Dismissal of Credit Card Debt Collection Suit for Want of Prosecution Affirmed

DALLAS COURT OF APPEALS' MEMORANDUM OPINION IN DEBT COLLECTOR'S APPEAL FROM DWOP ORDER

BY JUSTICE LANG

Crown Asset Management appeals the trial court's order dismissing its lawsuit for breach of contract against Paul R. Strayhorn, Jr. Crown Asset raises two issues arguing the trial court erred when it: (1) dismissed its lawsuit for want of prosecution; and (2) denied its motion for default judgment. Strayhorn did not make an appearance in the trial court and has not filed a brief on appeal.

We conclude the trial court did not err when it dismissed Crown Asset's lawsuit or when it denied Crown Asset's motion for default judgment. Because all dispositive issues are clearly settled in law, we issue this memorandum opinion. See Tex. R. App. P. 47.2(a), 47.4.

The trial court's judgment dismissing Crown Asset's lawsuit is affirmed.

I. FACTUAL AND PROCEDURAL BACKGROUND

On August 2, 2007, Crown Asset filed its lawsuit against Strayhorn alleging breach of contract and attaching discovery requests. On August 7, 2007, the trial court sent Crown Asset a letter that stated, pursuant to Texas Rule of Civil Procedure 165a, the case was set for dismissal on November 9, 2007, at 9:00 a.m. Also, the letter stated:

If no answer has been filed, or if the answer is insufficient as a matter of law to place any of the facts alleged in your petition in issue, you will be expected to have moved for, and to have heard, a summary judgment or to have proved up a default judgment on or prior to that date. Your failure to have done so will result in the dismissal of the case on the above date.

On August 8, 2007, Strayhorn was served with the citation. However, Strayhorn failed to file an answer to the lawsuit or the discovery requests. As a result, on October 9, 2007, Crown Asset filed a motion for default judgment, indicating the damages were unliquidated and attaching an affidavit it claimed proved up those damages.

On October 12, 2007, the trial court sent Crown Asset an unsigned form letter to “Counsel of Record” that identified the cause number and stated the proposed default judgment was being returned unsigned. The Dallas County, Texas crest was at the top of the first page directly above the trial judge's name and court.

The form letter included a list of items under two separate headings, “Procedural Issues” and “Substantive Issues.” A blank space was provided to the left of each “issue.” No procedural issues were checked on the unsigned form letter. However, the following substantive issues were checked, indicating the proposed default judgment was being returned for one or more of the following reasons “concerning the motion for default judgment”:

(1) the petition did not give Strayhorn fair notice of the claim;
(2) the judgment relied on a cause of action that was not properly pleaded;
(3) the damages could not be accurately calculated and no written instrument was attached to the pleading;
(4) there was no evidence of sale and delivery of the merchandise or performance of services; (5) there was no evidence the amount of the account or price charged was in accordance with an express contract or was usual, customary and reasonable;
(6) there was no evidence of a systematic record kept and supported by an affidavit; and
(7) the requests for admissions were deficient.

The letter also stated, “it is NOT NECESSARY to re-file all the paperwork associated with the Motion for Default Judgment, only the items identified above as necessary before a Default Judgment can be signed.” The record does not show Crown Asset responded, in any manner, to the trial court's form letter.

The trial court signed a judgment dated November 9, 2007, dismissing Crown Asset's lawsuit with the following two out of seven listed grounds for dismissal marked: (1) “Failure to appear for a hearing or trial of which notice was had”; and (2) “Dismiss for Want of Prosecution.”

Crown Asset appealed.

II. JUDGMENT OF DISMISSAL AND ORDER DENYING DEFAULT JUDGMENT

In issues one and two, Crown Asset argues the trial court erred when it: (1) dismissed its lawsuit for want of prosecution; and (2) denied its motion for default judgment.

A. Applicable Law

An appellant must challenge all independent bases or grounds that fully support the trial court's judgment. See Univ. of Houston v. Barth, 265 S.W.3d 607, 615 (Tex. App.-Houston [1st Dist.] 2008, pet. filed). When a separate independent ground that supports a judgment is not challenged on appeal, the appellate court must affirm the trial court's judgment. See Nobility Homes of Tex., Inc. v. Shivers, 557 S.W.2d 77, 83 (Tex. 1977) (concluding appellant's failure to challenge separate and independent ground of recovery for negligence required judgment to be affirmed); Midway Nat'l Bank v. W. Tex. Wholesale Supply Co., 453 S.W.2d 460, 461 (Tex. 1970) (per curiam) (affirming judgment when appellant failed to attack independent legal conclusion that “fully supported” judgment); Long v. Long, 196 S.W.3d 460, 468 (Tex. App.-Dallas 2006, no pet.) (appellants did not challenge trial court's findings of fact and conclusions of law with respect to breach of contract action). An appellate court may not reverse the trial court's judgment for a reason not raised by the parties on appeal. See Walling v. Metcalfe, 863 S.W.2d 56, 58 (Tex. 1983).

B. Dismissal For Want of Prosecution

In issue one, Crown Asset argues the trial court erred when it dismissed Crown Asset's lawsuit for want of prosecution. It claims it moved for a default judgment by November 9, 2007, as required by the trial court's August 7, 2007 letter. Also, it claims affirmative defenses and special exceptions are waived if not specifically pleaded. The trial court should not have raised these defenses and objections on behalf of Strayhorn in its October 12, 2007 unsigned form letter. Further, the dismissal of the suit was “arbitrary.”

The trial court's judgment dismissed Crown Asset's lawsuit for: (1) “Failure to appear for a hearing or trial of which notice was had”; and (2) “Dismiss for Want of Prosecution.” Crown Asset has not challenged a distinct ground for the trial court's judgment of dismissal, i.e., “Failure to appear for a hearing or trial of which notice was had.” Crown Asset argues only that the trial court abused its discretion when it dismissed Crown Asset's lawsuit for want of prosecution. Accordingly, we conclude the trial court did not abuse its discretion because Crown Asset has not challenged a ground for the trial court's judgment.

When a separate independent ground that supports a judgment is not challenged on appeal, the appellate court must affirm the trial court's judgment. See Nobility, 557 S.W.2d at 83; Midway Nat'l Bank, 453 S.W.2d at 461.

Issue one is decided against Crown Asset.

C. Motion For Default Judgment

In issue two, Crown Asset argues the trial court erred when it denied Crown Asset's motion for default judgment. Crown Asset argues all allegations, except for the amount of damages, were deemed admitted because Strayhorn did not answer the lawsuit. Also, it claims the trial court did not have discretion to refuse to deem the admissions because Strayhorn did not respond to its requests for admission. See Tex. R. Civ. P. 198.2(c) (if response to request for admissions not timely served, request is considered admitted without necessity of court order).

Assuming without deciding the trial court abused its discretion when it refused to deem the admissions, Crown Asset fails to challenge the other reasons the trial court denied its request for a default judgment. In addition to denying the motion for default judgment because the requests for admissions were deficient, the trial court denied the motion because: (1) the petition did not give Strayhorn fair notice of the claim; (2) the judgment relied on a cause of action that was not properly pleaded; (3) the damages could not be accurately calculated and no written instrument was attached to the pleading; (4) there was no evidence of sale and delivery of the merchandise or performance of services; (5) there was no evidence the amount of the account or price charged was in accordance with an express contract or was usual, customary and reasonable; and (6) there was no evidence of a systematic record kept and supported by an affidavit.

Accordingly, we conclude the trial court did not abuse its discretion because Crown Asset has not challenged the other grounds for the trial court's order. See Nobility, 557 S.W.2d at 83; Midway Nat'l Bank, 453 S.W.2d at 461.

Issue two is decided against Crown Asset.

III. CONCLUSION

Having decided Crown Asset's issues against it, we affirm the trial court's judgment dismissing Crown Asset's suit.

DOUGLAS S. LANG
JUSTICE

CASE DETAILS:
Decision of the Dallas Court of Appeals, Appellate Case No. 05-07-01603-CV Docket Sheet
Case Style: Crown Asset Managment LLCv. Strayhorn, Paul R. Jr. Date
Filed: 11/26/2007
Case Type: CONTRACT County: DALLAS
Court: COUNTY COURT AT LAW NO 1 - Trial Judge: Benson, D'Metria

DWOP: Dismissal of creditor's suit on credit card debt affirmed

Plaintiff committed procedural errors, did not show diligence in securing and documenting efforts to serve citation on defendant, and did not properly preserve error for appellate review. Court of appeals holds that dismissal was proper, and affirms trial court's order.

Hudson & Keyse, LLC v. Gipson
(Tex.App. - Houston [1st Dist.] Jan. 31, 2008)(Jennings) (credit card debt suit, DWOP, substitute service, motion to reinstate, failure to appear)
Opinion by Justice Jennings Before Chief Justice Radack, Justices Jennings and Bland
01-07-00380-CV Hudson & Keyse, L.L.C. v. Lavern W. Gipson and Emmett Gipson
Appeal from County Civil Court at Law No 1 of Harris County (Judge Jack Cagle)
Disposition: Affirmed trial court judgment of dismissal

MEMORANDUM OPINION

Appellant, Hudson & Keyse, L.L.C. ("Hudson"), challenges the trial court's order of dismissal of its suit against appellees, Lavern W. Gipson and Emmett Gipson, to recover an outstanding credit card balance. In two issues, Hudson contends that the trial court erred in dismissing the case for want of prosecution and denying its motion for substitute service. We affirm.

Factual and Procedural Background

On May 23, 2006, Hudson filed suit against the Gipsons, alleging that they defaulted in making required payments pursuant to a credit card agreement. On May 25, 2006, citation was issued. On June 22, 2006, Hudson filed a motion for substitute service, stating that it had unsuccessfully attempted to serve the Gipsons, who "[could] probably be found" at 808 Junell Street in Houston, Texas, and that the Gipsons could be given notice of the suit through substitute service.

In support of its motion, Hudson attached an affidavit from its process server, who testified that she "attempted to make personal delivery" on the Gipsons at their "place of abode," (1) but had "deemed" such service "impractical." She believed that the Gipsons could be given notice of the suit "by delivering to anyone over the age of sixteen (16) at the [Gipsons'] usual place of abode or by attaching [the citation and petition] to the front entrance of the [Gipsons'] usual place of abode." The process server had previously attempted to serve the Gipsons at the Junell Street address on five occasions--May 31, June 2, June 3, June 5, and June 10, 2006--but there was no answer at the door. Thus, she left her card on the door. On June 6, 2006, she received a telephone call from a male individual who identified himself as Emmett Gipson and told her that she "should not come back to his house because neither he nor his wife [would] take anything that [she] had."

The clerk's record does not show that the trial court ruled on Hudson's motion for substitute service. (2) Moreover, there is no evidence in the record that Hudson ever again attempted to serve the Gipsons during the following eight months in which the suit remained pending or that Hudson filed any additional requests for substitute service supported by any new evidence.

On January 5, 2007, the trial court granted Hudson a continuance. (3) Three months later, on March 5, 2007, the trial court signed an order of dismissal "for want of prosecution," stating that the parties had been notified of the trial date and had "failed to appear."

On March 28, 2007, Hudson filed a motion to reinstate, in which it stated that it had filed a second motion for continuance on February 28, 2007, "explain[ing] that it was having difficulties serving [the Gipsons]." Although this motion for continuance is not contained in the clerk's record, Hudson, in its appellate briefing represents that it filed this second motion for continuance "prior to dismissal indicating to the trial court that it was having continuing difficulties with service." (Emphasis added). However, there is no evidence in the record that Hudson made continuing service efforts following its five service attempts in late May and early June 2006. In its motion to reinstate, Hudson also asserted that Harris County Appraisal District ("HCAD") records established that the Gipsons owned "homestead property" at the Junell Street address and that the Gipsons had not been home or were avoiding service. However, Hudson did not attach the referenced HCAD records to its motion, and they are not contained in the record before us.

On April 5, 2007, the trial court signed an order stating that it heard Hudson's motion to reinstate and that the motion was "not well taken." Thus, the trial court denied the motion to reinstate. Although the order recites that a hearing was held on the motion, there was no reporter's record filed with this Court.

Dismissal for Want of Prosecution

In its first issue, Hudson argues that the trial court erred in dismissing the case for want of prosecution because Hudson attempted service on five different occasions, it provided proof that it made these service attempts at the Gipsons' homestead, the trial court should have allowed substitute service, and it exercised diligence.

A court may dismiss a case for want of prosecution "on failure of any party seeking affirmative relief to appear for any hearing or trial of which the party had notice." Tex. R. Civ. P. 165a(1). In fact, "[a]t the dismissal hearing, the court shall dismiss for want of prosecution unless there is good cause for the case to be maintained on the docket." Id. In addition to the express authority under Rule 165, the common law vests trial courts with the inherent power to dismiss a case when the plaintiff fails to prosecute the case with due diligence. Alexander v. Lynda's Boutique, 134 S.W.3d 845, 850 (Tex. 2004); Villarreal v. San Antonio Truck & Equip., 994 S.W.2d 628, 630 (Tex. 1999). We review a trial court's order dismissing a case for want of prosecution for an abuse of discretion. Wright v. Tex. Dep't of Criminal Justice-Institutional Div., 137 S.W.3d 693, 696 (Tex. App.--Houston [1st Dist.] 2004, no pet.).

Here, the trial court, in its March 5, 2007 dismissal order, recited that the parties had been notified of the trial date and failed to appear. In its appellate briefing, Hudson does not address the consequence of failing to appear on the trial date. Hudson does not contend that the trial court failed to provide it with the required notice. See Tex. R. Civ. P. 165a(1) (setting forth notice requirements before case may be dismissed for want of prosecution for failure to appear). Nor does Hudson assert any specific reason as to why it was not required to appear.

Moreover, Hudson does not challenge the trial court's statement in the dismissal order that Hudson, in fact, failed to appear. We note that although Hudson, in its subsequently-filed motion to reinstate, referred to the filing of a February 28, 2007 motion for continuance prior to the trial court's dismissal, there is no copy of any such motion in the record. On this record, we cannot conclude that the trial court abused its discretion in dismissing the case for want of prosecution under Rule 165 when Hudson failed to appear on the trial date on March 5, 2007. See id.

In regard to Hudson's motion to reinstate, a party may file a motion setting forth grounds for reinstatement, and the trial court "shall set a hearing on the motion." Tex. R. Civ. 165a(3). The trial court "shall reinstate the case upon finding after a hearing that the failure of the party or his attorney was not intentional or the result of conscious indifference but was due to an accident or mistake or that the failure has been otherwise reasonably explained." Id. We review a trial court's ruling on a motion for reinstatement for an abuse of discretion. WMC Mortg. Corp. v. Starkey, 200 S.W.3d 749, 752 (Tex. App.--Dallas 2006, pet. denied).

Here, in its first issue, Hudson has not specifically challenged the trial court's denial of its motion to reinstate. However, to the extent that it seeks to challenge this ruling, it has not cited anything in the record to show that the trial court would have abused its discretion in not making the requisite finding to reinstate the case, i.e., the finding that Hudson's failure was not intentional or the result of conscious indifference but was due to an accident or mistake or that Hudson's failure has been otherwise reasonably explained. Tex. R. Civ. 165a(3).

In considering whether the record would support such a finding, we note that although the order denying the motion to reinstate suggests that a hearing was held on Hudson's motion, there was no reporter's record taken at the hearing. Thus, we are not aware of what additional evidence, if any, was considered by the trial court in denying the motion to reinstate. Furthermore, although Hudson, in its appellate briefing, suggests that it was having continuing difficulties with service, the only evidence in the record is that Hudson made five service attempts in an eleven-day period from May 31 to June 10, 2006. There is no evidence as to what service efforts, if any, Hudson undertook during the subsequent eight-month period from June 2006 until March 2007, when the case was dismissed. Accordingly, we hold that the trial court did not err in dismissing the case for want of prosecution and denying Hudson's motion to reinstate.
We overrule Hudson's first issue.

Substitute Service

In its second issue, Hudson argues that the trial court erred in denying its motion for substitute service because it made five separate service attempts at the Gipsons' residence and that the Gipsons would not "cooperate in the service process." Hudson asserts that "[c]learly they were evading service and substituted service was the only means available to serve them" and that the "quality and quantity" of its service attempts shows "extreme diligence." Hudson also asserts that the trial court's error "caused this case to remain pending without any disposition until the trial court dismissed it for want of prosecution."

Texas Rule of Civil Procedure 106(b) provides,

Upon motion supported by affidavit stating the location of the defendant's usual place of business or usual place of abode or other place where the defendant can probably be found and stating specifically the facts showing that service has been attempted under either (a)(1) or (a)(2) at the location named in such affidavit but has not been successful, the court may authorize service

(1) by leaving a true copy of the citation, with a copy of the petition attached, with anyone over sixteen years of age at the location specified in such affidavit, or

(2) in any other manner that the affidavit or other evidence before the court shows will be reasonably effective to give the defendant notice of the suit.
Tex. R. Civ. P. 106(b).

We examine a trial court's denial of a motion for substitute service for an abuse of discretion. See Izen v. Sjostrom, No. 14-06-00142-CV, 2007 WL 968841, at *4 (Tex. App.--Houston [14th Dist.] 2007, pet. denied) (mem. op.).

Initially, we note that the record does not contain an order denying Hudson's motion for substitute service. It appears that the trial court simply did not rule on Hudson's motion. See Tex. R. App. P. 33.1 (providing that as prerequisite to presenting complaint for appellate review, record must show that trial court ruled on motion, expressly or implicitly, or refused to rule on motion, and complaining party objected to refusal).

Nevertheless, contrary to Hudson's assertions that it exercised "extreme diligence," the record does not establish that Hudson made continuous efforts to serve the Gipsons throughout the underlying proceedings. Rather, the record shows that Hudson's process server made five attempts during an eleven-day period to serve the Gipsons at their purported home address shortly after Hudson filed suit.

There is nothing in the record to indicate that, after these initial attempts, Hudson ever made any additional service attempts or that Hudson ever filed any additional motions for substitute service, supported by any additional evidence. Accordingly, we hold that the trial court did not abuse its discretion in not authorizing substitute service. See Izen, 2007 WL 968841, at *4 (holding that trial court did not abuse its discretion in denying motion for substitute service after plaintiff attempted to serve defendant at his residence on four separate occasions).

We overrule Hudson's second issue.

Conclusion

We affirm the order of the trial court dismissing the case for want of prosecution.
Terry Jennings
Justice
Panel consists of Chief Justice Radack and Justices Jennings and Bland.

1. The process server stated, without any explanation, that the Gipsons place of abode "was established personally in [her] efforts."
2. Although Hudson, in its briefing, asserts that the trial court denied its motion for substitute service, the clerk's record contains no such order.
3. The clerk's record does not contain a copy of any motion supporting Hudson's request for a continuance, nor does it contain any evidence as to the basis for the continuance.