Arnulfo GONZALES d/b/a Pueblo Leasing Insurance Co., Appellant, v. SURPLUS INSURANCE SERVICES, Appellee.
No. 09-91-270 CV.
Court of Appeals of Texas, Beaumont.
June 24, 1993.
Rehearing Denied Aug. 16, 1993.
863 S.W.2d 96
Daniel P. McManus, Raymond W. Greer, Raymond W. Greer & Associates, Houston, for appellee.
Before WALKER, C.J., and BROOKSHIRE and BURGESS, JJ.
OPINION
WALKER, Chief Justice.
This appeal results from the trial court‘s overruling of appellant‘s motion for new trial after the granting of summary judgment. Appellant alleges in his motion for new trial that he did not receive notice of the summary judgment hearing. The trial court considered the evidence presented at hearing on appellant‘s motion for new trial and determined that notice to appellant was sufficient, and that appellant failed to show his entitlement to a new trial.
Factually, the parties hereto had an agreement whereby appellant would be responsible to appellee for premiums due on insurance policies issued through appellee to insureds produced by appellant. Appellee filed suit against appellant for monies owed to appellee by appellant. Appellee later filed Plaintiff‘s First Amended Petition, which included claims against appellant based on
To better illustrate the chronology of events relevant to this appeal, the following times and events are set forth:
| 4-22-91 | “Plaintiff‘s First Amended Petition” and discovery requests, including request for admissions (“Mail 1“), mailed to Appellant. |
| 4-23-91 | “Plaintiff‘s First Amended Petition” and discovery requests, including request for admissions, filed. |
| 4-23-91 | First notice of “Mail 1” to Appellant by U.S. Post Office. |
| 4-28-91 | Second notice of “Mail 1” to Appellant by U.S. Post Office. |
| 5-8-91 | Return of “Mail 1” to Appellant by U.S. Post Office. |
| 5-14-91 | Appellee again mailed Appellant “Plaintiff‘s First Amended Petition” and discovery requests, including request for admissions (“Mail 2“), after return of “unclaimed” envelope and conference with Appellant‘s counsel. |
| 5-23-91 | Appellant claims from U.S. Post Office “Mail 2,” envelope containing Plaintiff‘s First Amended Petition and discovery documents. |
| 6-27-91 | Plaintiff‘s motion for summary judgment, exhibits, and notice of hearing (“Mail 3“) mailed to Appellant after admissions deemed by operation of law. |
| 6-28-91 | Plaintiff‘s motion for summary judgment, etc., filed. |
| 6-29-91 | First notice of “Mail 3” to Appellant by U.S. Post Office. |
| 7-4-91 | Second notice of “Mail 3” to Appellant by U.S. Post Office. |
| 7-14-91 | Return of “Mail 3” to Appellant by U.S. Post Office. |
| 7-19-91 | Appellant files First Amended Answer and late response to request for admissions. |
| 7-23-91 | Summary judgment granted at hearing. |
| 8-22-91 | Appellant files motion for new trial. |
| 9-18-91 | Appellee files response to motion for new trial, with affidavits. |
| 9-19-91 | Hearing on Appellant‘s motion for new trial; evidence presented, motion denied. |
Appellant brings two points of error for this Court‘s consideration. Point of error one contends that the trial court erred as a matter of law in granting appellee‘s motion for summary judgment in that appellant did not receive notice of the hearing on same. We take appellant‘s position to be that unless appellee can affirmatively show at a hearing on motion for new trial that appellant received actual notice of the hearing on motion for summary judgment that a new trial must be granted as a matter of law. Our threshold question is whether or not
Appellant‘s brief is both an attack upon the granting of summary judgment and upon the lack of actual notice of the summary judgment proceeding. Regarding the granting of summary judgment, the trial court had before it the following documents:
- Plaintiff‘s First Amended Petition;
- Plaintiff‘s Request for Admissions, deemed admitted by operation of law;
- Plaintiff‘s motion for summary judgment, with affidavits, and a certificate of service showing compliance with
TEX.R.CIV.P. 21a and166a . - Defendant‘s First Amended Answer;
- Defendant‘s late response to request for admissions, without a request for late filing or request to undeem admissions;
I. PROCEDURAL DEFAULT
In examining the record before us, appellant failed to timely answer request for admissions, or to file written objections, or to file a motion to file answers late, resulting in the appellee‘s admissions being deemed. Appellant admits receiving the request for admissions on May 23, 1991 and based on
A key issue appears to be the timing of appellee‘s request for admissions. Once appellant received a copy on May 23, 1991, the clock started ticking. The admissions were automatically deemed admitted on June 26, 1991. At this point in the proceedings, no notice problem existed. On June 27, 1991, one day after the deemed admissions took effect which essentially fully proved each and every element of appellee‘s case as a matter of law and not subject to any controverting evidence, Overstreet v. Home Indem. Co., 669 S.W.2d 825, 827 (Tex.App.--Dallas), rev‘d on other grounds, 678 S.W.2d 916 (Tex.1984); American Title Co. v. Smith, 445 S.W.2d 807, 809 (Tex.Civ.App. — Houston [1st Dist.] 1969, no writ), appellant had no recourse except that given to him in
In point of error one, appellant, citing a number of cases in his brief, asserts, “The notice provisions of
Therefore, notice to appellant of the summary judgment hearing was essentially moot as appellant was legally precluded from introducing any evidence controverting the deemed admissions. The trial court was essentially performing a ministerial act in granting the summary judgment motion.
Peralta v. Heights Medical Center, Inc., 485 U.S. 80, 108 S.Ct. 896, 99 L.Ed.2d 75 (1988) appears, at first blush, dispositive of the issue. In Peralta, a Texas case originating from a default judgment, the appellant was never served with notice on a suit for personal debt. Appellee conceded at oral argument before the Supreme Court that the Court must presume, for purposes of their
Holding that the default judgment procedure denied their appellant due process, the Supreme Court in Peralta stated:
The Texas courts nevertheless held, as appellee urged them to do, that to have the judgment set aside, appellant was required to show that he had a meritorious defense, apparently on the ground that without a defense, the same judgment would again be entered on retrial and hence appellant had suffered no harm from the judgment entered without notice. But this reasoning is untenable. As appellant asserts, had he had notice of the suit, he might have impleaded the employee whose debt had been guaranteed, worked out a settlement, or paid the debt. He would also have preferred to sell his property himself in order to raise funds rather than to suffer it sold at a constable‘s auction.
Peralta, supra 485 U.S. at 85, 108 S.Ct. at 899, 99 L.Ed.2d at 81.
In the instant case, the following alternatives, appellant posits, were available to him:
Had Appellant‘s attorney received Appellee‘s Motion For Summary Judgment and the Notice of Hearing, he could have done a number of things to defend Appellant Gonzales. Specifically, he could have filed a response to the Motion for Summary Judgment or, if necessary, Appellant‘s attorney could have asked for leave of court to file a request for a late response to the Motion for Summary Judgment. Attorney for Appellant could have filed a motion requesting the court to withdraw the deemed admissions. . . . Assuming arguendo that the court finds that Appellant is required to set up a meritorious defense in its Motion for New Trial, Appellant was ready to exactly just (sic) that. After filing a Motion to Withdraw the Deemed Admissions, there certainly exists questions of fact that preclude Summary Judgment for Appellee.
While the alternatives presented by the appellant in Peralta were realistically possible under the circumstances of that case, the alternatives presented by the appellant in the instant case are highly unlikely because of the fact that appellant simply failed to respond to appellee‘s request for admissions for no good reason, which in practical terms amounted to a procedural default.
Additionally, all of appellant‘s explanations and excuses were provided to the trial court during the motion for new trial hearing. Appellant actually had his day in court; he testified and cross-examined opposing counsel on the notice issue. Apparently, appellant was satisfied to let his “Motion for New Trial” stand in the shoes of a response to appellee‘s motion for summary judgment as is reflected in the following exchange between appellant and the trial court:
THE COURT: Now, when you say “answer,” are you talking about the response to the Motion for Summary Judgment?
MR. NAVARRO (for appellant): No, sir. I‘m talking about our answer to the Plaintiff‘s First Amended Petition. In which we answered. Our first amended answer. Which is on file at this point.
THE COURT: Okay. All right. Of course, that still does not constitute a response to the Motion for Summary Judgment, right?
MR. NAVARRO: Well, in effect in our Motion for New Trial the Court can take notice of the fact that in Paragraphs 1, 2 and 3 of our Motion for New Trial that it is the equivalent of a response. I have a copy of our--well, the Court has it before it.
After hearing all of the testimony, the trial court, for whatever reason, was not persuaded and denied appellant a new trial.
The Supreme Court, in focusing on the due process issue, boiled it down to the following:
An elementary and fundamental requirement of due process in any proceeding which is to be accorded finality is notice reasonably calculated, under the circumstances, to apprise interested parties of the
pendency of the action and afford them the opportunity to present their objections.
Id. Again, in the instant case, “under the circumstances,” once the admissions were deemed admitted by operation of law on June 26, 1991, the appellee‘s lawsuit was proven in its entirety and case law completely prohibited the admission of any contradictory summary judgment evidence. Whitworth v. Kuhn, 734 S.W.2d 108, 111 (Tex.App. — Austin 1987, no writ). We believe Peralta is completely distinguishable from the post-answer facts and procedures involved in the instant case.
II. CONSTRUCTIVE NOTICE
Procedural requirements under
“When a party complies with
TEX.R.CIV.P. 21a , by a certificate of service upon opposing counsel, this raises a prima facie showing of notice.” Costello v. Johnson, 680 S.W.2d 529, 536 (Tex.App.- Dallas 1984, writ ref‘d n.r.e.). At the time of the summary judgment hearing, appellee presented a proper certificate of service upon opposing counsel, showing strict compliance with the service requirements ofTEX.R.CIV.P. 21a and166a . It is not required that the record reflect receipt of notice by non-movant. Id. at 532.
We believe appellant‘s reliance on Anchor Casualty Co. v. Crisp, 346 S.W.2d 364, 366 (Tex.Civ.App.-Amarillo 1961, no writ), is misplaced. Appellant contends that the mailing, by appellee, of the notice of hearing on motion for summary judgment merely raises a rebuttable presumption of fact that it was duly received by the addressee. Appellant seems to contend that this in some way becomes a material issue of fact in the case. Not so. Crisp, involved the question of receipt by insured of notice of cancellation sent by insurer. The notice question in Crisp was a material fact for determination in the case, if not an ultimate issue. Here we are dealing with procedural facts regarding the proper presentation of the motion for summary judgment to the trial court. A determination of procedural facts lies within the sound discretion of the trial court.
We believe that the better course requires a restrictive holding directed to the specific facts of the case before the trial
Point of error two contends that the trial court erred in overruling appellant‘s motion for new trial because without notice appellant was not required to assert a meritorious defense.
Appellee contends that in order for appellant to obtain a new trial, appellant must demonstrate compliance with Craddock v. Sunshine Bus Lines, Inc., 134 Tex. 388, 133 S.W.2d 124 (1939). Appellant informs that Craddock does not apply to this case nor to these circumstances. Appellant contends that the record establishes that appellant had no actual or constructive notice of the hearing on the “Motion for Summary Judgment,” therefore, appellant need not show that he had a meritorious defense as a condition to receiving a new trial, citing Lopez v. Lopez, 757 S.W.2d 721 (Tex.1988). Appellant further relies on Peralta v. Heights Medical Center, Inc., supra, for the proposition that one need not show a meritorious defense, in the absence of notice for lack of notice violates due process rights under the Fourteenth Amendment to the United States Constitution.
Our holding on appellant‘s point of error one should adequately dispel appellant‘s contention that he did not have constructive notice of the hearing on the “Motion for Summary Judgment.” Having held that appellant had such constructive notice, we believe it elementary that appellant‘s efforts to set aside the default summary judgment must comply with the requirements of Craddock, supra 133 S.W.2d at 126.
The “Craddock” test for setting aside a default judgment places upon the movant for new trial, the following requirements:
- To show that defendant‘s failure to appear was not intentional, or the result of conscious indifference, but was due to mistake or accident;
- that defendant had a meritorious defense;
- that the motion for new trial was filed when it would not occasion a delay or otherwise work an injury to the plaintiff.
Craddock applies not only to default judgments, but also to default summary judgments. Costello, supra, 680 S.W.2d at 531.
Appellant positions that Craddock is not applicable to the case at hand, even though appellant‘s motion for new trial pleads the Craddock elements without specific reference to the case. Again, given our holding that appellant did have constructive notice satisfactory to
Regarding point of error two, we hold that appellant has failed to negate his conscious indifference to the proceedings.
AFFIRMED.
BURGESS, Justice, dissenting.
I respectfully dissent. I disagree with the majority on all aspects of its opinion, notice of the summary judgment hearing and the applicability of Craddock v. Sunshine Bus Lines, Inc., 134 Tex. 388, 133 S.W.2d 124 (1939).
NOTICE OF THE SUMMARY JUDGMENT HEARING
The majority initially tries to justify its holding by stating: “notice to appellant of the summary judgment hearing was essentially moot as appellant was legally precluded from introducing any evidence controverting the deemed admissions. The trial court was essentially performing a ministerial act in granting the summary judgment motion.” This argument, that since no defense was available, a retrial is useless since it would only result in a rendition of the same judgment on retrial, thus no harm has occurred, was rejected as untenable in Peralta v. Heights Medical Center, Inc., 485 U.S. 80, 108 S.Ct. 896, 99 L.Ed.2d 75 (1988) (quoted by the majority). Contrary to the majority, I do not believe “... Peralta is completely distinguishable....”
Next, the majority justifies its affirmance by finding constructive notice based upon the attempted deliveries of the motion for summary judgment and the notice of hearing because “the intended recipient engaged in instances of selective acceptance/refusal of certified mail relating to the case.” However, the majority cites no cases to buttress this finding or conclusion. The majority must rely upon this constructive notice theory because the evidence is uncontroverted that appellant did not receive notice of the
The certificate of service of the motion for summary judgment states that on the 27th day of June, 1991, it “was deposited in the United States Mail, postage prepaid certified mail, return receipt requested and/or was sent via telephonic document transfer and/or was messengered to” appellant‘s attorney.
Several cases support the position that notice is essential. Rozsa v. Jenkinson, 754 S.W.2d 507 (Tex.App.-San Antonio 1988, no writ), was a writ of error case where the non-movant was sent notice of summary judgment to the wrong address. Proper notice to the non-movant of the summary judgment hearing is a prerequisite to summary judgment. See Gulf Refining Co. v. A.F.G. Management 34 Ltd., 605 S.W.2d 346, 349 (Tex. Civ. App.-Houston [14th Dist.] 1980, writ ref‘d n.r.e.). In Rozsa, the error appeared on the record in that the wrong address was typed on the notice so writ of error requirements were met and the summary judgment was reversed. Wavell v. Caller-Times Pub. Co., 809 S.W.2d 633 (Tex.App.--Corpus Christi 1991, writ denied), was a summary judgment case reversed because of no proper
THE “CRADDOCK” REQUIREMENT
When no notice is proven, as the factual case here, it is not necessary to prove a meritorious defense. Lopez v. Lopez, 757 S.W.2d 721 (Tex.1988).
While the majority states: “we believe it elementary that appellant‘s efforts to set aside the default summary judgment must comply with the requirements of Craddock ...“, the courts of appeal are divided on the issue. As the majority notes, Costello v. Johnson, 680 S.W.2d 529, 531 (Tex.App.-- Dallas 1984, writ ref‘d n.r.e.), holds Craddock applies to “default” summary judgments. See also Krchnak v. Fulton, 759 S.W.2d 524, 529 (Tex.App.-Amarillo 1988, writ denied).
However, the Houston First Court of Appeals has held otherwise. In Enernational Corp. v. Exploitation Engineers, Inc., 705 S.W.2d 749 (Tex.App.- Houston [1st Dist.] 1986, writ ref‘d n.r.e.), which involved a motion for new trial after a summary judgment, the court held the requirements of Craddock have no application to an appeal from the granting of a summary judgment. They noted that a summary judgment is not granted because a non-movant fails to answer, but because the movant‘s summary judgment proof is sufficient as a matter of law. 705 S.W.2d at 751. Later, Rabe v. Guaranty Nat. Ins. Co., 787 S.W.2d 575 (Tex.App.- Houston [1st Dist.] 1990, writ denied), followed the rationale of Enernational Corp. I believe the Houston Court has the better of the argument and rationale. Craddock should not apply in the summary judgment context.
In summary:
- appellant proved he did not receive notice of the summary judgment hearing,
- this rebutted the presumption of
Rule 21a , - no other court has resorted to a constructive notice scenario in a summary judgment proceeding,
- because summary judgment is a harsh remedy, this court should neither invent nor utilize the constructive notice theory,
- without notice, Craddock definitely does not apply,
- with notice, Craddock should not apply.