Adib C. Rouhana v. Alberto Ramirez , 556 S.W.3d 472 ( 2018 )

COURT OF APPEALS
EIGHTH DISTRICT OF TEXAS
EL PASO, TEXAS
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ADIB C. ROUHANA, No. 08-16-00356-CV
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Appellant, Appeal from
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v. 171st District Court
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ALBERTO RAMIREZ, of El Paso County, Texas
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Appellee. (TC # 2015-DCV2915)
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OPINION
This appeal arises from a suit on a note. A final judgment was granted following a post-
answer default when Appellant, who was representing himself at the time, failed to appear for a
non-jury trial setting. We reverse and remand for a new trial.
BACKGROUIND
Alberto Ramirez sued Appellant Adib C. Rouhana for breach of contract, conversion, and
fraud, all arising out of non-payment of a $30,000 promissory note. The original petition, filed on
August 28, 2015, attached a copy of the note and a schedule that showed the previous payments
that had been made. Rouhana filed a pro se general denial. He also asserted a payment defense in
a sworn portion of the answer, contending that the entire loan had been repaid through the value
of some type of service he claimed to have provided over the past fourteen years. Rouhana’s
answer provided a street address as his mailing address, and a “Gmail” email address.
The trial court set the matter for a non-jury trial on September 28, 2016. The trial court
attempted to provide Rouhana notice of the trial setting by certified mail, return receipt requested.
Our record contains a copy of the mailing envelope with the certified mailing label. The envelope
is stamped, however, “Return To Sender Unclaimed Unable to Forward.” The signature card for
delivery was also returned unsigned.
On September 9, 2016, Ramirez’s counsel filed and served a Certificate of Readiness,
which attached a copy of the trial setting. The certificate of service on that pleading indicates that
he served Rouhana by email, but the email address, “ACR@FIN”, was not the “Gmail” email
address that Rouhana listed on his answer.
On the day of trial, Rouhana failed to appear. The trial court stated on the record that
Appellant received notice of the trial setting by email, referring to the service of Ramirez’s
Certificate of Readiness. Ramirez admitted the copy of an “Automatic Reply” generated from a
third email address (acrouhana@integrityfn.com) that states, “Thank you for contacting us. We
will respond to your e-mail as soon as possible. If this is an emergency, please call my mobile at
[provided phone number]. Thanks & Kind Regards. Adib C. Rouhana.” The automatic reply
reflects that it was sent September 9, one minute after the service of the Certificate of Readiness
was served.
The trial court entered a default judgment for $36,922 that represented the principal and
interest then due on the note. The judgment also awarded $2,500 in attorney’s fees and further
included a prohibition on Rouhana removing any assets from El Paso, County until the judgment
was paid. Ramirez put on no evidence at the trial, either of the note, the amount then due, or his
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attorney’s fees. Nor did the original petition specifically seek any type of injunctive relief. The
district clerk mailed Rouhana notice of the judgment to his designated mailing address.
Rouhana timely filed a motion for new trial through counsel. The motion contends that he
received no notice of the September trial setting, and met the other new trial requirements under
Craddock v. Sunshine Bus Lines, Inc., 134 Tex. 388, 133 S.W.2d 124 (1939). Rouhana’s affidavit,
attached to the motion, swore that he “never got notice from the clerk of El Paso County, TX, or
anyone else; of a Court hearing was to be held on September 28, 2016, in this case [sic].” The
affidavit also states that he “never ever received a notice from the U.S. Postal Office to go and
pick-up a letter” at his local postal sub-station. He recites that he has continuously lived at his
mailing address, and that no one else lives there. He further claims to have first learned of the trial
setting when he received the notice of judgment from the clerk’s office. Rouhana filed a request
for a hearing on his motion for new trial, but for reasons unclear in our record, no hearing was set,
and the motion was overruled by operation of law.
DISCUSSION
Appellant raises four issues for our review. In Issue One and Three he claims that the
evidence is legally insufficient to support the money judge and the attorney’s fees. In Issue Two,
he claims there was no pleading to support the injunction prohibiting the post-judgment transfer
of assets. His final issue complains that the trial court abused its discretion in overruling (by
operation of law) his motion for new trial based on the lack of notice of the trial setting. We
address the first three issue together.
Sufficiency of the Evidence and Pleadings to Support the Judgment
Because Rouhana filed an answer, we deal here with a post-answer default. The standards
governing a no-answer and post-answer default judgments differ greatly. For a no-answer default
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judgment, the non-answering party is deemed to have admitted all the facts properly pleaded in
the petition. See Stoner v. Thompson, 578 S.W.2d 679, 682 (Tex. 1979). Conversely, in a post-
answer default judgment case, non-appearance at trial does not constitute an abandonment of the
defendant’s answer and it is not an implied confession of any issues joined by the answer. Sedona
Pacific Housing Partnership v. Ventura, 408 S.W.3d 507, 512 (Tex.App.--El Paso 2013, no pet.);
Mountain Corp. v. Rose, 737 S.W.2d 22, 23 (Tex.App.--El Paso 1987, writ denied). Accordingly,
in a post-answer default, the plaintiff must offer evidence and prove their case as in a trial for any
contested issue. Stoner, 578 S.W.2d at 682. A judgment cannot be entered on the pleadings
themselves. Id.
Yet that is exactly what happened in this case. At the trial, Ramirez offered no evidence
of the note or non-payment of the note. He merely presented the trial court with a judgment to
sign. Moreover, the case was not pleaded as a suit on a sworn account. TEX.R.CIV.P. 185.
Rouhana’s general denial placed in issue every issue in the case. Accordingly, without any
evidence offered at trial to sustain Ramirez’s claim, the default judgment must be reversed. See
Sharif v. Par Tech, Inc., 135 S.W.3d 869, 873 (Tex.App.--Houston [1st Dist.] 2004, no
pet.)(reversing post-answer default judgment in sworn account suit, when verified was answer
filed, and no record was made to show that any evidence to support judgment was admitted);
Maldonado v. Puente, 694 S.W.2d 86, 90 (Tex.App.--San Antonio 1985, no writ)(post-answer
default set aside in suit on a note, when no evidence was admitted at trial); Hall v. C-F Emp. Credit
Union, 536 S.W.2d 266, 267 (Tex.Civ.App.--Texarkana 1976, no writ)(post-answer default
entered on two promissory notes set aside when no evidence admitted at trial).
Ramirez responds, however, that Rouhana’s answer acknowledges the existence and
amount of the of the debt and is a judicial admission of both matters. The sworn portion of
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Rouhana’s answer states: “I paid the full amount of the debt by services provided to Plaintiff
during the last fourteen (14) years.” [Emphasis added]. Even if the italicized portions of the
answer acknowledge the existence of some prior debt, the general denial placed in issue the other
portions of Ramirez’s claim, such as the amount then due and owing, along with presentment and
demand for payment. Nor are Rouhana’s other references to the “full amount” of the debt, and his
claim that it was “paid in full” clear admissions that the $36,922 amount awarded in the judgment
is in fact the correct amount due.
Ramirez also urges that Rule 241 allows a judge to assess the damages “if the claim is
liquidated and proved by an instrument in writing” when a defendant is in default. TEX.R.CIV.P.
241. While we agree that the court and not a jury should have decided the case when called, the
rule does not suspend the obligation to present evidence. Had the note been admitted at the
hearing, and some evidence of the amounts paid been adduced, the trial court could have well
entered a judgment for the amount due. But without as such evidence, we sustain Issue One.
For whichever type of default is at issue, the pleadings must also provide “fair notice” of
the relief sought. See Lloyd’s, U.S. Corp. v. Landis, 777 S.W.2d 470, 473 (Tex.App.--El Paso
1989, writ denied). Accordingly, a judgment must conform to the pleadings and proof, and a party
may not be granted relief in the absence of pleadings to support it. Stoner, 578 S.W.2d at 682,
683-84. Yet in this case the trial court entered relief that was not sought in the petition: a bar to
Rouhana transferring any assets outside of El Paso County. The parties tussle over whether this
portion of the judgment constitutes injunctive relief, or merely an effort by the trial court to enforce
its judgment. Setting aside the issue of how the relief might be labeled, we are not aware of any
authority that allows a trial court to enter such an order in absence of a pleading seeking that relief,
or some evidence justifying the need for such an order. We sustain Issue Two.
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Finally, Ramirez was awarded $2,500 in attorney’s fees in the absence of any evidence of
the reasonableness or necessity of that sum. Attorney’s fees are by nature unliquidated damage
and require proper proof as to their amount. Oliphant Fin., LLC v. Galaviz, 299 S.W.3d 829, 836
(Tex.App.--Dallas 2009, no pet.)(“The reasonableness of attorney’s fees, in the absence of a
contract therefore, is a question of fact and is an unliquidated demand for which the trial court
entering a default judgment should hear evidence.”); Bastine v. Comm’n for Lawyer Discipline,
252 S.W.3d 413, 416 (Tex.App.--Houston [1st Dist.] 1996, no pet.) (“A demand for reasonable
attorneys’ fees is a claim for unliquidated damages, and an award of fees must be based upon
evidence in support of the pleadings.”); Higgins v. Smith, 722 S.W.2d 825, 827 (Tex.App.--
Houston [14th Dist.] 1987, no pet.)(same); see also Paradigm Oil, Inc. v. Retamco Operating, Inc.,
372 S.W.3d 177, 184 (Tex. 2012)(noting attorney’s fees were unliquidated for purposes of hearing
on damages). We sustain Issue Three.
In a post-answer default setting, a legal insufficiency point will only support a new trial,
and not a rendition of judgment. See Dolgencorp of Texas, Inc. v. Lerma, 288 S.W.3d 922, 930
(Tex. 2009). Based on Issue One, we remand the case for a new trial.
Denial of Motion for New Trial
In Rouhana’s fourth issue, he claims the trial court erred in failing to grant his motion for
new trial because it demonstrated that he was never given notice of the trial setting. We review
the denial of a motion for new trial under an abuse of discretion standard. See Dolgencorp, 288
S.W.3d at 926; Strackbein v. Prewitt, 671 S.W.2d 37, 38 (Tex. 1984). A trial court abuses its
discretion if it acts in an unreasonable or arbitrary manner or without reference to any guiding
rules and principles. Cire v. Cummings, 134 S.W.3d 835, 838-39 (Tex. 2004).
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Generally, before a default judgment can be set aside and a new trial granted, the defaulting
party must satisfy the three elements of the Craddock test. Cliff v. Huggins, 724 S.W.2d 778, 779
(Tex. 1987)(stating that Craddock test applies to post-answer default judgments). Under
Craddock, a party must demonstrate that (1) the failure to appear was not intentional or the result
of conscious indifference; (2) there is a meritorious defense; and (3) the granting of a new trial will
not operate to cause delay or injury to the opposing party. Cliff, 724 S.W.2d at 779. A trial court
must set aside a post-answer default judgment when the defendant satisfies the Craddock test. See
Dolgencorp, 288 S.W.3d at 926; Dir., State Employees Workers’ Comp. Div. v. Evans, 889 S.W.2d
266, 268 (Tex. 1994); Cliff , 724 S.W.2d at 779.
In the context of this dispute, a party who has appeared in a case is entitled to notice of a
trial setting as a matter of due process. See LBL Oil Co. v. International Power Servs., Inc., 777
S.W.2d 390, 390-91 (Tex. 1989); Wimpy v. Motel 6 Op., L.P., 461 S.W.3d 619, 626 (Tex.App.--
El Paso 2015, pet. granted, judgm’t vacated w.r.m.), citing Peralta v. Heights Medical Center,
Inc., 485 U.S. 80, 84, 108 S. Ct. 896, 899, 99 L. Ed. 2d 75 (1988). A party who has been denied due
process through lack of notice of a trial setting satisfies the first Craddock factor (as one cannot be
consciously indifferent to a trial of which they are unaware), and, in such instances, courts dispense
with the second (meritorious defense) factor for constitutional reasons. Mathis v. Lockwood, 166
S.W.3d 743, 744 (Tex. 2005); Limestone Constr., Inc. v. Summit Commercial Indus. Props., Inc.,
143 S.W.3d 538, 543-44 (Tex.App.--Austin 2004, no pet.); Smith v. Holmes, 53 S.W.3d 815, 817
(Tex.App.--Austin 2001, no pet.).1
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While perhaps an open question, the third element (prejudice) may also not apply when there the defaulting party is
not given notice of the setting. See Mathis, 166 S.W.3d at 744; Smith v. Holmes, 53 S.W.3d 815, 818 (Tex.App.-
Austin 2001, no pet.). Ramirez does not contend the prejudice requirement is in play, and thus we do not reach it.
We note, however, that the kind of prejudice contemplated by the third Craddock includes an undue delay that would
result in some disadvantage in presenting the merits of the case at a new trial, such as with the loss of a witness or
other valuable evidence. See Dolgencorp, 288 S.W.3d at 929.
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“Constitutionally, a party is entitled to actual, or at least constructive notice, of a hearing.”
Wimpy, 461 S.W.3d at 626. When the defaulting party properly demonstrates lack of notice, the
burden shift to the other party to controvert that claim. Mathis, 166 S.W.3d at 744; Cliff, 724
S.W.2d at 779; Old Republic Ins. Co. v. Scott, 873 S.W.2d 381, 382 (Tex. 1994). In determining
if the defaulting party’s factual assertions are controverted, the court looks to all the evidence in
the record. Anderson v. Anderson, 282 S.W.3d 150, 153 (Tex.App.--El Paso 2009, no pet.). As
here, a party may controvert the defaulting party’s claim by (1) showing there is some evidence of
actual notice, or (2) under Rule 21a, the defaulting party is presumed to have received notice.
Mathis, 166 S.W.3d at 744; Ashworth v. Brzoska, 274 S.W.3d 324, 329 (Tex.App.--Houston [14th
Dist.] 2008, no pet.). We consider, but reject both claims.
The Trial Court’s Returned Certified Mailing Was Not Notice
The trial court attempted to notify Rouhana of the trial setting by certified mail, but the
letter was returned as unclaimed. Rouhana denies that he was ever notified by the post office of
an attempt to deliver the letter. The returned envelop confirms that Rouhana did not receive actual
notice of trial setting from the trial court. See Approximately $14,980.00 v. State, 261 S.W.3d 182,
189 (Tex.App.--Houston [14th Dist.] 2008, no pet.)(“Notice sent by certified mail and returned
‘unclaimed’ does not provide the notice required by Rule 21a.”); Etheredge v. Hidden Valley
Airpark Ass’n, Inc., 169 S.W.3d 378, 382 (Tex.App.--Fort Worth 2005)(“Accordingly, a notice of
hearing setting sent by certified mail and returned ‘unclaimed’ does not provide the notice required
by Rule 21a.”); Limestone Constr., Inc., 143 S.W.3d at 545 (evidence of post office’s failed
attempts to deliver summary judgment motion constitutes proof of non-receipt); Rabie v. Sonitrol
of Hous., Inc., 982 S.W .2d 194, 197 (Tex.App.--Houston [1st Dist.] 1998, no pet.)(holding
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summary judgment motion and submission notice sent by certified mail but returned unclaimed
did not provide nonmovant with proper notice).
As an alternative, however, refusing to accept duly mailed correspondence can constitute
constructive notice if the intended recipient refuses all certified mailings, or engages in repeated
instances of selective acceptance of notices. Etheredge, 169 S.W.3d at 382; see Roberts v. Roberts,
133 S.W.3d 661, 663 (Tex.App.--Corpus Christi 2003, no pet.)(noting postal worker’s testimony
that defendant had informed him “she would not be accepting any certified mail”); Sharpe v.
Kilcoyne, 962 S.W.2d 697, 700 (Tex.App.--Fort Worth 1998, no pet.)(noting defendant
acknowledged having refused multiple mailings pertaining to case). Our record contains only the
single instance of the trial court’s mailing which was returned unclaimed, which does not support
an inference that Rouhana dodged or refused delivery. See Pessel v. Jenkins, 125 S.W.3d 807, 810
(Tex.App.--Texarkana 2004, no pet.)(evidence of one mailing of notice by certified mail,
attempted to be delivered twice, was not proof of selective acceptance or refusal); Dowell v. Theken
Spine, LLC, No. 14-07-00887-CV, 2009 WL 1677844, at *2-3 (Tex.App.--Houston [14th Dist.]
June 2, 2009, no pet.)(mem.op.)(not designated for publication)(evidence that notice of summary
judgment hearing went “unclaimed” after post office unsuccessfully attempted delivery and left
notice of certified mail at intended recipient’s address did not, standing alone, constitute evidence
that recipient dodged or refused delivery).
Ramirez responds in part by asking us to take judicial notice of information from the United
State Post Office’s website regarding the attempted delivery of this certified mailing. Rule 201
permits a court to take judicial notice of adjudicative facts that “can be accurately and readily
determined from sources whose accuracy cannot reasonably be questioned.” TEX.R.EVID.
201(b)(2). Yet it would be mere supposition on our part to assume, without any record support,
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that the delivery records posted on the USPS website cannot be reasonable questioned. We
therefore decline to take judicial notice of such material. See Kreit v. Brewer & Pritchard, P.C.,
530 S.W.3d 231, 239 n.4 (Tex.App.--Houston [14th Dist.] 2017, pet. denied)(declining to take
notice of statement on USPS website about status of package delivery). These type of records,
however, are the type of responsive evidence that might have been developed below to rebut
Rouhana’s claim. It was not offered there, and we decline to consider it on appeal.
The record therefor does not show that Rouhana received actual or constructive knowledge
of the trial setting from the trial court’s efforts to provide notice.
The E-Mailed Certificate of Readiness
Ramirez also claims the service of his Certificate of Readiness rebuts Rouhana’s affidavit.
The Certificate of Readiness both attached and referenced the trial setting notice. Ramirez’s
counsel certified that he served it by emailing the document to an email address (ACR@FIN). The
trial court believed that Rouhana received the pleading because when the document was served,
Ramirez’s counsel contemporaneously received an automated reply, albeit from a different email
address (acrouhana@integrityfn.com). Rouhana swore in his affidavit, however, that he received
notice of the trial setting from no one, which implicitly denies receipt of the emailed notice.
Rule 21a(a)(1) is designed to avoid the problems raised by the facts here. It provides that
a document “must be served electronically through the electronic filing manager if the email
address of the party or attorney to be served is on file with the electronic filing manager.”
TEX.R.CIV.P. 21a(a)(1). Had that procedure been followed, then a certificate would have been
generated confirming the service of the pleading on an email address that Rouhana designated for
service. Id. at 21a(b)(3). Pro se litigants, however, are not required to participate in the electronic
service program. See Cruz v. Sanchez, 528 S.W.3d 104, 112 (Tex.App.--El Paso 2017, pet.
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denied). Rule 21a(a)(2) then provides an alternative: if no email address is on file with the
electronic filing manager, the document “may be served in person, mail, by commercial delivery
service, by fax, by email, or by such other manner as the court in its discretion may direct.”
TEX.R.CIV.P. 21a(a)(2) [Emphasis added].
Nothing in our record shows that Rouhana had signed up for electronic service, or had an
email address on file with the electronic file manager. Under Rule 57, Rouhana was required to
designate an email address if he had one. TEX.R.CIV.P. 57 (“A party not represented by an attorney
shall sign his pleadings, state his address, telephone number, email address, and, if available, fax
number.”). And while he did so, for reasons unclear in our record, Ramirez did not use that email
address to serve Rouhana.
Nonetheless, Ramirez argues that the “automated reply” message proves actual notice by
Rouhana of the trial setting. It is more accurate to say, however, that the automated reply proves
that whatever computer received the email executed its sub-routine to send an autoreply message.
It is no different than proof that a letter was left in a mailbox (here an electronic mailbox), but is
not proof that the mailbox is one that Rouhana actively uses, or checks. His designation of a
different email address on his pleading infers the opposite conclusion. And while Ramirez also
claims that service is completed on transmission of the document under Rule 21a, that provision
applies to the transmission of the pleading through the electronic filing manager. TEX.R.CIV.P.
21a(b)(3). The rule makes specific reference to the electronic filing manager’s certificate which
verifies service. Rouhana was not served through that system, and the “automated reply” message,
on this record, does not overcome Rouhana’s sworn denial of receiving the trial setting from
anyone.
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Ramirez also urges that Rouhana’s affidavit is too general, because while it specifically
addresses the mailed notice from the trial court, it does not specifically discuss his email accounts.
On this point, Ramirez refers to this Court’s decision in Liberty Mut. Fire Ins. Co. v. Ybarra, 751
S.W.2d 615 (Tex.App.--El Paso 1988, no writ). In Ybarra, an insurance company failed to answer
a lawsuit and suffered a default. Its motion for new trial was supported by affidavits from two
claims managers, who in general terms described a system of “rapid faxes” used to transmit
lawsuits for answer, and claimed the wrong number was entered on a fax transmittal. Id. at 617.
The plaintiff challenged that claim, and argued that the fax system would generate various written
records, none of which the defaulting party had attached to its affidavit. Id. at 618. This Court
concluded the trial court did not abuse its discretion in overruling the contested motion for new
trial. Id. Ybarra does not control here for two reasons. First, the plaintiff in that case specifically
joined issue with the defaulting party’s affidavit, and the question was whether the trial court
abused its discretion in discrediting the challenged affidavits. Second, the trial court in Ybarra
decided whether a party who admitted being served with a lawsuit acted with conscious
indifference in failing to file an answer. The issue in this case is the more straightforward question
issue of whether a person ever received notice or not. The conscious indifference question in
Ybarra required some detailed explanation, while the question here is more susceptible to a
straightforward denial.
Finally, we note that Rule 245 requires that a party receive “notice of not less than forty-
five days” for a first trial setting. TEX.R.CIV.P. 245. The Certificate of Readiness was filed
nineteen days prior to trial, and even if properly served, it would not have provided that required
notice. See Mathis, 166 S.W.3d at 746 (rejecting claim that oral notice given to defaulting party
within 45 days of trial setting constituted notice); Custom-Crete, Inc. v. K-Bar Services, Inc., 82
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S.W.3d 655, 659 (Tex.App.--San Antonio 2002, no pet.)(“A trial court’s failure to comply with
Rule 245 in a contested case deprives a party of its constitutional right to be present at the hearing,
to voice its objections in an appropriate manner, and results in a violation of fundamental due
process.”); Blanco v. Bolanos, 20 S.W.3d 809, 811 (Tex.App.--El Paso 2000, no pet.)(notice sent
within fifteen days of first trial setting failed to support post-answer default judgment); Platt v.
Platt, 991 S.W.2d 481, 484 (Tex.App.--Tyler 1999, no pet.)(notice sent seven days prior to trial
failed to support post-answer default judgment). Accordingly, we sustain issue four.
Having sustained Issues One, Two, Three, and Four, we reverse the judgment below and
remand the matter for trial on the merits.
July 31, 2018
ANN CRAWFORD McCLURE, Chief Justice
Before McClure, C.J., Rodriguez, and Palafox, JJ.
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