Case Information
*0 FILED IN 3rd COURT OF APPEALS AUSTIN, TEXAS 2/17/2015 3:12:06 PM JEFFREY D. KYLE Clerk NO. 03-14-00331-CV THIRD COURT OF APPEALS 2/17/2015 3:12:06 PM JEFFREY D. KYLE 03-14-00331-CV AUSTIN, TEXAS *1 ACCEPTED [4179766] CLERK IN THE COURT OF APPEALS THIRD JUDICIAL DISTRICT OF TEXAS AUSTIN, TEXAS
RANDOLPH A. LOPEZ D/B/A BROWN HAND CENTER AND D/B/A BROWN MEDICAL CENTER Appellant
v. COX TEXAS NEWSPAPERS, L.P., D/B/A AUSTIN AMERICAN- STATESMAN,
Appellee REPLY BRIEF OF APPELLANT RANDOLPH A. LOPEZ D/B/A BROWN HAND CENTER AND D/B/A BROWN MEDICAL CENTER On Appeal from County Court at Law No. 2 of Travis County, Texas Trial Court Cause No. C-1-CV-13-002354 Isaac J. Huron/SBN 24032447/ihuron@lawdcm.com Ramon R. Rodriguez/SBN 24088319/rrodriguez@lawdcm.com D AVIS , C EDILLO & M ENDOZA , I NC .
755 E. Mulberry Ave., Suite 500 San Antonio, Texas 78212
Tel:(210) 822-6666/Fax: (210) 822-1151 ATTORNEYS FOR APPELLANT RANDOLPH A. LOPEZ D/B/A BROWN HAND CENTER AND D/B/A BROWN MEDICAL CENTER ORAL ARGUMENT REQUESTED *2 TABLE OF CONTENTS
Page TABLE OF CONTENTS ........................................................................................... i
TABLE OF AUTHORITIES .................................................................................... ii
SUMMARY OF THE ARGUMENT ........................................................................ 1
ARGUMENT AND AUTHORITIES ........................................................................ 3
1. Appellee’s Characterization of the Carpenter Court’s Holding is an Erroneous Oversimplification. ......................................................................... 3 2. A Meritorious Defense in a Default Summary Judgment Context Can Be Established if the Movant Can Establish That There May Be a Genuine Issue of Material Fact. ............................................................................................... 5 3. Appellee’s Mistake Was Genuine, and Not Occassioned by Conscious Indifference. ..................................................................................................... 7 4. Appellant’s Challenge to the Award of Attorney’s Fees Was Subsumed Within Its Challenge to Liability. .................................................................... 8 5. Appellant is Willing to Reimburse the Appellee for its Expenses. ................. 9
CONCLUSION & PRAYER ................................................................................... 10
CERTIFICATE OF COMPLIANCE ........................................................................ 12
CERTIFICATE OF SERVICE ................................................................................. 13
i *3 TABLE OF AUTHORITIES Cases Page
Angelo v. Champion Restaurant Equipment Co. ,
713 S.W.2d 96 (Tex. 1986) ............................................................................. 9, 10 Arthur Andersen & Co. v. Perry Equip. Corp ,
945 S.W.2d 812, 818 (Tex. 1997) .......................................................................... 9 Carpenter v. Cimarron Hydrocarbons Corp. ,
98 S.W.3d 682, 686 (Tex. 2002) ............................................................... 1, 3, 4, 5
Costello v. Johnson ,
680 S.W.2d 529, 531 (Tex. App.—Dallas 1984, writ ref'd n.r.e.) ......................... 6
Craddock v. Sunshine Bus Lines, Inc. , 134 Tex. 388 (Comm'n App. 1939)
..................................................................................................... 1, 3, 5, 6, 7, 8, 10
Ferguson & Co. v. Roll ,
776 S.W.2d 692, 698 (Tex. App.—Dallas 1989, no writ) ..................................... 1
Gonzales v. Surplus Ins. Servs. ,
863 S.W.2d 96, 102 (Tex. App.—Beaumont 1993, writ denied) .......................... 6
Huffine v. Tomball Hosp. Auth. ,
979 S.W.2d 795, 799 (Tex. App.—Houston [14th Dist.] 1998, no pet.) ............... 6
Krchnak v. Fulton ,
759 S.W.2d 524, 528–29 (Tex. App.—Amarillo 1988, writ denied) .................... 6
Medina v. W. Waste Indus. ,
959 S.W.2d 328, 330 (Tex. App.—Houston [14th Dist.] 1997, pet. denied)
............................................................................................................................6, 7
Mosser v. Plano Three Venture ,
893 S.W.2d 8, 12 (Tex. App.—Dallas 1994, no pet. hist.) ........................................ 5
ii
Pascual Madrigal P.L.L.C. v. Commercial IT Solutions Inc. ,
No. 04-13-00742-CV, 2014 WL 4230174, at *4
(Tex. App.—San Antonio Aug. 27, 2014, no pet.) ................................................ 6
Washington v. McMillan , 898 S.W.2d 392, 396
(Tex. App.—San Antonio 1995, no writ) ...................................................... 5, 6, 7
Weech v. Baptist Health Sys. ,
392 S.W.3d 821, 825 (Tex. App.—San Antonio 2012, no pet.) ............................ 6
iii *5
SUMMARY OF THE ARGUMENT In contrast to the Appellee’s overly simplified views of this case, this Court must determine whether to apply the Craddock factors in a situation where the
non-responding did not discover its mistake until after judgment was entered.
When the Supreme Court of Texas issued its opinion in Craddock , it did so with the intention of preventing the unduly harsh punishment that results when a
default judgment is entered against a party who, by mistake or accident, failed to
respond. Carpenter v. Cimarron Hydrocarbons Corp. , 98 S.W.3d 682, 686 (Tex.
2002). Although Craddock has been a part of Texas Jurisprudence since 1939, the
question presented by the facts of this case remains unanswered. Craddock v.
Sunshine Bus Lines, Inc. , 134 Tex. 388 (Comm'n App. 1939). Appellee completely
ignores this fact to reach a conclusion that belies the dictates of this State’s highest
court.
Appellant maintains that this Court ought to apply the modified summary judgment Craddock standard [1] espoused by the appellate courts of this state to
prevent the manifest injustice that occurs when a party’s mistake precludes his
response. Appellant further maintains that its failure to respond was the result of a
*6 mistake and not conscious indifference as Appellee suggests. The Appellant has
demonstrated not one, but several, meritorious defenses which it may raise if this
matter is remanded to the Trial Court. Lastly, Appellant submits that it is willing to
reimburse the Appellee the cost of obtaining its judgment. Appellant’s reply
address each of the issues raised by Appellee in order.
ARGUMENT AND AUTHORITIES 1. A PPELLEE ’ S CHARACTERIZATION OF THE C ARPENTER C OURT ’ S HOLDING
IS AN ERRONEOUS OVERSIMPLIFICATION .
The Carpenter Court expressly stated that it was not deciding “whether Craddock should apply when a nonmovant discovers its mistake after the
summary-judgment hearing or rendition of judgment[,]” which is precisely the case
here. Carpenter v. Cimarron Hydrocarbons Corp. , 98 S.W.3d 682, 686 (Tex.
2002). Appellant did not discover that the suggestion of bankruptcy was
inapplicable until almost a month after the judgment was rendered. Under these
circumstances, Craddock is the appropriate standard.
The Carpenter holding is a narrow one. When a party has an opportunity to use other procedural remedies to avoid a default judgment, his motion for new trial
should be reviewed under an abuse of discretion standard. Carpenter , 98 S.W.3d at
686. As the Court explained, its purpose in “adopting the Craddock standard was
to alleviate unduly harsh and unjust results at a point in time when the defaulting
party has no other remedy available . . . [b]ut when our rules provide the defaulting
party a remedy, Craddock does not apply.” Id.
Cimarron, plaintiff in Carpenter , had an opportunity to file to a motion for leave before summary judgment was entered, and did so. Id. Cimarron failed to file
a response because there was a miscommunication between the partner and the
associate handling the file. Id. Once the partner discovered the failure to file a
response, he immediately took steps to remedy the situation by filing a motion for
leave and a motion for continuance. Id. His motion for new trial, then, was not his
only remedy.
Once the mistake is discovered, it is the subsequently employed procedural mechanism employed by the mistaken party that is evaluated under the equitable
principles espoused by this State’s highest court over seventy years ago. See
Carpenter , 98 S.W.3d at 686 (holding that a court abuses its discretion if the party
seeking leave can establish “good cause for failing to timely respond by showing
that (1) the failure to respond was not intentional or the result of conscious
indifference, but the result of accident or mistake, and (2) allowing the late
response will occasion no undue delay or otherwise injure the party seeking
summary judgment”).
Here, the Appellant’s only remedy after he discovered his mistake was to file a motion for new trial. Appellant’s mistake was twofold: (1) he mistakenly
believed that the suggestion of bankruptcy precluded the need for a response, and
(2) he relied on the discussions between the Court’s Clerk and Mrs. DeLeon to
bolster his erroneous belief [2] that there was no need to employ any other procedural
tools to prevent Appellee’s claim from going forward in this dispute. The
Appellant, unlike the plaintiff in Carpenter , failed to file a response because he did
*9 not think one was necessary. Appellant did not learn that his reliance on the
suggestion of bankruptcy was misplaced until “after the summary-judgment
hearing or rendition of judgment.” Carpenter , 98 S.W.3d at 686. Therefore, the
appropriate standard of review in this case is the Craddock standard.
2. A MERITORIOUS DEFENSE IN A DEFAULT SUMMARY JUDGMENT CONTEXT
CAN BE ESTABLISHED IF THE MOVANT CAN ESTABLISH THAT THERE MAY BE A GENUINE ISSUE OF MATERIAL FACT .
“Although Craddock involved a default judgment taken after a defendant failed to answer, the same requirements have been applied to motions for new trial
following default summary judgments.” Mosser v. Plano Three Venture , 893
S.W.2d 8, 12 (Tex. App.—Dallas 1994, no pet. hist.). “In the summary judgment
context, however, to set up a meritorious defense means to allege facts and bring
forth summary judgment proof sufficient to raise a material issue of fact.”
Washington v. McMillan , 898 S.W.2d 392, 396 (Tex. App.—San Antonio 1995,
rehearing overruled Apr. 27, 1995). To hold otherwise, would put the Appellant in
a worse position on appeal after summary judgment is entered than the one he was
in before judgment was entered.
Appellee’s contention that this Court should simply confine its review to its pleadings turns the purpose of the Craddock standard on its head. If, as Appellee
contends, a reviewing court must limit its review to the movant’s summary
judgment pleading, then a nonmovant could never establish a meritorious defense
in light of a well plead summary judgment motion. The purpose of considering
whether there is a meritorious defense is to determine whether there is any reason
that the result might have been different if the nonmovant had responded.
Otherwise, there is no need to undo the judgment. In essence, Appellee’s position
eliminates the meritorious defense element in the Craddock test.
Appellee’s response also ignores the well-established jurisprudence of this State that has applied the summary judgment standard of review in the default
context. Weech v. Baptist Health Sys. , 392 S.W.3d 821, 825 (Tex. App.—San
Antonio 2012, no pet.); Pascual Madrigal P.L.L.C. v. Commercial IT Solutions
Inc. , No. 04-13-00742-CV, 2014 WL 4230174, at *4 (Tex. App.—San Antonio
Aug. 27, 2014, no pet.); Huffine v. Tomball Hosp. Auth. , 979 S.W.2d 795, 799
(Tex. App.—Houston [14th Dist.] 1998, no pet.); Medina v. W. Waste Indus. , 959
S.W.2d 328, 330 (Tex. App.—Houston [14th Dist.] 1997, pet. denied); Washington
v. McMillan , 898 S.W.2d 392, 396 (Tex. App.—San Antonio 1995, no writ);
Gonzales v. Surplus Ins. Servs. , 863 S.W.2d 96, 102 (Tex. App.—Beaumont 1993,
writ denied); Krchnak v. Fulton , 759 S.W.2d 524, 528–29 (Tex. App.—Amarillo
1988, writ denied); Costello v. Johnson , 680 S.W.2d 529, 531 (Tex. App.—Dallas
1984, writ ref'd n.r.e.). The rule that Appellant suggests ought to apply in these
cases acknowledges the difference between the substantially lower burden imposed
on the non-movant to avoid judgment in the summary judgment context versus at
trial. Medina , 959 S.W.2d at 330-31. “For instance, when the movant's summary
judgment proof, standing alone, is sufficient as a matter of law, the non-movant
may still preclude summary judgment if he utilizes his response to direct the court's
attention to material questions of fact in the record, or if he attaches proof to his
response which controverts the proof offered by the movant.” Id. Holding
otherwise might establish scenarios where the “failing to respond [itself] . . . causes
a summary judgment to be rendered.” Washington , 898 S.W.2d at 396. The
equitable principles behind the reasoning in Craddock apply with equal force to the
case at bar.
3. A PPELLEE ’ S MISTAKE WAS GENUINE , AND NOT OCCASIONED BY CONSCIOUS
INDIFFERENCE . Appellee’s characterization of the Appellant’s mistake finds its greatest strength in hindsight. Appellant does not, and has never contended, that “a non-
parties bankruptcy filing never stays a judicial proceeding.” Appellee’s Brief at 17.
Instead, Appellant contends that the claims of Appellee are against the Brown
Medical Center, as that is the party that contracted for the advertising services.
Implicit in the lower court’s holding that judgment was proper against Dr.
Lopez is that he was a debtor on the sworn account. Dr. Lopez contends, still, that
there is insufficient evidence in this appellate record to support such a finding, and
that the actual debtor is the Brown Medical Center. Dr. Lopez mistakenly relied on
this contention, among other things, to reach his conclusion that the suggestion of
bankruptcy was the appropriate— and only —filing that was necessary to advise
the plaintiff that his claims had to be brought in the bankruptcy court against
Brown Medical Center.
Appellee contends that this argument is “hard to accept as truthfully felt.” Appellee’s Brief at 17. However, the Appellee wholly fails to point to any
controverting evidence, and the record certainly supports a finding that Dr. Lopez
was not consciously indifferent to the matter. Mrs. DeLeon testified that she
attempted to contact Appellee’s trial counsel on several occasions to no avail. See
Affidavit of Elizabeth DeLeon CR 79-80. Mrs. DeLeon further testified that she
contacted the lower court’s clerk to discuss the filing of the suggestion, and what
impact that would have on the proceedings. Id. Perhaps, Appellant was unwise in
reaching the conclusion that he did, but that is not demonstrative of conscious
indifference, and is rather properly classified as a mistake or an accident.
4. A PPELLANT ’ S CHALLENGE TO THE AWARD OF ATTORNEY ’ S FEES WAS
SUBSUMED WITHIN ITS CHALLENGE TO LIABILITY .
When Appellant challenged the finding of liability in its motion for new
trial, it also implicitly challenged the damages that were award as a result. Further,
nothing in the Craddock standard states that a movant seeking a new trial is
required to raise every meritorious defense he may possess. Simply, he is required
to show that he has at least one. When the questions before the Court are ones of
equity, the Court “should deal with the facts on a case-by-case basis in order to do
equity.” Angelo v. Champion Rest. Equip. Co. , 713 S.W.2d 96, 98 (Tex. 1986).
As previously stated by the Appellant, “[b]esides the already briefed challenge to liability, the Appellant challenges the damages that were awarded by
virtue of Appellee’s successful claim on a breach of contract claim.” Appellant’s
Brief at 20. It is clear that the award of attorney’s fees does not reflect a proper
application of the Arthur Anderson factors a court must consider in an award of
attorney’s fees. Arthur Andersen & Co. v. Perry Equip. Corp , 945 S.W.2d 812, 818
(Tex. 1997). This is simply one of the meritorious defenses that the Appellant
possesses to challenge the judgment that was entered against him, and is properly
before this Court.
5. A PPELLANT IS WILLING REIMBURSE THE A PPELLEE FOR ITS EXPENSES .
“Involved is an equitable principle, and the court should deal with the facts on a case-by-case basis in order to do equity. Failure to offer reimbursement
should not in every instance preclude the granting of a new trial.” Angelo v.
Champion Rest. Equip. Co. , 713 S.W.2d 96, 98 (Tex. 1986). While Appellee is
correct that there is presently no offer to reimburse the Appellee for the expenses it
incurred, the Supreme Court has never expressly stated that such an offer is
required. “Although these may be important factors for the court to look to in
determining whether it should grant a new trial, they should not be the sine qua
non of granting the motion.” Id.
Further, it is not too late for the Appellant to make such an offer, which Appellant, by this reply brief, is doing so at this time. Appellee should not be heard
to complain of this late offer of reimbursement, as evidence of the Appellant’s
willingness to reimburse the Appellee may be raised on appeal. Id. (“Additionally,
it should be noted that Angelo expressed the willingness to reimburse Champion
for their expenses at oral argument at the court of appeals and in their brief to us.”).
CONCLUSION & PRAYER Given that Lopez has satisfied the traditional and modified Craddock factors, this Court should reverse the judgment of the Trial Court, and remand this
matter so that it may proceed to trial.
Respectfully submitted, D AVIS , C EDILLO & M ENDOZA , I NC . McCombs Plaza, Suite 500 755 E. Mulberry Avenue San Antonio, Texas 78212 Telephone No. : (210) 822-6666 Telecopier No. : (210) 822-1151 By: /s/ Isaac J. Huron Isaac J. Huron
State Bar No. 24032447 Ramon Rodriguez State Bar No. 24088319 ihuron@lawdcm.com rrodriguez@lawdcm.com ATTORNEY FOR APPELLANTS *16 CERTIFICATE OF COMPLIANCE I hereby certify that this reply brief is in compliance with the rules governing the length and font requirements for briefs prepared by electronic means. The reply
brief was prepared using Microsoft Word 2010. According to the software used to
prepare this brief, the total word count, including footnotes, but not including those
sections excluded by rule, is 2,175. The “Times New Roman” font is used in this
reply brief, with 14 pt. font for the body of the reply brief, and 12 pt. font for
footnotes.
/s/ Isaac J. Huron Isaac J. Huron
CERTIFICATE OF SERVICE I hereby certify that a true and correct copy of the foregoing document has been forwarded on this 17th day of February, 2015 via the electronic service system
provided through Texas.gov and via email to Appellee’s counsel:
Timothy A. Hootman, SBN 09965450
2402 Pease St
Houston, TX 77003
(t) 713.247.9548
Email: thootman2000@yahoo.com
Bill Malone, Jr., SBN 12877500
8650 Spicewood Springs, No 145-598
Austin, TX 78759
(t) 512.346.9600
Email: bill@billmalonelaw.com
/s/ Isaac J. Huron Isaac J. Huron
[1] Under the modified Craddock standard, all the non-movant must do is allege that there is a genuine issue regarding a material fact. Medina , 959 S.W.2d at 331. Under the traditional Craddock standard, the movant must demonstrate that he has a meritorious defense, which, “if proved, would cause a different result upon a retrial of the case, although it need not be a totally opposite result.” Ferguson & Co. v. Roll , 776 S.W.2d 692, 698 (Tex. App.—Dallas 1989, no writ).
[2] Appellant still contends that the suggestion of bankruptcy was appropriate because Dr. Lopez is not the contracting party.