Opinion
No. 10-04-00154-CV
Opinion delivered and filed October 12, 2005.
Appeal from the 82nd District Court, Robertson County, Texas, Trial Court No. 03-02-16638-CV.
Reversed and remanded.
Before Cheif Justice GRAY, Justice VANCE, and, Justice REYNA.
MEMORANDUM OPINION
Appellees filed a suit against Thomas H. (Bubba) Smith and Bill Fowler, both individually and dba B B Joint Venture, alleging the existence of a stable keeper's lien, right to recover on a sworn account, breach of contract, and tortious interference with business relationships. After Smith failed to timely respond to requests for admissions, the court deemed admissions in Appellees' favor and rendered judgment in their favor. Smith contends in five issues that: (1) he was denied due process because the deemed admissions prevented him from presenting the merits of his defense; (2) he was denied due process because he did not receive notice and an opportunity to be heard on his defense; (3) the court abused its discretion by permitting requests for admissions after the conclusion of the discovery period; (4) the court abused its discretion by denying his jury demand; and (5) the court abused its discretion by failing to permit the withdrawal of the deemed admissions. We will reverse and remand.
Fowler did not perfect an appeal.
Background
Appellees' alleged in their original petition that Smith and Fowler (collectively, "Defendants") placed several racehorses in their care. They contended that Defendants failed and refused to pay for the horses' care despite requests. Appellees claimed the existence of a stable keeper's lien under section 70.003(a) of the Property Code and that they had sold the horses in satisfaction of the lien. Appellees sought to recover under a sworn account; they alleged that Defendants breached their agreement "to pay on a regular basis"; and they alleged that Defendants tortiously interfered with their "business of training and racing horses."
Smith filed a sworn denial of the alleged account and otherwise denied Appellees' allegations. Fowler filed a general denial and asserted a cross-claim against Smith for an accounting and dissolution of the partnership.
The suit was governed by a Level 2 discovery control plan. Appellees included a request for disclosure in their original petition, which was served on Smith on February 11, 2003. The parties conducted other discovery and filed other pleadings throughout 2003.
The court coordinator notified the parties on February 10, 2004 that the case was set for bench trial on April 14. Appellees served requests for admissions and other discovery on February 17.
Smith filed a jury demand and tendered the requisite fee on March 12. The court coordinator notified the parties on March 26 that Appellees' motion to compel Defendants to respond to their discovery requests would be heard on April 5.
According to the clerk's record however, no such motion was on file at that time.
Appellees filed a "Motion for Judgment" on March 31. Appellees contended in this motion that there were no genuine issues of material fact and that they were entitled to judgment as a matter of law because Defendants had not responded to their discovery. In the alternative, Appellees asked that the court compel Defendants to respond to their discovery requests and asked for appropriate sanctions.
Smith filed a motion for sanctions on April 5. Smith contended: (1) Appellees should be sanctioned because he had never been served with a motion to compel though the court had set same for hearing; and (2) because Appellees' February 2004 discovery was served after the expiration of the Level 2 discovery period, he had not failed to respond to any properly-served discovery request.
At the April 5 hearing, the parties argued the merits of Appellees' motion for judgment. Appellees contended that they were entitled to judgment because Smith had not answered their requests for admissions and thus those requests were deemed admitted. Smith responded that Appellees had not obtained leave of court to pursue additional discovery after the expiration of the Level 2 discovery period. Smith also disputed Appellees contention that he had not responded to the requests for admissions. However, Appellees' counsel denied that he had ever received a response to these requests. It was later determined that Smith's counsel had sent the responses to only Fowler's counsel. The responses were sent to Appellees' counsel on April 7.
The court found that Appellees' requests for admissions were deemed admitted, that Appellees had a valid stable keeper's lien, and that Appellees were entitled to recover $180,000 in damages and $60,000 in attorney's fees. The court severed out Fowler's cross-action against Smith to make the judgment final and appealable.
At Smith's request, the court made written findings of fact and conclusions of law. The court found among other things that Appellees' February 2004 discovery was "timely propounded" and that Defendants had failed to timely respond.
Deemed Admissions
Smith contends in his fifth issue that the court abused its discretion by failing to permit the withdrawal of the deemed admissions.
Rule 198.3 governs the withdrawal of deemed admissions.
Any admission made by a party under this rule may be used solely in the pending action and not in any other proceeding. A matter admitted under this rule is conclusively established as to the party making the admission unless the court permits the party to withdraw or amend the admission. The court may permit the party to withdraw or amend the admission if:
(a) the party shows good cause for the withdrawal or amendment; and
(b) the court finds that the parties relying upon the responses and deemed admissions will not be unduly prejudiced and that the presentation of the merits of the action will be subserved by permitting the party to amend or withdraw the admission.
TEX. R. CIV. P. 198.3.
"Good cause is established by showing the failure involved was an accident or mistake, not intentional or the result of conscious indifference." Wheeler v. Green, 157 S.W.3d 439, 442 (Tex. 2005) (per curiam). "Even a slight excuse will suffice, especially when delay or prejudice to the opposing party will not result." In re Kellogg-Brown Root, Inc., 45 S.W.3d 772, 775 (Tex.App.-Tyler 2001, orig. proceeding) (quoting Spiecker v. Petroff, 971 S.W.2d 536, 538 (Tex.App.-Dallas 1997, no pet.)); accord Credit Car Ctr., Inc. v. Chambers, 969 S.W.2d 459, 462 (Tex.App.-El Paso 1998, no pet.).
"Undue prejudice depends on whether withdrawing an admission or filing a late response will delay trial or significantly hamper the opposing party's ability to prepare for it." Wheeler, 157 S.W.3d at 443. "[P]resentation of the merits will suffer (1) if the requesting party cannot prepare for trial, and also (2) if the requestor can prepare but the case is decided on deemed (but perhaps untrue) facts anyway." Id. at 443 n. 2.
At the April 5 hearing, Smith's counsel argued that he had timely faxed Smith's responses to the requests for admissions to Appellees' counsel. The certificate of service on Smith's responses indicates service in this fashion. However, Appellees' counsel advised the court that he had never received the responses. At the hearing on Smith's motion for new trial, Smith's counsel explained that his secretary had inadvertently faxed the responses to only Fowler's counsel. The responses were sent to Appellees' counsel on April 7.
A showing of clerical error has been held sufficient to establish good cause for a failure to timely respond to a request for admissions. See Spiecker, 971 S.W.2d at 540-42; Burden v. John Watson Landscape Illumination, Inc., 896 S.W.2d 253, 255-56 (Tex.App.-Eastland 1995, writ denied). Clerical error is the reason for Smith's failure to timely respond. Thus, Smith established good cause for his failure to timely respond.
Regarding undue prejudice, Appellees made no suggestion in the trial court and make none in their brief as to how they may be prejudiced by the withdrawal of the deemed admissions. "The mere fact that a trial on the merits is necessary does not constitute undue prejudice." City of Houston v. Riner, 896 S.W.2d 317, 320 (Tex.App.-Houston [1st Dist.] 1995, writ denied); accord Spiecker, 971 S.W.2d at 542 (a litigant should not be permitted to use deemed admissions "to have judgment without supporting testimony when the case can be tried on the merits").
As the Supreme Court recently stated, the "presentation of the merits will suffer . . . if [Appellees] can prepare but the case is decided on deemed (but perhaps untrue) facts anyway." Wheeler, 157 S.W.3d at 443 n. 2; accord Kellogg-Brown Root, 45 S.W.3d at 777; Burden, 896 S.W.2d at 256; Employers Ins. Of Wausau v. Halton, 792 S.W.2d 462, 467 (Tex.App.-Dallas 1990, writ denied).
Smith showed good cause for the withdrawal of the deemed admissions. Appellees will not suffer undue prejudice from their withdrawal, and the presentation of the merits will be subserved by their withdrawal. Accordingly, the court abused its discretion by failing to permit the withdrawal of the deemed admissions. Thus, we sustain Smith's fifth issue.
Conclusion
We do not reach Smith's first, second, third, and fourth issues. Because Fowler did not appeal, we do not disturb the judgment against him. See Pat Baker Co. v. Wilson, 971 S.W.2d 447, 450-51 (Tex. 1998) (per curiam); Builders Transport, Inc. v. Grice-Smith, 167 S.W.3d 1, 15 (Tex.App.-Waco 2005, pet. filed). We reverse the judgment against Smith both individually and dba B B Joint Venture and remand this cause to the trial court for further proceedings consistent with this opinion.