Exocet Inc. v. Cordes

• Decision Date: 28 August 1991
• Docket Number: No. 3-90-003-CV,3-90-003-CV
• Citation: 815 S.W.2d 350
• Parties: EXOCET INCORPORATED, Appellant, v. W.W. CORDES and Evelyn Ford Cordes, Appellees.
• Court: Texas Court of Appeals

Page 350

815 S.W.2d 350

EXOCET INCORPORATED, Appellant, v. W.W. CORDES and Evelyn Ford Cordes, Appellees.

No. 3-90-003-CV.

Court of Appeals of Texas,

Austin.

Aug. 28, 1991.

Stephen N. Riner, Law Office of Stephen N. Riner, Houston, for appellant.

Roy L. Cordes, Jr., Sugar Land, for appellees.

Before POWERS, ABOUSSIE and KIDD, JJ.

POWERS, Justice.

Exocet, Incorporated appeals from a permanent injunction obtained by W.W. and Evelyn Ford Cordes following a jury trial. We will affirm the judgment.

THE CONTROVERSY

Exocet owned a final judgment rendered against W.W. Cordes in a district court of Dallas County. After recording in Fayette County an abstract of its judgment, Exocet obtained a writ of execution ordering the sheriff of that county to sell two parcels of land owned by the Cordeses. W.W. Cordes sued to enjoin the sheriff from conducting the sale. The trial court, by restraining order and temporary injunction, preserved the status quo until the time of trial.

Exocet counterclaimed for judicial foreclosure of its judgment lien, naming both Cordeses as defendants. Evelyn Ford Cordes appeared by an original answer wherein W.W. Cordes joined her.

The cause proceeded to trial on the Cordeses' claim that the property was their homestead and, thus, exempt from execution or forced sale, and on Exocet's claim that the Cordeses had abandoned the homestead, if the property had ever been a homestead. The jury found the property was the Cordeses' homestead and declined to find they had abandoned it. The trial court rendered judgment on the verdict, restraining Exocet and the Sheriff from any further attempt to sell the property. Exocet appealed.

DISCUSSION AND HOLDINGS

I.

Before trial, Exocet served upon the Cordeses requests for admissions. One request asked them to admit the following: "The lien which was perfected by the filing of the abstract of the Judgment is a first and preferred lien on the interests of Wilbur Wright Cordes and Evelyn Ford Cordes in the 55 Acres...." (Emphasis added.) The Cordeses admitted the proposition.

Exocet contends the Cordeses' judicial admission established, as a matter of law, that the property was not their homestead. Exocet's contention rests on the following theory: the homestead character of real property precludes the attachment of a judgment lien to the property, Harms v. Ehlers, 179 S.W.2d 582, 583 (Tex.Civ.App.1944, writ ref'd); therefore, the Cordeses necessarily conceded the property was not their homestead when they judicially admitted that Exocet had "perfected" its lien against the property.

The relevant statutes refute Exocet's theory. When an abstract of judgment is recorded and indexed in accordance with chapter 52 of the Property Code, it "constitutes a lien on the real property of the defendant located in the county ..., including real property acquired after such recording and indexing." Tex.Prop.Code Ann. § 52.001 (Supp.1991). Homestead property is not excluded from the scope and effect of this statute prescribing the legal consequence of perfecting a judgment lien by recording and indexing an abstract of the judgment. Section 41.001 of the Property Code provides, however, that a "homestead" is "exempt from seizure for the claims of creditors except for encumbrances properly fixed on homestead property."

Under these statutory provisions, a judgment lien is "perfected," or brought into existence against a debtor's property, by recording and indexing an abstract of the judgment in the county where the property lies. The debtor's homestead is not exempt from the perfected lien; rather, the homestead is exempt from any seizure attempting to enforce the perfected lien. This is all that the language in Ehlers means. Moreover, we may not construe a party's statement to be a judicial admission when it is obviously not intended to negate the very basis of his cause of action. Gregory v. Texas Emp. Ins. Ass'n, 530 S.W.2d 105, 108 (Tex.1975).

We hold accordingly and overrule the point of error.

II.

Before trial, Exocet served upon the Cordeses written interrogatories. One required them to state the names, addresses, and telephone numbers "of any person who you intend to call as a witness in the trial of this cause." The Cordeses did not object to the interrogatory; rather they supplied the requested information by listing the names, addresses, and telephone numbers of 28 individuals. The Cordeses were not required to answer the interrogatory at all, because it inquired concerning persons they intended to call as witnesses rather than persons having knowledge of relevant facts. Gutierrez v. Dallas Independent School Dist., 729 S.W.2d 691, 693 (Tex.1987); Employers Mut. Liability Ins. Co. of Wis. v. Butler, 511 S.W.2d 323, 324-25 (Tex.Civ.App.1974, writ ref'd n.r.e.). While the Cordeses supplied the information relative to the 28 individuals, without objection, they did not list themselves as persons they "intend to call as a witness in the trial of this cause."

Thereafter but before trial, Exocet moved for an order in limine excluding any witness not named on the Cordeses' list of 28 individuals, citing Boothe v. Hausler, 766 S.W.2d 788 (Tex.1989), and Farah Mfg. Co., Inc. v. Alvarado, 763 S.W.2d 529 (Tex.App.1988), aff'd, 34 Tex.S.Ct.J. 107 (Tex. November 21, 1990), each of which involved non-party, non-expert witnesses. The trial court granted the motion. The court also granted that part of the motion in limine wherein Exocet urged the court to admit at trial certain evidence that would "impeach W.W. Cordes' [sic] credibility."

After the jury were sworn, but before testimony began, Exocet objected to the Cordeses' giving testimony in the trial, on the grounds that they had not supplemented their answers to interrogatories by naming themselves as persons to be called and the trial court had "granted" Exocet's motion in limine to exclude any witness not on the list of 28 individuals. Accordingly, Exocet stated, "[w]e have assumed, and prepared our case under the assumption that [the Cordeses] were not to be called at trial." The Cordeses rejoined by stating they "expected to be witnesses on their own behalf in the case," even though they failed to include themselves on the list of witnesses furnished in response to Exocet's interrogatory.

The trial court ruled that the Cordeses might testify in the case, stating the court had "considered the pleadings and the circumstances here, and the fact that there are significant filings in this case," referring to the numerous interrogatories answered by the Cordeses and to the fact that the transcripts of their depositions had been on file in the case for about eight months before trial. The court admonished the Cordeses' counsel for not listing them, but concluded "there can really be no surprise to the defense, and ... any injury by the failure to list the parties as witnesses ... would be minimal." In its second point of error, Exocet contends the trial court abused its discretion by allowing the Cordeses to testify.

Exocet's argument seeks to bring the case within Tex.R.Civ.P.Ann. 166b(6)(a) (Supp.1991), and the automatic-exclusion doctrine of Hausler, Gutierrez, and Morrow v. H.E.B., Inc., 714 S.W.2d 297 (Tex.1986). Under that doctrine, an appellate court may set aside the trial court's good-cause determination only if the appellate court finds the trial court abused its discretion by deciding the issue of good cause without reference to any guiding rules and principles. In the present case, it appears that the guiding rules and principles are these: (1) the requirements of Rule 166b(6)(a); and (2) the purposes which underlie Rule 166b.

Rule 166b(6)(a) places upon a party the duty to supplement his response to discovery requests "if he obtains information upon the basis of which: (1) he knows that the response was incorrect or incomplete when made; 2) he knows that the response though correct and complete when made is no longer true and complete and the circumstances are such that failure to amend the answer is in substance misleading; ...."

The purposes behind Rule 166b and the sanctions available for discovery abuse are "to encourage full discovery of the issues and facts prior to trial," in order that the parties may "make realistic assessments of their respective positions," thereby facilitating settlements and preventing unfair surprise. Rainbo Baking Co. v. Stafford, 787 S.W.2d 41, 42 (Tex.1990). The aims of the sanctions are: (1) deterring future violations of the discovery rules; (2) ensuring that a violator does not profit by his wrong and that his adversary does not suffer by the wrong; (3) protecting innocent parties from unreasonable expense and burdens resulting from discovery misuse; and (4) preventing needless delay and consumption of court time. Kilgarlin & Jackson, Sanctions for Discovery Abuse under New Rule 215, 15 St. Mary's L.J. 767, 774-75 (1984); Longley & Kincaid, Discovery and Sanctions for Discovery Abuse, 18 St. Mary's L.J. 163, 188-92 (1986).

We cannot conclude the trial court acted without reference to the guiding rules and principles in its implied determination that good cause existed for the Cordeses' failure to include themselves in the list of witnesses they intended to call and for allowing them to testify. The "pleadings and circumstances" to which the court referred permitted the court reasonably to conclude that a duty to supplement never arose under Rule 166b(6)(a).

Under Rule 166b(6)(a)(1), the duty to supplement arose only when the Cordeses acquired information from which they knew their response was incomplete when made. The record reveals no such information apart from the knowledge imparted by the text of the interrogatory itself. In a strict and isolated sense, the interrogatory included the Cordeses within the scope of the expression "any person who you intend to call as a witness." It was not unnatural, however, to understand the expression in context as...