Le v. The Cheesecake Facto

United States Court of Appeals
Fifth Circuit
F I L E D
IN THE UNITED STATES COURT OF APPEALS March 6, 2007
FOR THE FIFTH CIRCUIT Charles R. Fulbruge III
Clerk
No. 06-20006
DAVID LE, Individually, doing business as Image Nail & Facial
CHUAN LE, Individually, doing business as Image Nail & Facial,
Individually
Plaintiffs - Appellants
v.
THE CHEESECAKE FACTORY RESTAURANTS INC
Defendant - Appellee
Appeal from the United States District Court
for the Southern District of Texas, Houston
No. 4:03-CV-5713
Before KING, WIENER, and OWEN, Circuit Judges.
PER CURIAM:*
Plaintiffs-appellants David Le and Chuan Le, individually
and doing business as Image Nail and Facial, appeal the district
court’s denial of their initial Rule 36(b) motion and a
subsequent amended Rule 36(b) motion to permit withdrawal of
deemed admissions and the subsequent summary judgment dismissal
of their negligence claim in favor of defendant-appellee The
*
Pursuant to 5TH CIR. R. 47.5, the court has determined
that this opinion should not be published and is not precedent
except under the limited circumstances set forth in 5TH CIR. R.
47.5.4.
Cheesecake Factory Restaurants, Inc. For the following reasons
we AFFIRM the district court’s grant of Final Summary Judgment.
I. The Motions to Permit Withdrawal
The Cheesecake Factory Restaurants, Inc. (“CCF”) served
David Le and Chuan Le, individually and doing business as Image
Nail and Facial (collectively, “plaintiffs”), with requests for
admission on November 24, 2004. Plaintiffs did not respond to
the requests for admission within the time mandated by Federal
Rule of Civil Procedure 36 and they were therefore deemed
admitted pursuant to Rule 36. On January 12, 2005, CCF moved for
summary judgment based on the deemed admissions and,
alternatively, on no-evidence grounds.
On February 4, 2005, plaintiffs moved for an extension of
time to respond to CCF’s motion for summary judgment, which the
court granted. Next, on February 17, 2005, plaintiffs filed a
Motion to Permit Withdrawal of Deemed Admissions pursuant to Rule
36(b). Without addressing Rule 36(b)’s first requirement that
withdrawal serve the presentation of the case on its merits,
their motion, with supporting affidavits, explained that their
failure to respond to CCF’s request was not the result of neglect
or conscious indifference,1 but was a mistake in mail handling.
1
In supporting their motion for withdrawal with evidence
that their failure to respond was not the result of conscious
indifference or neglect, plaintiffs appear to have moved for
relief under the Texas procedural standard rather than the
federal standard. Under Texas procedure, permitting withdrawal
of admissions is proper upon a showing of (1) good cause and (2)
2
Plaintiffs attached their responses to the requests for admission
as an exhibit.
Plaintiffs failed to include an answer for Request Number 10
when they attached their responses to their initial motion to
permit withdrawal. CCF noted this omission, as well as
plaintiffs’ failure to address Rule 36(b)’s first requirement, in
a March 8, 2005, reply opposing the initial motion to withdraw.
Nearly five months later, and just two days before the close of
discovery, plaintiffs filed a First Amended Motion to Permit
Withdrawal of Deemed Admissions on August 1, 2005, denying
Request Number 10. Plaintiffs offered no explanation for their
delay. Plaintiffs again failed to address Rule 36(b)’s first
requirement and instead offered that the failure to respond to
Request Number 10 was “inadvertent” and “not the result of
neglect or conscious indifference.”
The district court denied both the initial motion to permit
withdrawal and the subsequent amended motion to permit withdrawal
and granted Final Summary Judgment on the basis of the deemed
admissions on September 14, 2005. Plaintiffs now appeal the
district court’s denial of their two motions to permit withdrawal
and the subsequent summary judgment dismissal of their claim.
II. Withdrawal of Deemed Admissions
no undue prejudice. Wheeler v. Green, 157 S.W.3d 439, 442 (Tex.
2005). “Good cause” is established by showing that the failure
involved was an accident or mistake and not intentional or the
result of conscious indifference. Id.
3
Rule 36 provides that a party may serve any other party
written requests for admission of the truth of any matters within
the scope of Rule 26(b). FED. R. CIV. P. 36(a). The matter is
deemed admitted unless the party to whom the request is directed
serves the requesting party a written answer or objection within
thirty days after the service of the request. Id. Moreover,
“[a]ny matter admitted . . . is conclusively established unless
the court on motion permits withdrawal or amendment of the
admission.” FED. R. CIV. P. 36(b).
A district court’s decision to permit the withdrawal or
amendment of an admission is reviewed for abuse of discretion.
In re Carney, 258 F.3d 415, 419 (5th Cir. 2001). Although the
court has considerable discretion to permit withdrawal or
amendment, a deemed admission may only be withdrawn when the
moving party satisfies the conditions set forth in Rule 36(b).
American Auto. Ass’n v. AAA Legal Clinic, 930 1117, 1119 (5th
Cir. 1991); Carney, 258 F.3d at 419. Under Rule 36(b), “the
court may permit withdrawal or amendment when the presentation of
the merits of the action will be subserved thereby and the party
who obtained the admission fails to satisfy the court that
withdrawal or amendment will prejudice that party in maintaining
the action or defense on the merits.” FED. R. CIV. P. 36(b). And,
even when Rule 36(b)’s two-factor test has been satisfied, the
district court “still has discretion to deny a request to
withdraw or amend an admission.” Carney, 258 F.3d at 419.
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Plaintiffs contend that the district court abused its
discretion in denying their two motions to permit withdrawal
after concluding that plaintiffs had not shown that permitting
withdrawal would advance the presentation of the merits of their
case, but that CCF had shown that permitting withdrawal would
cause it to be prejudiced. Plaintiffs argue that the district
court based its conclusions on improper criteria. Plaintiffs
assert that they satisfy Rule 36(b)’s two-factor test because the
denial of their two motions for withdrawal served to eliminate
all merit issues and that any prejudice suffered by CCF by
permitting withdrawal would be simply the need to proceed to
trial. They further urge that because they satisfy the two-
factor test, the district court necessarily abused its discretion
in denying withdrawal.
Plaintiffs overlook our decision in Carney in arguing for a
per se rule that once Rule 36(b)’s two-factor test is satisfied,
a court abuses its discretion if it then denies withdrawal.
Carney, 258 F.3d at 419; see also Covarrubias v. Five Unknown
INS/Border Patrol Agents, 192 F. App’x 247, 258 (5th Cir. 2006)
(per curiam) (unpublished). Although we agree with plaintiffs
that it is proper to consider whether denying withdrawal would
have the practical effect of eliminating any presentation of the
merits of the case in determining whether Rule 36(b)’s first
requirement is met, see, e.g., Hadley v. United States, 45 F.3d
1345, 1348 (9th Cir. 1995), this and other courts have not relied
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solely on this factor in determining whether to permit
withdrawal. Even where the presentation of the merits of a case
would be eliminated, other factors considered are whether the
plaintiff has demonstrated that the merits would be served by
advancing evidence showing “the admission is contrary to the
record of the case,” or that the admission “is no longer true
because of changed circumstances or [that] through an honest
error a party has made an improvident admission.” N. La. Rehab.
Ctr. Inc. v. United States, 179 F. Supp. 2d 658, 663 (W.D. La.
2001) (quoting Ropfogel v. United States, 138 F.R.D. 579, 583 (D.
Kan. 1991)); accord Branch Banking & Trust Co. v. Deutz-Allis
Corp., 120 F.R.D. 655, 658-59 (E.D.N.C. 1988) (denying withdrawal
because the movants for withdrawal proffered “no affidavit,
verified pleading, or other evidence . . . to suggest the
admission, if left standing, would render an unjust result under
the law”). This circuit has also determined that a court acts
within its discretion in considering the fault of the party
seeking withdrawal, Pickens v. Equitable Life Assurance Soc., 413
F.2d 1390, 1394 (5th Cir. 1969),2 or its diligence in seeking
withdrawal, Covarrubias v. Five Unknown INS/Border Patrol Agents,
192 F. App’x 247, 248 (5th Cir. 2006) (per curiam) (unpublished).
2
We note that Pickens was decided before the 1970
amendments to Rule 36 and thus cannot be relied upon in its
entirety.
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Turning to Rule 36(b)’s second requirement, we agree with
plaintiffs that “[c]ourts have usually found that the prejudice
contemplated by Rule 36(b) relates to special difficulties a
party may face caused by a sudden need to obtain evidence upon
withdrawal or amendment of an admission.” American Auto., 930
F.2d at 1117. The Eighth Circuit has interpreted this standard
to not encompass the increased expenses caused by the need for
additional discovery to replace withdrawn admissions, Gutting v.
Falstaff Brewing Corp., 710 F.2d 1309, 1314 (8th Cir. 1983), and
other courts contemplating the standard have concluded that
merely having to prove the matters admitted does not constitute
prejudice. No. La. Rehab. Ctr., 179 F. Supp. 2d at 663. Courts
have also considered, however, within the prejudice analysis, the
timing of the motion for withdrawal as it relates to the
diligence of the party seeking withdrawal and the adequacy of
time remaining for additional discovery before trial. See, e.g.,
Branch Banking & Trust Co., 120 F.R.D. at 660 (denying withdrawal
where party, with due diligence, could have accessed the
information needed to respond to request for admissions yet had
failed to do so); No. La. Rehab. Ctr., 179 F. Supp. 2d at 663
(permitting withdrawal when party obtaining the admissions failed
to show that it would not be able to present alternative evidence
and adequate time remained before trial to conduct limited
discovery).
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The district court may have acted within its discretion in
denying plaintiffs’ initial February 17, 2005, Motion to Permit
Withdrawal of Deemed Admissions. As the court noted, although
denying withdrawal would eliminate the presentation of the merits
of plaintiffs’ case, plaintiffs entirely failed to address Rule
36(b)’s first requirement and did not support their motion with
any argument or information related to the merits of the case.
See N. La. Rehab. Ctr. Inc., 179 F. Supp. 2d at 663; Coca-Cola
Bottling Co v. Coca-Cola Co., 123 F.R.D. 97, 103 (D. Del. 1988);
Branch Banking & Trust Co., 120 F.R.D. at 658-59. A more complex
question is whether the court abused its discretion in
determining that plaintiffs had not acted with diligence as of
February 17, 2005, when they filed this initial motion. And,
given that discovery did not close until August 3, 2005, the
court may have abused its discretion in denying withdrawal when
CCF had almost six months to continue discovery and its prejudice
at that point in time consisted largely of the additional expense
of discovery. See Gutting, 710 F.2d at 1314; N. La. Rehab. Ctr.
Inc., 179 F. Supp. 2d at 663.
We need not resolve whether the district court abused its
discretion in denying plaintiffs’ initial motion to permit
withdrawal because it is clear from the distinct circumstances
surrounding plaintiffs’ subsequent First Amended Motion to Permit
Withdrawal that the court did not abuse its discretion in denying
the amended motion. Summary judgment is proper on the basis of
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that denial alone. Although plaintiffs had notice that they had
not responded to Request Number 10 on March 8, 2005, they did not
seek to withdraw this admission until nearly five months later
and did so just two days before the close of discovery. They
offered no explanation for their delay. Further, plaintiffs
again failed to address Rule 36(b)’s first requirement——even
after being apprised of Rule 36(b)’s standard by CCF’s reply——and
instead offered simply that “the failure to provide a response to
that one single request was inadvertent, and the result of an
accident and mistake in the preparation of responses to all other
requests, and not the result of neglect or conscious
indifference.” Given plaintiffs’ failure to present any argument
or information showing that the presentation of the merits of
their case would be served by allowing withdrawal, see, e.g., N.
La. Rehab. Ctr. Inc., 179 F. Supp. 2d at 663, their lack of
diligence in moving for withdrawal of Request Number 10, see,
e.g., Covarrubias, 192 F. App’x at 248, and the fact that they
moved for withdrawal just two days before the close of discovery,
see, e.g., Branch Banking & Trust Co., 120 F.R.D. at 660, the
court did not abuse its discretion in denying plaintiffs’ First
Amended Motion to Permit Withdrawal.
III. Summary Judgment
The district court properly granted summary judgment to CCF
on the basis of the deemed admission of Request Number 10. This
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court reviews grants of summary judgment de novo, applying the
same standards as the district court. Armstrong v. Am. Home
Shield Corp., 333 F.3d 566, 568 (5th Cir. 2003). Summary
judgment is proper when there is no genuine issue regarding any
material fact and the moving party is entitled to judgment as a
matter of law. FED. R. CIV. P. 56(c). Facts are material if they
might affect the outcome of the lawsuit under the governing law.
Anderson v. Liberty Lobby, Inc., 477 U.S. 242 (1986). Under
Texas substantive law, a claim for negligence requires the
plaintiff to show that (1) the defendant owed a legal duty to the
plaintiff, (2) the defendant breached the duty, and (3) the
breach proximately caused the plaintiff’s injuries. Van Horn v.
Chambers, 970 S.W.2d 542, 544 (Tex. 1998).
“Rule 36 allows litigants to request admissions as to a
broad range of matters, including ultimate facts, as well as
applications of law to fact.” Carney, 258 F.3d at 419. Rule
36(b) provides that any matter admitted is “conclusively
established.” FED. R. CIV. P. 36(b). Rule 56(c), in turn,
provides that admissions on file are an appropriate basis for
granting summary judgment. FED. R. CIV. P. 56(c). Although we
have recognized the “potential harshness” of granting summary
judgment on the basis of default admissions, we have also
emphasized that compliance with the rules of procedure is
“necessary to insure the orderly disposition of cases.” Carney,
258 F.3d at 421 (quoting United States v. Kasuboski, 834 F.2d
10
1345, 1350 (7th Cir. 1987)). By failing to respond to Request
Number 10, plaintiffs admitted that “[t]he Houston Galleria’s
failure to exercise reasonable care in the maintenance of the
drainpipe was the sole proximate cause of the rupture of the
drainpipe alleged in the Complaint.” Accordingly, summary
judgment is proper in this negligence claim on the basis of
Request Number 10 because plaintiffs assign sole responsibility
for causation to the Houston Galleria.
We further conclude that summary judgment is proper in this
case regardless of whether the deemed admissions are permitted to
be withdrawn. CCF moved for summary judgment based on the deemed
admissions, and alternatively, on no-evidence grounds. Although
the district court did not rule on the no-evidence ground,
“[s]ummary judgment must be affirmed if it is sustainable on any
legal ground in the record, and it may be affirmed on grounds
rejected or not stated by the district court.” S & W Enters.,
L.L.C. v. Southtrust Bank of Ala., N.A., 315 F.3d 533, 537-38
(5th Cir. 2003) (internal citations omitted).
On summary judgment, the moving party is not required to
negate the nonmoving party’s claims or present evidence proving
the absence of a material fact issue; rather, the moving party
may meet its burden by simply “pointing to an absence of evidence
to support the nonmoving party’s case.” Armstrong, 333 F.3d at
568; see also Celotex, 477 U.S. at 323 (finding “no express or
11
implied requirement in Rule 56 that the moving party support its
motion with affidavits or other similar materials negating the
opponent’s claim”). Once the moving party files a properly
supported motion for summary judgment, the burden then shifts to
the non-moving party to “set forth specific facts showing that
there is a genuine issue for trial.” FED. R. CIV. P. 56(e).
Summary judgment will be granted where the nonmovant is unable to
point to any evidence in the record that would sustain a finding
in the nonmovant’s favor on any issue on which he bears the
burden of proof at trial. See Celotex, 477 U.S. at 322-24.
The record demonstrates that plaintiffs offered no competent
summary judgment evidence below that would sustain a finding in
favor of their negligence claim. Their February 17, 2005, reply
to CCF’s motion for summary judgment argued that summary judgment
was not proper because the admissions should be withdrawn and the
no-evidence ground for summary judgment was premature because
discovery would not conclude until August 3, 2005. The response
did not identify any material fact issues in dispute. Plaintiffs
filed an amended reply on May 31, 2005, without leave of court,
attaching their overdue responses to CCF’s interrogatories and
asserting that the responses established genuine issues of
material fact precluding summary judgment. Plaintiffs did not
identify which responses created material fact issues. Moreover,
the court denied plaintiffs’ motion to extend time to file the
12
amended reply and plaintiffs do not challenge this ruling on
appeal.
Finally, plaintiffs filed a motion to extend time to file a
second amended reply to CCF’s motion for summary judgment on
August 1, 2005, attaching an affidavit from their proposed expert
that they contend established genuine issues of material fact.
The district court’s ruling, however, both barred the proposed
expert’s affidavit and denied plaintiffs’ motion to extend time
to file the second amended reply. On appeal, plaintiffs do not
challenge the district court’s rulings regarding their second
amended reply. Furthermore, plaintiffs do not address the no-
evidence ground for summary judgment on appeal. As such, summary
judgment is proper because plaintiffs have entirely failed to
point to any evidence in the record that would sustain a finding
in their favor on the issues on which they bear the burden of
proof at trial. See Celotex, 477 U.S. at 322-24.
IV. CONCLUSION
For the foregoing reasons, the Final Summary Judgment
entered by the district court is AFFIRMED.
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