Justice John Devine

In a case that reflects the continuing development of the Texas Supreme Court’s jurisprudence in favor of preserving appellate rights, the Court has ruled that a court of appeals must consider a previously perfected appeal as to the issues raised in that appeal, even if the trial court has issued an intervening final judgment on the merits. The ruling preserves an interlocutory appeal filed by a foreign defendant contesting the trial court’s denial of a special appearance to contest personal jurisdiction.

Warren Chen and DynaColor, Inc. v. Razberi Technologies, Inc., et al. (No. 21-0499) arose from a business deal gone bad, resulting in a lawsuit by Razberi against Chen, the Taiwainese CEO of DynaColor. The trial court denied the defendants’ special appearance. The defendants took an accelerated interlocutory appeal to the Dallas Court of Appeals and filed a motion with that court to stay proceedings in the trial court. Without ruling on the jurisdictional issue, the court of appeals denied the stay but proceeded with merits briefing and scheduled oral argument. Meanwhile, the trial court rendered final judgment against Chen that incorporated prior summary judgment orders but not the special appearance rulings. Chen did not file a second notice of appeal of the final judgment. After the deadline for appeal of the final judgment passed, Razberi moved to dismiss Chen’s interlocutory appeal as mooted by the final judgment. The court of appeals agreed and dismissed the appeal (Chen I) but granted Chen’s motion for rehearing. SCOTX then decided ERCOT, Inc. v. Panda Power Generation Infrastructure Fund, LLC, 619 S.W.3d 628 (Tex. 2021). In Panda Power, SCOTX cited Chen I “for the proposition that ‘the trial court’s entry of a final summary judgment in the plaintiff’s favor moots the defendant’s pending interlocutory appeal from a prior order denying the defendant’s special appearance, because the prior order merges into the final judgment.’” The court of appeals, over a dissent by Justice Schenk, interpreted this as validating its decision in Chen I and reinstated its original opinion. Chen sought review.

In an opinion by Justice Devine, SCOTX reversed and remanded to the court of appeals for consideration of Chen’s appeal, largely following the line of argument in Justice Schenk’s dissenting opinion. First, TRAP 27.3 requires an appellate court to treat an appeal from an order or judgment subsequently modified or vacated and replaced by the trial court as an appeal from the subsequent order or judgment. The rule accords with SCOTX’s precedent (discussed in Justice Young’s opinion in the Mitschke case reported yesterday) favoring “merits-based disposition when supportable by a reasonable, yet liberal, construction of the appellate rules.” Second, SCOTX previously ruled in Roccaforte v. Jefferson County, 341 S.W.3d 919 (Tex. 2011) that Rule 27.3 allows the court of appeals “to reach the merits of a jurisdictional issue after the interlocutory order on appeal had ‘merged into the [final] judgment.’” That is the situation here, and a second notice of appeal is not required to invoke the appellate court’s jurisdiction. Third, Panda Power, though it cited Chen I, dealt with the issue of whether Rule 27.3 applied to an interlocutory appeal that was no longer pending in the court of appeals when the trial court entered its final judgment. This case presents a distinct procedural posture governed not by Panda Power but by Roccaforte.

Finally, Justice Devine reiterates that SCOTX will not deprive a party of its constitutional right to appellate review based on narrow technical applications of the Rules of Appellate Procedure. While a party desiring to expand the scope of review to issues not presented in a timely perfected appeal is free to file a second notice of appeal from a subsequent modified appealable judgment or order, it is not obliged to in order to preserve its original appeal under Rule 27.3.

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