Opinion
NO. 01-17-00601-CV
07-24-2018
E&M PLUMBING LTD., Appellant v. WEST HOUSTON WINNELSON CO., ALLIANCE MANUFACTURER REPRESENTATIVES INC., AND PHC DISTRIBUTION INC., Appellees
On Appeal from the 189th District Court Harris County, Texas
Trial Court Case No. 2015-03838
MEMORANDUM OPINION
E&M Plumbing sued several parties for supplying it allegedly defective parts and later sought to implead the parts' foreign manufacturers. After the initial defendants settled, but before E&M could have the foreign manufacturers successfully served with process, the trial court's deadline for avoiding a dismissal for want of prosecution passed, and E&M's suit was dismissed.
In one issue, E&M contends that the trial court abused its discretion by denying its verified motion to reinstate. We reverse and remand for further proceedings.
Background
In January 2015, E&M initiated this lawsuit because it had purchased allegedly faulty plumbing parts that it installed in hundreds of homes and later replaced at its own expense. E&M initially sued the company that sold it the parts, the company that had sold the parts to that company, and another company that had marketed the same kind of parts. During discovery, E&M learned that two foreign companies were the ones that manufactured the parts. On July 11, 2016, E&M filed an amended petition, seeking to add those two companies to the lawsuit as new defendants by having them served with process under the Hague Convention. Later, E&M settled with the initial three defendants and nonsuited its claims against them.
After the nonsuits, but before E&M could cause the two foreign defendants to be served with process, the trial court notified E&M of its intent to dismiss the lawsuit for want of prosecution. The notice specified that the court was imposing a disposition deadline for the lawsuit of March 24, 2017.
E&M's counsel mistakenly failed to note the March 24 deadline or take any action concerning the court's notice of intent to dismiss for want of prosecution. On May 2, the court signed an order dismissing the lawsuit for want of prosecution. Notice of the order was mailed on May 4, but neither E&M nor its counsel received the notice.
The first time E&M or its counsel learned of the May 2 order was, according to E&M's verified motion to reinstate, on the evening of June 22 when E&M's counsel saw the order while checking the lawsuit's status on the clerk's website. The next morning, E&M filed a verified motion to reinstate the lawsuit.
On June 27, the trial court denied the motion. The court's order denying the motion said, in full:
Notice of the court's order dismissing the case for want of prosecution was mailed May 4, 2017. Thus it was received by counsel within 7 days undoubtedly. Counsel knew or should have known of the order in time to file a timely motion to reinstate but failed to do so. Because 30 days has elapsed this Court lacks power to reinstate the case. Accordingly reinstatement is denied.E&M then appealed.
Reinstatement of Lawsuit
In its sole issue, E&M contends that the trial court abused its discretion by denying E&M's verified motion to reinstate the lawsuit.
A. Applicable Law
"A case may be dismissed 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). Notice of intent to dismiss and the date and place of the dismissal hearing must be sent by mail to each party or attorney. Id. The court must dismiss for want of prosecution at the hearing unless there is good cause for the case to be maintained on the docket. Id. If the case is dismissed, notice of the dismissal order must be given. Id. (referencing notice requirements in Rule 306a).
When an order of dismissal for want of prosecution is signed, the clerk "shall immediately give notice to the parties or their attorneys of record by first-class mail advising that the . . . order was signed." See TEX. R. CIV. P. 306a(3).
Reinstatement after a dismissal for want of prosecution is governed by Rule of Civil Procedure 165a(3), which requires a motion to reinstate to be verified; to set forth the grounds for reinstatement; and, in most circumstances, to be filed within 30 days of the order of dismissal. TEX. R. CIV. P. 165a(3). If a motion to reinstate complying with Rule 165a(3) is filed, then 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. This rule has been interpreted to require an "adequate justification" by the party seeking reinstatement. Proof of an adequate justification—like "accident, mistake or other reasonable explanation—negates the intent or conscious indifference for which reinstatement can be denied." Smith v. Babcock & Wilcox Constr. Co., 913 S.W.2d 467, 468 (Tex. 1995) (per curiam). Conscious indifference is more than mere negligence. Id.; Jackson v. Thurahan, Inc., No. 14-02-00308-CV, 2003 WL 1566386, at *3 (Tex. App.—Houston [14th Dist.] Mar. 27, 2003, no pet.) (mem. op.). In this specific context, "[s]ome excuse, not necessarily a good one, is sufficient." Seigle v. Hollech, 892 S.W.2d 201, 203 (Tex. App.—Houston [14th Dist.] 1994, no writ).
There is a provision that allows a party to pursue reinstatement after the 30-day deadline in Rule 165a(3) on a showing of non-receipt of notice of the order of dismissal. Rule 306a extends the deadline if, within 20 days after the order is signed, the party adversely affected by the order has neither received that notice nor acquired actual knowledge of the order. TEX. R. CIV. P. 306a(4). In that circumstance, the period within which the motion to reinstate must be filed "shall begin on the date that such party or his attorney received such notice or acquired actual knowledge of the signing, whichever occurred first, but in no event shall such periods begin more than ninety days after the original judgment or other appealable order was signed." Id. Proving these circumstances requires the party adversely affected "to prove in the trial court, on sworn motion and notice, the date on which the party or his attorney first either received a notice of the judgment or acquired actual knowledge of the signing and that this date was more than twenty days after the judgment was signed." TEX. R. CIV. P. 306a(5).
A Rule 165a-compliant motion requires the trial court to reinstate the lawsuit. See TEX. R. CIV. P. 165a(3); Smith, 913 S.W.2d at 468; Jackson, 2003 WL 1566386, at *3; Seigle, 892 S.W.2d at 203-04.
B. Standard of Review
A trial court's denial of a motion to reinstate a lawsuit that has been dismissed for want of prosecution is reviewed for an abuse of discretion. Smith, 913 S.W.2d at 467-468. The trial court abuses its discretion if it acts without reference to any guiding rules or principles. Seigle, 892 S.W.2d at 203.
C. E&M established adequate justification
The court had notified E&M of its intent to dismiss the lawsuit for want of prosecution by March 24, and E&M's counsel received that notice. However, E&M's counsel explained in his verification that he inadvertently failed to record the March 24 deadline in his calendar, so the deadline passed without E&M filing a motion to retain. E&M's counsel further explained that he first discovered the dismissal order on June 22. This sufficiently establishes "accident or mistake" under Rule 165a(3). It therefore "negates the intent or conscious indifference for which reinstatement can be denied." Smith, 913 S.W.2d at 468.
D. E&M timely filed its motion
E&M's motion and verification offer evidence that neither E&M nor its attorneys received notice of the May 2 order of dismissal for want of prosecution. Further, they offer evidence that the first time either E&M or its counsel learned of the May 2 order was on June 22 when counsel saw the dismissal order on the clerk's website. This was beyond 20 days after the order was signed, as required by Rule 306a(4). Therefore, the period for filing the verified motion to reinstate began on June 22, and June 22 was not more than 90 days after May 2. See TEX. R. CIV. P. 306a(4). The motion was filed on June 23. The motion was therefore timely.
The trial court's dismissal order says that E&M's counsel knew or should have known of the May 2 dismissal order because notice of the order was mailed by May 4. But E&M offered direct evidence, via its counsel's verification, that it never received the mailed notice. While notices placed in the regular mail are normally received, E&M's counsel positively averred that E&M did not receive the notice, and the court did not hold any hearing to assess E&M's evidence. The trial court could not, therefore, disregard E&M's counsel's verification. See, e.g., In re E.A., 287 S.W.3d 1, 5 (Tex. 2009) (holding that return of amended petition labeled as unclaimed negated any presumption of receipt by mail under Rule of Civil Procedure 21a because presumption of mailing is not itself evidence, presumption vanishes when opposing evidence is introduced, and Rule 21a(e) allows party to introduce evidence disputing receipt by mail); Fed. Ins. Co. v. Ticor Title Ins. Co. of Cal., 774 S.W.2d 103, 105 (Tex. App.—Beaumont 1989, no writ) (holding that both sworn statement of receipt of judgment at a later date and statement of no evidence of any earlier receipt rebutted Rule of Civil Procedure 21a presumption of receipt by mail). In the context of a motion to reinstate, "[s]ome excuse, not necessarily a good one, is sufficient." Seigle, 892 S.W.2d at 203.
We note that the trial court's dismissal order states that because "30 days has elapsed this Court lacks the power to reinstate the case." A timely verified motion to reinstate, however, extends the trial court's plenary power. Abraham v. Acton, 539 S.W.3d 521, 523 (Tex. App.—El Paso 2018, no pet.); Buccaneer Constr., LLC v. Scott, No. 01-16-00670-CV, 2017 WL 1407661, at *2 (Tex. App.—Houston [1st Dist.] Apr. 18, 2017, no pet.) (mem. op.); Silguero v. State, 287 S.W.3d 146, 149-50 (Tex. App.—Corpus Christi 2009, no pet.). The trial court's plenary power, so extended, lasts "until 30 days after all such timely filed motions are overruled, either by a written and signed order or by operation of law, whichever occurs first." TEX. R. CIV. P. 165a(3). The verified motion to reinstate was timely filed on June 23, and the trial court denied it on June 27. The court therefore had plenary power over the lawsuit for 30 days after June 27 to reinstate the lawsuit.
E. The trial court abused discretion in denying E&M's motion
E&M's verified motion was timely and met the requirements for reinstatement. We therefore conclude that the trial court abused its discretion in denying the motion and refusing to reinstate the lawsuit. See TEX. R. CIV. P. 165a(3); Smith, 913 S.W.2d at 468; Jackson, 2003 WL 1566386, at *3; Seigle, 892 S.W.2d at 203-04. We therefore reverse the judgment of the trial court and remand for further proceedings.
Harvey Brown
Justice Panel consists of Justices Higley, Brown, and Caughey.