Carpenter v. Cimarron Hydrocarbons Corp.

• Citation: 98 S.W.3d 682
• Decision Date: 31 December 2002
• Docket Number: No. 01-0002.,01-0002.
• Parties: Bob E. CARPENTER, C.D. Consulting and Operating Company, and C.D. Roustabout Company and Equipment Sales, Petitioners, v. CIMARRON HYDROCARBONS CORPORATION, Respondent.
• Court: Texas Supreme Court

Page 682

98 S.W.3d 682

Bob E. CARPENTER, C.D. Consulting and Operating Company, and C.D. Roustabout Company and Equipment Sales, Petitioners, v. CIMARRON HYDROCARBONS CORPORATION, Respondent.

No. 01-0002.

Supreme Court of Texas.

Argued November 28, 2001.

Decided December 31, 2002.

Opinion Concurring in Judgment and Dissenting Opinion Filed July 3, 2002.

Rehearing Denied April 3, 2003.

Sue S. Walker, Fort Worth, Christopher N. Forbis, Sewell and Forbis, Decatur, Michael A. Miller, Miller & McCarthy, P.C., Dallas, Thomas M. Michel, David L. Evans, Bourland Kirkman Seidler Evans Jay & Michel, LLP, Fort Worth, April Love Foscue, Dallas, for Petitioner.

Joseph W. Spence, Shannon Gracey Ratliff & Miller, Robert E. Aldrich, Jr., John F. Murphy, Gardner Aldrich & Murphy, LLP, Fort Worth, for Respondent.

Justice O'NEILL delivered the opinion of the Court in which Chief Justice PHILLIPS, Justice ENOCH, Justice OWEN, Justice HANKINSON and justice JEFFERSON joined.

We grant Cimarron Hydrocarbon Corporation's motion for rehearing. We withdraw our opinion and judgment of July 3, 2002, and substitute the following in its place.

In this case, we decide the review standards governing certain pre- and post-summary judgment rulings. Defendants in the underlying case each filed summary-judgment motions to which the plaintiff failed to timely respond. Plaintiff filed a motion for leave to file a late response and a motion to continue the scheduled summary-judgment hearing. The trial court denied plaintiff's motions and granted the defendants summary judgment. Plaintiff then filed a motion for new trial claiming that the trial court abused its discretion in denying plaintiff's pre-summary judgment motions. Alternatively, plaintiff claimed that the equitable standard we established in Craddock v. Sunshine Bus Lines, 134 Tex. 388, 133 S.W.2d 124 (1939), to review motions for new trial on default judgments should apply in this context. The trial court denied plaintiff's motion for new trial, but the court of appeals reversed and remanded, holding that Craddock applied and that the plaintiff had met that standard. 35 S.W.3d 692, 694.

We hold that Craddock does not apply to a motion for new trial filed after summary judgment is granted on a motion to which the nonmovant failed to timely respond when the respondent had notice of the hearing and an opportunity to employ the means our civil procedure rules make available to alter the deadlines Rule 166a imposes. In this case, the rules provided the plaintiff an opportunity to obtain leave to file a late response to the summary-judgment motion.¹ Therefore, the court of appeals erred in applying the equitable Craddock standard to plaintiff's motion for new trial. We further hold that a motion for leave to file a late summary-judgment response should be granted when the nonmovant establishes good cause by showing that the failure to timely respond (1) was not intentional or the result of conscious indifference, but the result of an accident or mistake, and (2) that allowing the late response will occasion no undue delay or otherwise injure the party seeking summary judgment. Because the plaintiff here did not establish good cause, the trial court did not abuse its discretion in denying plaintiffs motion. Nor did the trial court err in denying plaintiffs motion for new trial on this basis. Accordingly, we reverse the court of appeals' judgment and remand to that court to allow it to consider points Cimarron raised that it did not previously address.

I

In the underlying lawsuit, Cimarron Hydrocarbons Corp. alleges that the petitioners, Bob E. Carpenter, C.D. Consulting and Operating Co., and C.D. Roustabout Co. (collectively, "Carpenter"), agreed to select, furnish, and install casing in a new oil and gas well in Jack County, Texas. The casing failed as it was being cemented within the well bore, and the well could not be completed. In November 1997, Cimarron sued Carpenter alleging that Carpenter was negligent, violated the Deceptive Trade Practices Act, and breached express and implied warranties.

On March 5, 1999, Cimarron's counsel withdrew. Ten days later, Carpenter moved for summary judgment, and a hearing on the motion was set for April 30th. Cimarron retained new counsel, Robert Aldrich, on April 15th. Aldrich contacted Carpenter's counsel, who agreed to reset the summary judgment hearing. Aldrich testified (at the hearing on Cimarron's motion for new trial) that, after speaking with Carpenter's counsel, he gave the summary-judgment motion to an associate, John Murphy, to prepare a response and handle the summary-judgment hearing. On April 28th, Aldrich received notice that the summary-judgment hearing had been reset for June 4th, making Cimarron's summary-judgment response due by May 28th. Aldrich testified that he placed the hearing notice in his outbox for his assistant to calendar, but failed to attach a note on it directing her to calendar the hearing for Murphy, as was his usual practice. Aldrich mistakenly assumed that Murphy was aware of the new hearing date and was preparing a response.

Two days before the scheduled hearing, Aldrich was reminded of the hearing date while speaking with an expert he had retained in mid-May. After that conversation, Aldrich asked Murphy for the response he assumed had been filed and discovered that a response had not been prepared. Upon realizing the mistake, Murphy began preparing a response, and Aldrich contacted Carpenter's counsel to inquire whether he would agree to the filing of a late response or a continuance of the hearing. Carpenter's counsel did not agree.

The day of the hearing, Cimarron filed a motion for leave to file an untimely response, with a proposed response attached, and a motion for continuance. The trial court denied both motions and granted Carpenter's motion for summary judgment. Cimarron filed a motion for new trial, claiming that the trial court abused its discretion in denying Cimarron's presummary judgment motions and, alternatively, that the summary judgment should be set aside on the equitable grounds articulated in Craddock. After conducting an evidentiary hearing, the trial court denied Cimarron's new-trial motion. Applying the Craddock standard, the court of appeals reversed the summary judgment. 35 S.W.3d at 696. We granted Carpenter's petition to decide the review standards governing Cimarron's motions.

II

In Craddock, we held that a default judgment should be set aside when the defendant establishes that (1) the failure to answer was not intentional or the result of conscious indifference, but the result of an accident or mistake, (2) the motion for new trial sets up a meritorious defense, and (3) granting the motion will occasion no undue delay or otherwise injure the plaintiff. Craddock, 133 S.W.2d at 126. Such a rule, we noted, is based upon equitable principles and "prevents an injustice to the defendant without working an injustice on the plaintiff." Id. In Ivy v. Carrell, 407 S.W.2d 212, 213 (Tex.1966), we again cited equitable principles and extended Craddock to cases in which a party has answered but fails to appear for trial. The present situation, though, differs significantly from the circumstances presented in those cases.

In Craddock, the defendant was served with citation, which he forwarded to his insurance agent, who in turn forwarded the citation to the insurance company whose duty it was to defend. Although marked "urgent," the citation was mixed up with other insurance company mail and was not discovered until the day on which the default judgment was rendered. Thus, the defendant did not actually realize its mistake in time to correct it before the default judgment was rendered. Craddock, 133 S.W.2d at 125. Similarly, in Ivy v. Carrell, the new trial movant did not learn that the case had been set for trial until after the trial court rendered judgment. 401 S.W.2d 336, 338 (Tex.Civ.App.-Beaumont 1966) (noting that mailed notice of trial setting did not reach defaulting party's attorney), aff'd, 407 S.W.2d 212 (Tex.1966). In both cases, the defaulting party realized its mistake only after judgment, when the only potential relief available was a motion for new trial or to otherwise set aside the judgment.

In this case, Cimarron learned two days before the summary judgment hearing, well before judgment was rendered, that a timely response to the motion for summary judgment had not been filed. Our summary-judgment rules afford a party in this situation an opportunity to obtain additional time to file a response, either by moving for leave to file a late response or by requesting a continuance of the summary-judgment hearing. See TEX.R. CIV. P. 166a(c), 251. Cimarron actually availed itself of these remedies by filing a motion for leave to file a late response and, alternatively, requesting a continuance. That the trial court denied these remedies does not mean that they were not available; rather, the trial court's rulings on Cimarron's pre summary-judgment motions are, like most other trial court rulings, subject to review for an abuse of discretion.

Our 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. See Craddock, 133 S.W.2d at 126. But when our rules provide the defaulting party a remedy, Craddock does not apply. Thus, we hold that Craddock does not apply to a motion for new trial filed after judgment has been granted on a summary-judgment motion to which the nonmovant failed to timely respond when the movant had an opportunity to seek a continuance or obtain permission to file a late response. Here, the facts necessary to establish good cause were available from Cimarron's own counsel and his employees two days before the summary judgment hearing. The facts were all ascertainable without resort to any time-consuming formal discovery processes. Because...