Eckman v. Centennial Sav. Bank, 05-87-00896-CV

• Decision Date: 13 June 1988
• Docket Number: No. 05-87-00896-CV,05-87-00896-CV
• Parties: Carl E. ECKMAN, Jr., James Nicholson and Gary Hutchison, Appellants, v. CENTENNIAL SAVINGS BANK, Appellee.
• Court: Texas Court of Appeals

Page 392

757 S.W.2d 392

Carl E. ECKMAN, Jr., James Nicholson and Gary Hutchison, Appellants, v. CENTENNIAL SAVINGS BANK, Appellee.

No. 05-87-00896-CV.

Court of Appeals of Texas Dallas.

June 13, 1988.

Rehearing Denied July 22, 1988.

Michael Lowenberg, Kathleen M. LaValle, Dallas, for appellants.

James V. Cornehls, Arlington, for appellee.

Before STEPHENS, McCLUNG and BAKER, JJ.

McCLUNG, Justice.

Carl Eckman, James Nicholson and Gary Hutchison appeal a summary judgment in favor of Centennial Savings Bank, appellee. The judgment ordered that Eckman, Nicholson and Hutchison take nothing on their claims and that Centennial recover the deficiency due under promissory notes executed by Eckman, Nicholson, Hutchison and Jackson. Eckman, Nicholson and Hutchison complain that the trial court erred in granting summary judgment because (1) Centennial failed to show there were no genuine issues of material fact as to their claims against Centennial (2) the affidavits, depositions and testimony they provided in response to the motion for summary judgment raise genuine issues of material fact (3) the trial court erred in refusing to strike deemed admissions and allow their qualified denials and (4) the trial court erred in refusing them leave to take depositions. Because we find no merit in these contentions, we affirm the judgment of the trial court.

A detailed recitation of the facts is necessary to fully explain our disposition of this case. Eckman, Nicholson, Hutchison and Jackson formed a joint venture, EJHN, for the purpose of constructing houses in a residential subdivision. In November, 1983, the four joint venturers obtained interim construction loans in the aggregate amount of $1,019,000 from Centennial Savings Bank. The loans were represented by fourteen separate notes, secured by liens on lots in the subdivision. After the original notes matured, Centennial granted Eckman, Nicholson, Hutchison and Jackson three consecutive extensions, at their request. Thereafter, Centennial refused further extensions and Eckman, Nicholson, Hutchison and Jackson defaulted. Centennial posted the properties for foreclosure and scheduled trustee's sales of the properties for January 7, 1986.

On January 6, 1986, Eckman, Nicholson and Hutchison filed this suit to enjoin foreclosure and recover damages from Centennial, resulting from Centennial's alleged breach of fiduciary duty, conspiracy to convert funds and conceal transactions on their account, violation of the Texas Deceptive Trade Practices Act, breach of depository contract, negligent handling of funds and fraud. Because of Eckman, Nicholson and Hutchison's failure to timely serve Centennial, the foreclosure sales were not enjoined; thus, only the suit for damages was addressed by the trial court.

On March 24, 1986, Centennial filed its First Amended Original Answer consisting of special exceptions to the pleadings of Eckman, Nicholson and Hutchison, and a counterclaim for the amounts owed on the notes in excess of the proceeds from the foreclosure sales. On the same day, Centennial served Eckman, Nicholson and Hutchison with a First Request for Admissions, Interrogatories and Requests for Production.

As of February 26, 1987, nearly one year later, Eckman, Nicholson and Hutchison had not responded to Centennial's discovery requests, had conducted no discovery of their own, and had raised no affirmative defenses to Centennial's counterclaim. On January 27, 1987, Centennial filed a motion for summary judgment, together with supporting affidavits, and the trial court set the hearing on the motion for March 9, 1987.

On February 26, 1987, Eckman, Nicholson and Hutchison filed a "Motion for Continuance of Hearing on Motion for Summary Judgment and Response to Motion for Summary Judgment." In the motion, they requested continuance, for an indefinite period of time, to allow them to take depositions of numerous individuals and to request bank records from Centennial. The trial court granted a continuance only until March 13, 1987.

On March 12, 1987, Eckman, Nicholson and Hutchison filed a second motion for continuance, asking for 45 additional days. The motion stated:

Plaintiffs have been unable to complete necessary discovery in this cause due to the pressures of other major litigation and subsequent appellate work in connection with another lawsuit involving the same parties. Plaintiffs ... cannot be fully and adequately prepared to respond to Defendant's motion for summary judgment until the ... additional discovery is completed.

The trial court denied the second motion for continuance.

Between March 9, 1987 and March 13, 1987, Eckman, Nicholson and Hutchison sought leave of court to file a variety of papers, including additional affidavits, deposition and trial testimony of Richard Tharp from a separate lawsuit, a notice of deposition of Al Pridmore and Richard Tharp, and a Request for Extension of Time to File Answers to Requests for Admissions. The record does not affirmatively show that the court granted leave to file any of these papers nor that the court granted any of appellants' requests. The court held a hearing on the Motion for Summary judgment on March 13, 1987, as scheduled and summary judgment was granted in favor of Centennial. Appellants raise five points of error on appeal, which we will discuss in reverse order.

Eckman, Nicholson and Hutchison complain, in their fifth point of error, that the trial court erred in denying their motion for leave to take the depositions of Richard Tharp and Al Pridmore prior to hearing on the motion for summary judgment. We note, at the outset, that they complain, as a practical matter, that the court refused to grant a second continuance so that they could obtain the desired deposition testimony prior to the summary judgment hearing.

In support of their contention Eckman, Nicholson and Hutchison cite Garza v. Serrato, 699 S.W.2d 275 (Tex.App.--San Antonio 1985, writ ref'd n.r.e.). Garza is a personal injury case in which the plaintiff's treating physician took x-rays fifteen days prior to trial which caused him to change his diagnosis from a sprain to a herniated disc. The doctor's deposition, taken five days prior to trial, revealed this change in diagnosis, and the defendant's attorney received a copy of the deposition only two days prior to trial. The court of appeals stated that, although the granting or denial of a motion for continuance is a matter resting within the sound discretion of the trial court, the denial of a motion for continuance, supported by affidavit, containing uncontroverted facts which constitute good sufficient cause alleged, was an abuse of discretion. Id. at 281.

The facts set out in appellants' affidavit, even if uncontroverted, do not constitute good sufficient cause as a matter of law as did the facts in Garza. Rather, the facts are more closely aligned with those of Manges v. Astra Bar, 596 S.W.2d 605, 612 (Tex.Civ.App.--Corpus Christi 1980, writ ref'd n.r.e.). In the present case, during a period of nearly one year, Eckman, Nicholson and Hutchison failed to institute discovery proceedings as to Al Pridmore or Richard Tharp in order to inquire into the circumstances surrounding the construction of the houses, the handling of their account, the relationship between Tharp and Jackson, or any other matter. Their motion fails to show any diligence in obtaining the critical discovery or any valid excuse for their lack of diligence. See Cronen v. Nix, 611 S.W.2d 651, 653 (Tex.Civ.App.--Houston [1st Dist.] 1980, writ ref'd n.r.e.), cert. denied, 454 U.S. 833, 102 S.Ct. 132, 70 L.Ed.2d 112 (1981) (trial court acted within its discretion in refusing to recognize another lawsuit as an excuse for plaintiff's inattention to this lawsuit over a fourteen-month period). Furthermore, their motion for continuance fails to show what evidence appellants sought to obtain or explain its materiality to this case. We hold that under these circumstances the trial judge did not abuse his discretion by denying the motion for continuance.

Eckman, Nicholson and Hutchison next complain that the trial court erred in failing to admit their qualified denial of Centennial's Request for Admissions. They contend that their request for extension of time to file answers to the requests for admissions point out facts that excuse their failure to timely respond, namely their involvement in another lawsuit between the same parties and the fact that the law firm representing them lost an employee who was handling the file.

When Eckman, Nicholson and Hutchison failed to answer the request for admissions or move for more time to answer, they were deemed admitted by operation of Rule 169. Elkins v. Jones, 613 S.W.2d 533 (Tex.Civ.App.--Austin 1981, no writ). No motion to deem unanswered requests for admissions admitted need be filed. Packer v. First Texas Savings Assoc., 567 S.W.2d 574 (Tex.Civ.App.--Eastland 1978, writ ref'd n.r.e.). This is so whether or not the court signed an order deeming the requests admitted. Elkins at 534.

In order to avoid the consequences of a failure to answer, the party must show legal or equitable excuse for his failure to answer. Burnett v. Cory Corp., 352 S.W.2d 502 (Tex.Civ.App.--Dallas 1961, writ ref'd n.r.e.). The trial court has broad discretion in refusing or granting a motion of a non-answering party to permit the filing of an answer or denial to a request for admissions after the time for answering has expired. Texas Employers' Insurance Association v. Bragg, 670 S.W.2d 712, 715 (Tex.App.--Corpus Christi 1984, writ ref'd n.r.e.). The ruling made by the trial court in either situation will be set aside only upon a showing of clear abuse. Id.

Centennial filed its requests for admissions on March 24, 1986. The requests for admissions were deemed admitted by operation of law thirty days later. Appellants did not file their request to extend the time for answering until March 13,...