Cimarron Hydrocarbons v. Carpenter

• Decision Date: 05 October 2000
• Citation: 35 S.W.3d 692
• Parties: (Tex.App.-Fort Worth 2000) CIMARRON HYDROCARBONS CORPORATION APPELLANT v. BOB E. CARPENTER, C.D. CONSULTING AND OPERATING COMPANY, AND C.D. ROUSTABOUT COMPANY AND EQUIPMENT SALES APPELLEES NO. 2-99-288-CV
• Court: Texas Court of Appeals

Page 692

35 S.W.3d 692 (Tex.App.-Fort Worth 2000)

CIMARRON HYDROCARBONS CORPORATIONAPPELLANT v.BOB E. CARPENTER, C.D. CONSULTING AND OPERATING COMPANY, AND C.D. ROUSTABOUT COMPANY AND EQUIPMENT SALESAPPELLEES

NO. 2-99-288-CV

Court of Appeals Second District of Texas Fort Worth

October 5, 2000

Rehearing Overruled November 16, 2000.

FROM THE271ST DISTRICT COURT OF JACK COUNTY

JOHN HILL, CLYDE R. ASHWORTH, and DAVID F. FARRIS, JJ.(All Retired, Sitting by Assignment).

OPINION

DAVID F. FARRIS, Justice(Retired).

The impending issues in this case are two: whether or not the rule in Craddock v. Sunshine Bus Lines Inc., 134 Tex. 388, 133 S.W.2d 124(1939) applies when the adverse party fails to timely respond to a summary judgment motion, and if Craddock applies, has the appellant in this case sufficiently proved all three of the Craddock elements.We hold that Craddock applies and that appellant proved all three Craddock elements.We reverse and remand.

Appellant, Cimarron Hydrocarbons Corporation, contracted with appellees for their services on a new well.A casing leak occurred as appellees were "cementing the well" and Cimarron sued the appellees alleging several theories of recovery including Deceptive Trade Practices Act violations, breach of warranties, and negligence.Approximately one-and-one-half-years after suit was filed, and following extensive discovery, Cimarron's attorney withdrew.

While Cimarron was without counsel, appellees moved for summary judgment.Hearing on their motions was scheduled for April 30, 1999.Cimarron retained new counsel on April 14, and at his request appellees agreed to reschedule the hearing.The hearing was later rescheduled for June 4 and Cimarron's response was due by May 28.Cimarron's attorney did not timely respond to the summary judgment motions.He and an associate explained their failure to respond in affidavits and testimony at a hearing on Cimarron's motion for new trial.

After appellees agreed to reschedule the hearing Cimarron's attorney gave the file to his associate, instructing him to prepare a response once the hearing was rescheduled and an expert witness had been retained.On April 28 Cimarron's attorney received notice of the June 4 hearing and followed his usual procedure of placing the notice in his "outbox" so his assistant could calendar the hearing.But the associate was not told of the hearing date and it was not placed on his calendar.On June 2 the attorneys discovered their error.They then asked appellees' attorney either to agree to continue the hearing or waive objections to a late response, but he refused.A response was prepared and filed minutes before the hearing together with a motion for leave to file a late response and a motion for continuance.The trial court denied Cimarron leave to file its late response, denied Cimarron's motion for continuance, and granted appellees' motions for summary judgment.Cimarron moved for a new trial, asserting that it was entitled to a new trial under Craddock, but its motion was overruled.

The first question we must address is whether the Craddock rule should be applied in cases where a party who has defaulted by not timely responding to a motion for summary judgment seeks a new trial.Four Texas courts of appeals have held that Craddock applies where a party has failed to respond to a summary judgment motion while only one, the First Court of Appeals, held that it does not.Those cases are discussed in Bell v. State Department of Highways & Public Transportation, 902 S.W.2d 197, 199 n.3(Tex. App. Houston[1st Dist.]1995, no writ).Significantly, in a concurring opinion, Justice Cohen criticized earlier opinions of his court holding that Craddock did not apply.Seeid. at 200-01(Cohen, J., concurring).This court has not addressed this question, concluding it need not do so in the Jatoi case discussed below.Jatoi v. Decker, Jones, McMackin, Hall & Bates, 955 S.W.2d 430, 432(Tex. App. Fort Worth1997, writ denied).But we must address the question.

The purpose of summary judgment remains to eliminate patently meritless claims or untenable defenses.SeeGulbenkian v. Penn, 151 Tex. 412, 252 S.W.2d 929, 931(1952);Hock v. Salaices, 982 S.W.2d 591, 593(Tex. App. San Antonio 1998, no pet.).With this purpose in mind, we hold Craddock applies to the failure to respond to a summary judgment motion because the question is controlled by the same principle of equity that engendered the rule in Craddock.Craddock, 133 S.W.2d at 126.That principle of equity is summoned when the remiss party offers some excuse, not necessarily a good excuse, coupled with the absence of an intentional failure to respond and makes a prima facie showing that if the summary judgment is set aside the moving party will be in no worse position than he would have been had a response been timely filed.Seeid. at 125.Where these elements occur, appellate review is restricted to determining whether or not the trial court abused its discretion.

The abuse of discretion standard acknowledges that trial courts have a measure of discretion in cases governed by equitable principles but confirms that it is discretion bridled by relevant guiding rules and principles.Seeid. at 126.Craddock restates the guiding rule applicable to a trial court's exercise of discretion when determining whether or not to set aside a default judgment:

A default judgment should be set aside and a new trial ordered in any case in which the failure of the defendant to answer before judgment was not intentional, or the result of conscious indifference on his part, but was due to a mistake or an accident; provided the motion for a new trial sets up a meritorious defense and is filed at a time when the granting thereof will occasion no delay or otherwise work an injury to the plaintiff.

Id.Craddock has been followed by a litany of cases that explain its rule, including Strackbein v. Prewitt, 671 S.W.2d 37(Tex.1984).According to Strackbein if the evidence in support of a Craddock new trial motion is not controverted and if the only reasonable interpretation of the evidence is that the failure to answer was not intentional or the result of conscious indifference but was due to a mistake or accident, a new trial must be granted.Id. at 38-39.In sum, while the standard of review in Craddock is no stricter than that imposed in other instances involving an abuse of discretion standard, the rule guiding the trial court's exercise of its discretion is particularly unyielding.

Appellees argue that applying Craddock to summary judgment cases effectively overrules the requirement of 166a(c) that responses must be filed not later than seven days prior to the hearing and allows an adverse party to tardily respond to a summary judgment by offering any excuse for the tardiness.Tex. R. Civ. P. 166a(c).The same argument can be made against applying Craddock to a defendant's failure to timely answer after being served with citation.As the adverse party must prove each of the Craddock elements and may be compelled to compensate the movant for expenses incurred because of delay, we find this argument without merit.

Appellees also argue that applying Craddock to untimely filed summary judgment responses rewards the adverse party by allowing additional time to investigate the facts and obtain witnesses.If the adverse party can discover facts and obtain witnesses that will defeat summary judgment, then the case should not end in summary judgment.SeeWashington v. McMillan, 898 S.W.2d 392, 396(Tex. App. San Antonio 1995, no writ);Krchnak v. Fulton, 759 S.W.2d 524, 528-29(Tex. App. Amarillo1988, writ denied).Further, while it will often be difficult for the movant to controvert proof that a failure to respond was not intentional, there are risks to the party who cavalierly takes advantage of Craddock.The movant may present controverting proof that will justify the trial court either overruling a Craddock motion or sanctioning the adverse party.

Appellees assert there are no Texas cases holding Craddock applicable to default summary judgments when the adverse party had actual adequate notice of the motion and hearing.We find this to be a misreading of the cases cited by both Cimarron and appellees.In Medina v. Western Waste Industries, 959 S.W.2d 328, 331(Tex. App. Houston [14th Dist.]1997, pet. denied), the attorney for the adverse party admitted receiving notice of the summary judgment hearing but claimed his failure to respond was caused by unrelated distractions.In Washington v. McMillan, 898 S.W.2d at 394, notice was properly served on the adverse party's attorney but was mistakenly sent to the file room rather than to the attorney or his secretary.The court held that Washington met the Craddock test and that the trial...