Fourth Court of Appeals San Antonio, Texas MEMORANDUM OPINION No. 04-14-00824-CV Robert TYSON, Carl and Kathy Taylor, Linda and Ron Tetrick, Jim and Nancy Wescott, and Paul and Ruthe Nilson, Appellants v. Demar BOREN and Demar BOREN and Lorena Yates, Appellees From the 198th Judicial District Court, Bandera County, Texas Trial Court No. CV-13-0100356 Honorable M. Rex Emerson, Judge Presiding No. 04-15-00006-CV Robert TYSON, Carl and Kathy Taylor, Linda and Ron Tetrick, Jim and Nancy Wescott, and Paul and Ruthe Nilson, Appellants v. Robert N. FREEMAN IIAppellees Robert N. FREEMAN II, Appellee From the 198th Judicial District Court, Bandera County, Texas Trial Court No. CV-13-0200356 Honorable M. Rex Emerson, Judge Presiding Opinion by: Sitting: Karen Angelini, Justice Sandee Bryan Marion, Chief Justice Karen Angelini, Justice Jason Pulliam, Justice Delivered and Filed: March 2, 2015
AFFIRMED In Trial Court Cause No. CV-13-0000356, Appellants Robert Tyson, Carl and Kathy Taylor, Linda and Ron Tetrick, Jim and Nancy Wescott, and Paul and Ruthe Nilson (collectively the leaseholders ) sued Demar Boren, Lorena Yeates, and Robert N. Freeman II, individually and as principal of Medina Livestock Sales Company, Ltd. The leaseholders alleged that they were lifetime leaseholders in a senior citizen retirement community originally called Las Aves Retreat. The leaseholders brought claims for DTPA, common law fraud, statutory fraud, fraudulent inducement, negligent misrepresentation, negligence, and gross negligence. Freeman moved for summary judgment on the individual claims against him. After the trial court granted his motion, he moved for severance, requesting that the trial court sever all of the leaseholders individual claims against him and assign a separate cause number so that the summary judgment could become a final, appealable order. The trial court granted Freeman s motion for severance and ordered that all of the leaseholders individual claims against him were severed and assigned to Trial Court Cause No. CV-13-0200356. At the same time Freeman had moved for summary judgment, Yeates and Boren also moved for summary judgment. The trial court also granted their motion for summary judgment. Like Freeman, Yeates and Boren moved for severance, and the trial court granted their motion, ordering that all of the leaseholders claims against them were severed and assigned to Trial Court No. CV-13-0100356. Thus, the only remaining claims in the original action relate to those against Freeman in his capacity as principal of Medina Livestock Sales Company, Ltd. The leaseholders then filed a notice of appeal, stating their desire to appeal from both summary judgments. We consolidated the appeals for purposes of briefing and argument. On appeal, the leaseholders bring five issues: (1) whether the trial court erred in rejecting [the leaseholders ] summary judgment evidence ; (2) whether the trial court erred in granting summary - 2 -
judgment before there had been an adequate time for discovery; (3) whether the trial court erred in denying the leaseholders Motion for Opportunity to Remedy and for Rehearing ; (4) whether the trial court erred in granting the motions for severances filed by Freeman, and Yeates and Boren; and (5) whether the trial court erred in denying the leaseholders motion to withdraw deemed admissions. We affirm. BACKGROUND The leaseholders alleged in their petition that they owned lifetime leases of real property in a senior citizen retirement community originally called Las Aves Retreat. They entered into their leases with the owner of Las Aves Retreat, Medina Livestock Sales Co., Ltd., a Texas Limited Partnership ( Medina Ltd. ). The leaseholders alleged that they paid, on average, $25,000 for lifetime leases for lots on which they could park a RV or motor home. Medina Ltd. later sold Las Aves Retreat to El Viaje Retreat, LLC ( El Viaje LLC ), which took over the leases. El Viaje LLC later declared bankruptcy, and a bankruptcy judge ruled that the leaseholders leases were not enforceable and that El Viaje LLC could terminate the leases. Attorneys for El Viaje LLC then sent the leaseholders letters terminating their leases and ordering them to vacate the premises. The leaseholders sued Freeman individually and as principal of Medina Livestock Sales Co., Ltd., alleging that Freeman was the registered agent for Medina Ltd. The leaseholders also sued Boren and Yeates, who they alleged were the initial management and performed maintenance and office duties. The leaseholders brought claims for DTPA, common law fraud, statutory fraud, fraudulent inducement, negligent misrepresentation, negligence, and gross negligence against Boren, Yeates, and Freeman. As explained above, Boren, Yeates, and Freeman filed motions for summary judgment, which were granted by the trial court. Both the motion for summary judgment filed by Freeman and the motion for summary judgment filed by Boren and Yeates were heard by the trial court at the same time during one hearing. - 3 -
THE LEASEHOLDERS SUMMARY JUDGMENT EVIDENCE In their first issue, the leaseholders argue that the trial court erred in striking the summary judgment evidence attached to their responses to the motions for summary judgment filed by Freeman, Boren and Yeates. Specifically, the leaseholders attached to their responses the following exhibits: Exhibit A: transcript of a bankruptcy hearing; Exhibit B: a bankruptcy court order; Exhibit C: letter from the bankruptcy debtor declaring the leaseholders leases terminated; and Exhibit D: deposition excerpts from Yeates deposition. Freeman, Boren, and Yeates filed objections to the leaseholders summary judgment evidence, arguing that the transcript of the bankruptcy hearing, the bankruptcy order, and the letter were not authenticated. They also argued that the deposition excerpts were unsworn and not certified by the court reporter. Finally, Freeman, Boren, and Yeates argued that the leaseholders in their responses pointed to their own discovery responses as evidence. The trial court agreed with the objections and struck the leaseholders summary judgment evidence. On appeal, we review a trial court s ruling sustaining an objection to summary judgment evidence for abuse of discretion. In re Estate of Abernethy, 390 S.W.3d 431, 436 (Tex. App. El Paso 2012, no pet.); Owens v. Comerica Bank, 229 S.W.3d 544, 548 (Tex. App. Dallas 2007, no pet.). To show the trial court abused its discretion in excluding evidence, a complaining party must demonstrate that (1) the trial court erred in excluding the evidence; (2) the erroneously excluded evidence was controlling on a material issue dispositive of the case and was not cumulative; and (3) the error probably caused rendition of an improper judgment in the case. Estate of Abernathy, 390 S.W.3d at 436-37; see also Owens, 299 S.W.3d at 548 ( To successfully challenge an evidentiary ruling, the complaining party generally must show that the judgment turned on the particular evidence being challenged and the error in admitting or excluding the evidence probably - 4 -
resulted in the rendition of an improper judgment. ). In this case, the leaseholders have not shown that their excluded summary judgment evidence was controlling on a material issue dispositive of the case or that the exclusion probably resulted in the rendition of an improper judgment. Boren and Yeates s motion for summary judgment argued that the statute of limitations barred the leaseholders claims. In their appellate brief, the leaseholders argue that because their summary judgment evidence was stricken, they could not show that the discovery rule applied. According to the leaseholders, they only knew of the illegality of their leases when the bankruptcy judge ruled they were not enforceable in Texas. However, the summary judgment evidence they attached to their responses is not evidence that the leaseholders did not know of the illegality of their leases until the bankruptcy judge ruled on the issue. The summary judgment evidence attached consists of the following: (1) a reporter s record of a nonevidentiary hearing before the bankruptcy judge; (2) a bankruptcy order terminating the leases; (3) a letter sent to the leaseholders terminating their leases; and (4) an excerpt of Yeates s deposition. None of this summary judgment evidence relates to what the leaseholders knew about their claims and when they knew about them. Similarly, with respect to Freeman s motion for summary judgment, the leaseholders have not shown that their excluded summary judgment evidence was controlling on a material issue dispositive of the case or that the exclusion probably resulted in the rendition of an improper judgment. Freeman s motion for summary judgment emphasized that Medina Ltd. is a Texas Limited Partnership, with Corcat Enterprises, L.C. as its general partner. Freeman argued that [t]here is no legitimate legal basis for the [leaseholders] to assert individual liability against [him] and stressed that the leaseholders had admitted facts that preclude all their claims against him as a matter of law. Freeman pointed to the following admissions by the leaseholders in their responses to discovery: (1) Medina Ltd. was the original landlord under their leases; (2) Freeman was not the agent of Medina Ltd. who negotiated their leases; (3) Freeman did not negotiate their - 5 -
leases; (4) the leaseholders did not speak with Freeman at the time they entered their leases; (5) Freeman did not represent the leaseholders as their attorney; and (6) Freeman, individually, never made the leaseholders any promises or representations regarding their leases. Freeman emphasized in his summary judgment motion that (1) none of the leaseholders entered into any lease with him, (2) he did not draft the leases, (3) he did not represent the leaseholders as an attorney; and (4) he did not make a single representation to the leaseholders regarding the leases. In their brief, the leaseholders contend that a corporate agent can be personally liable for tortious acts which he directs or participates in during his employment. Even assuming this statement is legally accurate, the leaseholders excluded summary judgment evidence did not raise a genuine issue of material fact on this issue. The leaseholders also claim they suffered harm because the trial court treated the motions for summary judgment as no-evidence motions for summary judgment even though they were not labeled as such. According to the leaseholders, they assumed because the motions were not specifically labeled, the motions were traditional motions for summary judgment. The leaseholders claim that the trial court treated them as no-evidence motions for summary judgment, resulting in the leaseholders having no notice of what their burden of proof was at the summary judgment hearing. We agree with the leaseholders that the motion for summary judgment filed by Freeman was not specifically labeled as a traditional motion for summary judgment or a no-evidence motion for summary judgment. Similarly, the motion for summary judgment filed by Yeates and Boren did not specifically designate what type of summary judgment motion it was. However, both Freeman s motion and the one filed by Yeates and Boren attached summary judgment evidence. Further, neither motion for summary judgment argued that the leaseholders did not have evidence to support their claims. See TEX. R. CIV. P. 166a(i). Therefore, we conclude that the substance of the motions for summary judgment moved for summary judgment on traditional grounds pursuant - 6 -
to Texas Rule of Civil Procedure 166a(c) and not on no-evidence grounds pursuant to Rule 166a(i). See PNP Petroleum I, LP v. Taylor, 438 S.W.3d 723, 731 (Tex. App. San Antonio 2014, pet. denied) ( Although we recognize that [the parties] labeled their motion as a motion to reconsider, the law is well-established that courts look to the substance of the motion to determine the relief sought, not merely its title. ). And, we disagree with the leaseholders that the trial court treated the motions as no-evidence motions for summary judgment and not as traditional motions for summary judgment evidence. The appellate record does not reflect that the trial court treated the motions as no-evidence motions for summary judgment. We thus conclude that the leaseholders have not shown an abuse of discretion by the trial court. GRANTING SUMMARY JUDGMENT BEFORE AN OPPORTUNITY FOR DISCOVERY In their second issue, the leaseholders argue that the trial court erred in granting summary judgment before they could depose Freeman. Under Texas Civil Procedure Rule 166a(g), a respondent to a summary judgment motion may request a continuance to permit affidavits or discovery to be had. See TEX. R. CIV. P. 166a(g). Here, however, the leaseholders did not file a motion for continuance requesting additional time for discovery. Indeed, the trial judge at the hearing remarked that he did not have a motion for continuance on the summary judgment before the Court, so I don t even really have the ability to address that issue. In their appellate brief, the leaseholders argue that they did not need to file a motion for continuance because an adequate time for discovery had not passed pursuant to Texas Rule of Civil Procedure 166a(i). Rule 166a(i) relates to no-evidence motions for summary judgment, and as noted previously, the motions filed in this case were traditional motions for summary judgment. Rule 166a(i) therefore is not applicable. - 7 -
Because the leaseholders did not file a motion for continuance, we hold the trial court did not err in granting summary judgment before Freeman s deposition was taken. THE LEASEHOLDERS MOTION FOR OPPORTUNITY TO REMEDY AND REHEARING Additionally, the leaseholders argue on appeal that the trial court erred because it had an opportunity upon the return date of appellants motion for remedy and rehearing to correct [its] mistake of law and allow appellants a rehearing on the appellees motions. The leaseholders argue that they had made the court aware of case law evidencing the fact that appellants summary judgment evidence was admissible, as well as case law whereby [the leaseholders] had viable claims against individual defendants for liability. As explained previously, the leaseholders have not shown they were harmed by the trial court s exclusion of their summary judgment evidence. Thus, we find no abuse of discretion by the trial court in denying the leaseholders motion for rehearing of the summary judgments. See PNP Petroleum, 438 S.W.3d at 729-31. MOTIONS FOR SEVERANCE The leaseholders argue the trial court erred in granting Freeman s and Yeates and Boren s respective motions for severance. According to the leaseholders, the severances were only to make the summary judgments in favor of the individuals instantly appealable and to divide the litigation into three separate actions. They argue [t]here was no compelling reason for severance except to create a hardship for [them]. Texas Rule of Civil Procedure 41 provides that [a]ny claim against a party may be severed and proceeded with separately. TEX. R. CIV. P. 41. Pursuant to Rule 41, a trial court is not required to sever an interlocutory summary judgment. Instead, a trial court has broad discretion in determining whether to grant a severance. See Guar. Fed. Sav. Bank v. Horseshoe Operating Co., 793 S.W.2d 652, 658 (Tex. 1990); Cherokee Water Co. v. Forderhause, 641 S.W.2d 522, 525 (Tex.1982); Arredondo v. City of Dallas, 79 S.W.3d 657, 665 (Tex. App. Dallas 2002, pet. - 8 -
denied). The controlling reasons for a severance are to do justice, avoid prejudice and further convenience. Horseshoe Operating, 793 S.W.2d at 658. If summary judgment in favor of one defendant is proper in a case with multiple defendants, severance of that claim is proper so it can be appealed. Arredondo, 79 S.W.3d at 665. Here, the leaseholders brought multiple claims against multiple defendants. As explained above, we find no error by the trial court in granting the summary judgments. And, while the leaseholders argue the trial court s purpose in granting the motions to sever was to divide the litigation into three separate actions and to create a hardship for [them], there is nothing in the record to support these allegations. We find no abuse of discretion by the trial court in granting the respective motions for severance. MOTION TO WITHDRAW DEEMED ADMISSIONS Finally, the leaseholders complain the trial court erred in ordering the first set of discovery admissions deemed admitted and the second set undeemed. According to the leaseholders, the trial court, in ordering the first set of discovery admissions deemed admitted, and the second set undeemed, has divided plaintiffs, all having the same claims and causes of action, so that some have retained their correct admissions, and others have had their admissions all deemed admitted, despite having denied many of them, and despite answers to interrogatories running to the contrary. First, we note that the trial court never ordered the first set of discovery admissions deemed admitted. When the leaseholders failed to timely respond to requests for admissions, their answers were deemed admitted pursuant to Texas Rule of Civil Procedure 198.2(c). See TEX. R. CIV. P. 198.2(c) ( If a response is not timely served, the request is considered admitted without the necessity of a court order. ). With regard to this first set of discovery admissions deemed admitted, the leaseholders cannot point to an order by the trial court. Instead, they point to the August 28, 2014 summary judgment hearing. While the deemed admissions were discussed during - 9 -
the summary judgment, there was not a pending motion to withdraw the admissions before the trial court at the time of the hearing. See TEX. R. CIV. P. 198.3. 1 Nor did the trial court make a ruling concerning the deemed admissions during the summary judgment hearing. Thus, the leaseholders waived any complaint on appeal by not filing a motion before the summary judgment hearing and obtaining a ruling. See TEX. R. APP. P. 33.1. It was not until January 23, 2015 that the leaseholders filed a motion to withdraw their deemed admissions in the original cause number. 2 Thus, the leaseholders filed a motion to withdraw their admissions almost five months after the summary judgment hearing, almost five months after the trial court granted the summary judgments, and three months after the trial court severed the claims against Boren and Yeates, and Freeman from the original cause number. They nonetheless on appeal complain about an order signed by the trial court in the original cause number on March 10, 2015, where the trial court granted their motion to withdraw their admissions as to the second set of admissions. The leaseholders complain that the trial court erred in making this March 10, 2015 ruling because it did not withdraw all of their deemed admissions. However, this March 10, 2015 ruling by the trial court in the original cause of action in no way relates to this appeal of the summary judgments in the severed causes of action. We therefore affirm the summary judgments granted by the trial court. Karen Angelini, Justice 1 Rule 198.3 provides that [a] matter admitted under this rule is conclusively established as to the party making the admission unless the court permits the party to withdraw or amend the admission. TEX. R. CIV. P. 198.3. A court may permit the party to withdraw or amend the admission if: (a) the party shows good cause for the withdrawal or amendment; and (b) the court finds that the parties relying upon the responses and deemed admissions will not be unduly prejudiced and that the presentation of the merits of the action will be subserved by permitting the party to amend or withdraw the admission. Id. 2 The leaseholders claims against Medina Ltd. remain pending in the original cause number. - 10 -