Opinion
05-20-00541-CV
08-09-2022
NAVNITKUMAR PATEL, Appellant v. BIZ FRIEND, LLC, AND 4555 BELTLINE, LLC, Appellees
On Appeal from the 193rd Judicial District Court Dallas County, Texas Trial Court Cause No. DC-18-08942
Before Justices Reichek, Nowell, and Carlyle
MEMORANDUM OPINION
ERIN A. NOWELL JUSTICE
This is an appeal from a post-answer default judgment and partial summary judgment. Navnitkumar Patel ("Navnit") argues the trial court abused its discretion by denying his motion for new trial because he did not receive notice of the trial setting and by granting the partial summary judgment because he raised genuine issues of material fact in his response. We affirm the trial court's judgment.
Because other parties involved in this case bear the same surname we refer to appellant as Navnit.
Background
This dispute arose out of transactions to fund the development of two hotels, one in Plano and one in Fort Worth. Navnit represented to Biz Friend and 4555 Beltline that he had contracts to purchase the hotel projects from Mukesh "Mike" Patel. Navnit and his wife obtained short-term loans from Biz Friend and 4555 Beltline to purchase the entities allegedly holding title to the properties. Navnit guaranteed the loans. Biz Friend and 4555 Beltline funded the loans. Afterwards, Biz Friend and 4555 Beltline (collectively Biz Friend) discovered there were no contracts for purchase of the projects. The loans were not paid in full when due, and Biz Friend did not acquire an interest in the hotel projects.
Although they have the same surname, the record does not indicate Navnit and Mike are related.
Biz Friend filed suit against Navnit and several others involved in the transactions. It sued Navnit for breach of the loan agreements and guarantees, statutory and common law fraud, fraudulent inducement, and several other causes of action. Navnit was served and filed an answer. Biz Friend filed a motion for partial summary judgment against Navnit on the claims for breach of the loan agreement and guaranty on the Plano project. It reserved its claim for attorney's fees and its other causes of action. Navnit filed a response to the motion for partial summary judgment. Although the response referred to an affidavit from Navnit and exhibits, the affidavit and exhibits were not attached to the response and do not appear in the record. The trial court granted partial summary judgment in favor of Biz Friend against Navnit for approximately $2.6 million.
On May 6, 2019, the trial court granted a joint motion for continuance and sent notice to all counsel of record of a trial setting for February 18, 2020. By December 2019, Biz Friend had obtained a default judgment against another defendant and reached settlements or tolling agreements with all defendants except Navnit. On December 26, 2019, the court sent a notice that the case was set for dismissal on January 31, 2020 due to the settlement.
After returning from a holiday vacation, Biz Friend's attorney noticed the setting on the dismissal docket and sent a letter to the court on January 17, 2020 advising that the case had not settled and Biz Friend still had live claims against Navnit. Biz Friend asked that the case be returned to the active docket. The letter was served on Navnit's attorney by email.
On January 30, 2020, Navnit's attorneys, Lovein Ribman, P.C., filed a motion to withdraw as counsel for Navnit. The motion stated that Navnit had retained new counsel to represent him but did not include a statement substituting counsel. The motion listed Navnit's last known address and telephone number and stated the case was currently set for dismissal on January 31, 2020.
On January 31, 2020, a Friday, the trial court signed an order dismissing the case without prejudice. On February 3, 2020, the following Monday, Biz Friend filed a verified motion to reopen the case and to set a trial date for Biz Friend's remaining claims against Navnit. The motion included a certificate of service for all counsel of record. There is no order in the record on this motion. However, the court's docket sheet indicates that the case was reactivated on January 31, 2020.
On February 4, 2020, the trial court signed an order granting Lovein Ribman's motion to withdraw as counsel for Navnit. The order directed that all notices in the case be served on Navnit in person or by certified mail at his last known address.
On February 13, 2020, Biz Friend filed a motion for continuance due to a conflicting trial setting of its attorney in another court. On February 17, 2020, Biz Friend was advised by the court coordinator that its motion for continuance was denied and it filed its pretrial exhibit and witness lists and proposed jury charge. Both of these filings were served on Lovein Ribman, former counsel for Navnit.
On February 18, 2020, the case was called to trial. Navnit did not appear in person or by counsel. Biz Friend presented evidence on the elements of its fraud claim and damages regarding the two projects. It also presented evidence of its attorney's fees. The trial court rendered a final judgment for Biz Friend against Navnit, incorporating the partial summary judgment, and awarding damages on the fraud claims and attorney's fees.
Navnit filed a motion for new trial and affidavit on March 16, 2020 seeking to set aside the final judgment. According to Navnit's affidavit, in early January, before the court dismissed the case and before Lovein Ribman moved to withdraw, he contacted attorneys at Stinson LLP about representing him in this matter. The attorneys told him they would not "represent [him] in a February trial" because there was not enough time to prepare. He also stated this appeared to be a non-issue when the court dismissed the case on January 31, 2020.
Navnit stated that on February 18, 2020, there was significant confusion about whether the case would go to trial. He also stated that he had been summoned to a court hearing in Mesquite on the same day on a city code compliance matter. He indicated he would have raised this conflict if he had known about the trial.
Biz Friend filed a response to the motion for new trial supported by the declaration of its attorney, Dennis Holmgren. Holmgren denied that there was any confusion about whether the case would be going to trial and that court staff contacted his office on February 17, 2020 to notify him that his motion for continuance had been denied.
The trial court conducted a telephonic hearing on the motion for new trial on April 13, 2020, but there is no record of this hearing. The motion for new trial was later overruled by operation of law.
Standard of Review
We review a trial court's denial of a motion for new trial for abuse of discretion. Dir., State Emps. Workers' Comp. Div. v. Evans, 889 S.W.2d 266, 268 (Tex. 1994). A default judgment should be set aside and a new trial granted if (1) the failure to answer was not intentional or the result of conscious indifference but was due to a mistake or accident, (2) the defendant sets up a meritorious defense, and (3) the motion is filed at such time that granting a new trial would not result in delay or otherwise injure the plaintiff. See Craddock v. Sunshine Bus Lines, Inc., 133 S.W.2d 124, 126 (Tex. 1939). However, when the first element is established by proof that the defaulting party did not receive notice of the trial setting, due process requires a new trial without a showing of the other two elements. See Mabon Ltd. v. Afri-Carib Enter., Inc., 369 S.W.3d 809, 813 (Tex. 2012) (per curiam).
A trial court abuses its discretion if it fails to grant a new trial when all three elements of the Craddock test are met. Dolgencorp of Tex., Inc. v. Lerma, 288 S.W.3d 922, 926 (Tex. 2009). The defaulting defendant has the burden of proving all three elements of the Craddock test before a trial court is required to grant a motion for new trial. Chloe's Concepts, LLC v. Clear Rainbow, Inc., No. 05-20-00484-CV, 2021 WL 5998006, at *2 (Tex. App.-Dallas Dec. 20, 2021, no pet.) (mem. op.). "Consciously indifferent conduct occurs when 'the defendant knew it was sued but did not care.'" Sutherland v. Spencer, 376 S.W.3d 752, 755 (Tex. 2012). "Generally, 'some excuse, although not necessarily a good one, will suffice to show that a defendant's failure to file an answer was not because the defendant did not care.'" Id. (citing In re R.R., 209 S.W.3d 112, 115 (Tex. 2006)).
Where the factual allegations in a movant's affidavits are not controverted, it is sufficient that the affidavits set forth facts which, if true, would negate intentional or consciously indifferent conduct. Evans, 889 S.W.2d at 269. However, conclusory allegations are insufficient. Holt Atherton Indus., Inc. v. Heine, 835 S.W.2d 80, 82-83 (Tex. 1992) (mere statement that failure to answer was due to accident and mistake was conclusory). In determining if the defendant's factual assertions are controverted, the court looks to all the evidence in the record. Evans, 889 S.W.2d at 269. When the defendant's factual assertions are controverted, the question of whether the defendant's failure to answer was intentional or the result of conscious indifference is a fact question. Rhodes v. Kelly, No. 05-16-00888-CV, 2017 WL 2774452, at *8 (Tex. App.-Dallas June 27, 2017, pet. denied) (mem. op.).
We review the trial court's summary judgment de novo. Provident Life & Accident Ins. Co. v. Knott, 128 S.W.3d 211, 215 (Tex. 2003). A party moving for traditional summary judgment has the burden to prove that there is no genuine issue of material fact and it is entitled to judgment as a matter of law. Tex.R.Civ.P. 166a(c); Mann Frankfort Stein & Lipp Advisors, Inc. v. Fielding, 289 S.W.3d 844, 848 (Tex. 2009). If the movant establishes its right to summary judgment, the burden shifts to the non-movant to raise a genuine issue of material fact. Knott, 128 S.W.3d at 215. A party relying on an affirmative defense to oppose a motion for summary judgment must present summary judgment evidence raising a fact issue on each element of the affirmative defense. Brownlee v. Brownlee, 665 S.W.2d 111, 112 (Tex. 1984); Birenbaum v. Option Care, Inc., 971 S.W.2d 497, 504 (Tex. App.- Dallas 1997, no pet.). "When reviewing a summary judgment, we take as true all evidence favorable to the nonmovant, and we indulge every reasonable inference and resolve any doubts in the nonmovant's favor." Valence Operating Co. v. Dorsett, 164 S.W.3d 656, 661 (Tex. 2005).
Analysis
A. Default Judgment
In his first issue, Navnit argues he did not have notice of the trial setting and his failure to appear was not intentional or the result of conscious indifference. He also argues his motion for new trial satisfied the remaining elements of the Craddock standard.
In determining whether the failure to appear was intentional or the result of conscious indifference, a court must look to the defendant's knowledge and acts as shown by the evidence in the record. See Holt Atherton, 835 S.W.2d at 82.
Navnit's affidavit indicates he knew about the February trial setting when he contacted Stinson in early January about representing him in this case. Navnit said Stinson's refusal to represent him at a February trial was a non-issue because the trial court dismissed the case on January 31, 2020. However, the court could have concluded Navnit had constructive notice of Biz Friend's motion to reinstate that was served on Lovein Ribman before the court granted the motion to withdraw. Although Navnit denied receiving notice of this motion, it was served on Lovein Ribman on February 3, 2020, the day before the trial court granted the motion to withdraw on February 4, 2020. Notice to counsel during the attorney-client relationship is generally imputed to the client. See O'Connell v. O'Connell, 843 S.W.2d 212, 216 (Tex. App.-Texarkana 1992, no writ) (holding notice of trial setting request sent to counsel before court granted motion to withdraw was constructive notice to client). Navnit's affidavit does not identify any action he took in response to the motion to reinstate.
Navnit's affidavit states that on February 18, 2020, "there was significant confusion and conflicting evidence as to whether there would actually be a trial." While this statement is conclusory, it does indicate that Patel was aware of the trial setting. The motion for new trial asserted that the day of trial, Navnit and his current counsel acted diligently by contacting the court administrator and his former counsel to determine if the case was actually going to trial. However, Navnit's affidavit does not contain this information and he submitted no other evidence of these facts. Therefore, we do not consider them.
In light of the knowledge and actions of Navnit as shown in the record, the trial court could have reasonably discounted Navnit's claim that he did not receive notice that the case had been reinstated and set for trial on February 18, 2020. See Campbell v. Martell, No. 05-19-01413-CV, 2021 WL 1731754, at *7-8 (Tex. App.-Dallas May 3, 2021, no pet.) (mem. op.).
Finally, we note there is no record of the hearing on the motion for new trial. As appellant, Navnit has the burden of bringing forward a sufficient record to show the trial court abused its discretion by denying his motion for new trial. See Christiansen v. Prezelski, 782 S.W.2d 842, 843 (Tex. 1990). Without a record of the hearing, we presume the proceedings support the trial court's ruling. See In re Marriage of Owoye, No. 05-20-00072-CV, 2021 WL 5917505, at *9-10 (Tex. App.-Dallas Dec. 15, 2021, no pet.) (mem. op.); Waggoner v. Breland, No. 01-10-00226-CV, 2011 WL 2732687, at *3 (Tex. App.-Houston [1st Dist.] July 14, 2011, no pet.) (mem. op.).
We conclude the trial court did not abuse its discretion by concluding Navnit did not satisfy the first element of Craddock. We need not address the remaining two elements of Craddock. See Rhodes, 2017 WL 2774452, at *9. We overrule Navnit's first issue.
B. Summary Judgment
In his second issue, Navnit argues he raised a genuine issue of material fact in his response and the trial court erred by granting the partial summary judgment.
Biz Friend moved for partial summary judgment on its breach of contract claims against Navnit. Navnit filed a response, but an affidavit and attachments referenced in the response were not attached to the response and do not appear in the appellate record.
Biz Friend's motion for partial summary judgment asserted Navnit was in breach of a Bridge Loan and Equity Participation Agreement (the Bridge Loan Agreement) with Biz Friend for the Plano hotel and his personal guaranty. The purpose of the agreement was for Biz Friend to loan $2.5 million to Navnit for acquisition of the company owning the right to develop the hotel project in Plano. In return, Navnit and the new company promised to repay the loan with interest and to give Biz Friend a partnership interest in the project. Navnit signed the Bridge Loan Agreement individually and on behalf of the company to be acquired by Navnit. His wife, Dipika, was also a borrower on the Bridge Loan Agreement. Navnit also signed an unlimited guaranty of all indebtedness to Biz Friend. The loan matured on October 1, 2017, but could be extended to December 1, 2017 and for up to two months thereafter.
Through the affidavit of its representative, David Ge, Biz Friend proved: the Bridge Loan Agreement and guaranty; Navnit signed the agreement and guaranty; Biz Friend was the owner or holder of the agreement and guaranty; Biz Friend funded the loan; the loan was due; demand was made; Navnit refused to pay after demand; and the balance due after all offsets and payments.
To recover on a promissory note, the plaintiff must prove: (1) the note in question, (2) the party sued signed the note, (3) the plaintiff is the owner or holder of the note, and (4) a certain balance is due and owing on the note. Roberts v. Roper, 373 S.W.3d 227, 232 (Tex. App.-Dallas 2012, no pet.). We conclude that Biz Friend met its burden to prove the claim for breach of the Bridge Loan Agreement.
In his response to the motion for summary judgment, Navnit argued he was discharged from the guaranty when the terms of the underlying contract were materially altered by a subsequent agreement between Dipika and Biz Friend. However, Biz Friend moved for summary judgment on the Bridge Loan Agreement in addition to the guaranty. Navnit's affirmative defense to the guaranty, even if supported by evidence, did not raise a genuine issue of material fact as to the Bridge Loan Agreement. Further, this argument is based on an alleged agreement later reached between Dipika Patel and Biz Friend to which Navnit was not a party. And the alleged agreement was not included in the summary judgment evidence. Thus, Navnit failed to raise an issue of material fact to defeat summary judgment on this ground.
Next, Navnit argued that default could not have occurred because one of the borrowers on the Bridge Loan Agreement had not been formed. However, the company to be acquired by Navnit was only one of three borrowers. Navnit was also a borrower under the agreement and nothing in the agreement makes repayment of the loan conditional on the formation or acquisition of the entity by Navnit. The text of the agreement simply does not support the argument that the debt is not due. The express terms of the agreement are that the loan matured on October 1, 2017, which could be extended to December 1, 2017. Then the borrowers had the option to extend the loan for an additional two months. Therefore, the loan became due at the latest on February 1, 2018. Ge's affidavit indicates that the borrowers exercised the extension and both options and that the loan had matured and was due and owing.
Finally, Navnit argued the parties are incorrect under the guaranty because the lender and the borrower identified in the guaranty do not exist. Assuming this would amount to a defense for Navnit, who is named as the guarantor in the guaranty agreement, it would be a defense to liability on the guaranty, but not to liability on the Bridge Loan Agreement. Thus, this argument did not raise a material fact issue as to the Bridge Loan Agreement.
On appeal, Navnit argues there is a fact issue as to the amount owed under the agreements. But this argument is based on terms in the alleged subsequent agreement between Dipika and Biz Friend which is not in the summary judgment record.
The record on appeal does not contain the affidavit and exhibits referenced in Navnit's response and they have not been included in a supplemental record despite appellant's representation in his reply brief that a supplemental record had been requested. Thus, we have no record that the evidence cited in Navnit's response was ever presented to the trial court. As appellant and the non-movant, Navnit bears "the burden to bring forward the record of the summary judgment evidence to provide appellate courts with a basis to review the claim of harmful error." Enter. Leasing Co. of Houston v. Barrios, 156 S.W.3d 547, 549 (Tex. 2004) (per curiam); Christiansen, 782 S.W.2d at 843 (stating that burden is on appellant to present sufficient record to show error requiring reversal); Palla v. Bio-One, Inc., 424 S.W.3d 722, 727-28 (Tex. App.-Dallas 2014, no pet.). When pertinent summary judgment evidence "is not included in the appellate record, an appellate court must presume that the omitted evidence supports the trial court's judgment." Barrios, 156 S.W.3d at 550. Therefore, we presume the omitted evidence supports the trial court's judgment.
We conclude the trial court did not err by granting Biz Friend's motion for partial summary judgment. We overrule Navnit's second issue.
Conclusion
Navnit failed to show that his failure to appear at trial was not intentional or the result of conscious indifference. Therefore, the trial court did not abuse its discretion by denying the motion for new trial. After Biz Friend established its entitlement to summary judgment on the Bridge Loan Agreement, Navnit failed to raise a genuine issue of material fact on all elements of his affirmative defenses. Accordingly, the trial court did not err by granting partial summary judgment. We affirm the trial court's judgment.
JUDGMENT
In accordance with this Court's opinion of this date, the judgment of the trial court is AFFIRMED.
It is ORDERED that appellees BIZ FRIEND, LLC AND 4555 BELTLINE, LLC recover their costs of this appeal from appellant NAVNITKUMAR PATEL.