Thompson v. Harco National Ins. Co., 05-95-01409-CV
| Decision Date | 24 September 1998 |
| Docket Number | No. 05-95-01409-CV,05-95-01409-CV |
| Citation | 997 S.W.2d 607 |
| Parties | (Tex.App.-Dallas 1998) ELMER THOMPSON AND DOROTHY THOMPSON, Appellants v. HARCO NATIONAL INSURANCE COMPANY, Appellee |
| Court | Texas Court of Appeals |
On Appeal from the 95th District Court Dallas County, Texas Trial Court Cause No. 95-4488-D
[Copyrighted Material Omitted]
Before Maloney, James, and Moseley, JJ.
Appellants, Elmer and Dorothy Thompson ("Thompsons"), filed a garnishment action against appellee, Harco National Insurance Company ("Harco"). They claimed they had a final judgment against Harco's insured, John W. Henderson, d/b/a John W. Henderson Trucking Co. ("Henderson"), and that, under the terms of Henderson's insurance policy, Harco was indebted to Henderson for $750,000. Harco answered, asserted a counterclaim for wrongful garnishment, and moved to dissolve the writ under Texas Rule of Civil Procedure 664a.1 After a hearing on Harco's motion, the trial court entered a final judgment dissolving the writ, dismissing the garnishment suit, and awarding Harco its attorney's fees and costs. The Thompsons appealed.
We hold: (1) the Thompsons waived any procedural error based on Harco's standing under Rule 664a; (2) the Thompsons proved, as a matter of law, that they had a valid, subsisting judgment against Henderson; (3) whether Harco was indebted to Henderson, and the amount of any such indebtedness, was not at issue in the Rule 664a hearing, and any findings relating to that issue were premature and irrelevant; (4) there is no evidence the Thompsons wrongfully filed their garnishment action; and (5) the trial court's award of attorney's fees and costs was premature. For these and the other reasons set forth herein, we reverse the judgment of the trial court, render judgment that Harco take nothing by way of its wrongful garnishment counterclaim, and remand the remainder of the case for further proceedings consistent with this opinion.
The garnishment proceeding before us is ancillary to a personal injury suit between the Thompsons, Henderson, and others. Because the actions of the parties to that suit affect the outcome of this appeal, we review those actions in some detail. (Except as noted, the record of that personal injury suit was before the trial court in the garnishment proceeding and is before us on the appeal.)
In 1991, the Thompsons filed a personal injury suit against Henderson, Daniel E. Penrod, and others. The suit arose out of an auto accident between the Thompsons' vehicle and a truck. The Thompsons alleged that the truck was owned, operated, or leased by Henderson.
None of the defendants in the personal injury suit filed an answer. The Thompsons obtained an interlocutory default judgment against all defendants except Henderson and Penrod. On March 22, 1993, the Thompsons obtained a default judgment against all defendants, including Henderson, jointly and severally for $974,739.93, plus prejudgment and postjudgment interest.
On April 22, 1993, thirty-one days after the trial court rendered the default judgment, Henderson and the Thompsons filed a motion entitled "Agreed Motion for New Trial." Despite this title and a certificate of conference stating that the Thompsons were "not opposed" to the motion, in actuality the motion was a joint motion. It stated that Henderson and the Thompsons "jointly move" to set aside the default judgment rendered against Henderson, contained a joint prayer for relief, and was signed by counsel for Henderson and the Thompsons. The motion stated that it was timely filed, and incorporated the affidavit of Henderson's attorney, Rickman; this affidavit was attached as an exhibit to the motion.
On May 13, 1993, Henderson filed an unsworn motion entitled "Supplemental Motion for New Trial." This motion, filed without the Thompsons' involvement, stated that the Thompsons had withdrawn their agreement to the original motion. Like the original motion, the supplemental motion stated that it was timely filed, referencing the April 22, 1993 motion for new trial. The supplemental motion stated that a "new trial should be granted on either of the legal or equitable grounds set forth below."
As legal grounds for granting a new trial, the supplemental motion alleged that a statement of facts (now "reporter's record") was not made of the default judgment hearing. As equitable grounds for granting a new trial, Henderson alleged the requirements enunciated in Craddock v. Sunshine Bus Lines.2 The supplemental motion was accompanied by sworn affidavits ("1993 affidavits") from Henderson and from Dave Leary, Harco's adjuster responsible for overseeing the Thompsons' claim against Henderson. These affidavits, both dated May 11, 1993, described the circumstances surrounding Henderson's failure to file an answer, the entry of the default judgment, and the filing of the original motion for new trial. They stated that Henderson's failure to file an answer was caused by mistaken beliefs and was not intentional or due to conscious indifference. (The contents of the 1993 affidavits will be discussed in more detail herein.)
On May 28, 1993, the trial court heard Henderson's motion. That same day, it entered an order voiding the default judgment as to Henderson and granting him a new trial. The trial court also granted a motion to withdraw filed by the Thompsons' attorneys.
The Thompsons retained new counsel, and the personal injury suit continued. In May 1995, shortly before the personal injury suit was scheduled for trial, the Thompsons filed a pleading entitled "Motion to Declare Void Order on Motion for New Trial Signed May 28, 1993" ("1995 motion"). The 1995 motion contended that, because a motion for new trial was not filed within thirty days of the default judgment (March 22, 1993), the trial court's plenary power over the personal injury suit expired on April 21, 1993. Therefore, the April 22, 1993 motion for new trial was untimely, the order granting that motion was void, and the default judgment was final. The 1995 motion is the first pleading filed by any of the parties to the personal injury suit that recognized that the original 1993 motion for new trial was filed thirty-one days after the trial court had entered the default judgment.
On May 11, 1995, Henderson filed a response to the 1995 motion. In that response, Henderson's attorney explicitly argued, for the first time, that Rule 306a applied to extend the trial court's plenary jurisdiction beyond the date the motion for new trial was filed. Therefore, according to Henderson, the original motion for new trial was timely and extended the trial court's plenary power over the judgment beyond May 28, 1993, the date the trial court granted the motion for new trial. Along with his response, Henderson filed additional affidavits by Henderson and Leary ("1995 affidavits"). The trial court heard and denied the Thompsons' 1995 motion, and a subsequent motion to reconsider filed by the Thompsons.
According to Harco's brief and the trial court's docket sheet in the personal injury case, the Thompsons and Henderson subsequently went to trial on the liability portion of the personal injury suit. The parties agreed to dismiss the jury. After hearing evidence, the trial court granted Henderson's motion for judgment. On September 18, 1995, the trial court signed a take-nothing judgment against the Thompsons. The Thompsons did not appeal this judgment.
A week after the Thompsons filed the 1995 motion, but before that motion was decided, the Thompsons filed a separate garnishment action against Harco, Henderson's insurer. This is the case before us on appeal. Because the Thompsons raise some procedural issues regarding the garnishment, we review the law applicable to garnishment actions before we recount the pertinent facts of this case.
Garnishment is a proceeding in which the property, money, or credits of a debtor that are in the possession of another--the garnishee--are applied to the payment of the garnishor's debt.3 The garnishor may enforce, against the garnishee, any rights the debtor could have enforced had he sued the garnishee directly.4 The garnishor, however, cannot acquire any greater rights against the garnishee than the debtor, himself, possesses.5
We emphasize that garnishment is purely a statutory remedy, and the statutory provisions are strictly construed.6 Although the interpretative commentary to the Texas Constitution mentions that garnishment owes its origins to English common law, in the United States the right is entirely regulated by statute.7 The Texas Supreme Court has long held there is no right to garnishment absent statute:
The process of garnishment is an inquisitorial proceeding, given to ascertain these facts, so that the effects of the original defendant might be reached and subjected to the payment of his just debts. The act giving this remedy is not entitled to, nor has it ever received, a liberal construction in favor of the party resorting to the remedy.8
A garnishor may obtain a writ of garnishment if he has a valid subsisting final judgment and makes an affidavit that, within his knowledge, the judgment debtor does not possess property in Texas subject to execution sufficient to satisfy the judgment.9 For purposes of a garnishment proceeding, a judgment is final upon signing, unless a supersedeas bond is approved and filed.10
If the garnishee answers and admits being indebted to the defendant, the trial court shall render a judgment against the garnishee for the lesser of the amount of the garnishee's indebtedness to the defendant or the defendant's indebtedness to the garnishor.11 If the garnishee answers and denies being indebted to the judgment defen...
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