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 2005-08

Dolgencorp of Texas, Inc., D/B/A Dollar General Store v. Maria Isabel Lerma, Individually and D/B/A Le Styles ( 2005 )


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                                 NUMBER 13-03-314-CV

     

                             COURT OF APPEALS

     

                   THIRTEENTH DISTRICT OF TEXAS

     

                      CORPUS CHRISTI - EDINBURG

     

     

     

    DOLGENCORP OF TEXAS, INC. D/B/A

    DOLLAR GENERAL STORE,                                        Appellant,

     

                                               v.

     

    MARIA ISABEL LERMA, INDIVIDUALLY AND

    D/B/A LE STYLES, ET AL.,                                        Appellees.

     

     

     

                      On appeal from the 103rd District Court

                              of Cameron County, Texas.

     

     

     

                         MEMORANDUM OPINION

     

                  Before Justices Rodriguez, Castillo, and Garza

                      Memorandum Opinion by Justice Castillo

     

    A post-answer default judgment was issued against Dolgencorp of Texas, Inc., d/b/a Dollar General ("Dollar General").[1]  Dollar General appeals the judgment by four issues:  (1) challenging the legal and factual sufficiency of the evidence supporting the liability finding, specifically as to causation; (2) claiming the judgment is based on an unplead theory of recovery; (3) asserting the trial court abused its discretion in denying Dollar General's motion for new trial; and (4) alleging an alternate trial court abused its discretion in denying Dollar General's motion to recuse the trial court from hearing the motion for new trial. We reverse and remand.

    I.  Background

    On May 9, 2000, a fire originated at a Dollar General store located in the Palm Village Shopping Center in Brownsville, Texas.  Business tenants of the shopping center sustaining damages from the fire ("appellees") brought claims against Dollar General based on (1) negligence, (2) negligent activities, and (3) premises defect.  After Dollar General successfully opposed the plaintiffs' motion for continuance, trial was originally set for Monday, February 24, 2003, in the 103rd District Court.  Clifford Harrison served as lead counsel for Dollar General.  Mr. Harrison's associate, Christopher Sachitano, appeared at docket call on Friday, February 21, 2003, and informed the court that Mr. Harrison was preferentially set for trial in Harris County the same day Dollar General's case was set to go to court.  At the appellees' request, the Dollar General case was subsequently moved to the 404th District Court.  On February 24, 2003, Mr. Sachitano appeared before the 404th District Court and apprised it of the situation with Mr. Harrison.  The trial court informed Mr. Sachitano that it was "willing to work with them on the trial scheduling," and would not make Mr. Sachitano try the case by himself.  The court then rescheduled the trial to begin two days later, on February 26, 2003. Over the next two days the attorneys involved and others made multiple calls to the trial court's office informing it that Mr. Harrison would not complete his preferentially set trial until the end of the week.  On February 26, 2003, the trial court nevertheless called the Dollar General case to begin.  Neither Mr. Harrison nor Mr. Sachitano were present.  The trial court announced that it had heard nothing from Dollar General's counsel, proceeded to hear the appellees' evidence, and granted a default judgment.  Dollar General timely filed a motion for new trial, and a motion to recuse the trial court judge from hearing the motion for new trial.  Both motions were denied, and this appeal ensued.

    II.  Motion for New Trial

    Dollar General's third issue on appeal alleges that the trial court erred in denying Dollar General=s motion for new trial.

    A.  Standard of Review

    Even if the evidence were legally sufficient, we would reverse and remand based on our disposition of Dollar General's third issue.  A motion for new trial, following a default judgment, is addressed to the trial court's discretion and the court's ruling will not be disturbed on appeal absent a showing of an abuse of discretion. Strackbein v. Prewitt, 671 S.W.2d 37, 38 (Tex. 1984).  A trial court abuses its discretion if its decision is arbitrary, unreasonable, and without reference to any guiding rules and principles. Goode v. Shoukfeh, 943 S.W.2d 441, 446 (Tex. 1997).  In Craddock v. Sunshine Bus Lines, Inc., 133 S.W.2d 124, 126 (1939), the Texas Supreme Court set forth the guiding rule or principle in granting a motion for new trial:

    A default judgment should be set aside and a new trial ordered in any case in which 1) the failure of the defendant to answer before judgment was not intentional, or the result of conscious indifference on his part, but was due to a mistake or accident; provided 2) the motion for a new trial sets up a meritorious defense and 3) is filed at a time when the granting thereof will occasion no delay or otherwise work an injury to the plaintiff.

     

    Cliff v. Huggins, 724 S.W.2d 778, 779 (Tex. 1987) (citing Craddock, 133 S.W.2d at 126).  A trial court abuses its discretion if it denies a motion for new trial when the defendant satisfies the Craddock standard.  See Old Republic Ins. Co. v. Scott, 873 S.W.2d 381, 382 (Tex. 1994).  Additionally, the requisites for granting a motion to set aside a trial court's default judgment also apply to a post-answer default judgment. Huggins, 724 S.W.2d at 779.

    B. Application of Craddock is Appropriate

    The appellees contend that the Craddock standard does not apply here, because Mr. Harrison never filed a formal motion for continuance prior to his failure to appear. In support of this position, the appellees rely on Carpenter v. Cimarron Hydrocarbons Corp., 98 S.W.3d 682 (Tex. 2002).  The Texas Supreme Court held that "Craddock does not apply to a motion for new trial filed after judgment has been granted on a summary‑judgment motion to which the non-movant failed to timely respond when the movant had an opportunity to seek a continuance or obtain permission to file a late response."  Carpenter, 98 S.W.3d at 686 (Emphasis added).  In Carpenter, counsel for the plaintiff discovered two days prior to a scheduled summary judgment hearing that no summary judgment response had been filed on behalf of his client.  Id. at 684.  On the day of the summary judgment hearing, the plaintiff filed a motion for leave to file a late response and a motion to continue the scheduled summary judgment hearing.  Id. The trial court denied the plaintiff's motions and granted the defendant's summary judgment.  Id.  In affirming the trial court's denial of the plaintiff's later motion for new trial under Craddock, the Carpenter court noted that the purpose in adopting the Craddock standard was to alleviate unduly harsh and unjust results at a point in time when the defaulting party has no other remedy available.  Id. at 686. (Emphasis added).  The plaintiff in Carpenter had the alternate remedy of appealing the trial court's denial of his motion for leave to file a late response to the summary judgment motion.  Id.

    While the appellees urge us to apply the Carpenter holding to the case at hand, we interpret the Carpenter opinion as a restraint on the application of the equitable remedy set out in Craddock, in the summary judgment context, where the complaining party has other remedies available. Id. at 686.  We decline to expand the scope of that holding to the context of a Craddock motion for new trial following a post-answer default judgment.  As such, we conclude the standard set forth in Craddock is the applicable and appropriate standard in this situation and is not limited by the Carpenter decision.

    C. Analysis

    1. Failure to Appear

    In applying the Craddock test, we must first determine whether Mr. Harrison established that his failure to appear for trial was neither intentional nor the result of conscious indifference.  In order to make this determination, we must look to the knowledge and acts of the appellant.  State v. Sledge, 982 S.W.2d 911, 914 (Tex. App.BHouston [14th Dist.] 1998, no writ); Prince v. Prince, 912 S.W.2d 367, 370 (Tex. App.BHouston [14th Dist.] 1995, no writ).  To be entitled to a new trial, an appellant need only show a slight excuse for failing to appear.  Sledge, 982 S.W.2d at 914.  A failure to appear is not intentional or due to conscious indifference merely because it was deliberate; it must also be without adequate justification.  Smith v. Babcock & Wilcox Constr. Co., 913 S.W.2d 467, 468 (Tex. 1995) (per curiam).  Proof of such justificationBaccident, mistake, or other reasonable explanationBnegates the intent or conscious indifference for which a new trial can be denied.  See id.  



    The Texas Supreme Court has concluded that a conflicting trial setting is a reasonable explanation for failure to appear resulting in dismissal for want of prosecution.[2]  See id. (holding that a trial court abused its discretion in not reinstating a case dismissed for want of prosecution where counsel for the appellant failed to appear for trial because he was in trial in another county).  The appellees argue that failure to appear for trial without filing a formal motion for continuance is never justified. However, in  Aero Mayflower Transit Co. v. Spoljaric, our sister court, applying Craddock, concluded that an appellant who had not filed a formal motion for continuance, but was in trial in another case, "certainly was not consciously indifferent in his failure to appear. His failure to appear was intentional, but only because he was in trial in [another] case."  Aero Mayflower Transit Co. v. Spoljaric, 669 S.W.2d 158, 160 (Tex. App.BFort Worth 1984, writ dism'd).  In Spoljaric, the trial court set the case for April 14, 1983.  Id.  The appellant's attorney had conflicts the week of the trial setting. Id.  Subsequently, the appellant's attorney told his secretary to call the trial court to advise of the conflict, and obtain a new setting.  Id.  The secretary thought the setting was for 10:00 a.m. and intended to call before that time on April 14.  At 9:20 a.m. on April 14, the trial court called to speak to the attorney, at which time the secretary advised it that the attorney was in trial.  Id.  The trial court told the secretary the case was going to trial at 9:30 a.m., with or without the attorney.  Id. The trial court allowed the case to be tried without the appellant's attorney present.  The appellant filed a motion for new trial, which was denied. However, our sister court reversed and remanded for a new trial in accordance with Craddock.  Id.

    Similarly, in the present case, Mr. Harrison, lead counsel for Dollar General, in trial in Harris County, believed the trial court would postpone the Dollar General case until the completion of his preferentially set case. The record indicates that the Dollar General case was originally set for trial Monday February 24, 2003 in the 103rd district court.  At docket call Friday, February 21, 2003, Mr. Harrison's associate, Mr. Sachitano, informed the court of Mr. Harrison's conflicting trial settings.  The 103rd  court advised Mr. Sachitano to return on Monday, but informed the parties that he had a full docket and he would not decide what to do about Mr. Harrison's issue until the case came up again on the docket.  On Monday, February 24, 2003, while the 103rd court was hearing another matter,  appellees' counsel successfully had the trial moved to the 404th district court ("trial court").  Mr. Sachitano specifically informed the trial court that he personally was not qualified to try the case, and that lead counsel for Dollar General, Mr. Harrison, was currently in trial in Harris County.  The trial court informed Mr. Sachitano that he would not have to try the case on his own, and that the trial court was going to "work with [them]" on scheduling.  Accordingly, the trial court re-scheduled the case for Wednesday, February 26, 2003. Mr. Sachitano reiterated to the court that Mr. Harrison may or may not be available by the new trial date, depending on the conclusion of his trial in Harris County.  Subsequently, the court informed the bailiff to "get the telephone numbers of the jurors" and tell them to be on "stand-by" in case the Dollar General matter had to begin.

    In the two days leading up to trial, and on the morning of trial, Mr. Harrison had his secretary, his associate, and both the court-coordinator and the judge from the Harris county court where he was in trial call the trial court's office to inform it that Mr. Harrison was still in trial.[3]  The trial court, in denying Dollar General's motion for new trial, stated that at no time between Monday, February 26, and Wednesday, February 27 did the court receive a call from Mr. Harrison's office.  It further stated, "[T]his court asked if there was any letters, any faxes, any communication to the court, [nothing] whatsoever was communicated to the court." The evidence presented at Dollar General's hearing on the motion for new trial clearly demonstrates that Mr. Harrison not only informed the court of his conflicting trial settings, but made repeated efforts to keep the court apprised of his status.[4]  We conclude that while Mr. Harrison's failure to appear was intentional in that he was aware of the trial setting, it was not without adequate justification, nor was it the result of conscious indifference.  See Spoljaric, 669 S.W.2d at 160.  Accordingly, we conclude that Dollar General satisfied the first prong of the Craddock test. 

    2. Meritorious Defense

    The second element of Craddock requires that the motion for new trial set up a meritorious defense.  Craddock, 133 S.W.2d at 126.  The defendant is not required to prove a meritorious defense; he is merely required to set up a meritorious defense.  Dir. State Employees Worker's Comp. Div. v. Evans, 889 S.W.2d 266, 270 (Tex. 1994).  A meritorious defense is one that, if proven, would cause a different result upon retrial of the case, although it need not be a totally opposite result.  Jackson v. Mares, 802 S.W.2d 48, 51 (Tex. App.BCorpus Christi 1990, writ denied); Ferguson & Co. v. Roll, 776 S.W.2d 692, 698 (Tex. App.BDallas 1989, no writ).  A motion for new trial should be granted if the facts alleged in the motion and supporting affidavits set up a meritorious defense, regardless of whether those facts are controverted.  Id. If the motion for new trial and affidavits raise several defenses, the second prong of the Craddock test will be satisfied if any one of its defenses qualifies as meritorious. Id. The appellees' second amended petition alleged that Dollar General's lack of a complete firewall and fire prevention devices such as a sprinkler system posed an unreasonable risk of harm to the appellees and their customers.  The appellees also alleged negligence on the part of Dollar General, and at the bench trial on February 26, 2003, presented evidence that Dollar General failed to properly address a burning smell coming from a light fixture that the appellees contend was the possible origin of the fire.


    In the motion for new trial, Dollar General argued that there was no defect in the fire wall and it claimed it could have brought forth evidence during trial that the Dollar General store met all building specifications and passed all city inspections.  In addition, no applicable city ordinances or fire codes required Dollar General to have a sprinkler system.  Further evidence supporting Dollar General's motion for new trial included the Brownsville Fire Department's official fire investigation report, which concluded that the electrical system was not the cause of fire.  Additionally, at the hearing on the motion for new trial, Dollar General's counsel pointed out that the appellees' damages expert did not subtract overhead costs from his calculations of lost profits for the appellees' businesses. Based on Dollar General's motion for new trial and subsequent hearing, we conclude that Dollar General set up a meritorious defense.  We conclude that Dollar General has met the second requirement set forth in Craddock. 

    3. Delay or Injury to Plaintiff

    The third prong of the Craddock test requires that the defendant "file the motion for new trial when it would not cause delay or otherwise injure the prevailing party." Craddock, 133 S.W.2d at 126.  In determining this factor, courts should deal with the facts on a case‑by‑case basis in order to accomplish equity.  Angelo v. Champion Rest. Equip. Co., 713 S.W.2d 96, 98 (Tex. 1986). That a defendant offers to reimburse the plaintiff for costs associated with the default judgment and states it is prepared for immediate trial are important factors to be considered in making such a case‑by‑case determination.  Cliff, 724 S.W.2d at 779.  Once a defendant alleges the granting of a new trial will not injure the plaintiff, the burden shifts to the plaintiff to establish proof of injury.  Evans, 889 S.W.2d at 270.

    Dollar General has alleged that granting a new trial would not cause any undue delay or prejudice to the appellees.  Dollar General also stated in its motion for new trial that it was prepared for trial, and willing to reimburse the appellees for any reasonable costs associated with the default judgment.  Thus, the burden shifted to the appellees to establish proof of injury. Evans, 889 S.W.2d at 270. At the hearing on the motion for a new trial, the appellees argued that granting a new trial would cause "extreme harm and prejudice" because Dollar General would "now know what the appellees were going to be alleging and arguing to the jury." However, if this argument were sufficient to establish injury, and thus defeat the third prong of Craddock, this type of argument could be made by every party ever prevailing in a post-answer default judgment.  Further, the allegations and evidence presented by the appellees at the bench trial were already available to Dollar General through the pleadings and discovery process. As the record is absent of any evidence of hardship or undue delay which would be suffered by appellees, we conclude that Dollar General has satisfied the third prong of the Craddock test.

    C. Conclusion

    When a post-answer default judgment is granted, a trial court abuses its discretion if it denies a motion for new trial where the defendant satisfies the Craddock standard.  See Old Republic Ins. Co., 873 S.W.2d at 382.  Dollar General has met the three requirements set forth in Craddock.  Thus, we sustain Dollar General's third issue on appeal and remand for new trial. 

    III.  Legal Sufficiency

    By its first issue on appeal, Dollar General claims the appellees' evidence is legally or factually insufficient to prove that Dollar General's negligence was the proximate cause of the damages for which appellees seek recovery.  As we are required to render unless remand is necessary, (Tex. R. App. P. 43.3), we consider this issue as Dollar General asks that we reverse and render based upon it. 

    A motion for new trial is one of five ways to preserve error for no-evidence challenges. See Cecil v. Smith, 804 S.W.2d 509, 510‑11 (Tex. 1991).  To preserve error, the motion must be sufficient to call the trial court's attention to the matter at issue.  TEX. R. APP. P. 33.1(a); Wal‑Mart Stores, Inc. v. McKenzie, 997 S.W.2d 278, 280 (Tex. 1999) (per curiam).  Dollar General's motion for new trial alleged the "plaintiffs had developed no evidence, and designated no expert that would indicate that the Dollar General light fixture, any possible 'defect' in the fire wall, or the absence of a sprinkler system was a proximate cause of the fire."

    A.  Standard of Review

    In determining a legal sufficiency question, we consider only the evidence and inferences that tend to support the finding and disregard all evidence and inferences to the contrary.  Holt Atherton Indus., Inc. v. Heine, 835 S.W.2d 80, 84 (Tex. 1992).  If there is more than a scintilla of evidence to support the finding, the no‑evidence challenge fails.  Id.  The evidence is no more than a scintilla and, in legal effect, is no evidence "when the evidence offered to prove a vital fact is so weak as to do no more than create a mere surmise or suspicion of its existence."  Kindred v. Con/Chem, Inc., 650 S.W.2d 61, 63 (Tex. 1983).  Conversely, more than a scintilla exists when the evidence "rises to a level that would enable reasonable and fair‑minded people to differ in their conclusions."  Transp. Ins. Co. v. Moriel, 879 S.W.2d 10, 25 (Tex. 1994).

    B.  The Law on Negligence

    In its final judgment the trial court specifically found Dollar General liable "with respect to the cause of action for negligence."  Texas law requires proof of three familiar elements to sustain a cause of action for negligence:  (1) a legal duty owed by one party to another, (2) a breach of that duty, and (3) damages proximately caused by the breach.  D. Houston, Inc. v. Love, 92 S.W.3d 450, 454 (Tex. 2002). The non‑existence of a duty ends the inquiry into whether negligence liability may be imposed.  Van Horn v. Chambers, 970 S.W.2d 542, 544 (Tex. 1998).

    C.  Evidence Presented

    At the bench trial resulting in the post-answer default judgment, the appellees presented the testimony of Eduardo Flores, an employee of Dollar General who was working on the day of the fire.  Flores testified that around 3:30 p.m. on the day of the fire, he was unloading boxes when he smelled smoke or some kind of electrical burning.  Flores was asked to change a florescent light bulb; however, he testified that the smell continued even after he changed out the light. Assistant manager Juan Molina stated that he smelled a burning smell around 4:00 p.m., and was also notified by customers of the smell.  Rosa Pena, a customer at Dollar General, testified she was in the store around 6:00 p.m and remembered a very strong smell of something burning which she characterized as roof tar burning.  Pena testified that she notified a Dollar General cashier.  According to testimony, the assistant manager, store manager, and area manager were all on the premises of Dollar General and were all aware of the burning smell.  Dollar General's management and employees did not call the fire department to investigate the situation.  The City of Brownsville was not called to investigate any potential electrical problems. Nor did Dollar General's management close the store or shut the power off to investigate the potentially hazardous situation.

    D.  Analysis

    The appellees' last live pleading alleged that Dollar General's conduct "constituted a breach of the duty of ordinary care."  However, upon careful review of the record we conclude that the appellees did not establish at trial the existence of a legal duty owed by Dollar General to the appellees. Further, the appellees failed to specify what conduct constituted a breach of any potential duty owed by Dollar General. 


    While the evidence presented could potentially support a "premises defect" cause of action, appellees pursued a premises liability cause of action under an entirely different set of allegations, and the trial court found Dollar General liable based on negligence.[5]  The appellees' evidence did not establish what duty Dollar General owed them as neighboring tenants in the same shopping center, or how Dollar General's actions or omissions breached any duty owed to the appellees.  Without first establishing that Dollar General owed a duty to the appellees, and then how it breached that duty, this Court cannot assess whether Dollar General's breach proximately caused the appellees' damages. As the appellees' evidence does not establish the requisite elements to sustain a cause of action for negligence, we conclude that the appellees' evidence is legally insufficient.[6]  Accordingly, we sustain Dollar General's first issue on appeal and reverse the lower court's decision.  We do not address the second portion of the issue, whether or not the evidence was factually sufficient.  See Tex. R. App. P. 47.1.

    IV.  Disposition


    Because we sustain Dollar General's first and third issues we do not reach Dollar General's other issues, which would entitle Dollar General to equal or lesser relief.  See TEX. R. APP. P. 47.1.  We reverse the judgment and remand the case for further proceedings.                              

    ERRLINDA CASTILLO

    Justice

     

    Memorandum Opinion delivered

    and filed this 4th day of August, 2005.

     


    [1] A post-answer default judgment occurs when an answer has been filed, but the defendant fails to appear at the trial.  See Stoner v. Thompson, 578 S.W.2d 679, 682 (Tex. 1979).  A post-answer default constitutes neither an abandonment of defendant's answer nor an implied confession of any issues thus joined by the defendant's answer.  Id.  Judgment cannot be entered on the pleadings, but the plaintiff in such a case must offer evidence and prove his case as in a judgment upon a trial.  Id.

     

     

    [2] The operative standard in a motion for new trial after a dismissal for want of prosecution is essentially the same as that for setting aside a default judgment.  Smith v. Babcock & Wilcox Constr. Co., 913 S.W.2d 467, 468 (Tex. 1995) (citing Craddock v. Sunshine Bus Lines, 133 S.W.2d 124, 126 (Tex. 1939)).

     

     

    [3] The court coordinator for the 404th district court submitted a sworn affidavit confirming the fact that she received calls from Mr. Harrison's associate, his secretary, and the 189th district court where Mr. Harrison was in trial, each of which confirmed that Mr. Harrison would be in trial in Harris County beyond his scheduled trial date in Cameron County. 

    [4] The 404th district court coordinator's affidavit confirmed that on February 24th, 25th, and 26th phone calls came into the office, advising her of Mr. Harrison's status.  Mr. Harrison also provided similar affidavits from his secretary, his associate, and the 189th district court coordinator verifying the communications with the 404th district court's office on multiple days leading up to the trial.

    [5]  A plaintiff raising a premises defect claim must show (1) the owner/operator had actual or constructive knowledge of some condition on the premises, (2) the condition posed an unreasonable risk of harm, (3) the owner/operator did not exercise reasonable care to reduce or eliminate the risk, (4) the owner/operator's failure to use reasonable care proximately caused the plaintiff's injuries.  Keetch v. Kroger Co., 845 S.W.2d 262, 264 (Tex. 1992).  While the appellees' evidence might potentially support a cause of action based on premises defect, the trial court did not find Dollar General liable based on a premises defect claim.  Further, with regard to their premises defect claim, appellees specifically plead that the "defendants failed to exercise ordinary care to protect the plaintiffs by failing to adequately warn plaintiffs of the lack of or incomplete fire wall and fire prevention devices such as a sprinkler system." However, the appellees presented no evidence at trial concerning Dollar General's lack of a fire wall or fire prevention devices.  Instead, appellees focused primarily on a faulty light fixture and electrical problems, a liability theory which appears nowhere in the appellees' pleadings.

    [6] The appellees also invoked the doctrine of res ipsa loquitor in their pleading.  To be entitled to a res ipsa judgment, the plaintiff must show both (1) that the character of the injury is such that it could not have occurred without negligence, and (2) that the instrumentality causing the injury was under the sole management and control of the defendant.  Haddock v. Arnspiger, 793 S.W.2d 948, 950 (Tex. 1990).  Appellees' own expert witness on fire origin concluded that "incendiary cannot be eliminated as a cause at this time.  This is the second fire in eighteen days in a Dollar General store in the Rio Grande Valley."  Because incendiary cannot be eliminated as a cause of the fire and resulting damage, the appellees' damages could have occurred without negligence. Id.