author: JAN P. PATTERSON, Justice.

text:
    NUCOR STEEL, a division of Nucor Corporation, Appellant, v. PUBLIC UTILITY COMMISSION OF TEXAS, TXU Electric Company, Texas Industrial Energy Consumers, Steering Committee of Cities Served by TXU Electric Company, and Office of Public Utility Counsel, Appellees.
    No. 03-04-00742-CV.
    Court of Appeals of Texas, Austin.
    June 23, 2005.

      John H. Conway, Brickfield, Burchette, Ritts & Stone, P.C., Washington, DC, Mark C. Davis, John Thomas Wright, Nelson H. Nease, Brickfield, Burchette, Ritts & Stone, P.C., for Nucor Steel.
    David C. Duggins, Clark, Thomas & Winters, PC, Austin, Howard V. Fisher, Hunton & Williams, LLP, Dallas, for TXU Electric Company.
    John R. Hulme, Asst. Atty. Gen., Austin, for Public Utility Commission of Texas.
    Joseph P. Younger, Lino Mendiola, III, Jonathan S. Day, Andrews & Kurth LLP, Austin, for Texas Industrial Energy Consumers.
    Elizabeth Elleson, Office of Public Utility Counsel, Austin, for Office of Public Utility Counsel.
    Steven A. Porter, Lloyd, Gosselink, Blevins, Rochelle, Baldwin & Townsend, PC, Austin, for Steering Committee of Cities Served by TXU Electric Co.
    Before Chief Justice LAW, Justices PATTERSON and PURYEAR.
   OPINION

JAN P. PATTERSON, Justice.

This is an appeal by Nucor Steel of a contested case proceeding, held before the Public Utility Commission, regarding the design of TXU Electric Delivery’s transmission and distribution rates. Nucor, an industrial TXU customer located in a non-municipal area, claims that the rate design ordered by the Commission unfairly imposes charges on non-municipal customers for costs incurred wholly within the municipality. Specifically, Nucor asserts that TXU should not be permitted to pass along its “franchise charges” as part of its base rates for non-municipal customers because those charges are calculated only on sales of electricity to municipal customers. Appellees — the Commission, TXU, the Texas Industrial Energy Consumers, and the Steering Committee of Cities Served by TXU Electric Company — counter that it is reasonable to collect these charges from non-municipal customers because both municipal and non-municipal customers benefit from the purpose served by the franchise charge, which is TXU’s ability to locate its electric lines on municipal streets, alleys, and public rights-of-way in order to provide electric service to all of its customers. Nucor also challenges the Commission’s order on the grounds that it improperly allocates the franchise charges based on the volume of sales, as measured in kilowatt hours, rather than on the sales revenue, as was historically done. Appel-lees contend that it was reasonable to base the allocation on kWh because it tracks the 1999 amendments to the Public Utilities Regulation Act.

Nucor urges this Court to reverse the Commission’s determination that the franchise charges should be allocated based on kWh and collected from all customers (the “spread collection” method), on the grounds that the order was arbitrary and capricious, an abuse of discretion, and a violation of PURA. See Tex. Gov’t Code Ann. § 2001.174(2) (West 2000) (standards for substantial evidence review of contested case); see also Tex. UtiLCode Ann. §§ 33.008 (West Supp.2004-05) (discussing franchise charges), 36.003 (West 1998) (primary section Nucor claims is violated, stating utility’s rates must be “just and reasonable”). Appellees claim that the order should be affirmed because the Commission’s decisions on rate design matters are entitled to deference and the order is supported by substantial evidence. We affirm the judgment of the district court upholding the Commission’s order.

BACKGROUND

In 1999, the Texas Legislature passed Senate Bill 7 to deregulate aspects of the electric utilities industry, making several amendments to PURA. See Act of May 27, 1999, 76th Leg., R.S., ch. 405, 1999 Tex. Gen. Laws 2543. The legislative intent was to increase competition by ending the monopoly historically enjoyed by a limited number of investor-owned utilities. Tex. Util.Code Ann. § 39.001 (West Supp.2004-05). The utilities were “unbundled” into three entities: power generation companies, transmission and distribution utilities, and retail electric providers. Id. § 39.051(b) (West Supp.2004-05). Only the transmission and distribution utilities remained subject to traditional, cost-based regulation after the start of competition in January 2002. Id. § 39.001.

Following the 1999 amendments, TXU applied to the Commission to establish cost-of-service rates for its newly unbundled transmission and distribution utility. See id. § 39.201 (West Supp.2004-05) (requiring utilities to file proposed tariffs, including transmission and distribution utility charges). Nucor Steel and each of the appellees participated in the proceedings, which included a hearing at the State Office of Administrative Hearings, a motion for rehearing to the Commission, and an appeal to the district court.

At issue, here are the rates charged by TXU’s transmission and distribution utility under the 1999 statutory provisions. Pursuant to PURA section 33.008, which was enacted that year, a municipality may impose a “franchise charge” on an electric utility that provides distribution service within the municipality. Id. § 33.008. The term “distribution service” includes utilities that provide both transmission and distribution service, and “service within the municipality” includes utilities that serve customers both within and outside of the municipal borders, but excludes those that serve only non-municipal customers. Id. § 33.008(a)(1) (excluding non-municipal service from imposition of charges), (h) (“In this section, ‘distribution service’ means the delivery of electricity to all retail customers.”). Because TXU is a transmission and distribution utility serving municipal and non-municipal customers, it is subject to the franchise charges set forth in section 33.008. Id.

The purpose of the charge is to reimburse the municipality for a utility’s “use of a municipal street, alley, or public way to deliver electricity to a retail customer.” Id. § 33.008(a). If an electric utility locates its facilities and lines on municipal property then, in exchange, it must pay the municipality a franchise charge. The statute defines the charge as a “reasonable and necessary operating expense of each electric utility” and mandates that it be included in the utility’s “nonbypassable delivery charges” pursuant to section 39.107. Id. § 33.008(c); see also id. § 39.107(d) (West Supp.2004-05) (electric utilities “shall bill a customer’s retail electric provider for nonbypassable delivery charges”).

Section 33.008 specifies how the charge is to be calculated, but it is silent as to the methods by which utilities are to allocate and collect the charges. Id. § 33.008(b). The formula for calculating the franchise charge begins by dividing the “total franchise fee revenue collected by the municipality in 1998” by “the total kilowatt hours of electricity delivered by these utilities to municipal customers in 1998.” Id. This yields the 1998 rate-of-revenue collected by a municipality from a utility, per kilowatt hour of electricity sold by that utility within the municipality. To determine the amount of the franchise charge, this 1998 rate is then multiplied by the total number of kilowatt hours of electricity sold by a utility to its municipal customers during a specified time period. Id. Therefore, while the rate of the franchise charge is derived from the amount of revenues historically collected, the ultimate charge is dependent on the volume of electricity sold within the municipality. As a result, the revenues collected by municipalities from franchise charges do not increase and decrease with the price of electricity; rather, they fluctuate based on the volume of sales, as measured in kWh. See id.

Historically, municipalities were entitled to collect “local gross receipts taxes” (LGRTs) from electric utilities for the same purpose as the franchise charge — the utility’s use of municipal streets and rights-of-way to run its electric lines. See Tex. Tax Code Ann. § 182.025 (West 2002). As implied by its name, the LGRT was historically based on the total amount of gross revenues earned by a utility for the sale of electricity within a municipality; the historical method of allocation was “direct” (allocated only on municipal sales) based on revenues, and the historical method of collection was “spread,” meaning that both municipal and non-municipal customers were responsible for paying their portion of the LGRT.

The legislature was concerned that deregulation would erode the amount of LGRTs collected by municipalities because, in the newly unbundled market, revenues would only accrue on the sale of transmission and distribution services and would no longer accrue on the sale of generation services. To prevent such revenue erosion, the legislature enacted section 33.008, which modified the revenue-based LGRT into a volume-based franchise charge, thereby providing a more stable source of compensation for the municipalities.

In October 2000, an ALJ conducted a contested case hearing. See generally Tex. Gov’t Code Ann. § 2001.051-.062 (West 2000) (rights and procedural rules regarding contested case hearings). One issue addressed during that proceeding was the method by which TXU should allocate and collect the franchise charges imposed on it by municipalities pursuant to section 33.008. See Tex. Util.Code Ann. § 33.008.

Regarding the method of allocation, TXU, TIEC, and the Commission staff recommended that the “direct” method be used, that is, that the charges be allocated only on municipal sales, and that the basis of the allocation be the volume of sales within the municipality, as measured in kWh. They urged that this plan would maintain the historical practice of direct allocation while updating the basis of the allocation — to be based on sales volume, in kWh, rather than on sales revenue — in order to parallel section 33.008’s calculation of the franchise charge. See id. Although Nucor did not dispute that a direct allocation method should be maintained, Nucor did challenge TXU’s proposed basis of the allocation, contending that the franchise charges should continue to be allocated based on sales revenue rather than on kWh. Nucor supported its recommendation by arguing that, because the calculation of franchise charges under section 33.008 is dependent in part on the 1998 revenue data, the historical practice of basing the allocation on revenues should not be altered.

Regarding the method of collection, TXU, TIEC, the Commission staff, and the Cities recommended that the franchise charges be collected from all customers, whether they be municipal or non-municipal residents; this is the “spread” collection method. Nucor, as a non-municipal TXU customer, challenged this proposal and urged that a direct method of collection be used, meaning that only customers residing within the municipal boundaries would be responsible for paying the charge. The two proposals diverge on the issue of whether non-municipal customers benefit from the purpose for which the charge is imposed — TXU’s ability to locate its electric facilities on municipal streets, alleys, and rights-of-way. See id. Arguing that all customers benefit from the integrated electric grid and that, historically, the LGRT was collected from all customers, TXU, TIEC, the Commission Staff, and the Cities supported the spread collection method. Countering that the franchise charge only benefits municipal customers and that it constitutes an improper tax by which non-municipal customers are forced to subsidize municipal projects, Nucor supported the direct collection method. Nucor further argued that the spread collection method violates PURA section 36.003, which requires that utility rates be “just and reasonable,” because it unreasonably discriminates against non-municipal customers. See id. § 36.003.

In March 2001, the ALJ issued a proposal for decision concluding, among other things, that (1) the charges should be allocated using the “direct” method — based on sales within the municipality rather than systemwide sales; (2) given the enactment of section 33.008, the basis of the allocation should be the volume of sales, measured by kWh, rather than the historical method of basing the allocation on the gross sales revenues; and (3) the charges should be collected from all customers, both within and outside of the municipality — the “spread” collection method — because the franchise charge “continues to serve the entirety of the transmission and distribution system, benefits all customers in the system and, consequently, the costs should be shared among all customers through base rates.” The ALJ determined that, pursuant to section 36.003, it is “reasonable, not unreasonably preferential, prejudicial, or discriminatory” for TXU to adopt a direci/spread plan based on an energy allocator. See id.

On October 3, 2001, the Commission issued a final order stating that its goal “is to institute, to the extent possible, a generic rate design that would honor the principles of cost causation, simplicity, and equity to customers.” The Commission determined that the ALJ’s conclusion satisfied this goal and thus adopted the PFD, finding that the franchise charges “should be allocated using a direct allocation and employing the energy allocator ... [and] collected from all customers on TXU’s system.” The Commission agreed with the ALJ’s conclusion that the direct allocation based on kWh and spread collection methods “honors the principles of equity” because the “franchise arrangement serves the entirety of the transmission and distribution system [and] benefits all customers in the system.” Further, the Commission concluded, as a matter of law, that the direct/spread methods comply with PURA sections 33.008 and 36.003. Nucor filed a motion for rehearing and then appealed the Commission’s order to the district court. In October 2004, the district court affirmed the Commission’s order.

ANALYSIS

Nucor appeals to this Court, claiming in a single issue that the final order should be reversed because it was arbitrary and capricious, an abuse of discretion, and a violation of section 36.003 for the Commission to permit TXU to allocate its franchise charges using the direct method based on kWh sales and to collect these charges from municipal and non-municipal customers using the spread method. Because the final order was supported by substantial evidence, we affirm the judgment.

Standard of Review

We review commission proceedings under the substantial evidence rule. Id. § 15.001 (West 1998). That standard affords great deference to the Commission’s decisions on topics that the legislature has determined are within the agency’s discretion, such as rate design. Tex. Gov’t Code Ann. § 2001.174. “PURA generally confers authority upon the PUC to regulate and supervise public utilities, to fix and regulate rates of public utilities, and to insure rates, operations, and services [] are just and reasonable to the consumers and to the utilities.” Public Util. Comm’n v. GTE-Southwest, Inc., 901 S.W.2d 401, 407 (Tex.1995).

Pursuant to the substantial evidence rule, we may not substitute our judgment for that of the Commission and we are to reverse or remand the case only if the Commission’s decision (1) violates a constitutional or statutory provision, (2) exceeds the agency’s authority, (3) was made through unlawful procedure, (4) is affected by another error of law, (5) is not reasonably supported by substantial evidence when considering the reliable and probative evidence in the record as a whole, or (6) is arbitrary or capricious or characterized by an abuse of discretion. Nucor challenges the Commission’s decision on grounds (1), (5), and (6).

To prevail, Nucor bears the burden of overcoming a presumption that the Commission’s findings are supported by substantial evidence. Reliant Energy, Inc. v. Public Util. Comm’n, 153 S.W.3d 174, 184 (Tex.App.-Austin 2004, no pet.). The evidence may actually preponderate against the Commission’s finding and this Court must still uphold it if enough evidence suggests that the Commission’s determination was within the bounds of reasonableness, that is, if substantial evidence supports its determination. Southwestern Pub. Serv. Co. v. Public Util. Comm’n, 962 S.W.2d 207, 215 (Tex.App.-Austin 1998, pet. denied). “The true test is not whether the agency reached the correct conclusion, but whether some reasonable basis exists in the record for the action taken by the agency.” City of El Paso v. Public Util. Comm’n, 883 S.W.2d 179, 185 (Tex.1994). Although the record may contain conflicting evidence, credibility is lent to the Commission’s ultimate resolution of those conflicts when, as here, “the record, evaluated as a whole, reflects a process of discussion, careful consideration, and compromise.” Pedernales Elec. Coop. v. Public Util. Comm’n, 809 S.W.2d 332, 341 (Tex.App.-Austin 1991, no writ).

Rate Design

PURA grants the Commission authority to “establish and regulate rates of an electric utility” and “to do anything ... that is necessary and convenient to the exercise of [its regulatory] power.” Tex. UtilCode Ann. §§ 14.001, 36.001 (West 1998). The Commission has “discretion to determine the method of rate design,” which is “a complex problem that involves many factors.” Texas Alarm & Signal Ass’n v. Public Util. Comm’n, 603 S.W.2d 766, 772 (Tex.1980). The supreme court has rejected the notion that the Commission’s rate design decisions must be based on a precise list of factors; while the Commission must address the rate considerations set forth in PURA, such as section 36.003’s requirement that rates be “just and reasonable,” it has discretion over the particular factors to consider and the weight to be given to those factors. Cities of Abilene v. Public Util. Comm’n, 854 S.W.2d 932, 949 (Tex.App.-Austin 1993), partially rev’d on other grounds, 909 S.W.2d 493 (1995); see also Tex. UtiLCode Ann. § 36.003. Cost is not the only factor that is pertinent to the Commission’s decision; the Commission may also consider the purpose for which the service is received, the quantity received, the time of use, and the consistency and regularity of use, among other factors. Texas Alarm & Signal Ass’n, 603 S.W.2d at 772; see also Public Util. Comm’n v. AT & T Communications, 777 S.W.2d 363, 366 (Tex.1989).

Rate design is the “distribution of the revenue requirements among the various services” provided by the utility. Texas Alarm & Signal Ass’n, 603 S.W.2d at 768 n. 2; see also Michael Little, Rate Design, 28 Baylor L.Rev. 1083 (1976) (discussing overall goals of rate design). The rate design process relies on the Commission’s “informed judgment and expertise and utilizes projections and estimates in virtually all areas.” GTE-Southwest, Inc., 901 S.W.2d at 411; see also Southwestern Pub. Serv. Co., 962 S.W.2d at 214 (logical for Commission to have discretion over rate design based on complexity of issues and procedures). When PURA is silent as to an aspect of rate design, it demonstrates the legislature’s intent to leave that decision within the Commission’s discretion. Reliant Energy, Inc., 153 S.W.3d at 189.

The questions at issue here, which regard the proper methods for TXU to allocate and collect its franchise charges as part of its customers’ base rates, are rate design matters within the Commission’s discretion. Rate design proceedings are frequently characterized by a utility’s filing of a “statement of intent” to change its rates, which is then formally acted on by the Commission. See Southwestern Pub. Serv. Co., 962 S.W.2d at 219; see also Tex. UtiLCode Ann. §§ 33.024, 36.102 (West 1998). As part of deregulation, utilities were required to file “proposed tariff’ documents with the Commission for the purpose of setting new rates. Id. § 39.201. Such filings are akin to statements of intent in that they characterize the proceedings as being for rate design purposes. Furthermore, PURA does not specify the methods by which TXU’s franchise charges should be allocated and collected. See id. § 33.008 (specifying only the method of calculating the charges). Because these issues are rate design matters upon which the statute is silent, the Commission’s conclusions are entitled to great deference.

Direct Allocation Based on kWh

Nucor claims that the franchise charges are “driven by historical revenue sales” and, thus, it is inconsistent with the goal of cost-causation to allocate them based on “present kWh sales.” Instead, Nucor urges, TXU should continue to use “the historical method of allocating franchise charges on the basis of gross revenues derived by TXU.” Appellees counter that the Commission’s decision to allocate the franchise charges based on kWh is supported by substantial evidence.

At the SOAH hearing, TXU’s expert, J. Michael Sherburne, testified that the benefits of basing the allocation on kWh include that “(1) it maintains the existing rate structure, (2) it is consistent with metering facilities available for this type of service, and (3) it eliminates cost shifting due to a change in rate design.” Sherburne urged that the only basis for Nucor’s proposal was that it “would virtually eliminate any allocation of [the charge] to [Nucor].” Sherburne also rebutted Nucor’s proposal by stating that it is “contrary to TXU’s past allocation method ... and is contrary to the clear cost causative factor.” Jeffry Pollock, an expert witness for TIEC, testified that, while he would have preferred that the legislature not have modified the calculation of the charge from being based on revenues to being based on volume (kWh), that change has been made and, thus, the allocation of the charge needs to be uniformly modified; “like it or not, it’s a kilowatt-hour based [charge].” Pollock also testified that the direct allocation based on kWh method is consistent with cost-causation principles.

The record reflects substantial evidence upon which the Commission could determine that the allocation of TXU’s franchise charges should be based on kWh sales. Furthermore, the statute is silent on the proper method of allocation, the Commission’s chosen method parallels the calculation set forth in section 33.008, the Commission has broad discretion over rate design issues, and the record reflects that a “process of discussion, careful consideration, and compromise” occurred here. Given these facts, Nucor has failed to show that the Commission’s order allocating the franchise charges based on kWh was arbitrary and capricious, characterized by an abuse of discretion, or in violation of a statute or constitution. See Ped-ernales Elec. Coop., 809 S.W.2d at 341. Nucor’s challenge to the direct allocation based on kWh is overruled.

Spread Collection

Nucor claims that, because franchise charges are incurred only on municipal sales and non-municipal customers do not benefit from the purpose served by the franchise charge, it was an abuse of discretion and a violation of section 33.006 for the Commission to order that TXU collect its franchise charges from both municipal and non-municipal customers. Nucor’s challenge to the spread collection method is primarily based on its claim that the franchise charge is a “tax” that should not be paid by non-municipal customers who do not benefit from its collection. Nucor claims that, by allowing TXU to collect a portion of the franchise charge from non-municipal customers, the Commission’s order forces non-municipal customers (such as Nucor) to subsidize municipal activities, resulting in “taxation without representation.”

Appellees counter that the franchise charge is not a tax but is, instead, akin to a “rental fee,” which TXU pays in exchange for the ability to locate its electric lines on municipal streets, alleys, and public rights-of-way. Appellees urge that there is substantial evidence in the record to support the Commission’s determination that all customers benefit from the purpose served by the charge and, hence, that all customers should share responsibility for the cost.

Much of the debate over the nature of the charge — whether it is a tax or a rental fee — stems from the use of imprecise nomenclature. Historically, the phrase “local gross receipts tax” was used to describe the money that municipalities could collect from utilities for locating their electric facilities on municipal property. This was set forth in the tax code. See Tex. Tax Code Ann. § 182.025. As of 1999, however, the legislature determined that it was more appropriate to refer to these fees as “franchise charges” and to include them in the utilities code. PURA section 33.008, titled “Franchise Charges,” was therefore enacted, expressly stating that the purpose was “a reasonable charge ... for the use of a municipal street, alley, or public way to deliver electricity to a retail customer” and that the “franchise charges authorized by this section shall be considered a reasonable and necessary operating expense of each electric utility....” Tex. Util. Code Ann. § 33.008(a), (c). Despite this clear legislative expression that the nature of the franchise charge is a fee, not a tax, many parties continued to use the old terminology, referring to the charge as an “LGRT.” But simply calling the charge an LGRT does not make it so. The legislature determined the franchise charge should not be labeled as a tax and should not appear in the tax code because the charge is not imposed like a tax. Utilities only incur the charge in exchange for the use of municipal streets, alleys, and rights-of-way; if a utility does not locate its electric facilities on municipal property, it does not incur the charge. Nucor recognized this: its expert, Dennis W. Goins, testified that “while this assessment is commonly called a tax, the ‘tax’ nomenclature should not disguise the fundamental nature of this fee as a charge for a specific purpose,” and Nucor’s motion for rehearing urged that the “underlying basis for the fee” is “a charge to use city streets and public ways.”

Nucor also relies on City of Houston v. Public Utility Commission to support its claim that the franchise charge is a tax. 656 S.W.2d 107 (Tex.App.-Austin 1983, writ refd n.r.e.). This Court in City of Houston held that there was substantial evidence to affirm a Commission order that determined, in the context of telephone rates, that LGRTs should only be collected from municipal customers because “rural” customers derive no benefits from them. Id. at 108-09. Appellees argue that City of Houston does not support Nucor’s claim. First, the court merely held that the direct collection wag a “reasonable means which the Commission could permissibly adopt” under those circumstances; it did not hold that direct collection was the only appropriate method or that spread collection could never be reasonable. Id. at 110. Here, the appel-lees contend that the statute is silent as to the method of collection, and Nucor has offered nothing to show that the spread method is impermissible. Second, City of Houston pertained to telephone rates. The court noted that it was reasonable to collect the charge from only municipal customers because they were the “predominant users” of the telephone services; the same is not necessarily true with electric utilities because some of the largest industrial customers — such as Nucor — are located outside of the municipal borders. Id. at 111. Finally, the appellees assert that the legislature, by enacting section 38.008 with express language that the franchise charges are “operating expenses,” rejected the “tax” argument advanced in City of Houston.

In addition to rebutting Nucor’s argument that the franchise charge is an “impermissible tax,” the appellees offered evidence to support the spread collection method on the basis that all customers should be responsible for the charges because all customers benefit from their purpose. Section 33.008 expressly states that franchise charges are incurred by TXU to pay for its ability to locate electric lines on municipal streets, alleys, and rights-of-way. Tex. UtiLCode Ann. § 33.008. Sher-burne testified that all customers, whether located within or outside of the municipal borders, benefit from TXU’s ability to locate its facilities in municipal areas because the electricity travels to all customers over an integrated grid and, therefore, all customers should be responsible for a portion of the costs TXU incurs in providing transmission and distribution service over these lines. TIEC and the Cities concurred with Sherburne’s assessment, based on the notion that these lines do not abruptly end at the municipal border; rather, they run continuously from municipal locations to non-municipal areas.

Appellees also urged that simplicity and consistency are important factors to consider in rate design and that the spread collection method serves both of these goals because it applies a uniform policy to all customers and maintains the historical practice of collecting the fees from both municipal and non-municipal customers. Pointing to Docket 5640, Sherburne testified that, since 1984, the Commission has consistently approved these charges “as a system cost because all customers, including [Nucor], receive the benefits of the voltage support, improved power factor, and increased efficiency that the devices provide”; thus, for over twenty years, the franchise charges have been “recovered from all of TXU customers, regardless of whether the customer is located inside or outside of a taxing municipality’s boundaries.” The supreme court stated in Texas Alarm and Signal Association that, when a concept has historically been “widely accepted as a proper pattern for rate design” it “should not be discarded by the Commission without concrete data to support such a change.” 603 S.W.2d at 768. The Cities argued that the Commission cannot alter its historical practice of spread collection without a geographically based eost-of-serviee study, which Nucor failed to provide.

Moreover, the appellees claimed that Nucor’s proposal for a direct collection method would be problematic. Raymond Stanley, an expert for Texas Industries (TXI), testified that the direct collection method would adversely affect municipal customers by shifting costs to them that were historically paid by non-municipal customers. Sherburne testified that Nu-cor’s proposal “is contrary to efforts to create simple, easy to understand charges and billing mechanisms for REPs. For TXU, this suggestion would require approximately 400 different rates, one for each of the cities in which it provides a distribution service. This is obviously not simple, would create confusion and is contrary to the ‘historical precedent’ as stated above.” Nucor’s expert, Goins, acknowledged that the direct collection method would “require identifying each class’ LGRT cost responsibility and developing separate LGRT cost-recovery factors by class for each taxing jurisdiction,” but claimed this was a reasonable approach because it is the one used by Reliant Energy. Sherburne responded that, just because one utility chooses to allocate or collect costs a certain way does not mean that all utilities are bound by that decision. He further testified that, due to the differences in utilities, the Commission has noted that allocation and collection methods should be determined on a utility-specific basis and need not be standardized among utilities.

With these competing views before it, the Commission ultimately determined that TXU’s franchise charges should be collected from all customers because the purpose of the charge — TXU’s ability to locate its electric facilities on municipal property — benefits both municipal and non-municipal customers. The Commission concluded that the spread collection method complied with PURA sections 33.008 and 36.008. We must not substitute our judgment for that of the Commission, and its order should be affirmed if the record demonstrates any reasonable basis for it. City of El Paso, 883 S.W.2d at 185.

The record evidences that the legislature intended the franchise charge to be a rental fee or an operating expense, not a tax, and that all customers derive a benefit from the service for which the charge is imposed. The record also demonstrates that implementing Nucor’s direct-collection proposal would be “problematic,” as found by the Commission, because it would result in different rates based on geography and would substantially deviate from the historical practice of collecting the charges from all customers, both within and outside of the municipality. Thus, substantial evidence exists upon which the Commission could determine that the franchise charges should be collected from all customers, and Nucor failed to demonstrate that the order was characterized by an abuse of discretion, was arbitrary and capricious, or was in violation of a statute or constitution. See Pedernales Elec. Coop., 809 S.W.2d at 341. Nucor’s challenge to the collection method is overruled.

CONCLUSION

The Commission issued a final order adopting the ALJ’s proposal for decision concluding that TXU’s franchise charges should be allocated using the direct method based on kWh and collected using the spread method as part of its base rates from all customers. This order was affirmed by the district court. Because the record demonstrates substantial evidence to uphold the Commission’s determinations on these rate design matters over which the Commission is afforded discretion, we affirm the judgment of the district court.

      . The parties collectively use "TXU” to refer ió TXU's transmission and distribution utility, which is currently named "TXU Electric Delivery,” but was previously known by other names, including "Oncor Electric Delivery Company.”

      . PURA is codified in title 2 of the Texas Utilities Code. Tex. Util.Code Ann. §§ 11.001-63.063 (West 1998 & Supp.2004-05).

      . The statute expressly lists the following as the types of utilities upon which municipalities may impose a franchise charge: electric utilities, transmission and distribution utilities, municipally — owned utilities, and electric cooperatives. In discussing section 33.008, we will refer to these specified utilities generally as "electric utilities.”

      . As a point of clarification, TXU’s franchise charges are initially passed along to retail electric providers (REPs), who then shift the ultimate responsibility for payment to the customers. As one such customer, Nucor challenges the method in which TXU allocates and collects these charges.

      . Section 182.025 was originally codified in 1981 as part of the tax code’s "Subtitle G: Gross Receipts Taxes, Subchapter B: Utility Companies,” stating that "[a]n incorporated city or town may make a reasonable lawful charge for the use of a city street, alley, or public way by a public utility in the course of its business.” See Act of May 31, 1981, 67th Leg., R.S., ch. 389, § 1, 1981 Tex. Gen. Laws 1490, 1716. This section was amended in 1999 as part of Senate Bill 7 to bring it into conformance with the newly-enacted PURA section 33.008. See Act of May 27, 1999, 76th Leg., R.S., ch. 405, § 56, 1999 Tex. Gen. Laws 2543, 2623.

      . Nucor, TXU, TIEC, and the Commission agree on these historical facts and on the legislative intent behind section 33.008.

      . TIEC supported spread collection in the alternative.

      . Nucor acknowledges that the statute is silent on this matter. Nucor’s expert, Dennis W. Goins, testified that “neither Senate Bill 7 nor PURA indicate whether or how LGRT should be allocated to rate classes in unbundled cost-of-service analyses. Moreover, they indicate only that the LGRT charge must be included in nonbypassable delivery charges without specifying the form that an LGRT charge should take — for example, a uniform charge applicable to all customers, [or] a charge applicable only to customers ... within the boundaries of municipalities...."

      . At oral argument, the Cities defined “cost-causation” as “the Commission’s policy of allocating costs in a non-discriminatory manner; the Commission has great discretion in this regard.” At the hearing, a TIEC witness defined it as "dictating] that only those customers whose energy usage determines the amount of the [franchise charge] should be required to pay [it].”

      . Nucor also challenged the spread collection method on the ground that transmission-only customers (such as Nucor) should not be responsible for the franchise charges because section 33.008 states that the charges are to be calculated based on sale of "distribution service.” Given that the statute defines "distribution service” as "the delivery of electricity to all retail customers,” however, Nucor conceded at oral argument that it was included in this definition and therefore abandoned this argument. See Tex. Util.Code. Ann. § 33.008 (West Supp.2004-05).

      . Tex. Pub. Util. Comm’n, Application of Texas Utilities Electric Company for a Rate Increase, Docket No. 5640, 10 Tex. P.U.C. Bull. 659, 853, 1984 WL 274024 (1985) ("All of TUEC's customers are served from an integrated system; thus all customers benefit from the rights of the company to maintain its facilities on municipal property. Furthermore, it is clear that customer confusion and administrative burdens to the company would increase by virtue of [charging different rates based on geography].”).

      . TXI is not an appellee but was a participant below.

      . Beyond such general assertions, nothing in the record establishes the exact collection methods used by Reliant.


source: Caselaw Access Project

author: DAVID PURYEAR, Justice.

license: Public Domain

text:
    Garry ACKERSON, Appellant, v. CLARENDON NATIONAL INSURANCE COMPANY, Appellee.
    No. 03-03-00627-CV.
    Court of Appeals of Texas, Austin.
    June 23, 2005.

      Kelly A. Matthews, R. Douglas Campbell, Matthews & Associates, P.C., San Antonio, for Appellant.
    Dean G. Pappas, Mary M. Markantonis, Dean Pappas & Associates, Houston, for Appellee.
    Before Chief Justice LAW, Justices PATTERSON and PURYEAR.
   OPINION

DAVID PURYEAR, Justice.

Appellant was injured on the job and submitted a claim against appellee, his employer’s insurance carrier, to the Texas Workers’ Compensation Commission (“Commission”). After the Commission granted partial relief, the Commission’s Appeals Panel denied appellant’s request for review, holding that the Commission’s decision had become final by operation of law because appellant had filed his request one day after the fifteen-day appeal deadline expired. The district court affirmed. Appellant argues that the Commission’s general provisions for computing periods of time should extend the five-day deemed receipt provision and delay the start of the fifteen-day appeals period by one day. See 28 Tex. Admin. Code §§ 102.3, 102.5(d) (2005) (Tex. Workers’ Comp. Comm’n). We will reverse the decision below and remand.

SUMMARY OF FACTS

While working as a carpenter at a construction site in February 1999, appellant fell onto scaffolding and was injured. Over the next seven months, he received medical treatment, including medication, surgery, and physical therapy and was either unable to work or restricted to light lifting duties. Although released to full duty on November 1, 1999, appellant continued to experience knee and back pain, possibly aggravated by a subsequent non-work-related fall. He sought additional treatment early the next year.

Appellant disputed the workers’ compensation benefits offered by appellee before the Commission. The Commission mailed its written opinion on Wednesday, August 30, 2000. Appellant filed a request for review on September 20, 2000. The Commission Appeals Panel applied its deemed-received provision to deem the date of appellant’s receipt of the decision as September 4, calculated the fifteen-day time period from that date, and held that appellant’s request, mailed sixteen days after September 4, was one day too late. See Tex. Lab.Code Ann. § 410.202(a) (West 2004) (fifteen-day limit for filing timely request for review); 28 Tex. Admin. Code § 102.5(d) (notice deemed received five days after mailing).

Appellant then filed suit in district court, claiming that because September 4, 2000, was Labor Day, it could not be deemed the receipt date. The district court concluded that, because the Commission’s rule provides that a “working day” is any day, including Labor Day, the fifteen-day period began on September 4, and the request was untimely filed. The court dismissed for lack of jurisdiction. This appeal followed.

DISCUSSION

The only issue on appeal is whether the Commission’s rule excluding weekends and holidays from being the last day of a time period applies to the Commission’s deemed-received provision. See 28 Tex. Admin. Code §§ 102.3(a)-(b) (governing computation of time periods), 102.5(d) (deemed-receipt provision).

Because an examination of an Appeals Panel ruling involves interpretation of an administrative rule, we apply principles of statutory construction and conduct a de novo review. Continental Cas. Co. v. Rivera, 124 S.W.3d 705, 709 (Tex.App.-Austin, 2003, pet.denied). When construing Commission rules, we face two further, competing factors. An administrative agency’s interpretation of its own rules is entitled to great weight and deference; it controls unless plainly erroneous or inconsistent with the agency’s enabling statute. Id. at 710. However, we must liberally construe the Workers’ Compensation Act in favor of the injured worker; thus, a strained or narrow construction is improper. Kroger Co. v. Keng, 23 S.W.3d 347, 349 (Tex.2000).

The Commission has adopted a general rule for computing due dates and time periods. See Tex. Lab.Code Ann. § 402.061 (West 1996) (Commission has authority to “adopt rules as necessary for the implementation and enforcement of’ Act); 28 Tex. Admin. Code § 102.3 (general rule for computing due dates and time periods). Principles of statutory construction require that we discern the drafters’ intent from the language of the provision, if possible. See Fleming Foods of Tex., Inc. v. Rylander, 6 S.W.3d 278, 284 (Tex.1999).

The scheme that the Commission uses to calculate time and receipt is clear from its language: a party requesting that the Commission review a decision has fifteen days from the date of receipt of the decision in which to respond. Tex. Lab.Code Ann. § 410.202(a). “For purposes of determining the date of receipt for those written communications sent by the Commission which require the recipient to perform an action by a specific date after receipt, ... the Commission shall deem the received date to be five days after the date mailed.... ” 28 Tex. Admin. Code § 102.5(d) (2004). In counting the five days, the deemed-receipt provision refers to calendar days, because “[u]se in this title of the term ‘day,’ rather than ‘working day’ shall mean a calendar day.” Id. § 102.3(b). However, in determining the last day of the period, “unless otherwise specified, if the last day of any period is not a working day, the period is extended to include the next day that is a working day.” Id. § 102.3(a)(3). Contrary to the district court’s conclusion, “[a] working day is any day, Monday-Friday, other than a national holiday as defined by Texas Government Code, § 662.003(a)” and a few other holidays. Id. § 102.3(b). Under the government code, the first Monday in September, Labor Day, is a national holiday. Tex. Gov’t Code Ann. § 662.003(6) (West 2004). Therefore, because the last day of this period — September 4, 2000, Labor Day — was not a working day, the period was extended to include the next day that was a working day, Tuesday, September 5. 28 Tex. Admin. Code § 102.3(a)(3).

Therefore, when appellant mailed his request for review on September 20, 2000, he was still within the statutorily-provided appeals period. The Appeals Panel and district court erred in holding that the original Commission decision was final by operation of law and in denying appellant’s request for review.

Appellee argues that appellant waived his sole point of error by not supporting it with argument and authority because he offers only statutory interpretation with no relevant cases to back it up. We disagree. Appellant offers argument and authority supporting a clear interpretation and refers us to all necessary statutes and regulations and a Texas Supreme Court decision that mandates liberal construction. Appellee further argues several counter-interpretations: (1) that the deemed-received provision’s use of “days” rather than “working days” requires a strict calendar-day counting; (2) that the Commission intended for the deemed-received provision to count calendar days, as shown by the Commission’s use of “first working day” elsewhere in the same rule and not in the deemed-received provision, see 28 Tex. Admin. Code § 102.5(d); (3) that the general rule for counting a period of days does not apply because the fifth day is not the end of a time period but rather the beginning of the fifteen day appeal period; and (4) that the fifth day need not roll over to a working day because no action is required between the date mailed and the date received. Each of these interpretations forces a strained or narrow reading; thus, we are unpersuaded in light of the mandate favoring liberal construction in favor of the injured worker. See Keng, 23 S.W.3d at 349.

CONCLUSION

The Appeals Panel and district court erred in not properly applying the general rule for computing time periods to the five-day deemed-received provision. Appellant’s request for review was timely filed. We reverse and remand to the district court for proceedings consistent with this opinion.

      . This statute was amended in 2001 to exclude Saturdays, Sundays, and holidays listed in section 662.003 of the Government Code when computing the fifteen-day appeals filing period. Tex. Lab.Code Ann. § 410.202(d) (West Supp.2004-05). This change does not affect our analysis or holding here regarding when the fifteen-day period begins.

      . Our interpretation of the deemed-received provision does not contradict the holdings of the three Appeals Panel decisions appellee cites. These decisions assert that the five-day deemed receipt, rather than the date of actual receipt (unless the great weight of the evidence indicates otherwise), establishes the beginning of the fifteen-day appeals period. Tex. Work. Comp. Comm'n, Appeal No. 001469, 2000 WL 33155955, at ⅜1 (Aug. 10, 2000); Tex. Work. Comp. Comm’n, Appeal No. 001646, 2000 WL 33159008, at *1 (Aug. 18, 2000); Tex. Work. Comp. Comm’n, Appeal No. 012254, 2001 WL 1510756, at ⅜1 (Nov. 13, 2001). That proposition still holds true. Because the fifth day did not fall on a weekend or holiday in any of those decisions, the method for counting the five-day period was never addressed. Even the Appeals Panel decision in the instant case looked at the dates without considering whether they were working days. Tex. Work. Comp. Comm'n, Appeal No. 002208, 2000 WL 33124289, at *1 (Nov. 2, 2000).


author: ONEILL, Justice.

text:
    Gary Paul YOUNG, Appellant, v. Pamela Jane YOUNG, Appellee.
    No. 05-04-00388-CV.
    Court of Appeals of Texas, Dallas.
    June 24, 2005.

      James D. Blume, Joshua H. Northam, Jennifer S. Stoddard, Kevin Wayne Vance, Blume & Stoddard, Dallas, for Appellant.
    Benjamin Baker, Benjamin A. Baker, P.C., Sherman, for Appellee.
    Before Justices BRIDGES, O’NEILL, and FITZGERALD.
   OPINION

ONEILL, Justice.

Gary Paul Young (Husband) appeals from the trial court’s divorce decree. In three points of error, Husband contends the trial court erred in: (1) characterizing certain assets as community that he claims are his separate property; (2) assessing the value of certain assets; and (3) awarding Wife certain equitable liens. We sustain Husband’s third point of error to the extent he contends the trial court erred in imposing an owelty of partition on partnership property. We reform the trial court’s judgment to delete the owelty of partition provision. In all other respects, we affirm the trial court’s judgment.

Background

Husband and Wife were married, on June 28, 1994. Approximately seven years later, Wife filed for divorce. Prior to the marriage, Husband had formed DAX Enterprises, Inc. During the marriage, Husband and Wife entered into various business ventures. The source of the investment funds used in forming these businesses was contested at trial. Several assets that Husband claimed were his separate property were also in dispute.

Following trial, the trial court orally rendered judgment. Wife filed a motion for reconsideration. The trial court granted Wife’s motion and the parties presented additional testimony as to the value of certain assets. The trial court signed a final judgment on January 7, 2004. The trial court rendered judgment that DAX was the alter ego of Husband. In addition to dividing the property, the trial court awarded Wife a money judgment and placed liens on community property awarded to Husband to secure that judgment. The trial court made findings of fact and conclusions of law. This appeal timely followed.

Standard of Review

Findings of fact in a case tried to the court have the same force and effect as jury findings. See Gregory v. Sunbelt Sav., F.S.B., 835 S.W.2d 155, 158 (Tex. App.-Dallas 1992, writ denied). We review a trial court’s fact findings by the same standards we use to review the sufficiency of the evidence to support a jury’s findings. See Zieben v. Platt, 786 S.W.2d 797, 799 (Tex.App.-Houston [14th DistJ 1990, no writ).

When we review the findings for legal sufficiency, we consider only the evidence and inferences tending to support the finding and disregard all the evidence and inferences to the contrary. See Burroughs Wellcome Co. v. Crye, 907 S.W.2d 497, 499 (Tex.1995). We uphold the finding if it is supported by more than a scintilla of evidence. Id. When reviewing findings of fact for factual sufficiency, we consider and weigh all of the evidence and set aside the finding only if it is so contrary to the overwhelming weight of the evidence as to be clearly wrong and unjust. See Cain v. Bain, 709 S.W.2d 175, 176 (Tex.1986) (per curiam). In a bench trial, it is for the court, as trier of fact, to judge the witnesses, to assign the weight to be given their testimony, and to resolve any conflicts or inconsistencies in the testimony. LaCroix v. Simpson, 148 S.W.3d 731, 784 (Tex.App.-Dallas 2004, no pet.).

We review challenges to a trial court’s conclusions of law as a matter of law. Boyd v. Diversified Fin. Sys., 1 S.W.3d 888, 890 (Tex.App.-Dallas 1999, no pet.). When a party challenges conclusions of law on appeal, we independently evaluate those conclusions with limited deference to the trial court’s application of the law to the facts. Id. at 890-91. The trial court abuses its discretion when it fails to apply the law correctly. Id. at 891.

Characterization

In his first point of error, Husband contends the trial court erred in characterizing six items as community assets. He contends these assets are his separate property.

Property owned before marriage or acquired during marriage by gift, devise, or descent, is separate property. TEX. FAM. CODE ANN. § 3.001 (Vernon 1998). Community property consists of all property, other than separate property, acquired by either spouse during marriage. TEX. FAM. CODE ANN. § 3.002 (Vernon 1998). All property on hand at the dissolution of marriage is presumed to be community property. TEX. FAM. CODE ANN. § 3.003(a) (Vernon 1998). It is a rebuttable presumption, requiring a spouse claiming assets as separate property to establish the separate character by clear and convincing evidence. TEX. FAM. CODE ANN. § 3.003(b) (Vernon 1998). A trial court is charged with dividing the community estate in a “just and right” manner, considering the rights of both parties. TEX. FAM. CODE ANN. § 7.001 (Vernon 1998).

1. DAX Enterprises, Inc.

Husband contends the trial court erred in its finding that DAX Enterprises, Inc. was his alter ego. DAX was Husband’s separate property because he owned it prior to the marriage. See TEX. FAM. CODE ANN. § 3.001 (Vernon 1998).

Under certain circumstances, a spouse may be able to reach the assets of the other spouse’s separately owned corporation. A finding of alter ego allows piercing of the corporate veil. Piercing the corporate veil, in turn, allows the trial court to characterize as community property assets that would otherwise be the separate property of a spouse. Lifshutz v. Lifshutz, 61 S.W.3d 511, 516 (Tex.App.-San Antonio 2001, pet. denied). In the divorce context, piercing the corporate veil allows the trial court to achieve an equitable result. Id.

In a divorce case, a finding of alter ego sufficient to justify piercing the corporate veil requires: (1) unity between the separate property corporation and the spouse such that the separateness has ceased to exist; and (2) the spouse’s improper use of the corporation damaged the community estate beyond that which might be remedied by a claim for reimbursement. Lifshutz v. Lifshutz, 61 S.W.3d at 517. In Lifshutz, the trial court pierced the corporate veil of the husband’s corporation. The appeals court reversed. Although there was some evidence of unity between the corporation’s and the husband’s finances, the court held there was no evidence that the husband’s misuse and dominance of the corporation resulted in a transfer of community property to the corporation. Lifshutz, 61 S.W.3d at 517-18.

In another case, the appellate court held the trial court’s conclusion that the husband’s corporation was not his alter was against the great weight and preponderance of the evidence. See Zisblatt v. Zisblatt, 693 S.W.2d 944, 955 (Tex.App.Fort Worth 1985, writ dism’d). In Zis-blatt, the husband had a separately owned corporation. The home purchased by the couple was in the corporation’s name. The furniture in the couple’s home was paid for and owned by the corporation. Id. at 947. The husband’s income came from the corporation. He deposited his earned income into the corporate account. Id. at 955. In finding the husband’s management of his separately owned corporation to constitute a fraud on the community, the court stated, “to uphold the fiction of [the corporation] as an entity separate from [the husband] would be a clear and material prejudice to the rights of [the wife] and the community estate and an evasion of an existing legal obligation of [the husband] to devote his time, talent, and industry to the community.” Id.

Turning now to the facts of this case, the first requirement for piercing the corporate veil is unity between the spouse and the corporation. Husband was the sole employee of DAX. He alone was in charge of the day-to-day finances of the corporation. Wife put her income into the parties’ personal account. Instead of doing the same, Husband kept his income in the DAX account. Wife testified that Husband routinely used the DAX account to pay personal expenses. Husband admitted to this practice. He argues, however, that such expenditures benefited the community estate. To the extent these personal expenses were community debts, the community did benefit. Husband, however, paid many debts for which he alone was responsible. He used the DAX account to pay for the daycare expenses for his daughter from a former marriage and make car payments and payments on a house he owned individually. Roger Johnson, a business partner of the Youngs testified that, in his opinion, Husband and DAX were one in the same. We conclude the evidence establishes a unity between Husband and DAX.

We turn now to the second requirement that the spouse’s misuse of the corporation damaged the community estate. From 1995 through 2000, DAX’s gross earnings amounted to $992,000. During this five-year period, Husband reported officer income of $40,000, officer loans of $31,260, and personal checks from the DAX account of $145,000. Near the time of the marriage the parties agreed to purchase á house. Husband told Wife the house would be in both of their names. Husband instead put the house in the corporation’s name. Testimony at trial showed that many charges had been made on the DAX credit cards from locations where DAX had previously done work. However, Husband claimed that he had not been working during this time and that there were no invoices to produce showing income to DAX.

According to corporate records, there is a substantial amount of money unaccounted for. Husband’s practice of commingling his income with that of the corporation supports the trial court’s fraud finding. During the course of the marriage, Husband dedicated most of his time and talent to DAX. Essentially, the benefit received by the community from Husband’s time and talent was the payment of some of its expenses. Labeling the vast majority of income as belonging to DAX, was an effective tool to enhance his separate property. Like the husband in Zisblatt, Husband placed many community assets in the corporation’s name. Husband also paid himself a relatively small salary in relation to the income received by DAX. Moreover, he put his earned income, a community asset, right back into DAX.

We conclude the evidence in this case reveals Husband misused DAX to the extent it damaged the community estate. The evidence supports the trial court’s finding that DAX was the alter ego of Husband.

2. 69 RV & Self Storage

Husband contends the trial court miseharacterized the interest in the 69 RV partnership as community property. He asserts 69 RV is his separate property because it was purchased with separate funds.

Without evidence of tracing the funds, testimony that property was purchased with separate funds, is insufficient to rebut the community presumption. Boyd v. Boyd, 131 S.W.3d 605, 612 (Tex.App.-Fort Worth 2004, no pet.). In Boyd, the husband sought economic contribution alleging that he used separate funds to reduce the mortgage on a home purchased during the marriage. He testified the money used to reduce the mortgage came from the sale of another house that was his separate property. Id. at 613-14. In holding the evidence insufficient to rebut the community presumption, the court stated, “the trial court was left to surmise or speculate, based on [the husband’s] testimony alone, that the proceeds from the sale of [the husband’s] separate property were the source of funds that created his claim for economic contribution.” Id. at 616-17. Several courts have held that testimony without any documentary evidence to trace the funds is insufficient to overcome the community presumption. See Osomo v. Osomo, 76 S.W.3d 509, 512 (Tex.App.-Houston [14th Dist.] 2002, no pet.) (husband’s testimony insufficient without deposit slips or bank records tracing the source of the funds); Robles v. Robles, 965 S.W.2d 605, 616 (Tex.App.-Houston [1st Dist.] 1998, pet. denied) (op. on reh’g) (husband’s testimony insufficient to rebut community presumption without documentary evidence to trace the funds used to purchase the property).

The 69 RV property was purchased during the marriage and, therefore, the community presumption applies. Husband contends the money used to purchase 69 RV came from his retirement money he had in three CD accounts. The three CDs were in the amounts of $30,000, $10,000, and $5,000. He contends he deposited the retirement money into the DAX account. He then wire-transferred the money for closing on the property from the DAX account. Husband had no documentation of the transfer of the CD money into the DAX account and he could not recall the dates.

In this case, Husband testified that at some point he cashed in three CDs and put the money into the DAX account. He alleged that he then wire-transferred $42,000 to cover the down payment on the 69 RV property. He provided no documentary evidence to substantiate his claim. Wife, on the other hand, presented documentary evidence showing that $30,000 was deposited into the DAX account. She also showed that subsequent to that deposit, the DAX account had a negative balance. Documents introduced also showed that between the time that the DAX account had a negative balance and the time of the wire-transfer of the down payment on the 69 RV property, the only money deposited into the DAX account were payments for work completed by DAX. Husband presented no documentary evidence to support his claim that separate funds were used to pay the down payment on the 69 RV property. Wife, however, presented documentary evidence establishing that the down payment was paid with community funds. Husband failed to establish 69 RV as his separate property and, accordingly, the trial court did not err in characterizing it as community property.

3. Sun Shak Tans

Husband also contends the trial court erred in characterizing Sun Shak Tans as community property. Sun Shak Tans was acquired during the marriage. Husband testified the money for Sun Shak Tans came from the sale of a home he owned prior to the marriage. That money, however, did not go directly into Sun Shak Tans. Husband testified he used $100,000 from that sale to fund a car wash business between he and Wife and another couple, the Johnsons, in 1997. Mr. Johnson testified, however, that he understood that the $100,000 came out of the DAX account. Later that year, the Johnsons bought out the Young’s interest in the car wash for $100,000, the amount of their initial investment. Husband contends the $100,000 the couple received in the buy-out of their investment was the same $100,000 of separate funds he initially invested. The Youngs used most of the $100,000 for living expenses. Husband says with the remainder of the money, $12,000 was used to purchase the assets of Sun Shak Tans.

Like his testimony regarding the 69 RV property, Husband’s testimony on Sun Shak Tans is insufficient to overcome the community presumption. Again, he provides no documentary evidence tracing the funds. Essentially, Husband’s evidence tracing the funds was as follows: (1) he sold separate property (amount of sale not known); (2) he and Wife used $100,000 from the sale to invest in a business with another couple; (3) months later, their business partners bought out their interest in the business for $100,000; and (4) he and Wife lived off that money and used $12,000 of it to buy the assets of Sun Shak Tans. This evidence is insufficient to trace the proceeds from the sale of Husband’s separate property to the purchase of the assets of Sun Shak Tans several years later.

3. 1987 Chris Craft Boat

Husband contends the trial court erred in characterizing the 1987 Chris Craft boat as community property because he contends he purchased it prior to the marriage. At trial, Husband testified that he “vaguely remembered we had it when we got married” and “I believe I had that before we were married.” Wife, on the other hand, testified unequivocally that Husband bought the boat from his friend after they were married. The trial court resolved this conflicting testimony in favor of Wife. See LaCroix, 148 S.W.3d at 734. Accordingly, the trial court did not err in characterizing the 1987 Chris Craft boat as community property.

5. Boat Slip/Condominium

Husband contends the boat slip and condominium (collectively “boat slip”) are his separate property because he had the lease on the boat slip since 1988 when he purchased the boat. He testified that he believed he signed a lease that automatically renewed from year to year. He did not produce a copy of the lease. Following the marriage, the Youngs paid the lease payments from both the DAX account and them personal account.

Depending upon the language in the lease, a holdover tenancy may be a new tenancy rather than a continuation of the original lease. Bockelmann v. Marynick, 788 S.W.2d 569, 571 (Tex.1990). In Bockelmann, a husband and wife leased a duplex. Prior to the lease’s expiration, the wife moved out of the duplex. The husband continued to occupy the duplex after the lease expired and became delinquent on the rent. The lessors sued both the husband and wife for the unpaid rent. The trial court found the husband liable but not the wife. The court of appeals held the husband and wife were liable for the unpaid rent because her joint obligation under the lease continued through her husband’s holdover period. Id. at 571. The supreme court, looking to the language of the lease, reversed. The lease in Bockelmann provided that if a tenant remained in possession of the leased premises after the lease expired, “a new tenancy from year to year shall be created ...” Id. at 570. The supreme court held that the wife was not liable for the unpaid rent because she was not a tenant when the holdover term began and the new tenancy was created. Id. at 572.

If the boat slip lease provides that a holdover tenancy creates a new tenancy, then the leasehold interest would have been acquired during the marriage and, therefore, constitutes community property. It was Husband’s burden to establish by clear and convincing evidence that the boat slip was his separate property. Husband did not produce a copy of the lease. Because the lease’s language is controlling, Husband failed to establish the boat slip as his separate property.

We overrule Husband’s first point of error.

Property Division

In his second point of error, Husband asserts the trial court failed to make a just and right property division because it: (1) improperly characterized certain assets as community; (2) assessed improper values to certain assets; and (3) ordered Husband liable for their federal income tax liabilities. We have all ready concluded that the trial court properly characterized the assets of the parties. Thus, the trial court’s characterization of property cannot support Husband’s claim of an unjust property division.

Husband also asserts the property division is unjust because the trial court erred in assessing the value of certain properties. Specifically, Husband contends the trial court erred in assessing the value of 69 RV and Sun Shak Tans.

In reviewing the trial court’s valuation of a particular asset, we must first consider whether the trial court had sufficient evidence to support its valuation. Naguib v. Naguib, 137 S.W.3d 367, 374 (Tex.App.-Dallas 2004, pet. denied). If we determine the trial court’s valuation was erroneous, we must then determine whether the trial court abused its discretion in dividing the estate. Naguib, 137 S.W.3d at 374. A property owner may testify as to fair market value if his testimony reveals that he is familiar with the market value of the property. Redman Homes, Inc. v. Ivy, 920 S.W.2d 664, 669 (Tex.1996).

The trial court found the fan market value of the community interest in the 69 RV partnership was $175,000. At trial, Wife presented the expert testimony of real estate appraiser James Edward Jacobs. Jacobs appraised the 69 RV and assessed its value at $350,000. Husband’s evidence of the 69 RVs value at trial consisted of his own testimony and that of Tim Armstrong, the other partner in 69 RV. Husband valued the property at $200,000. Armstrong valued 69 RV between $200,000 and $250,000.

At the hearing on the motion to reconsider, appraisals obtained by Husband were introduced into evidence. Larry Long appraised the 69 RV property and valued it at $260,000. Long’s appraisal did not include, at Husband’s request, sixteen completed storage units. Wife had her expert, Jacobs, prepare a supplemental report to add the value of the additional sixteen storage units to Long’s appraisal. Jacobs’s supplemental report suggested Long’s appraised value would have been $296,000 with the inclusion of the additional units.

The trial court assessed the value of 69 RV in accordance with the appraisal prepared by Wife’s expert witness. The appraisal prepared by Husband’s expert witness failed to include certain improvements to the property. We conclude the trial court had sufficient evidence to support its assessed value of 69.

As to Sun Shak Tans, the trial court found its fair market value to be $20,000. Wife testified at trial that Sun Shak Tans was worth approximately $17,000 to $18,000. She testified that two other tanning salons in the area had recently sold for $37,500 and $40,000. Husband, on the other hand, valued the salon at approximately $180,000.

At the hearing on Wife’s motion for rehearing, Joan Summers’s appraisal was introduced into evidence. She prepared the appraisal for Husband. She assessed the value of Sun Shak Tans at $130,000.

The testimony as to the value of Sun Shak Tans varied greatly. There is evidence that does support the trial court’s assessment. Accordingly, we conclude the trial court did not err in its value assessments of 69 RV and Sun Shak Tans.

Husband also contends the trial court erred in ordering him responsible for the parties federal income tax liabilities during the marriage. The parties’ liabilities are factors to be considered in making a just and right division. Finn v. Finn, 658 S.W.2d 735, 748 (Tex.App.Dallas 1983, writ ref'd n.r.e.). A divorce court has au thority and discretion to impose the entire tax liability of the parties on one spouse. Benedict v. Benedict, 542 S.W.2d 692, 698 (Tex.Civ.App. — Fort Worth 1976, writ dism’d). In this case, it is undisputed that DAX had a substantial amount of unreported income. In light of the manner in which Husband managed DAX and controlled its finances, we conclude the trial court did not err in placing responsibility for the parties’ income tax liability on Husband.

Liens

In his last point of error, Husband contends the trial court erred in placing liens on certain assets to secure the money judgment to Wife.

A trial court may impose an equitable lien against community property to secure one spouse’s obligation to pay a monetary award that represents the consideration for the other spouse’s relinquishment of his or her interest in the marital estate. Magallanez v. Magallanez, 911 S.W.2d 91, 94 (Tex.App.-El Paso 1995, no writ). The trial court awarded Wife an equitable lien in certain community assets that the trial court awarded to Husband. The purpose of the lien was to secure the money judgment awarded to Wife. We conclude the trial court did not err in placing a lien on assets it found to belong to the community.

Husband also contends the trial court erred in placing an owelty of partition on the entire 69 RV property. We agree.

Partnership property is owned by the partnership itself and not by the individual partners. Marshall v. Marshall, 735 S.W.2d 587, 595 (Tex.App.—Dallas 1987, writ ref d n.r.e.). A partner’s partnership interest, the right to receive his share of the profits and surpluses from the business, is the only property right a partner has that is subject to a community or separate property characterization. Id.

The trial court found that 69 RV was partnership property. The trial court awarded the community interest in 69 RV to Husband. Accordingly, Husband owns one-half of the partnership and Tim Armstrong owns the other half. Because 69 RV belongs to the partnership, the trial court erred when it placed an owelty of partition against the entirety of the partnership property.

Husband also complains of the judgment ordering him to pay the money judgment within seven days. He contends the trial court erred because this payment provision in the judgment conflicted with the trial court’s oral rendition that the judgment be paid within thirty days.

Wife contends this issue is moot because the case has proceeded far beyond the thirty-day period Husband contends the trial court should have provided for in the judgment. The mootness doctrine dictates that courts avoid rendering advisory opinions by only deciding issues that present a “live” controversy at the time of the decision. Camarena v. Texas Employment Comm’n, 754 S.W.2d 149, 151 (Tex.1988). An issue becomes moot when: (1) it appears that one seeks to obtain a judgment on some controversy, when in reality none exists; or (2) when one seeks a judgment on some matter which, when rendered for any reason, cannot have any practical legal effect on a then-existing controversy. Texas Health Care Info. Council v. Seton Health Plan, Inc., 94 S.W.3d 841, 846-47 (Tex.App.-Austin 2002, pet. denied). Husband’s request for a thirty-day time period is no longer a live controversy because that time period has passed. Reforming the trial court’s judgment to order payment within thirty days would have no practical legal effect. We conclude this issue is moot.

Finally, Husband contends the trial court erred in ordering him to pay all court costs. He argues that rule 131 which allows for a successful party to a lawsuit to recover court costs is inapplicable to divorce actions. See TEX. R. CIV. P. 131. Regardless of the applicability of rule 131, the family code provides that in a divorce suit, the trial may award costs to a party as it considers reasonable. See TEX. FAM. CODE ANN. § 6.708(a) (Vernon 1998). Accordingly, the trial court did not err in ordering Husband to pay court costs.

We sustain Husband’s third point of error to the extent he complains of the owelty of partition against the partnership property.

We reform the trial court’s judgment to delete the award of the owelty of partition. In all other respects, we affirm the trial court’s judgment.

      . In his brief, Husband asserts the trial court valued Sun Shak Tans at $115,000. In finding of fact 21, however, the trial court states, "The fair market value of the sole proprietorship known as Sun Shak Tans is $20,000”.


author: Justice WRIGHT.

text:
    Karen Brock MURPHY, Amelia Brock Banner, and Jody Brock Irwin, Individually and as Co-independent Executors of the Estate of Doris Berglund Brock, Deceased and as Co-trustees of The Joe & Doris Brock Family Trust and The Brock Children’s Trust, and MBI Management Company, Inc., as General Partner of MBI Investments, Ltd. and MBI Resources, Ltd., Appellants, v. MULLIN, HOARD & BROWN, L.L.P., John F. Howell, III, John M. Brown, Cowles & Thompson, P.C., Kane, Russell, Coleman & Logan, P.C., and William E. Elliott, Appellees.
    No. 05-04-00433-CV.
    Court of Appeals of Texas, Dallas.
    June 30, 2005.

      George Whittenburg, "Whittenburg Whittenburg Schachter & Haras, P.C., C. Jared Knight, Amarillo, for appellants.
    Robert F. Begert, Joann N. Wilkins, Burford & Ryburn, L.L.P., Alan S. Loew-insohn, Loewinsohn & Flegle, L.L.P., Dallas, for appellees.
    Before Justices WRIGHT, MOSELEY, and LANG.
   OPINION

Opinion by

Justice WRIGHT.

In this legal malpractice case, appellants appeal the trial court’s take nothing summary judgment in favor of appellees. In five issues, appellants generally contend the trial court erred by granting appellees’ motions for summary judgment because it (1) improperly applied the discovery rule, (2) failed to apply the Hughes tolling rule, (3) erred in concluding limitations had run as to Kane, Russell, Coleman & Logan (KRCL) and William Elliott because, even assuming the trial court correctly applied the discovery and Hughes rules, KRCL and Elliott committed malpractice and breached their fiduciary duty to appellants within the limitations period, and (4) failed to grant appellants’ motion for continuance. We overrule appellants’ issues and affirm the trial court’s judgment.

Background

In 1994, appellants and their mother, Doris Brock, retained Mullin, Hoard, & Brown, L.L.P. (MHB), John F. Howell, III, and John M. Brown to draft agreements to form two family limited partnerships in an effort to reduce their estate and inheritance tax liability. MHB, Howell, and Brown drafted agreements that formed MBI Investments, Ltd. and MBI Resources, Ltd., with MBI Management Company, Inc. being the general partner for both entities. After Doris Brock died, appellants consulted with Jerry C. Wilson, an accountant and the accounting firm of Chambless, Wilson, & Ruff, as well as Elliott, Cowles & Thompson, and KRCL regarding the preparation and filing of the estate tax return.

On September 3, 1997, John Connell, an Internal Revenue Service attorney, sent a letter to Wilson stating that it could not agree with the valuations of the family limited partnerships as stated in the tax return. The letter contained six reasons why it did not agree to the valuations, including that “control exercised by the decedent over the assets did not change as a result of the formation of the partnerships [and] the decedent continued to make all decisions regarding the assets .... ” On June 25, 1998, the IRS served appellants with a notice of deficiency regarding the estate. According to the IRS, the taxable estate was significantly increased in value, resulting in a tax deficiency of $3,388,233.

In August 1998, Elliott wrote a memorandum advising appellants of the IRS’s position that the family limited partnerships should be disregarded. In September 1998, Karen Brock Murphy filed a petition in tax court. That case was handled by William R. Cousins, III. The tax case settled and on July 28, 2000, a judgment was entered on the settlement.

Appellants filed this suit on March 7, 2002, alleging appellees negligently drafted or reviewed the family limited partnership agreements and failed to timely notify appellants of the defects in the agreements. MHB, Howell, and Brown filed a motion for summary judgment, contending appellants’ claims against them were barred by limitations. Likewise, Cowles & Thompson and KRCL and Elliott filed motions for summary judgment based on limitations. Appellants responded to these motions arguing the discovery rule applied and their claims were not barred by limitations because nothing in the September 3, 1997 Connell letter, the IRS notice of deficiency, or the Elliott memorandum would have put a reasonably prudent, non-lawyer taxpayer on notice of her claims. According to appellants, their claims did not ac-erue until early May 2000, when Cousins informed appellants of the defects in the family limited partnership agreements. Appellants also argued that their claims were tolled under the Hughes rule until July 28, 2000 when their tax case was resolved.

After considering the motions, appellants’ response, and the summary judgment evidence, the trial court granted the motions for summary judgment and entered a take-nothing judgment on appellants’ claims. This appeal followed.

Discussion

We review motions for summary judgment using well-known standards. See Nixon v. Mr. Prop. Mgmt. Co., 690 S.W.2d 546, 548-49 (Tex.1985). When, as here, a defendant moves for summary judgment based on the affirmative defense of limitations, the defendant assumes the burden of showing as a matter of law that the suit is barred by limitations. Rogers v. Ricane Enters., Inc., 772 S.W.2d 76, 80-81 (Tex.1989); Parsons v. Turley, 109 S.W.3d 804, 807 (Tex.App.-Dallas 2003, pet. denied) (op. on remand). The defendant must (1) conclusively prove when the cause of action accrued, and (2) if raised, negate the discovery rule, by proving there is no genuine issue of material fact about when the plaintiff discovered, or in the exercise of reasonable diligence, should have discovered the nature of its injury. Burns v. Thomas, 786 S.W.2d 266, 267 (Tex.1990). In addition to the discovery rule delaying accrual of the cause of action, the Hughes rule provides that, in certain types of legal malpractice actions, the statute of limitations may be tolled until the malpractice litigation is final. Apex Towing Co. v. Tolin, 41 S.W.3d 118, 119 (Tex.2001). As with the discovery rule, the defendant moving for summary judgment bears the burden of showing that the Hughes rule has not tolled limitations. See Nunez v. Caldarola, 56 S.W.3d 812, 815 (Tex.App.Corpus Christi 2001, no pet.).

As a legal malpractice action, appellants’ suit has a two-year statute of limitations. Apex, 41 S.W.3d at 120. In this case, there is no dispute that appellants filed suit more than two years after (1) the family limited partnerships were formed, (2) the estate taxes were filed, and (3) the notice of deficiency from the IRS was given. We must determine whether, as appellants claim, the discovery rule delayed accrual of appellants’ malpractice claims, and whether the Hughes rule operated to toll limitations. We begin with the first of these determinations, i.e., whether the discovery rule operated to delay accrual of appellants’ malpractice claims to within two years of the date they filed suit. After reviewing the record in this case, we conclude it did not.

A person suffers injury from faulty professional advice when the advice is taken. Murphy v. Campbell, 964 S.W.2d 265, 271 (Tex.1997). Because it is unrealistic to expect a lay client to have the legal acumen to perceive the negligence of his attorney in giving faulty tax advice, and because the injury flowing from faulty tax advice is objectively verifiable, the discovery rule applies and such a claim accrues when the claimant knows or in the exercise of ordinary diligence should know of the wrongful act and resulting injury. Id. at 271. In a faulty tax advice case, this cannot occur later than the receipt of the deficiency notice, when the IRS takes a final, formal position. Id. Here, the deficiency notice on June 25, 1998 was the latest date on which appellants’ claims accrued. See id. Because they did not file suit until March 7, 2002, their claims are barred.

In reaching this conclusion, we necessarily reject appellants’ argument that Murphy is inapplicable because in that case, the notice of deficiency was more specific and “it was no surprise to the plaintiffs upon what basis the IRS made its complaint.” According to appellants, they did not have notice of the defects in the partnership agreements until May 2000, when an IRS attorney spoke with Cousins alerting him to the “fatal flaw” in the partnership agreements. We disagree.

In September 1997, the IRS informed appellants that it was questioning the valuations of the family limited partnerships because, in part, the “control exercised by the decedent over the assets did not change as a result of the formation of the partnerships [and] the decedent continued to make all decisions regarding the assets .... ” Later, in its June 25, 1998 deficiency notice, the IRS stated it had determined the value for federal estate tax purposes of MBI Resources, Ltd. and MBI Investments, Ltd. was significantly increased. The deficiency notice showed the revaluation of the family limited partnerships and the calculated deficiency. The crux of appellants’ case is that appel-lees wrongly advised them regarding the tax benefits of the family limited partnerships. Thus, contrary to appellants’ assertion, we conclude that after receiving the deficiency notice, appellants knew or should have known that appellees’ negligence in drafting and/or reviewing the agreements forming the limited family partnerships, if any, had caused them the risk of concrete and specific harm to their legally protected economic interests. See Hoover v. Gregory, 835 S.W.2d 668, 674 (Tex.App.-Dallas 1992, writ denied) (notices informed appellants had been disallowed and the IRS considered certain “shams entered into for tax avoidance purposes”); Ponder v. Brice & Mankoff, 889 S.W.2d 637, 643 (Tex.App.-Houston [14th Dist.] 1994, writ denied) (crux of appellant’s case was that tax attorney wrongly advised him regarding partnership deductions, and appellant was aware on date of notice of adjustment he might be subject to certain tax liabilities, even though attorney’s opinion was to the contrary). We overrule appellant’s second issue.

Appellants next argue the trial court erred by granting appellees’ motions for summary judgment because it failed to apply the Hughes tolling rule. In Hughes, the supreme court established a “bright-line rule” that tolls the statute of limitations when an attorney commits malpractice in the prosecution or defense of a claim that results in litigation until all appeals on the underlying claim are exhausted. Hughes, 821 S.W.2d at 156. Although one of the policy considerations behind this rule is to prevent a litigant from being forced to take inconsistent positions, it is not so broad as to apply whenever that would be the case. Murphy, 964 S.W.2d at 272. Rather, the rule is expressly limited to cases encompassed within the definition of “attorney malpractice in the prosecution or defense of a claim that results in litigation.” Apex, 41 S.W.3d at 121-22. Although we recognize that the citations contained in Apex create some ambiguity regarding application of the Hughes rule to cases arising from transactional work, we are persuaded by the Houston First Court of Appeals’s analysis of Hughes, Murphy, and Apex and agree that alleged attorney malpractice claims based on transactional work are not tolled under the Hughes rule. See Vacek Group, Inc. v. Clark, 95 S.W.3d 439, 444-47 (Tex.App.Houston [1st Dist.] 2002, no pet.). Because the negligent drafting and/or review of the agreements creating the family limited partnerships, if any, is not attorney malpractice committed during “the prosecution or defense of a claim that results in litigation,” the alleged malpractice in this case is not within a category of legal malpractice cases encompassed within the Hughes definition, and, thus, the Hughes rule does not apply. See id. We overrule appellants’ third issue.

In them fourth issue, appellants contend that even if the trial court correctly determined that the statute of limitations has run against Howell, Brown, and MHB, the trial court incorrectly determined that limitations has run with respect to KRCL and Elliott because they committed malpractice within the limitations period by failing to inform appellants of the defects in the family limited partnerships and by actively downplaying the importance of the notice of deficiency. In a single paragraph, and without citation to any authority, appellants maintain that “appellees had a continuing duty to disclose or correct the above information ... until appellants in fact discovered their claims against Howell, Brown, and MHB.”

Rule 38 of the rules of appellate procedure provides that a brief to this Court shall contain, among other things, a clear, concise argument for the contentions made with appropriate citations to authority and to the record. See Tex.R.App. P. 38.1; Kang v. Hyundai Corp. (U.S.A.), 992 S.W.2d 499, 503 (Tex.App.-Dallas 1999, no pet.). Bare assertions of error, without citations to authority, are insufficient to preserve error for our review. See Thedford v. Union Oil Co., 3 S.W.3d 609, 616 (Tex.App.-Dallas 1999, pet. denied); Sullivan v. Bickel & Brewer, 943 S.W.2d 477, 486 (Tex.App.-Dallas 1995, writ denied); see also Fredonia State Bank v. Gen. Am. Life Ins. Co., 881 S.W.2d 279, 284 (Tex.1994) (appellate court has discretion to waive points of error due to inadequate briefing). Because appellants have not provided any meaningful argument in support of their assertions that a different date of accrual applies to KRCL and Elliott, and because appellants have failed to cite to any authority in support of their bare assertion of error, we conclude appellants have inadequately briefed this issue and have, therefore, failed to preserve error, if any, for our review. See Thedford, 3 S.W.3d at 616; Kang, 992 S.W.2d at 503.

Similarly, under their fifth issue, appellants’ argument regarding the trial court’s error in failing to grant their motion for continuance is contained in three sentences. Their briefing under this issue does not contain a single citation to the record or to authority. Nor does it contain any application of the facts of this case to the applicable law. Thus, as under them fourth issue, we conclude the argument under their fifth issue is inadequately briefed and presents nothing for our review. See Thedford, 3 S.W.3d at 616; Kang, 992 S.W.2d at 503.

Accordingly, we affirm the trial court’s judgment.

      . Appellants alleged both malpractice and breach of fiduciary duty against appellees. However, the focus of appellants’ claims are negligent drafting or review of certain documents and failure to timely inform appellants of defects in the document. They do not complain about any improper benefit appel-lees received from representing appellants. Thus, because the crux of appellants' complaints is a failure to provide adequate legal representation, we conclude the claims are only for legal malpractice. See Kimleco Petroleum, Inc. v. Morrison & Shelton, 91 S.W.3d 921, 924 (Tex.App.-Fort Worth 2002, pet. denied).

      . Hughes v. Mahaney & Higgins, 821 S.W.2d 154 (Tex.1991).

      . Elliott first performed this work while at Cowles & Thompson, but later moved to KRCL where he continued his work with the estate tax return.

      . Appellants also sued Wilson and Chambless, Wilson & Ruff and the trial court granted their motion for summary judgment based on limitations. Appellants do not, however, challenge that ruling on appeal.


author: TERRY McCALL, Justice.

text:
    In re HARTFORD UNDERWRITERS INSURANCE COMPANY.
    No. 11-05-00188-CV.
    Court of Appeals of Texas, Eastland.
    June 30, 2005.

      Darrell W. Corzine, Rush, Kelly, Morgan, Dennis, Corzine & Hansen, P.C., Odessa, for appellant.
    Ruff Ahders, Ruff Ahders, Associated Attorneys at law, Odessa, for appellee.
    Panel consists of: ARNOT, C.J., and WRIGHT, J., and McCALL, J.
   Opinion

TERRY McCALL, Justice.

In the underlying proceeding, the real parties in interest filed an action in Ector County seeking judicial review of a Texas Workers’ Compensation Commission appeals panel decision that vacated the hearing officer’s order awarding attorney’s fees to the real parties in interest. In this mandamus proceeding, Hartford Underwriters Insurance Company maintains that mandatory venue for reviewing the appeals panel decision is in Travis County and that the trial court abused its discretion in denying Hartford’s motion to transfer venue. We conditionally grant the petition for writ of mandamus directing the trial court to sustain Hartford’s motion to transfer the case to Travis County. The writ will not issue unless the trial court fails to act in accordance with this opinion.

After a contested workers’ compensation case hearing, the hearing officer concluded that Bobbie G. Thurman, who was fatally injured in a motor vehicle accident, was in the course and scope of his employment at the time of his accident. The hearing officer also awarded attorney’s fees in the amount of 25 percent of the benefits paid to Thurman’s beneficiaries, who are the real parties in interest in this mandamus proceeding. Hartford limited its appeal of the hearing officer’s decision, requesting the Commission appeals panel to only review the attorney’s fee award. The appeals panel vacated the hearing officer’s award of attorney’s fees, finding that there was no evidence in the record to support the award. The appeals panel ruled, however, that the attorney for the real parties in interest could submit a new request for attorney’s fees by submitting the proper form with the time, hourly rate, and expenses itemized separately for the attorney and for any legal assistant.

The real parties in interest instead filed an original petition with the County Court at Law No. 2 in Ector County, seeking review of the Commission appeals panel decision vacating the award of attorney’s fees. Ector County was the county of Thurman’s residence at the time of his death. Hartford moved to transfer venue from Ector County to Travis County, contending that mandatory venue for the petition was in Travis County.

TEX. CIV. PRAC. & REM. CODE ANN. § 15.0642 (Vernon 2002) provides that a party may apply for a writ of mandamus with an appellate court to enforce the mandatory venue provisions of that chapter. The requirement of showing an inadequate appellate remedy in mandatory venue cases was eliminated by Section 15.0642. In re Missouri Pacific Railroad Company, 998 S.W.2d 212 (Tex.1999). Although Chapter 15, TEX. CIV. PRAC. & REM. CODE ANN. ch. 15 (Vernon 2002 & Supp.2004-2005), does not expressly list a mandatory venue provision for judicial review of contested cases involving workers’ compensation, Section 15.016 includes other mandatory venue statutes within the purview of Chapter 15:

An action governed by any other statute prescribing mandatory venue shall be brought in the county required by that statute.

TEX. LAB. CODE ANN. ch. 410 (Vernon 1996 & Supp.2004-2005) addresses the adjudication process in workers’ compensation disputes. Hernandez v. Texas Workers’ Compensation Insurance Fund, 946 S.W.2d 904 (Tex.App.-Eastland 1997, no writ). There are two mandatory venue provisions for petitions to review Commission appeals panel decisions: Section 2001.176 of the Texas Government Code and Section 410.252 of the Texas Labor Code.

TEX. GOV’T CODE ANN. ch. 2001 (Vernon 2000) is the Administrative Procedure Act. Section 410.255(a) of the Labor Code provides that judicial review of final administrative decisions in workers’ compensation cases for “all issues other than those covered under Section 410.301(a)” shall be conducted in accordance with Chapter 2001. The mandatory venue provision in Section 2001.176 provides in part:

(a) A person initiates judicial review in a contested case by filing a petition not later than the 30th day after the date on which the decision that is the subject of complaint is final and appeal-able.
(b) Unless otherwise provided by statute:
(1) the petition must be filed in a Travis County district court.

Thus, Travis County is the mandatory venue for reviewing all Commission appeals panel decisions except those Commission decisions covered by Section 410.301. Judicial review conducted under Section 410.255 is governed by the substantial evidence rule.

The second mandatory venue provision, Section 410.252 of the Labor Code, is for the appeal of Commission appeals panel decisions covered by Section 410.301. Section 410.301 deals only with judicial review of a final decision of a Commission appeals panel regarding “compensability or eligibility for or the amount of income or death benefits.” A district court reviews the decision under a modified de novo standard. See Section 410.301; Rodriguez v. Service Lloyds Insurance Company, 997 S.W.2d 248, 253 (Tex.1999). Section 410.252 requires that court petitions appealing decisions under Section 410.301 must be filed in the county where the employee resided at the time of death not later than the 40th day after the decision of the appeals panel became final. Section 410.252; Rodriguez v. Service Lloyds Insurance Company, supra at 253.

A Commission appeals panel decision dealing only with attorney’s fees is not a decision regarding “compensability or eligibility for or the amount of income or death benefits.” Therefore, mandatory venue for the petition of the real parties in interest is Travis County.

A trial court abuses its discretion when it reaches a decision so arbitrary and unreasonable as to amount to a clear and prejudicial error of law. Walker v. Packer, 827 S.W.2d 833, 839 (Tex.1992). The trial court’s denial of Hartford’s motion to transfer venue to Travis County was a clear error of law.

The petition for writ of mandamus is conditionally granted. A writ of mandamus will issue if the trial court does not enter an order that transfers venue of the underlying case to Travis County.

      . Jana Thurman, As Guardian of Amanda Nicole Thurman and Jarreth Lucas Thurman, Minor Children of Bobbie G. Thurman, Deceased, Plaintiff in Fact Ruff Ahders, Ruff Ahders, Associated v. Hartford Underwriters Insurance Company, Cause No. CC2-17,808.