Delgado v. Texas Workers' Compensation Insurance Fund, No. 03-03-00621-CV (TX 3/17/2006)
| Decision Date | 17 March 2006 |
| Docket Number | No. 03-03-00621-CV.,03-03-00621-CV. |
| Court | Texas Supreme Court |
| Parties | LINDA DELGADO, INDIVIDUALLY AND D/B/A DEL-KLEEN, INC., Appellant, v. TEXAS WORKERS' COMPENSATION INSURANCE FUND,<SMALL><SUP>1</SUP></SMALL> Appellee. |
Appeal from the District Court of Travis County, 200th Judicial District, No. 98-02514, Honorable Patrick O. Keel, Judge Presiding.
Affirmed.
Before Chief Justice LAW, Justices PATTERSON and PURYEAR.
In four issues, appellant Linda Delgado argues that the district court erred by (1) granting a default judgment and denying her motion for new trial when there is no evidence she was notified of the trial setting, (2) allowing her attorney to withdraw without notice to her, and (3) issuing a final judgment that is not supported by legally and factually sufficient evidence. For the reasons explained below, we will affirm the judgment.
On March 9, 1998, the Texas Workers' Compensation Insurance Fund (the Fund) filed suit against Border Maintenance Services, Inc. (BMS), Miguel Delgado, and Linda Delgado, individually and d/b/a Del-Kleen, Inc. (collectively, the defendants).2 The Fund alleged that the defendants "conspired with one another to fraudulently and unlawfully obtain workers' compensation insurance coverage while evading payment of properly calculated premiums." Miguel and BMS were served with citation and promptly filed an answer. The claims against them are not at issue in this appeal.
Linda was personally served with citations in her individual capacity and as the registered agent for Del-Kleen, Inc. An answer was filed on behalf of both her and Del-Kleen by the same attorneys who represented Miguel and BMS. In March 1999, the defendants' attorneys withdrew, and Howard Newton became their attorney of record.
The parties engaged in discovery, filed motions for summary judgment, and participated in other legal proceedings. Newton continued to file and receive pleadings and other documents on behalf of Linda as well as the other defendants. On December 16, 2002, Newton filed a motion to withdraw as counsel. In the motion, Newton stated that the defendants' address "is as follows: Mr. Miguel Delgado; Border Maintenance Services, Inc.; 2300 West Commerce, Suite 205; San Antonio, Texas 78205." Newton also provided a last known telephone number and facsimile number for the defendants.
The court subsequently granted Newton's motion, ordering him to furnish a signed copy of the order to the defendants by certified mail, return receipt requested, first class mail, and facsimile to their last known address: "Border Maintenance Services, Inc., c/o Miguel Delgado, 200 West Commerce, Suite 205, San Antonio, Texas 78205." (Emphasis added.) Although the order contained a typographical error, listing the address as 200 West Commerce instead of 2300 West Commerce, the order accurately listed the telephone number and facsimile number provided by Newton in his motion to withdraw. The court ordered that, until a new attorney of record appeared on behalf of the defendants, notices of settings, deadlines, and filings must be served on them "at their last known address" as listed above.
On June 23, 2003, the case was called for trial. Miguel appeared on his own behalf and also attempted to represent BMS pro se.3 Linda did not appear. Miguel's request for a continuance to find an attorney for BMS was denied and a default judgment was entered against BMS, Del-Kleen, and Linda.
Miguel was permitted to represent himself in his individual capacity. He testified that he was the president of BMS and that he and his wife (not Linda) owned 100% of the stock. BMS had contracts with governmental entities to perform janitorial work; the contracts required BMS to procure workers' compensation insurance. However, Miguel did not want to purchase insurance for every employee of BMS, so he created Del-Kleen in an attempt to use the company to provide insurance for the BMS workers that were performing under his contract with the governmental entities. Miguel testified that in the application for insurance submitted to the Fund, he listed Linda as 51% owner of Del-Kleen, but in reality, no stock was ever issued for Del-Kleen. He admitted that Linda "never really owned anything at all," but stated that she allowed her name to be used on the documents so that Miguel would not appear as a majority owner. Miguel's intent was to prevent the Fund from charging him premiums for both companies. In the Fund's closing argument, it urged that Del-Kleen was "nothing more than a shell" and that "[i]n fact, nothing was ever done to incorporate the business."
On June 26, the district court entered a final judgment against BMS, Miguel, Linda, and Del-Kleen, finding them jointly and severally liable and awarding damages of $868,162 (actual damages for past due premiums), $694,529 (pre-judgment interest), $80,338 (attorneys' fees and expenses), post-judgment interest, and costs of court. On July 28, BMS, Miguel, and Linda, individually and d/b/a Del-Kleen, filed a motion for new trial with affidavits attached.4 Linda's affidavit is consistent with Miguel's testimony that she was not involved in the daily operation of the businesses and further avers that she was not aware of the trial setting or the fact that Newton had withdrawn from the case; Miguel's affidavit establishes that he knew Newton had withdrawn and that he received notice of the jury trial on April 17. The Fund did not file a response to the motion. On September 8, the court denied the motion.5 This appeal followed.
In four issues, Linda argues that the district court erred by (1) granting a default judgment and denying her motion for new trial when there is no evidence she was notified of the trial setting, (2) allowing her attorney to withdraw without notice to her before the case was set for trial, and (3) issuing a final judgment that is not supported by legally and factually sufficient evidence. For convenience, we will address the issues in chronological order.
Withdrawal of attorney
First, Linda contends that the district court erred by allowing Newton to withdraw from the case when his motion to withdraw did not comply with rule 10 of the rules of civil procedure and when, she alleges, he did not provide notice to her of his withdrawal.
Texas Rule of Civil Procedure 10 governs the withdrawal of counsel in civil cases. See Tex. R. Civ. P. 10; Gillie v. Boulas, 65 S.W.3d 219, 221 (Tex. App.-Dallas 2001, pet. denied). Attorneys may withdraw from cases "upon written motion for good cause shown." Tex. R. Civ. P. 10. Attorneys who are withdrawing without substituting counsel are required to file a written motion stating: (1) that a copy of the motion has been delivered to the party; (2) that the party has been notified in writing of his right to object to the motion; (3) whether the party consents to the motion; (4) the party's last known address; and (5) all pending settings and deadlines. Id. If the motion is granted, the withdrawing attorney shall immediately notify the party in writing of any additional settings or deadlines of which the attorney has knowledge at the time of the withdrawal and has not already notified the party. Id. The court may impose further conditions upon granting leave to withdraw. Id. Notice or delivery to the party shall be either made to the party in person or mailed to the party's last known address by both certified and regular first class mail. Id.
We review the court's decision to grant a motion to withdraw for an abuse of discretion. See Boulas, 65 S.W.3d at 221; Walton v. Canon, Short & Gaston, P.C., 23 S.W.3d 143, 148 (Tex. App.-El Paso 2000, no pet.); Williams v. Bank One, Tex., N.A., 15 S.W.3d 110, 114 (Tex. App.-Waco 1999, no pet.); Moss v. Malone, 880 S.W.2d 45, 49 (Tex. App.-Tyler 1994, writ denied). A court abuses its discretion when it grants a motion to withdraw that does not comply with the mandatory requirements of rule 10. Boulas, 65 S.W.3d at 221; Williams, 15 S.W.3d at 114. However, even if the court erred by allowing the attorney to withdraw, we may only reverse the judgment if the error probably caused the rendition of an improper judgment or probably prevented Linda from properly presenting her case on appeal.6 See Tex. R. App. P. 44.1.
On December 16, 2002, Newton filed a motion to withdraw as counsel for the defendants. Newton's motion stated that his clients had failed to cooperate in completing a settlement agreement, ceased to communicate with him, and failed to pay his firm pursuant to the parties' agreement; the motion included the defendants' last known address,8 telephone number, and facsimile number. The motion does not, however, state: (1) that a copy of the motion has been delivered to the parties; (2) that the parties have been notified in writing of their right to object to the motion; (3) whether the parties consent to the motion; or (4) any pending settings and deadlines. See Tex. R. Civ. P. 10. The certificates of service attached to the motion to withdraw and the notice of hearing on the motion state that a copy of the motion and notice of hearing was sent, via facsimile and certified mail, return receipt requested, to Miguel.
On March 5, 2003, the court granted Newton's request to withdraw. The order granting the withdrawal accurately states that there were no pending settings or deadlines in the case, and orders Newton to furnish a copy of the order to the defendants at their last known address via facsimile, first class mail, and certified mail, return receipt requested. The last known address listed in the order is "Border Maintenance Services, Inc., c/o Miguel Delgado, 200 West Commerce, Suite 205, San Antonio, Texas 78205." (Emphasis added.) Telephone and facsimile numbers are also listed. Furthermore, the order states that, until another attorney appeared on the defendants' behalf, notices of settings and...
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