Opinion
No. 05-07-01446-CV
Opinion Filed November 18, 2009.
On Appeal from the County Court at Law No. 1, Dallas County, Texas, Trial Court Cause No. CC-07-05747-A.
Before Justices WRIGHT, O'NEILL, and LANG.
MEMORANDUM OPINION
This appeal follows the trial court's order dismissing for want of prosecution AIS Services, L.L.C.'s lawsuit against Joyce A. Bayless to recover an unpaid credit card debt. In a single issue, AIS argues that the trial court erred in dismissing the case for want of prosecution because it timely moved for default judgment and was entitled to a default judgment. Because all dispositive issues are settled in law, we issue this memorandum opinion. Tex. R. App. P. 47.2(a). For the reasons set forth below, we reverse the judgment of dismissal and remand the case to the trial court for further proceedings.
AIS specifically states its issue as follows: "In the context of a no-answer default judgment on liquidated damages, plaintiff is entitled to a judgment because the pleadings support the judgment, and damages can be readily ascertained from the allegations and documents attached to the pleadings. Furthermore, deemed admissions support the judgment."
I. FACTUAL AND PROCEDURAL BACKGROUND:
On April 11, 2007, AIS filed its lawsuit against Bayless. AIS alleged that Bayless owed BankOne money on a credit-card account, that AIS purchased the account from BankOne, that AIS made a written demand to Bayless for payment of the account, that Bayless did not respond to AIS's demand, and that the amount owed by Bayless was $16,321.73, plus interest of six percent and attorney's fees. AIS included discovery requests in its original petition. Also, AIS attached to the petition the affidavit of its "designated agent," Amnona Spates, which recited that the account value was $16,321.73 and AIS's "Statement of Account."
On April 16, 2007, the trial court sent to AIS a letter advising that, pursuant to rule of civil procedure 165a, AIS's case against Bayless was set for dismissal on August 10, 2007. The letter stated:
If no answer has been filed, or if the answer is insufficient as a matter of law to place any of the facts alleged in your petition in issue, you will be expected to have moved for, and to have had heard, a summary judgment or to have proved up a default judgment on or prior to that date. Your failure to have done so will result in the dismissal of the case on the above date.
On April 19, 2007, Bayless was served with the citation. However, Bayless failed to file an answer to the lawsuit or to respond to AIS's discovery requests. Accordingly, AIS filed a motion for default judgment on May 22, 2007. In its motion, AIS asserted that Bayless had failed to answer after being properly served with citation, that its cause of action against Bayless was "a liquidated claim based upon the purchase of goods and/or services by credit card," that damages were liquidated in the amount of $16,321.73, and that interest was requested pursuant to section 304 of the Texas Finance Code, and that attorneys' fees in the amount of $5,440.58 were requested pursuant to section 38.002 of the Civil Practice and Remedies Code. AIS also attached to its motion an attorneys' fees affidavit confirming the amount of attorneys' fees incurred, a non-military affidavit confirming Bayless's civilian status, and a certificate of last known address.
On June 6, 2006, the trial court returned the default judgment unsigned to AIS with a form letter indicating that the default judgment was being returned for "one or more of the following reasons." The trial court checked off "Other" as the "reason" and handwrote "insufficient evidence in pleadings to put [defendant] on notice of specific claims against her." The record does not show that AIS responded to this notice.
The trial court signed a judgment entitled "DISMISSAL," dated August 13, 2007, that dismissed AIS's lawsuit. In the judgment, seven potential grounds for dismissal were listed, but only the following two grounds were marked as being applicable by the trial court: (1) "Failure to take action after notice of intent to dismiss for want of prosecution (IN ACCORDANCE WITH RULE 165A LETTER)"; and (2) "Dismiss for Want of Prosecution."
On August 15, 2007, AIS filed a trial brief in support of judgment. Then, on September 11, 2007, AIS filed a verified motion to reinstate the case with a request for oral hearing and a notice of submission to the defendant. On October 1, 2007, AIS again filed a sworn and verified motion for default judgment. Attached to the motion was a copy of Bayless's bank statement indicating a balance of $16,144.55, an "affidavit of deemed admissions," an attorney's fees affidavit, and a non-military affidavit confirming Bayless's civilian status. AIS filed a request for oral hearing on the motion for default judgment. Nothing in the record indicates that the trial court held a hearing on the motion to reinstate or on the second motion for default judgment. This appeal timely followed.
II. DISMISSAL
In AIS's sole issue, AIS contends that the trial court erred in dismissing the case for want of prosecution because AIS timely moved for default judgment and was entitled to the judgment. AIS argues that it was entitled to a default judgment on liquidated damages and attorneys fees because "the pleadings and attached documents support the judgment." Specifically, AIS contends its pleading gave fair notice of its breach of contract claim against Bayless and that AIS proved its liquidated damages.
A. Standard of Review
We review a dismissal for want of prosecution under an abuse of discretion standard. See Villarreal v. San Antonio Truck Equip., 994 S.W.2d 628, 630 (Tex. 1999); Vann v. Brown, 244 S.W.3d 612, 614 (Tex. App.-Dallas 2008, no pet). We will only disturb a trial court's ruling if the trial court acted "in an arbitrary or unreasonable manner without reference to any guiding principles." Downer v. Aquamarine Operators Inc., 701 S.W.2d 238, 241-42 (Tex. 1985).
B. Applicable Law
A trial court's authority to dismiss a case for want of prosecution stems from two sources: (1) Texas Rule of Civil Procedure 165a, and (2) the trial court's inherent power. Villarreal, 994 S.W.2d at 630. A trial court may dismiss a case under rule 165a on "failure of any party seeking affirmative relief to appear for any hearing or trial of which the party had notice" or when a case is "not disposed of within the time standards promulgated" by the supreme court. Tex. R. Civ. P. 165a(1), (2). In addition, the common law vests the trial court with the inherent power to dismiss independently of the rules of procedure when a plaintiff fails to prosecute its case with due diligence. Villarreal, 994 S.W.2d at 630; WMC Mortgage Corp. v. Starkey, 200 S.W.3d 749, 752 (Tex. App.-Dallas 2006, pet. denied). Lack of diligence need not amount to abandonment for a case to be properly dismissed. WMC Mortgage Corp., 200 S.W.3d at 752. In determining whether a party has demonstrated a lack of diligence in prosecuting a claim, a trial court may consider the entire history of the case, including the length of time the case was on file, the extent of activity in the case, whether a trial setting was requested, and the existence of reasonable excuses for delay. Id. No single factor is dispositive. Id.
If the trial court dismisses a case for want of prosecution, a party may file a motion to reinstate within "30 days after the order of dismissal is signed or within the period provided by rule 306(a)." Tex. R. Civ. P. 165a(3). The motion to reinstate must be verified by the movant or the movant's attorney and must be served on the parties. Id. If a verified motion to reinstate is filed within 30 days, the judge "shall set a hearing on the motion as soon as practicable," and "notify all the parties or their attorneys of record of the date, time and place of hearing. . . ." Id.
C. Application to Facts
After the trial court dismissed the case for want of prosecution on August 13, 2007, AIS filed a motion to reinstate on September 11, 2007. AIS's motion to reinstate was verified by AIS's attorney and served on the defendant by certified mail. In addition to filing the motion to reinstate, AIS also filed a "Request for Oral Hearing" on the motion to reinstate. Thereafter, on October 1, 2007, AIS again filed another motion for default judgment with affidavits and bank statements attached to support the judgment. AIS requested an oral hearing on the motion for default judgment. Despite the fact that AIS filed a verified motion to reinstate within 30 days of the trial court's dismissal of the case and specifically requested a hearing on the motion, the record does not demonstrate that the trial court held a hearing on the motion.
Under civil procedure rule 165(a)(3) when a verified motion to reinstate has been filed, an oral hearing is required. Thordson v. City of Houston, 815 S.W.2d 550, 550 (Tex. 1991) (per curiam). Failure to hold such a hearing is an abuse of discretion and requires reversal. Id; see Resurgence v. Foster, 2009 WL 1875568, at *2 (Tex. App.-Dallas July 1, 2009, no pet.) (mem. op.); Reed v. City of Dallas, 774 S.W.2d 384, 385 (Tex. App.-Dallas, writ denied); NASA 1 Bus. Ctr. v. Am. Nat'l Ins. Co., 747 S.W.2d 36, 38-39 (Tex. App.-Houston [14tht Dist.]), writ denied sub. nom. Gulf Coast Inv. Corp. v. NASA 1 Bus. Ctr., 754 S.W.2d 152 (Tex. 1988) (per curiam) .
Consequently, because AIS filed a verified motion to reinstate within 30 days, the trial court was required by rule 165(a)(3) to hold a hearing. Because the trial court did not hold a hearing on the motion to reinstate, the trial court abused its discretion. We need not address AIS's other arguments raised in its brief before this court. We reverse the trial court's judgment of dismissal and remand this case to the trial court for proceedings consistent with this opinion.
III. CONCLUSION
We conclude the trial court abused its discretion because the trial court did not hold a hearing on the motion to reinstate as required by civil procedure rule 165(a)(3). The trial court's judgment of dismissal is reversed, and we remand this case to the trial court for proceedings consistent with this opinion.