FinServ Casualty Corp , Capstone Associated Services, Ltd., Liquidating Marketing, Ltd., RSL-3B-IL, Ltd., and RSL-5B-IL, Ltd.,, RSL Funding and RSL Special-IV v. Transamerica Occidental Life Insurance Company, Transamerica Life Insurance Company, and Transamerica Annuity Service Corporation ( 2015 )

ACCEPTED
14-14-0838-cv
FOURTEENTH COURT OF APPEALS
HOUSTON, TEXAS
11/4/2015 10:22:29 AM
CHRISTOPHER PRINE
CLERK
No. 14-14-0838-CV
FILED IN
FINSERV CASUALTY CORP., CAPSTONE ASSOCIATED SERVICES , LTDOF
14th COURT ., APPEALS
HOUSTON, TEXAS
LIQUIDATING MARKETING, LTD., RSL-3B-IL, LTD., & RSL-5B-IL, LTD.
11/4/2015 10:22:29 AM
RSL FUNDING, LLC, AND RSL SPECIAL-IV, LTD.
CHRISTOPHER A. PRINE
Clerk
V.
TRANSAMERICA LIFE INSURANCE COMPANY AND
TRANSAMERICA ANNUITY SERVICES CORPORATION
ON APPEAL FROM THE 165TH DISTRICT COURT
IN HARRIS COUNTY, TEXAS, CAUSE NO. 2011-05238
APPELLANTS’ OPPOSITION TO APPELLEES’ MOTION TO
RECONSIDER ORDER ACCEPTING AMENDED BRIEF AND
REPLY IN SUPPORT OF MOTION TO POSTPONE SUBMISSION DATE
MAY IT PLEASE THE COURT:
The Court should deny the motion to reconsider filed by Transamerica Life
Insurance Company and Transamerica Annuity Service Corporation (the
“Transamerica Parties”), which seeks to undo the order accepting the appellants’
amended brief. In their own brief, the Transamerica Parties asked the Court to
“dismiss this appeal for failing to provide record references,” Brief of Appellees at
62, thereby triggering Rule 44.3 and the holding from Inpetco. See TEX. R. APP. P.
44.3; Inpetco, Inc. v. Tex. Am. Bank, 729 S.W.2d 300, 300 (Tex. 1987) (per
curiam). A distinct set of rules set the boundaries of this Court’s discretion.
Rather than single out an issue or two to argue for waiver, the Transamerica
Parties attacked the appeal in its entirety in advocating for “dismissal.” Brief of
Appellees at 61-62. The amended motion for leave to amend brief filed by FinServ
Casualty Corp., Capstone Associated Services, Ltd., Liquidating Marketing, Ltd.,
RSL-3B-IL, Ltd., RSL-5B-IL, Ltd., RSL Funding, LLC, and RSL Special-IV, Ltd.
(the “Appellants”) seized on this critical distinction in Texas case law in seeking
relief. See Elder v. Bro, 809 S.W.2d 799, 802 (Tex. App. – Houston [14th Dist]
1991, writ denied). The Court therefore applied the proper legal principles and
analysis in granting the Appellants leave to amend their brief. See id.
THE SPECTER OF PREJUDICE PROVES TO BE ETHEREAL
A. The Transamerica Parties Fail To Establish Any Prejudice
The Transamerica Parties initially claim they had to “prepare their brief
without Appellants’ record citations.” Motion at 2. While true, the Appellants
warned the Transamerica Parties from the outset that this eventuality may occur.
See Original Brief of Appellants at 57 n.1. The Transamerica Parties filed their
brief anyway, without asking for an extension of time that dated from the point at
which the Appellants filed the amended brief with record cites.
Nor do the Transamerica Parties explain how the absence of record cites
actually prejudiced their rights on appeal or affected the manner in which they
prepared their brief. As a practical matter, the Transamerica Parties must read the
2
complete record anyway to draft their brief. The brief they filed, which contains
detailed facts, discloses that the Transamerica Parties did read the record and cited
to it extensively.
If the Transamerica Parties disagreed with or contested any factual
statements made by the Appellants, Texas law offers several forms of protection.
First, the Transamerica Parties could submit their own statement of facts if they
were simply “dissatisfied” with the one presented by the Appellants. See TEX. R.
APP. P. 38.2(a)(1)(B). As their lengthy brief reveals, the Transamerica Parties did
just that, also restating the issues on appeal to their liking. Brief of Appellees at xi
n.1 (citing TEX. R. APP. P. 38.2(a)(1)(B)).
Second, the Transamerica Parties could “contradict” any fact stated by the
brief of Appellants to preclude the Court from accepting that fact as true. See
TEX. R. APP. P. 38.1(g). The brief of appellees relies on its own factual recitations.
In detailing the facts, the Transamerica Parties took advantage of protections that
inure to any appellee’s benefit. By looking after themselves and invoking the
applicable procedural rules, the Transamerica Parties suffered no prejudice.
Third, the Transamerica Parties could have moved for an extension of time
to file their brief conditioned on the date whereby the Appellants added record
cites to theirs. See TEX. R. APP. P. 10.5(b). The Appellants would not have
opposed such relief. Or the Transamerica Parties could have sought leave to
3
amend their brief after the Appellants filed the brief with the record cites. See TEX.
R. APP. P. 38.7. Yet the Transamerica Parties took no such action, sitting on their
rights instead.
B. The Facts In The Appellants’ Brief Remain Unchallenged
By arguing they were unable to “check [the cites in the brief of Appellants]
for accuracy,” Motion at 3, the Transamerica Parties attempt to shift their burden
on appeal to the Appellants. Rule 38.2(a)(1)(B) excuses the Transamerica Parties
from including a statement of facts in their brief “unless the appellee is dissatisfied
with that portion of the appellants’ brief.” Despite “restating” the issues on appeal,
the Transamerica Parties never expressed their “dissatisfaction” with the statement
of facts provided by the Appellants’ original brief. See Brief of Appellees at xi
n.1. Nor have the Transamerica Parties expressed their “dissatisfaction” with the
facts or the record cites that appear in amended brief.
C. Record Citations Aid The Court And Not The Appellees
The Appellants sought leave to amend their brief before the submission date,
giving the Court all of the appropriate record cites it will need to decide the case.
See TEX. R. APP. P. 38.1(g), (i). The Court will carry out its function as the
ultimate fact checker based on the record cites provided by the amended brief.
While no duty requires the Court “to make an independent search of the statement
of facts” to determine if harmful error exists, that benefit inures to the Court itself.
4
Saldana v. Garcia, 285 S.W.2d 197, 201 (Tex. 1955). Such a protection does not
extend to the Transamerica Parties, which can find their own remedies in Rules
38.1(g), 38.2(a)(1)(B), 10.5(b), and elsewhere.
The Supreme Court of Texas marks “the rendition of judgment” as the
operative time for amending the brief of appellant to add record cites the original
brief omits. See Saldana, 285 S.W.2d at 201. “The petitioner was timely apprised
of defects in his original brief, and was given an opportunity before the rendition of
the judgment to present a statement from the record supporting his right of
recovery on the theory advanced by his pleadings. Petitioner failed to take
advantage of this opportunity.” Id. (emphasis added). Unlike the petitioner in
Saldana, the Appellants did take advantage of their opportunity to rebrief before
the Court renders judgment.
THE COURT PROPERLY GRANTED THE APPELLANTS LEAVE TO AMEND
A. The Inpetco Standard Applies To Allow Rebriefing
In trying to distinguish Inpetco, the Transamerica Parties misapprehend the
case law on which they rely. The Transamerica Parties asked the Court to
“dismiss” the entire appeal because the Appellants omitted record cites in the
opening brief. Brief of Appellees at 61-62. In a section heading, the Transamerica
Parties alternatively argued that the Appellants “waived” not some, but “all” of
their grounds for reversal by failing to cite to the record. Id. at 61. Under these
5
circumstances, which unquestionably exist here, Rule 44.3 and Inpetco apply, not
the other cases cited by the Transamerica Parties.
This Court’s own precedent verifies that Inpetco governs the Appellants’
right to amend where the Transamerica Parties sought an outright dismissal of the
appeal. In quoting from Elder, the Transamerica Parties skipped this critical part:
An appeal may be disposed of partially on defects or irregularities in
the appellate briefs. See Davis, 752 S.W.2d at 522; King, 762 S.W.2d
at 299. Overruling some points of error due to procedural defects,
while reaching others on the merits was held to be consistent with the
Inpetco decision in Henry S. Miller Management v. Houston State,
792 S.W.2d 128, 134 (Tex. App. – Houston [1st District] 1990, writ
den). Such is not the same as affirming a judgment because of
procedural defects in the appellant’s brief. A party may still obtain
complete or partial relief on other points not waived by those
procedural defects. Id.; see, e.g., Texaco, Inc. v. Pennzoil, Co., 729
S.W.2d 768, 810, 815, 866 (Tex. App. – Houston [1st District] 1987,
writ ref’d n.r.e.).
Elder, 809 S.W.2d at 802 (emphasis added).
The court in Henry S. Miller Management Corp. articulated the acid test
used by this Court in Elder and other cases:
The supreme court concluded that the court of appeals erred in
affirming the judgment because of Inpetco’s briefing defects without
first allowing it to rebrief. We note that rule 74 [now Rule 44.3]
speaks of affirming judgments, which requires that all points of error
be overruled, as happened in Inpetco. It does not speak of overruling
some points of error due to procedural defects, while reaching others
on the merits and affirming, reversing, or dismissing, as those other
points require.
This case differs from Inpetco. There, the summary judgment
was affirmed due to briefing defects because every point of error
6
(albeit a single one) was deemed waived. Here, we have reviewed 10
points of error on the merits. Thus, we have not affirmed the judgment
because of briefing defects, but because appellant has not shown
reversible error in any point of error, including the 10 points of error
that we reviewed on the merits. Overruling some, but not all, points of
error because of procedural defects is not the same as affirming a
judgment due to procedural defects. The difference is that the
appellant may still get complete or partial relief on other points not
waived by procedural defects.
We hold that rule 83 does not require a court to grant time to amend
defective points of error, unless, as in Inpetco, all the points are
defective and overruling them on that basis would constitute an
affirmance for defects in appellate procedure. We think this
interpretation is consistent with the following authorities: Davis v.
City of San Antonio, 752 S.W.2d 518, 521–22 (Tex. 1988); Trenholm
v. Ratcliff, 646 S.W.2d 927, 934 (Tex. 1983); King v. Graham
Holding Co., 762 S.W.2d 296, 298–99 (Tex. App. – Houston [14th
Dist.] 1988, no writ); Arrechea v. Arrechea, 609 S.W.2d 852, 855
(Tex. Civ. App. – Houston [14th Dist.] 1980, writ ref’d n.r.e.) (cited
with approval in Trenholm ).
Henry S. Miller Mgmt. Corp., 792 S.W.2d at 134-35 (emphasis added).
The original brief of Appellants contained no record cites to support any of
the issues or legal arguments raised by the Appellants. Because this procedural
defect would conceivably entitle the Court to affirm the trial court’s judgment en
toto on a waiver theory or to dismiss the entire appeal, Inpetco and Rule 44.3
apply. Indeed, the Transamerica Parties asked for that very relief in their brief,
triggering the legal principle fixed by Inpetco and Rule 44.3. The Court
accordingly applied the correct legal standard in granting the Appellants leave to
rebrief.
7
B. No Flagrant Rule Violation Occurred
The Transamerica Parties erroneously suggest the Appellants conceded in
their amended motion for leave to add record cites that their opening brief
evidences a “flagrant violation of the briefing rules.” Motion at 3. The Appellants
admitted no such thing. Their opening brief disclosed the absence of record cites,
and that brief and the amended motion for leave gave a reasonable explanation for
same. Nor did the Appellants disobey an order to rebrief, but kept their promise to
add record citations when the Court received a complete clerk’s record.
Using the subjunctive tense, the Appellants pointed out that even when the
Court concludes that a “flagrant violation” has occurred in the general sense, Rule
38.9 entitles any party to an appeal to correct such procedural defects by
rebriefing. See TEX. R. APP. P. 38.9. In any event, the Appellants corrected their
brief on their own by adding record citations without any need for the Court to
order rebriefing.
The Transamerica Parties fail to contrast what real-life briefing deficiencies
qualify as “flagrant violations” of the briefing rules. See Motion at 3. Unlike this
case, Texas courts require far more that what happened here before a flagrant
violation will arise. Even then, the opportunity to rebrief or amend can cure the
flagrant violation. See In re M.R., No. 04-08-00624-CV, 2009 WL 1019041, at *1
(Tex. App. – San Antonio Apr. 15, 2009, no pet.) (allowing an amended brief after
8
finding flagrant violations that resulted from the failure to: “1) identify the parties
and counsel; (2) include a table of contents; (3) include an index of authorities; (4)
include a brief statement of the issues presented; (5) include record references in
the statement of facts; (6) include a summary of the argument; (7) include a
conclusion stating the nature of the relief sought; or (8) include an appendix.”).
This Court likewise requires an extreme example to qualify as a flagrant
violation. See Harkins v. Dever Nursing Home, 999 S.W.2d 571, 572-73 (Tex.
App. – Houston [14th Dist.] 1999, no pet.). In Harkins, the Court allowed the
appellants to amend after finding flagrant violations where the original brief “failed
to provide a clear and concise argument for the contentions made, with appropriate
citations to the record.” Id. at 572. The “amended brief, however, fail[ed] to cure
the defects found in their original brief.” Id.
This Court could “discern [no] significant distinction between Appellants’
original brief and their amended brief” in Harkins. Unlike this case, the “statement
of facts . . . contains no facts of the case and no citations to the record,” “the body
of Appellants’ brief contains no argument section,” which means that the summary
of the argument could sum up nothing, and “Appellants’ brief contains not a single
citation to the record.” Id. at 572-73. In stark contrast to the original brief in this
appeal, only a “conclusion and prayer” followed the “summary of argument” in the
brief under review in Harkins. Id.
9
THE TRANSAMERICA PARTIES ACT TO PUSH BACK THE SUBMISSION DATE
Knowing the submission date, which the Court set by letter dated August 28,
2015, the Transamerica Parties sought a second extension of time to file their brief.
On September 16, 2015, the Transamerica Parties filed their second motion for
extension, which the Court granted on September 24, 2015. This two-week
extension made the brief of appellees due on October 9, 2015. This timing means
that the submission date of October 27, 2015 would come and go before the
deadline for filing the reply brief even arrived. See TEX. R. APP. P. 38.6(c),
39.8(b).
The Appellants are asking the Court to move back the deadline for filing
their reply brief by 20 days, not by 30 days as stated by the Transamerica Parties.
See Motion at 1-2. October 29, 2015, marked the due date for the reply brief as
measured by the filing of the brief of appellees, so the new deadline would run on
November 18, 2015. The Court should re-set the submission date to November 26,
2015, or by 30 days, to accommodate this extension. To rearrange these deadlines
seems only fair after the Transamerica Parties obtained an extension that derailed
the conventional order for submitting an appeal for decision. This outcome would
promote this state’s public policy that calls for deciding appeals on the merits. See
Republic Underwriters Ins. Co. v. Mex-Tex, Inc., 150 S.W.3d 423, 427 (Tex.
2004).
10
CONCLUSION AND PRAYER FOR RELIEF
The Court should deny the motion to reconsider filed by the Transamerica
Parties, overrule their opposition to the Appellants’ motion to postpone the
submission date, and overrule their opposition to the Appellants’ motion to extend
time to file the reply brief. Thus, the Appellants pray the Court will grant them all
of the relief they are currently seeking.
Respectfully submitted,
/s/ E. John Gorman
E. John Gorman
State Bar No. 08217560
jgorman@feldlaw.com
THE FELDMAN LAW FIRM LLP
Two Post Oak Central
1980 Post Oak Blvd., Suite 1900
Houston, TX 77056-3877
(713) 850-0700
(713) 850-8530 (fax)
Michael Choyke
State Bar No. 00793504
WRIGHT & CLOSE, LLP
One Riverway, Suite 2200
Houston, Texas 77056
(713) 572-4321
(713) 572-4320 (fax)
choyke@wrightclose.com
COUNSEL FOR APPELLANTS
11
CERTIFICATE OF SERVICE
I certify delivering a true and correct copy of this response to the motion to
reconsider to all counsel of record on November 4, 2015, in compliance with Texas
Rule of Appellate Procedure 9.5:
David L. Pybus
PREIS, PLC
24 Greenway Plaza, Suite 2050
Houston, TX 77046
/s/ E. John Gorman
E. John Gorman
12