Ocean Transport, Inc. v. Greycas, Inc.

• Decision Date: 26 May 1994
• Docket Number: No. 13-92-453-CV,13-92-453-CV
• Citation: 878 S.W.2d 256
• Parties: OCEAN TRANSPORT, INC., et al., Appellants, v. GREYCAS, INC., et al., Appellees.
• Court: Texas Court of Appeals

Page 256

878 S.W.2d 256

OCEAN TRANSPORT, INC., et al., Appellants, v. GREYCAS, INC., et al., Appellees.

No. 13-92-453-CV.

Court of Appeals of Texas,

Corpus Christi.

May 26, 1994.

Rehearing Overruled June 30, 1994.

James R. Harris, J. Norman Thomas, Andrew M. Greenwell, Harris & Thomas, Corpus Christi, for appellants.

C. Michael Clark, Johnson & Dylewski, Houston, David T. Maddox, Fennemore Craiz, Phoenix, Lee Casstevens, David Atnip, Gregory T. Perkes, Wood, Burney, Cohn & Viles, Corpus Christi, Jerald Gibbs, Calvin, Dylewski, Gibbs, Johnson & Verner, Houston, for appellees.

Before DORSEY, PAUL W. NYE, ¹ and GILBERTO HINOJOSA, JJ.

OPINION

GILBERTO HINOJOSA, Justice.

This appeal involves a deficiency suit asserted by Greycas, Inc., against appellants on a $3.1 million promissory note secured by two first preferred ship mortgages on two barges. Appellants filed a counterclaim against appellees for usury and violations of the Texas Deceptive Trade Practices-Consumer Protection Act (the DTPA), ² and appellees filed counterclaims against appellants for their attorneys fees. The trial was to a jury which found that $250,000 was the unpaid balance due and owing upon the promissory note. It also made an affirmative finding that the interest rate on the note was calculable. It made no awards to appellees on their claims for attorneys fees. The trial court entered a take-nothing judgment against appellants on all of their claims, and it ordered that Greycas recover $250,000 against appellants.

Appellants appeal by five points of error, Greycas, Inc., raises three cross-points of error, Greyhound Financial Corporation (GFC) raises nine cross-points of error, and Dial Corporation raises four cross-points of error. We reverse and remand in part and as reformed, we affirm in part.

Greycas, Inc., was a corporation listed as the lender on the $3.1 million promissory note. GFC was a corporate entity that allegedly owned 100% of Greycas's stock. Appellants alleged that Greycas was the alter ego of GFC, the Dial Corporation, f/k/a the Greyhound Corporation, or both.

In 1979, Lawrence Kieschnick and William Cross, both certified public accountants, learned of the economic need for ocean-going barges. Kieschnick had legal counsel set up a corporation called Ocean Transport, Inc., and a Texas limited partnership called Ocean Transport Ltd. No. 1 (the Partnership). Kieschnick and Cross each owned 50% of Ocean Transport, and Ocean Transport was the general partner in the Partnership. Other persons had invested money into the Partnership as well. The intent was that the Partnership would make money leasing two ocean-going barges to companies that ferried equipment and supplies to offshore oil rigs.

In November 1980, Kieschnick signed two contracts with St. Augustine Shipbuilding to make two barges at $1,925,000 a piece. On April 14, 1981, Kieschnick, Cross, and Ocean Transport (collectively the Guarantors) agreed to unconditionally guaranty payment by the Partnership of all its obligations, including the payment of all sums that may become due to Greycas from the Partnership.

On April 21, 1981, Greycas and the Partnership entered into a commitment letter in which Greycas agreed to lend the Partnership $3.1 million. Appellants took the commitment letter to Texas Commerce Bank (TCB) and borrowed $2,825,000 to pay for the construction costs of the two barges. The TCB loans were due on June 30, 1982. On that date, Kieschnick signed a promissory note on the Partnership's behalf in which the Partnership borrowed $3.1 million from Greycas. The funds were paid to TCB in order to pay off the construction loans on the two barges. The note provided for 180 monthly installments of $53,096.80 (principal and interest combined) and one final $620,000 payment at the end of the specified 15-year term of the note. The first installment was due on the closing date (June 30, 1982). Two first preferred ship mortgages (one on each barge) secured the financing on the June 30, 1982 note.

Soon after the barges became ready for work, the oil and gas industry declined, and the Partnership was not able to earn enough money from leasing the barges to make all of its loan payments. Greycas sent the Partnership a notice of default, and it accelerated maturity of the promissory note. Greycas called upon the Guarantors to honor their guarantee agreements.

The Guarantors were not able to pay the balance due. The barges were turned over to Greycas in June 1986, and on October 27, 1986, a federal judge signed a judgment against the barges in rem (the Federal Court Judgment). The court ordered a judgment favorable to Greycas for $4,268,616.24, "plus interest thereon at the rate of $1,649.00 per diem from March 4, 1986 through even date herewith, plus interest from even date herewith at the legal rate until paid." On November 14, 1986, the barges were sold to Greycas at a federal marshal's sale for $5,000 a piece. That amount ($10,000) was applied to the amount owing at the time. In July 1988, Greycas resold the barges for $670,000, less a $25,000 brokerage commission. The net proceeds of $645,000 were applied to the indebtedness existing at the time of the marshal's sale.

On February 26, 1990, Greycas filed a deficiency suit in the 148th Judicial District Court of Nueces County, Texas against the Guarantors. Appellants responded with a counterclaim against Greycas, GFC, and Dial for usury as well as other causes of action. On May 7, 1990, the trial court granted Greycas's motion for a nonsuit of its deficiency claim. On April 1, 1991, Greycas refiled its deficiency suit as a counterclaim against the Guarantors and the Partnership. Appellants then amended their counterclaim to include violations of the DTPA. In response, appellees filed counterclaims against appellants, alleging that their DTPA claims were groundless and brought in bad faith, or for the purpose of harassment. They requested attorneys fees for defending the DTPA claims.

Appellants' Points of Error

By point three, appellants complain that the trial court erred when it overruled their motion to strike appellees' expert witnesses because they were not timely designated and no showing of good cause was made. In October 1990, the trial court signed an agreed docket control order which stated that counsel for appellees, Greycas and GFC, had to designate experts by April 3, 1991. In May 1991, the trial court signed an agreed order which amended the docket control order and stated that the deadline for appellees' designation of experts was September 23, 1991. In a letter dated September 23, 1991, appellants' counsel informed Dial's counsel that "we agree to allow you to supplement your experts designation by September 26 1991...." On September 27, 1991, Dial designated Greg Smalis as an expert, and Greycas and GFC listed Smalis and Joe P. Dove as experts.

Appellants requested that the trial court strike Smalis and Dove as expert witnesses. The trial court overruled the motion, and they were allowed to testify at trial.

Appellants argue that rules 215(5) and 166b(6)(b) of the Texas Rules of Civil Procedure govern the disposition of this point. They contend that appellees' failure to timely designate Smalis and Dove should have led to the automatic exclusion of their testimony, unless they made a showing of good cause for its admission. We disagree.

Rule 166 of the Texas Rules of Civil Procedure relates to pre-trial conferences. The rule provides for an order to be made at the pre-trial conference hearing, and that "such order when issued shall control the subsequent course of the action, unless modified at the trial to prevent manifest injustice." TEX.R.CIV.P. 166. Rule 166 recognizes the fundamental rule that a trial court has the inherent right to change or modify any interlocutory order or judgment down to the time the judgment on the merits in the case becomes final. Hill v. W.E. Brittain, Inc., 405 S.W.2d 803, 808 (Tex.Civ.App.--Fort Worth 1966, no writ); Bachman Center Corp. v. Sale, 359 S.W.2d 290, 292 (Tex.Civ.App.--Dallas 1962, writ ref'd n.r.e.); Sneed v. Martin, 292 S.W.2d 891, 894 (Tex.Civ.App.--Dallas 1956, no writ). See Carrizales v. Wal-Mart Stores, Inc., 794 S.W.2d 129, 130 (Tex.App.--Fort Worth 1990, writ denied). In the instant case, appellees had designated their expert witnesses no later than September 27, 1991, and voir dire examination began in December 1991. By overruling the motion to strike, the trial court implicitly modified the docket control order. The modification occurred before the judgment became final. We hold that the trial court did not abuse its inherent right to change or modify the docket control order. Furthermore, because the designation of the expert witnesses occurred more than 30 days before trial, rules 215(5) and 166b(6)(b) do not apply. We find no abuse of discretion. The point of error is overruled.

Standard of Review

Several of the following points of error involve challenges to the factual and legal sufficiency of the evidence. In determining a no evidence point, we consider only the evidence and inferences which tend to support the finding of the jury and disregard all evidence and inferences to the contrary. Larson v. Cook Consultants, Inc., 690 S.W.2d 567, 568 (Tex.1985); International Armament Corp. v. King, 686 S.W.2d 595, 597 (Tex.1985); In re King's Estate, 244 S.W.2d 660, 661-62 (Tex.1951). If any evidence of probative force exists to support the finding of the jury, we must overrule the point and uphold the finding. In re King's Estate, 244 S.W.2d at 661-62.

If an appellant is attacking the legal sufficiency of an adverse finding on an issue on which he had the burden of proof, he must show that the evidence conclusively established all vital facts in support of the issue. Sterner v. Marathon Oil Co., 767 S.W.2d 686, 690 (Tex.1989); Holley v. Watts, 629 S.W.2d 694, 696 (Tex.1982). In reviewing a "matter of law" challenge, we...