In re Paul & Cynthia Elizondo & Eagle Fabricators, Inc.

• Decision Date: 13 April 2018
• Docket Number: No. 17–0197,17–0197
• Citation: 544 S.W.3d 824
• Parties: IN RE Paul & Cynthia ELIZONDO and Eagle Fabricators, Inc., Relators
• Court: Texas Supreme Court

544 S.W.3d 824

IN RE Paul & Cynthia ELIZONDO and Eagle Fabricators, Inc., Relators,

No. 17–0197

Supreme Court of Texas.

OPINION DELIVERED: April 13, 2018

Robert B. Gilbreath, Hawkins Parnell Thackston & Young LLP, Ryan C. Hale, Thackston & Young LLP, Dallas, TX, R. Kelly Donaldson, R. Scott Wolfrom, Vincent Serafino Geary Waddell Jenevein, P.C., Houston, TX, for Relators.

Orlando Cuello, Porter, TX, pro se.

Maria De Jesus Gamez, Porter, TX, pro se.

Rhonda L. Allen, Linda Johnson White, Nicole Killgore, Allen Killgore & White, P.C., Karalynn C. Cromeens, The Cromeens Law Firm PLLC, Houston, TX, for Real Parties in Interest Orlando Cuello, Maria De Jesus Gamez, M & O Homebuilders, Inc. and Texas Homebuilders, LLC.

Elizabeth G. Bloch, Husch Blackwell LLP, Austin, TX, for Amicus Curiae State Bar of Texas Appellate Section.

PER CURIAM

This is a mandamus action. After its plenary power had expired, the trial court issued an amended order omitting a Lehmann -like finality phrase that it had included in its original order. See generally Lehmann v. Har–Con Corp. , 39 S.W.3d 191, 205–06 (Tex. 2001) (discussing finality phrases). The court of appeals directed the trial court to vacate the amended order. Here, the relator seeks a writ directing the court of appeals to vacate its opinion. For seventeen years, we have relied on Lehmann to mitigate the mischief and chaos that can arise when the prospect of appeal rears its head long after the parties believed a judgment to be final. We see no need to reduce Lehmann 's ambit, and we deny Elizondo's petition for writ of mandamus. See TEX. R. APP. P. 52.8(d).

Paul Elizondo, Cynthia Elizondo, and Eagle Fabricators, Inc. (collectively, Elizondo) hired M & O Homebuilders, Inc., Orlando Cuello, Maria De Jesus Gamez, and Texas Homebuilders, LLC (collectively, the Builders) to build a home. A cost dispute arose. Elizondo sued the Builders, asserting breach of contract, fraud, negligence, and other claims. Elizondo placed a lien on the Builders' property on the theory that the Builders had improved it using funds intended for his home. For good measure, he also applied for a temporary injunction to prevent the Builders from selling the property until the underlying litigation ended. The trial court granted the temporary injunction.

The Builders argued the lien was invalid and they filed a motion to remove it. The Builders drafted and submitted an order titled "Order on Defendants' Summary Motion to Remove Invalid Lien." The trial court signed the order, which included at the bottom of its first and only page a finality phrase that stated: "This judgment is final, disposes of all claims and all parties, and is appealable. All relief not granted herein is denied." The order left lots of relief not granted—namely, all other relief Elizondo sought against the Builders. Thirty days elapsed, marking the end of the trial court's plenary power. See TEX. R. CIV. P. 329b(d). Several weeks later, Elizondo noticed the original order had disposed of his entire case. He requested an amended order, which the trial court issued, this time omitting the finality phrase.

The Builders sought mandamus relief in the court of appeals, requesting a writ directing the trial court to vacate the amended order. The Builders argued that the original order was final, and that the amended order was void since the trial court issued it after the court's plenary power had expired. See id. ("The trial court ... has plenary power to grant a new trial or to vacate, modify, correct, or reform the judgment within thirty days after the judgment is signed."). Elizondo argued that the original order was not final, and that even if it was, the finality phrase constituted a clerical error the likes of which a trial court can modify even after its plenary power expires. See id. 329b(f) (clarifying that "the [trial] court may at any time correct a clerical error in the record of a judgment and render judgment nunc pro tunc under Rule 316" (emphasis added) ).

A divided panel conditionally granted the writ in favor of the Builders. In re M & O Homebuilders, Inc. , 516 S.W.3d 101, 110 (Tex. App.—Houston [1st Dist.] 2017, orig. proceeding). The majority reasoned that Lehmann offers two independently sufficient tests under which an order rendered without a conventional trial on the merits may become final. See id. at 106 (citing Lehmann , 39 S.W.3d at 205–06 ). First, an order is final if it includes a finality phrase. See Lehmann , 39 S.W.3d at 206 (suggesting as a finality phrase the statement that "[t]his judgment finally disposes of all parties and all claims and is appealable"). The parties do not dispute that the finality phrase in the original order is essentially the same as the finality phrase this Court suggested in Lehmann . Second, an order is final if it actually disposes of all claims before the trial court. See id. at 205. Importantly, in this case, the majority held that it is "necessary to review the record" only under the second test. Homebuilders , 516 S.W.3d at 106. That is, according to the majority, the finality phrase rendered the order final and the record irrelevant. See Id. Since the order was final, the majority held that the amended order retracting the finality language was an attempt to correct judicial error, and therefore void. See id. at 110.

In the dissent's view, the majority's result "[c]learly ... is not intended by Lehmann ." See Homebuilders , 516 S.W.3d at 112 (Keyes, J., dissenting). The dissent argued that the majority placed too much weight on the finality phrase, and too little weight on the trial court's later "agree[ment that] it had no intention of entering a final judgment in the case." Id. at 111. The dissent also rejected the majority's conclusion that the finality phrase made the record irrelevant. See id. at 115. Finally, the dissent wrote that Lehmann and its progeny apply only in a "summary judgment or default judgment context." Id.

Elizondo seeks a writ of mandamus directing the court of appeals to vacate its opinion. He argues that the original order was not final, and that even if it was, the trial court's inclusion of the finality phrase was a clerical error. Elizondo cites Lehmann 's statement that "whether a judicial decree is a final judgment must be determined from its language and the record in the case." See Lehmann , 39 S.W.3d at 195. In Elizondo's view, the record in this case makes clear that the trial court did not intend to render a final judgment. Elizondo also argues that the original order is ambiguous because although its title refers to removing a lien, its body includes a finality phrase. In the alternative, Elizondo asks the Court to clarify that Lehmann does not apply to the trial court's original order. He argues that applying Lehmann to the original order leads to the absurd result that Elizondo loses all of his claims against the Builders. Furthermore, he argues, that result will incentivize attorneys to sneak finality language into orders that are otherwise routine.

In response, the Builders argue that the original order was final under Lehmann , which means that the amended order improperly sought to correct judicial error rather than clerical error. The Builders concede that Lehmann allows a court of appeals to look at the record, but only "[t]o determine whether an order disposes of all pending claims and parties." Id. at 205. In other words, according to the Builders, a reviewing court may not look at the record where, as here, the order includes a finality phrase. They further contend that the original order was not ambiguous on its face, and that Elizondo's argument to the contrary depends on the record. True, the order granted more relief than the Builders requested, but the Builders urge that Lehmann specifically contemplates that possibility. The windfall the Builders' received was reversible, but it was not interlocutory. See id. at 206 ("An express adjudication of all parties and claims in a case is not interlocutory merely because the record does not afford a legal basis for the adjudication. In those circumstances, the order must be appealed and reversed.").

Thus, the Builders argue, the court of appeals correctly held that the trial court's original order was a final judgment.

We conclude that the court of appeals correctly applied Lehmann . Elizondo had thirty days to examine the one-page order and notice that it included a finality phrase. Even if he disagreed that the order was final, he should have treated it as though it was. See id. at 196 ("A party who is uncertain whether a judgment is final must err on the side of appealing or risk losing the right to appeal."). Had he examined the order within the thirty-day window, he could have sought an amended order or pursued an appeal. Since Elizondo waited more than thirty days to contend that the order improperly disposed of his other claims, he has lost them. Though jarring for Elizondo, this outcome reflects Lehmann 's reasoning and comports with this Court's subsequent application of Lehmann 's finality tests.

Our decision in In re Daredia offers guidance. See 317 S.W.3d 247 (Tex. 2010) (orig. proceeding) (per curiam). In that case, American Express sued a corporation and an individual to recover about $750,000 due on multiple credit-card accounts. The individual answered, but the corporation did not. American Express drafted a default judgment against the corporation, which the trial court signed. The judgment included a finality phrase. The time for appeal expired, and when American Express attempted to continue its case against the individual, the individual argued the judgment was final as to all of American Express's claims—not only those against the corporation, but also those against him. The court of appeals held that the judgment was ambiguous, and thus interlocutory. This Court reversed in a per curiam opinion reasoning that "[t]he court of appeals' holding that the [order's] failure to...