Opinion
No. 04-17-00219-CV
11-08-2017
Rolando HERRERA and Integrated International, Inc. d/b/a International Carriers, Inc., Appellants v. Maria E. RODRIGUEZ, Appellee
MEMORANDUM OPINION
From the 341st Judicial District Court, Webb County, Texas
Trial Court No. 2016CVF001625D3
Honorable Rebecca Ramirez Palomo, Judge Presiding Opinion by: Sandee Bryan Marion, Chief Justice Sitting: Sandee Bryan Marion, Chief Justice Marialyn Barnard, Justice Luz Elena D. Chapa, Justice AFFIRMED
This is a restricted appeal of a no-answer default judgment. The sole issue presented by appellants Rolando Herrera and Integrated International, Inc. d/b/a International Carriers, Inc. is that the "record is entirely devoid of any evidence that Rolando Herrera is liable under the Promissory Note in his individual capacity." We affirm the trial court's judgment.
BACKGROUND
On June 10, 2016, Maria E. Rodriguez filed the underlying lawsuit naming Herrera and Integrated International as defendants. In her petition, Rodriguez alleged that in November of 2014, Herrera and Integrated International executed a promissory note payable to her in the amount of $580,000, and they did not make any payments pursuant to the note. Rodriguez further alleged that on March 15, 2016, Herrera and Integrated International executed a promissory note modification agreement increasing the principal amount of the note to $614,800, and they did not make any payments pursuant to the modified note. Neither Herrera nor Integrated International filed an answer.
The petition's style lists Rolando Herrera and Integrated International, Inc. d/b/a International Carriers, Inc. as defendants, but lists Rolando Herrera and Integrated Carriers, Inc. as the parties in the body of the petition.
On August 31, 2016, Rodriguez filed a motion for a default judgment. Several documents were attached to the motion, including: (1) the return of citation issued to Herrera; (2) a Sale and Purchase Agreement dated December 19, 2014, pursuant to which Integrated Carriers, Inc. agreed to purchase Rodriguez's stock in Integrated Logistics Solutions, Inc. by delivering a promissory note payable to Rodriguez at closing in the principal amount of $580,000, bearing interest at 4.5% and payable in forty-eight monthly installments; (3) a Promissory Note Modification Agreement executed by Integrated Carriers, Inc., increasing the principal amount of a November 2014 promissory note payable to Rodriguez to $614,800, bearing interest at 4.5% per annum and payable in forty-eight monthly installments; and (4) an affidavit setting forth the amount of attorney's fees and costs incurred by Rodriguez and the amount of attorney's fees she would incur in the event of an appeal.
Yolanda Rodriguez was also included as a seller; however, the promissory note was only to be made payable to Maria E. Rodriguez.
On October 3, 2016, the trial court held a hearing on Rodriguez's motion. At the hearing, the trial court took judicial notice of the documents attached to the motion and heard testimony from Rodriguez and her husband. At the conclusion of the hearing, the trial court granted a default judgment in Rodriguez's favor. Herrera and Integrated International timely filed a restricted appeal to challenge the default judgment.
RESTRICTED APPEAL
To prevail on a restricted appeal, the appellant must prove: (1) the notice of the restricted appeal was filed within six months after the judgment was signed; (2) the appellant was a party to the underlying lawsuit; (3) the appellant did not participate in the hearing that resulted in the judgment complained of, and did not timely file any post-judgment motions or requests for findings of fact and conclusions of law; and (4) error is apparent on the face of the record. Pike-Grant v. Grant, 447 S.W.3d 884, 886 (Tex. 2014). The record clearly establishes the first three elements; therefore, we only need to determine if Herrera and Integrated International have shown error apparent on the face of the record. Herrera and Integrated International argue error is apparent on the face of the record because the record contains no evidence that Herrera is personally liable for the debt.
NO-ANSWER DEFAULT JUDGMENT
"[D]efault judgments are not all alike," and "different rules apply in different circumstances." Paradigm Oil, Inc. v. Retamco Operating, Inc., 372 S.W.3d 177, 183 (Tex. 2012). Because the default judgment in the instant case is a no-answer default judgment, we focus on the rules applicable to that circumstance.
"[T]he non-answering party in a no-answer default judgment is said to have admitted both the truth of the facts set out in the petition and the defendant's liability on any cause of action properly alleged by those facts." Id.; see also Morgan v. Compugraphic Corp., 675 S.W.2d 729, 731 (Tex. 1984) (noting no-answer default judgment "admits all allegations of fact set out in the petition"). "The defendant's default thus establishes liability, but a trial may still be necessary if the plaintiff's damages are unliquidated." Paradigm Oil, Inc., 372 S.W.3d at 183; see also Morgan, 675 S.W.2d at 731 (noting "if the facts set out in the petition allege a cause of action, a [no-answer] default judgment conclusively establishes the defendant's liability"). As a result, "an appellant is precluded from challenging the legal and factual sufficiency of the evidence supporting liability in a no-answer default judgment." Chen v. Johnson, No. 02-12-00428-CV, 2013 WL 2339233, at *1 (Tex. App.—Fort Worth May 30, 2013, no pet.) (mem. op.); see also Texaco, Inc. v. Phan, 137 S.W.3d 763, 768-70 (Tex. App.—Houston [1st Dist.] 2004, no pet.) (holding appellate court not allowed to review legal and factual sufficiency of the evidence supporting defendant's liability in a restricted appeal of a no-answer default judgment); Norton v. Martinez, 935 S.W.2d 898, 901 (Tex. App.—San Antonio 1996, no writ) (holding "default judgment conclusively establishe[d] the [appellants'] liability" and appellants could not "challenge the sufficiency of the evidence where their failure to answer constitute[d] an admission of such liability").
DISCUSSION
As previously noted, Herrera and Integrated International argue the record is devoid of evidence that Herrera is liable in his individual capacity. They assert the documents attached to Rodriguez's motion establish that Integrated Carriers, Inc. was the only party to the Sale and Purchase Agreement and the Promissory Note Modification Agreement, and Herrera executed those documents only in his representative capacity as the president of Integrated Carriers, Inc.
In support of their argument that the evidence is insufficient to show that Herrera is liable in his individual capacity, Herrera and Integrated International cite two default divorce cases. See Wilson v. Wilson, 132 S.W.3d 533 (Tex. App.—Houston [1st Dist.] 2004, pet. denied); O'Neal v. O'Neal, 69 S.W.3d 347 (Tex. App.—Eastland 2002, no pet.). "[T]he general rule regarding the scope of the allegations in a petition deemed admitted by a failure to answer in a divorce proceeding is limited by Section 6.701 of the Family Code." Osteen v. Osteen, 38 S.W.3d 809, 814 (Tex. App.—Houston [14th Dist.] 2001, no pet.); see also Texaco, Inc., 137 S.W.3d at 770 n.4 (noting distinction when appeal involves a default judgment in a divorce case). Section 6.01 provides, "In a suit for divorce, the petition may not be taken as confessed if the respondent does not file an answer." TEX. FAM. CODE ANN. § 6.701 (West 2016). "In a divorce case, therefore, even if the respondent fails to file an answer, the petitioner must adduce proof to support the material allegations in the petition." Osteen, 38 S.W.3d at 814.
Because this is not an appeal of a default judgment in a divorce case, the general rules regarding no-answer default judgments apply which preclude Herrera and Integrated International from challenging the legal and factual sufficiency of the evidence supporting liability. Chen, 2013 WL 2339233, at *1; Texaco, Inc., 137 S.W.3d at 768-70. Accordingly, their complaint on appeal is overruled. See Paramount Pipe & Supply Co. v. Muhr, 749 S.W.2d 491, 495 (Tex. 1988) (rejecting argument that individual defendant should not be liable for no-answer default judgment where invoices attached to petition only referenced corporate defendant because petition alleged corporate defendant was acting for itself and individual defendant); Edwards Feed Mill, Inc. v. Johnson, 311 S.W.2d 232, 234 (Tex. 1958) (holding no-answer default judgment against father was proper even though only son executed promissory note where petition alleged father and son were partners); Brown v. Clark Cincinnati, Inc., No. 2-02-378-CV, 2003 WL 22147555, at *6 (Tex. App.—Fort Worth Sept. 18, 2003, no pet.) (mem. op.) (refusing to address sufficiency challenge to individual defendant's liability on corporate defendant's promissory note in a restricted appeal from a no-answer default judgment because liability was conclusively established by the default judgment).
We note Herrera and Integrated International do not complain about the adequacy of Rodriguez's petition to state a cause of action against Herrera. See Texaco, Inc., 137 S.W.3d at 769 n.3 (noting appellant did not argue that appellee's petition was insufficient as a matter of law for failing to plead a cause of action).
CONCLUSION
The trial court's judgment is affirmed.
Sandee Bryan Marion, Chief Justice