Arthur X. Carson v. A. Serrano and the Texas Department of Criminal Justice, Institutional Division ( 2003 )

In The Court of Appeals Sixth Appellate District of Texas at Texarkana

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No. 06-02-00060-CV ______________________________



ARTHUR X. CARSON, Appellant

V.

A. SERRANO AND THE TEXAS DEPARTMENT OF

CRIMINAL JUSTICE, INSTITUTIONAL DIVISION, Appellees

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On Appeal from the 202nd Judicial District Court Bowie County, Texas Trial Court No. 99C1351-202

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Before Ross, Cornelius* and Grant,** JJ.

Opinion by Justice Cornelius

Concurring Opinion by Justice Grant

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*William J. Cornelius, Chief Justice, Retired, Sitting by Assignment

**Ben Z. Grant, Justice, Retired, Sitting by Assignment

O P I N I O N

Arthur X. Carson, an inmate, appeals the dismissal of his lawsuit against A. Serrano and the Texas Department of Criminal Justice, Institutional Division, alleging "extrinsic fraud under the auspice of a judgment." The trial court dismissed Carson's suit, alleging want of prosecution. On appeal, Carson raises three issues: (1) whether the trial court was without jurisdiction to dismiss the case, (2) whether the trial court abused its discretion in failing to conduct a hearing on the motion for reinstatement, and (3) whether Chapter 14 filing fees apply to Carson's suit, which he styled "PETITION FOR BILL OF REVIEW."

In his first issue, Carson contends that the trial court lacked jurisdiction to dismiss his action because he filed a motion for the trial judge to recuse himself. To recuse a judge, a party must follow the procedure prescribed by Texas Rule of Civil Procedure 18a. Wirtz v. Mass. Mut. Life Ins. Co., 898 S.W.2d 414, 422 (Tex. App.-Amarillo 1995, no writ). According to Rule 18a, on the day the motion for recusal is filed, copies must be served on all other parties or their counsel of record, together with a notice that the movant expects the motion to be presented to the judge three days after the filing of such motion unless otherwise ordered by the judge. Tex. R. Civ. P. 18a(b). If a party fails to follow this procedure, he waives the right to complain of a judge's failure to recuse himself. Wirtz v. Mass. Mut. Life Ins. Co., 898 S.W.2d at 423. Although Carson did file a motion for recusal, there is no evidence Carson gave notice of expectancy of presentment to the judge three days after filing, and there is no evidence the judge was presented with the motion three days after filing. Therefore, Carson may not complain about the judge's failure to recuse himself because Carson did not follow the procedure prescribed by Rule 18a.

Secondly, Carson contends the trial court failed to conduct a hearing on his motion for reinstatement. On February 26, 2002, the court set a hearing on the dismissal of Carson's case for March 11, 2002, and did issue a notice to that effect. On March 8, 2002, Carson filed a motion for reinstatement. Carson alleges his due process rights were denied because there was no hearing on his motion for reinstatement. However, at the time of Carson's request for reinstatement, his case had not been dismissed. Moreover, the trial court did hold a hearing on March 11, 2002. Carson could have shown good cause not to dismiss the case at that time.

Carson's real complaint on this point seems to be that his request for a writ of habeas corpus ad testificandum for the March 11 hearing was not granted, rather than that a hearing was not held. Review of trial court decisions on this issue is by an abuse of discretion standard. Armstrong v. Randle, 881 S.W.2d 53, 57 (Tex. App.-Texarkana 1994, writ denied). A prison inmate's right to access the courts does not include a right to appear personally. Brewer v. Taylor, 737 S.W.2d 421, 423 (Tex. App.-Dallas 1987, no writ). In considering an inmate's right to appear, the trial court must balance the preservation of the correctional system's integrity and the prisoner's right to access. Id. at 423-24. Several factors should be considered: (1) the cost and inconvenience of transporting the inmate to court; (2) the security risk and danger to the court and the public by allowing the inmate to attend court; (3) whether the inmate's claims are substantial; (4) whether a determination of the matter can reasonably be delayed until the inmate is released; (5) whether the inmate can and will offer admissible, noncumulative testimony that cannot be offered effectively by deposition, telephone, or otherwise; (6) whether the inmate's presence is important in judging his demeanor and credibility compared with that of other witnesses; (7) whether the trial is to the court or to a jury; and (8) the inmate's probability of success on the merits. Armstrong v. Randle, 881 S.W.2d at 57; Brewer v. Taylor, 737 S.W.2d at 423. In his request for a writ of habeas corpus ad testificandum, Carson states "Plaintiff's [Carson's] Testimony is material to His case," but he offered no evidence of why he could not testify by deposition or telephone or why his presence in the courtroom was important. Therefore, the trial court did not abuse its discretion in failing to grant Carson's request for a writ of habeas corpus ad testificandum.

Finally, Carson contends that, because his original petition was a bill of review and not a lawsuit under Chapter 14 of the Texas Civil Practice and Remedies Code, the filing fees and court costs under Section 14.006 are inapplicable. See Tex. Civ. Prac. & Rem. Code Ann. § 14.006 (Vernon 2002). Unless an action is brought under the Texas Family Code, an action brought by an inmate and accompanied by an affidavit or unsworn declaration of inability to pay costs is governed by Chapter 14. Tex. Civ. Prac. & Rem. Code Ann. § 14.002 (Vernon 2002). Additionally, the rules set out in Chapter 14 may not be modified or repealed by the regular Rules of Civil Procedure. Tex. Civ. Prac. & Rem. Code Ann. § 14.014 (Vernon 2002); Jackson v. Tex. Dep't of Criminal Justice, 28 S.W.3d 811, 813 (Tex. App.-Corpus Christi 2000, pet. denied). There is no exception for an inmate's petition for a bill of review. Carson brought this action while an inmate and filed an affidavit of poverty with his petition. Because his petition was not brought under the Texas Family Code and because the rules of Chapter 14 cannot be modified by the regular Rules of Civil Procedure, Chapter 14 applies to Carson's bill of review.

We affirm the judgment of the trial court.

William J. Cornelius*

Justice

*Chief Justice, Retired, Sitting by Assignment

CONCURRING OPINION

I concur, but I would emphasize that the requirement that the party present the motion to the trial court does not mean that the party has to physically present the motion to the judge. In a situation in which the moving party is incarcerated, it is not practical for this party to hand deliver the motion to the judge. This requirement can be satisfied by bringing the motion to the trial court's attention in other ways; directly mailing the motion to the trial judge would satisfy that rule.

Ben Z. Grant*

Justice

*Justice, Retired, Sitting by Assignment

Date Submitted: August 15, 2002

Date Decided: January 24, 2003

the holder of the note take action against the maker as a condition precedent to his liability on the guaranty. Hopkins v. First Nat'l Bank at Brownsville, 551 S.W.2d 343, 345 (Tex. 1977) (per curiam). The lender may bring an action against the guarantor of payment without joining the principal debtor. Ferguson v. McCarrell, 582 S.W.2d 539, 541-42 (Tex. Civ. App.--Austin), writ ref'd n.r.e., 588 S.W.2d 895 (Tex. 1979) (per curiam). Under the terms of the guaranty agreements given by each of the four men to Hibernia, the holder could proceed against the corporation, all of the four guarantors, or any one or more of the guarantors without the joinder of the others. Also under the terms of that guaranty agreement, the holder of the note and lien had the ability to proceed against the security or not; that was its choice.

Position of Assignee of Obligation as to Collateral

An assignee of a promissory note stands in the shoes of the assignor and obtains the rights, title, and interest that the assignor had at the time of the assignment. Thweatt v. Jackson, 838 S.W.2d 725, 727 (Tex. App.--Austin 1992), aff'd, 883 S.W.2d 171 (Tex. 1994). Therefore, when Bunch acquired the note from Hibernia, he stepped into the shoes of Hibernia, having the same rights which Hibernia possessed.

Release of Security by Holder

Among those rights which were granted under the guaranty agreements to the holder of the note and lien was the right to "release any security, with or without substitution of new collateral." This was precisely what Bunch did. He released the certificate of deposit which was the security for the note; there is no evidence that he actually foreclosed the security interest with which the certificate of deposit was impressed and did not, therefore, need to follow the dictates of the law in the procedure to be followed in effecting foreclosure.

The guaranty agreements signed by the parties permitted the holder of the note to release the security of the note without jeopardizing the holder's claim against the guarantors. Under such an agreement, the release of a secured item does nothing to require application of the proceeds of the security to the underlying debt; accordingly, the release of the $100,000.00 certificate of deposit to the owner of it did not constitute accord and satisfaction of the debt secured by it.

Release of Liability by Holder/Co-Guarantor

Bunch, in his capacity as the holder of the promissory note, also attempted to release himself from liability as a guarantor of the note. We determine that he could not use this means to unilaterally exculpate himself of any proportional liability he may hold as one of the four guarantors of the note.

When Bunch acquired the promissory note from Hibernia, he did not trade the hat of guarantor of the note for that of holder of the obligation; he wore both hats. As between the coguarantors, he still maintained some liability to his coguarantors for the satisfaction of the debt.

Surprisingly, this issue of a guarantor cum noteholder seeking relief from his coguarantors had not been presented to Texas courts until 2004, when it was shown as an issue in Byrd v. Estate of Nelms, 154 S.W.3d 149 (Tex. App.--Waco 2004, no pet.). As here, a guarantor of a promissory note purchased the underlying obligation and brought action against its coguarantors in its new capacity as the holder of the promissory note. The Waco court, noting that the issue of the relative liability among coguarantors in such a circumstance was then a case of first impression in Texas, looked at decisions in many other jurisdictions and concluded that

[C]ontribution is an equitable remedy that implies a contract between guarantors ensuring that in the event one of the guarantors is called to pay the debt, the other guarantors would contribute their proportionate share, and no more. See Curtis v. Cichon, 462 So. 2d 104, 105-06 (Fla.2d D.C.A 1985). The assignment of an underlying note and guaranty agreement to a guarantor does not change the status of the guarantor in relation to his co-guarantors. Mandolfo, 253 Neb. at 931, 573 N.W.2d at 138. Therefore, as a matter of law, the relationship between guarantors restricts recovery to their contributive share. Weitz v. Marram, 34 Md. App. 115, 121-22, 366 A.2d 86, 89-90 (1976).

Id. at 164.

The Waco court observed, in adopting the wording of a decision from a sister state that

Common sense dictates this result. All . . . sureties agree to be liable for full payment of the note if the principal debtor defaults and are further liable for contribution to the co-surety who actually pays the creditor. Thus, each surety's ultimate liability may be fixed at his virile share of the note. If one of several sureties, as here, could purchase the note (or otherwise contractually subrogate to the creditor's rights) and then collect the full amount of the note from a co-surety, the purchasing surety would thereby escape liability for his virile portion of the debt. If [Appellants] were able to succeed on their theory, then upon the debtor's default, every surety would race to the bank to purchase the note. The Civil Code does not contemplate that a surety's liability should be premised upon the fortuity of being the first to purchase the debtor's note.

Byrd, 154 S.W.3d at 165 (quoting Boyter v. Shreveport Bank & Trust, 65 B.R. 944, 948 (W.D. La. 1986)).

Reciprocal Co-Guarantor Liability

Although the particular fact situation presented here has only recently been addressed by the courts of this State, the question of liability of coguarantors to each other has a long history. For well over a hundred years, it has been a "general and familiar rule of law" that, as among coguarantors, each will bear his proportional part of the burden to the effect that should one of them pay more than his proportional part, the others will contribute equally to indemnify him for any amount in excess of his proportional part. Merchants' Nat'l Bank v. McAnulty, 89 Tex. 124, 33 S.W. 963 (1896); Sisco v. Briones, 809 S.W.2d 524 (Tex. App.--San Antonio 1991, no writ); Byrd, 154 S.W.3d at 164.

Bunch, still being among the joint guarantors of the note, is not entitled to recover the entire amount of the promissory note from his coguarantors. There were four joint guarantors of the note: Bunch, Lavender, Lively, and Coburn. Therefore, Bunch can recover judgment for only three-fourths of the jointly-owed amount.

Attorneys' Fees

The attorneys' fees which were awarded to Bunch in response to his motion for summary judgment were based on his recovery of the entire amount of the promissory note. Since that judgment has been reversed and since the appeal of Lavender is partially successful, the trial court may determine a different amount of attorneys' fees for which each of the coguarantors would be liable.

The court properly found that the surrender to Bunch of the $100,000.00 certificate of deposit held as collateral for the note did not operate as accord and satisfaction.

The court was in error in awarding Bunch judgment against his coguarantors for the full amount of the debt, and we hold that he was only entitled to judgment for three-fourths of the obligation of which all four parties guaranteed payment. By having acquired the note by assignment, however, Bunch does benefit by being able to seek recovery, jointly and severally, against the other three joint guarantors. ⁽²⁾

We reverse the judgment and remand this case to the trial court for further proceedings consistent with our opinion.

Bailey C. Moseley

Justice

Date Submitted: January 24, 2007

Date Decided: March 6, 2007

1. The final judgment called for postjudgment interest on both the debt and attorney's fees to be calculated at the rate of ten percent per annum, substantially different from and greater than that prescribed by Section 304.002 of the Texas Finance Code. See Tex. Fin. Code Ann. § 304.002 (Vernon 2006). However, no point of error was raised concerning this issue and we do not address it.

2. We recognize that rights of contribution exist between and among Lavender, Lively, and Coburn should one or more of them pay more than the proportionate liability to satisfy the three-fourths of the debt, but issues of contribution among them is not presented here.