlements. The =
arbitrator=E2=80=99s=20
award approves the transfer of:
Sums Certain Payments: Fifteen (15) =
monthly=20
payments each in the amount of $1100 out of $1182.80 beginning on =
June,=20
2004 [sic] through and including August 1, 2015.
Sums Uncertain Payments (payments are =
made only=20
during the measuring individual=E2=80=99s life): One hundred =
fifty-five (155)=20
monthly payments each in the amount of $1100 out of $1182.80 =
beginning on=20
September 1, 2015 through and including July 1, 2028. =
The award also confirms Rapid =
Settlements=E2=80=99=20
agreement to pay Kaminski $13,000 for the transfer =
rights.
<=
/SPAN>Transamerica=20
received notice of the arbitration proceeding, but did not appear. =
The=20
arbitration award orders Transamerica to change the designated =
payee under=20
the annuity to an entity designated by Rapid Settlements, and to =
send=20
formal acknowledgment of the transfer within seven days after its =
receipt=20
of a judgment confirming the award.
<=
/SPAN>Rapid=20
Settlements then filed an =E2=80=9COriginal Petition for =
Confirmation of=20
Arbitration Award=E2=80=9D in Harris County Civil Court at Law =
Number 2. The=20
petition named Kaminski as the only defendant. Transamerica was =
not named=20
as a party and was not served with notice of the suit. The trial =
court=20
signed a final judgment confirming the arbitration award on =
October 27,=20
2006.
The judgment orders
that [Kaminski and Transamerica] are =
hereby=20
directed to deliver and make payable to [Rapid Settlements], its=20
successors and/or assigns, as they become due, the following =
payments=20
under the Annuity Contract No. 942463 with Kaminski:
Sums Certain Payments: Fifteen (15) =
monthly=20
payments each in the amount of $1100 out of $1182.80 beginning on =
August=20
1, 2013 through and including August 1, 2015.
Sums Uncertain Payments (payments are =
made only=20
during the measuring individual=E2=80=99s life): One hundred =
fifty-five (155)=20
monthly payments each in the amount of $1100 out of $1182.80 =
beginning on=20
September 1, 2015 through and including July 1, =
2028.
Transamerica noticed its =
restricted appeal=20
from this judgment on February 26, 2007. &=
nbsp; &n=
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sp; &nbs=
p; =
; Subject=20
Matter Jurisdiction
<=
/SPAN>Among=20
other issues in its appeal, Transamerica contends that the amount =
in=20
controversy exceeds the limits of the trial court=E2=80=99s =
jurisdiction. Subject=20
matter jurisdiction is essential for a court to have the authority =
to=20
resolve a case. French v. Moore, 169 S.W.3d 1, 6 (Tex. =
App.=E2=80=94Houston=20
[1st Dist.] 2004, no pet.) (citing Tex. Ass=E2=80=99n of Bus.v. =
Tex. Air=20
Control Bd., 852 S.W.2d 440, 443 (Tex. 1993)). Whether a court =
has=20
subject matter jurisdiction is a question of law that we review de =
novo.=20
Id. (citing Mayhew v. Town of Sunnyvale, 964 S.W.2d =
922, 928=20
(Tex. 1998)). We look to the allegations in the =
plaintiff=E2=80=99s petition in=20
determining the amount in controversy for jurisdictional purposes. =
See=20
id. (citing Cont=E2=80=99l Coffee Prods. Co. v. =
Cazarez, 937 S.W.2d=20
444, 449 (Tex. 1996)); see also Bland Indep. Sch. Dist. v. =
Blue, 34=20
S.W.3d 547, 555 (Tex. 2000) (stating that amount in controversy =
=E2=80=9Cmust=20
ordinarily be decided solely on the pleadings=E2=80=9D). We must =
presume that the=20
trial court has subject matter jurisdiction unless the absence of=20
jurisdiction affirmatively appears on the face of the petition.=20
French, 169 S.W.3d at 6. Normally, the plaintiff=E2=80=99s =
pleadings=20
determine the amount in controversy, except when the defendant =
alleges=20
that the amount in controversy pleaded by the plaintiff is a sham =
to=20
wrongfully obtain jurisdiction. Id. (citing Bland, =
34 S.W.3d=20
at 554); see also United Servs. Auto. Ass=E2=80=99n v. =
Brite, 215 S.W.3d=20
400, 402 (Tex. 2007) (=E2=80=9CWe have previously held that the =
amount in=20
controversy is determined by the amount the plaintiff seeks to =
recover.=E2=80=9D).=20
When a plaintiff fails to state an amount in controversy in its =
petition,=20
the trial court is not automatically deprived of subject matter=20
jurisdiction. French, 169 S.W.3d at 6=E2=80=937 (citing =
Peek v. Equip.=20
Serv. Co., 779 S.W.2d 802, 804 (Tex. 1989)). Rather, a =
plaintiff may=20
prove jurisdiction at trial. Id. at 7 (citing Peek, =
779=20
S.W.2d at 804).
<=
/SPAN>Sections=20
25.0003 and 25.1032 of the Texas Government Code grant =
jurisdiction to=20
statutory county courts and to the Harris County Civil Courts at =
Law.=20
See Tex. =
Gov=E2=80=99t Code=20
Ann. =C2=A7=C2=A7 25.0003, 25.1032 (Vernon 2004); =
see also=20
Cazarez, 937 S.W.2d at 447=E2=80=9349. The jurisdictional =
limit of the Harris=20
County Civil Courts at Law is more than $500 but less than =
$100,000,=20
excluding interest, statutory or punitive damages, penalties, =
attorney=E2=80=99s=20
fees, and costs. Tex. =
Gov=E2=80=99t Code=20
Ann. =C2=A7=C2=A7 25.0003(c)(1), 25.1032(a); =
see also Smith v.=20
Clary Corp., 917 S.W.2d 796, 798 (Tex. 1996) (stating general=20
jurisdictional rule, and noting that =E2=80=9Cmany =
exceptions=E2=80=9D exist).
<=
/SPAN>Rapid=20
Settlements=E2=80=99s original petition does not allege that the =
amount in=20
controversy is within the jurisdictional limits of the court. In =
its=20
request for relief, Rapid Settlements asked that the trial court =
=E2=80=9Center=20
judgment confirming the arbitrator=E2=80=99s award as made by the =
arbitrator.=E2=80=9D=20
Rapid Settlements also attached a copy of the arbitration award =
and=20
expressly incorporated it by reference. The language in the =
arbitration=20
award demonstrates that Rapid Settlements=E2=80=99s total damages =
claim involves=20
rights to payments totaling $187,000 plus $500 in arbitration =
fees. This=20
exceeds the $100,000 jurisdictional limit of the trial court. =
See=20
Tex. Gov=E2=80=99t Code =
Ann.=20
=C2=A7=C2=A7 25.0003(c)(1); 25.1032(a). Because the amount =
sought by Rapid=20
Settlements exceeds $100,000, the face of the petition =
affirmatively shows=20
that the trial court did not have subject matter jurisdiction. =
<=
/SPAN>Rapid=20
Settlements contends that the amount in controversy is below the =
$100,000=20
limit of the trial court because: (1) although it sought in excess =
of=20
$100,000, it was required to pay Kaminski for the assignment of =
the right=20
to the future payments; and (2) the disclosure statement that =
Rapid=20
Settlements provided to Kaminski in connection with the transfer =
agreement=20
estimated the current fair market value of the future payments at =
$90,230.=20
We disagree with both contentions. Even after subtracting the =
$13,000 owed=20
to Kaminski pursuant to the arbitrator=E2=80=99s award, the amount =
sought by Rapid=20
Settlements still exceeds $100,000. With respect to Rapid =
Settlements=E2=80=99s=20
valuation argument, we note that Rapid Settlements, the master of =
its=20
pleadings, did not attach the disclosure statement to its =
pleadings or=20
plead damages under a current market value theory. Rather, it =
relied on=20
the arbitrator=E2=80=99s award as grounds for its damages claim, =
and therefore=20
pleaded for an amount beyond the jurisdictional limits of the =
trial court.=20
See United Servs. Auto. Ass=E2=80=99n, 215 S.W.3d at 402 =
(noting that=20
=E2=80=9Camount in controversy is determined by the amount the =
plaintiff seeks to=20
recover=E2=80=9D). Conclusion
=
We reverse the =
trial court=E2=80=99s=20
judgment and=20
render judgment dismissing the cause for lack of subject matter=20
jurisdiction.
=
All=20
pending motions are dismissed as moot.
=
&=
nbsp; &n=
bsp; &nb=
sp; &nbs=
p; Jane=20
Bland
=
&=
nbsp; &n=
bsp; &nb=
sp; &nbs=
p; Justice
Panel consists of =
Chief=20
Justice Radack and Justices Jennings and=20
Bland.
|