Employers Ins. of Wausau v. Halton

• Decision Date: 27 February 1990
• Docket Number: No. 05-89-00065-CV,05-89-00065-CV
• Citation: 792 S.W.2d 462
• Parties: EMPLOYERS INSURANCE OF WAUSAU, Appellant, v. Larry J. HALTON, Appellee.
• Court: Texas Court of Appeals

Page 462

792 S.W.2d 462

EMPLOYERS INSURANCE OF WAUSAU, Appellant, v. Larry J. HALTON, Appellee.

No. 05-89-00065-CV.

Court of Appeals of Texas Dallas.

Feb. 27, 1990.

Rehearing Denied May 5, 1990.

Jeffrey R. Boggess, Irving, for appellant.

Roger G. Williams and Mark Darrow Wilson, Dallas, for appellee.

Before HOWELL, THOMAS, and OVARD, JJ.

OPINION ON REHEARING

HOWELL, Justice.

The following revised opinion is now the opinion of the Court.

In this workers' compensation case, Employers Insurance of Wausau (defendant) appeals a summary judgment rendered in favor of Larry J. Halton (plaintiff). Plaintiff had served requests for admissions on defendant, along with other discovery requests, which defendant failed to answer timely. Based primarily on the deemed admissions, the trial court entered judgment that plaintiff recover approximately $62,000 in workers' compensation payments, plus lifetime medical benefits, and $20,000 in attorney's fees.

In this appeal, defendant claims that the trial court abused its discretion in failing to grant defendant's motion to set aside the deemed admissions and to extend time to file objections and responses to plaintiff's requests for admissions. In urging this point, defendant claims that, under rule 169 of the Texas Rules of Civil Procedure, it proved "good cause" for the court to allow withdrawal of the deemed admissions. We agree with defendant's contentions. Because we conclude that its negligence in this matter did not rise to the level of conscious indifference, we reverse the summary judgment and remand this cause for trial on the merits.

I. PROCEDURAL HISTORY

On June 16, 1988, about one month after this case was filed, plaintiff's counsel mailed requests for admissions to defense counsel, which defense counsel admits he received "[s]hortly after that date." The requests consisted of fifty-one statements covering every issue in the case. In support of his motion to set aside the deemed admissions, defense counsel asserted by affidavit that during the thirty-day response period allowed by rule 169, he had prepared handwritten responses to the discovery requests according to his usual custom. He maintains that he intended to submit these to his secretary for typing, which was also his customary practice.

By his affidavit, defense counsel also stated that on September 7, 1988, while reviewing the file for reasons unrelated to the discovery requests, he discovered that the handwritten responses had never been transcribed, mailed, or filed. He said that he immediately contacted plaintiff's counsel to explain his failure to respond and to request an extension of time to prepare answers. Plaintiff's counsel refused and informed defense counsel that he was preparing a motion for summary judgment based on the deemed admissions.

On September 9, 1988, defense counsel filed answers to plaintiff's requests for admissions and delivered a copy to plaintiff's counsel. On this same date, plaintiff filed his motion for summary judgment based on the deemed admissions. Ten days later, defendant filed its motion to set aside the deemed admissions and to extend time to file objections and responses. On October 4, 1988, the trial court conducted a hearing on defendant's motions and on plaintiff's summary judgment motion. One week later, the trial court denied defendant's requests and granted summary judgment to plaintiff. We note that the case had been set for jury trial November 7, 1988.

II. REQUIREMENTS OF RULE 169

Rule 169 of the Texas Rules of Civil Procedure provides in pertinent part:

Each matter of which an admission is requested shall be separately set forth. The matter is admitted, without necessity of a court order unless, within thirty (30) days after service of the request, or within such time as the court may allow, the party to whom the request is directed serves upon the party requesting the admission a written answer or objection.

TEX.R.CIV.P. 169(1). The consequence of "deemed admissions" is that the matters are conclusively established against the admitting party unless the court, on motion, permits withdrawal or amendment of the admissions. The rule states:

[T]he court may permit withdrawal or amendment of responses and deemed admissions upon a showing of good cause for such withdrawal or amendment if the court finds that the parties relying upon the responses and deemed admissions will not be unduly prejudiced and that the presentation of the merits of the action will be subserved thereby.

TEX.R.CIV.P. 169(2). The "good cause" language was added to the rule by an amendment that took effect January 1, 1988. The remaining language has been part of the rule since 1973. Since the 1988 amendment, few, if any, Texas courts have examined the "good cause" requirement under rule 169.

In construing the withdrawal prerequisites of rule 169, we must give the rule a liberal construction. TEX.R.CIV.P. 1; cf. Sanders v. Harder, 148 Tex. 593, 596-97, 227 S.W.2d 206, 208-09 (1950) (trial court declined to deem matters admitted where defendant substantially complied with rule). The objective of the rules of civil procedure is to obtain a just, fair, equitable, and impartial adjudication of the rights of litigants. TEX.R.CIV.P. 1.

A number of decisions have elaborated on the policy underlying rule 169. In Sanders the Texas Supreme Court stated:

The primary purpose of the rule is to simplify trials by eliminating matters about which there is no real controversy, but which may be difficult or expensive to prove. It was never intended to be used as a demand upon a plaintiff or defendant to admit that he had no cause of action or ground of defense.

Sanders, 227 S.W.2d at 208. It has been held that rule 169 "should not be so construed as to give one litigant an advantage over his opponent, permitting him to have judgment without supporting testimony when, without injustice to either party, the case can be opened for a full hearing on the evidence." Gordon v. Williams, 164 S.W.2d 867, 868 (Tex.Civ.App.--Beaumont 1942, no writ). The court in Bynum v. Shatto, 514 S.W.2d 808, 811 (Tex.Civ.App.--Corpus Christi 1974, writ ref'd n.r.e.), stated that the rules of civil procedure "were never designed as traps for the unwary nor should they be construed in order to prevent a litigant from presenting the truth to the trier of facts."

As a consequence of these policies, the trial court possesses broad discretion to permit or deny withdrawal of deemed admissions. Eckman v. Centennial Sav. Bank, 757 S.W.2d 392, 396 (Tex.App.--Dallas 1988, writ denied); Rosenthal v. National Terrazzo Tile & Marble, Inc., 742 S.W.2d 55, 57 (Tex.App.--Houston [14th Dist.] 1987, no writ). The court's ruling on withdrawal will be set aside only upon a clear showing of abuse. Crime Control, Inc. v. RMH-Oxford Joint Venture, 712 S.W.2d 550, 552 (Tex.App.--Houston [14th Dist.] 1986, no writ); Texas Employers Ins. Ass'n v. Bragg, 670 S.W.2d 712, 715 (Tex.App.--Corpus Christi 1984, writ ref'd n.r.e.). An abuse of discretion occurs when a court acts without reference to guiding rules or principles or acts arbitrarily or unreasonably. See Downer v. Aquamarine Operators, Inc., 701 S.W.2d 238, 241 (Tex.1985).

In most of the rule 169 cases prior to the 1988 amendment, the litigant seeking to avoid the consequences of failing to answer a request for admissions was required to show a legal or equitable excuse for his failure to answer. Crime Control, 712 S.W.2d at 552; Bragg, 670 S.W.2d at 715; Mathes v. Kelton, 565 S.W.2d 78, 81 (Tex.Civ.App.--Amarillo 1977), aff'd, 569 S.W.2d 876 (Tex.1978); Burnett v. Cory Corp., 352 S.W.2d 502, 507 (Tex.Civ.App.--Dallas 1961, writ ref'd n.r.e.). In one preamendment case from this Court, the litigant was required to show good cause for the failure to answer timely. Curry v. Clayton, 715 S.W.2d 77, 79 (Tex.App.--Dallas 1986, no writ). But, in a later case from this Court, we again required a showing of legal or equitable excuse, possibly because the case was tried preamendment. Eckman, 757 S.W.2d at 396. However, with the amendment of rule 169, it is apparent that "good cause" has been adopted as the threshold standard for the withdrawal of deemed admissions.

III. TEXAS CASES CONSIDERING RULE 169

In Trevino v. Central Freight Lines, Inc., 613 S.W.2d 356 (Tex.Civ.App.--Waco 1981, no writ), relied on by plaintiff, the respondent never answered the movant's requests and waited until the day of trial (eleven months after the requests had been served) to file a motion for extension of time. Id. at 358. The uncontradicted testimony in the case established that the failure to answer was due solely to the attorney's neglect. The Trevino court noted that under the agency relationship of attorney and client, the neglect of the attorney is attributable to the client. Id. at 359. Thus, the court found no abuse of discretion in the court's denial of the motion to extend time. Id.

In Bragg, also cited by plaintiff, the respondent was three months tardy with its responses to the requests for admissions. Respondent thereafter delayed an additional five months in filing a motion to extend the time to file its answers, said motion being filed on the date of trial (third setting). Bragg, 670 S.W.2d at 716. The appellate court found no abuse in the trial court's striking of the late-filed answers. Id.

In both Trevino and Bragg, the delays by both respondents in filing their motions for extension of time were quite lengthy (eleven months and eight months). Plainly, in Trevino, the attorney's conduct in waiting eleven months until the day of trial to try to withdraw the deemed admissions, upon which the movant had relied in preparing his case, caused undue prejudice to the movant and would have resulted in unnecessary delay in the trial. Apparently, the attorneys in both cases gave no valid reason for their lack of compliance with the rules. More importantly, they offered no rationale for their delay...