in Re Seizure of Gambling Proceeds , 2012 Tex. App. LEXIS 9930 ( 2012 )

Affirmed and Majority and Dissenting Opinions filed November 29, 2012.
In The
Fourteenth Court of Appeals
NO. 14-11-00965-CV
IN RE SEIZURE OF GAMBLING PROCEEDS
On Appeal from the 338th District Court
Harris County, Texas
Trial Court Cause No. 1226408
DISSENTING OPINION
I respectfully dissent.
The uncontroverted, agreed-upon summary judgment evidence shows that (1)
Worldwide received the State’s requests for admissions on June 11, 2010, and (2) the
State received Worldwide’s responses to the requests for admissions 30 days later, on
July 11, 2010.
In response to the State’s motion for summary judgment based on deemed
admissions, Worldwide argued that its responses to the requests for admissions were
timely and therefore the requests should not be deemed admitted. Even though
Worldwide did not file a motion to withdraw deemed admissions, the arguments
presented to the trial court were sufficient to put the trial court on notice of exactly that
complaint, and the trial court should have allowed the deemed admissions to be
withdrawn in accordance with controlling Supreme Court authority. Thus, the summary
judgment is not supported by deemed admissions. Accordingly, I dissent.
This case is controlled by Wheeler v. Green, 157 S.W.3d 439 (Tex 2005) (per
curiam).1 In that case, the trial court granted summary judgment based on deemed
admissions. Id. at 441. It was uncontested that the appellant (Sandra) had filed responses
to the requests for admissions 27 days after she received the requests, but 35 days after
the “mailbox rule” deemed they were served, thus making the responses two days late
under Texas Rule of Civil Procedure 21(a) (providing service occurs upon mailing and
extending response time by three days). Id. Sandra did not file a response to the motion
for summary judgment, but she did file a motion for new trial in which she argued her
responses to the requests for admissions were timely, and therefore the summary
judgment was improperly granted on deemed admissions. Id. at 441–42. The Supreme
Court held that the effect of Sandra’s argument in the motion for new trial was a request
that the deemed admissions be withdrawn, stating:
. . . although Sandra never filed a motion to withdraw deemed admissions
or a motion to allow a late response to the summary judgment, the
arguments and requests in her motion for new trial were sufficient to put
the trial court on notice of exactly that complaint. See Tex. R. App. P.
33.1(a).
Id. at 442.
In the present case, Worldwide did not wait until the motion for new trial to argue
that it had timely filed its responses to the requests for admissions; rather, it made that
argument in its response to the motion for summary judgment, and thus put the trial court
on notice that it sought the withdrawal of any deemed admissions. Withdrawal of
1
Although Wheeler involved a pro se defendant, the analysis and due process considerations
apply equally to the present case.
2
deemed admissions should be granted when there is a showing of (1) good cause, and (2)
no undue prejudice. Id.
GOOD CAUSE
Good cause is established by showing the failure involved was an accident or
mistake, not intentional or the result of conscious indifference. Id. In Wheeler, the
Supreme Court noted:
While Sandra argued only that her responses were timely, the trial court
could not have concluded otherwise without noting that she was mistaken
as to when “service” occurs. . . . On this record, the lower courts could
have concluded that Sandra was wrong on her dates and wrong on how to
correct them, but not that either was the result of intent or conscious
indifference.
Id. Likewise, in the present case, the record is clear that Worldwide did not intentionally
ignore the deadline for filing the responses to the requests for admissions, nor did it act
with conscious indifference to the rule of law.2 This case is similar to Cudd v.
Hydrostatic Transmission, Inc., relied on by the Majority Opinion. 867 S.W.2d 101
(Tex. App.—Corpus Christi 1993, no writ). There, the attorney for Cudd also had the
mistaken belief that the time for filing the responses to the requests for admissions ran
from the date of the receipt of the requests; the appellate court held that good cause was
shown and the deemed admissions should have been withdrawn. Id. at 104–05.
UNDUE PREJUDICE
Undue prejudice depends on whether withdrawing an admission will delay trial or
significantly hamper the opposing party’s ability to prepare for it. Wheeler, 157 S.W.3d
at 443. In Wheeler, where Sandra’s responses to requests for admissions were received
two days late but six months before the summary judgment motion was heard, the
2
In its response to the motion for summary judgment, Worldwide cited Payton v. Ashton, 29
S.W.3d 896, 898 (Tex. App.—Amarillo 2000, no pet) in support of its position that the time for filing
responses to requests for admissions begins to run from the date of receipt of the requests, quoting
language from the opinion supporting that conclusion.
3
Supreme Court concluded: “The lower courts could not have concluded on this record
that Darrin would suffer any undue prejudice if the admissions were withdrawn.” Id.
Similarly, in the present case, assuming Worldwide’s responses were late by five days,
they were filed more than one year before the submission of the State’s motion for
summary judgment; no undue prejudice would have been suffered by the State if the
deemed admissions were withdrawn.
DUE PROCESS CONCERNS
The State served 49 requests for admissions on Worldwide aimed at obtaining
Worldwide’s admissions that it had no valid claims, and no valid defenses to the State’s
action. Before admissions are allowed to be deemed due to tardy responses, the courts
are required to ensure that due process has been afforded the parties. The Supreme Court
in Wheeler explained the due process concerns:
We recognize that trial courts have broad discretion to permit or deny
withdrawal of deemed admissions, but they cannot do so arbitrarily,
unreasonably, or without reference to guiding rules or principles. While
requests for admissions were at one time unique in including an automatic
sanction for untimely responses, failure to comply with any discovery
requests now bears similar consequences. See Tex. R. Civ. P. 193.6(a).
Nevertheless, we have held for all other forms of discovery that absent
flagrant bad faith or callous disregard for the rules, due process bars merits-
preclusive sanctions. . . .
When requests for admissions are used as intended—addressing
uncontroverted matters or evidentiary ones like the authenticity or
admissibility of documents—deeming admissions by default is unlikely to
compromise presentation of the merits. But when a party uses deemed
admissions to try to preclude presentation of the merits of a case, the same
due-process concerns arise.
Id. at 443 (citations omitted). The Wheeler court concluded that the record contained no
evidence of flagrant bad faith or callous disregard for the rules. Id. at 443–44. Similarly,
in the present case, the record contains no evidence of flagrant bad faith or callous
disregard for the rules; in fact, Worldwide’s construction of the rules is supported by
4
Payton, 29 S.W.3d at 898,3 which was cited with approval by this Court in Approximately
$14,980.00 v. State, 261 S.W.3d 182, 186 (Tex. App.—Houston [14th Dist.] 2008, no
pet.). Due process bars the merits-preclusive sanction of summary judgment on deemed
admissions in this case. If the Majority Opinion truly followed Cudd, it would hold,
applying relevant principles, that withdrawal of the deemed admissions should have been
allowed. See Cudd, 867 S.W.2d at 105.
The fact that Worldwide did not specifically ask the trial court to withdraw
deemed admissions is not fatal to Worldwide’s right to due process. The Texas Supreme
Court has clearly held that a defendant’s argument in the trial court, that responses to
requests for admissions were timely filed and therefore there are no deemed admissions,
is sufficient to put the trial court on notice that the defendant is asking for withdrawal of
deemed admissions. See Wheeler, 157 S.W.3d at 441–42. In its third issue on appeal to
this Court, Worldwide specifically asserts the trial court erred in granting summary
judgment based on deemed admissions. I would sustain Worldwide’s third issue.
CONCLUSION
Worldwide’s deemed admissions should have been withdrawn, and therefore the
State’s motion for summary judgment based on deemed admissions should have been
denied.
/s/ Margaret Garner Mirabal
Senior Justice
Panel consists of Justices Boyce, McCally, and Mirabal.4 (Boyce, J., majority).
3
In its response to the motion for summary judgment, Worldwide quoted the following language
from Payton: “Next, upon combining our interpretation of Rule 21a with that of Rule 198.2(a), we are
also compelled to hold that a party’s duty to respond to requests for admission is dependent upon receipt
of those requests. And, because his duty does not ripen until service has been perfected (i.e. his receipt of
them), the party cannot be made to suffer the effect of not answering or answering untimely.” 29 S.W.3d
at 898.
4
Senior Justice Margaret Garner Mirabal sitting by assignment.
5