Sebastian v. Durant, 2025 Tex. Bus. 4 (11th Div.)

OCR transcription for search; preserved printed pages are authoritative

2025 Tex. Bus. 4

The Business Court of Texas
Eleventh Division

TIFFANY LYNN SEBASTIAN and

MICHAEL JEFFREY SEBASTIAN,

INDIVIDUALLY and

DERIVATIVELY ON BEHALF OF

THE CLASSIC DEALERSHIPS and

16835 CADET PARTNERS, LLC,
Plaintiffs,

V.

T. BENTLY DURANT, THOMAS R.
DURANT, THE DURANT CLASSIC
DYNASTY TRUST, MICHAEL A.
WARD, 8100 PARTNERS, LTD.,
8100 MANAGEMENT LLC, 8705

MN M MMM MMM MMMM M MM MD

Cause No. 25-BC11A-0001

PARTNERS, LTD., and 8705
MANAGEMENT LLC,
Defendants.
SYLLABUS!

This opinion concludes that, under Section 8 of House Bill 19—the

court’s enabling legislation—the entirety of a civil action commences with the filing

of the original petition, regardless of when additional parties and claims are joined.

1 NOTE: The syllabus was created by court staff and is provided for the convenience of the reader.
It is not part of the Court’s opinion, does not constitute the Court’s official description or
statement, and should not be relied upon as legal authority.

Additionally, Chapter 25A of the Texas Government Code permits only the removal
of an “action,” and not the partial removal of individual claims within an action.
The court orders remand based on its lack of jurisdiction.

ql

2025 Tex. Bus. 4

The Business Court of Texas
Eleventh Division

TIFFANY LYNN SEBASTIAN and

MICHAEL JEFFREY SEBASTIAN,

INDIVIDUALLY and

DERIVATIVELY ON BEHALF OF

THE CLASSIC DEALERSHIPS and

16835 CADET PARTNERS, LLC,
Plaintiffs,

Vv.

T. BENTLY DURANT, THOMAS R.
DURANT, THE DURANT CLASSIC
DYNASTY TRUST, MICHAEL A.
WARD, 8100 PARTNERS, LTD.,
8100 MANAGEMENT LLC, 8705
PARTNERS, LTD., and 8705
MANAGEMENT LLC,
Defendants.

G0 6G 0G 0G> CGD COD 0G GOD COO 0G2 640 6D Ca Co (2 GD

Cause No. 25-BC11A-0001

OPINION AND ORDER

Before the court are (1) Michael Sebastian’s Motion to Remand filed January
9, 2025; (2) Tiffany Sebastian’s Joinder in the Motion to Remand filed January 15,
2025; (3) the response filed by T. Bently Durant, Thomas R. Durant, the Durant
Classic Dynasty Trust, Michael A. Ward, 8100 Partners, Ltd., 8100 Management

LLC, $705 Partners, Ltd., 8705 Management LLC (collectively “Defendants”) and

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by Classic Chevrolet Sugar Land, LLC, Classic Chevrolet West Houston, LLC,
Classic Elite Buick GMC, Inc., and 16835 Cadet Partners, LLC (collectively
“Classic”); and (4) the Sebastians’ joint reply.

Having considered the parties’ arguments and the relevant law, the court

grants the Sebastians’ motions and remands this cause to the district court.
Factual and Procedural Background

This suit originated as a divorce proceeding. On July 11, 2024, Ms. Sebastian
filed an Original Petition for Divorce in the 387th Judicial District Court of Fort
Bend County, Texas. At the time, both spouses worked for and owned interests in
Classic.

In the weeks that followed, according to the Sebastians, the Defendants
improperly purported to terminate the Sebastians’ employment, strip them of their
membership interests, and block their access to the entities’ books and records.

On September 18, 2024, Mr. Sebastian filed a Counterpetition for Divorce,
adding Classic as Co-Respondents. On December 3, 2024, the Sebastians jointly
filed a Third-Party Petition that brought derivative claims on Classic’s behalf and
added the Durant and 8100 Defendants. The Sebastians amended those claims on
December 20, 2024, adding third-party claims against the remaining Defendants.

Meanwhile, the parties pursued settlement—seeking to negotiate a buyout of the

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Sebastians’ membership interests under the parties’ buy-sell agreement—but their
discussions stalled.

On January 2, 2025, Defendants and Classic (jointly “the Removing
Parties”) filed their Notice of Removal to the Texas Business Court, pleading that
they “remove[d] the individual and derivative claims asserted by” the Sebastians
but did “not agree to submit the determination of” the divorce cross-petitions. The
Sebastians, in turn, sought remand to the district court. Ata hearing on January 30,
2025, all parties appeared through counsel and presented their arguments.

Legal Standard

“A party to an action filed in district court or county court at law that is
within the jurisdiction of the business court may remove the action to the business
court.” TEX. GOV’T CODE § 25A.006(d). If the Business Court lacks jurisdiction of
a removed action, the court shall remand the action to the original court in which
the action was filed. Id.; TEx. R. Civ. P. 355(f)(1).

Whether a court has subject-matter jurisdiction is a question of law. Tew.
Dep’t of Parks & Wildlife v. Miranda, 133 S.W.3d 217, 226 (Tex. 2004).

Analysis
I. Ms. Sebastian’s Motion for Joinder
No party presented argument opposing Ms. Sebastian’s motion for joinder of

Mr. Sebastian’s motion to remand. The court grants the motion for joinder,

collectively considers the Sebastians’ arguments in favor of remand, and finds that
both motions were timely filed within 30 days of removal. See TEx. R. Cv. P.
355(£)(2).

II. The Sebastians’ Motion to Remand

A. The Texas Business Court lacks jurisdiction of actions commenced before
September 1, 2024.

q10 The Business Court of Texas is a specialty statutory court, created by the
Texas Legislature to adjudicate complex commercial disputes. See Act of May 25,
2023, 88th Leg., R.S., ch. 380, § 1, 2023 Tex. Sess. Law Serv. 919, 919 (“the
Act”). The Act added a new chapter to the Texas Government Code: Chapter 25A.
Id. § 1. Chapter 25A is entitled “Business Court,” and it outlines the new court’s
composition by regional divisions; includes provisions for the appointment of the
court’s judges; and describes the procedures by which suits may be filed in,
transferred to, or removed to the court. TEX. GOV’T CODE §§ 25A.003, 254.006,
25A.008-.009, 25A.017.

qil The Code’s new Chapter 25A also grants the Business Court its jurisdiction
and powers. Id. § 254.004. While the statute’s effective date is September 1, 2023,
the Business Court “is created September 1, 2024” and the Act’s Section 8 specifies
that the “changes in law made by this Act apply to civil actions commenced on or
after September 1, 2024.” Act at §§ 5, 8, 9. This court has consistently construed

Section 8 as conferring jurisdiction of only those suits commencing on or after

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September 1, 2024. E.g., Jorrie v. Charles, 2024 Tex. Bus. 4, 2024 WL 5337409
(Nov. 7, 2024); Winans v. Berry, 2024 Tex. Bus. 5, 2024 WL 5337410 (Nov. 7,
2024); Bestway Oilfield, Inc. v. Cox, 2025 Tex. Bus. 2, 2025 WL 251338 (Jan. 17,
2025); Energy Transfer LP v. Culberson Midstream LLC, 2024 Tex. Bus. 1, 2024
WL 5320611 (Oct. 30, 2024).

B. The court lacks jurisdiction of this action because it commenced in July
2024.

qi2 The Sebastians move to remand on the basis that this action commenced
when the original divorce petition was filed—before September 1, 2024. The
Removing Parties counter that the derivative and third-party claims on Classic’s
behalf or against the Defendants commenced new “actions” against them that
allow the court to exercise jurisdiction here. They protest that they were improperly
joined to the divorce suit and have not yet been served with any claims.
qi3 The Act does not define the terms “civil action” or “commence.” “When a
statute contains an undefined term, we typically give the term its ordinary
meaning.” Hegar v. Am. Multi-Cinema, Inc., 605 S.W.3d 35, 41 (Tex. 2020).
1. Under the Act’s Section 8, the civil action is the entire lawsuit.
qi4 The Removing Parties concede that the divorce suit filed by Ms. Sebastian in
July 2024 is an “action.” They also recognize that “‘action’ is generally
synonymous with ‘suit,’” and that “for there to be a ‘suit’ or ‘action,’ it is ‘essential

that it rest in a court, with the power to hear it.” Resp. at 11 (quoting Jaster v. Comet

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II Constr., Inc., 438 S.W.3d 556, 568 (Tex. 2014) (plurality op.)). In July 2024, the divorce action undisputedly rested in a state district court having power to hear it.
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After September 2024, the Sebastians filed various additional pleadings: Mr. Sebastian's Counterpetition identifying Classic as "Co-Respondents" without pleading any express claims against them, the Sebastians' later addition of derivative claims on Classic's behalf, and the Sebastians' two successive pleadings asserting claims against the Defendants. None of those events spawned a new "civil action." The Sebastians' claims were all filed in, and part of, the same action-the one filed by Ms. Sebastian in July 2024 and assigned the cause number 24-DCV- 318087 in the 387th Judicial District Court of Fort Bend County.
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The Texas Supreme Court, construing "action" as an undefined term, has considered its "common meaning" as referring to the "entire lawsuit or cause or proceeding, not to discrete 'claims' or 'causes of action' asserted within a suit[.]" Off. of Att'y Gen. of Tex. v. C.W.H., 531 S.W.3d 178, 183 (Tex. 2017). The Act similarly treats a claim not as a standalone lawsuit but as a component of an action. TEX. GOV'T CODE § 25A.004(b)(3) (granting jurisdiction of "an action in which a claim under a state or federal securities or trade regulation law is asserted . (emphasis added). Other divisions of this court have recognized that "a civil action is a lawsuit." Tema Oil & Gas Co. v. ETC Field Servs., LLC, 2024 Tex. Bus. 3 at 115, 2024 WL 5337411, at *3 (Nov. 6, 2024), quoted in C Ten 31 LLC v. Tarbox, 2025
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Tex. Bus. 1 at 16, 2025 WL 224542, at *7 (Jan. 3, 2025) ("'action' relates to the lawsuit generally while 'claim' relates to individual rights and remedies asserted within the suit.").
The Removing Parties argue their joinder to the divorce suit was procedurally and substantively improper. Because the company-related claims are unrelated to the divorce, they contend, the removed case should be deemed a separate "civil action" and should have been severed under Texas Rule of Civil Procedure 41 from the beginning. Indeed, they correctly recognize that a partial removal to this court would amount to a de facto severance.
But the Act does not override the long-settled doctrine permitting only court- ordered severance. See id .; F.F.P. Op. Partners, L.P. v. Duenez, 237 S.W.3d 680, 693 (Tex. 2007) (quoting Guar. Fed. Sav. Bank v. Horseshoe Op. Co., 793 S.W.2d 652, 658 (Tex. 1990)). Instead, the Act permits a party to "remove the action"-not independent claims-to the Business Court. TEX. GOV'T CODE § 25A.006(d). The court holds that the Removing Parties' opposed notice of partial removal could not unilaterally divide this case into a new "civil action" for purposes of Section 8.
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Under the Act's Section 8, civil action refers to the entire lawsuit, including the divorce cross-petitions and the later-filed claims involving the Removing Parties.
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2. This civil action commenced before September 1, 2024.

q20 This action commenced with the original divorce petition in July 2024. TEx.
R. Civ. P. 22 (“A civil suit in the district or county court shall be commenced by a
petition filed in the office of the clerk.”). Because the court holds that no subsequent
pleading created a new lawsuit, the entirety of this action—including the claims on
Classic’s behalf and against Defendants—“commenced” before September 2024.

q21 The First Division of this court recently reached the same conclusion. See
Osmose Utils. Servs., Inc. v. Navarro Cnty. Elec. Coop., 2025 Tex. Bus. 3, 24-BCO1A-
0011 (Jan. 31, 2025). As in this case, Osmose attempted a partial removal, asking
the Business Court to hear only the contractual claims involving Osmose and not
the underlying personal-injury claims that pre-dated September 2024. Id. at JJ 2-
5. The court remanded, concluding that “the sole reasonable interpretation of
Chapter 25A” was that “an action means a lawsuit, and does not refer to each
individual claim within a lawsuit.” Id. at J 27. Accordingly, under the Act’s Section
8, “the relevant date is the date on which suit was filed in the district court—not
the date on which the parties filed the discrete claims sought to be removed to this
Court.” Id. at J 30.

q22 Sitting en banc, the Third Court of Appeals was similarly faced with a statute
applying only to actions “commenced on or after” the legislation’s effective date. S

& P Consulting Eng’rs, PLLC v. Baker, 334 S.W.3d 390, 395 (Tex. App.— Austin

2011, no pet.) (en banc). The appellate court concluded “for purposes of the
effective date” that “the filing of the original petition commences the action with
respect to all parties regardless of when they are brought into the action.” Id. at 396.
Here, too, this action commenced in July 2024, regardless of when the Removing
Parties were joined.

q23 The Removing Parties claim they were not yet properly served, but the Act’s
effective date hinges on the date an action “commences,” not on the date a plaintiff
effects service or “brings suit.” See Tex. State Univ. v. Tanner, 689 8.W.3d 202,
300 (Tex. 2024) (describing “distinction between ‘bringing’ and ‘filing’” suit to
satisfy statute of limitations). The Removing Parties certainly do not contend the
case could have fallen within the Act’s purview if only the Sebastians had effected
service sooner.

q24 The nonbinding precedent analyzing when an action commenced “as to” a
certain defendant cannot alter the outcome, either:

e For purposes of triggering expert deadlines, holding “an action commences

as to each defendant when it is first named as a defendant.” Morris v. Ponce,
5848.W.3d 922, 928 (Tex. App.—Houston [14th Dist.] 2019, pet. denied).

e For purposes of triggering defendant’s removal deadlines, holding “under
Texas law, the action commenced as to [the defendant] when it was first
named[.|” Granite State Ins. Co. v. Chaucer Syndicate 1084 at Lloyd’s, CV-
H-20-1588, 2020 WL 8678020, at *10 (S.D. Tex. July 14, 2020).

The Removing Parties rely on these and other cases construing when an action

“commenced” as to a given party for purposes of triggering that party’s rights or

obligations. E.g., Martinez v. Gonzales, No. 13-14-00241-CV, 2015 WL 5626242,
at “4 (Tex. App.—Corpus Christi-Edinburg Sept. 17, 2015, pet. denied) (mem. op.)
(construing commencement for purposes of “triggering the applicable [expert]
deadline”); Univ. of Tex. Health Sci. Ctr. at San Antonio v. Batley, 332 S.W.3d 395,
400 (Tex. 2011) (noting plaintiff’s amendment does not relate back to original
pleading to toll her limitations deadline).

q25 But the question before this court is not merely one of when a certain party’s
rights or duties were triggered. The question is whether this court has jurisdiction
of the suit at all. And the court has consistently held in multiple contexts and across
multiple divisions that it lacks jurisdiction over actions preceding the Act’s
specified date. E.g., Seter v. Westdale Asset Mgmt., Ltd., 2024 Tex. Bus. 7 at 2,
2024 WL 5337346, at *1 (Dec. 16, 2024) (“In six prior instances, this Court has
remanded actions commenced before September 1, 2024, for lack of authority or

want of jurisdiction.”), mandamus pet. denied in In re Westdale Asset Mgmt., Ltd.,

* See also Rigo Mfg. Co. v. Thomas, 458 S.W.2d 180, 182 (Tex. 1970) (requiring diligent service for
“commencement” of suit to trigger plaintiff’s tolling of limitations); Travelers Ins. Co. v. Brown,
402 8.W.2d 500, 503 (Tex. 1966) (construing whether plaintiff “commence[d] any proceeding...
seeking damages from the” defendant under its contractual defense); Marez v. Moeck, 608 S.W.2d
740, 742 (Tex. App.—Corpus Christi 1980, no writ) (requiring amended petition against proper
party to trigger plaintiff’s tolling of limitations). The en banc Austin Court of Appeals made an
analogous distinction in S & P, noting that the “[c]ontext is critical, as are the consequences of a
particular construction.” 334 8.W.3d at 398 n.10 (“instead of determining whether a claim is
unnecessarily barred by an unintended use of a statute, we are considering which version of a
statute the legislature wanted to be applicable on the facts before us.”).

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No. 15-24-00135-CV, 2025 WL 300912 (Tex. App.—15th Jan. 24, 2025, orig.
proceeding). The court construes the Act’s Section 8 as an all-or-nothing
jurisdictional grant as to suits commencing on or after September 1, 2024. See id.;
Jorrie, 2024 Tex. Bus. 4 at 8. The clause’s common meaning reflects no intent for
each addition of a new party to revive the Business Court’s jurisdiction on suits that
were otherwise too old to satisfy Section 8.

q26 To be clear, the court does not reach its decision based on whether the
Sebastians’ “cause of action” accrued against any defendant before September 1.
Whether the parties exchanged demand letters or had a “right to relief” before that
date is not dispositive here. See Resp. at 11. Instead, the civil action itself
commenced in July upon the filing of the original petition.

q27 The Removing Parties insist the Business Court is a more appropriate forum
for the corporate-governance and derivative matters against them. And the
Sebastians concede those matters substantively fall within the Act’s subject-matter
jurisdiction, but they counter that the “issues are too entwined” to bifurcate this
suit. See Reply at 3, 4. Having concluded it lacks jurisdiction for the reasons above,
the court expresses no opinion on whether the buy-sell litigation and remaining
commercial disputes should be severed from the family-law claims or whether

joinder was timely, necessary, or proper.

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Conclusion and Order
q28 For the reasons stated above, the court lacks jurisdiction of this suit and must
remand it. The court GRANTS Tiffany Sebastian’s Motion to Remand and Michael
Sebastian’s Motion for Joinder. The cause is REMANDED to the 387th Judicial
District Court of Fort Bend County, Texas.

SO ORDERED.

STACY ROGERS SHARP
Judge of the Texas Business Court,
Fourth Division

SIGNED ON: February 4, 2025

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